14172 Federal Register / Vol. 72, No. 57 / Monday, March 26, 2007 / Proposed Rules 

ENVIRONMENTAL PROTECTION 

AGENCY 

40 CFR Parts 260 and 261 

[EPA–HQ–RCRA–2002–0031–FRL–8289–9] 

RIN 2050–AG31 

Revisions to the Definition of Solid 

Waste 

AGENCY: Environmental Protection 

Agency. 

ACTION: Supplemental Proposed Rule. 

SUMMARY: The Environmental Protection 

Agency (EPA) is today publishing a 

supplemental proposal which would 

revise the definition of solid waste to 

exclude certain hazardous secondary 

materials from regulation under Subtitle 

C of the Resource Conservation and 

Recovery Act (RCRA). We are also 

soliciting comments on regulatory 

factors to be used to determine whether 

recycling of hazardous secondary 

materials is legitimate. The Agency first 

proposed changes to the definition of 

solid waste on October 28, 2003 (68 FR 

61558). The purpose of this proposal is 

to encourage safe, environmentally 

sound recycling and resource 

conservation and to respond to several 

court decisions concerning the 

definition of solid waste. 

DATES: Comments must be received on 

or before May 25, 2007. Under the 

Paperwork Reduction Act, comments on 

the information collection provisions 

must be received by OMB on or before 

April 25, 2007. 

ADDRESSES: Submit your comments, 

identified by Docket ID No. EPA–HQ 

–RCRA 2002–0031 by one of the 

following methods: 

http://www.regulations.gov: Follow 

the on-line instructions for submitting 

comments. 

E-mail: Comments may be sent by 

electronic mail (e-mail) to RCRAdocket@epa.gov, Attention Docket ID 

No. EPA–HQ–RCRA–2002–0031. 

Fax: Fax comments to: 202–566–0270, 

Attention Docket ID No. EPA–HQ– 

RCRA 2002–0031. 

Mail: Send comments to: OSWER 

Docket, EPA Docket Center, Mail Code 

5305T, Environmental Protection 

Agency, 1200 Pennsylvania Avenue, 

NW., Washington, DC 20460, Attention 

Docket ID No. EPA–HQ–RCRA–2002– 

0031. In addition, please mail a copy of 

your 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, DC 20503. 

Hand delivery: Deliver comments to: 

Environmental Protection Agency, EPA 

Docket Center, Room B102, 1301 

Constitution Avenue, NW., Washington, 

DC, Attention Docket ID No. EPA–HQ– 

RCRA–2002–0031. Such deliveries are 

only accepted during the docket’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– 

2002–0031. EPA’s policy is that all 

comments received will be included in 

the public docket without change and 

may be made available online at 

http://www.regulations.gov, including 

any personal information provided, 

unless the comment includes 

information claimed to be Confidential 

Business Information (CBI) or other 

information whose disclosure is 

restricted by statute. Do not submit 

information that you consider to be CBI 

or otherwise protected through http:// 

www.regulations.gov or e-mail. The 

http://www.regulations.gov Web site is 

an ‘‘anonymous access’’ system, which 

means EPA will not know your identity 

or contact information unless you 

provide it in the body of your comment. 

If you send an e-mail comment directly 

to EPA without going through http:// 

www.regulations.gov your e-mail 

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 an electronic comment, EPA 

recommends that you include your 

name and other contact information in 

the body of your comment and with any 

disk or CD–ROM you submit. If EPA 

cannot read your comment due to 

technical difficulties and cannot contact 

you for clarification, EPA may not be 

able to consider your comment. 

Electronic files should avoid the use of 

special characters, any form of 

encryption, and be free of any defects or 

viruses. 

Docket: All documents in the docket 

are listed in the http:// 

www.regulations.gov index. Although 

listed in the index, some information is 

not publicly available, such as CBI or 

other information whose disclosure is 

restricted by statute. Certain other 

material, such as copyrighted material, 

will be publicly available only in hard 

copy. Publicly available docket 

materials are available either 

electronically in http:// 

www.regulations.gov or in hard copy at 

the OSWER Docket, EPA/DC, EPA West, 

Room B102, 1301 Constitution Ave., 

NW., Washington, DC. The Public 

Reading Room is open from 8:30 a.m. to 

4:30 p.m. Monday through Friday, 

excluding legal holidays. The telephone 

number for the Public Reading Room is 

(202) 566–1744, and the telephone 

number for the OSWER Docket is 202– 

566–0270. 

FOR FURTHER INFORMATION CONTACT: For 

more detailed information on specific 

aspects of this rulemaking, contact 

Marilyn Goode, Office of Solid Waste, 

Hazardous Waste Identification 

Division, MC 5304P, Environmental 

Protection Agency, 1200 Pennsylvania 

Ave., NW., Washington, DC 20460 (703) 

308–8800, (goode.marilyn@epa.gov) or 

Tracy Atagi, Office of Solid Waste, 

Hazardous Waste Identification 

Division, MC 5304P, Environmental 

Protection Agency, 1200 Pennsylvania 

Ave., NW., Washington, DC 20460, at 

(703) 308–8672 (atagi.tracy@epa.gov). 

SUPPLEMENTARY INFORMATION: 

A. Regulated Entities 

Entities potentially affected by this 

action include about 4600 facilities in 

530 industries in 17 economic sectors 

that generate or recycle hazardous 

secondary materials which are currently 

regulated as RCRA Subtitle C hazardous 

wastes (e.g., industrial co-products, byproducts, residues, unreacted 

feedstocks). About 80 percent of these 

affected facilities are classified in 

NAICS code economic sectors 31, 32, 

and 33 (manufacturing), and the 

remainder are in NAICS code economic 

sectors 21 (mining), 22 (utilities), 23 

(construction), 42 (wholesale trade), 44 

and 45 (retail trade), 48 and 49 

(transportation), 51 (information), 54 

(professional, scientific and technical 

services), 56 (administrative support, 

waste management and remediation), 61 

(educational services), 62 (health care 

and social assistance, and 81 (other 

services). About 0.65 million tons per 

year of recyclable industrial materials 

handled by these entities may be 

affected, of which the most common 

types are metal-bearing hazardous 

secondary materials (e.g., sludges and 

spent catalysts) for commodity metals 

recovery, and organic chemical liquids 

for recycling as solvents. This proposed 

rule, if promulgated, is expected to 

result in regulatory and materials 

recovery cost savings to these industries 

of approximately $107 million per year. 

Taking into account impact estimation 

uncertainty factors, this rule, if 

promulgated, could affect between 0.3 

to 1.7 million tons per year of industrial 

hazardous secondary materials handled 

by 3600 to 5400 entities in 460 to 570 

industries, resulting in $93 million to 

$205 million per year of net cost 

savings. More detailed information on 

the potentially affected entities, 

industries, and industrial materials, as 

well as the economic impacts of this 


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1 In this context, the terms ‘‘recycling’’ and 

‘‘reclamation’’ are not necessarily synonymous. 

‘‘Recycling typically involves a series of activities, 

including storage and other handling steps that 

culminate in the production of a valuable end 

product of some kind. Thus, if materials need to be 

reclaimed in order to produce a valuable end 

product, the reclamation activity can be thought of 

as one step in the overall recycling process. See 

proposed § 261.4(g). Further explanation of the term 

‘‘reclamation’’ can be found in the preamble to the 

October 2003 proposal at 68 FR 61564. 

2EPA has proposed to limit this exclusion to 

hazardous secondary materials reclaimed within 

the United States or its territories because it does 

not have sufficient information related to recycling 

activities outside of the United States or its 

territories to make the same general finding that it 

has made for materials legitimately recycled under 

the control of the generator. However, as noted 

below, EPA requests comment on whether the 

Agency should promulgate a conditional exclusion 

for exported hazardous secondary material 

otherwise meeting the criteria for this rule. 

rule (with impact uncertainty factors), is 

presented in section XVI.A of this 

preamble and in the ‘‘Economics 

Background Document’’ available in the 

docket for this rulemaking. 

B. What To Consider When Preparing 

Comments for EPA 

1. Submitting CBI. Do not submit this 

information to EPA through http:// 

www.regulations.gov or e-mail. Clearly 

mark part of all information that you 

claim to be CBI. For CBI information in 

a disk or CD–ROM that you mail to EPA, 

mark the outside of the disk or CD–ROM 

as CBI and then identify electronically 

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 copy 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 in accordance with 

procedures set forth in 40 CFR Part 2. 

2. Tips for Preparing Your Comments. 

When submitting comments, remember 

to: 

• Identify 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 

by referencing a Code of Federal 

Regulations (CFR) part or Section 

number. 

• Explain why you agree or disagree; 

suggest alternatives and substitute 

language for your requested changes. 

• Describe any assumptions and 

provide any technical information and/ 

or data that you used. 

• If estimating 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 deadline identified 

above. 

Preamble Outline 

I. Statutory Authority. 

II. What Is the Scope of This Supplemental 

Proposal? 

III. What Is the Intent of This Supplemental 

Proposal? 

IV. How Does This Supplemental Proposal 

Relate to the October 2003 Proposal? 

V. How Is Hazardous Waste Recycling 

Currently Regulated? 

VI. What Is the History of Recent Court 

Decisions on the Definition of Solid 

Waste? 

VII. How Does the Concept of Discard Relate 

to These Proposed Exclusions? 

VIII. Recycling Studies. 

IX. Exclusion for Hazardous Secondary 

Materials That Are Legitimately 

Reclaimed Under the Control of the 

Generator: Proposed 40 CFR 260.10, 

261.2(a)(1), 261.2(a)(2), 261.2(c)(3), 

261.4(a)(23). 

X. Conditional Exclusion for Hazardous 

Secondary Materials That Are 

Transferred for the Purpose of 

Reclamation: Proposed 40 CFR 

261.2(c)(3), 261.4(a)(24), 261.4(a)(25). 

XI. Legitimacy: Proposed 40 CFR 261.2(g). 

XII. Petitions for Non-waste Classification: 

Proposed 40 CFR 260.30(d), 260.30(e), 

260.30(f), 260.34. 

XIII. Effect of This Proposal on Other 

Programs. 

XIV. Measurement of the Performance 

Outcomes of This Supplemental 

Proposal. 

XV. How Would These Proposed Regulatory 

Changes Be Administered and Enforced 

in the States? 

XVI. How Has EPA Fulfilled the 

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 by 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. 

II. What Is the Scope of This 

Supplemental Proposal? 

In today’s notice, EPA is proposing to 

revise the definition of solid waste in 

order to exclude from regulation under 

Subtitle C of RCRA certain hazardous 

secondary materials sent for recycling. 

We are also seeking comment on certain 

changes to the proposed regulatory 

factors for determining whether 

recycling is legitimate. The Agency first 

proposed changes to the definition of 

solid waste, as well as regulatory criteria 

for legitimacy, on October 28, 2003 (68 

FR 61581–61588). 

The scope of the regulatory changes 

proposed today are as follows: 

A. Exclusion for Materials That Are 

Legitimately Reclaimed Under the 

Control of the Generator in Non-LandBased Units 

This provision, with regulatory 

language proposed in 40 CFR 

261.2(a)(2)(ii), would exclude certain 

hazardous secondary materials (i.e., 

spent materials, listed sludges, and 

listed byproducts) that are generated 

and legitimately reclaimed1 within the 

United States or its territories 2 and are 

only handled in non-land-based units 

(e.g., tanks, containers, containment 

buildings). The exclusion would apply 

to hazardous secondary material that is 

reclaimed under the control of the 

generator, if the materials are not 

speculatively accumulated. In addition, 

EPA is proposing to include in 40 CFR 

260.42 a requirement that the generator 

would be required to submit a one-time 

notification to EPA or the authorized 

state. Hazardous secondary material 

would be considered ‘‘under the control 

of the generator’’ under the following 

circumstances: 

(1) It is generated and then reclaimed 

at the generating facility; or 

(2) It is generated and reclaimed by 

the same company, if the generator 

certifies that it is under the same 

ownership as the reclaimer and that the 

owner company has acknowledged 

responsibility for safe management of 

the hazardous secondary materials; or 

(3) It is generated and reclaimed 

pursuant to a written agreement 

between a tolling contractor and batch 

manufacturer, if the tolling contractor 

retains ownership of, and responsibility 

for, the hazardous secondary materials 

that are generated during the course of 

the manufacture. 

This proposed exclusion would not 

include recycling practices that involve 

discard of materials. These practices 

include recycling of inherently wastelike materials (40 CFR 261.2(d)), 

recycling of 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)), 

and burning of materials for energy 

recovery or used to produce a fuel or 

otherwise contained in fuels (40 CFR 

261.2(c)(2)). This proposed exclusion is 

further described in section IX of this 


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14174 Federal Register / Vol. 72, No. 57 / Monday, March 26, 2007 / Proposed Rules 

preamble. We note that the Agency is 

considering expanding its regulations 

for comparable fuels in a separate 

rulemaking. 

B. Exclusion for Materials That Are 

Legitimately Reclaimed Under the 

Control of the Generator in Land-Based 

Units 

This provision, with regulatory 

language proposed in 40 CFR 

261.4(a)(23), would exclude certain 

hazardous secondary materials that are 

generated and legitimately reclaimed 

within the United States or its territories 

and handled in land-based units (e.g., 

surface impoundments, waste piles). 

This provision requires that hazardous 

secondary materials managed in landbased units must be contained in such 

units. 

C. Conditional Exclusion for Materials 

That Are Transferred for the Purpose of 

Reclamation 

This conditional exclusion, with 

regulatory language proposed in 40 CFR 

261.4(a)(24), (hereinafter referred to as 

the ‘‘transfer-based exclusion’’) would 

apply to hazardous secondary materials 

(i.e., spent materials, listed sludges, and 

listed byproducts) that are generated 

and subsequently transferred to a 

different person or company for the 

purpose of reclamation. As long as the 

conditions to the exclusion are satisfied, 

the hazardous secondary materials 

would not be subject to Subtitle C 

regulation. The conditions are intended 

to ensure that such materials are 

handled as commodities rather than 

wastes. They will also help guarantee 

that protection of human health and the 

environment will not be compromised 

in the absence of hazardous waste 

regulatory requirements for these 

materials. It is important to note that 

when hazardous secondary materials are 

generated and reclaimed within the 

United States pursuant to a written 

agreement between a tolling contractor 

and a batch manufacturer as defined in 

proposed 40 CFR 260.10, these materials 

would be subject to the requirements of 

proposed 40 CFR 261.2(a)(ii) or 

261.4(a)(23) rather than the more 

extensive requirements of proposed 40 

CFR 261.4(a)(24). 

If any of the hazardous secondary 

materials under proposed 40 CFR 

261.4(a)(24) are generated and then 

exported to another country for 

reclamation, we are also proposing that 

the exporter notify the receiving country 

of the export through EPA and obtain 

consent from that country before 

shipment of the material. This 

requirement is proposed to be codified 

in 40 CFR 261.4(a)(25). Like the 

previously discussed exclusion for 

hazardous secondary materials recycled 

under the control of the generator, this 

exclusion would not cover recycling of 

inherently waste-like materials, 

recycling of materials that are used in a 

manner constituting disposal, and 

burning of materials for energy recovery. 

The proposed exclusion is described in 

more detail in section X of this 

preamble. 

D. Petition Process for Non-Waste 

Determinations 

In addition to the exclusions 

discussed above, the Agency also is 

proposing a petition process, with 

regulatory language found in proposed 

40 CFR 260.30(d), 260.30(e), 260.30(f), 

and 260.34, for obtaining a case-specific 

non-waste determination for certain 

hazardous secondary materials that are 

recycled. This process would allow a 

petitioner to receive a formal 

determination from the Agency that its 

hazardous secondary material is clearly 

not ‘‘discarded’’ and therefore is not a 

solid waste. The procedure would allow 

EPA or the authorized state to take into 

account the particular fact pattern of the 

recycling and to determine that the 

hazardous secondary material in 

question is not a solid waste without 

imposing additional requirements. The 

determination would be available to 

petitioners who could demonstrate that 

their hazardous secondary materials 

were recycled in a continuous industrial 

process, or that the materials were 

indistinguishable in all relevant aspects 

from a product or intermediate, or that 

the materials were under the control of 

the generator via a tolling arrangement 

or similar contractual arrangement. The 

petition process for the non-waste 

determinations would be the same as 

that for the variances from the definition 

of solid waste found in 40 CFR 261.31. 

This process and the criteria for making 

these determinations, are described in 

section XII of this preamble. 

E. Legitimacy 

On October 28, 2003 (68 FR 61581–

61588), EPA extensively discussed our 

position on the relevance of legitimacy 

to hazardous waste recycling in general 

and to the redefinition of solid waste 

specifically. We proposed to codify in 

the RCRA regulations four general 

criteria to be used in determining 

whether recycling of hazardous 

secondary materials is legitimate. In 

today’s action, we are proposing 

changes to the proposed legitimacy 

criteria and asking for public comment 

on these revisions. The changes consist 

of a restructuring of the proposed 

criteria, called factors in this proposal, 

by making two of these factors 

mandatory and two non-mandatory 

considerations, and providing further 

guidance and clarification on how the 

economics of recycling should be 

considered in making legitimacy 

determinations. The changes are 

described in section XI of this preamble. 

III. What Is the Intent of This 

Supplemental Proposal? 

Today’s supplemental proposal would 

revise and clarify the RCRA definition 

of solid waste as it pertains to certain 

types of hazardous secondary materials 

that would not be considered wastes 

subject to regulation under RCRA 

Subtitle C. This notice builds on our 

October 28, 2003 proposal (68 FR 

61558) which was initiated partially in 

response to decisions by the United 

States Court of Appeals for the DC 

Circuit, which, taken together, have 

provided the Agency with additional 

direction in this area. 

This proposal represents an important 

restructuring of the RCRA regulations 

that distinguish wastes from non-waste 

materials for RCRA purposes, and that 

ensure environmental protections over 

hazardous secondary materials recycling 

practices. As such, it also is an 

opportunity for the Agency to clarify in 

a regulatory context the concept of 

‘‘legitimate recycling,’’ which has been 

and is a key component of RCRA’s 

regulatory program for recycling, but 

which to date has been implemented 

without regulatory criteria. Today’s 

supplemental proposal thus includes 

specific regulatory provisions for 

determining when hazardous secondary 

materials are recycled legitimately. 

Today’s supplemental proposal is deregulatory in nature because certain 

recyclable materials that have heretofore 

been subject to the hazardous waste 

regulations would no longer be 

regulated as hazardous waste. The 

factors to consider for legitimate 

recycling codify existing principles 

without increasing regulation. This 

proposal is not intended to bring new 

wastes into the RCRA regulatory system. 

By removing unnecessary hazardous 

waste regulatory controls over certain 

recycling practices, and by providing 

more explicit criteria for determining 

the legitimacy of recycling practices in 

general, EPA expects that this proposal 

will encourage the safe, beneficial 

recycling of hazardous secondary 

materials. This regulatory initiative is 

thus consistent with the Agency’s 

longstanding policy of encouraging the 

recovery and reuse of valuable resources 

as an alternative to land disposal, while 

at the same time maintaining protection 

of human health and the environment. 


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Federal Register / Vol. 72, No. 57 / Monday, March 26, 2007 / Proposed Rules 14175 

3The Agency’s long-term ‘‘vision’’ of the future of 

the RCRA program is discussed in the document 

‘‘Beyond RCRA: Prospects for Waste and Materials 

Management in the Year 2020,’’ which is available 

on the Agency’s Web site http://www.epa.gov/ 

epaoswer/osw/vision.htm. 

It also is consistent with one of the 

primary goals of the Congress in 

enacting the RCRA statute (as evidenced 

by its name), and with the Agency’s 

vision of how the RCRA program could 

evolve over the longer term to promote 

sustainability and more efficient use of 

resources.3

IV. How Does This Supplemental 

Proposal Relate to the October 2003 

Proposal? 

On October 28, 2003 (68 FR 61558), 

the Agency proposed to exclude from 

the definition of solid waste any 

material generated and reclaimed in a 

continuous process within the same 

industry, provided the reclamation was 

legitimate. ‘‘Same industry’’ was 

defined as industries sharing the same 

4-digit North American Industry 

Classification System (NAICS) code. 

The basis for that exclusion was the 

holding in American Mining Congress v. 

EPA (‘‘AMC I’’), 824 F.2d 1177 (DC Cir. 

1987)) that materials destined for 

beneficial reuse of recycling in a 

continuous process by the generating 

industry are not discarded. In order to 

be eligible for the exclusion, the 

hazardous secondary material could not 

be speculatively accumulated under 

261.1(c)(8). In addition, the generator of 

such materials would be required to 

submit a one-time notification to EPA or 

the authorized State with contact 

information, the type of material that 

would be excluded, and the industry 

that generated the material. In the 

October 2003 proposal, the Agency also 

proposed to codify in the RCRA 

regulations four criteria to be used in 

determining whether recycling of 

hazardous secondary material was 

legitimate. We also solicited comment 

on a broader conditional exclusion from 

RCRA regulation for essentially all 

hazardous secondary materials that are 

legitimately recycled. For a discussion 

of public comments received on our 

proposed exclusion, see section IX of 

this preamble. 

After evaluating comments received 

on the October 2003 proposal and 

conducting an independent analysis, 

EPA decided to restructure its approach. 

Following the decision of the DC Circuit 

Court in Association of Battery 

Recyclers v. EPA (‘‘ABR’’)( 208 F.3d 

1047 (DC Cir. 2000), EPA has decided to 

examine the principles behind the 

court’s holdings on the definition of 

solid waste, rather than trying to fit 

materials into specific fact patterns 

addressed by the court. EPA is therefore 

proposing (1) an exclusion for 

hazardous secondary materials that are 

generated and then reclaimed under the 

control of the generator; (2) a 

conditional exclusion for hazardous 

secondary materials that are generated 

and then transferred to another person 

for the purpose of reclamation; and (3) 

a petition process for obtaining a casespecific non-waste determination for 

certain hazardous secondary materials 

that are recycled. Today’s notice also 

proposes a restructuring of the 

previously proposed legitimacy criteria 

and further clarification and guidance 

on how the economics of the recycling 

transaction should be considered in 

making legitimacy determinations. A 

detailed description of today’s proposed 

regulatory changes and the reasons for 

not finalizing the October 2003 proposal 

are discussed in sections IX, X, XI, and 

XII of this preamble. 

V. How Is Hazardous Waste Recycling 

Currently Regulated? 

The basic regulatory provisions for 

defining ‘‘solid wastes’’ and ‘‘hazardous 

wastes’’ under RCRA are found in part 

261 of Title 40 of the Code of Federal 

Regulations (CFR). To be subject to 

RCRA’s hazardous waste regulatory 

program, a material must be a solid 

waste that is also a hazardous waste. A 

solid waste is a hazardous waste if it is 

explicitly listed as such (in subpart D of 

part 261), or if it exhibits one or more 

of the hazardous characteristics (as 

specified in subpart C of part 261). 

In general, hazardous wastes are 

subject to RCRA’s full ‘‘cradle to grave’’

regulatory system from the time they are 

generated to the time that they are 

ultimately disposed. However, 

hazardous secondary materials often can 

be recycled instead of being disposed, 

which can change how those wastes are 

regulated. The ‘‘definition of solid 

waste’’ regulations in part 261 in effect 

separate recyclable hazardous secondary 

materials into two broad categories—

those that are classified as solid wastes 

when recycled, and are therefore subject 

to regulation under Subtitle C of RCRA 

if they are listed or characteristic 

hazardous wastes, and those that are not 

considered solid wastes when they are 

recycled, and thus are not regulated. It 

should be understood that the term 

‘‘hazardous secondary material’’ as it is 

used in today’s rule and preamble 

therefore refers to both categories of 

recyclable materials; that is, materials 

that are regulated as hazardous wastes 

when recycled, and materials that are 

not considered wastes when recycled. 

Hazardous secondary materials that 

are currently not regulated as wastes 

when they are recycled include, for 

example, those which are used or 

reused directly as effective substitutes 

for commercial products, and those 

which can be used as ingredients in an 

industrial process, provided the 

materials are not being reclaimed. See 

40 CFR 261.2(e). In essence, EPA 

considers these types of recycling 

practices to be more akin to normal 

industrial production rather than waste 

management. 

In contrast, in some recycling 

practices, the hazardous secondary 

material cannot be used as is and must 

be significantly processed before it can 

be reused in a manner similar to 

products in commerce. In these cases, 

EPA has found that the material may be 

more ‘‘waste-like’’ and the hazardous 

secondary materials therefore have been 

regulated as hazardous wastes. One type 

of recycling that falls within this 

category and that is especially relevant 

to this rule is reclamation of certain 

types of hazardous secondary materials. 

Reclamation involves the processing of 

hazardous secondary materials in some 

way in order so that they can be used 

or reused. See 40 CFR 261.1(c)(4) and 40 

CFR 261.2(c)(3). An example of 

reclamation is processing of a spent 

solvent to restore its solvent properties 

before it is suitable for reuse as a 

solvent. As explained elsewhere in 

today’s preamble, this supplemental 

proposal would reexamine the 

regulatory status of these hazardous 

secondary materials and de-regulate a 

specific subset of these materials that 

are recycled by being reclaimed. 

In the existing Part 261 regulations, 

EPA identified other types of recycling 

practices that are fully regulated 

because, we concluded, they involve 

discard of materials. These practices 

include recycling of ‘‘inherently wastelike’’ materials (40 CFR 261.2(d)), 

recycling of 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)) and ‘‘burning of 

materials for energy recovery’’ or ‘‘used 

to produce a fuel or otherwise contained 

in fuels’’ (40 CFR 261.2(c)(2)). Today’s 

supplemental proposal is not intended 

to affect how these recycling practices 

are regulated. 

The current regulations also provide 

certain specific exemptions and 

exclusions from the definition of solid 

waste for particular recycling practices. 

For example, pulping liquors from 

paper manufacturing that are reclaimed 

in a pulping liquor recovery furnace and 

then reused in the pulping process are 


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excluded from regulation under 40 CFR 

261.4(a)(6). In some cases, these 

exclusions specify certain conditions 

that must be met in order to qualify for 

and maintain the excluded status of the 

recycled material. An example of such 

a ‘‘conditional exclusion’’ is the one 

provided in 40 CFR 261.4(a)(9) for spent 

wood preserving solutions that are 

reclaimed and reused. EPA is proposing 

that hazardous secondary materials that 

are currently excluded with specific 

requirements or conditions should be 

required to continue to meet those 

requirements (e.g., the drip pad 

requirements for the wood preserving 

exclusion). In addition, recycling of 

such materials at new facilities, or at 

existing facilities that are not currently 

operating under the terms of an existing 

exclusion, would also be subject to the 

existing applicable regulatory exclusion, 

rather than today’s proposed exclusions. 

For a fuller discussion of this issue, see 

section XIII of this preamble. In that 

section, we solicit comment on allowing 

regulated entities to choose which 

exclusion they would be subject to in 

cases where more than one exclusion 

could apply. 

VI. What Is the History of Recent Court 

Decisions on the Definition of Solid 

Waste? 

A. Background 

RCRA gives EPA the authority to 

regulate the disposal of ‘‘solid wastes’’

under its non-hazardous waste program. 

See, e.g., RCRA sections 1008(a), 4001 

and 4004(a). RCRA also gives EPA 

authority to regulate hazardous wastes. 

See, e.g., RCRA sections 3001–3004. 

‘‘Hazardous wastes’’ are the subset of 

solid wastes that present threats to 

human health and the environment. See 

section 1004(5). EPA also may address 

solid and hazardous wastes under its 

endangerment authorities in section 

7003. (Similar authorities are available 

for citizen suits under section 7002.) 

Materials that are not solid wastes are 

generally not subject to regulation under 

RCRA Subtitle C. Thus, the definition of 

‘‘solid waste’’ plays a key role in 

defining the scope of EPA’s authorities 

under RCRA. 

The statute defines ‘‘solid waste’’ as 

‘‘* * * any 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 

operations, and from community 

activities * * *’’ (RCRA Section 1004 

(27) (emphasis added)). In its RCRA 

hazardous waste regulations, EPA has 

historically defined certain hazardous 

secondary materials destined for 

recycling as ‘‘waste,’’ while excluding 

others. 

Since 1980, EPA has interpreted 

‘‘solid waste’’ under its Subtitle C 

regulations to encompass both materials 

that are destined for final, permanent 

placement in disposal units, as well as 

some materials that are destined for 

recycling. 45 FR 33090–95 (May 19, 

1980); 50 FR 604–656 (Jan. 4, 1985) (see 

especially pages 616–618). EPA has 

offered three arguments in support of 

this approach: 

• The statute and the legislative 

history suggest that Congress expected 

EPA to regulate as solid and hazardous 

wastes certain materials that are 

destined for recycling (see 45 FR 33091, 

citing numerous sections of the statute 

and U.S. Brewers’ Association v. EPA, 

600 F.2d 974 (DC Cir. 1979); 48 FR 

14502–04 (April 3, 1983); and 50 FR 

616–618). 

• Hazardous secondary materials 

stored or transported prior to recycling 

have the potential to present the same 

types of threats to human health and the 

environment as hazardous wastes stored 

or transported prior to disposal. In fact, 

EPA found that recycling operations 

have accounted for a number of 

significant damage incidents. For 

example, materials destined for 

recycling were involved in one-third of 

the first 60 filings under RCRA’s 

imminent and substantial endangerment 

authority, and 20 of the initial sites 

listed under CERCLA. (48 FR 14474, 

April 4, 1983.) Congress also cited some 

damage cases which can be interpreted 

to involve recycling. (H.R. Rep. 94–

1491, 94th Cong., 2d Sess., at 17, 18, 

22). More recent data (i.e., information 

on damages occurring after 1982) 

included in the rulemaking docket for 

today’s supplemental proposal 

corroborate the fact that recycling 

operations can result in significant 

damage incidents. (See section IV.B.2 of 

today’s preamble.) 

• Excluding all hazardous secondary 

materials destined for recycling would 

allow materials to move in and out of 

the hazardous waste management 

system depending on what any person 

handling the material intended to do 

with it. This seems inconsistent with 

the mandate to track hazardous wastes 

and control them from ‘‘cradle to 

grave.’’

EPA has interpreted the statute to 

confer jurisdiction over at least certain 

hazardous secondary materials destined 

for recycling. 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 

endangerment and informationgathering authorities. See 40 CFR 

261.1(b) and Connecticut Coastal 

Fishermen’s Association v. Remington 

Arms Co., 989 F.2d 1305, 1315 (2d Cir. 

1993), holding 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 (DC Cir. 1998).) 

Under its current Subtitle C 

regulations, EPA classifies as solid 

wastes some—but not all—hazardous 

secondary materials that are recycled by 

‘‘reclamation.’’ The regulations define 

‘‘spent materials’’ as being ‘‘discarded’’

if they are destined for reclamation. 

However, ‘‘commercial chemical 

products’’ are not defined as 

‘‘discarded’’ when reclaimed. In 

addition, byproducts and sludges are 

defined as ‘‘discarded’’ when reclaimed 

on a case-by-case basis. That is, EPA 

considers these materials to be 

‘‘discarded’’ when they are specifically 

listed as a hazardous waste at 40 CFR 

261 Subpart D. See Table 1 to 40 CFR 

261.2. EPA has also promulgated three 

exceptions from the Subtitle C 

definition for materials destined for 

reclamation. See 260.31(b) and (c); 40 

CFR 261.4(a)(8). 

Finally, EPA has always asserted that 

materials are not excluded from its 

jurisdiction simply because someone 

claims that they will be recycled. EPA 

has consistently considered hazardous 

secondary materials destined 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 638–39 (Jan. 4, 1985). The 

U.S. Court of Appeals for the DC 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 (DC 

Cir. 2000). 

B. A Series of DC Circuit Court 

Decisions 

Trade associations representing 

mining and oil refining interests 

challenged EPA’s 1985 regulatory 

definition of solid waste. In 1987, the 

DC Circuit held that EPA exceeded its 

authority ‘‘in 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 

(DC Cir. 1987). Although the Court 

clearly articulated this concept, it did 

not specify which portions of the rules 

exceeded EPA’s authority. It more 


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generally ‘‘granted the petition for 

review.’’

The Court held that certain of the 

materials EPA was seeking to regulate 

were not ‘‘discarded materials’’ under 

section 1004(27). After reviewing 

numerous statutory provisions and 

portions of the legislative history, the 

Court held that Congress used the term 

‘‘discarded’’ in its ordinary sense, to 

mean ‘‘disposed of’’ or ‘‘abandoned 824 

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 by the 

generating industry itself (because they) 

are not yet 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 use of a 

conflicting 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 the same time, the Court did not 

hold that no recycled materials could be 

discarded. The Court mentioned at least 

two examples of recycled materials that 

EPA properly considered within its 

statutory jurisdiction, 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 

recycled as part of a waste management 

program are within EPA’s jurisdiction. 

824 F.2d at 1179. Subsequent decisions 

by the DC Circuit also indicate that 

some materials destined for recycling 

are ‘‘discarded’’ and therefore within 

EPA’s jurisdiction. 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 (DC Cir. 

1990). The Court held that it is 

reasonable for EPA to consider as 

discarded (and solid wastes) listed 

wastes managed in units that are part of 

wastewater treatment units, especially 

where it is not clear that the industry 

actually reuses the materials. (‘‘AMC 

II’’), 907 F.2d 1179 (DC Cir. 1990). Also, 

the Court found that EPA potentially 

had jurisdiction over oil-bearing 

wastewaters recycled at petroleum 

refineries, although in the rule under 

review EPA failed to provide a rational 

basis for asserting jurisdiction. 

American Petroleum Institute v. EPA 

(‘‘API II ’’), 216 F.3d 50, 57–58 (DC Cir. 

2000). 

It also is worth noting that two other 

Circuits also have held that EPA has 

authority over at least some materials 

destined for reclamation rather than 

final discard. The U.S. Court of Appeals 

for the 11th Circuit found that ‘‘[i]t is 

unnecessary to read into the term 

‘discarded’ a congressional intent that 

the waste in question must finally and 

forever be discarded.’’ U.S. v. ILCO, 996 

F.2d 1126, 1132 (11th Cir. 1993) 

(finding that used lead batteries sent to 

a reclaimer have been ‘‘discarded once’’

by the entity that sent the battery to the 

reclaimer). 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). 

Considering all of these decisions 

(except the API case decided in 2000), 

in 1998, EPA promulgated a rule in 

which EPA claimed Subtitle C 

jurisdiction over 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 types of mineral processing 

hazardous secondary materials destined 

for reclamation. EPA imposed a 

condition prohibiting land-based storage 

prior to reclamation because it 

considered hazardous secondary 

materials from the mineral processing 

industry that were stored on the land to 

be part of the waste disposal problem 

(63 FR at 28581). The conditional 

exclusion decreased regulation over 

spent materials stored prior to 

reclamation, but increased regulation 

over by-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 materials that are 

removed from a production process for 

storage are not ‘‘immediately reused,’’

and therefore are ‘‘discarded’’ (63 FR at 

28580). 

The mining industry challenged the 

rule, and the DC Circuit vacated the 

provisions that expanded jurisdiction 

over characteristic by-products and 

sludges destined for reclamation. 

Association of Battery Recyclers v. EPA 

(‘‘ABR’’), 208 F.3d 1047 (DC Cir. 2000). 

The Court held that it had already 

resolved the issue presented here in its 

opinion in AMC I, where it found that 

‘‘* * * Congress unambiguously 

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. 

It explained that the intervening API I 

and AMC II decisions had not narrowed 

the holding in AMC I. 208 F.3d at 1054–

1056. 

At the same time, 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 

for 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, 350 F.3d 

1263 (DC Cir. 2003), the Court upheld 

an EPA rule that excludes from the 

definition of solid waste hazardous 

secondary materials used to make zinc 

fertilizers, and the fertilizers 

themselves, so long as the recycled 

materials meet certain handling, storage 

and 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 

Recycled Hazardous Secondary 

Materials’’ (‘‘Fertilizer Rule’’), (67 FR 

48393 (2002)). EPA determined that if 

these conditions are met, the recycled 

materials have not been discarded. The 

conditions apply to a number of 

recycled materials not produced in the 

fertilizer production industry, including 

certain zinc-bearing hazardous 

secondary materials such as brass 

foundry dusts. 

EPA’s reasoning was that market 

participants, consistent with the EPArequired conditions in the rule, would 

treat the exempted materials more like 

valuable products than like negativelyvalued wastes and, thus, would manage 

them in ways inconsistent with discard. 

In addition, the fertilizers derived from 

these recycled feedstocks are chemically 

indistinguishable from analogous 

commercial products made from raw 

materials. 350 F.3d at 1269. The court 

upheld the rule based on EPA’s 

explanation that market participants 

manage materials in ways inconsistent 

with discard, and the fact that the levels 

of contaminants in the recycled 

fertilizers were ‘‘identical’’ to the 

fertilizers made with raw materials. The 

court held that this interpretation of 

‘‘discard’’ was reasonable and consistent 

with the statutory purpose. The court 


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noted that the identity principle was 

defensible because the differences in 

health and environmental risks between 

the two types of fertilizers are so slight 

as to be substantively meaningless. 

However, the Court specifically stated 

that it ‘‘need not consider whether a 

material could be classified as a nondiscarded exclusively on the basis of the 

market-participation theory.’’ 350 F.3d 

at 1269. The court only determined that 

the combination of market participants’

treatment of the materials, EPA required 

management standards and the 

‘‘identity principle’’ are a reasonable set 

of tools to establish that the recycled 

secondary materials and fertilizers are 

not discarded. 

C. 2003 Proposed Revisions to the 

Definition of Solid Waste 

As a result of the court decision in 

ABR to vacate the provisions in the May 

1998 final rule that increased regulation 

of characteristic by-products and 

sludges from mineral processing, EPA 

promulgated a final rule removing from 

the Code of Federal Regulations the 

byproduct and sludge provisions (67 FR 

11251 (Mar. 13, 2002)). Later, prompted 

by concerns articulated in the various 

Court opinions up to the ABR decision, 

EPA issued the October 2003 notice, 

which proposed that material generated 

and reclaimed in a continuous process 

within the same industry is not 

discarded for purposes of Subtitle C, 

provided that the recycling process is 

legitimate. However, for the reasons 

described elsewhere in today’s notice, 

we are proposing different types of 

exclusions from the definition of solid 

waste in this supplemental proposal 

that we believe more directly consider 

whether particular materials are not 

considered ‘‘discarded’’, and are not 

solid and hazardous wastes subject to 

regulation under Subtitle C of RCRA. 

The October 2003 proposal and how it 

relates to today’s supplemental proposal 

is further discussed elsewhere in today’s 

preamble. 

VII. How Does the Concept of Discard 

Relate to These Proposed Exclusions? 

The concept of ‘‘discard’’ is the 

central organizing idea behind today’s 

supplemental proposal, which reflects 

the fundamental logic of the RCRA 

statute. As stated in RCRA Section 

1004(27), ‘‘solid waste’’ is defined as 

‘‘* * * any garbage, refuse, sludge from 

a waste treatment plant, or air pollution 

control facility and other discarded 

material * * * resulting from industrial, 

commercial, mining and agricultural 

activities* * *’’ Therefore, in the 

context of this supplemental proposal, a 

key issue is the circumstances under 

which a material that is recycled by 

reclamation is or is not discarded. 

In the series of decisions discussed 

above relating to the RCRA definition of 

solid waste, the Court of Appeals for the 

DC Circuit has consistently cited a plain 

language definition of discard, as 

meaning ‘‘disposing, abandoning or 

throwing away.’’ EPA believes that this 

is a workable and logical definition of 

the term, and the underlying logic of 

today’s proposed exclusions is 

consistent with this definition. 

The basic rationale that EPA is 

applying in this case differentiates 

between recycled hazardous secondary 

materials over which the generator 

maintains control and recycled 

hazardous secondary materials over 

which the generator relinquishes 

control. If the generator maintains 

control over the recycled hazardous 

secondary material and it is legitimately 

recycled under the standards 

established in this proposal and the 

material is not speculatively 

accumulated within the meaning of 

EPA’s regulations, the hazardous 

secondary material is not discarded. 

This is because the material is being 

treated as a valuable commodity rather 

than as a waste. By maintaining control 

over, and potential liability for, the 

recycling process, the generator ensures 

that the materials are not discarded. See 

ABR 208 F.3d at 1051 (‘‘Rather than 

throwing these materials [destined for 

recycling] away, the producers saves 

them; rather than abandoning them, the 

producer reuses them.’’). However, 

when the hazardous secondary 

materials are managed in land-based 

units (e.g., waste piles, surface 

impoundments, etc), the hazardous 

secondary materials must be contained, 

or they may be considered discarded, 

even if they remain under the control of 

the generator. While placement on the 

land would not in itself constitute 

discard, when hazardous secondary 

materials are not being managed as a 

valuable product and, as a result, a 

significant release occurs, such 

materials would be considered 

discarded. Further discussion of these 

concepts appears in section IX of this 

preamble. 

In those cases, however, where 

generators of hazardous secondary 

materials do not re-use or recycle the 

materials themselves, it often may be a 

sound business decision to ship the 

material to be recycled to a commercial 

facility or another manufacturer in order 

to avoid the costs of disposing of the 

material. In such situations, the 

generator has relinquished control of the 

hazardous secondary material and the 

entity receiving such materials may not 

have the same incentives to manage the 

hazardous secondary material as a 

useful product. Accordingly, the Agency 

believes that conditions are needed for 

the Agency to determine that this 

material is not discarded. However, if 

the recycler legitimately recycles the 

hazardous secondary material, it is not 

regulated as a solid waste, provided 

certain additional conditions are met. 

Further discussion of the Agency’s 

rationale for this concept appears in 

section X.A. of this preamble. 

This is the general logic we have used 

in developing the exclusions in today’s 

supplemental proposal. The proposed 

exclusion for hazardous secondary 

materials that are recycled under the 

control of the generator is based on the 

notion that as long as the generator has 

control over the recycling process, has 

chosen to legitimately reclaim it within 

the United States or its territories, 

retains liability in the event that the 

hazardous secondary materials (be they 

the materials that were generated, 

residuals from a reclamation process, or 

both) are somehow released into the 

environment, these materials are not 

discarded. In addition, if the materials 

are managed in a land-based unit, the 

generator must ensure that the materials 

are contained. Of course, if such 

hazardous secondary materials are 

released into the environment and are 

not recovered in a timely manner, these 

materials have been discarded and the 

generator is subject to all applicable 

federal and state regulations, and 

applicable cleanup authorities. The 

‘‘broader’’ exclusion for materials that 

are transferred by the generator to 

another person or company for 

reclamation is based on the idea 

subsequent activities are more likely to 

involve discard, given that the generator 

has relinquished control of the 

hazardous secondary material, and 

additional conditions are needed for the 

Agency to determine that these 

materials are not discarded. 

VIII. Recycling Studies 

A. Purpose of Studies 

In response to the October, 2003 

proposal, a number of commenters 

criticized the Agency specifically for not 

having conducted a thorough study of 

the potential impact of the proposed 

regulatory changes. These commenters 

expressed the general concern that 

deregulating hazardous secondary 

materials that are reclaimed in the 

manner proposed could result in 

mismanagement of these materials, and 

thus could create new cases of 

environmental damage that would 

require remedial action under federal or 


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state authorities. Some of the 

commenters further cited a number of 

examples of environmental damage that 

were attributed to hazardous material 

recycling, including a number of sites 

listed on the Superfund National 

Priorities List (NPL). 

However, a number of other 

commenters expressed the view that the 

great majority of these cases of 

recycling-related environmental 

problems occurred before RCRA, 

CERCLA or other environmental 

programs were established in the early 

1980s. These commenters further 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 

recyclable materials and recycling 

residuals. Several commenters further 

noted that because of these 

developments, industrial recycling 

practices have changed substantially 

since the early 1980s, and present day 

generators and recyclers are much better 

environmental stewards than in the preRCRA/CERCLA era. Thus, they argued, 

cases of ‘‘historical’’ recycling-related 

environmental damage are not 

particularly relevant or instructive with 

regard to modifying the current RCRA 

hazardous waste regulations for 

hazardous material recycling. 

In light of these comments and in 

deliberating on how to proceed with 

this rulemaking effort, the Agency 

decided that additional information on 

hazardous material recycling would 

benefit the regulatory decision-making 

process, and would provide 

stakeholders with a clearer picture of 

the hazardous material recycling 

industry in this country. Accordingly, 

the Agency examined three basic issues 

that we believed were of particular 

importance to informing this 

rulemaking effort: 

• How do responsible generators and 

recyclers of hazardous secondary 

materials ensure that recycling is done 

in an environmentally safe manner? 

• To what extent have hazardous 

secondary material recycling practices 

resulted in environmental problems in 

recent years, and why? 

• Are there certain economic forces or 

incentives specific to hazardous 

secondary material recycling that can 

explain why environmental problems 

can sometimes originate from such 

recycling activities? 

Reports documenting these studies 

are in the administrative record for this 

rulemaking, under the following titles: 

• ‘‘An Assessment of Current Good 

Practices for Recycling of Hazardous 

Secondary Materials’’

• ‘‘An Assessment of Environmental 

Problems Associated With Recycling of 

Hazardous Secondary Materials’’

• ‘‘Potential Effects of Market Forces 

on the Management of Hazardous 

Recyclable Materials’’

The findings of these background 

studies have informed many of the 

Agency’s policy decisions in developing 

this regulatory proposal. However, it 

should be understood that these three 

reports are not definitive, peer-reviewed 

documents of a technical nature. We 

fully acknowledge that in some respects 

they may not paint a complete picture, 

or capture every detail of the subject 

matter that was examined. However, we 

believe that the information in the 

studies provides an important 

perspective on current recycling 

practices, and that it supports our policy 

direction in developing today’s 

supplemental proposal. EPA solicits 

comment on the policy and regulatory 

implications of the information in these 

studies. 

B. Results 

1. Successful Recycling Practices 

One of the studies that EPA has 

completed is an examination of what 

practices many generators and recyclers 

currently use to ensure that their 

hazardous secondary materials are 

recycled safely and responsibly. One 

purpose of this study was to provide the 

Agency and the rulemaking record with 

another angle from which to view the 

hazardous secondary material recycling 

industry. In addition, the results of this 

study suggest what kinds of regulatory 

controls might be appropriate for these 

hazardous secondary materials to 

determine that they are handled as 

commodities rather than wastes. The 

practices have helped the Agency 

develop elements of the supplemental 

proposal presented today. 

The Agency has long heard from 

various representatives of industry and 

other stakeholders that management of 

hazardous secondary materials has 

changed and improved since the 

inception of the RCRA hazardous waste 

regulations in the early 1980s and that 

these hazardous secondary materials are 

being managed much more carefully 

than they were historically. The 

successful recycling study examines 

which improved practices are used by 

many companies in the industry and the 

reasons the practices are implemented. 

To complete this study, EPA spoke 

with representatives from multiple 

organizations that regularly manage 

hazardous secondary materials, both for 

recycling and for treatment followed by 

disposal, and examined literature and 

publicly available information on the 

Internet focused on the subject of 

recycling of hazardous secondary 

materials. The study uses these sources 

to assemble an overall picture of the 

good practices that are currently in use 

by a number of companies. The full 

study can be found in the docket for 

today’s supplemental proposal, 

available at http://www.regulations.gov. 

The successful recycling study found 

two main drivers behind companies 

adopting responsible recycling practices 

in the management of their hazardous 

secondary materials. The first is concern 

of liability under the Comprehensive 

Environmental Response, 

Compensation, and Liability Act 

(CERCLA), also known as Superfund. 

Under CERCLA, a company can be held 

liable as an arranger for disposal for 

contamination caused by its materials 

sent for recycling at another facility’s 

site. Therefore, it is in that company’s 

best interest to ensure that the facility to 

which it sends its waste is not likely to 

become a Superfund site or to fall under 

CERCLA in the future either because of 

financial failure or because of bad 

materials management practices. The 

threat of Superfund liability was cited 

by many of the sources for the 

responsible recycling study as the main 

reason for the development of their 

audit programs in this area. 

The other reason for adoption of 

responsible recycling practices cited 

falls into a broad category of concerns 

about corporate responsibility and 

public relations. Many companies now 

have very public environmental policies 

and have implemented environmental 

management systems that are part of 

their programs for corporate 

responsibility. Although the real effects 

of these corporate policies are hard to 

gauge, EPA observed during this study 

that audit programs that were developed 

in response to CERCLA, now are 

maintained as part of a philosophy of 

corporate responsibility, which is part 

of the image a corporation sells to its 

customers. 

EPA found that responsible recycling 

practices used by generators and 

recyclers 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 material 

to determine whether the entity to 

which it is sending the hazardous 

secondary material is equipped to 

responsibly manage those materials 

without the risk of releases or other 

environmental damage. These recycling 

and waste audits of other companies’

facilities form a backbone of many of the 

transactions in the hazardous secondary 


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materials market. The second category 

of responsible recycling practices 

consists of the control practices that 

ensure responsible management of any 

given shipment of hazardous secondary 

material, such as the contracts under 

which the transaction takes place and 

the tracking systems in place that can 

inform a generator that its hazardous 

secondary material has been properly 

managed. 

In this study, EPA found that certain 

generators of hazardous secondary 

materials perform facility audits—a kind 

of environmental due diligence—on the 

facilities to which they send their 

materials. These audits can take many 

forms and can be of varying degrees of 

complexity, depending on the 

secondary material or, in some cases, on 

the size and sophistication of the 

generator. Although large companies are 

more likely to perform in-depth facility 

audits, possibly because they more 

frequently have environmental health 

and safety divisions coordinating audits 

or because they may have greater 

amounts of hazardous secondary 

materials they are sending off-site, some 

smaller companies are also performing 

some kind of audit on the recycling 

facility receiving the hazardous 

secondary material. 

The exact nature of each generator’s 

audit process will vary, but there are 

some common elements. Often the audit 

has two parts: (1) A remote screening 

audit during which the auditor 

examines the recycler’s compliance 

history and financial records and the 

recycler may fill out a questionnaire 

about its operations and facility and (2) 

a visit to the recycler’s facility, which 

can take anywhere from several hours to 

several days. Some common elements 

examined in both phases of an audit 

include: (1) Site history; (2) history of 

compliance with environmental 

requirements and permits; (3) general 

appearance and housekeeping at the 

facility; (4) description of process design 

and capability; (5) residuals 

management; (6) financial soundness of 

the recycler; and (7) possession of 

adequate pollution liability and general 

insurance. 

In addition to generators auditing 

recycling facilities, another example of 

a practice that EPA believes helps to 

ensure responsible management is the 

design of hazardous secondary materials 

recycling contracts and tracking systems 

to manage information about the 

location of a particular container and to 

document its eventual recycling. 

Recycling contracts are normal 

business practice and minimize the 

potential for recyclers to receive 

shipments of hazardous secondary 

materials that they are not equipped to 

recycle. In these contracts, the two 

parties can lay out specifications for the 

make-up of materials being shipped to 

the recycler and describe the protocol 

for actions taken if a material not 

meeting these specifications arrives at 

the recycling facility. In some cases, the 

recycler can still handle the material, 

but may charge the generator an 

additional fee for having to alter the 

material to meet specifications. In other 

cases, the recycler may not be able to 

accept the material at all. Through the 

contract mechanism, both parties then 

agree on whether that hazardous 

secondary material should be returned 

to the generator or sent to a different 

recycler or waste disposal facility. 

EPA also found that knowing whether 

materials conform to the contract 

specifications necessitated sampling of 

the hazardous secondary material 

arriving at a recycler. Several recyclers 

told EPA that they sample each rail car, 

truck, and drum arriving at their 

facilities before accepting them. 

Legitimate recycling practices operate as 

a manufacturing process might and 

there is tight control over the nature of 

the materials being recycled. Recyclers 

who are seeking to make a salable 

product will make sure that the inputs 

meet specifications. 

Due to time and resource limitations, 

EPA’s examination of successful 

recycling practices was not exhaustive, 

as we were able to gather information 

from a limited number of sources. We 

believe that the practices and situations 

outlined in the study are representative 

of industry practices performed by 

many companies, but ask today for 

comments on the results of the study 

and for relevant information not 

represented therein. 

2. Environmental Problems Associated 

With Recycling of Hazardous Secondary 

Materials 

a. Scope and objectives of the study. 

The general goal of this study was to 

identify and characterize environmental 

problems that have been attributed to 

some type of hazardous secondary 

material recycling activity, and that are 

relevant for the purpose of this 

rulemaking effort. The Agency believes 

that discarding is more likely to occur 

if environmental problems exist. 

Specifically, we sought to identify the 

following types of cases: 

• Cases where environmental damage 

clearly can be attributed to some type of 

recycling activity. In conducting this 

study, we limited our search to those 

environmental problems in which 

environmental damages were clearly 

caused by some type of recycling-related 

activity. In this context, ‘‘recyclingrelated activities’’ included—

• accumulation or storage of 

hazardous secondary materials by the 

generator, the recycler or an 

intermediary; 

• illegal disposal or abandonment of 

recyclable hazardous secondary 

materials or recycling residuals; 

• transportation of recyclable 

hazardous secondary materials; 

• ‘‘sham’’ recycling operations (i.e., 

illegal disposal or treatment disguised 

as recycling); 

• production and/or use of 

contaminated products from recycled 

hazardous secondary materials, 

reclamation and/or production 

processes; 

• management of residuals from 

reclamation or production processes, or 

• other activities associated with the 

management of recyclable hazardous 

secondary materials, recycling residuals, 

or the products of recycling processes. 

The study identified a number of 

cleanup sites at which a recycling 

process had operated, but where other 

sources of contamination made it 

extremely difficult to determine with 

any certainty that the recycling activity 

contributed to the environmental 

problems at the site. These cases were 

not included in this study. 

• Relatively recent cases. Many of the 

environmental problems that were 

examined in the course of this study 

occurred before RCRA, CERCLA or other 

environmental programs were 

established in the early 1980s. The 

Agency believes that, for the purpose of 

this rulemaking effort, these ‘‘historical’’

recycling-related damage cases are 

much less relevant and instructive than 

cases which have occurred within the 

current regulatory and liability 

‘‘landscape.’’ This belief is based in 

large part on the findings of our 

companion study of current good 

hazardous secondary material recycling 

practices, which indicate that in today’s 

era (though there are exceptions), most 

generators and recyclers are aware of 

their environmental responsibilities, 

and generally make considerable efforts 

to ensure that materials are recycled and 

otherwise managed responsibly. 

Therefore, all the cases included in the 

data for this study occurred after 1982. 

• Cases involving recycling of 

regulated hazardous secondary 

materials that are specifically excluded 

from RCRA regulation. The study was 

intended to identify environmental 

problems associated with recycling of 

regulated hazardous secondary 

materials, as well as those involving the 

recycling of hazardous secondary 

materials that are not regulated because 


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they are subject to a specific regulatory 

exemption or exclusion (see, for 

example, the exclusions in 40 CFR 

261.4). The Agency was interested in 

these types of problems because they 

may indicate the extent to which 

environmental damages can occur even 

when recycling is conducted under a 

stringent regulatory regime, and 

whether such environmental problems 

may be more or less prevalent for 

materials that are not regulated as 

hazardous wastes. The study was not 

designed to identify cases involving 

recycling of non-hazardous materials 

such as paper, glass, rubber, or plastics. 

b. Methodology. The initial task of 

this study was to identify as many 

recycling-related environmental 

problems that were relevant to the scope 

and purpose of the study as possible 

(the preceding section of this preamble 

describes the types of cases that were 

considered relevant to the study). 

Potential cases were identified from a 

variety of sources, including: 

• Comments on the October 28, 2003, 

proposed rule 

• The Superfund National Priorities 

List 

• National EPA data bases maintained 

for the CERCLA, RCRA, and 

enforcement programs 

• Contacts with staff in state 

environmental agencies 

• Contacts with staff in EPA Regional 

Offices 

• State agency data bases maintained 

for state Superfund programs and other 

environmental programs 

• Internet searches 

• News media reports 

For those environmental problems 

found at recycling facilities or resulting 

in the mismanagement of hazardous 

secondary materials to be recycled that 

were relevant to the study, we gathered 

available information to identify certain 

key facts relating to when the problem 

occurred, the type of recycling practice 

involved, the types of materials 

recycled, how and why the 

environmental damage occurred, and 

other key data (these data are 

summarized in tabular form in 

Appendix 1 of the report entitled The 

Assessment of Environmental Problems 

Associated With Recycling of Hazardous 

Secondary Materials). A written 

description of each case was then 

prepared—these are in Appendix 2 of 

the same report. 

Many of the cases that were 

investigated, including many of the 

Superfund sites, were well-documented, 

and we were able to assemble relatively 

complete profiles for those cases. For 

many other cases, however, much less 

complete information was available, 

while at some of the sites, we were able 

to collect only very basic information. 

In addition, because of time and 

resource limitations, the search for 

potentially relevant cases was not 

exhaustive. For example, we did not 

systematically survey all state 

environmental agencies for relevant 

cases, nor did we search paper files in 

EPA Regional Offices. Because of this 

relatively limited scope, we believe that 

the cases we have identified and 

described in this report in effect 

represent those that were relatively easy 

to find, and that there are likely to be 

additional cases that we did not 

identify. However, we have no reason to 

think that additional cases would 

substantially change the overall picture. 

Nevertheless, the Agency requests 

information on relevant cases of 

environmental problems that we did not 

identify, as well as comments or 

supplemental information on those that 

were characterized in the report. If you 

provide data on additional cases of 

environmental problems from recycling, 

Appendix 2 of the study is a good 

resource for the types of information 

most useful to the Agency, particularly 

when the problem occurred; the type of 

recycling practice involved; whether 

recycling occurred at an on-site or offsite recycling facility; the types of 

hazardous secondary materials being 

recycled; and how and why the problem 

occurred. 

c. Summary of findings. The study 

identified 208 cases in which 

environmental damages of some kind 

occurred from some type of recycling 

activity and that fit the scope of the 

study. Such damages included leaks, 

spills, dumps, or other types of releases 

that were serious enough to require 

some type of cleanup action. They also 

included instances where materials 

were abandoned (e.g., in warehouses) 

and which required removal overseen 

by a government agency and 

expenditure of public funds. However, 

the study did not include situations in 

which environmental regulatory 

violations occurred, but did not result in 

actual damage to the environment or 

human health. 

With regard to the types of materials 

associated with the cases that were 

documented in the study, most common 

were scrap metals, solvents, used oil, 

non-ferrous metals, lead-acid batteries, 

and used drums sent for cleaning and 

reconditioning. Less common were 

cases involving mercury, precious 

metals, and hazardous foundry sands. 

The types of environmental damage 

that occurred varied widely; many were 

relatively small incidents involving 

contaminated soils and/or residuals, 

such as battery casings, while a number 

were much more substantial and 

expensive, with large-scale soil and 

ground water contamination, and 

remediation costs in the tens of millions 

of dollars. A surprising number of cases 

(sixty-nine) involved materials that were 

abandoned in one way or another. 

The study also tried to identify the 

cause of the environmental problems for 

each case that was investigated. In large 

part, we were able to identify, or at least 

infer, how the problems occurred, 

although for four percent of the cases 

examined, we were unable to determine 

the primary cause of damage. However, 

in only a few cases were we able to 

identify with any certainty why they 

occurred. For example, in 

approximately one-third of the cases, we 

were able to conclude that 

mismanagement of recycling residuals 

was at least partly the cause of 

contamination problems. We were 

unable, however, to identify why the 

residuals were managed improperly. 

Mismanagement of the hazardous 

secondary materials prior to their 

reclamation or reuse caused 

contamination at forty percent of sites, 

whereas mismanagement of recycling 

residuals was the primary cause at 

thirty-four percent of the sites. Often, at 

the latter category of sites, reclamation 

processes generated residuals in which 

the toxic components of the recycled 

materials became concentrated, and 

these wastes were then mismanaged. 

Examples of this include a number of 

drum reconditioning facilities, where 

large numbers of used drums were 

cleaned out to remove small amounts of 

remaining product such as solvent, and 

these wastes were then improperly 

stored or disposed of. 

As already noted, sixty-nine of the 

cases examined in the study involved 

abandonment of recyclable hazardous 

secondary materials as the primary 

cause of damage. In most of these cases, 

business failure appears to have been 

the main reason the hazardous 

secondary materials were abandoned. 

Seven of the cases that were examined 

appear to have been outright ‘‘sham’’

recyclers. In most of these cases, 

companies advertised themselves to 

local generators as recyclers and 

accumulated considerable quantities of 

waste materials, but did not actually 

recycle them. These sites were also then 

abandoned. 

Since a considerable number of 

commenters to the October 2003 

proposal supported the idea of a 

regulatory exclusion for on-site 

recycling (i.e., at the generating facility), 

the study also distinguished between 

environmental problems from recycling 


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that occurred at off-site, commercial 

recycling facilities, and those from 

recycling on-site. Thirteen (6%) of the 

208 cases were determined to be from 

recycling that occurred on-site. This 

relatively small proportion of cases may 

signify that on-site recycling is 

inherently less likely to result in 

environmental problems, for various 

reasons. However, it may also be that 

recycling conducted at facilities 

generating hazardous secondary 

materials occurs at fewer facilities than 

recycling by commercial facilities or 

that these types of environmental 

problems are not as well documented, 

or for other reasons are more difficult to 

identify, given the scope and 

methodology of the study. The Agency 

solicits comment and additional data on 

the issue of environmental problems 

from on-site recycling that occurred 

since 1982 and where the problems are 

clearly attributable to the recycling 

activity. We are particularly seeking 

facts about any instances that are not 

captured in the study, particularly 

answering the questions of when the 

recycling took place, what type of 

recycling practices were involved, what 

the environmental problem was, and 

what caused the problem. 

The study also addressed whether or 

not instances of environmental damage 

occurred at hazardous waste recycling 

facilities with RCRA permits (Note: 

RCRA does not require Part B permits 

for the recycling processes themselves; 

typically, permits are issued to such 

facilities when hazardous secondary 

materials are stored prior to recycling.) 

RCRA permitted hazardous waste 

management facilities are subject to 

relatively stringent, facility-specific 

requirements, and in general are given 

more oversight by regulatory agencies 

than facilities without permits. For 

these reasons, these cases are of 

particular interest to the Agency with 

regard to this rulemaking. 

Twenty-four of the cases identified 

were, at one time or another, operating 

under RCRA hazardous waste permits. 

However, only nine clearly appear to 

have been operating under RCRA 

permits at the time the damage 

occurred. Two of these cases involved 

fires and/or explosions. 

The study also looked at some of the 

financial circumstances regarding clean 

up of environmental problems. At 

thirteen of the twenty-four hazardous 

waste permitted facilities, all or part of 

the funds used to clean up 

environmental damages were 

contributed by the owner/operator of 

the facility, either voluntarily or under 

some form of consent agreement. In at 

least two of these cases, it appears that 

cleanup funds became available by 

means of a RCRA-required financial 

assurance mechanism, such as a surety 

bond. Thirteen of the facilities appear to 

have been cited for serious permit 

violations, either before or as a result of 

the damage incident. In four cases, the 

facility permits were revoked because of 

compliance issues. Eleven of the 

twenty-four facilities were found to be 

no longer in business, because of 

bankruptcy or for other reasons. 

Of the 208 cases that were 

documented in the study, fifty-one were 

or are listed on the CERCLA National 

Priorities List (NPL). Fifty-five 

additional cases were addressed under 

CERCLA authorities, but the sites were 

not listed on the NPL. State cleanup 

authorities were used to address sixtyfive of the cases, while thirty were 

addressed using RCRA corrective action 

authorities. For nineteen of the cases, 

we were unable to identify what 

remedial program, if any, was used to 

clean up the sites. (In some cases, there 

was more than one type of cleanup 

action at a site). 

For eighty-nine of the cases, we were 

able to identify the costs, or at least cost 

estimates, associated with addressing 

the environmental problems caused by 

recycling activities. Thirty-seven of 

these cases required less than one 

million dollars to clean up; forty-four 

cost between one and ten million 

dollars; and eight cost more than ten 

million dollars to remediate. 

It is possible that these cost data are 

incomplete and are not an accurate 

representation of actual cleanup costs 

for the entire sample of 208 cases. For 

one thing, cost data were much easier to 

find for CERCLA-lead cleanups than 

cleanups done under other programs. 

Another uncertainty with regard to 

these cost data is that in some cases, it 

was not possible to distinguish between 

cleanup costs that were incurred 

specifically to address recycling-related 

contamination, and costs for other 

cleanup activities at the site. The 

Agency solicits additional information 

from commenters regarding cleanup 

costs (actual or estimated) incurred in 

remediating these recycling-related 

environmental problems. 

C. Potential Effects of Market Forces on 

the Management of Recyclable 

Hazardous Secondary Materials 

EPA also has completed a study of 

how market forces can affect the 

management of recyclable hazardous 

secondary materials. This study uses 

economic theory to describe how 

various market incentives can influence 

a firm’s decision making process when 

the recycling of hazardous secondary 

material is involved. Because the study 

is largely theoretical, the results should 

be interpreted with caution, but it does 

provide insights that can explain some 

of the possible fundamental economic 

drivers of both the successful and 

unsuccessful recycling practices, which 

in turn help us to design the exclusions 

that we are proposing today. 

The October 2003 proposal was based 

in part on the premise that some types 

of recycling are more akin to 

manufacturing than waste management 

and therefore are not appropriate for 

regulation as waste management. [‘‘In 

EPA’s view, a recycler will value 

secondary materials that provide an 

important contribution to his process or 

product and will manage them in a 

manner consistent with a valuable 

feedstock material (i.e., will manage 

them to minimize their loss)’’; 68 FR 

61583]. 

However, as pointed out by some 

commenters to the proposed rule, the 

economic forces shaping the behavior of 

firms that recycle hazardous secondary 

materials can be different from those at 

play in manufacturing processes using 

virgin materials. For example, the 

inherent value of hazardous secondary 

materials can be much lower than virgin 

materials used in manufacturing, 

resulting in a different set of economic 

incentives. Additionally, different 

economic incentives between the 

recycling of hazardous secondary 

materials and manufacturing may arise 

due to differences in these two business 

models. 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, some 

models of hazardous materials recycling 

involve generating revenue primarily 

from receipt of the hazardous secondary 

materials. Recyclers of hazardous 

secondary materials in this situation 

may thus respond differently from 

traditional manufacturers to economic 

forces and incentives. 

An increased understanding of these 

aspects of hazardous secondary material 

recycling can help to craft a rule that 

takes advantage of the positive 

economic forces, and compensates for 

the negative ones, in order to produce 

an optimal amount of recycling. An 

optimal amount of recycling is one that 

maximizes the net benefits (private and 

social benefits minus private and social 

costs). One sub-optimal outcome of not 

providing a proper balance could be too 

little recycling, resulting in 

inefficiencies. In this case, increasing 

the rate of recycling (for example, via 

today’s proposed changes) would realize 

additional net benefits. However, subVerDate Aug<31>2005 15:31 Mar 23, 2007 Jkt 211001 PO 00000 Frm 00012 Fmt 4701 Sfmt 4702 E:\FR\FM\26MRP2.SGM 26MRP2

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optimal outcomes can also result from 

too much of an activity. For hazardous 

secondary material recycling, this 

situation occurs when firms accumulate 

more hazardous secondary material than 

can be recycled in a reasonable 

timeframe, or operate their recycling 

process in a way that imposes excessive 

costs on society (such as excess 

pollution or mishandling of hazardous 

secondary material) and that can result 

in the material being discarded. 

The market incentive study uses 

economic theory to provide information 

on how certain characteristics can 

influence three different recycling 

models to encourage or discourage an 

optimal outcome. The three recycling 

models examined are: (1) Commercial 

recycling, where the primary business of 

the firms is recycling hazardous 

secondary materials, which are accepted 

for recycling from offsite industrial 

sources (which usually pay a fee); (2) 

industrial intra-company recycling, 

where firms generate hazardous 

secondary materials as byproducts of 

their main production processes and 

recycle the hazardous secondary 

materials for sale or for their own reuse 

in production; and (3) industrial intercompany recycling, where firms whose 

primary business is not recycling, but 

use or recycle hazardous secondary 

materials obtained from other firms with 

the objective of reducing the cost of 

their production inputs. 

For each of these recycling models, 

the report looks at how they are 

potentially affected by three market 

characteristics: (1) Value of the recycled 

product; (2) price stability of recycling 

output or inputs; and (3) net worth of 

the firm. 

For all three models of hazardous 

secondary material recycling, a recycled 

product with a high value appears to 

contribute to an optimal outcome for 

hazardous secondary material recycling. 

For commercial and industrial intercompany firms, the value of the product 

can serve as a strong incentive for the 

firm to recycle the product with care 

and bring it to the market. Recycling by 

these firms would thus be driven 

primarily by the potential revenues from 

the recycled product, and not by other 

factors such as an acceptance fee. For 

industrial intra-company recyclers, the 

value of the recycled product would 

contribute to optimal recycling behavior 

even if the firm is reusing the product 

in its own production process instead of 

selling it to outside firms. Conversely, 

for all three models of hazardous 

secondary material recycling, a recycled 

product with a low value could be a 

potential indicator of sub-optimal 

recycling outcomes. For commercial 

firms in particular, the acceptance fee is 

likely to be a much more prevalent 

factor in the firm’s revenue structure 

when the recycled product has a low 

value. If the value of the recycled 

product is low, the firm may have more 

of an incentive to focus on accepting 

hazardous secondary material than 

properly recycling it and selling a lowvalue recycled product. 

Price stability is another potential 

indicator of hazardous secondary 

material recycling markets that produce 

optimal outcomes, particularly for 

commercial recyclers. When prices are 

stable, firms can more easily adjust their 

production in response to the price 

signals they receive from the market. 

They are thus less subject to sudden 

upsets to their revenue streams or costs 

which could force them to operate at a 

short or long-term loss. Unstable 

markets can contribute to sub-optimal 

outcomes, due to an unexpected fall in 

revenues or rise in costs, such that the 

firm is no longer able to cover the costs 

incurred to make the product. This 

could encourage the stockpiling of 

hazardous secondary material by the 

firm in order to continue collecting the 

acceptance fee. A commercial firm’s 

choice to shut down can also contribute 

to sub-optimal recycling outcomes if 

this involves the abandonment of 

hazardous secondary material that the 

firm was stockpiling on-site. Since 

industrial intra- and inter-company 

recyclers are also recycling to produce 

a marketable product, they are subject to 

similar forces as commercial firms. They 

are less constrained in their responses to 

these forces, however, since recycling is 

not their primary business operation, 

and are able to switch from recycling to 

disposal, or from using recycled 

materials to raw materials, if market 

conditions shift. 

For all three recycling models, firms 

that have a higher net worth have more 

to lose from liability issues and thus 

have a greater incentive to invest in safe 

hazardous secondary material 

management and recycling practices. 

These firms would have more incentive 

to practice recycling in an 

environmentally safe manner and also 

to insure against possible liability risks 

that would jeopardize their investments. 

Firms that have a relatively low worth 

and do not have an established history 

in the market could be potentially more 

likely to face incentives that could cause 

them to engage in recycling practices 

that impose few controls or cut corners 

in order to boost revenues. While we 

recognize that it should not be assumed 

that all low-value firms would engage in 

such practices, this can be viewed as 

one potential indicator of risky 

behavior. 

As mentioned earlier, using economic 

theory to interpret recycling behavior 

should be done with extreme caution. 

An individual firm’s decision-making 

process is based on many factors, and 

attempting to extrapolate a firm’s likely 

behavior from a few factors, particularly 

based on theoretical considerations, 

could lead to erroneous conclusions. 

However, when used in conjunction 

with other pieces of information, the 

economic theory can be quite 

illuminating. For example, because the 

industrial intra- and inter-company 

recyclers have more flexibility (e.g., 

during price fluctuations, these 

companies can more easily switch from 

recycling to disposal or from recycled 

inputs to virgin inputs), they would be 

less likely to have environmental 

problems from over-accumulated 

materials. This outcome appears to be 

supported by the results of the 

assessment of environmental problems 

study (see section VIII.B.2 of today’s 

supplemental proposal). 

On the other hand, certain specific 

types of commercial recycling, where 

the product has low value, the prices are 

unstable, and/or the firm has a low net 

worth, could indicate that it is more 

likely for environmental problems to 

occur from over-accumulation of 

recycled materials, compared to 

recycling by a well-capitalized firm that 

yields a product with high value. Again, 

this outcome appears to be supported by 

the results of the assessment of 

environmental problems study (see 

section VIII.B.2 of today’s supplemental 

proposal). 

However, as shown by the study of 

successful recycling practices, 

generators who might otherwise bear a 

large liability from poorly managed 

recycling at other companies have 

addressed this issue by carefully 

examining the recyclers to which they 

send their hazardous secondary 

materials to ensure the recyclers are 

technically and financially capable of 

performing the recycling (see section 

VIII.B.1 of today’s supplemental 

proposal). In addition, we have seen 

that successful recyclers (both 

commercial and industrial) have often 

taken advantage of mechanisms such as 

tolling contracts to help stabilize price 

fluctuations, allowing recyclers to plan 

their operations better. 

For further discussion of this study, 

please see A Study of Potential Effects 

of Market Forces on the Management of 

Hazardous Secondary Materials in the 

docket for today’s supplemental 

proposal. 


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IX. Exclusion for Hazardous Secondary 

Materials That Are Legitimately 

Reclaimed Under the Control of the 

Generator: Proposed 40 CFR 260.0, 

261.2(a)(1), 261.2(a)(2), 261.2(c)(3), 

261.4(a)(23) 

A. Purpose of the Exclusion 

In the October 2003 proposal, EPA 

proposed to exclude from the definition 

of solid waste hazardous secondary 

materials generated and reclaimed in a 

continuous industrial process within 

the same industry. ‘‘Same industry’’ was 

defined as industries sharing the same 

four-digit North American Industry 

Classification System (NAICS) code. We 

also co-proposed a second option, under 

which such materials would not be 

eligible for the exclusion if the 

reclamation took place at a facility that 

also recycled regulated hazardous 

wastes generated in a different industry. 

EPA chose the NAICS system as a way 

to define ‘‘same industry’’ because the 

system is already widely used to classify 

different industries. We recognized that 

the system was developed for statistical 

rather than regulatory purposes. 

However, the NAICS scheme employs a 

production-oriented concept, grouping 

together industries that have similar or 

identical production processes. In 

addition, the regulated community is 

generally familiar with the NAICS 

system. For these reasons, the Agency 

proposed this system to define ‘‘same 

industry’’. 

EPA chose the four-digit NAICS level 

(rather than the three or five-digit level) 

because that level appeared to be an 

appropriate compromise between being 

too broad or too restrictive. The Agency 

evaluated the potential recycling 

opportunities available through defining 

‘‘same industry’’ at the three, four, and 

five-digit levels. We performed the 

analysis for the chemical manufacturing 

sector, which contains many RCRA 

hazardous waste generators and served 

as a surrogate for other manufacturing 

sectors. In general, we found that 

classification at the three-digit level led 

to grouping facilities that did not have 

similar production processes. 

Classification at the five-digit level, on 

the other hand, led to grouping similar 

processes, but greatly reduced 

opportunities for recycling. 

In the same notice, EPA also solicited 

comment on several different 

alternatives to the proposed exclusion. 

The first alternative was whether to 

exclude from the definition of solid 

waste those hazardous secondary 

materials that are generated and 

reclaimed in a continuous process onsite (as defined in 40 CFR 260.10), even 

if different industries were involved. 

This option would also have required 

the same notification and speculative 

accumulation provisions proposed for 

the proposed option. This exclusion 

would be based on the premise that 

materials recycled on-site in a 

continuous process are unlikely to be 

discarded because they would be 

closely managed and monitored by a 

single entity who is intimately familiar 

with both the generation and 

reclamation of the material. In addition, 

no off-site transport of the hazardous 

secondary material (with its attendant 

risks) would occur, and there would be 

few questions about potential liability in 

the event of mismanagement or mishap. 

An example of such recycling given in 

the proposal was a facility that produces 

petrochemicals, as well as 

pharmaceuticals. Under the four-digit 

NAICS-based proposal, such 

reclamation would not have been 

excluded even if both establishments 

were located at the same site and 

operated by the same company. Another 

example might be a situation where a 

generator contracts with a different 

company to reclaim material at the 

generator’s facility, possibly through a 

mobile treatment unit. 

The second alternative was an 

exclusion for certain situations within 

the chemical manufacturing industry 

that might present unique recycling 

situations. Specifically, within the 

chemical manufacturing industry, the 

first manufacturer will contract out 

production of certain chemicals to 

another manufacturer (referred to as 

batch or tolling operations). The second 

manufacturer may generate hazardous 

secondary materials that could be 

returned to the larger chemical 

manufacturer for reclamation. In the 

proposal, we inquired whether some 

recycling could be precluded as a result 

of uncertain application of the NAICS 

classification approach due to 

frequently changing product slates, or 

different products being produced from 

the same equipment at different times. 

The third alternative would have 

provided a broader conditional 

regulatory exclusion from RCRA 

regulation for essentially all hazardous 

secondary materials that are legitimately 

recycled by reclamation. The purpose of 

this broader exclusion would be to 

encourage recycling and lower costs, 

while still protecting human health and 

the environment. The Agency suggested 

that additional requirements or 

conditions might be appropriate to 

protect human health and the 

environment for this exclusion, 

compared to the same-industry 

exclusion that we proposed. Examples 

of such additional conditions could 

include record-keeping and reporting 

requirements, along with safeguards on 

storage or handling. Although the 

Agency solicited comment on additional 

conditions, the discussion in the 

preamble of this approach was brief and 

may not have provided sufficient 

information to commenters. Like the 

other exclusions discussed in the 

October 28, 2003 proposal, hazardous 

secondary materials used in a manner 

constituting disposal, burned for energy 

recovery, or materials that were 

inherently waste-like would not be 

eligible. The Agency solicited comment 

on the increased recycling and reuse 

that would result from broadening the 

rule in this way, as well as comment on 

the potential effects to human health 

and the environment. 

EPA received many comments on the 

NAICS ‘‘same industry’’ scheme from 

various stakeholders. Many commenters 

did not agree that NAICS was an 

appropriate way to define ‘‘same 

industry’’; more importantly, most 

commenters did not agree that 

excluding recycling within the same 

industry was justified on legal or 

pragmatic grounds. These commenters 

generally stated that EPA’s proposed 

exclusion did not accurately reflect 

Congressional intent or court mandates 

concerning EPA’s authority over 

legitimate recycling. They reiterated that 

EPA’s RCRA authority extends only to 

materials that are truly discarded (i.e., 

disposed of, thrown away, or 

abandoned) and that have not yet 

become part of the waste disposal 

problem. Many of these commenters 

interpreted the relevant court decisions 

to mean that any legitimately reclaimed 

material (whether recycled within the 

same industry or between industries) is 

not ‘‘discarded’’ and thus cannot be 

regulated as a solid waste. Some of these 

commenters cited the ‘‘Safe Foods’’

decision (Safe Food and Fertilizer, et al., 

v. EPA, 350 F.3d 1263, DC Cir. 2003) as 

support for their contention that 

materials recycled in different 

industries were not discarded. 

Other commenters said that they 

would not benefit from the proposed 

exclusion because so many recycling 

opportunities occur among different 

industries. These commenters included 

companies in the metals recycling 

industry, mining and mineral 

processors, specialty batch chemical 

manufacturers, some solvent recyclers, 

the paint and coatings industry, spent 

pickle liquor generators, and small 

businesses. 

Still other commenters argued that the 

Agency had read the court decisions too 

broadly rather than too narrowly, but 

some of these commenters also said that 


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EPA had failed to present a reasoned 

analysis of the indicia of discard. One 

commenter stated that EPA did not 

analyze potential environmental harm 

from the proposed rule. 

Many commenters, on the other hand, 

responded positively to the Agency’s 

solicitation of comment about excluding 

on-site recycling from the definition of 

solid waste. These commenters agreed 

with EPA’s suggestion that generators 

who recycle materials on-site (even if 

the reclamation takes place in a 

different NAICS code) are likely to be 

familiar with the material and more 

likely to maintain responsibility for the 

materials. Some commenters wanted 

any exclusion confined to on-site 

recycling, but other commenters 

suggested that EPA expand any on-site 

exclusion to include recycling 

(including off-site recycling) conducted 

within the same company. These 

commenters believed that the principal 

reasoning applied to on-site recycling 

would also apply to same-company 

recycling—i.e., that the same entity 

would be familiar with the material and 

would remain responsible for it. 

Concerning our solicitation of 

comments on tolling arrangements, 

some stakeholders commented that the 

specialty batch chemical industry, in 

particular, might present unique 

situations regarding appropriate 

exclusions, principally due to the 

varying nature of production and hence 

of potential hazardous secondary 

materials available for recycling. 

Because of these circumstances, 

stakeholders believed that exclusions 

targeted to the types of tolling 

arrangements common in this industry 

would be easier to implement. 

After evaluating the comments, the 

Agency has concluded that its proposed 

approach to ‘‘same industry recycling’’

does not accurately delineate EPA’s 

RCRA jurisdiction over hazardous 

secondary materials. We agree with the 

many commenters who said that 

whether materials are recycled within 

the same NAICS code is not an 

appropriate indication of whether they 

are discarded. NAICS designations are 

designed to be consistent only with 

product lines, so that the effect of our 

October 2003 proposal would be that 

materials generated and reclaimed 

under the control of the generator would 

not be excluded, even though the 

generator has not abandoned the 

material and has every opportunity and 

incentive to maintain oversight of, and 

responsibility for, the material that is 

reclaimed (see ABR, 208 F.2d at 1051 

(noting that discard has not taken place 

where the producer saves and reuses 

secondary materials)). Under these 

circumstances, we believe that discard 

has generally not occurred. For 

example, of the 208 recycling cases that 

caused environmental damage, only 

thirteen (approximately six percent) 

occurred as a result of on-site recycling. 

We also agree with those commenters 

who said that most of this rationale 

would apply just as reasonably to 

reclamation taking place within the 

same company. In the case of samecompany recycling, both the generating 

facility and the reclamation facility (if 

they are different) would be familiar 

with the hazardous secondary materials 

and the parent company would be 

ultimately liable for any 

mismanagement of the hazardous 

secondary materials. Under these 

circumstances, the incentive to avoid 

such mismanagement would be so 

strong that mismanagement also would 

be very unlikely. 

Concerning tolling arrangements, we 

also believe that the type of tolling 

contract common in the specialty batch 

chemical industry does not constitute 

discard as long as the recycling is 

legitimate and the hazardous secondary 

material is not speculatively 

accumulated. Under a typical type of 

arrangement, one company (the tolling 

contractor) contracts with a second 

(often smaller) company (the batch 

manufacturer) to produce a specialty 

chemical (sometimes because of a 

temporary lack of capacity, or because 

the batch manufacturer has specialized 

equipment or expertise). The batch 

manufacturer produces the chemical 

and the production process generates a 

hazardous secondary material (such as a 

solvent) which is routinely reclaimed at 

the tolling contractor’s facility through 

an exempt closed-loop recycling process 

when it has the capacity to manufacture 

the chemical in question at its own 

facility. However, if the batch 

manufacturer transports the hazardous 

secondary material back to the tolling 

contractor for reclamation, the tolling 

contractor would be deemed under 

existing regulations to be reclaiming a 

spent material, and an RCRA storage 

permit would generally be required. The 

typical contract in the specialty batch 

chemical industry contains detailed 

specifications about the product to be 

manufactured, including management of 

any hazardous secondary materials that 

are produced and returned to the tolling 

contractor for reclamation. Under this 

scenario, the hazardous secondary 

material continues to be managed as a 

valuable product, so discard has not 

occurred. Moreover, if hazardous 

secondary materials are generated and 

reclaimed pursuant to a written contract 

between a tolling contractor and a batch 

manufacturer, and if the contract 

specifies that the tolling contractor 

retains ownership of, and responsibility 

for, the hazardous secondary materials, 

there is a strong incentive to avoid any 

mismanagement or release. 

In today’s supplemental notice, EPA 

has described three general situations 

where we believe that discard has not 

taken place and where the potential for 

environmental releases is therefore low. 

The three situations involve 

circumstances under which hazardous 

secondary materials are generated and 

reclaimed within the United States or its 

territories. They are either generated 

and reclaimed at the generating facility, 

at a different facility, but within the 

same company, or through a tolling 

arrangement. Because the facility owner 

in these situations still finds value in 

the hazardous secondary materials, has 

retained control over them, and intends 

to use them, EPA is proposing to 

exclude these materials from being a 

solid waste and thus from regulation 

under Subtitle C of RCRA, if the 

recycling is legitimate (see 40 CFR 

261.4(g)), and if the hazardous 

secondary materials are not 

speculatively accumulated. We are 

proposing slightly different exclusions, 

depending on whether or not the 

excluded hazardous secondary materials 

are stored in land-based units prior to 

reclamation or as part of the reclamation 

process. The scope and applicability of 

the exclusions are described below. 

B. Scope and Applicability 

1. Hazardous Secondary Materials 

Managed Under the Control of the 

Generator in Non-Land-Based Units 

As stated above, the Agency generally 

believes that discard has not occurred if 

hazardous secondary materials are 

legitimately recycled under the control 

of the generator, provided they are not 

speculatively accumulated, and 

provided they are reclaimed within the 

United States or its territories. We are 

therefore proposing an exclusion for 

these hazardous secondary materials 

under § 261.2(a)(2)(ii), except if such 

materials are managed in a land-based 

unit prior to reclamation or as part of 

the reclamation process. See section B.2 

below for discussion of management in 

land-based units. Examples of non-landbased units include, but are not limited 

to, tanks, containers, and containment 

buildings. 

The definition of ‘‘hazardous 

secondary material generated and 

reclaimed under the control of the 

generator’’ is proposed in 40 CFR 260.10 

and consists of three parts. The first part 


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of the definition would apply to 

hazardous secondary materials 

generated and reclaimed at the 

generating facility. This definition 

would include situations where a 

generator contracts with a different 

company to reclaim hazardous 

secondary materials at the generator’s 

facility, either temporarily or 

permanently. For purposes of this 

exclusion, ‘‘generating facility’’ means 

all contiguous property owned by the 

generator. We are proposing to exclude 

hazardous secondary material that is 

reclaimed ‘‘at the generating facility’’

rather than ‘‘on-site’’ as defined in 40 

CFR 260.10 (as we proposed in October 

2003) because the latter definition may 

encompass facilities not under the 

control of the generator. For example, an 

industrial park meets the definition of 

‘‘on-site,’’ even though facilities 

operating at an industrial park may be 

completely separate and under separate 

ownership. However, EPA solicits 

comment on whether facilities under 

separate ownership, but located at the 

same site, should be included within 

this proposed exclusion. Additionally, 

EPA solicits comment on other 

definitions which might be equally 

compatible with generator control as the 

definition proposed in today’s notice. 

The second part of the definition of 

hazardous secondary materials 

generated and reclaimed under the 

control of the generator would apply to 

hazardous secondary materials 

generated and reclaimed by the same 

company (i.e., by the same ‘‘person’’ as 

defined in § 260.10). The generator must 

certify that the hazardous secondary 

materials will be sent to a company 

under the same ownership as the 

generator, and that the owner 

corporation has acknowledged full 

responsibility for the safe management 

of the hazardous secondary materials. 

Because of existing complexities in 

corporate ownership and liability, we 

are proposing to require the generator to 

certify regarding ownership and 

responsibility for the recyclable 

hazardous secondary materials. EPA 

solicits comment on any other 

certification language that might 

accomplish the same end, and we also 

seek comment on other definitions of 

‘‘same-company.’’

The third part of the definition of 

hazardous secondary materials 

generated and reclaimed under the 

control of the generator would apply to 

hazardous secondary materials that are 

generated pursuant to a written contract 

between a tolling contractor and batch 

manufacturer and reclaimed by the 

tolling contractor. Under today’s 

proposal, the tolling contractor must 

retain ownership of, and responsibility 

for, the hazardous secondary materials 

that are generated during the course of 

the manufacture. For purposes of this 

exclusion, tolling contractor means a 

person who arranges for the production 

of a product made from raw materials 

through a written contract with the 

batch manufacturer. Batch manufacturer 

means a person who produces a product 

made from raw materials pursuant to a 

written contract with a tolling 

contractor. As stated above, this type of 

contract appears to be common within 

the specialty batch chemical 

manufacturing industry. 

EPA notes that in order to be eligible 

for this exclusion, it is not a 

requirement that the contractual 

arrangement in question refer 

specifically to ‘‘tolling’’ or ‘‘batch 

manufacturing,’’ as long as the person 

commissioning the manufacture of the 

product retains ownership of, and 

responsibility for, the hazardous 

secondary materials that are generated 

during the course of the manufacture. 

The Agency also solicits comment on 

other types of contractual arrangements 

under which discard is unlikely to 

happen and which could appropriately 

be covered by an exclusion for 

‘‘generator-controlled’’ hazardous 

secondary material. For example, one 

company may enter into a contractual 

arrangement for a second company to 

reclaim and reuse (or return for reuse) 

the first company’s hazardous 

secondary material. The first company 

could create a contractual instrument 

that exhibits the same degree of control 

over how the second company manages 

the hazardous secondary material as is 

found in a tolling agreement. EPA 

solicits comment on whether hazardous 

secondary materials recycled under 

such contracts also should be included 

within the scope of the exclusion. 

2. Hazardous Secondary Materials 

Managed Under the Control of the 

Generator in Land-Based Units 

As stated above in section B.1 of this 

preamble, the exclusion proposed today 

at 40 CFR 261.2(a)(2)(ii) would apply to 

materials generated and reclaimed 

within the United States or its territories 

that are under the control of the 

generator and that are stored in nonland-based units. However, some 

hazardous secondary materials that are 

generated and reclaimed within the 

United States or its territories under the 

control of the generator (i.e., at the 

generating facility, within the same 

company, or through a tolling 

arrangement) are managed in units that 

are land-based. For these materials, we 

are proposing a slightly different 

exclusion at 40 CFR 261.4(a)(23). 

The Agency is proposing to place this 

exclusion in 40 CFR 261.4(a)(23) 

because while we recognize that raw 

materials and hazardous secondary 

materials can be and are stored in landbased units (such as mineral processing 

residues or pulping liquors), we also 

recognize that such management clearly 

presents a greater potential for releases 

to the environment than management in 

non-land-based units. Therefore, we are 

proposing an additional requirement 

which provides that if hazardous 

secondary materials are managed in 

land-based units, such materials must 

be contained in the units. We are not 

proposing that the units meet any 

particular design requirement or that the 

hazardous secondary materials in the 

unit be managed in a particular way. 

Rather, we are only proposing that the 

hazardous secondary material in the 

unit be ‘‘contained’’ and not released 

into the environment. The definition of 

land-based unit is proposed in § 260.10, 

and is taken from section 3004(k) of 

RCRA (i.e., landfill, surface 

impoundment, waste pile, injection 

well, land treatment facility, salt dome 

formation, salt bed formation, or 

underground mine or cave). Examples of 

surface impoundments include ditches 

and sumps. 

Whether the hazardous secondary 

material is ‘‘contained’’ in the landbased unit will necessarily be 

determined on a case-by-case basis. 

Generally, however, recyclable material 

is ‘‘contained’’ if it is placed in a unit 

that controls the movement of the 

hazardous secondary material out of the 

unit. Hazardous secondary material that 

remains contained in a land-based unit 

that experiences a release would still 

meet the terms of the exclusion in 

261.4(a)(23), unless the hazardous 

secondary material is not managed as a 

valuable product and as a result, a 

significant release from the unit occurs. 

In this situation, the hazardous 

secondary material in the land-based 

unit would be considered discarded. In 

determining whether hazardous 

secondary materials in a land-based unit 

are contained, a facility should consider 

the circumstances under which the 

materials are stored. For example, 

materials that are stored in direct 

contact with the soil in a natural or 

man-made impoundment may be more 

likely to leak. However, the local 

geological and meteorological 

conditions can greatly influence 

whether such materials would be 

contained. These local conditions, along 

with specific measures that a facility 

employs, such as liners, leak detection 


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measures, inventory control and 

tracking, control of releases, or 

monitoring and inspection during 

construction and operation of the unit, 

may be used in determining whether the 

hazardous secondary material is 

contained in the land-based unit. 

3. Hazardous Secondary Materials 

Managed Under the Control of the 

Generator: General Provisions 

Hazardous secondary materials 

released from any storage unit, whether 

land-based or non-land based, are 

discarded and if such materials upon 

discard would be either a listed 

hazardous waste or exhibit a hazardous 

waste characteristic, the hazardous 

secondary materials would be part of 

the waste disposal problem and would 

be subject to the hazardous waste 

regulations, unless they are immediately 

cleaned up. 

We also note that hazardous 

secondary materials excluded from the 

definition of solid waste generally 

become wastes when they are 

speculatively accumulated, because at 

that point they are considered to be 

discarded. For this reason, all hazardous 

secondary materials excluded under 

proposed 40 CFR 261.2(a)(2)(ii) or 

261.4(a)(23) would be subject to the 

speculative accumulation provisions of 

40 CFR 261.1(c)(8). In addition, as with 

other excluded recycling operations, 

residuals from the recycling process are 

considered to be newly generated solid 

wastes, which can also be hazardous 

wastes if they exhibit a hazardous 

characteristic under Subpart C of Part 

261 or if they are specifically listed 

under Subpart D of Part 261. 

The Agency is soliciting comment on 

whether additional requirements might 

be necessary to demonstrate absence of 

discard when hazardous secondary 

materials are recycled under proposed 

40 CFR 261.2(a)(2)(ii) or 261.4(a)(23). 

Our analysis has led us to conclude that 

discard has not occurred and releases 

are highly unlikely when hazardous 

secondary materials are generated and 

reclaimed under these circumstances, 

except possibly when such materials are 

managed in land-based units. 

Nevertheless, we are requesting 

comment on other points of view. An 

example of such conditions would be 

recordkeeping requirements, such as 

those proposed today in 40 CFR 

261.4(a)(24)). Another example would 

be appropriate limitations on storage, 

such as performance-based standards 

designed to address releases to the 

environment. The Agency solicits 

comment on whether additional 

management requirements are 

appropriate for hazardous secondary 

materials that are generated and 

reclaimed under the control of the 

generator. If commenters believe such 

additional requirements are appropriate, 

they should specify the technical 

rationale for each requirement 

suggested, and why the requirement is 

necessary if the hazardous secondary 

material remains under the control of 

the generator. 

We are also proposing that generators 

(and reclaimers, where the generator 

and reclaimer are located at different 

facilities) of hazardous secondary 

materials recycled under the control of 

the generator, whether managed in a 

land-based or non-land based unit, 

would be required to submit a one-time 

notice to the EPA Regional 

Administrator or, in an authorized state, 

to the state Director. The notice would 

need to identify the name, address, and 

EPA ID number (if it has one) of the 

generator or reclaimer, the name and 

phone number of a contact person, the 

type of hazardous secondary material 

that would be managed according to the 

exclusion, and when the hazardous 

secondary materials would begin to be 

managed in accordance with the 

exclusion. A revised notice would be 

required to be submitted in the event of 

a change to the name, address, or EPA 

ID number of the generator or reclaimer 

or a change in the type of hazardous 

secondary material being recycled. 

The intent of this proposed 

notification requirement is to provide 

basic information to regulatory agencies 

about who will be managing hazardous 

secondary materials under the 

exclusion, and the types of hazardous 

secondary materials that would be 

recycled. For hazardous secondary 

materials that would be excluded under 

40 CFR 261.2(a)(2)(ii), this proposed 

notification requirement would be 

specified in 40 CFR 260.42 (i.e., separate 

from 40 CFR 261.2). For hazardous 

secondary materials that would be 

excluded under 40 CFR 261.4(a)(23), 

this proposed notification requirement 

is included in the exclusion. We note 

that in both cases, the requirement to 

provide this notification would not be a 

condition of the exclusion. Thus, failure 

to comply with the requirement would 

constitute a violation of RCRA, but 

would not affect the excluded status of 

the waste. 

We believe our authority to request 

such information is inherent in our 

authority to determine whether a 

material is discarded, and we consider 

this to be the minimum information 

needed to enable credible evaluation of 

the status of a hazardous secondary 

material under section 3007 of RCRA. 

EPA further believes that RCRA section 

3007 allows it to gather information 

with regard to any material when the 

Agency has reason to believe that the 

material may be a solid waste and 

possibly a hazardous waste within the 

meaning of RCRA section 1004(5). 

Section 2002 also gives EPA authority to 

issue regulations necessary to carry out 

the purposes of RCRA. 

We also note that after EPA 

promulgates regulations listing a 

material as a hazardous waste or 

identifying it by its characteristics, 

section 3010 of RCRA requires 

generators of such materials to submit a 

notification to EPA within 90 days. 

Since the changes proposed today could 

substantially affect this universe of 

facilities in the Subtitle C system, we 

believe the notifications are appropriate 

and useful. 

EPA notes that the information 

discussed above can be difficult for 

regulatory authorities to retrieve and use 

if it is not placed into a data 

management system. Similarly, using 

different notification procedures and 

data management systems for different 

regulated materials can be confusing 

and time-consuming for the regulated 

community. For these reasons, the 

Agency requests comment on whether 

the Subtitle C Site Identification Form 

(EPA Form 8700–12) or the comparable 

state form should be used to provide the 

information required in this 

supplemental proposal. This form is 

used to enter data into the RCRAInfo 

data management system managed by 

the states and EPA. To implement use 

of this form for the notification 

requirements proposed today, we would 

revise the form to include a section for 

materials covered by this exclusion, 

with spaces for the appropriate data 

elements. 

In addition, we are considering 

including additional information in the 

notification in order to measure the 

impact of the proposed rulemaking. 

More data would assist EPA in targeting 

future resources and activities to further 

increase recycling and to report to the 

public the impacts of the proposed 

rulemaking. The additional data 

elements for which we are requesting 

comment are discussed in section XIV 

of today’s notice. 

We note that this exclusion applies 

only to hazardous secondary materials 

generated and reclaimed within the 

United States or its territories, because 

most of our information about recycling 

comes from these geographical areas. 

We do not have sufficient information 

about most recycling activities outside 

of the United States to decide whether 

discard is likely or unlikely. However, 

we are soliciting comment on whether 


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EPA should promulgate a conditional 

exclusion for exported material 

otherwise meeting the criteria for this 

exclusion. 

C. Enforcement 

Under today’s proposal, hazardous 

secondary materials generated and 

reclaimed within the United States 

under the control of the generator would 

be excluded from RCRA Subtitle C 

regulation, but would be subject to 

certain restrictions, principally 

speculative accumulation. Persons that 

handle these hazardous secondary 

materials would be responsible for 

maintaining the exclusion by ensuring 

that these restrictions are met. If the 

hazardous secondary materials were not 

managed pursuant to these restrictions, 

they would not be excluded. They 

would then be considered solid and 

hazardous wastes if they were listed or 

they exhibited a hazardous waste 

characteristic for Subtitle C purposes 

from the time they were generated. 

Persons operating under the exclusion 

would also be required to notify EPA or 

the authorized state. 

Persons taking advantage of today’s 

proposed exclusion that fail to meet the 

requirements may be subject to 

enforcement action and the materials 

could be considered hazardous waste 

from the point of their generation. EPA 

could choose to bring an enforcement 

action under RCRA section 3008(a) for 

all violations of the hazardous waste 

requirements occurring from the time 

they are generated through the time they 

are ultimately disposed or reclaimed. 

The Agency believes that this approach 

provides generators with an incentive to 

handle (or in the case of tolling or other 

contractual arrangements, ensure that 

their contractors handle) the hazardous 

secondary materials pursuant to the 

requirements. It also encourages each 

person to take appropriate steps to 

ensure that such materials are safely 

handled and legitimately recycled by 

others in the management chain. If there 

is a release of the hazardous secondary 

materials into the environment, they are 

considered discarded and subject to all 

applicable hazardous waste regulations. 

X. Conditional Exclusion for Hazardous 

Secondary Materials That Are 

Transferred for the Purpose of 

Reclamation: Proposed 40 CFR 

261.2(c)(3), 261.4(a)(24), 261.4(a)(25) 

EPA is today proposing an exclusion 

from the definition of solid waste for 

hazardous secondary materials that are 

generated and subsequently transferred 

to another company or person for the 

purpose of reclamation, provided that 

certain conditions are met. Recycling 

that conforms to these conditions would 

not involve discard and therefore the 

recyclable materials would not be 

regulated as solid waste. Such excluded 

hazardous secondary materials would 

also need to be recycled legitimately, as 

determined according to the provisions 

of 40 CFR 261.2(g), which also are being 

proposed today, and could not be 

speculatively accumulated, as defined 

in 40 CFR 261.1(c)(8). 

The conditions that EPA is proposing 

today are based on our understanding of 

how successful third-party recycling 

currently operates (and, conversely, 

how unsuccessful recycling practices 

can result in recyclable hazardous 

secondary materials being discarded), 

and are supported by the information 

included in the recycling studies that 

are described in section VIII of this 

preamble. For example, the study of 

current good recycling practices 

indicates that many generators examine 

the recycler’s technical capabilities, 

business viability, environmental track 

record, and other relevant questions 

before sending hazardous secondary 

materials for recycling. These recycler 

audits, which can be thought of as a 

form of environmental ‘‘due diligence,’’

are in essence a precaution to minimize 

the prospect of incurring CERCLA 

liability in the event that the recycling, 

or lack thereof, results in discard of the 

material. The fact that these companies 

are willing to incur the expense of 

auditing recyclers as a business practice 

is of itself a marketplace affirmation that 

sending hazardous secondary materials 

to other companies for recycling 

involves some degree of risk. Although 

these risks may be small when the 

recycler is a well established, successful 

enterprise with a good record of 

environmental stewardship, it also is 

apparent that not all recyclers fit this 

profile, as evidenced in the study of 

environmental problems associated with 

hazardous secondary material recycling. 

Thus, we believe that there is sufficient 

reason for the Agency to place certain 

conditions on this proposed exclusion 

for the generator to determine that the 

material is not discarded, particularly 

since we expect that this rulemaking, if 

implemented, could encourage some 

number of companies that may be 

unfamiliar with recycling to enter the 

hazardous secondary material recycling 

business. 

A. What Is the Intent of Today’s 

Proposed Conditional Exclusion? 

In proposing this conditional 

exclusion, EPA’s objectives are to 

encourage recycling of hazardous 

secondary materials, and reduce 

unnecessary regulatory compliance 

costs to industry, while maintaining 

protection of human health and the 

environment. We believe that this 

proposed conditional exclusion is a 

workable, common sense approach to 

meeting these objectives, is well 

supported by the record for this 

rulemaking, including the recent 

recycling studies that EPA has 

conducted, and in important ways 

reflects current good industry practices 

that are used by certain generators for 

recycling of hazardous secondary 

materials. 

B. Scope and Applicability 

The conditional exclusion for 

transferred materials would potentially 

apply to materials that are currently 

regulated as hazardous wastes because 

their recycling involves reclamation—

specifically, spent materials, and listed 

sludges and listed by-products. 

This is the same universe of materials 

that would have potentially been 

eligible for the exclusion proposed in 

October, 2003, except that that proposed 

exclusion would have applied only to 

these types of hazardous secondary 

materials that were recycled within the 

‘‘same industry.’’ It would not be 

available for recycled materials that are 

regulated as hazardous wastes for other 

reasons, such as ‘‘inherently waste-like 

materials,’’ materials that are ‘‘used in a 

manner constituting disposal,’’ or 

‘‘materials burned for energy recovery.’’

The exclusion proposed today also 

would not address materials that are 

currently excluded from the definition 

of solid waste according to other, 

existing provisions of 40 CFR part 261. 

For example, the wood preserving 

exclusion in 40 CFR 261.4(a)(9) includes 

conditions for managing materials on 

drip pads. Today’s proposed exclusion, 

if finalized, would not supersede or 

otherwise affect this conditional 

exclusion; such hazardous secondary 

materials would need to continue being 

managed in accordance with that 

existing exclusion. 

Today’s proposed exclusion specifies 

three restrictions, in addition to 

conditions for both generators and the 

reclaimers to whom excluded materials 

would be transferred. One restriction is 

that materials that are speculatively 

accumulated would not be eligible for 

the exclusion. Restrictions on 

speculative accumulation (see 40 CFR 

261.1(c)(8)) have been an important 

element of the RCRA recycling 

regulations since they were promulgated 

on January 4, 1985. According to this 

regulatory provision, a hazardous 

secondary material is accumulated 

speculatively if the person accumulating 

it cannot show that the material is 


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potentially recyclable; further, the 

person accumulating the hazardous 

secondary material must show that 

during a calendar year (beginning 

January 1) the amount of such material 

that is recycled, or transferred to a 

different site for recycling, must equal at 

least 75% by weight or volume of the 

amount of that material at the beginning 

of the period. This provision already 

applies to hazardous secondary 

materials that are not otherwise 

considered to be wastes when recycled, 

such as materials used as ingredients or 

commercial product substitutes, 

materials that are recycled in a closedloop production process, or unlisted 

sludges and byproducts being 

reclaimed. 

A second restriction or pre-condition 

specified in the proposed exclusion is 

that excluded hazardous secondary 

materials would need to be transferred 

directly from the generator to the 

reclaimer, and not be handled by 

anyone else other than a transporter. 

Thus, a generator who wished to 

maintain the excluded status of his 

hazardous secondary materials would 

not be able to ship those materials to a 

‘‘middleman,’’ such as a broker. This 

restriction is consistent with a premise 

underlying this proposed exclusion—

that is, in order to ensure that 

unregulated materials will not be 

discarded, generators should have a 

reasonable understanding of who will 

be reclaiming the materials and how 

they will be managed and reclaimed, 

and a reasonable assurance that the 

recycling practice is safe and legitimate 

(see the following discussion of the 

proposed condition for ‘‘reasonable 

efforts’’). A generator who ships 

materials to a middleman such as a 

broker typically does not know who will 

ultimately manage and reclaim them, or 

how they will be reclaimed. Thus, we 

believe that this restriction helps ensure 

that materials that become unregulated 

under the terms of this conditional 

exclusion will not be discarded by the 

generator. The Agency requests 

comment on this aspect of the proposed 

exclusion. 

The Agency recognizes that, in some 

cases, recycling of an excluded 

hazardous secondary material may 

involve more than one reclamation step. 

For example, a recyclable hazardous 

secondary material such as an 

electroplating waste might have a 

relatively high moisture content, and a 

somewhat variable chemical 

composition. Such materials might thus 

need to be dried and blended to a 

suitable, consistent specification before 

they are amenable to a ‘‘final’’

reclamation process (e.g., metals 

smelting). In this example, the two 

different reclamation processes might be 

conducted by different companies and/ 

or at different facilities. The Agency 

sees no reason to discourage this kind 

of recycling, and we are thus proposing 

that today’s transfer-based exclusion 

would be available for materials that are 

recycled by means of one or more 

reclamation processes. Note, however, 

that the condition for generators to make 

‘‘reasonable efforts’’ under the terms of 

this exclusion would apply in the same 

way, regardless of how many 

reclamation steps were involved with 

recycling of an excluded material. In 

other words, if the excluded hazardous 

secondary material were reclaimed by 

more than one facility or company, the 

generator of such material would need 

to make ‘‘reasonable efforts’’ to examine 

each facility or company in order to 

ensure that the hazardous secondary 

materials will be safely and legitimately 

recycled. We believe that this is a 

consistent application of the idea of 

requiring ‘‘reasonable efforts’’ as a 

condition of this proposed exclusion; 

where recycling of a hazardous 

secondary material involves more than 

one reclamation step at more than one 

facility, generators should nevertheless 

be well informed as to how the 

materials will be reclaimed, and by 

whom, throughout the recycling 

process. 

The third specified pre-condition is 

that, for all hazardous secondary 

materials that would be excluded under 

40 CFR 261.4(a)(24), generators and 

reclaimers that are currently subject to 

the hazardous waste regulations would 

need to submit a one-time notice to EPA 

or the authorized state. The notice 

would need to identify the name, 

address, and EPA ID number (if 

applicable) of the generator or reclaimer, 

the name and phone number of a 

contact person, the type of hazardous 

secondary material that would be 

managed according to the exclusion, 

and when the hazardous secondary 

materials would begin to be managed in 

accordance with the exclusion. A 

revised notice would be required to be 

submitted in the event of a change to the 

name, address, or EPA ID number of the 

generator or reclaimer or a change in the 

type of material recycled. 

The intent of this proposed 

notification requirement is to provide 

basic information to regulatory agencies 

about who would be managing 

hazardous secondary materials under 

the exclusion, and the types of materials 

that would be recycled. We believe our 

authority to request such information is 

inherent in our authority to determine 

whether a material is discarded, and we 

consider this to be the minimum 

information needed to enable credible 

evaluation of the status of a material 

under section 3007 of RCRA. We also 

note after EPA promulgates regulations 

listing a material as a hazardous waste 

or identifying it by its characteristics, 

section 3010 of RCRA requires 

generators of such materials to submit a 

notification to EPA within 90 days. 

Since the changes proposed today could 

substantially affect this universe of 

facilities in the Subtitle C system, we 

believe the notifications are appropriate 

and useful. 

The Agency requests comment on 

alternative notification requirements for 

this exclusion. One such alternative 

would be to require that more detailed 

information be provided in the notice, 

such as identification of the reclamation 

facility to which it will be shipped, how 

it will be stored at the generator’s 

facility, and/or a detailed 

characterization of the hazardous 

secondary material and of the recycling 

process. 

Another option being considered with 

regard to notification would be a 

requirement that it be signed by an 

authorized representative. In addition, 

we are considering the option of 

requiring persons using this exclusion 

to submit periodic (e.g., annual) reports 

detailing their recycling activities, to 

provide information on the types of 

volumes of hazardous secondary 

materials recycled, to whom the 

materials were sent for reclamation, the 

types of products that were produced 

from the reclamation processes, or other 

relevant information. We are also 

considering (and soliciting comment on) 

the option of requiring the information 

to be submitted in a particular format, 

or submitted electronically, and 

whether, in lieu of sending it to the 

implementing agency, it should be 

maintained at the facility. 

EPA notes that the information 

discussed above can be difficult for 

regulatory authorities to retrieve and use 

if it is not placed into a data 

management system. Similarly, using 

different notification procedures and 

data management systems for different 

regulated materials can be confusing 

and time-consuming for the regulated 

community. For these reasons, the 

Agency requests comment on whether 

the Subtitle C Site Identification Form 

(EPA Form 8700–12) or the comparable 

state form should be used to provide the 

information required in this 

supplemental proposal. This form is 

used to enter data into the RCRAInfo 

data management system managed by 

the states and EPA. To implement use 

of this form for the notification 


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requirements proposed today, we would 

revise the form to include a section for 

materials covered by this exclusion, 

with spaces for the appropriate data 

elements. 

C. Conditions 

Today’s proposed conditional 

exclusion for transferred materials 

specifies conditions for generators, as 

well as the reclaimers to whom 

generators transfer their hazardous 

secondary materials. 

1. Conditions for Generators 

In addition to the three pre-conditions 

described above, EPA is proposing that 

generators who wish to avail themselves 

of the exclusion for transferred materials 

must satisfy two basic conditions: 

record keeping, which includes export 

notification, and ‘‘reasonable efforts,’’

which in effect would require the 

generator to make an assessment of the 

reclaimer so as to ensure that the 

hazardous secondary materials he or she 

generates will be recycled legitimately 

and would allow the Agency to 

determine that the materials are not 

discarded. 

Recordkeeping. In order to allow for 

adequate oversight of generators who 

manage hazardous secondary materials 

in accordance with this exclusion, we 

are proposing that such generators 

maintain for a period of three years 

certain records that document 

shipments (i.e., transfers) of excluded 

hazardous secondary materials to 

reclamation facilities. Specifically, the 

generator would need to maintain, for 

each shipment of excluded material, 

documentation of when the shipment 

occurred, who the transporter was, the 

name and address of the destination 

reclamation facility, and the type and 

quantity of the hazardous secondary 

material in the shipment. We are not 

proposing to prescribe any specific 

template for these records, or require 

that they be maintained in a particular 

format (e.g., paper vs. electronic 

records). 

It is our understanding, supported by 

the information in the study of current 

good recycling practices, that generators 

who are concerned about potential 

environmental liability maintain these 

types of records as a routine business 

matter. Thus, we expect that this recordkeeping condition will impose a 

minimal additional paperwork burden 

for those facilities. We also believe that 

this recordkeeping condition will help 

to clarify what ‘‘appropriate 

documentation’’ the generator would 

need to provide in the event of some 

type of RCRA enforcement action (see 

40 CFR 261.2(f)). This proposed 

condition is also very similar to the 

recordkeeping condition that currently 

applies to excluded hazardous 

secondary materials used to make zinc 

fertilizer (see 40 CFR 261.4(a)(20)(ii)(D)). 

We are also requesting comment on 

whether to require the generator to 

maintain a copy of a confirmation of the 

receipt of the hazardous secondary 

material by the reclaimer. Based on our 

conversations with commercial 

recycling facilities, they routinely issue 

receipt confirmations or ‘‘recycling 

certificates’’ as a way of helping the 

generator verify that the hazardous 

secondary material reached its intended 

destination. The Agency solicits 

comment on this proposed condition for 

recordkeeping, including whether 

retention of confirmation of receipt is a 

normal business practice. 

We considered additional record 

keeping conditions for generators who 

would operate under this proposed 

exclusion, but are not proposing them 

today, primarily because we are 

committed to limiting such conditions 

to those we believe are essential to 

allowing proper oversight of hazardous 

secondary materials that are managed 

outside of the existing RCRA hazardous 

waste regulatory system. Examples of 

such additional conditions would 

include more thorough characterization 

of the materials that are transferred for 

reclamation, the types of units in which 

they were accumulated at the generating 

facility, how they were transported (e.g., 

by truck), whether or not the hazardous 

secondary materials were transported as 

a DOT hazardous material, the date the 

hazardous secondary materials were 

generated, the quantity of hazardous 

secondary materials generated, and 

other similar conditions. We request 

comment on whether such additional 

record keeping conditions or others not 

mentioned here are warranted for 

generators who would manage materials 

under this proposed exclusion. 

Similarly, under today’s supplemental 

proposal, exporters of hazardous 

secondary materials that are excluded 

under 40 CFR 261.4(a)(24) would be 

required to notify the receiving country 

through EPA and obtain consent from 

that country before shipment of the 

hazardous secondary materials could 

take place (see 40 CFR 261.4(a)(25)). 

This requirement would serve as a 

notification to the receiving country so 

that it can ensure that the hazardous 

secondary materials are recycled rather 

than disposed. As an additional benefit, 

the receiving country has the 

opportunity to consent or not based on 

its analysis of whether the recycling 

facility can properly recycle the 

hazardous secondary materials and 

manage process residuals in an 

environmentally sound manner within 

its borders. EPA believes that sections 

2002, 3002, 3007, and 3017 of RCRA 

provide authority to impose this 

condition because such notice and 

consent help determine that the 

materials are not discarded. 

Under today’s supplemental proposal, 

hazardous secondary materials that are 

exported from the United States and 

recycled at a reclamation facility located 

in a foreign country are not solid wastes, 

provided that the exporter complies 

with the requirements of 40 CFR 

261.4(a)(24)(i)–(iv) and notifies EPA and 

obtains a subsequent written consent 

forwarded by EPA from the receiving 

country. The provisions that we are 

proposing today in 40 CFR 261.4(a)(25) 

require exporters to notify EPA of an 

intended export 60 days before the 

initial shipment is intended to be 

shipped off-site. The notification may 

cover export activities extending over a 

12 month or shorter period. The 

notification must include contact 

information about the exporter and the 

recycler, including any alternate 

recycler. The notification must include 

a description of the manner in which 

the hazardous secondary materials will 

be recycled. It must also include the 

frequency and rate at which they will be 

exported, the period of time over which 

they will be exported, the means of 

transport, the estimated total quantity of 

hazardous secondary materials to be 

exported, and information about transit 

countries through which such materials 

will pass. Notifications must be sent to 

EPA’s Office of Enforcement and 

Compliance Assurance, which will 

notify the receiving country and any 

transit countries. When the receiving 

country consents in writing to the 

receipt of the hazardous secondary 

materials, EPA will forward the written 

consent to the exporter. The exporter 

may proceed with shipment only after it 

has received a copy of the written 

consent from EPA. If the receiving 

country does not consent to receipt of 

the hazardous secondary materials or 

withdraws a prior consent, EPA will 

notify the exporter in writing. EPA also 

will notify the exporter of any responses 

from transit countries. Exporters must 

keep copies of notifications and 

consents for a period of three years 

following receipt of the consent. These 

procedures are similar to those required 

for exports of hazardous waste under 40 

CFR Subpart E, except for the use of the 

hazardous waste manifest. 

Reasonable Efforts. Today’s 

supplemental proposal would require 

generators to make ‘‘reasonable efforts’’

to ensure that their materials are safely 


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and legitimately recycled, before 

shipping or otherwise transferring them 

to a reclamation facility. In effect, this 

would require the generator to perform 

a type of ‘‘environmental due diligence’’

of the reclaimer in advance of 

transferring the hazardous secondary 

materials. We believe that today’s 

proposed condition for reasonable 

efforts reflects, and would perhaps 

reinforce, the methods, such as audits, 

that many generators of hazardous 

secondary materials now use to 

maintain their commitment to sound 

environmental stewardship, and to 

minimize their potential regulatory and 

liability exposures. 

Some generators, particularly those 

who generate relatively large volumes of 

hazardous secondary materials, audit 

recyclers before shipping such materials 

to them. EPA’s study of good practices 

for recycling quotes one large recycling 

and disposal vendor as stating that of its 

new customers, sixty percent of the 

large customers and thirty to fifty 

percent of the smaller customers now 

perform audits on them. Under current 

practices, such audits can involve a site 

visit to the recycling facility, and an 

examination of the company’s finances, 

technical capability, environmental 

compliance record, and housekeeping 

practices. (Note: Audits that are 

currently conducted may or may not 

cover all of these areas.) According to 

those interviewed as part of our 

recycling study, auditing a recycler 

typically costs the generator from two to 

five thousand dollars, and in some cases 

more, depending on how thorough the 

audit is, and whether it is conducted by 

the generator’s own personnel, or by an 

outside consultant. The study also 

identified at least one organization 

which conducts audits at several 

hundred recycling and other waste 

handling facilities per year. This 

organization audits overseas facilities, 

as well as domestic recyclers, and reaudits facilities on a more or less 

ongoing basis. Membership in this and 

similar organizations, by spreading the 

expense of conducting audits among a 

number of companies, gives a generator 

a means of reducing the cost of this type 

of ‘‘environmental due diligence’’ even 

further. Such auditing ‘‘consortiums’’

also reduce costs for the facilities that 

are audited, since fewer audits need to 

be conducted by individual generators. 

Note, however, that third-party auditors 

do not generally draw any conclusions 

based on their audits or provide a 

‘‘certification’’ with respect to reclaimer 

operations, so the generator would still 

be expected to decide if the reclaimer is 

acceptable. 

Today’s proposed condition that 

addresses ‘‘reasonable efforts’’ is 

intended to reflect and capture in a 

regulatory context how many generators 

currently inquire and make decisions 

about whom they should do business 

with, and how they manage their 

potential liability and regulatory noncompliance risks. 

Currently, under 40 CFR 262, a 

generator must make a hazardous waste 

determination and thus, already has an 

obligation to determine whether the 

waste is subject to regulation. EPA 

believes that to make a parallel 

determination that hazardous secondary 

materials are not solid wastes because 

they are destined for reclamation and 

are not discarded, the generator must 

make a reasonable effort to ensure that 

the reclaimer intends to legitimately 

recycle the material pursuant to 40 CFR 

261.2(g) and not discard it, and that the 

reclaimer will manage the material in a 

manner that is protective of human 

health and the environment. 

EPA is also proposing that the 

generator can use any credible evidence 

available in making his reasonable 

efforts, including information gathered 

by the generator, provided by the 

reclaimer, and/or provided by a third 

party, in lieu of personally performing 

an environmental audit. (In fact, in 

some cases, the generator may not be an 

expert in different aspects of recycling, 

and reliable third-party information or 

judgment would play an important part 

in the generator’s conclusion.) For 

example, the generator might hire an 

independent auditor to review the 

operations of a recycler. Also, the 

generator might rely on third-party 

certifying bodies to provide a reasonable 

level of confidence that a recycler 

would safely manage his materials. 

Trade associations might make available 

to their members information on 

specific facilities that could be used to 

determine that the facility is safely and 

legitimately recycling the hazardous 

secondary material. Likewise, a parent 

corporation might perform an 

environmental audit of a recycler, and 

the audit could then be used by several 

of the company’s facilities. In fact, EPA 

believes that many reputable third party 

auditors, and trade associations that 

might make available to their members 

information on specific facilities, 

already assemble the types of 

information that would be needed for a 

generator to determine, based on 

credible evidence, that the hazardous 

secondary material is being legitimately 

recycled. EPA would encourage this 

type of pooling of information in order 

to reduce the burden and take advantage 

of specialized technical expertise. 

This proposed provision requiring 

reasonable efforts by generators would 

only apply to generators who send 

hazardous secondary materials to 

recyclers that are not operating under 

RCRA Part B permits or interim status 

standards. RCRA permitted facilities 

and interim status facilities are already 

subject to stringent design and operating 

standards, must demonstrate financial 

assurance, are subject to corrective 

action requirements in the event of 

environmental problems, and are 

typically given more thorough oversight 

than facilities without RCRA Part B 

permits. Thus, the Agency believes that 

permitted and interim status recycling 

facilities provide generators with 

environmental assurances that would 

ensure the hazardous secondary 

materials sent to such a facility are not 

discarded. Not requiring reasonable 

efforts for generators who ship 

hazardous secondary materials to RCRA 

permitted or interim status recycling 

facilities would likely be of particular 

benefit to relatively smaller volume 

generators who may not have the 

resources required to undertake 

‘‘reasonable efforts.’’

EPA requests comment on whether to 

require generators to maintain at the 

generating facility documentation 

showing the reasonable efforts made 

before transferring the hazardous 

secondary materials to the reclamation 

facility. Such records would presumably 

include copies of audit reports, and/or 

other relevant information that was used 

as the basis for the generator’s 

determination that the reclamation 

facilities to which the hazardous 

secondary materials were sent would 

legitimately recycle the hazardous 

secondary material in a protective 

manner. Requiring specific 

documentation would help EPA or the 

authorized state to determine whether 

the generator did make reasonable 

efforts to ensure that his hazardous 

secondary material was not discarded. 

In addition, EPA requests comment 

on whether, as part of the 

documentation, the generator should 

also be required to maintain at the 

generating facility a certification 

statement, signed and dated by an 

authorized representative of the 

generator company, that for each 

reclamation facility to which the 

generator transferred excluded 

hazardous secondary materials, that the 

generator made reasonable efforts that 

the hazardous secondary material was 

legitimately recycled. Such certification 

statement could, for example, be 

worded as follows: 


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‘‘I hereby certify in good faith and to the 

best of my knowledge that, prior to arranging 

for transport of excluded hazardous 

secondary materials to [insert name of 

reclamation facility], reasonable efforts were 

made to ensure that the hazardous secondary 

materials would be recycled legitimately, and 

otherwise managed in a manner that is 

protective of human health and the 

environment, and that such efforts were 

based on current and accurate information.’’

Today’s proposed condition for 

reasonable efforts is in effect a general 

standard; we are not proposing specific 

questions that generators would need to 

assess in satisfying this condition of the 

exclusion. However, we acknowledge 

that specifying in more explicit terms 

the questions that should be examined 

in making such reasonable efforts could 

provide more certainty to generators, as 

well as overseeing agencies. On the 

other hand, more explicit provisions for 

defining reasonable efforts in this 

context could also limit a generator’s 

flexibility. The Agency requests 

comment on whether more specific 

provisions to define reasonable efforts 

for the purpose of this exclusion should 

be specified in the final rule. 

If EPA were to specify in more 

explicit terms how generators should 

perform reasonable efforts with respect 

to this regulatory exclusion, one 

approach could be to identify specific 

questions that generators would need to 

address in satisfying this condition. 

Such questions would be focused on 

ensuring that the hazardous secondary 

material will not be discarded. The 

following are examples of possible 

questions that EPA could specify in the 

final regulatory condition for 

determining reasonable efforts, with an 

explanation of how each question could 

potentially assist in determining that the 

hazardous secondary material is not 

discarded. EPA then outlines two 

options for how to determine 

‘‘reasonable efforts;’’ the first option 

would use the broader list of questions 

(A through F) and the second option 

would use a subset of questions (A and 

F) that some believe have a more brightline nature. EPA requests comment on 

whether any or all of these questions 

should be included in the regulation 

(including the advantages and 

disadvantages of the various questions, 

as well as of the two options outlined 

below), and if there are other questions 

that should be also be considered. 

(A) Has the reclaimer notified the 

appropriate authorities pursuant to 

§ 261.4(a)(24)(iii) and does he have 

financial assurance as required under 

§ 261.4(a)(24)(v)(D)? 

(B) Does the reclamation facility have 

the equipment and trained personnel to 

safely recycle the hazardous secondary 

material? 

(C) Are there any unresolved 

significant violations of environmental 

regulations at the reclamation facility, or 

any formal enforcement actions taken 

against the facility in the previous three 

years for violations of environmental 

regulations? If yes, then the generator 

must have credible evidence that the 

reclaimer will manage the materials 

safely. 

(D) Does the material being recycled 

provide a useful component that will be 

reused in the product of the recycling 

process or aid in the recycling process 

itself? 

(E) Is the product (or intermediate) of 

recycling at the reclamation facility a 

generally traded commodity meeting 

applicable specifications? If not, is there 

other available information, such as 

sales records or long-term contracts, 

demonstrating that there is a reliable 

market for the product (or 

intermediate)? If not, then the generator 

must have credible evidence that the 

recycling at the reclamation facility will 

produce a valuable product or 

intermediate. 

(F) Does the reclamation facility have 

the permits required (if any) to manage 

the residuals (if any) generated from 

reclamation of the excluded hazardous 

secondary material? If not, does the 

reclaimer have a contract with an 

appropriately permitted facility to 

dispose of the residuals (if any) 

generated from the reclamation of the 

excluded hazardous secondary material? 

If not, then the generator must have 

credible evidence that the residuals 

generated from the recycling of the 

excluded secondary hazardous material 

will be managed in a manner that is 

protective of human health and the 

environment. 

The first possible question (A) focuses 

on whether the recycler has met two of 

the requirements he must fulfill before 

accepting excluded hazardous 

secondary materials for reclamation: 

notification of the appropriate 

regulatory authority that he plans to 

reclaim excluded hazardous secondary 

material (see Section X.B of today’s 

proposal), and establishment of 

financial assurance to cover the costs of 

managing any hazardous secondary 

materials that remain if the facility 

closes (see Section X.C.2 of today’s 

proposal). If a recycler were found to 

have failed to meet these requirements 

then he will have also failed to show a 

good faith effort towards demonstrating 

that he intends to recycle the material 

and not discard it, and will manage the 

material in a manner that is not 

protective of human health and the 

environment. 

The second possible question (B) 

focuses on the technical capability of 

the recycler, the most basic of 

requirements for ensuring safe recycling 

of hazardous secondary material. If a 

reclamation facility were found to not 

have adequate equipment or trained 

personnel, it raises serious questions as 

to whether the facility would be 

engaged in safe recycling. 

The third set of possible questions (C) 

focuses on the compliance history of the 

recycler. Although compliance data are 

an imperfect tool for determining 

whether a recycler would safely manage 

the hazardous secondary material, EPA 

believes that they are a reasonable 

starting point. Facility-specific 

enforcement data on unresolved alleged 

significant violations and on formal 

enforcement actions (by both EPA and 

states) and specific case information for 

the formal enforcement actions are 

readily available on EPA’s public Web 

site at http://www.epa.gov/echo/. While 

the presence of a violation does not 

automatically mean that the facility 

would not recycle the hazardous 

secondary material safely, it would raise 

questions and would likely require 

additional information from the facility. 

If the generator provides reasonable 

documentation that the enforcement 

data are unrelated to the facility’s 

commitment to manage the hazardous 

secondary material safely or that the 

violation has been corrected and the 

facility is back in compliance, then that 

would satisfy this aspect of the 

reasonable efforts determination. 

The fourth possible question (D) 

focuses on the usefulness of the 

secondary material to the recycling 

process. EPA’s study of the potential 

effect of market forces on the recycling 

of hazardous secondary materials shows 

that there is a particular incentive for 

materials to be recycled when it can be 

done at a lower cost than disposing of 

the material. In some cases, however, a 

hazardous secondary material with little 

value can be put into a ‘‘recycling’’

process, but not add anything of value 

either to the end product or to the 

process itself. In such cases, the 

hazardous secondary material is 

effectively being discarded rather than 

recycled. A material being legitimately 

recycled can contribute value to the 

process in two ways. The recycled 

material can contain a constituent that 

is being reused and which also appears 

in the final product. Alternatively, the 

material being recycled can aid in the 

process itself, such as by replacing a raw 

material that would otherwise be 

needed. For example, a hazardous 


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secondary material may act as an 

important catalyst or a carrier in a 

process, but not end up in the final 

product. To ensure that its hazardous 

secondary material is being properly 

recycled, a generator would need to 

ensure that his material contributes to 

the process in one of these ways. 

The fifth set of possible questions (E) 

focuses on the products of recycling. 

According to EPA’s study of the 

potential effect of market forces on the 

management of recyclable hazardous 

secondary materials, there is a 

relationship between the value of the 

product from recycling and the 

likelihood of successful recycling. 

Products with little or no value can 

result in recyclable materials being overaccumulated and mismanaged. 

Mismanagement of recyclable materials 

was a major cause of environmental 

damage in forty percent of the cases that 

EPA has studied. To provide assurance 

that the products created from the 

hazardous secondary materials are in 

fact valuable, the generator would need 

to determine if the products are general 

commodities that meet applicable 

standards, or that there is a reliable 

market based on sales records or longterm contracts. 

For most recycled products, this 

determination would be straightforward 

and the product specifications are well 

known. Metals reclamation and 

solvents, for example, results in the 

production of valuable products that are 

readily traded on the open market. 

Other products, however, may be 

unique or recycled in a different manner 

and may require a closer look to 

determine if they meet minimum 

standards. For example, in one of the 

damage cases, the reclamation facility 

used spent plastic blast media to make 

certain construction materials, which 

are a generally traded commodity with 

rigorous standards. However, in this 

case, the ‘‘recycling’’ process resulted in 

cinder blocks that would crumble on 

contact, and concrete slabs that would 

not support the weight of a person. In 

some cases, there may be no formal 

standard for a product, but a 

commonsense informal standard would 

still apply, particularly in regards to 

toxic constituents. For example, in 

another of the damage cases, children’s 

play sand was made from foundry sands 

highly contaminated with lead, which, 

in this situation would not meet such a 

commonsense standard. There are also 

other instances in the damage cases of 

recyclers marketing their product as 

appropriate for ‘‘fill’’ despite high levels 

of toxic constituents. In one case, a 

battery recycler distributed material 

from old battery casings to a community 

to be used as fill and driveway paving 

material, resulting in elevated levels of 

lead at 96 of the 109 properties. In order 

to determine whether a reclamation 

facility is legitimately recycling, the 

generator will need to check to make 

sure that the recycling results in a 

valuable product or intermediate. 

Although a typical audit of a recycling 

facility would include an examination 

of the facility’s finances, EPA does not 

have information on whether this 

financial evaluation would include an 

investigation as to whether the recycling 

process results in a valuable product. 

EPA requests comment on how 

including such a question might affect 

the scope of a typical audit. 

The sixth set of possible questions (F) 

focuses on another major cause of 

environmental problems from 

hazardous secondary material recycling: 

the management of the residuals. 

Roughly one-third of the damage cases 

that EPA documented were caused by 

mismanagement of the residuals from 

recycling. Because the residuals from 

recycling can contain the hazardous 

constituents that originated with the 

hazardous secondary materials, it is 

important that the generator 

understands how those residuals will be 

disposed. These residuals may or may 

not be regulated hazardous wastes, but 

in either case, the generator would need 

to determine that they are managed in 

units that have the necessary permits 

(either solid waste permits or hazardous 

waste permits) or otherwise comply 

with applicable environmental 

standards (whether federal or state), 

such that the material is being managed 

in a manner that is protective of human 

health and the environment. 

In drafting these possible questions to 

establish reasonable efforts, we have 

attempted to write them in as an 

objective a manner as possible, but we 

recognize that answering these 

questions still requires a certain amount 

of judgment. We understand that 

generators might prefer more definitive 

criteria. Therefore, we ask for 

suggestions on how the possible 

reasonable efforts questions (if they are 

included in the regulation) could be 

more objective, yet provide the 

necessary information, or any other 

information that should be required for 

making a reasonable efforts 

determination. 

In particular, as noted at the 

beginning of this discussion, EPA 

requests comment on the alternative 

option of focusing ‘‘reasonable efforts’’

only on questions A and F above. This 

second of the two options would limit 

the generator’s reasonable efforts 

requirement to determining whether the 

reclaimer has notified EPA or the 

authorized state that he is engaged in 

recycling excluded hazardous secondary 

material; whether the recycler complies 

with the financial requirements of this 

part; and whether the reclaimer has 

obtained the appropriate permits for 

managing residuals onsite or, 

alternatively, ships the material offsite 

under a contract with an appropriately 

permitted facility. These requirements 

would assure the generator that the 

reclaimer’s operations are known to the 

regulatory authority and therefore can 

be inspected for compliance, that 

residuals would be properly managed 

(thus addressing the second most 

common environmental problem in the 

recycling case studies EPA has 

analyzed), and that financial assurance 

would cover the cost of facility closure 

and other potential environmental 

liabilities. While this list would not be 

as comprehensive, this option of 

focusing on a set of criteria that some 

believe is of a more bright-line nature 

could make it easier for the generator to 

determine whether the criteria have 

been met and thereby make, in good 

faith, a certification that would 

demonstrate ‘‘reasonable efforts.’’

In addition, EPA requests comment 

on how difficult it would be for a 

generator to address and certify in good 

faith the responses to questions B 

through E. In this regard, EPA requests 

comment on whether generators already 

possess, or would be able to acquire 

through reasonable efforts, the 

information and ability necessary to 

evaluate the relevant aspects of the 

recycling industry, especially in 

situations where the generator does not 

work in that industry or otherwise have 

a reason to be familiar with it. For 

example, under question (B), to what 

extent do generators already posses, or 

would be able to acquire readily, the 

information and ability needed to 

evaluate the adequacy of ‘‘the 

equipment and trained personnel’’ in a 

different industry than the one in which 

the generator operates? Similarly, under 

question (E), to what extent do 

generators already possess, or would be 

able to acquire readily, the required 

knowledge of markets (in which they 

might not participate) for purposes of 

determining whether something 

constitutes a ‘‘valuable product or 

intermediate’’? 

EPA also requests comment on 

whether, if the final regulation does 

include specific questions for the 

generator to consider when making 

reasonable efforts, (1) should all 

generators be required to answer those 

questions and document their responses 

to each of them—that is, this 


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documentation would be a condition of 

the exclusion, or (2) should generators 

have the option of choosing to answer 

and document their response to these 

sets of questions or not. Under the latter 

approach, if a generator chooses to meet 

his burden of an objectively reasonable 

belief that his materials would not be 

discarded and would be managed in a 

manner that is protective of human 

health and the environment by 

answering these sets of questions, then 

the generator would have met his 

obligation under the regulations. 

Alternatively, the generator under the 

latter approach could meet his burden 

of proof based on other considerations, 

but without any assurance that a court, 

if the Agency were to undertake an 

enforcement action, would not later 

decide that the information he relied on 

did not support an objectively 

reasonable belief that his materials 

would not be discarded or would be 

managed in a manner that is protective 

of human health and the environment. 

However, under both approaches, if a 

generator meets the burden of proof that 

his decision to send his materials to a 

reclaimer was based on an objectively 

reasonable belief that the hazardous 

secondary materials would not be 

discarded and would be managed in a 

manner that is protective of human 

health and the environment, then the 

Agency would consider that the 

generator met his obligation under the 

regulations. 

Note that codifying ‘‘reasonable 

efforts’’ standards that the generator 

would certify have been met would 

have the effect of placing on the 

generator the responsibility of assessing 

the recycler and ensuring that the 

hazardous secondary materials would 

not be discarded. EPA is seeking 

comment on this aspect of the proposal. 

Further, the Agency seeks comment on 

whether any or all of the questions are 

appropriate for the generator to answer 

in making reasonable efforts to ensure 

that the reclaimer intends to 

legitimately recycle the material and 

will not discard it pursuant to the 

criteria in 261.2(g), and that the 

reclaimer will manage the material in a 

manner that is protective of human 

health and the environment. 

Of course, regardless of the type of 

information/questions EPA may include 

in the final rule, if any, the generator 

could choose to seek additional 

information or ask additional questions, 

and as shown in EPA’s study of good 

recycling practices, many generators 

already do so. EPA anticipates 

generators may seek additional 

information in determining that their 

hazardous secondary materials will not 

be discarded due to concerns about 

CERCLA liability (which is unaffected 

by today’s proposal, see Section XIII.D. 

of today’s proposal). 

EPA also requests comment on the 

relationship between the reasonable 

efforts questions and legitimacy 

(discussed in more detail in section XI 

of today’s preamble). Two of the 

questions identified above, questions D 

and E, are related to the two factors that 

EPA is proposing today to be the ‘‘core’’

considerations for determining whether 

a recycling operation is legitimate, 

rather than sham recycling (i.e., whether 

the hazardous secondary material makes 

a useful contribution, and whether the 

recycling process results in a valuable 

product). EPA believes that it is 

appropriate to include these concepts in 

‘‘reasonable efforts,’’ thus allowing the 

generator to make only one 

determination before sending hazardous 

secondary material for recycling. In 

other words, if these reasonable efforts 

questions are codified in the 

regulations, EPA is proposing that by 

satisfying reasonable efforts, the 

generator would have also satisfied the 

obligation to determine his hazardous 

secondary material would be 

legitimately recycled per proposed 40 

CFR 261.2(g). However, because EPA is 

also requesting comment on 

recordkeeping and certification 

requirements related to reasonable 

efforts, incorporating questions D and E 

could alter the implementation of the 

legitimacy determination for materials 

excluded under this provision. EPA 

requests comment on whether to keep 

the legitimacy determination an 

independent requirement for generators 

who would claim today’s proposed 

exclusion and not directly link it to 

‘‘reasonable efforts.’’

Finally, EPA also solicits comment on 

whether the frequency of periodic 

updates of the ‘‘reasonable efforts’’

should be identified in the regulations, 

or whether that question should be left 

to individual situations applying an 

objectively reasonable belief standard. 

Information on industry standards for 

facility audits of off-site activities, 

including how frequently they are 

conducted, would be especially helpful. 

Storage conditions. As with the 

proposed exclusion for hazardous 

secondary materials reclaimed under 

the control of the generator, if the 

generator manages the hazardous 

secondary material in a land-based unit 

under the transfer-based exclusion, the 

material must be contained. For further 

discussion of how to determine if a 

material in a land-based unit is 

contained, see section IX of today’s 

preamble. 

However, the Agency is also 

considering several other conditions for 

generators under this exclusion. One 

option would be a condition addressing 

storage of accumulated recyclable 

hazardous secondary materials by the 

generator prior to shipping them to a 

reclamation facility. For example, we 

are proposing today a condition that 

specifies a general performance 

standard for storage of excluded 

hazardous secondary materials at 

reclamation facilities. Arguably, the 

same or a similar standard could be 

required for generators who take 

advantage of the exclusion. The Agency 

requests comment as to whether a 

storage condition (beyond the 

requirement that material in land-based 

units be contained) should be imposed 

on generators as part of this exclusion, 

and if so, what type of condition(s) it 

should be. 

2. Conditions for Reclaimers 

EPA is proposing that reclaimers of 

conditionally excluded materials will 

have to satisfy four general conditions, 

which pertain to record keeping, storage 

of recyclable hazardous secondary 

materials, management of the residuals 

from reclamation processes, and 

financial assurance. 

Recordkeeping. Today’s supplemental 

proposal would require reclaimers who 

operate under this conditional exclusion 

for transferred materials to maintain 

certain records, similar to the records 

we are proposing to require for 

generators. Specifically, such reclaimers 

would need to maintain for at least three 

years records of each shipment of 

materials received at the reclamation 

facility that were excluded from 

regulation under the terms of this 

exclusion. Such records would need to 

document the name and address of the 

generator of the hazardous secondary 

materials, the name of the transporter 

and the date such materials were 

received, and the type and quantity of 

hazardous secondary materials received. 

The Agency believes that this 

information is the minimum needed to 

enable effective oversight of recycling 

activities that would no longer be 

subject to the existing hazardous waste 

regulations. 

In addition to these proposed record 

keeping provisions, the Agency is 

considering additional records that 

would more thoroughly document 

excluded recycling activities by 

reclaimers. Examples of such additional 

records would include more thorough 

characterization of the hazardous 

secondary materials that are received for 

reclamation, the types of units in which 

they were stored at the reclamation 


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facility, how they were transported (e.g., 

by truck), whether or not the hazardous 

secondary material was transported as a 

DOT hazardous material, and other 

similar conditions. We request comment 

on whether such additional record 

keeping conditions are warranted for 

reclaimers. 

Storage of Recyclable Hazardous 

Secondary Materials. We are proposing 

today a general performance standard 

for storage of excluded hazardous 

secondary materials at reclamation 

facilities that operate under this 

proposed exclusion. Specifically, the 

hazardous secondary materials must be 

managed in a manner that is at least as 

protective as that employed for 

analogous raw materials. An ‘‘analogous 

raw material’’ is a raw material for 

which a hazardous secondary material 

is a substitute and serves the same 

function and has similar physical and 

chemical properties as the hazardous 

secondary material. A raw material that 

has significantly different physical or 

chemical properties would not be 

considered analogous even if it serves 

the same function. For example, a 

metal-bearing ore might serve the same 

function as a metal-bearing air pollution 

control dust, but because the physical 

properties of the dust would make it 

more susceptible to wind dispersal, the 

two would not be considered analogous. 

Similarly, a hazardous secondary 

material with high levels of toxic 

volatile chemicals would not be 

considered analogous to a raw material 

without these volatile chemicals. Where 

there is no analogous raw material, or if 

the hazardous secondary material is 

managed in a land-based unit, the 

material must be contained. For 

example, in the case of the metalbearing air pollution control dust, dust 

suppression measures would likely be 

needed to contain the hazardous 

secondary materials. For the hazardous 

secondary material with high levels of 

toxic volatile chemicals, a closed tank or 

container would probably be needed to 

contain the volatile chemicals. For 

further discussion of how to determine 

if a material is contained, see section IX 

of today’s preamble. 

Storage conditions for reclamation 

facilities that operate under today’s 

proposed exclusion would allow the 

Agency to determine that the recyclable 

materials are not discarded. The great 

majority of damages documented in the 

study of recent recycling-related damage 

incidents occurred at commercial 

reclamation facilities, and 

mismanagement of hazardous secondary 

materials was found to be a cause of 

environmental problems in 35% of the 

incidents. Accordingly, EPA believes 

that this proposed condition for storage, 

or some similar condition, is necessary 

and appropriate for reclamation 

facilities that take advantage of this 

exclusion, and will establish an 

expectation for the owner/operators of 

such facilities; i.e., that they must 

manage hazardous secondary materials 

in at least as protective a manner as they 

would an analogous raw material, and 

in such a way that materials would not 

be released into the environment. 

The Agency considered a number of 

alternatives to this proposed storage 

condition, including specifying a much 

more rigorous set of conditions 

equivalent to current Subtitle C 

regulatory requirements for storage (see, 

for example, the requirements for tanks 

and containers, which are specified in 

subparts I and J of 40 CFR Part 264), or 

to a similar, but less stringent set of 

storage conditions (e.g., requiring the 

hazardous secondary material to be 

stored in an engineered unit). However, 

we do not believe that an elaborate set 

of conditions for storage are necessary 

for the purpose of this exclusion. For 

one thing, we are proposing today that 

generators who wish to take advantage 

of this exclusion must make ‘‘reasonable 

efforts’’ to evaluate the reclamation 

facilities they ship materials to, to 

ensure that the hazardous secondary 

materials will be legitimately and safely 

recycled. In making such reasonable 

efforts, we expect that generators will 

make an assessment of the reclamation 

facilities’ material storage practices and 

equipment. Thus, we believe generators 

will themselves evaluate the storage and 

handling practices of hazardous 

secondary materials at the reclamation 

facilities they do business with. We 

request comment on whether or not the 

condition should be written in more 

specific terms, that is, in a way that 

would provide greater clarity with 

regard to how storage units should be 

designed and operated. 

Management of recycling residuals. 

We are today proposing a condition 

pertaining to management of residuals 

that are generated from reclamation of 

hazardous secondary materials excluded 

from regulation under this proposal. 

The proposed condition specifies that 

‘‘any residuals that are generated from 

reclamation processes will be managed 

in a manner that is protective of human 

health and the environment. If any 

residuals exhibit a hazardous 

characteristic according to subpart C of 

40 CFR part 261, or themselves are 

listed hazardous wastes, they are 

hazardous wastes (if discarded) and 

must be managed according to the 

applicable requirements of 40 CFR parts 

260 through 272.’’

The purpose of this condition is 

primarily to clarify the regulatory status 

of these waste materials, and to 

emphasize in explicit terms that 

recycling residuals must be managed 

properly. The study of recent (i.e., postCERCLA, post-RCRA) recycling-related 

environmental problems revealed that 

mismanagement of residuals was the 

cause of such problems in one third of 

the incidents that were documented. 

Some common examples of these 

mismanaged residuals were acids and 

casings from processing of lead-acid 

batteries, solvents and other liquids 

generated from cleaning drums at drum 

reconditioning facilities, and PCBs and 

other oils generated from disassembled 

transformers. In many of these damage 

incidents, the residuals were simply 

disposed in on-site landfills or piles, 

with little apparent regard for the 

environmental consequences of such 

mismanagement, or possible CERCLA 

liabilities associated with cleanup of 

these releases. 

One issue that the Agency considered 

with respect to this proposed condition 

was the regulatory status of wastes 

generated from the reclamation of 

hazardous secondary materials that 

would be listed hazardous wastes if they 

were not recycled. One argument could 

be that these residuals should be 

regulated as listed hazardous wastes, 

since they were derived from materials 

that were physically and chemically 

identical to listed hazardous wastes, and 

could contain hazardous constituents 

that might pose significant threats to 

human health and the environment if 

the residuals were mismanaged. A 

different argument would be that such 

a regulatory construct is unwarranted, 

since the recycled hazardous secondary 

materials are not wastes, provided they 

meet the conditions of the exclusion, 

and therefore the ‘‘derived from’’

concept as articulated in § 261.3(c)(2) 

should not be applied to these wastes. 

Further, such waste residuals from 

reclamation processes often do not 

resemble the hazardous secondary 

materials that were reclaimed, and thus, 

the argument goes, it should not be 

assumed that they would always need to 

be managed as hazardous wastes. 

The Agency does not believe it is 

necessary to apply the ‘‘derived-from’’

principle to the residuals generated 

from the reclamation of excluded 

hazardous secondary materials. If the 

residuals exhibited a hazardous 

characteristic, or they themselves were 

a listed hazardous waste, they would be 

considered hazardous wastes, and 

would have to be managed accordingly. 

If they did not exhibit a hazardous 

characteristic, or were not themselves a 


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listed hazardous waste, they would 

need to be managed in accordance with 

applicable state or federal requirements 

for non-hazardous wastes. Thus, they 

would be subject to the same regulatory 

system that applies to wastes that are 

not hazardous wastes. The Agency does 

not see a compelling reason to establish 

as part of this rulemaking a different 

regulatory system based on the 

‘‘derived-from’’ principle for 

reclamation residuals. We solicit 

comment on this aspect of today’s 

supplemental proposal. 

Financial Assurance. EPA is 

proposing today the condition that 

owner/operators of reclamation facilities 

that would operate under the terms of 

this exclusion for transferred materials 

demonstrate financial assurance, in 

accordance with the current 

requirements of Subpart H of 40 CFR 

Part 265. Under Part 265 Subpart H, 

owners and operators must demonstrate 

that resources will be available to pay 

for closure, and post-closure care at 

their facilities. They also must meet 

liability coverage requirements for 

sudden and accidental occurrences at 

their facilities. The requirements found 

in Subpart H of 40 CFR 265 also outline 

how owners and operators should 

determine cost estimates, provide the 

acceptable mechanisms for 

demonstrating financial assurance, and 

set the minimum amounts of liability 

coverage required. 

We believe that requiring financial 

assurance for these reclamation facilities 

is necessary for the Agency to determine 

that the materials managed at these 

facilities are not discarded, and is 

supported by the findings of the 

recycling studies we conducted as part 

of this rulemaking effort. 

For example, the study of current 

good recycling practices indicated that 

one of the main reasons that generators 

audit recyclers is to evaluate their 

financial health and resources to 

respond to accidents or other problems 

that could cause adverse environmental 

or human health consequences. This is 

primarily because of the joint-andseveral liability provisions of CERCLA, 

under which a generator can become a 

‘‘responsible party’’ obligated to help 

pay for remediation expenses if (in this 

example) a recycler to whom he sent 

recyclable hazardous secondary 

materials were to create contamination 

problems, but lacked the resources to 

pay for their cleanup. Because American 

manufacturers have considerable 

experience with these types of CERCLA 

liability issues, evaluating the financial 

health of the reclamation facility before 

shipping recyclable materials to them 

has become a standard business 

precaution for many generators. Today’s 

proposed condition for financial 

assurance thus can be seen as a 

regulatory precaution against the same 

concern, ensuring that the reclamation 

facility owner/operators who would 

operate under the terms of this proposed 

exclusion are financially sound. 

The need for some type of financial 

assurance for recyclers in this context 

also is supported by the study of 

recycling-related environmental 

problems. The study indicates that 

business failure is a primary causative 

factor associated with these damage 

incidents. For example, of the 208 

damage incidents that were 

documented, at least 138 of the 

recyclers are no longer in business. 

While there may not be a clear causeand-effect relationship in all of these 

cases, we believe that this clearly 

suggests a correlation between the 

financial health of recycling companies 

and the probability that their recycling 

activities will result in some form of 

environmental damage. In our view, this 

further supports the need for some type 

of financial assurance condition for this 

exclusion. 

As proposed, reclaimers of excluded 

hazardous secondary materials would 

need to have financial assurance in 

accordance with the applicable financial 

assurance requirements for hazardous 

waste treatment storage and disposal 

facilities (cited above). We believe that 

these financial assurance requirements 

are appropriate for reclamation facilities 

that would be managing excluded 

hazardous secondary materials, since 

such management will typically involve 

some type of storage, and reclamation, 

which is defined as ‘‘treatment’’ under 

the existing RCRA regulations. If a 

reclamation facility were to manage 

excluded materials in land-based units 

(e.g., piles), it would be subject to the 

additional Subpart H financial 

assurance requirements for land 

disposal facilities. 

The Agency currently has underway a 

review of the Subpart H financial 

assurance regulations now in effect for 

hazardous waste treatment, storage and 

disposal facilities. The Agency does not 

intend to address general issues related 

to the financial assurance mechanisms 

as a part of today’s rulemaking, since 

these issues are being addressed in the 

broader review. However, in the context 

of this rulemaking, the Agency is 

interested in receiving comments as to 

whether or not the existing Subpart H 

requirements need to be modified in 

some way specifically for reclamation 

facility owner/operators that would be 

affected by today’s proposed exclusion. 

EPA also solicits comment on whether 

we should adopt the financial assurance 

requirements that were promulgated as 

part of the standardized permit rule (see 

70 FR 53419, September 8, 2005), which 

are EPA’s most recently issued RCRA 

financial assurance requirements. 

We are also interested in options that 

would involve tailoring the costing 

requirements associated with Subpart H 

requirements for today’s rulemaking. 

For example, the Subpart H financial 

obligations are tied in large part to the 

estimated future cost of closing the 

hazardous waste facility. Closure costs 

can be difficult to estimate, or subject to 

disagreement, and failure to close might 

not be the problem at a given facility. 

For example, closure cost estimates 

might not address the kind of releases 

identified in the recycling study. Thus, 

a simpler alternative might be to set a 

standard, fixed amount of financial 

assurance that would need to be 

demonstrated. For example, EPA’s study 

of environmental problems associated 

with hazardous material recycling was 

able to identify actual or estimated 

cleanup costs associated with 89 of the 

damage cases that were documented. Of 

these cases, 71 (80%) involved cleanup 

costs of $5 million or less, while 81 

cases (91%) cost $10 million or less. It 

should be noted that there are important 

uncertainties associated with these cost 

data, as explained in our study report. 

With these uncertainties in mind, these 

findings might be used as the basis for 

identifying a specific, minimum amount 

of financial assurance that reclamation 

facility owner/operators would need to 

demonstrate. Such funds would thus be 

available for any environmental damage 

associated with the reclamation 

operations at such facilities. 

This type of approach to establishing 

financial assurance requirements for 

reclamation facilities would be less 

flexible than the current regulations, but 

it would have the virtue of simplicity 

and transparency. Similarly, the 

regulatory language of individual 

financial assurance mechanisms might 

need to be modified slightly, to make it 

clear that funds would be available for 

environmental damages beyond closure. 

The Agency solicits comment on such 

alternative approaches to financial 

assurance requirements for reclamation 

facilities that would operate under 

today’s proposed exclusion. 

Finally, the Agency anticipates that, 

when and if today’s proposed exclusion 

for transferred materials is promulgated 

and becomes effective, there are likely 

to be some generators of recyclable 

hazardous wastes that will choose not to 

use the exclusion, and thus will 

continue to manage their wastes under 

the current hazardous waste regulatory 


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system. These generators may 

nevertheless wish to ship their 

hazardous waste to a reclamation 

facility that is operating under this 

exclusion. In such situations, it is 

possible that questions could arise as to 

the regulatory status of the hazardous 

waste materials that are sent to such 

reclamation facilities. Today’s proposed 

exclusion includes a provision 

(§ 261.4(a)(24)(vi)) that is intended to 

clarify that the reclamation facilities 

may still claim the exclusion in these 

types of situations. The Agency requests 

comment on this provision. 

D. Enforcement 

Under today’s proposal, hazardous 

secondary materials transferred for the 

purpose of reclamation would be 

excluded from RCRA subtitle C 

regulation, but would be subject to 

certain conditions and restrictions. If a 

generator fails to meet any of the abovedescribed conditions or restrictions on 

the management of hazardous secondary 

materials that are applicable to the 

generator, then the materials would be 

considered discarded by the generator 

and would be subject to RCRA subtitle 

C regulations from the point at which 

the material was used and could not be 

reused without reclamation. If a 

reclaimer were to fail to meet any of the 

above-described pre-conditions or 

restrictions on the management of 

hazardous secondary materials that are 

applicable to the reclaimer, then the 

materials would be considered 

discarded by the reclaimer and would 

be subject to RCRA subtitle C regulation 

from the point at which the reclaimer 

failed to meet a condition or restriction, 

thereby discarding the material. 

Please note that the failure of the 

reclaimer to meet conditions or 

restrictions does not mean the material 

was considered waste when handled by 

the generator, as long as the generator 

can adequately demonstrate that he has 

met his obligations, including the 

obligation under proposed 40 CFR 

261.4(a)(24)(iv)(A) to make reasonable 

efforts to ensure that the material will be 

recycled legitimately and otherwise 

managed in a manner that is protective 

of human health and the environment. 

A generator who met his reasonable 

efforts obligations could in good faith 

ship his excluded materials to a 

reclamation facility where, due to 

circumstances beyond his control, they 

were released and caused 

environmental problems at that facility. 

In such situations, and where the 

generator’s decision to ship to that 

reclaimer is based on an objectively 

reasonable belief that the hazardous 

secondary materials would be recycled 

legitimately and otherwise managed in 

a manner consistent with this 

regulation, the generator would not have 

violated the terms of the exclusion. 

XI. Legitimacy: Proposed 40 CFR 

261.2(g) 

A. What Is the Purpose of Distinguishing 

Legitimate Recycling From Sham 

Recycling? 

Under the RCRA Subtitle C definition 

of solid waste, many existing hazardous 

secondary materials are not solid wastes 

and thus, not subject to RCRA’s ‘‘cradle 

to grave’’ management system if they are 

recycled. The basic idea behind this 

construct is that recycling of such 

materials often closely resembles 

normal industrial manufacturing, rather 

than waste management. However, since 

there can be significant economic 

incentive to manage hazardous 

secondary materials outside the RCRA 

regulatory system, there is a clear 

potential for some handlers to claim that 

they are recycling, when in fact they are 

conducting waste treatment and/or 

disposal in the guise of recycling. To 

guard against this, EPA has long 

articulated the need to distinguish 

between ‘‘legitimate’’ (i.e., true) 

recycling and ‘‘sham’’ recycling, 

beginning with the preamble to the 1985 

regulations that established the 

definition of solid waste (50 FR 638, 

January 4, 1985) and continuing with 

the 2003 proposed codification of 

criteria for identifying legitimate 

recycling. 

On October 28, 2003 (68 FR 61581–

61588), EPA extensively discussed our 

position on the relevance of legitimate 

recycling to hazardous secondary 

materials recycling in general and to the 

redefinition of solid waste specifically. 

We proposed to codify in the RCRA 

hazardous waste regulations four 

general criteria to be used in 

determining whether recycling of 

hazardous secondary materials is 

legitimate. In today’s action, we are 

proposing two changes to the proposed 

legitimacy criteria and asking for public 

comment on those changes. The changes 

are (1) a restructuring of the proposed 

criteria, called factors in this proposal, 

to make two of them mandatory, while 

leaving the rest as factors to be 

considered, and (2) additional guidance 

on how the economics of the recycling 

activity should be considered in a 

legitimate recycling determination. 

As we explained in the 2003 proposal, 

it is the Agency’s longstanding policy 

that, for activities to qualify as recycling 

of hazardous secondary materials, they 

must be legitimate. This principle 

applies to both recycling of excluded 

hazardous secondary materials and 

recycling of regulated hazardous 

secondary materials. The definition of 

legitimate recycling is intended to apply 

to all recycling of hazardous secondary 

materials, including: 

• Recyclable hazardous secondary 

materials that would be excluded from 

Subtitle C regulation as wastes under 

today’s proposed exclusion from the 

definition of solid waste. 

• Hazardous secondary materials that, 

because they are recycled, are excluded 

or exempted from Subtitle C regulation 

under other regulatory provisions (e.g., 

see the exclusions in 40 CFR 261.2(e) 

and 261.4). 

• Recyclable hazardous wastes that 

are regulated under Subtitle C prior to 

recycling. 

Apart from the definition of solid 

waste implications, the concept of 

legitimate recycling also is used to 

determine if a recycling unit is exempt 

from RCRA Subtitle C permitting 

(except for certain air emission 

standards) or a regulated waste 

treatment or disposal unit, subject to 

full RCRA Subtitle C permitting. 

The concept of legitimate recycling is 

designed to be used in addition to and 

in concert with more specific criteria or 

requirements when they have been 

established in the regulations for 

specific recycling activities or recycled 

hazardous secondary materials. Affected 

parties should look to those regulatory 

provisions, in addition to the definition 

of legitimate recycling, to ensure 

compliance. For example, for a zinc 

micronutrient fertilizer manufacturer 

who uses hazardous secondary 

materials as a feedstock, the 

consideration of hazardous constituents 

in the final product would involve an 

analysis of whether the operation is 

legitimate recycling and an analysis of 

whether the fertilizer meets the 

contaminant limits specified in 40 CFR 

261.4(a)(21). 

By ensuring that use of hazardous 

secondary materials in an industrial 

process is legitimate recycling, the 

Agency seeks to ensure that when a 

facility claims that it is recycling, the 

hazardous secondary material is in fact 

being recycled and is contributing to a 

valuable product and is not being 

treated or disposed of in the guise of 

recycling. 

B. Definition of Legitimate Recycling in 

the 2003 Proposal 

In the 2003 proposed rule (68 FR 

61581–61588), EPA proposed codifying 

specific regulatory provisions for 

determining when hazardous secondary 

materials are recycled legitimately. 

Previously, the criteria considered in 


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evaluating legitimate recycling have 

been discussed extensively in preambles 

to definition of solid waste rulemakings 

and, notably, in a 1989 memorandum 

that laid out a single list of criteria to 

be considered in evaluating legitimacy 

(the ‘‘Lowrance Memo’’; OSWER 

directive 9441.1989(19), dated April 26, 

1989). 

The 2003 proposal consolidated the 

criteria in that memorandum into four 

criteria. EPA was clear in its expectation 

that most, if not all, legitimate recycling 

would conform with all four of the 

criteria, but stated that the application 

of those criteria would require some 

subjective evaluation of the criteria in 

each specific situation to which they are 

being applied. In those cases where a 

legitimate recycling operation does not 

meet all four criteria, the structure of the 

definition of legitimacy was designed to 

be flexible enough to allow those 

situations to be deemed legitimate. 

In general, the proposed regulatory 

language stated that legitimacy 

determinations must be made by 

considering whether: 

• The hazardous secondary material 

to be recycled is managed as a valuable 

commodity; 

• The hazardous secondary material 

provides a useful contribution to the 

recycling process or to a product of the 

recycling process; 

• The recycling process yields a 

valuable product or intermediate; 

• The product of the recycling 

process does not contain significant 

amounts of hazardous constituents that 

are not found in the analogous products 

or exhibit a hazardous characteristic not 

exhibited by the analogous product. 

The full proposed regulatory text can 

be found in the proposed rule (68 FR 

61596). 

It is the Agency’s opinion that the 

concept of legitimate recycling proposed 

in the October 2003 proposal and in 

today’s supplemental proposal is not 

substantively different than our 

longstanding policy, as expressed in 

earlier preamble and guidance 

statements. As part of proposing 

regulatory provisions on the legitimacy 

of recycling, we are simply reorganizing, 

streamlining, and clarifying the existing 

legitimacy principles. We believe that 

the regulatory definition of legitimate 

recycling, when applied to specific 

recycling scenarios, will result in 

determinations that are consistent with 

the earlier policy. Therefore, we 

generally do not see the need for the 

regulated community or overseeing 

agencies to revisit previous 

determinations and expect any written 

determinations from these agencies to, 

in effect, be grandfathered. For a more 

detailed analysis on how the definition 

of legitimacy has evolved from earlier 

preamble and guidance statements, see 

the October 28, 2003 proposal (68 FR 

61581–61588), where we provided a 

thorough explanation of how the 

proposed criteria related to existing 

guidance. The Agency does not intend 

to reiterate that analysis in today’s 

supplemental proposed rule, but will 

explain below the changes we are 

proposing to make from the 2003 

proposal. 

The 2003 proposal did result in 

comments on the Agency’s proposal to 

codify legitimacy and we are requesting 

further comment on this issue. The 

Agency believes that there are many 

benefits to codifying the legitimacy 

factors, as discussed in the 2003 

proposal. Many commenters, 

particularly the state regulatory 

agencies, but some members of industry 

as well, agreed with EPA’s rationale for 

codifying the legitimacy in part 261. 

However, some commenters urged EPA 

to retain the existing legitimacy 

guidance instead of codifying it in the 

regulations. These commenters stated 

that the existing guidance provides a 

more flexible way to assess whether an 

activity constitutes legitimate recycling 

and raised several concerns with the 

codification of legitimacy. The 

commenters expressed concern that 

codification could alter the application 

of legitimacy. Although EPA intends to 

preserve current interpretations of 

legitimacy, the commenters raised the 

concern that putting legitimacy in the 

regulations could eliminate the 

flexibility in the existing guidance for 

subjective evaluation and balancing of 

the factors when making a 

determination. EPA is requesting 

comment on this issue. 

In addition, the commenters raised 

the concern that codification of 

legitimacy would place too much 

burden on the regulated entity to make 

a showing that it is engaged in 

legitimate recycling. The Agency 

believes that it has always been the 

responsibility of the regulated entity to 

ensure, and if requested, to show that its 

recycling is legitimate. EPA expects that 

regulated entities have evaluated and 

will continue to evaluate their recycling 

operations using these factors and will 

reach their conclusions about legitimacy 

without prior approval by an overseeing 

agency. However, EPA is requesting 

comment on whether codifying the 

factors in today’s proposal would place 

increased burden on the regulated entity 

and, if so, what the reasons are for such 

increased burden. Finally, the concern 

has been expressed that codification 

would fix into place a specific 

formulation of EPA’s legitimacy factors, 

and therefore would limit future 

evolution of them. Future changes to the 

factors could become more difficult if 

they have been codified. The Agency 

believes there are many benefits to 

codifying the legitimacy factors, as 

discussed in the 2003 proposal, but is 

requesting comment on this issue. 

EPA is interested in comments about 

the benefits and drawbacks of codifying 

legitimacy. In particular, EPA solicits 

comments on current practices for 

assessing legitimacy, on any problems 

with current practices that may be 

alleviated by codifying the factors, and 

on alternative means of addressing any 

such problems. 

C. Changes Proposed in This Action 

1. New Structure of Legitimacy Factors 

a. Design of the new structure. For the 

reasons discussed below, EPA is 

proposing a new structure for the 

definition of legitimate recycling. The 

proposed design of the definition has 

two basic parts. The first part is 

considered the core of legitimacy, which 

includes a requirement that the 

hazardous secondary material being 

recycled provides a useful contribution 

to the recycling process or to the 

product of the recycling process and a 

requirement that the product of the 

recycling process is valuable. These two 

factors are fundamental to the definition 

of legitimacy and, therefore, an 

industrial process that does not conform 

to them would be considered sham 

recycling (i.e., treatment or disposal in 

lieu of recycling). 

The second part of the proposed 

structure for legitimacy is a list of two 

factors that must be considered, but not 

necessarily met, when a recycler is 

making a legitimacy determination. EPA 

believes that these factors are important 

in determining legitimacy, but has not 

proposed to make them mandatory 

because the Agency believes that there 

may be some situations in which a 

legitimate recycling process does not 

conform to one of these factors. 

Therefore, EPA is proposing that the 

management of the hazardous secondary 

material and the presence of hazardous 

constituents in the product of the 

recycling activity be factors that must be 

considered in the overall legitimacy 

determination, but not mandatory 

requirements that must be met as part of 

a definition of legitimacy. The full 

proposed regulatory text for the 

legitimacy portion of this supplemental 

proposal is found in 40 CFR 261.2(g). 

b. Why EPA is proposing this change. 

In the 2003 proposed rule, the 

regulatory text for legitimacy was made 


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4One of the profiles in the docket for today’s 

proposal shows that from 1997–1998, a 

horticultural nursery purchased approximately 375 

tons of foundry sand which contained lead above 

the regulatory limits, that was then bagged and sold 

as play sand to approximately 40 different retailers. 

(U.S. EPA, An Assessment of Environmental 

Problems Associated with Recycling of Hazardous 

Secondary Materials, Appendix 2). 

up of paragraph (g) of proposed section 

261.2, which stated that hazardous 

secondary materials that are not 

legitimately recycled are discarded and, 

therefore, solid wastes. Paragraphs (1) 

through (4) then listed the four 

proposed legitimacy criteria after a 

statement that legitimacy 

determinations must be made by 

considering them. Proposed criteria 1 

and 2 focused on the hazardous 

secondary material being recycled and 

criteria 3 and 4 focused on the product 

of the recycling process. 

In the 2003 proposed rule, the 

application of the four criteria to a 

recycling process was proposed to 

require some evaluation and balancing. 

That is, although the Agency expected 

that most legitimate recycling practices 

would conform to all the pieces of 

legitimacy, it was aware that there 

would be some cases in which 

legitimate recycling may not conform to 

one or more of the criteria. As in the 

Lowrance Memo, the structure of 

legitimacy allowed circumstances in 

which certain criteria weighed more 

heavily than others in the final 

legitimacy determination. 

Analysis of public comment on the 

2003 proposal shows that there was 

general agreement from industry, states, 

and other commenters that recycling 

cannot be legitimate if the hazardous 

secondary material being recycled does 

not provide a useful contribution to the 

process or to the product and if the 

recycling process does not yield a 

product or intermediate that is valuable 

to someone. Certain commenters 

requested that EPA provide more 

information on how it defines the terms 

used in the regulation and there was 

some disagreement with the specifics 

laid out in the preamble. Some 

commenters, particularly several states, 

felt that all four criteria should be 

mandatory requirements. However, 

almost all commenters agreed that 

proposed criteria 2 and 3 should be met 

in order for recycling to be considered 

legitimate. 

EPA agrees with the importance of 

criteria 2 and 3 and, for this proposal, 

has decided that these two concepts are, 

in fact, at the very core of what it means 

to recycle legitimately. Therefore, 

today’s proposed regulatory language 

states in 40 CFR 261.2(g)(2) that 

‘‘Legitimate recycling must involve a 

hazardous secondary material that 

provides a useful contribution to the 

recycling process or to a product of the 

recycling process and the recycling 

process must produce a valuable 

product or intermediate.’’ This 

statement is followed by paragraphs (i) 

and (ii) to give more details on how the 

Agency defines these critical concepts. 

EPA has determined that the other 

criteria in the 2003 proposal, criterion 1 

and criterion 4, are still important 

concepts in making legitimacy 

determinations, but should not be 

mandatory. Instead, today’s proposed 

regulations state these two factors need 

to be considered in making a 

determination as to the overall 

legitimacy, which are found in 

261.2(g)(3). In stating these factors need 

to be considered, EPA expects that 

anyone making a legitimacy 

determination will look carefully at how 

their hazardous secondary materials are 

managed as compared to analogous raw 

materials and at the hazardous 

constituents in their products. 

However, these two factors would not 

be mandatory because EPA and 

commenters were able to identify 

situations in which a recycling scenario 

appears to be legitimate, but one of 

these factors was not met in the way 

EPA described because that factor is not 

applicable or relevant to the materials 

being recycled or to the particulars of 

the recycling process. For example, it is 

possible that a solid, powdery 

hazardous secondary material could be 

shipped to a recycling facility in 

flexible, woven ‘‘supersack’’ containers, 

where the supersacks are then stored at 

the facility in a well-designed, 

designated indoor containment area and 

then legitimately recycled. If, however, 

an analogous raw material (i.e., with 

similar physical and chemical 

characteristics) was typically received 

and stored at the same facility in sealed 

steel drums, one could conclude that 

the hazardous secondary material was 

not managed ‘‘in a manner consistent 

with the analogous raw material.’’ In 

this case, therefore, a strict finding 

could be made that this factor was not 

met, even though the differences in 

storage practices do not affect 

protectiveness. In evaluating the 

legitimacy of a recycling process in 

situations like this, EPA does not 

believe that such a strict finding should 

necessarily be the determining factor. 

We are proposing that this factor not be 

mandatory in making legitimacy 

determinations in order to allow 

flexibility for these types of situations. 

For similar reasons, the Agency is also 

proposing that the factor which 

addresses ‘‘toxics along for the ride’’ be 

a consideration in making legitimacy 

determinations, rather than a mandatory 

requirement. One illustration as to why 

some flexibility may be needed in 

assessing this proposed factor could be 

a hypothetical situation in which a 

pharmaceutical manufacturer uses a 

‘‘virgin’’ solvent (‘‘Solvent X’’) as a 

process ingredient, and generates a 

spent solvent that is identical to the 

virgin solvent, except that it has become 

contaminated with a relatively small 

amount of a different solvent (‘‘Solvent 

Y’’). Solvents X and Y are assumed to 

have essentially the same toxicity and 

solvent properties, and both chemicals 

would be considered ‘‘hazardous 

constituents’’ under RCRA for waste 

identification purposes. In this example, 

the spent material (i.e., the mixture of 

solvents ‘‘X’’ and ‘‘Y’’) is no longer 

useful to the generator in making 

pharmaceuticals. It would potentially be 

useful, however, to a manufacturer of 

oil-based paints, as a substitute for 

virgin Solvent X. If the spent material 

was used in this manner by the paint 

manufacturer, the resulting paint 

products could contain significant 

concentrations of a hazardous 

constituent (i.e., ‘‘Solvent Y’’) not found 

in analogous products made from virgin 

Solvent X. Thus, this recycling practice 

could be determined as not meeting 

today’s proposed legitimacy factor that 

addresses ‘‘toxics along for the ride.’’

Given that the paint products made 

from spent (i.e., secondary) materials 

would essentially have the same solvent 

properties and potential environmental 

hazards as paint made from virgin 

solvents, it might be reasonable to 

determine that the overall recycling 

practice was legitimate. Again, because 

of situations like this, we believe that 

this factor is best expressed as a 

consideration in making legitimacy 

determinations, rather than as a 

mandatory requirement. 

At the same time, it should be noted 

that ‘‘toxics along for the ride’’ is an 

important consideration when the toxic 

constituents affect either the 

performance of the product or cause 

adverse environmental or health effects. 

For example, elevated levels of lead in 

foundry sand would not be a problem 

when the sand is re-used in the foundry 

molds, but it has been a significant 

problem when the sand was sold as 

children’s play sand.4 In such a case, the 

high levels of lead would disqualify this 

use from being considered legitimate 

recycling. 

Under this proposed structure, if a 

facility making a legitimacy 

determination decides that one of these 


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5Today’s supplemental proposal would make the 

‘‘useful contribution’’ factor a central, or 

mandatory, part of the definition of legitimacy 

(along with the ‘‘valuable product’’ factor). 

However, we do not believe that consideration of 

economics should also be considered a mandatory 

factor. Nevertheless, the economics of a recycling 

activity is a consideration because it can assist in 

informing the useful contribution and valuable 

product factors of the definition of legitimate 

recycling. 

6As an example, metal prices fluctuate and at 

times are below the cost of processing. However, 

recovery of metals is usually legitimate recycling. 

7Where the hazardous secondary material being 

reclaimed is under the control of the generator, the 

recycling operation is generally part of an overall 

manufacturing operation, which would be part of 

the evaluation. 

8 In general, overaccumulation of hazardous 

secondary materials is subject to the speculative 

accumulation provisions, as defined in 40 CFR 

261.1(c) (8). 

two factors to be considered is, in fact, 

not applicable to the recycling process, 

we recommend that the facility 

document why the recycling process is 

legitimate, even though it may not meet 

one or more of the factors to be 

considered. 

EPA believes that the new structure 

for the definition of legitimacy will 

clarify what the Agency believes are the 

most important elements of legitimacy 

and requests comment on this structure 

for making legitimacy determinations 

related to hazardous secondary material 

recycling. 

2. Consideration of Economics in 

Legitimate Recycling 

EPA also notes that the economics of 

the recycling activity may be relevant to 

legitimate recycling determinations. 

Consideration of economics has long 

been a part of the Agency’s concept of 

legitimacy, as evident in the Lowrance 

Memo and earlier preamble text (50 FR 

638, January 4, 1985 and 53 FR 522, 

January 8, 1988) [see also American 

Petroleum Institute v. EPA (‘‘API II’’), 

216 F.3d 50, 57–58 (DC Cir. 2000)]. In 

addition, in our October 2003 proposal, 

EPA proposed that consideration of 

economics be part of the second 

legitimacy criterion (i.e., whether the 

hazardous secondary material provides 

a useful contribution). In their 

comments to the October 2003 proposal, 

states and some other stakeholders 

supported including a consideration of 

economics when making legitimacy 

determinations, although they also 

expressed a need for clarification of how 

economics should inform legitimacy 

determinations. Today’s proposal, 

unlike the October 2003 proposal, does 

not codify specific regulatory language 

on economics, but offers further 

guidance and clarification on how 

economics may be considered in making 

legitimacy determinations. The Agency 

believes that we are clarifying how 

economics has traditionally been 

implemented via the Lowrance Memo 

guidance, and therefore, does not 

believe the consideration of economics 

as explained below impacts existing 

legitimacy determinations.5

Specifically, EPA believes that 

consideration of the economics of a 

recycling activity can be used to inform 

and help determine whether the 

recycling operation is legitimate. 

Positive economic factors would be a 

strong indication of legitimate recycling, 

whereas negative economic factors 

would be an indication that a further 

look at the recycling operation may be 

warranted in assessing its legitimacy. 

While not specifically addressed in the 

proposed regulations, consideration of 

economics could be a factor in 

informing whether the hazardous 

secondary material input provides a 

useful contribution and whether the 

product of the recycling operation is of 

value. 

Consideration of the economics of a 

particular recycling operation can 

greatly assist in making legitimacy 

determinations. Appropriate 

information for this consideration could 

include an understanding of the major 

costs, revenues, and economic flows for 

a recycling operation. Information that 

may be useful could include (1) the 

amount paid or revenue generated by 

the recycler for recycling hazardous 

secondary materials; (2) the revenue 

generated from the sale of recycled 

products; (3) the future cost of 

processing existing inventories of 

hazardous secondary materials and (4) 

other costs and revenues associated 

with the recycling operation. The 

economics of the recycling transaction 

may be more of an issue when 

hazardous secondary materials are sent 

to a third-party recycler, although where 

the hazardous secondary material being 

recycled is under the control of the 

generator, the generator must still be 

able to show that the hazardous 

secondary material is, at a minimum, 

providing a useful contribution and 

producing a valuable product. 

The basic economic flows can suggest 

whether the recycling operation will 

process inputs, including hazardous 

secondary materials, and produce 

products over a reasonable period of 

time, recognizing that there will be lean 

and slow times.6 Thus, processing 

inputs that produce legitimate products 

is a threshold for legitimate recycling. A 

general accounting of the major costs, 

revenues, and economic flows for a 

recycling operation over a reasonable 

period of time 7 can provide information 

to consider whether recycling is likely 

to continue at a reasonable rate, 

compared to the rate at which inputs are 

received, or whether it is likely that 

significant amounts of unrecycled 

material are likely to be accumulated 

and then abandoned when the facility 

closes.8 Any bona fide sources of 

revenues would be included in this 

consideration, such as payments by 

generators to recyclers for accepting 

hazardous secondary materials and 

subsidies supporting recycling. 

However, in order to have some level of 

confidence that beneficial products are 

or will be produced; we believe that at 

least some portion of the revenues 

should be from product sales (or savings 

due to avoided purchases of products if 

the hazardous secondary materials are 

used directly by the recycler), consistent 

with the hazardous secondary material 

being recycled to make a useful product. 

Two examples illustrate this concept. 

A recycling operation that generates 

revenues from sales of recycled 

products that greatly exceed the costs of 

the operation is likely to quickly process 

the hazardous secondary materials it 

receives into useful products. A very 

different example is an operation that 

has, relative to its revenues, large 

inventories of unsold product and large 

future liabilities in terms of stocks of 

unprocessed hazardous secondary 

material. This operation would draw 

closer attention to determine whether it 

is engaged, in essence, in treatment and/ 

or abandonment in the guise of 

recycling. 

When the economics of a recycling 

operation is similar to that of 

manufacturing using raw materials, the 

Agency believes that such an operation 

is likely to be legitimate. That is, the 

recycler pays for hazardous secondary 

materials as a manufacturer would pay 

for raw materials, the recycler sells 

products from the recycling process as 

a manufacturer would sell products of 

manufacturing, and revenues equal or 

exceed costs. In this scenario, hazardous 

secondary materials are valuable (i.e., 

the recycler is willing to pay for them) 

and make a useful contribution to a 

valuable recycled product (otherwise 

the recycler would not be willing to pay 

for them). In addition, the sale of the 

products of recycling demonstrates their 

value. 

However, we also recognize that the 

economics of many legitimate recycling 

operations that utilize hazardous 

secondary materials differs from the 

economics of more traditional 

manufacturing operations. An 

understanding of the economics of these 


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operations can be useful in evaluating 

the legitimacy of a recycling operation. 

For example, many recyclers are paid by 

generators to accept hazardous 

secondary materials. Generators may be 

willing to pay recyclers because they 

can save money if the recycling is less 

expensive than disposing of the 

hazardous secondary materials in 

landfills or incinerators. Another 

example is a scenario where recyclers 

receive subsidies which may be 

designed to develop recycling 

infrastructure and markets, remove 

problematic materials from disposal, or 

achieve other benefits of recycling. For 

example, the recycling of electronic 

materials can be legitimate even though 

the recycler is often subsidized for 

processing the material. Both of these 

examples involve situations that are 

different from manufacturing using raw 

materials, but as long as they are 

appropriately considered, an analysis of 

the economics of these operations can 

assist in determining the legitimacy of 

the recycling. 

Any analysis of the economics of a 

recycling operation should recognize 

that a recycler may be able to charge 

generators and still be a legitimate 

recycling operation properly excluded 

from regulation. In short, because these 

hazardous secondary materials are 

hazardous wastes if disposed of, 

typically the generators’ other 

alternative management option already 

carries a cost that is based on the 

existing market for hazardous waste 

transportation and disposal. Hence, 

unless there is strong competition in 

recycling markets or the hazardous 

secondary materials are extremely 

valuable, a recycler may be able to 

charge generators simply because 

alternative disposal options cost more. 

While the generator’s objective may be 

finding the least cost alternative for 

getting rid of the hazardous secondary 

material, the recycling may well be a 

legitimate recycling operation. 

Recognizing that such a dynamic 

exists can assist those making 

determinations in evaluating legitimacy 

of the recycling operation. For example, 

if a recycler is charging generators fees 

(or receiving subsidies from elsewhere) 

for taking hazardous secondary material 

and receives a far greater proportion of 

its revenue from acceptance fees than 

from the sale of its products, both the 

useful contribution and the valuable 

product factors may warrant further 

review, unless other information would 

indicate that such recycling is 

legitimate. Fees and subsidies could 

indicate that the economic situation 

allows the recycler to charge high fees, 

regardless of the contribution provided 

by the inputs, including hazardous 

secondary materials. In this situation, 

recyclers may also have an increased 

economic incentive to over-accumulate 

or overuse hazardous secondary 

materials, or to manage them less 

carefully than one might manage more 

valuable inputs. Additionally, if there is 

little competition in the recycling 

market, and/or if acceptance fees seem 

to be set largely to compete with the 

relative costs of alternative disposal 

options rather than to reflect the quality 

or usefulness of the input to the 

recycling operation, this may also 

suggest a closer look at ‘‘useful 

contribution.’’

A relatively low proportion of 

revenues coming from sales of recycled 

products compared to payments by 

generators may suggest the need for 

more consideration of the ‘‘valuable 

product’’ criterion. It is possible that it 

is appropriate for product sales 

revenues to be dwarfed by acceptance 

fee revenues because markets for the 

particular products are highly 

competitive or because high alternative 

disposal costs allow for high acceptance 

fees. However, relatively low sales 

revenues could also point to a review of 

product sales prices to see whether they 

are lower than other comparable 

products, products are being stockpiled 

rather than sold, or very little product 

is being produced relative to the amount 

of inputs to the recycling operation. 

These could be possible indicators that 

the recycled product may not be 

valuable and, thus, sham recycling may 

be occurring. 

A consideration of the future cost of 

processing or alternatively managing 

existing inventories of hazardous 

secondary material inputs also can 

inform the legitimacy determination. 

When hazardous secondary materials 

make a significant useful contribution to 

the recycling activity, a recycler will 

have an economic incentive to process 

input materials relatively quickly or 

efficiently, rather than to maintain large 

inventories. While recyclers often need 

to acquire a sufficient amount of a 

hazardous secondary material to make it 

economically feasible to recycle, there 

should be little economic incentive to 

over-accumulate such materials that 

make a useful contribution. Overly large 

accumulations of input materials may 

indicate that the input materials are not 

providing a useful contribution or that 

the recycler is increasing its future costs 

of either processing or disposing of the 

material, and hence may be faced with 

an unsound recycling operation in the 

future. Again, it is important to weigh 

this factor against other considerations. 

For example, it is possible that the 

recycler has acquired a large stock of 

hazardous secondary material because 

the price was unusually low or perhaps 

the material is generated episodically 

and the recycler has few opportunities 

to collect it. 

When recycling is conducted under 

the control of the generator, the recycler 

may not account formally for some of 

the costs and savings of the operation. 

Still, when deciding whether to 

undertake or continue the recycling 

operation or to utilize alternative 

outside recycling or disposal options, 

the recycler will evaluate basic 

economic factors as a part of doing 

business. Also, the recycler would be 

likely to account for the costs of virgin 

materials avoided by using hazardous 

secondary materials. Similarly, sales of 

recycled products under the control of 

the generator that are sold to an external 

market may be used to evaluate the 

valuable product criterion. Thus, the 

recycler should have available the basic 

information necessary to consider the 

economics of an on-site or internal 

recycling operation for purposes of 

making a legitimacy determination. We 

recognize, however, that an evaluation 

of the economic structure of a recycling 

operation under the control of the 

generator is likely to be less rigorous 

than that of a typical offsite commercial 

recycling operation. 

We request comment on how the 

economics of the recycling activity 

should be considered in making overall 

legitimate recycling determinations 

consistent with prior legitimacy 

determinations under the Lowrance 

Memo. We are specifically interested in 

whether economics should simply be a 

consideration that informs legitimacy 

overall or whether the economics of 

recycling should be a separate factor, 

including regulatory language, to 

consider. In addition, we are interested 

in hearing from both the regulated 

community and the States about other 

ways in which consideration of 

economics can inform and support 

determinations of legitimate recycling 

for both on-site and offsite recycling. 

XII. Petitions for Non-Waste 

Classification: Proposed 40 CFR 

260.30(d), 260.30(e), 260.30(f), 260.34 

A. What Is the Intent of This Provision? 

The intent of the non-waste 

determination petition process is to 

provide petitioners with an 

administrative procedure for receiving a 

formal determination that their recycled 

hazardous secondary material is not 

discarded. This process would be 

available in addition to the solid waste 

exclusions proposed today. Once a nonVerDate Aug<31>2005 15:31 Mar 23, 2007 Jkt 211001 PO 00000 Frm 00031 Fmt 4701 Sfmt 4702 E:\FR\FM\26MRP2.SGM 26MRP2

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9See, for example the ABR decision, where the 

Court acknowledged that the term, ‘‘discard,’’ could 

be ‘‘ambiguous as applied to some situations, but 

not as applied to others,’’ and particularly cited the 

difficulty in examining the details of the many 

processes in the mineral processing industry. 208 

F.3d at 1056. While the court overturned EPA’s 

regulations for casting too wide a net over 

continuous industrial processes, it acknowledged 

that there are large number of processes, some of 

which may be continuous and some of which may 

not. Determining what is a continuous process in 

the mineral processing industry, according to the 

Court, would require examination of the details of 

the processes and does not lend itself, well, to 

broad abstraction. Specifically, the court stated: 

Some mineral processing secondary materials 

covered under the Phase IV Rule may not proceed 

directly to an ongoing recycling process and may 

be analogous to the sludge in AMC II. The parties 

have presented this aspect of the case in broad 

abstraction, providing little detail about the many 

processes throughout the industry that generate 

residual material of the sort EPA is attempting to 

regulate under RCRA, 208 F.3d at 1056. 

In the case of today’s supplemental proposal, 

which applies across industries, there are far larger 

and more diverse processes. While the Agency 

believes it is proposing a reasonable set of 

principles, they must still be applied to the details 

of the industrial processes in question. 

waste determination has been granted, 

the hazardous secondary material would 

not be subject to the restrictions and 

conditions that the exclusions discussed 

elsewhere in today’s supplemental 

proposal would include (e.g., 

prohibition on speculative 

accumulation, or, for the transfer-based 

exclusion, recordkeeping, reasonable 

efforts, financial assurance, storage 

standard and export notice and 

consent). 

The petition process would be 

voluntary. Facilities may choose to 

continue to self-implement any 

applicable waste exclusions and, for the 

vast majority of cases, where the 

regulatory status of the material is 

evident, self-implementation will still 

be the most appropriate approach. In 

addition, facilities may continue to 

contact EPA or the authorized state 

asking for informal assistance in making 

these types of waste determinations. 

However, for cases where there is 

ambiguity about whether a hazardous 

secondary material is a solid waste, the 

formal petition process will provide 

regulatory certainty for both the facility 

and the implementing Agency 

EPA anticipates that most generators 

who recycle their hazardous secondary 

materials would use either the selfimplementing exclusions proposed 

today or existing exclusions. We request 

comment on how frequently the nonwaste determination process is likely to 

be used and how best to minimize the 

burden to the authorized states and to 

the regulated community. 

The Agency is proposing three types 

of non-waste determinations: (1) For 

hazardous secondary materials recycled 

in a continuous industrial process, (2) 

for hazardous secondary materials 

indistinguishable in all relevant aspects 

from a product or intermediate, (3) for 

hazardous secondary materials that is 

recycled under the control of the 

generator, such as through contracts 

similar to the tolling arrangements 

proposed in section IX of today’s 

preamble. 

B. Non-Waste Determination for 

Hazardous Secondary Material Recycled 

in a Continuous Industrial Process 

As discussed earlier in today’s 

supplemental proposal, court decisions 

have made it clear that hazardous 

secondary material that is recycled in a 

continuous industrial process is not 

discarded and therefore, not a solid 

waste. The October 2003 proposed rule 

attempted to parse the language of some 

of those decisions in order to identify 

when material destined for recycling is 

clearly not a solid waste. As explained 

earlier, we are not finalizing that 

approach. Instead, the Agency has 

decided to link the rulemaking more 

explicitly to the concept of ‘‘discard’’

which underlie those decisions. EPA 

believes that today’s supplemental 

proposal excludes from the definition of 

solid waste hazardous secondary 

materials recycled in a continuous 

industrial process by virtue of the 

determination that such materials that 

are legitimately recycled under the 

control of the generating facility and not 

speculatively accumulated are not 

discarded and therefore not solid waste. 

However, production processes can 

vary widely from industry to industry. 

In the October 2003 proposal, we 

attempted to define ‘‘recycled in a 

continuous industrial process’’ using 

the NAICS codes. Based on the 

comments we received, we determined 

that identifying which hazardous 

secondary materials are recycled within 

a continuous industrial process presents 

difficulties as courts have, at least 

implicitly, acknowledged.9 Even if EPA 

had more specific information on some 

hazardous secondary materials, it still 

would be impossible to know if the 

Agency has addressed every possibility. 

Thus to determine whether an 

individual hazardous secondary 

material is recycled in a continuous 

industrial process, and therefore not a 

solid waste, EPA may need to evaluate 

case-specific fact patterns, which is best 

done through a case-by-case procedure. 

We are titling this procedure a ‘‘nonwaste determination’’ to acknowledge 

that this procedure constitutes an 

administrative process for formally 

recognizing that a specific hazardous 

secondary material is not a solid waste. 

EPA is proposing four criteria for 

making this ‘‘non-waste determination’’

that a specific hazardous secondary 

material is reclaimed in a continuous 

industrial process. The first is the extent 

that the management of the hazardous 

secondary material is part of the 

continuous production process. At one 

end of the spectrum, if the material is 

handled in a manner identical to virgin 

feedstock, then it is fully integrated into 

the production process. At the other end 

of the spectrum, materials indisputably 

discarded prior to being reclaimed are 

not a part of the continuous primary 

production process. (‘‘AMC II’’), 

907 F. 2d 1179 (DC Cir. 1990) (listed 

wastes managed in units that are part of 

wastewater treatment units are 

discarded materials (and solid wastes), 

especially where it is not clear that the 

industry actually reuses the materials). 

For cases that lie within the spectrum, 

the petitioner would need to provide 

sufficient information about the 

production process to demonstrate that 

the management of the hazardous 

secondary material is an integral part of 

the production process and is not waste 

treatment. 

The second criterion for making this 

non-waste determination is the capacity 

of the production process to use the 

hazardous secondary material in a 

reasonable timeframe and ensure that it 

will not be abandoned (for example, 

based on past practices, market factors, 

the nature of the material, and any 

contractual arrangements). 

Abandonment of stockpiled recyclable 

hazardous secondary materials is one 

way that discard can occur at recycling 

operations and is one of the major 

causes of environmental problems. As 

indicated in the recycling studies, 69 of 

the 208 incidents of environmental 

damage involve abandonment of the 

hazardous secondary material as the 

primary cause of damage. For today’s 

proposed exclusions for hazardous 

secondary materials recycled under the 

control of the generating facility and 

hazardous secondary materials 

transferred to another facility for 

recycling, EPA is proposing speculative 

accumulation (as defined in 40 CFR 

261.1(a)(8)) as the method for 

determining when a material is unlikely 

to be recycled and therefore may end up 

being discarded via abandonment. For 

the non-waste determination, the 

petitioner would not necessarily need to 

demonstrate that the material would not 

be accumulated speculatively per 40 

CFR 261.1(a)(8), but he must provide 

sufficient information about the material 

and the process to demonstrate that the 


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hazardous secondary material will in 

fact be reclaimed in a reasonable 

timeframe and will not be abandoned. 

EPA is not proposing an explicit 

definition of ‘‘reasonable timeframe’’

because such a timeframe would vary 

according to the material and industry 

involved, and therefore determining this 

timeframe should be made on a casespecific basis. However, an applicant 

may still choose to use the speculative 

accumulation timeframe as a default if 

it wishes. 

The third criterion for this non-waste 

determination is whether the hazardous 

constituents in the hazardous secondary 

material are recycled rather than 

released to the air, land or water at 

significantly higher concentrations from 

either a statistical or from a health and 

environmental risk perspective than 

would otherwise be released by the 

primary production process. To the 

extent that the hazardous constituents 

are a continuation of the original 

hazardous secondary material, their 

release to the environment is an 

indicator of discard. The Agency 

recognizes that normal production 

processes also result in a certain level of 

releases and, in evaluating this criteria, 

would not deny a petition if the increase 

in releases is not significantly different 

from either a statistical or risk 

perspective. However, when 

unacceptably high levels of the 

constituents that make the hazardous 

secondary material of regulatory 

concern are released to the environment 

rather than recycled, then that material 

(or at least the portion of the material 

that is of most concern) is not in fact 

being ‘‘reused within an ongoing 

industrial process.’’

The fourth and final criterion for this 

non-waste determination includes any 

other relevant factors that demonstrate 

the hazardous secondary material is not 

discarded. This ‘‘catch-all’’ criterion is 

intended to allow the applicant to 

provide any case-specific information it 

deems important in making the case that 

its material is not discarded and 

therefore not a solid waste. 

EPA requests comment on these 

criteria, as well as any other criteria that 

may be relevant for making this nonwaste determination. 

C. Non-Waste Determination for 

Hazardous Secondary Material 

Indistinguishable in All Relevant 

Aspects From a Product or Intermediate 

Although the courts have made clear 

that hazardous secondary materials 

recycled within a continuous industrial 

process are not discarded and therefore 

not solid waste, they have also said that 

hazardous secondary materials destined 

for recycling in another industry are not 

automatically discarded. In the Safe 

Foods case, the Court stated ‘‘Nobody 

questions that virgin * * * feedstocks 

are products rather than wastes. Once 

one accepts that premise, it seems 

eminently reasonable to treat [recycled] 

materials that are indistinguishable in 

the relevant respects as products as 

well.’’ 350 F.3d at 1269. In most cases, 

hazardous secondary materials that are 

indistinguishable from products are 

unambiguously excluded from solid 

waste regulation under 40 CFR 261.2(e). 

However, there may be some instances 

which would benefit from a non-waste 

determination similar to that proposed 

today for hazardous secondary materials 

reclaimed in a continuous industrial 

process. EPA is proposing four criteria 

for making a non-waste determination 

for hazardous secondary materials 

indistinguishable in all relevant aspects 

from a product or intermediate. 

The first criterion for this non-waste 

determination is consideration of likely 

markets for the hazardous secondary 

material (for example, based on the 

current positive value of the material, 

stability of demand, and any contractual 

arrangements). This evaluation of 

market participation is a key element for 

determining whether companies view 

and handle these hazardous secondary 

materials like products rather than like 

negatively-valued wastes. EPA’s report 

on how market incentives affect the 

management of hazardous secondary 

materials indicates that both high value 

and stable markets are strong incentives 

to refrain from over-accumulating 

recyclable materials, thus maximizing 

the likelihood that the hazardous 

secondary materials will be recycled 

and not abandoned. 

The second criterion for this nonwaste determination is the chemical and 

physical identity of the hazardous 

secondary material and whether it is 

comparable to commercial products or 

intermediates. This ‘‘identity principle’’

is a second key factor that the Court in 

Safe Food found useful in determining 

whether a material is indistinguishable 

from a product. It is important to note 

that the identity of a material can be 

‘‘comparable’’ to a product without 

being identical. However, to qualify for 

a non-waste determination, any 

differences between the hazardous 

secondary material in question and 

commercial products or intermediates 

must be insignificant from either a 

statistical or from a health and 

environmental risk perspective. 

The third criterion for this non-waste 

determination is whether the hazardous 

constituents in the hazardous secondary 

materials are recycled rather than 

released to the air, land or water at 

significantly higher concentrations from 

either a statistical or from a health and 

environmental risk perspective than 

would otherwise be released by the 

production process. The Agency 

believes that to the extent that the 

hazardous constituents are a 

continuation of the original hazardous 

secondary material, their release to the 

environment is a possible indicator of 

discard. The Agency recognizes that 

normal production processes also result 

in a certain level of releases and, in 

evaluating this criteria, would not deny 

a petition if the increase in releases is 

not significant from either a statistical or 

a health and environmental risk 

perspective. However, when high 

concentrations of the constituents that 

make the hazardous secondary material 

of regulatory concern are released to the 

environment rather than reclaimed, then 

that material (or at least the portion of 

the material that is of most concern) is 

not being handled as a commercial 

product or intermediate. 

As with the non-waste determination 

for hazardous secondary materials 

reclaimed in a continuous industrial 

process, the fourth and final criterion 

for this non-waste determination 

includes any other relevant factors that 

demonstrate the material is not 

discarded. This ‘‘catch-all’’ criterion is 

intended to allow the applicant to 

provide any case-specific information it 

deems important in making the case that 

its material is not discarded. 

EPA requests comment on these 

criteria, as well as any other criteria that 

may be relevant for making this nonwaste determination. 

D. Non-Waste Determination for 

Hazardous Secondary Material 

Reclaimed Under the Control of the 

Generator Via a Tolling Arrangement or 

Similar Contractual Arrangement 

As discussed earlier in today’s 

preamble, EPA is proposing that 

hazardous secondary materials recycled 

via a specific type of tolling (or 

contractual) arrangement are not 

discarded and therefore are not solid 

waste, and is requesting comment if 

other types of tolling arrangements 

would also not involve discard. Because 

the generator maintains control over the 

recycled hazardous secondary material 

and it is legitimately recycled, the 

hazardous secondary material would 

not be considered discarded. By 

maintaining control over, and potential 

liability for, the recycling process, the 

generator ensures that the materials are 

not discarded. See ABR 208 F.3d at 

1051 (‘‘Rather than throwing these 

materials [destined for recycling] away, 


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the producers saves them; rather than 

abandoning them, the producer reuses 

them.’’). 

However, the large variety of 

contractual arrangements may preclude 

EPA from identifying all possible 

arrangements that clearly do not involve 

discard. For this reason, the Agency also 

is proposing that generators may seek a 

non-waste determination for tolling or 

other contractual arrangements not 

covered by the proposed exclusion 

discussed in section IX of today’s 

preamble. 

The first criterion for this non-waste 

determination would be whether the 

generator retains ownership and 

responsibility via a contract or other 

mechanism for the hazardous secondary 

materials and the residuals that result 

from their recycling. Assumption of 

responsibility of both the hazardous 

secondary materials and the residuals 

that would result from their recycling is 

a key indication that the generator is not 

abandoning the hazardous constituents 

that would have caused the hazardous 

secondary materials to have been 

hazardous waste had they been 

discarded. 

The second criterion for this nonwaste determination is whether the 

hazardous constituents in the hazardous 

secondary materials are recycled rather 

than released to the air, land or water at 

significantly higher concentrations from 

either a statistical or from a health and 

environmental risk perspective than 

would otherwise be released by the 

production process. The Agency 

believes that to the extent that the 

hazardous constituents are a 

continuation of the original hazardous 

secondary material, their release to the 

environment is a possible indicator of 

discard. The Agency recognizes that 

normal production processes also result 

in a certain level of releases and, in 

evaluating this criteria, would not deny 

a petition if the increase in releases is 

not significant from either a statistical or 

a health and environmental risk 

perspective. However, when high 

concentrations of the constituents that 

make the hazardous secondary material 

of regulatory concern are released to the 

environment rather than reclaimed, then 

that material (or at least the portion of 

the material that is of most concern) is 

not being recycled under the control of 

the generator. 

As with the other types of non-waste 

determinations, the final criterion for 

this non-waste determination includes 

any other relevant factors that 

demonstrate the material is not 

discarded. This ‘‘catch-all’’ criterion is 

intended to allow the applicant to 

provide any case-specific information it 

deems important in making the case that 

its material is not discarded. 

EPA requests comment on these 

criteria, as well as any other criteria that 

may be relevant for making this nonwaste determination. 

E. Scope and Eligibility 

As with any solid waste 

determination that involves recycling, 

hazardous secondary materials 

presented for a non-waste determination 

must be legitimately recycled. In other 

words, the hazardous secondary 

material must provide a useful 

contribution to the recycling process or 

to a product of the recycling process, 

and the recycling process must produce 

a valuable product or intermediate. For 

further discussion of legitimacy and the 

factors to be considered, see section XI 

of today’s preamble. 

In addition, non-waste determinations 

are limited to reclamation activities and 

would not apply to recycling of 

‘‘inherently waste-like’’ materials (40 

CFR 261.2(d)), recycling of 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)) and 

‘‘burning of materials for energy 

recovery’’ or ‘‘used to produce a fuel or 

otherwise contained in fuels’’ (40 CFR 

261.2(c)(2)). Today’s supplemental 

proposal is not intended to affect how 

these recycling practices are regulated. 

However, we request comment on 

whether such practices should be 

eligible for the case-specific non-waste 

determinations. 

F. Petition Process 

The petition process for the non-waste 

determination would be the same as that 

for the solid waste variances found in 40 

CFR 260.31. In order to obtain a nonwaste determination, a facility that 

manages a hazardous secondary 

material that would otherwise be 

regulated under 40 CFR 261 as either a 

solid waste, or as a conditionally 

excluded waste, must apply to the 

Administrator or the authorized state 

per the procedures described in 40 CFR 

260.33. EPA proposes to amend section 

260.33 to apply to non-waste 

determinations also. The application 

must address the relevant criteria 

(discussed in further detail above). The 

Administrator would evaluate the 

petition and issue a draft notice 

tentatively granting or denying the 

application. Notification of this 

tentative decision will be provided by 

newspaper advertisement or radio 

broadcast in the locality where the 

facility is located. The Administrator 

would accept comment on the tentative 

decision for 30 days, and also may hold 

a public hearing. The Administrator 

would issue a final decision after receipt 

of comments and after the hearing (if 

any). If the application is denied, the 

facility may still pursue a solid waste 

variance or exclusion (for example, one 

of the solid waste variances under 40 

CFR 260.31 or solid waste exclusions 

under 40 CFR 261.4). EPA also may 

choose to specify the Regional 

Administrator as the appropriate level 

of review for this process. 

As discussed in more detail in section 

XV of today’s supplemental proposal, 

under section 3006 of RCRA, EPA 

would authorize states to administer the 

non-waste determinations as part of 

their base RCRA program. Because 

states are not required to implement 

Federal requirements that are less 

stringent or narrower in scope than 

current requirements, authorized states 

are not required to adopt the non-waste 

determination process, and ordinarily 

the proposed provision could not go 

into effect in an authorized state until it 

does choose to adopt it. However, 

because the non-waste determination 

process is a formalization of 

determinations that states may already 

perform on an ad hoc basis, EPA is 

proposing to allow states that have not 

yet formally adopted the proposed 

regulation in 40 CFR 260.34 to 

participate in non-waste determinations 

if the following conditions are met: (1) 

The state determines that the hazardous 

secondary material meets the criteria in 

either paragraph (b), (c) or (d) of 

proposed section 40 CFR 260.34; (2) the 

state requests EPA to review its 

determination; and (3) EPA approves 

the state determination. 

G. Enforcement 

If a regulatory authority determines 

that a hazardous secondary material is 

not a solid waste via the proposed 

petition process, the material is not 

subject to Subtitle C hazardous waste 

regulations. However, as part of this 

process, the applicant has an obligation 

to submit, to the best of its ability, 

complete and accurate information. If 

the information in the application is 

found to be incomplete or inaccurate 

and, as a result, the hazardous 

secondary material does not meet the 

criteria for a non-waste determination, 

then the material may be subject to 

RCRA Subtitle C regulation and EPA or 

the authorized state could choose to 

bring an enforcement action under 

RCRA section 3008(a). Moreover, if the 

petitioner is found to have knowingly 

submitted false information, then it also 

may be subject to criminal penalties 

under RCRA section 3008(d). 


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A special situation occurs when a 

material meets all the criteria at the time 

the determination is made, but, as 

circumstances change, ceases to meet 

the criteria. In particular, proposed 

criteria 40 CFR 260.34(b)(2) and 40 CFR 

260.34(c)(1) depend at least in part on 

market conditions, which can change 

over time. EPA requests comments on 

whether there should be as part of the 

petition process an obligation for the 

petitioner to inform the Agency when 

circumstances change, and whether 

there should be a formal mechanism for 

the Agency to revoke a determination if 

the change in circumstances results in 

the hazardous secondary material no 

longer meeting the criteria for a nonwaste determination. 

XIII. Effect of This Proposal on Other 

Programs 

A. Other Exclusions 

In the October 2003 proposal, EPA 

proposed a number of specific 

‘‘conforming changes’’ to existing 

exclusions (68 FR 61578–61580). The 

purpose of these conforming changes 

was to simplify and clarify the 

regulations. EPA did not intend to make 

any substantive changes as to how 

currently excluded materials would 

need to be managed or regulated. 

However, comments to the proposed 

changes were overwhelming in favor of 

retaining the existing exclusions. These 

existing exclusions are familiar to both 

the States and the regulated community, 

and making wholesale adjustments 

appears to have had unintended 

consequences in many cases. 

Thus in today’s supplemental 

proposal, EPA is proposing to retain the 

existing exclusions (for example, the 

scrap metal exclusion in 40 CFR 

261.4(a)(13)) exactly as written. 

However, we request comment on 

whether any specific regulatory 

exclusion would need revision in order 

to avoid confusion or contradictions. 

EPA also is proposing that hazardous 

secondary materials that are currently 

excluded with specific requirements or 

conditions should be required to 

continue to meet those requirements 

(e.g., the drip pad requirements for the 

wood preserving exclusion in 40 CFR 

261.4(a) (9)). In addition, recycling of 

such materials at new facilities, or at 

existing facilities that are not currently 

operating under the terms of an existing 

exclusion, would also be subject to the 

existing applicable regulatory exclusion, 

rather than today’s proposed exclusions. 

We request comment on the option of 

allowing a regulated entity to choose 

which exclusion the person is subject to 

in those cases where more than one 

exclusion could apply and, if so, 

whether that entity should be required 

to document the choice made. 

B. Permitted Facilities 

Facilities that currently have RCRA 

permits or interim status, and are 

managing hazardous wastes that would 

become excluded under this rule, could 

be affected by today’s supplemental 

proposal in a number of ways. Under 

one scenario, a facility that manages a 

variety of hazardous waste materials, 

including some hazardous secondary 

materials that would become excluded 

under this rule, would be affected only 

to the extent that certain units or 

processes at the facility would no longer 

be subject to hazardous waste 

regulations. A somewhat different 

scenario could involve a facility whose 

hazardous secondary materials would 

all become excluded from regulation 

when this rule takes effect (i.e., the 

facility is no longer a hazardous waste 

management facility). 

For permitted facilities that would be 

managing hazardous secondary 

materials excluded under this rule in 

addition to regulated hazardous wastes, 

changes to the facility’s permit would be 

necessary. These facilities would need 

to maintain their permits, but the units 

used solely to manage hazardous 

secondary materials would no longer be 

regulated solid waste management units 

subject to permit requirements. (Of 

course, to the extent that the exclusion 

were conditional, the owner/operator of 

the facility would need to comply with 

the applicable conditions to maintain 

the exclusion.) In such cases, the facility 

owner/operator could seek a permit 

modification from EPA or more 

typically the authorized state agency to 

remove the formerly subject unit(s) from 

the permit. 

The Agency believes that owners and 

operators modifying their permits to 

remove units managing only wastes 

excluded by this rule should comply 

with the requirements of section 

270.42(a) for Class 1 permit 

modifications, with prior Agency 

approval. Under this approach, owners 

and operators would be required to 

submit notification of the permit 

modification to the implementing 

agency, along with documentation 

demonstrating that the operations at the 

unit meet the conditions of the 

exclusion, and that the unit is used 

solely to manage excluded hazardous 

secondary materials. In addition, the 

owner or operator would be required to 

comply with the requirements of section 

270.42(a)(ii) for public notification. 

Under section 270.42(a)(2), the permit 

modification would not become 

effective until the owner or operator 

received written approval by the 

implementing agency. The 

implementing agency would approve 

the permit modification so long as the 

owner or operator complied with the 

procedural requirements of section 

270.42(a), that the operations met the 

conditions of the exclusion, and 

adequately demonstrated that the unit 

did not manage non-excluded 

hazardous wastes. EPA believes that 

Class 1 permit modifications with 

approval are appropriate in this case 

even though the proposal would 

establish a self-implementing exclusion, 

which does not require a regulatory 

agency’s approval. In this case, the unit 

in question has been through a formal 

permit process, and the Agency believes 

it appropriate that the regulatory agency 

have the opportunity for a brief review 

before the permit conditions it imposed 

are removed. For example, the unit 

might be intimately tied into other 

waste management operations at the 

facility, or perhaps the regulatory 

agency imposed special provisions 

under the omnibus provision, which it 

would want to consider. EPA seeks 

comment on this approach. 

A permitted facility that would no 

longer be considered a hazardous waste 

management facility under the 

exclusion (e.g., a facility managing only 

hazardous secondary materials that 

become excluded under today’s 

supplemental proposal) would no 

longer need a hazardous waste operating 

permit nor need to comply with the 

existing hazardous waste regulations 

governing permitted facilities. (Again, to 

the extent that the exclusion is 

conditional, the owner/operator of the 

facility would need to comply with the 

applicable conditions to maintain the 

exclusion.) Owners or operators of such 

facilities could, therefore, apply to the 

overseeing agency to terminate the 

permit by modifying the permit term. 

The Agency believes that owners or 

operators seeking to terminate the 

facility’s permit by modifying the 

permit term should comply with the 

requirements of section 270.42(a) for 

Class 1 modifications with prior Agency 

approval, as described above. To 

support a request for permit termination 

by modifying the permit term, the 

owner or operator would have to 

demonstrate that the operations meet 

the conditions of the exclusion, and that 

the facility does not manage nonexcluded hazardous wastes. Further, as 

discussed below, the owner or operator 

would have to demonstrate that 

corrective action obligations at the 

facility have been addressed, or, where 


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corrective action obligations remain, 

that continuation of the permit is not 

necessary to assure that they will be 

addressed (e.g., where the facilities 

cleanup obligations will be addressed 

under an alternative federal or state 

enforcement mechanism, or other 

federal or state cleanup authority). The 

Agency seeks comment on this 

approach. 

As was explained in the October 2003 

proposal (68 FR 61580), where a 

permitted facility has not yet completed 

facility-wide corrective action, but 

manages only hazardous secondary 

materials that would become excluded 

under this proposed rule (see 40 CFR 

264.101), the obligation to address 

facility-wide corrective action would 

remain in effect. 

At some facilities, corrective action 

obligations will likely continue to be 

addressed through the corrective action 

provisions of the permit. In these cases, 

maintenance of the permit would ensure 

that facility-wide corrective action will 

be addressed. Thus, in these cases, the 

permit would not be terminated by 

modifying the permit term, but would 

be modified to remove the provisions 

that applied to the now-excluded 

hazardous secondary material. The 

facility’s permit would, thereafter, only 

address corrective action. 

In other cases, however, EPA or an 

authorized state may have available an 

alternative federal or state enforcement 

mechanism, or other federal or state 

cleanup authority, through which it 

could choose to address the facility’s 

cleanup obligations, rather than 

continue to pursue corrective action 

under a permit. In these cases, where 

the alternate authority would ensure 

that facility-wide corrective action will 

be addressed, maintenance of the permit 

would not be necessary. 

A facility that is operating under 

interim status would be affected by 

promulgation of today’s supplemental 

proposal in much the same way as 

would a permitted facility, and the issue 

of corrective action would be addressed 

in a similar manner. At an interim status 

facility managing only hazardous 

secondary materials that become 

excluded under today’s supplemental 

proposal, the Part 265 interim status 

standards that applied to the hazardous 

waste management units at the facility, 

as well as the general facility standards 

in Part 265, would no longer apply. At 

the same time, the owner or operator 

would retain responsibility for 

unaddressed corrective action 

obligations at the solid waste 

management units. 

Owners and operators of permitted 

and interim status facilities with 

corrective action obligations should 

refer to the Agency’s February 25, 2003 

guidance entitled ‘‘Final Guidance on 

Completion of Corrective Action 

Activities at RCRA Facilities,’’ (68 FR 

8757) for a detailed discussion of 

corrective action completion. 

In addition to the above described 

issues relating to permits and corrective 

action, today’s supplemental proposal 

also may have implications with regard 

to closure of hazardous waste storage 

units at affected facilities. In cases 

where hazardous waste storage units 

would only be managing excluded 

hazardous secondary material pursuant 

to today’s supplemental proposal, the 

current regulations could be read as 

triggering the closure requirements for 

those units, since owners/operators of 

non-land-based hazardous waste units 

(e.g., tanks, containers, containment 

buildings) must begin closure within 90 

days of receiving a unit’s final volume 

of hazardous wastes. See 40 CFR 

264.113(a) and 265.113(a). 

In the October, 2003 proposal (68 FR 

61580–61581), EPA expressed the view 

that requiring closure of units in these 

situations would serve little 

environmental purpose, since after 

closure the unit would be immediately 

reopened and used to store the same 

(now excluded) hazardous secondary 

material. In that notice, the Agency 

proposed that closure of storage units 

would not be required when the wastes 

in such units were excluded under the 

proposal. 

In response to that proposal, several 

commenters stated that one of the main 

purposes of the RCRA subtitle C closure 

requirements is to identify and 

remediate any releases originating from 

the units. The Agency notes that 

releases from these units are discarded 

and solid and hazardous wastes, and 

agrees with commenter’s concern that 

such releases should be addressed. The 

Agency does not agree, however, that 

the specific subtitle C closure 

requirements are most appropriate to 

address cleanup of releases from these 

units, if any have occurred. Rather, the 

Agency believes that a better approach 

would be to address potential releases 

from these units as part of corrective 

action for all releases at the facility. This 

approach would achieve the same 

environmental results, and would 

provide the owner or operator the 

option of integrating the cleanup more 

closely into the broader facility 

response. 

When considering the issue of 

addressing releases from these units, the 

question arises about what happens to 

the funds that provide financial 

assurance for closure. The requirements 

in Part 264 and 265 Subpart H, which 

apply at these units prior to the 

exclusion taking effect, provide for 

release of financial assurance upon 

certification by the owner or operator 

that closure has been completed in 

accordance with the approved closure 

plan, and Agency verification of that 

certification (see 264.143(i) and 

265.143(h)). Similar provisions at 

sections 264.145(i) and 265.145(h) 

provide for release of financial 

assurance for post-closure care. 

Under the approach to closure 

discussed above, owners and operators 

of units that manage only wastes that 

would be excluded under this 

supplemental proposal would not be 

subject to closure requirements and, 

therefore, would not submit a 

certification of closure, and thus would 

not trigger release of financial 

assurance. As discussed in section X.C.2 

of today’s preamble, reclaimers who 

receive hazardous secondary materials 

that have been excluded under the 

proposed 40 CFR 261.4(a)(24) would 

still be required to meet Subpart H 

financial assurance requirements as a 

condition of the exclusion. In this case, 

the financial assurance provided for 

closure would satisfy that requirement 

(perhaps with some modification). 

However, persons who recycle 

materials under the proposed exclusions 

for materials recycled under the control 

of the generator (40 CFR 261.2(a)(2)(ii) 

and 40 CFR 261.4(a)(23)) would not be 

required to meet Subpart H financial 

assurance requirements as a condition 

of the exclusion. The Agency believes 

that those owners and operators should 

be released from financial assurance 

requirements upon demonstrating that 

no releases from the unit remain to be 

addressed. In complex facilities, that 

demonstration might be difficult, or it 

might be inconsistent with broader 

corrective action strategy (for example, 

if historical releases from the unit were 

mingled with other general facility 

contamination). Where such a situation 

exists, the Agency believes that 

financial assurances obtained for 

closure and/or post-closure should be 

redirected to address the corrective 

action needs at the unit. (In general, 

however, EPA believes that these 

situations will be the exception rather 

than the rule, since the overwhelming 

majority of units in question would 

have upgraded to current subtitle C 

standards, e.g., secondary containment 

for tanks, etc.). The Agency requests 

comment on modifying the regulations 

to allow financial assurances obtained 

for closure and/or post-closure to be 

redirected to address the corrective 

action needs at units that manage only 


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wastes that would be excluded by this 

proposal. 

C. Imports and Exports 

The proposed exclusion for hazardous 

secondary materials recycled under the 

control of the generating facility is 

limited to recycling performed in the 

United States or its territories. However, 

the transfer-based recycling exclusion 

and non-waste determinations included 

in today’s supplemental proposal do not 

place any geographic restrictions on 

movements of such hazardous 

secondary materials, provided they meet 

the description of the exclusion. It is 

therefore possible that in some cases 

excluded hazardous secondary materials 

could be generated in the United States 

or its territories and subsequently 

exported for reclamation to a facility in 

a foreign country. Under today’s 

supplemental proposal, the exclusion 

would be effective while the hazardous 

secondary material is within the United 

States or its territories. However, such 

excluded hazardous secondary materials 

may be subject to regulation as 

hazardous wastes in the receiving 

country, even if they are excluded from 

the definition of solid waste 

domestically (i.e., under RCRA). If this 

is the case, the U.S. exporter of the 

hazardous secondary material will need 

to comply with any applicable 

requirements of the importing country. 

(For further discussion, see section 

X.C.1 of today’s preamble regarding 

specific export/import conditions for 

hazardous secondary materials excluded 

under this proposal.) 

D. Superfund 

A primary purpose of today’s 

supplemental proposal is to encourage 

the safe, beneficial recycling of 

hazardous secondary materials. In 1999, 

Congress enacted the Superfund 

Recycling Equity Act (SREA), explicitly 

defining those hazardous substance 

recycling activities that potentially may 

be exempted from liability under the 

Comprehensive Environmental 

Response, Compensation and Liability 

Act (CERCLA). CERCLA section 127. 

Today’s supplemental proposal does not 

change the universe of recycling 

activities that could be exempted from 

CERCLA liability pursuant to CERCLA 

section 127. Today’s supplemental 

proposal only changes the definition of 

solid waste for purposes of RCRA 

subtitle C requirements. The 

supplemental proposal also does 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. 

E. National Partnership for 

Environmental Priorities 

If today’s proposed changes to the 

RCRA definition of solid waste are 

promulgated, the Agency expects that 

affected companies will take advantage 

of this new regulatory framework by 

exploring new opportunities to recycle 

their hazardous secondary materials. We 

believe that these regulatory changes are 

consistent with EPA’s efforts to 

encourage and promote sustainable 

methods and practices by manufacturers 

and other businesses. In this context, 

‘‘sustainability’’ is defined as economic 

development that meets the needs of the 

present without compromising the 

ability of future generations to meet 

their own needs. 

The National Partnership for 

Environmental Priorities (NPEP) is a 

voluntary program administered by EPA 

that fosters the establishment of a new 

corporate/federal partnership in which 

both work collaboratively towards 

voluntary reductions in the use of 

certain chemicals. Recycling is one 

means of achieving such reductions in 

chemical use. The NPEP can provide 

technical assistance and expertise to 

assist companies in successfully 

achieving these goals, while at the same 

time saving money or increasing 

production. NPEP members’ successes 

are voluntarily reported to EPA, and 

members are publicly recognized and 

rewarded for their accomplishments. 

For further information on the NPEP 

program, visit the NPEP Web site at 

Http://www.epa.gov/epaoswer/ 

hazwaste/minimize/partnership.htm. 

XIV. Measurement of the Performance 

Outcomes of This Supplemental 

Proposal 

A. Need for Performance Measurement 

Since today’s supplemental proposal, 

if finalized, would make important 

changes to the Agency’s current RCRA 

regulatory framework for industrial 

recycling of hazardous secondary 

materials, and is designed to encourage 

industrial recycling of such materials, 

the Agency has a strong interest in being 

able to measure the performance 

outcomes that these regulatory changes 

may have on the regulated community. 

In general, it is important for the Agency 

to be able to quantify, monitor, and 

report to the public the actual 

performance outcomes of this 

supplemental proposal. In general, 

performance measurement of federal 

programs is expected of by Congress 

according to the 1993 Government 

Performance and Results Act (http:// 

www.whitehouse.gov/omb/mgmt-gpra) 

and the 2005 Government 

Reorganization and Program 

Performance Improvement Act (http:// 

www.whitehouse.gov/omb/legislative/ 

grppi_act_2005.pdf), as well as by the 

2002 President’s Management Agenda 

(http://www.whitehouse.gov/omb/ 

budget/fy2002/mgmt.pdf), and by the 

Office of Management and Budget 

according to the annual Program 

Assessment Rating Tool (http:// 

www.whitehouse.gov/omb/part) 

initiated in 2003. In particular, 

measurement of the performance 

outcomes for this supplemental 

proposal will enable EPA to evaluate the 

actual effectiveness with regard to 

encouraging industrial recycling, 

affecting future industrial recycling 

trends, and targeting possible future 

regulatory and non-regulatory initiatives 

directed at furthering safe and beneficial 

industrial recycling practices. As 

discussed elsewhere in today’s 

preamble, we expect that the regulatory 

changes being proposed will have the 

effect of reducing regulatory 

disincentives to industrial recycling, 

thereby encouraging new recycling 

initiatives by the regulated community. 

To measure performance outcomes, 

the Agency is interested in being able to 

measure the numbers of existing and 

new industrial facilities that actually 

take advantage of these regulatory 

changes, as well as the quantities and 

types of hazardous secondary materials 

that are affected, and the specific types 

of industries that are affected. We also 

are interested in measuring the extent to 

which industrial recycling that is 

affected by today’s supplemental 

proposal occurs onsite or offsite, and the 

extent to which small quantity and large 

quantity hazardous waste generators 

(i.e., SQGs and LQGs) are able to take 

advantage of an exclusion. Such 

information on the actual outcomes of 

these regulatory changes could enable 

the Agency to measure, rather than 

estimate, the actual cost savings benefits 

to industries affected by the regulatory 

changes, as well as to measure 

environmental benefits (e.g., annual 

quantities of specific materials 

conserved, avoided raw material inputs, 

reduced pressure on landfill capacity, 

water and energy conserved). 

B. Approaches to Performance 

Measurement 

1. Use of the Proposed Notification 

Requirements 

Today’s supplemental proposal 

includes a requirement that facilities 

(both generators and recyclers) taking 

advantage of an exclusion provide 

regulatory authorities with certain basic 

items of information through a one-time 


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notification. This information would 

allow EPA to track the number of 

facilities and the types of hazardous 

secondary materials affected by the 

proposed rulemaking, but would not 

allow us to estimate the amount of 

material affected. We request comment 

on whether additional data elements 

could be added that would help inform 

EPA and the public about the effect of 

the proposed exclusions without 

imposing a significant additional 

burden on the regulated community. 

2. Use of Existing EPA Data Systems 

There are two existing data systems 

which may be of limited utility to EPA 

for measuring the performance 

outcomes of this supplemental proposal. 

(a) RCRA Biennial Report. Under 40 

CFR 262.41, large quantity hazardous 

waste generators and hazardous waste 

treatment, storage, recycling and 

disposal facilities (TSDRFs) are required 

to prepare and submit Biennial Reports 

to RCRA-authorized states on the types 

and quantities of hazardous wastes 

generated and managed during the 

reporting year (http://www.epa.gov/ 

epaoswer/hazwaste/data/ 

biennialreport). In the past, the Agency 

has used data from the Biennial Report 

(BR) for analytic purposes such as 

establishing baselines for estimating the 

potential economic impacts on 

industries and facilities potentially 

affected by RCRA rulemaking 

initiatives. While the BR has provided 

the Agency with considerable valuable 

data regarding the types and quantities 

of hazardous wastes that are generated, 

and where and how they are treated, 

stored or disposed, this system has a 

number of limitations, particularly with 

regard to: (i) How small quantity 

generators are not required to report to 

the BR and (ii) how generation and 

management of hazardous secondary 

materials that are not regulated as 

hazardous wastes are not covered in the 

BR. Under today’s supplemental 

proposal, these limitations may be 

exacerbated, since current RCRAregulated hazardous wastes subject to 

BR reporting will become excluded as 

recycled hazardous secondary materials. 

As a result, in the future we expect the 

BR will provide less data relevant to 

measuring hazardous secondary 

materials recycling trends, and thus will 

be inadequate for measuring the future 

outcomes and success of this 

supplemental proposal. Therefore, we 

request comment on modifying the BRS 

to require or continue to require that 

such information be submitted to EPA. 

(b) Toxic Release Inventory. 

Compared to the BR, the Toxic Release 

Inventory (TRI) may provide greater 

utility for the purpose of measuring 

future performance outcomes of today’s 

supplemental proposal, because the TRI 

is not limited to hazardous waste and 

not limited to LQGs, but includes 

annual reporting on industrial materials 

manufactured, imported, processed, 

otherwise used, transferred offsite, 

treated or disposed as waste, or recycled 

by certain industries. Consequently, by 

its design and relatively broader scope, 

the TRI (Form R; http://www.epa.gov/ 

tri) contains limited information on 

RCRA hazardous wastes (as well as 

more information about other types of 

industrial materials such as secondary 

by-products) and it is probably more onpoint for the Agency to attempt to use 

for measuring future outcomes of 

today’s supplemental proposal. 

In combination, both the BR and TRI 

data systems may provide a skeletal but 

complementary framework for 

measuring future performance 

outcomes. 

3. Surveys 

Another option, either as a standalone option or used in combination 

with the BR/TRI option above, could be 

to conduct a mail or phone survey of 

affected facilities. The main advantage 

of a survey would be the ability to 

collect data on targeted performance 

measures that would not be available 

through either the BR or TRI. Moreover, 

a survey mechanism could potentially 

serve a dual purpose as a form of 

communications outreach to industrial 

facilities that are not recycling or are 

unaware of today’s supplemental 

proposal, which would assist EPA in 

better understanding why some 

generators are unable or unwilling to 

recycle their hazardous secondary 

materials. Such a survey could be 

voluntary or mandatory, and could 

involve a statistically-valid sample of 

industrial facilities, or could focus on 

particular industries or affected 

materials. It could be conducted as a 

one-time effort or periodically (e.g., 

once every four years) to capture 

recycling trends over time. To minimize 

burden, it could also be conducted 

electronically over the internet. It 

should be noted, however, that with 

some exceptions (e.g., surveys of fewer 

than 10 respondents), conducting a 

survey of this nature would need OMB 

approval in accordance with the 

provisions of the Paperwork Reduction 

Act. 

4. Voluntary Partnerships With Affected 

Industries 

Measuring the impact of today’s 

supplemental proposal might also be 

done with the voluntary assistance of 

stakeholder industry and trade 

associations, many of which also may 

have a vested interest in assessing their 

success, or lack thereof. We are aware 

that some trade associations may 

maintain data on the recycling activities 

of their member companies; such 

associations might be willing to share 

some of that existing information with 

the Agency. Another option could be to 

partner with certain trade associations 

that may be willing on a voluntary basis 

to gather relevant information from their 

members. 

5. NPEP Voluntary Program 

As discussed in the preceding section 

of this preamble, EPA’s National 

Partnership for Environmental Priorities 

(NPEP) is a voluntary program that 

encourages companies and federal 

facilities to reduce priority chemicals 

through waste minimization, reuse, 

recycling, and reclamation, and to 

report achievements in reductions. 

Companies that choose to change their 

materials management practices from 

disposal to recycling as a result of 

today’s supplemental proposal could be 

eligible for membership in NPEP. 

Companies that join NPEP could 

identify voluntary goal(s) to initiate new 

recycling or to increase current 

recycling at their facility of priority 

chemicals. Upon completion of their 

goal(s), the partners can submit a 

success story of their accomplishments. 

In turn, these partners will receive EPA 

support and assistance for reducing 

priority chemicals and award 

recognition for their success. Thus, 

information from NPEP partners might 

also be of assistance to EPA in 

evaluating the impacts of today’s 

proposed rule. 

C. Request for Comment on Performance 

Measurement Approaches 

The Agency requests comment on the 

alternative performance measurement 

approaches described above for enabling 

the Agency to measure the actual 

performance outcomes of today’s 

supplemental proposal. In addition to 

satisfying federal performance 

measurement requirements, we are also 

interested in stakeholder views as to the 

potential utility of measuring the 

effectiveness of today’s proposed 

exclusions in achieving their intended 

induced new recycling and industry 

cost-savings objectives, and how such 

information might benefit stakeholders 

and the regulated community. Finally, 

we also solicit comment on other 

performance measurement approaches 

than those described above, that may be 

more effective in enabling EPA to 


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measure the actual future outcomes of 

today’s supplemental proposal. 

XV. How Would These Proposed 

Regulatory Changes Be Administered 

and Enforced in the States? 

A. Applicability of Rules in Authorized 

States 

Under section 3006 of RCRA, EPA 

may authorize qualified states to 

administer the RCRA Subtitle C 

hazardous waste program within the 

state. Following authorization, EPA 

retains Subtitle C enforcement 

authority, although authorized states 

have primary enforcement 

responsibility. EPA retains authority 

under sections 3007, 3008, 3013, 3017 

and 7003. The standards and 

requirements for state authorization are 

found at 40 CFR part 271. 

Prior to enactment of the Hazardous 

and Solid Waste Amendments of 1984 

(HSWA), a state with final RCRA 

authorization administered its 

hazardous waste program entirely in 

lieu of EPA administering the federal 

program in that state. The federal 

requirements no longer applied in the 

authorized state, and EPA could not 

issue permits for any facilities in that 

state, since only the state was 

authorized to issue RCRA permits. 

When new, more stringent federal 

requirements were promulgated, the 

state was obligated to enact equivalent 

authorities within specified time frames. 

However, the new federal requirements 

did not take effect in an authorized state 

until the state adopted the federal 

requirements as state law. 

In contrast, under RCRA section 

3006(g) (42 U.S.C. 6926(g)), which was 

added by HSWA, new requirements and 

prohibitions imposed under HSWA 

authority take effect in authorized states 

at the same time that they take effect in 

unauthorized states. EPA is directed by 

the statute to implement these 

requirements and prohibitions in 

authorized states, including the 

issuance of permits, until the state is 

granted authorization to do so. While 

states must still adopt HSWA related 

provisions as state law to retain final 

authorization, EPA implements the 

HSWA provisions in authorized states 

until the states do so. 

Authorized states are required to 

modify their programs only when EPA 

enacts federal requirements that are 

more stringent or broader in scope than 

existing federal requirements. RCRA 

section 3009 allows the states to impose 

standards more stringent than those in 

the federal program (see also 40 CFR 

271.1). Therefore, authorized states may, 

but are not required to, adopt federal 

regulations, both HSWA and nonHSWA, that are considered less 

stringent than previous federal 

regulations. 

B. Effect on State Authorization 

Today’s proposed rule would 

eliminate specific requirements that 

apply to materials currently managed as 

hazardous waste, and is being proposed, 

at least in part, in response to recent 

court decisions on the definition of 

solid waste. Specifically, in several 

decisions, courts have held that EPA’s 

current definition of solid waste at 40 

CFR 261.2 is overly broad and would 

lead to the regulation of some hazardous 

secondary materials that are not 

discarded and, therefore, are not solid 

wastes. In this rulemaking, the 

exclusion for materials reclaimed under 

the control of the generator (proposed 

40 CFR 261.2(a)(2)(ii)) identifies those 

hazardous secondary materials that are 

not discarded and, therefore, are not 

solid wastes under RCRA. EPA also 

recognizes that there may be some 

hazardous secondary materials that are 

not recycled under the control of the 

generator, but are not solid wastes 

because they are reclaimed in a 

continuous industrial process. Because 

it was not possible to identify all of the 

continuous industrial process recycling 

fact patterns, EPA has proposed a 

petition process for non-waste 

determinations at proposed 40 CFR 

260.30 (see Section VII above). 

EPA believes that the proposed rule 

describes the appropriate scope of the 

federal program under RCRA. Thus, 

reclamation under the control of the 

generator and recycling in a continuous 

process, as described herein, are not 

activities associated with discarded 

materials and would not be subject to 

RCRA. In addition, today’s proposal also 

conditionally excludes from the 

definition of solid waste reclaimed 

materials that are not under the control 

of the generator and are not recycled in 

a continuous industrial process. EPA 

believes that these exclusions will 

encourage recycling and that they are 

consistent with RCRA’s statutory 

objective of conserving valuable 

material and energy resources. 

EPA would strongly encourage states 

to adopt the regulations being proposed 

today. When EPA authorizes a state to 

implement the RCRA hazardous waste 

program, EPA determines whether the 

state program is consistent with the 

federal program, and whether it is no 

less stringent. This process, codified in 

40 CFR 271, ensures national 

consistency and minimum standards, 

while providing flexibility to states in 

implementing rules. In making this 

determination, EPA evaluates the state 

requirements to ensure they are no less 

stringent than the federal requirements. 

Because today’s rule would eliminate 

specific requirements for hazardous 

secondary materials that are currently 

managed as hazardous waste, state 

programs would no longer need to 

include those specific requirements in 

order to be consistent with EPA’s 

regulations, when and if today’s rule is 

finalized. 

However, under RCRA section 3009, a 

state may adopt standards that are more 

stringent than the federal program. 

Thus, a state is not required to adopt 

today’s proposal, or a state may choose 

to adopt only part of today’s proposal. 

Some states incorporate the federal 

regulations by reference or have specific 

state statutory requirements that their 

state program can be no more stringent 

than the federal regulations. In those 

cases, EPA anticipates that the 

exclusions in today’s proposal, when 

and if finalized, would be adopted by 

these states, consistent with state laws 

and state administrative procedures, 

unless they take explicit action as 

specified by their respective state laws 

to decline the proposed revisions. We 

note that if states choose not to adopt 

the provisions of today’s proposal 

concerning exports, the provisions of 40 

CFR 262 Subparts E or H would apply 

to hazardous secondary materials that 

are exported. 

C. Interstate Transport 

Because some states may choose not 

to seek authorization for today’s 

supplemental proposal, there will 

probably be cases where the hazardous 

secondary materials in question will be 

transported through states with different 

regulations governing them. 

First, a hazardous secondary material 

which is subject to an exclusion from 

the definition of solid waste regulations 

may be sent to a state, or through a state, 

where it is subject to the hazardous 

waste regulations. In this scenario, for 

the portion of the trip through the 

originating state, and any other states 

where the hazardous secondary material 

is excluded, neither a hazardous waste 

transporter with an EPA identification 

number per 40 CFR 263.11 nor a 

manifest would be required. However, 

for the portion of the trip through the 

receiving state, and any other states that 

do not consider the hazardous 

secondary material to be excluded, the 

transporter must have a manifest, and 

must move the hazardous secondary 

material in compliance with 40 CFR 

part 263. In order for the final 

transporter and the receiving facility to 

fulfill the requirements concerning the 


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10As explained in the ‘‘Economics Background 

Document,’’ in the docket for today’s rule, EPA 

expects that as a result of this rule, transportation 

distances for hazardous secondary materials that are 

affected by today’s rule are expected to be reduced 

from averages of about 340 miles for disposal at 

hazardous waste landfills and between 400 to 520 

miles for offsite hazardous waste recycling to 0 

miles for on-site recycling (for about 9% of the 

affected facilities) and an average of about 50 miles 

for non-hazardous waste recycling (for about 91% 

of the affected facilities). Because, on an annual 

nationwide basis, 91% of RCRA hazardous waste is 

transported by truck, transportation risk is 

predominantly roadway crash risks involving 

property damage crashes, personal injury crashes, 

or fatal crashes. Because of the fact that 

transportation accident risks positively correlate 

with travel distances, EPA expects a minimum 85% 

to 90% reduction in baseline annual transport 

accident risk for affected materials, as a rough 

estimate, regardless of DOT regulatory status (i.e., 

340 to 520 miles average transport distance 

baseline, compared to 0 to 50 miles hypothetical 

average post-promulgation distance). 

manifest (40 CFR 263.20, 263.21, 

263.22, 264.71, 264.72, 264.76 or 

265.71, 265.72, and 265.76), the 

initiating facility should complete a 

manifest and forward it to the first 

transporter to travel in a state where the 

hazardous secondary material is not 

excluded. The receiving facility must 

then sign the manifest and send a copy 

to the initiating facility. 

Second, a hazardous secondary 

material generated in a state that does 

not provide an exclusion for the 

hazardous secondary material may be 

sent to a state where it is excluded. In 

this scenario, the hazardous secondary 

material must be moved by a hazardous 

waste transporter while the hazardous 

secondary material is in the generator’s 

state or any other states where it is not 

excluded. The initiating facility would 

complete a manifest and give copies to 

the transporter as required under 40 

CFR 262.23(a). Transportation within 

the receiving state and any other states 

that exclude the hazardous secondary 

material would not require a manifest 

and need not be transported by a 

hazardous waste transporter. However, 

it is the initiating facility’s 

responsibility to ensure that the 

manifest is forwarded to the receiving 

facility by any non-hazardous waste 

transporter and sent back to the 

initiating facility by the receiving 

facility (see 40 CFR 262.23 and 262.42). 

One final point is that RCRAregulated hazardous wastes, when 

transported, require an EPA hazardous 

waste manifest, and are incorporated by 

reference in Department of 

Transportation (DOT) regulations in the 

DOT definition of hazardous material 

(49 CFR 171.8). Under today’s 

supplemental proposal, a hazardous 

secondary material that is not a solid 

waste would no longer need an EPA 

manifest when transported off-site for 

recycling, and therefore would not 

automatically be considered a DOT 

hazardous material (hazmat). However, 

if the material contains a chemical or 

falls into a class of substances that DOT 

has determined to pose an unacceptable 

hazard during transportation, it would 

still be regulated as a DOT hazardous 

material (a table at 49 CFR 172.101 lists 

materials considered ‘‘hazardous’’ by 

DOT, according to 23 DOT hazard 

classes). If it does not, then it would not 

be so regulated by DOT. EPA believes 

this is appropriate, since when sent to 

recycling rather than disposal, these 

hazardous secondary materials pose no 

greater risk than similar types of nonwaste materials already in 

transportation for commerce under nonhazmat DOT status. Moreover, 

regardless of a hazardous secondary 

material’s EPA manifest and DOT 

hazmat status, EPA believes that today’s 

supplemental proposal is likely to result 

in a net reduction in annual 

transportation accident risks during 

transport of affected materials, due to 

the expected net reduction in annual 

miles transported, as a result of the 

companies which would choose to 

switch from current offsite hazardous 

waste management to recycling at either 

on-site or closer facilities to the 

generating facility.10

XVI. How Has EPA Fulfilled the 

Administrative Requirements for This 

Rulemaking? 

A. Executive Order 12866: Regulatory 

Planning and Review 

Under section 3(f)(1) of Executive 

Order (EO) 12866 (58 FR 51735, October 

4, 1993), this action is an ‘‘economically 

significant regulatory action’’ because 

the annual effect on the economy of this 

proposed action is expected to be 

greater than $100 million, and the 

proposed action contains novel policy 

issues. Accordingly, EPA submitted this 

action to the Office of Management and 

Budget (OMB) for review under EO 

12866 and any changes made in 

response to OMB recommendations 

have been documented in the docket for 

this action. 

EPA prepared an analysis of the 

potential national economic costs and 

benefits associated with this proposed 

action. The analysis is contained in our 

‘‘Economics Background Document: 

Regulatory Impact Analysis (RIA) for 

EPA’s 2007 Supplemental Proposed 

Revisions to the Industrial Recycling 

Exclusions of the RCRA Definition of 

Solid Waste’’ (January 22, 2007, 284 

pages) which is available for public 

review and comment in the EPA Docket 

(http://www.regulations.gov) and is 

briefly summarized below. If the 

exclusions are promulgated as proposed 

today, (i.e., the two generator controlled 

exclusions involving land- and non-land 

based units, plus the offsite transfer 

exclusion, plus the case-by-case petition 

process) and are adopted by all state 

governments, EPA expects this action to 

result in a net effect of $107 million in 

average annual net cost savings to about 

4,600 facilities in 530 industries, and is 

expected to remove from RCRA 

regulation 0.65 million tons per year of 

hazardous secondary materials currently 

managed as RCRA hazardous waste. 

These materials consist of 0.59 million 

tons (91%) that are currently recycled as 

RCRA hazardous waste, and 0.06 

million tons (9%) of hazardous waste 

that is currently disposed (i.e., 

landfilled, or incinerated), which EPA 

expects may switch from disposal to 

recycling as a result of this action, if 

promulgated. With respect to each of the 

proposed exclusions, the $107 million 

per year best estimate net cost savings 

effect consists of additive components: 

(a) $87 million per year for hazardous 

secondary materials recycled under the 

control of the generating facility in 

either land or non-land based units 

(which includes the onsite, within 

same-company, and tolling arrangement 

exclusions), plus (b) $19 million cost 

savings for conditional exclusion of 

other offsite transfers, plus (c) $1 

million per year cost savings for caseby-case non-waste determinations. 

These impact estimates are EPA’s best 

estimates within the economic impact 

estimation uncertainty range of $93 

million to $205 million in annual 

materials management cost savings, and 

0.33 to 1.70 million tons per year in 

affected hazardous secondary materials, 

respectively, for the net effect of the 

proposed regulatory exclusions. The 

purpose of these impact ranges is to 

reveal two major sources of uncertainty 

at the launch of our RIA prior to the 

final draft of this proposal: (1) Our RIA 

assigned eight implementation 

conditions to the best estimate impact 

for the proposed exclusions from a list 

of 18 possible conditions formulated at 

the launch of the RIA. In comparison, 

today’s notice proposes nine conditions 

which differ by five conditions and 

standards (i.e., recycling legitimacy 

criteria, reasonable effort by generators, 

onsite recordkeeping, land placement, 

and offsite shipment tracking); the 

impact uncertainty range lower and 

upper bounds reflect inclusion of two 

conditions and of 17 conditions, 

respectively; and (2) the main 

underlying data in the RIA is the RCRA 

Biennial Report database about RCRA 


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hazardous waste activity, which 

includes numerical outliers; to address 

these statistical outliers, the impact 

uncertainty ranges reflect inclusion of 

99% and 100% of the data, respectively, 

whereas our best estimate includes 

99.5% of the data (i.e., 0.5% of the 

largest hazardous waste streams 

removed from the impact estimate). 

In addition to these uncertainty 

factors which the RIA attempted to 

address directly in the impact 

computations, there are five other 

sources of impact uncertainty that our 

RIA describes as sensitivity analyses 

and provides estimates of potential 

overall magnitude: (1) Based on 

extrapolating the adverse comments by 

some state governments on exclusion 

options described in the October 2003 

proposal, the economic impacts could 

be 4% to 46% less than estimated in the 

RIA from state non-adoption of this rule 

if promulgated; (2) the RIA is based on 

a single year 2003 snapshot of RCRA 

hazardous waste data, but recent (1997–

2003) trend data show ¥17% to +38% 

fluctuation about mean in annual waste 

tonnages recycled and disposed, and 

¥54% to +54% fluctuation in annual 

count of hazardous waste facilities; 

consequently, future annual impacts 

could fluctuate rather widely relative to 

the average annual impact estimates of 

our RIA based on 2003 data; (3) our RIA 

is based on hazardous waste tonnages 

reported as managed in 2003 rather than 

reported as generated; however, recent 

trend (1997–2003) data show ¥34% to 

+39% annual fluctuations between 

management and generation quantities; 

(4) to a large degree macro economic 

conditions determine the quantity of 

hazardous waste and secondary 

industrial materials generated and 

managed in any given year; for example, 

although our RIA is built upon a single 

year 2003 snapshot, one of the top-5 

industries generating such materials is 

NAICS 3241 petroleum refining which 

is expected to grow almost 6% annually 

through 2010, which could increase 

future impacts; and (5) our RIA is 

founded on the ‘‘large quantity 

generator’’ (LQG) and the ‘‘treatment, 

storage, disposal, recycler facility’’

(TSDRF) data from the RCRA Biennial 

Report, and therefore to some degree if 

not double-counted in the TSDRF data, 

excludes from the impact estimates the 

RCRA regulatory class of ‘‘small 

quantity generators’’ (SQGs), which may 

represent a 2% to 3% impact 

underestimation. 

Furthermore, our RIA estimate of 

potential new induced recycling as a 

result of this proposal if promulgated, 

does not include an evaluation of 

whether the U.S. or global markets for 

recycled industrial secondary materials 

are large enough to absorb a potential 

increase in supply of recycled materials. 

Market conditions for recycled 

secondary materials can vary 

considerably over time. Demand for 

recycled solvents, for example, is largely 

dependent on the petroleum market: 

because virgin solvents are made from 

petroleum products, high petroleum 

prices encourage solvent recycling. 

Similarly, high metals prices obviously 

favor the recycling of metal-bearing 

secondary materials. In addition, there 

are four physical factors that suggest 

U.S. industries may be near their 

current technical and economic limits 

for recycling RCRA hazardous wastes: 

(1) The recent hazardous waste 

generation trend shows a 25% decline 

between 1999 and 2003; (2) the recent 

hazardous waste recycling trend shows 

a 73% increase in baseline recycling 

between 1999 and 2003 accounting in 

aggregate for metals recycling plus 

solvents recycling plus other materials 

recycling (e.g., acid regeneration, nonsolvent liquid recycling); (3) recycling of 

RCRA hazardous wastes and secondary 

industrial materials is technically 

difficult in some cases because of 

numerous chemical co-contaminates in 

the materials; for example, based on a 

national survey of large RCRA 

hazardous waste TSDRFs, 90% of 

facilities reported between 10 and 60 

hazardous chemical constituents in 

wastes, with 287 constituents reported 

for a single wastestream, and a total of 

724 different chemical constituents 

reported in surveyed wastes; this survey 

suggests that most LQGs must address a 

relatively high number of hazardous 

chemical constituents in evaluating the 

feasibility of their waste management 

options such as recycling; and (4) some 

RCRA hazardous wastes have relatively 

low (e.g., less than 1%) assay values for 

constituents with market value. 

EPA requests comment on the 

regulatory impact analysis, including 

both the estimates of additional 

recycling and the cost savings that may 

result from this proposed rule, and 

welcomes data from the public about 

the possible impacts of the uncertainty 

factors. For example, EPA is seeking 

comments about whether the 

codification of the legitimacy criteria, 

while not intended to impose any 

additional requirements as compared to 

the current practice, may result in 

additional costs or benefits that are not 

included in the RIA, and, if so, what 

those additional costs or benefits would 

be. 

In addition to estimating the potential 

impact of this proposal, EPA’s economic 

analysis also examined three other 

alternative approaches for recycling 

exclusions: On-site-only exclusion, 

intra-industry offsite exclusion, and 

broad inter-industry transfer exclusion 

with few conditions, as discussed in 

EPA’s October 2003 proposed rule. Our 

best estimates of the potential net cost 

savings for these three other approaches 

are $63 million, $72 million, and $129 

million per year, associated with 0.35 

million tons, 0.38 million tons, and 0.67 

million tons per year secondary 

materials potentially affected, 

respectively. Accounting for estimation 

uncertainty factors, net cost savings and 

potentially affected materials for these 

three options could range between $45 

million to $147 million per year and 

0.24 million to 0.91 million tons per 

year for the on-site option, between $56 

million to $156 million per year and 

0.27 million to 0.98 million tons per 

year for the intra-industry option, and 

between $114 million to $206 million 

per year and 0.46 million to 1.57 million 

tons per year for the broad interindustry transfer option. In comparison 

to these three options, and taking 

account of impact uncertainty factors, 

the proposed approach is expected to 

result in approximately the same range 

in annual cost savings as the highest 

impact broad inter-industry transfer 

option of these three alternatives, 

because it consists of four components: 

a broad transfer option with certain 

conditions plus the two generator 

controlled options plus the case-by-case 

petition option, but is expected to affect 

slightly more waste quantities annually 

from addition of the case-by-case 

exclusion. 

In selecting the options for today’s 

proposal, EPA considered both the cost 

and benefits of the different options and 

the potential for each option to result in 

materials being discarded and then 

resulting in remediation or 

environmental damages. The proposed 

combination option of excluding 

materials recycled under the control of 

the generator, hazardous secondary 

materials transferred for recycling with 

certain conditions, and a case-by-case 

non-waste determination results in the 

second highest estimated cost savings, 

number of entities affected and amount 

of material expected to be induced to 

new recycling. EPA chose not to pursue 

the option with the highest estimated 

annual cost savings ($129 million versus 

$107 million per year for today’s 

proposed approach) because the lack of 

conditions for materials transferred to a 

third-party recycler may result in 

material being discarded and increase 

the likelihood of new cleanup sites that 

would need to be funded by public 


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funds. See our ‘‘Economics Background 

Document,’’ which is in the docket for 

today’s supplemental proposal, for a 

more detailed discussion regarding the 

estimated impacts of the proposed 

approach, as well as the impact 

uncertainties, and exclusion option 

alternatives that we evaluated. 

B. Paperwork Reduction Act (ICR) 

The information collection 

requirements in this supplemental 

proposal have been submitted for 

approval to the Office of Management 

and Budget (OMB) under the Paperwork 

Reduction Act, 44 U.S.C. 3501 et seq. 

An Information Collection Request (ICR) 

document prepared by EPA has been 

assigned EPA ICR number 1189.19. 

The information requirements 

established for this action, and 

identified in the ICR supporting today’s 

supplemental proposal, are largely selfimplementing, except for notice and 

consent requirements for hazardous 

secondary materials exported for 

recycling. This process will ensure that 

(1) Regulated entities are held 

accountable to the applicable 

requirements; (2) state inspectors can 

verify compliance when needed; and (3) 

hazardous secondary materials exported 

for recycling are actually handled as 

commodities abroad. 

EPA has carefully considered the 

burden that would be imposed upon the 

regulated community by the regulations. 

EPA is confident that those activities 

required of respondents are necessary, 

and, to the extent possible, has 

attempted to minimize the burden 

imposed. EPA believes that if the 

minimum requirements specified under 

the proposed requirements are not met, 

neither the facilities nor EPA can ensure 

that hazardous secondary materials sent 

for recycling are being managed in a 

manner protective of human health and 

the environment. 

For the recordkeeping and reporting 

requirements applicable to hazardous 

secondary materials sent for recycling, 

the aggregate annual burden to 

respondents over the three-year period 

covered by this ICR is estimated to be 

11,552 hours, with a cost to affected 

entities (i.e., industrial facilities) of 

$1,417,242. However, this represents an 

annual reduction in burden to 

respondents of 52,050 hours, 

representing a cost reduction of 

$3,474,035 per year. The estimated 

annual operation and maintenance costs 

to affected entities are $739,469 per 

year, primarily for purchasing audit 

reports. There are no startup costs and 

no costs for purchases of services. 

Administrative costs to the Agency are 

estimated to be 1,257 hours per year, 

representing an annual cost of $49,891. 

Burden means the total time, effort, or 

financial resources expended by persons 

to generate, maintain, retain, or disclose 

or provide information to or for a 

Federal agency. This includes the time 

needed to review instructions; develop, 

acquire, install, and utilize technology 

and systems for the purposes of 

collecting, validating, and verifying 

information, processing and 

maintaining information, and disclosing 

and providing information; adjust 

existing systems to comply with any 

previously applicable instructions and 

requirements; train personnel to be able 

to respond to a collection of 

information; search data sources; 

complete and review the collection of 

information; and transmit or otherwise 

disclose the information. 

An Agency may not conduct or 

sponsor, and a person is not required to 

respond to, a collection of information 

unless it displays a currently valid OMB 

control number. The OMB control 

numbers for EPA’s regulations 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, including the use of 

automated collection techniques, EPA 

has established a public docket for this 

rule, which includes this ICR, under 

Docket ID No. EPA–HQ–RCRA–2002–

0031. Submit any comments related to 

the ICR for this proposed rule to EPA 

and OMB. See the 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, 

Office of Management and Budget, Attn: 

Desk Officer for EPA, 725 17th Street, 

NW., Washington, DC 20503. 

C. Regulatory Flexibility Act 

The Regulatory Flexibility Act (RFA), 

as amended by the Small Business 

Regulatory Enforcement Fairness Act of 

1996 (SBREFA), 5 U.S.C. 601 et. seq., 

generally requires an agency to prepare 

a regulatory flexibility analysis of any 

rule subject to notice and comment 

rulemaking requirements under the 

Administrative Procedure Act or any 

other statute, unless the agency certifies 

that the rule will not have a significant 

economic impact on a substantial 

number of small entities. Small entities 

include small businesses, small 

organizations, and small governmental 

jurisdictions. Because this action is 

designed to lower the cost of waste 

management for industries subject to the 

supplemental proposal, this proposal 

will not result in an adverse economic 

impact effect on affected small entities. 

Consequently, I hereby certify that this 

supplemental proposal will not have a 

significant economic impact on a 

substantial number of small entities. In 

determining whether a rule has a 

significant economic impact on a 

substantial number of small entities, the 

impact of concern is any significant 

adverse economic impact on small 

entities, since the primary purpose of 

the regulatory flexibility analyses is to 

identify and address regulatory 

alternatives which minimize any 

significant economic impact of the 

proposed rule on small entities (5 U.S.C. 

Sections 603 and 604). Thus, an agency 

may certify that a rule will not have a 

significant economic impact on a 

substantial number of small entities if 

the rule relieves regulatory burden, or 

otherwise has a positive economic effect 

on small entities subject to the rule. For 

more information regarding the 

economic impact of this supplemental 

proposal, please refer to the ‘‘Economics 

Background Document’’ available from 

the EPA Docket (http:// 

www.regulations.gov). 

EPA therefore concludes that today’s 

supplemental proposal will relieve 

regulatory burden for all size entities, 

including small entities. The Agency 

continues to be interested in the 

potential impacts of the proposed rule 

on small entities and welcomes 

comments on issues related to such 

impacts. 

D. Unfunded Mandates Reform Act 

Title II of the Unfunded Mandates 

Reform Act of 1995 (UMRA), Public 

Law 104–4, establishes requirements for 

Federal Agencies to assess the effects of 

their regulatory actions on State, local, 

and tribal governments and the private 

sector. Under section 202 of the UMRA, 

EPA must prepare a written analysis, 

including a cost-benefit analysis, for 

proposed and final rules with Federal 

mandates that may result in 

expenditures to State, local, and tribal 

governments, in the aggregate, or to the 

private sector, of $100 million or more 

in any one year. Before promulgating an 

EPA rule for which a written statement 

is needed, section 205 of the UMRA 

requires EPA to identify and consider a 

reasonable number of regulatory 

alternatives and adopt the least costly, 

most cost-effective, or least burdensome 

alternative that achieves the objectives 

of the rule. The provisions of section 

205 do not apply when they are 

inconsistent with applicable law. 

Moreover, section 205 allows EPA to 

adopt an alternative other than the least 

costly, most cost effective or least 


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burdensome alternative if the 

Administrator publishes with the final 

rule an explanation why that alternative 

was not adopted. 

Before EPA establishes any regulatory 

requirements that may significantly or 

uniquely affect small governments, 

including tribal governments, it must 

have developed under section 203 of the 

UMRA a small government agency plan. 

The plan must provide for notifying 

potentially affected small governments, 

enabling officials to have meaningful 

and timely input in the development of 

regulatory proposals, and informing, 

educating, and advising small 

governments on compliance with the 

regulatory requirements. 

EPA has determined that this rule 

does not include a Federal mandate that 

may result in expenditures of $100 

million or more for State, local, or tribal 

governments, in the aggregate, or the 

private sector in any one year. This is 

because this supplemental proposal 

imposes no enforceable duty on any 

State, local, or tribal governments. EPA 

also has determined that this rule 

contains no regulatory requirements that 

might significantly or uniquely affect 

small governments. In addition, as 

discussed above, the private sector is 

not expected to incur costs exceeding 

$100 million. Therefore, today’s 

supplemental proposal is not subject to 

the requirements of sections 202 and 

205 of UMRA. 

E. Executive Order 13132: Federalism 

Executive Order 13132, entitled 

Federalism (64 FR 43255, August 10, 

1999), requires EPA to develop an 

accountable process to ensure a 

meaningful and timely input by State 

and local officials in the development of 

regulatory policies that have federalism 

implications. Policies that have 

federalism implications are defined in 

the Executive Order to include 

regulations that have substantial direct 

effects on the States, on the relationship 

between the national government and 

the States, or on the distribution of 

power and responsibilities among the 

various levels of government. 

This supplemental proposal does not 

have federalism implications. It will not 

have substantial direct effects on the 

States, on the relationship between the 

national government and the States, or 

on the distribution of power and 

responsibilities among the various 

levels of government, as specified in 

Executive Order 13132. There are no 

State and local government bodies that 

incur direct compliance costs by this 

rulemaking. State and local government 

implementation expenditures are 

expected to be less than $500,000 in any 

one year. Thus, the requirements of 

Section 6 of the Executive Order do not 

apply to this supplemental proposal. In 

addition, because this rule is less 

stringent than the current federal 

program, states are not required to adopt 

it. 

In the spirit of Executive Order 13132, 

and consistent with EPA policy to 

promote communications between EPA 

and State and local governments, EPA 

specifically solicits comment on this 

supplemental proposal from State and 

local officials. 

F. Executive Order 13175: Consultation 

and Coordination With Indian Tribal 

Governments 

Executive Order 13175, entitled 

Consultation and Coordination with 

Indian Tribal Governments (65 FR 

67249, November 9, 2000), requires EPA 

to develop an accountable process to 

ensure a meaningful and timely input 

by tribal officials in the development of 

regulatory policies that have tribal 

implications. This supplemental 

proposal does not have tribal 

implications, as specified in Executive 

Order 13175. It does not significantly or 

uniquely affect the communities of 

Indian tribal governments, nor would it 

impose substantial direct compliance 

costs on them. Thus, Executive Order 

13175 does not apply to this 

supplemental proposal. 

G. Executive Order 13045: Protection of 

Children From Environmental Health 

Risks and Safety Risks 

The Executive Order 13045, entitled 

Protection of Children from 

Environmental Health Risks and Safety 

Risks (62 FR 19885, April 23, 1997) 

applies to any rule that EPA determines 

(1) is economically significant as 

defined under Executive Order 12866, 

and (2) the environmental health or 

safety risk addressed by the rule has a 

disproportionate effect on children. If 

the regulatory action meets both criteria, 

the Agency must evaluate the 

environmental health or safety effects of 

the planned rule on children; and 

explain why the planned regulation is 

preferable to other potentially effective 

and reasonably feasible alternatives 

considered by the Agency. 

This supplemental proposal is not 

subject to the Executive Order because 

the Agency does not have reason to 

believe the environmental health or 

safety risks addressed by this proposed 

rule present a disproportionate risk to 

children. 

H. Executive Order 13211: Actions that 

Significantly Affect Energy Supply, 

Distribution, or Use 

This supplemental proposal is not a 

‘‘significant energy action’’ as defined in 

Executive Order 13211, ‘‘Actions 

Concerning Regulations That 

Significantly Affect Energy Supply, 

Distribution, or Use’’ (66 FR 28355, May 

22, 2001) because it is not likely to have 

a significant adverse effect on the 

supply, distribution, or use of energy. 

This supplemental proposal reduces 

regulatory burden and as explained in 

our Economics Background Document, 

may possibly induce fuel efficiency and 

energy savings from voluntary shifting 

of some types of secondary industrial 

materials, where cost-effective for firms 

to do so, from current landfill and 

incineration disposal, to industrial 

recycling. It therefore should not 

adversely affect energy supply, 

distribution, or use. 

I. National Technology Transfer and 

Advancement Act of 1995 

Section 12(d) of the National 

Technology Transfer and Advancement 

Act of 1995 (ANTTAA), Public Law 

104–113, section 12(d) (15 U.S.C. 272 

note) directs EPA to use voluntary 

consensus standards in its regulatory 

activities, unless to do so would be 

inconsistent with applicable law or 

otherwise impractical. Voluntary 

consensus standards are technical 

standards e.g., materials specifications, 

test methods, sampling procedures, and 

business practices) that are developed or 

adopted by voluntary consensus 

standards bodies. The NTTAA directs 

EPA to provide Congress, through OMB, 

explanations when the Agency decides 

not to use available and applicable 

voluntary consensus standards. Today’s 

supplemental proposal does not contain 

technical standards and therefore the 

NTTAA is not applicable. 

J. Executive Order 12898: 

Environmental Justice 

Executive Order 12898, Federal 

Actions to Address Environmental 

Justice in Minority Populations and 

Low-Income Populations (February 11, 

1994), is designed to address the 

environmental and human health 

conditions of minority and low-income 

populations. EPA is committed to 

addressing environmental justice 

concerns and has assumed a leadership 

role in environmental justice initiatives 

to enhance environmental quality for all 

citizens of the United States. The 

Agency’s goals are to ensure that no 

segment of the population, regardless of 

race, color, national origin, income, or 


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net worth bears disproportionately high 

and adverse human health and 

environmental impacts as a result of 

EPA’s policies, programs, and activities. 

Our goal is to ensure that all citizens 

live in clean and sustainable 

communities. In response to Executive 

Order 12898, and to concerns voiced by 

many groups outside the Agency, EPA’s 

Office of Solid Waste and Emergency 

Response (OSWER) formed an 

Environmental Justice Task Force to 

analyze the array of environmental 

justice issues specific to waste programs 

and to develop an overall strategy to 

identify and address these issues 

(OSWER Directive No. 9200.3–17). 

This supplemental proposal would 

streamline hazardous waste 

management requirements for certain 

hazardous secondary materials sent for 

recycling. Facilities that would be 

affected by today’s proposal include 

those generating hazardous secondary 

materials, as well as facilities which 

recycle such materials. Disposal 

facilities would not be affected by this 

proposal. The wide distribution of 

affected facilities throughout the United 

States does not suggest any 

distributional pattern around 

communities of concern. Specific 

impacts on low income or minority 

communities, therefore, are 

undetermined. Overall, no 

disproportionate impacts to minorities 

or low income communities are 

expected. 

List of Subjects 

40 CFR Part 260 

Environmental protection, 

Administrative practice and procedure, 

Confidential business information, 

Hazardous waste, Reporting and 

recordkeeping requirements. 

40 CFR Part 261 

Environmental protection, Hazardous 

waste, Recycling, Reporting and 

recordkeeping requirements. 

Dated: March 15, 2007. 

Stephen L. Johnson, 

Administrator. 

For the reasons stated in the 

preamble, title 40, Chapter I of the Code 

of Federal Regulations is proposed to be 

amended as follows: 

PART 260—HAZARDOUS WASTE 

MANAGEMENT SYSTEM: GENERAL 

1. The authority 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. Section 260.10 is amended by 

adding in alphabetical order the 

definitions of ‘‘Land-based unit’’ and 

‘‘Hazardous secondary materials 

generated and reclaimed under the 

control of the generator’’ to read as 

follows: 

§ 260.10 Definitions. 

* * * * * 

Hazardous secondary material 

generated and reclaimed under the 

control of the generator means: 

(1) That such material is generated 

and reclaimed at the generating facility 

(for purposes of this paragraph, 

generating facility means all contiguous 

property owned by the generator); or 

(2) That such material is generated 

and reclaimed by the same ‘‘person’’ as 

defined in § 260.10, if the generator 

certifies the following: ‘‘on behalf of 

[insert company name] I certify that the 

indicated hazardous recyclable material 

will be sent to [insert company name], 

that the two companies are under the 

same ownership, and that the owner 

corporation [insert company name] has 

acknowledged full responsibility for the 

safe management of the hazardous 

recyclable material,’’ or 

(3) That such material is generated 

pursuant to a written contract between 

a tolling contractor and a batch 

manufacturer and are reclaimed by the 

tolling contractor, if the tolling 

contractor retains ownership of, and 

responsibility for, the recyclable 

material that is generated during the 

course of the production of the product. 

For purposes of this paragraph, tolling 

contractor means a person who arranges 

for the production of a product made 

from raw materials through a written 

contract with a batch manufacturer. 

Batch manufacturer means a person 

who produces a product made from raw 

materials pursuant to a written contract 

with a tolling contractor. 

* * * * * 

Land-based unit means a landfill, 

surface impoundment, waste pile, 

injection well, land treatment facility, 

salt dome formation, salt bed formation, 

or underground mine or cave. 

* * * * * 

Subpart C—[Amended] 

3. Section 260.30 is amended as 

follows: 

a. By revising the section heading. 

b. By revising paragraph (b). 

c. By adding paragraphs (d), (e), and 

(f). 

§ 260.30 Non-waste determinations and 

variances from classification as a solid 

waste. 

* * * * * 

(b) Materials that are reclaimed and 

then reused within the original 

production process in which they were 

generated; 

* * * * * 

(d) Materials that are reclaimed in a 

continuous industrial process; 

(e) Materials that are 

indistinguishable in all relevant aspects 

from a product or intermediate; and 

(f) Materials that are reclaimed under 

the control of the generator, including 

control through contracts, such as 

tolling arrangements. 

4. Section 260.33 is amended by 

revising the section heading, the 

introductory text, and paragraph (a) 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. 

The 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 

Administrator for the variance or nonwaste determination. The application 

must address the relevant criteria 

contained in § 260.31, § 260.32, or 

§ 260.34 as applicable. 

* * * * * 

5. Section 260.34 is added to Subpart 

C to read as follows: 

§ 260.34 Standards and criteria for nonwaste determinations. 

(a) An applicant may apply to the 

Administrator for a formal 

determination that a material is clearly 

not discarded and therefore not a solid 

waste. The determinations will be based 

on the criteria contained in paragraphs 

(b), (c), or (d) of this section as 

applicable. If an application is denied, 

the material might still be eligible for a 

solid waste variance or exclusion (for 

example, one of the solid waste 

variances under § 260.31 or solid waste 

exclusions under § 261.4). 

Determinations may also be granted by 

the State if the State is either authorized 

for this provision or if the following 

conditions are met: 

(1) The State determines the material 

meets the criteria in paragraphs (b), (c), 

or (d) of this section; 

(2) The State requests that EPA review 

its determination; and 


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(3) EPA approves the State 

determination. 

(b) The Administrator may grant a 

non-waste determination for material 

which is reclaimed in a continuous 

industrial process if the applicant 

demonstrates that the material is a part 

of the production process and is not 

discarded. The determination will be 

based on the following criteria: 

(1) The extent that the management of 

the material is part of the continuous 

primary production process and is not 

waste treatment; 

(2) Whether the capacity of the 

production process would use the 

material in a reasonable timeframe and 

ensure that the material will not be 

abandoned (for example, based on past 

practices, market factors, the nature of 

the material, and any contractual 

arrangements); 

(3) Whether the hazardous 

constituents in the secondary material 

are reclaimed rather than discarded to 

the air, water or land at significantly 

higher levels from either a statistical or 

from a health and environmental risk 

perspective than would otherwise be 

released by the primary production 

process; and 

(4) Other relevant factors that 

demonstrate the material is not 

discarded. 

(c) The Administrator may grant a 

non-waste determination for material 

which is indistinguishable in all 

relevant aspects from a product or 

intermediate if the applicant 

demonstrates that the material is 

comparable to a product or intermediate 

and is not discarded. The determination 

will be based on the following criteria: 

(1) Whether market participants treat 

the material as a product rather than a 

waste (for example, based on the current 

positive value of the material, stability 

of demand, and any contractual 

arrangements); 

(2) Whether the chemical and 

physical identity of the material is 

comparable to commercial products or 

intermediates; 

(3) Whether the hazardous 

constituents in the material are 

reclaimed rather than discarded to the 

air, water or land at significantly higher 

levels from either a statistical or from a 

health and environmental risk 

perspective than would otherwise be 

released by the production process. 

(4) Other relevant factors that 

demonstrate the material is not 

discarded. 

(d) The Administrator may grant a 

non-waste determination for material 

which is reclaimed under the control of 

the generator, including control through 

contracts such as tolling arrangements, 

if the applicant demonstrates that the 

generator retains control of the 

production and the residuals, and that 

the material is not discarded. The 

determination will be based on the 

following criteria: 

(1) Whether the generator retains 

ownership and liability via a contract or 

other mechanism for the material and 

the residuals resulting from its 

recycling. 

(2) Whether the hazardous 

constituents in the material are 

reclaimed rather than discarded to the 

air, water or land at significantly higher 

levels from either a statistical or from a 

health and environmental risk 

perspective than would otherwise be 

released by a production process. 

(3) Other relevant factors that 

demonstrate the material is not 

discarded. 

6. Section 260.42 is added to Subpart 

C read as follows: 

§ 260.42 Notification requirement for 

generators of hazardous secondary 

materials generated and reclaimed under 

the control of the generator. 

Generators of hazardous secondary 

material that has previously been 

subject to regulation as hazardous 

wastes, but which will be excluded from 

regulation under § 261.2(a)(2)(ii) must 

send a one-time notification to the 

Regional Administrator. Such notices 

must identify the name, address, and 

EPA ID number of the generator (if 

applicable); the name and phone 

number of a contact person; the type of 

material that will be managed according 

to this exclusion; and when the material 

will begin to be managed in accordance 

with this exclusion. A revised notice 

must be sent to the Regional 

Administrator in the event of a change 

to the name, address or EPA ID number 

of the generator, or a change in the type 

of material generated. If reclamation 

takes place at a facility other than the 

generating facility, the reclaimer must 

also send a one-time notification to the 

Regional Administrator. Such notices 

must identify the name, address, and 

EPA ID number of the reclamation 

facility (if applicable); the name and 

phone number of a contact person; the 

type of material that will be managed 

according to the exclusion; and when 

the material will begin to be managed in 

accordance with this conditional 

exclusion. A revised notice must be sent 

to the Regional Administrator in the 

event of a change to the name, address 

or EPA ID number of the reclamation 

facility, or a change in the type of 

material reclaimed. 

PART 261—IDENTIFICATION AND 

LISTING OF HAZARDOUS WASTE 

7. The authority citation for part 261 

continues to read as follows: 

Authority: 42 U.S.C. 6905, 6912(a), 6921, 

6922, 6924(y), and 6938. 

Subpart A—[Amended] 

8. Section 261.2 is amended as 

follows: 

a. By revising paragraph (a)(1). 

b. By revising paragraph (a)(2). 

c. By revising paragraph (c)(3). 

d. By revising Table 1 in paragraph 

(c)(4). 

e. By adding paragraph (g). 

§ 261.2 Definition of solid waste. 

* * * * * 

(a)(1) A solid waste is any discarded 

material that is not excluded under 

§ 261.4(a) or that is not excluded by a 

variance granted under §§ 260.30 and 

260.31 or that is not excluded by a nonwaste determination under §§ 260.30 

and 260.34. 

* * * * * 

(2)(i) A discarded material is any 

material which is: 

(A) Abandoned, as explained in 

paragraph (b) of this section; or 

(B) Recycled, as explained in 

paragraph (c) of this section; or 

(C) Considered inherently waste-like, 

as explained in paragraph (d) of this 

section; or 

(D) A military munition identified as 

a solid waste in 40 CFR 266.202. 

(ii) A hazardous secondary material is 

not discarded if it is generated and 

reclaimed within the United States or its 

territories, provided that the material is 

only handled in non-land-based units, it 

is a hazardous secondary material 

generated and reclaimed under the 

control of the generator as defined in 

§ 260.10, and it is not speculatively 

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

(See also § 260.42) 

* * * * * 

(c) * * * 

(3) Reclaimed. Materials noted with a 

‘‘—’’ in column 3 of Table 1 are not 

solid wastes when reclaimed. Materials 

noted with an ‘‘*’’ in column 3 of Table 

1 are solid wastes when reclaimed 

unless they meet the requirements of 

§§ 261.2(a)(2)(ii), or 261.4(a)(17), or 

261.4(a)(23), or 261.4(a)(24) and 

261.4(a)(25). 

* * * * * 

(4) * * * 


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TABLE 1 

Use constituting 

disposal 

(§ 261.2(c)(1)) 

Energy recovery/fuel 

(§ 261.2(c)(2)) 

Reclamation 

(261.2(c)(3)), 

except as provided in 

§§ 261.4(a)(17), 

261.4(a)(23) or 

261.4(a)(24), 

and 

261.4(a)(25) 

Speculative accumulation 

(§ 261.2(c)(4)) 

1 2 3 4 

Spent Materials ........................................................................................ (*) (*) (*) (*) 

Sludges (listed in 40 CFR Part 261.31 or 261.32 ................................... (*) (*) (*) (*) 

Sludges exhibiting a characteristic of hazardous waste ......................... (*) (*) — (*) 

By-products (listed in 40 CFR 261.31 or 261.32) ................................... (*) (*) (*) (*) 

By-products exhibiting a characteristic of hazardous waste ................... (*) (*) — (*) 

Commercial chemical products listed in 40 CFR 261.33 ........................ (*) (*) — — 

Scrap metal other than excluded scrap metal (see 261.1(c)(9)) ............ (*) (*) (*) (*) 

Note: The terms ‘‘spent materials,’’ ‘‘sludges,’’ ‘‘by-products,’’ and ‘‘scrap metal’’ and ‘‘processed scrap metal’’ are defined in 261.1. 

* * * * * 

(g) Legitimate Recycling. 

(1) Hazardous secondary material that 

is not legitimately recycled is discarded 

material and is a solid waste. Persons 

who recycle such material, as well as 

persons claiming to be excluded from 

hazardous waste regulation under 

§ 260.31, § 260.34, § 261.2 or § 261.4 

because they are engaged in recycling, 

must be able to demonstrate that the 

recycling is legitimate. Moreover, 

hazardous secondary material must be 

legitimately recycled to qualify for 

special management standards under 

§ 261.6 and 40 CFR Part 266. 

(2) Legitimate recycling must involve 

a hazardous secondary material that 

provides a useful contribution to the 

recycling process or to a product of the 

recycling process, and the recycling 

process must produce a valuable 

product or intermediate. 

(i) The hazardous secondary material 

provides a useful contribution if it: 

(A) Contributes valuable ingredients 

to a product or intermediate; or 

(B) Replaces a catalyst or carrier in the 

recycling process; or 

(C) Is the source of a valuable 

constituent recovered in the recycling 

process; or 

(D) Is recovered or regenerated by the 

recycling process; or 

(E) Is used as an effective substitute 

for a commercial product. 

(ii) The product or intermediate is 

valuable if it is: 

(A) Sold to a third party; or 

(B) Used by 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 following factors need to be 

considered in making a determination 

as to the overall legitimacy of a specific 

recycling activity. If these factors are not 

met, then this fact may be an indication 

that the material is not legitimately 

recycled: 

(i) How the hazardous secondary 

material to be recycled is managed. The 

generator and the recycler should 

manage such 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 consistent 

with the management of the raw 

material. Where there is no analogous 

raw material, the hazardous secondary 

material should be contained. Materials 

that are released to the environment and 

are not recovered in a timely manner are 

discarded. If the material is not 

managed as a valuable commodity, that 

fact may be an indication that the 

material is not legitimately recycled. 

(ii) Whether the product of the 

recycling process: 

(A) Contains significant 

concentrations of any Appendix VIII of 

Part 261 hazardous constituents that are 

not found in analogous products; or 

(B) Contains concentrations of any 

Appendix VIII of Part 261 hazardous 

constituents at levels that are 

significantly elevated from those found 

in analogous products; or 

(C) Exhibits a hazardous characteristic 

(as defined in Part 261 subpart C) that 

analogous products do not exhibit. If a 

product contains any of these 

concentrations or exhibits a hazardous 

characteristic, that fact may be an 

indication that the material is not 

legitimately recycled. 

9. Section 261.4 is amended by 

adding new paragraphs (a)(23), (24), and 

(25) to read as follows: 

§ 261.4 Exclusions. 

(a) * * * 

(23) Hazardous secondary material 

generated and reclaimed within the 

United States or its territories is not a 

solid waste provided that: 

(i) If it is managed in a land-based 

unit as defined in § 260.10, the material 

must be contained; and 

(ii) It is a hazardous secondary 

material generated and reclaimed under 

the control of the generator as defined 

in § 260.10; and 

(iii) It is not speculatively 

accumulated, as defined in § 261.1(c)(8); 

and 

(iv) Generators of hazardous 

secondary material that has previously 

been subject to regulation as hazardous 

wastes, but which will be excluded from 

regulation under this paragraph (a)(23) 

must send a one-time notification to the 

Regional Administrator. Such notices 

must identify the name, address, and 

EPA ID number of the generator (if 

applicable); the name and phone 

number of a contact person; the type of 

material that will be managed according 

to this exclusion, and when the material 

will begin to be managed in accordance 

with this exclusion. A revised notice 

must be sent to the Regional 

Administrator in the event of a change 

to the name, address or EPA ID number 

of the generator, or a change in the type 

of material generated. If reclamation 

takes place at a facility other than the 

generating facility, the reclaimer must 

send a one-time notification to the 

Regional Administrator. Such notices 

must identify the name, address, and 

EPA ID number of the reclamation 

facility (if applicable); the name and 

phone number of a contact person; the 

type of material that will be managed 

according to the exclusion, and when 

the material will begin to be managed in 

accordance with this conditional 

exclusion. A revised notice must be sent 

to the Regional Administrator in the 

event of a change to the name, address 


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or EPA ID number of the reclamation 

facility, or a change in the type of 

material reclaimed. 

(24) Hazardous secondary material 

that is generated and then transferred to 

another person for the purpose of 

reclamation is not a solid waste, 

provided that: 

(i) The material is not speculatively 

accumulated, as defined in § 261.1(c)(8); 

and 

(ii) The material is not handled by any 

person or facility other than the 

generator, the transporter, or a 

reclaimer; and 

(iii) The generator and each reclaimer 

of hazardous secondary material that 

has previously been subject to 

regulation as hazardous wastes, but 

which will be excluded from regulation 

under this paragraph, must send a onetime notification to the Regional 

Administrator. Such notices must 

identify the name, address, and EPA ID 

number of the generator or reclaimer (if 

applicable); the name and phone 

number of a contact person; the type of 

material that will be managed according 

to the exclusion, and when the materials 

will begin to be managed in accordance 

with this conditional exclusion. A 

revised notice must be sent to the 

Regional Administrator in the event of 

a change to the name, address or EPA 

ID number of the generator, or a change 

in the type of material generated, and 

(iv) Generators of hazardous 

secondary materials that are eligible for 

this exclusion must satisfy the following 

conditions: 

(A) Prior to arranging for transport of 

excluded material to a reclamation 

facility that is not operating under a 

RCRA Part B permit or interim status 

standards, the generator must make 

reasonable efforts to ensure that the 

reclaimer intends to legitimately recycle 

the material and not discard it pursuant 

to the criteria in § 261.2(g), and that the 

reclaimer will manage the material in a 

manner that is protective of human 

health and the environment. In making 

these reasonable efforts, the generator 

may use any credible evidence 

available, including information 

gathered by the generator, provided by 

the reclaimer, and/or provided by a 

third party. 

(B) The generator must maintain at 

the generating facility for no less than 

three years records of all off-site 

shipments of excluded material. For 

each shipment, these records must at a 

minimum contain the following 

information: 

(1) Name of the transporter and date 

of the shipment; 

(2) Name and address of the 

reclamation facility to which it was 

sent, and 

(3) The type and quantity of excluded 

material in the shipment. 

(C) If it is managed in a land-based 

unit as defined in § 260.10, the material 

must be contained. 

(v) Reclaimers of hazardous secondary 

material excluded from regulation under 

this exclusion must satisfy the following 

conditions: 

(A) The reclaimer must maintain at 

the reclamation facility for no less than 

three years records of all shipments of 

excluded material that were received at 

the facility. For each shipment, these 

records must at a minimum contain the 

following information: 

(1) Name of the transporter and date 

the shipment was received; 

(2) Name and address of the 

generating facility from which it was 

sent; and 

(3) The type and quantity of excluded 

material in the shipment. 

(B) The reclaimer must manage the 

hazardous secondary material in a 

manner that is at least as protective as 

that employed for analogous raw 

material or is otherwise contained. An 

‘‘analogous raw material’’ is a raw 

material for which a hazardous 

secondary material is a substitute and 

serves the same function and has similar 

physical and chemical properties as the 

hazardous secondary material. Where 

there is no analogous raw material, or if 

the secondary hazardous material is 

managed in a land-based unit as defined 

in defined in § 260.10, the material must 

be contained. 

(C) Any residuals that are generated 

from reclamation processes will be 

managed in a manner that is protective 

of human health and the environment. 

If any residuals exhibit a hazardous 

characteristic according to subpart C of 

40 CFR part 261, or if they themselves 

are specifically listed in subpart D of 40 

CFR part 261, such residuals are 

hazardous wastes and must be managed 

according to the applicable 

requirements of 40 CFR parts 260 

through 272. 

(D) The reclaimer must comply with 

the financial requirements of 40 CFR 

part 264, subpart H. 

(vi) A reclamation facility at which 

hazardous secondary materials are 

managed in accordance with the 

provisions of this exclusion may also 

accept and manage fully regulated 

hazardous wastes from generators who 

do not use this exclusion. Such 

materials are not solid wastes, and the 

RCRA regulatory status of the 

reclamation facility will not be affected, 

provided that the reclamation facility 

complies with the requirements 

specified in § 261.4(a)(24)(i), (ii), (iii) 

and (v). 

(25) Exports. Hazardous secondary 

material that is exported from the 

United States and recycled at a 

reclamation facility located in a foreign 

country, provided that the exporter 

complies with the requirements of 

§ 261.4(a)(24)(i)–(iv) and also with the 

following requirements: 

(i) Notify EPA of an intended export 

before the hazardous secondary material 

is scheduled to leave the United States. 

A complete notification must be 

submitted at least sixty (60) days before 

the initial shipment is intended to be 

shipped off-site. This notification may 

cover export activities extending over a 

twelve (12) month or lesser period. The 

notification must be in writing, signed 

by the exporter, and include the 

following information: 

(A) Name, mailing address, telephone 

number and EPA ID number (if 

applicable) of the exporter. 

(B) The estimated frequency or rate at 

which the materials is to be exported 

and the period of time over which it is 

to be exported. 

(C) The estimated total quantity of 

material specified in kilograms. 

(D) All points of entry to and 

departure from each foreign country 

through which the material will pass. 

(E) A description of the means by 

which each shipment of the material 

will be transported (e.g., mode of 

transportation vehicle (air, highway, 

rail, water, etc.), type(s) of container 

(drums, boxes, tanks, etc.)). 

(F) The name and address of the 

reclaimer and any alternate reclaimer. 

(G) A description of the manner in 

which the material will be recycled in 

the foreign country that will be 

receiving it. 

(H) The name of any transit country 

through which the material will be sent 

and a description of the approximate 

length of time it will remain in such 

country and the nature of its handling 

while there. 

(ii) Notifications submitted by mail 

should be sent to the following mailing 

address: Office of Enforcement and 

Compliance Assurance, Office of 

Federal Activities, International 

Compliance Assurance Division, (Mail 

Code 2254A), Environmental Protection 

Agency, 1200 Pennsylvania Ave., NW., 

Washington, DC 20460. Hand-delivered 

notifications should be sent to: Office of 

Enforcement and Compliance 

Assurance, Office of Federal Activities, 

International Compliance Assurance 

Division, (Mail Code 2254A), 

Environmental Protection Agency, Ariel 

Rios Bldg., Room 6144, 1200 


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Pennsylvania Ave., NW., Washington, 

DC. In both cases, the following shall be 

prominently displayed on the front of 

the envelope: ‘‘Attention: Notification of 

Intent to Export.’’

(iii) Upon request by EPA, the 

exporter shall furnish to EPA any 

additional information which a 

receiving country requests in order to 

respond to a notification. 

(iv) EPA will provide a complete 

notification to the receiving country and 

any transit countries. A notification is 

complete when EPA receives a 

notification which EPA determines 

satisfies the requirements of paragraph 

(a) (5) (i) of this section. Where a claim 

of confidentiality is asserted with 

respect to any notification information 

required by paragraph (a)(5)(i) of this 

section, EPA may find the notification 

not complete until any such claim is 

resolved in accordance with 40 CFR 

260.2. 

(v) The export of hazardous secondary 

material under this paragraph is 

prohibited unless the receiving country 

consents to the intended export. When 

the receiving country consents in 

writing to the receipt of the material, 

EPA will forward an Acknowledgment 

of Consent to the exporter. Where the 

receiving country objects to receipt of 

the material or withdraws a prior 

consent, EPA will notify the exporter in 

writing. EPA will also notify the 

exporter of any responses from transit 

countries. 

(vi) When the conditions specified on 

the original notification change, the 

exporter must provide EPA with a 

written renotification of the change, 

except for changes to the telephone 

number in paragraph (a)(5)(i)(A) of this 

section and decreases in the quantity 

indicated pursuant to paragraph 

(a)(5)(i)(C) of this section. The shipment 

cannot take place until consent of the 

receiving country to the changes has 

been obtained (except for changes to 

information about points of entry and 

departure and transit countries pursuant 

to paragraphs (a)(5)(i)(D) and (a)(5)(i)(H) 

of this section) and the exporter receives 

from EPA a copy of the 

Acknowledgment of Consent to Export 

reflecting the receiving country’s 

consent to the changes. 

(vii) A copy of the Acknowledgment 

of Consent to Export must accompany 

the shipment. The shipment must 

conform to the terms of the 

Acknowledgment. 

(viii) If a shipment cannot be 

delivered for any reason to the recycler 

or the alternate recycler, the exporter 

must renotify EPA of a change in the 

conditions of the original notification to 

allow shipment to a new recycler in 

accordance with paragraph (a)(5)(vi) of 

this section and obtain another 

Acknowledgment of Consent to Export. 

(ix) Exporters must keep copies of 

notifications and Acknowledgments of 

Consent to Export for a period of three 

years following receipt of the 

Acknowledgment. 

[FR Doc. E7–5159 Filed 3–23–07; 8:45 am] 

BILLING CODE 6560–50–P 


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