[Federal Register Volume 80, Number 8 (Tuesday, January 13, 2015)]
[Rules and Regulations]
[Pages 1694-1814]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-30382]



[[Page 1693]]

Vol. 80

Tuesday,

No. 8

January 13, 2015

Part II





Environmental Protection Agency





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40 CFR Parts 260 and 261





Definition of Solid Waste; Final Rule

Federal Register / Vol. 80 , No. 8 / Tuesday, January 13, 2015 / 
Rules and Regulations

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 260 and 261

[EPA-HQ-RCRA-2010-0742; FRL-9728-5-OSWER]
RIN 2050-AG62


Definition of Solid Waste

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: The Environmental Protection Agency (EPA, or the Agency) is 
publishing a final rule that revises several recycling-related 
provisions associated with the definition of solid waste used to 
determine hazardous waste regulation under Subtitle C of the Resource 
Conservation and Recovery Act (RCRA). The purpose of these revisions is 
to ensure that the hazardous secondary materials recycling regulations, 
as implemented, encourage reclamation in a way that does not result in 
increased risk to human health and the environment from discarded 
hazardous secondary material.

DATES: This final rule is effective on July 13, 2015.

ADDRESSES: EPA has established a docket for this action under Docket ID 
No. EPA-HQ-RCRA-2010-0742. All documents in the docket are listed in 
the www.regulations.gov index. Although listed in the index, some 
information is not publicly available, such as Confidential Business 
Information (CBI) or other information whose disclosure is restricted 
by statute. Certain other material, such as copyrighted material, is 
not placed on the internet and will be publicly available only in hard 
copy form. Publicly available docket materials are available either 
electronically at www.regulations.gov or in hard copy at the RCRA 
Docket, EPA/DC, William Jefferson Clinton Building West, Room 3334, 
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 RCRA Docket is (202) 566-
0276.

FOR FURTHER INFORMATION CONTACT: Tracy Atagi, Office of Resource 
Conservation and Recovery, Materials Recovery and Waste Management 
Division, MC 5304P, Environmental Protection Agency, 1200 Pennsylvania 
Ave. NW., Washington, DC 20460, at (703) 308-8672, 
(<a href="/cdn-cgi/l/email-protection#08697c696f61267c7a696b71486d7869266f677e"><span class="__cf_email__" data-cfemail="18796c797f71366c6a797b61587d6879367f776e">[email protected]</span></a>) or Amanda Kohler, Office of Resource Conservation 
and Recovery, Materials Recovery and Waste Management Division, MC 
5304P, Environmental Protection Agency, 1200 Pennsylvania Ave. NW., 
Washington, DC 20460, at (703) 347-8975, (<a href="/cdn-cgi/l/email-protection#43282c2b2f26316d222e222d2722032633226d242c35"><span class="__cf_email__" data-cfemail="9af1f5f2f6ffe8b4fbf7fbf4fefbdaffeafbb4fdf5ec">[email protected]</span></a>).

SUPPLEMENTARY INFORMATION:

A. Does this action apply to me?

    Entities potentially affected by today's action include over 5,000 
industrial facilities in 634 industries (at the 6-digit North American 
Industry Classification System (NAICS) code level) that generate or 
recycle hazardous secondary materials (HSM). Most of these 634 
industries have relatively few entities that are potentially affected. 
The top-5 economic sectors (at the 2-digit NAICS code level) with the 
largest number of potentially affected entities are as follows: (1) 41% 
in NAICS code 33--the manufacturing sector, which consists of metals, 
metal products, machinery, computer & electronics, electrical 
equipment, transportation equipment, furniture, and miscellaneous 
manufacturing subsectors, (2) 23% in NAICS code 32--the manufacturing 
sector, which consists of wood products, paper, printing, petroleum & 
coal products, chemicals plastics & rubber products, and nonmetallic 
mineral products manufacturing subsectors, (3) 3.0% in NAICS code 92--
the public administration sector, (4) 2.9% in NAICS code 61--the 
educational services sector, and (5) 2.8% in NAICS code 54--the 
professional, scientific and technical services sector.
    Information on the estimated future economic impacts of today's 
action is presented in section XXI of this notice, as well as in the 
RIA available in the docket for today's action.

Preamble Outline

I. Statutory Authority
II. Which revisions to the regulations is EPA finalizing?
III. History of the Definition of Solid Waste
IV. When will the final rule become effective?
V. Revisions to the Exclusion for Hazardous Secondary Materials That 
Are Legitimately Reclaimed Under the Control of the Generator
VI. Verified Recycler Exclusion Replacing the Exclusion for 
Hazardous Secondary Materials That Are Transferred for the Purpose 
of Reclamation
VII. Remanufacturing eXclusion
VIII. Revisions to the Definition of Legitimacy and Prohibition of 
Sham Recycling
IX. Revisions to Solid Waste Variances and Non-Waste Determinations
X. Effect on Facilities Currently Operating Under Solid Waste 
Exclusions
XI. Effect on Spent Petroleum Catalysts
XII. Effect on CERCLA
XIII. General Comments on the 2011 Proposed Revisions to the 
Definition of Solid Waste
XIV. Major Comments on the Exclusion for Hazardous Secondary 
Materials Legitimately Reclaimed Under the Control of the Generator 
and Recordkeeping for Speculative Accumulation
XV. Major Comments on the Replacement of the Exclusion for Hazardous 
Secondary Materials That Are Transferred for the Purpose of 
Reclamation
XVI. Major Comments on the Remanufacturing Exclusion
XVII. Major Comments on Legitimacy
XVIII. Major Comments on the Revisions to Solid Waste Variances and 
Non-Waste Determinations
XIX. Major Comments on the Proposed Revisions to Pre-2008 Recycling 
Exclusions
XX. State Authorization
XXI. Statutory and Executive Order (E.O.) Reviews

I. Statutory Authority

    These regulations are promulgated 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. 
This statute is commonly referred to as ``RCRA.''

II. Which revisions to the regulations is EPA finalizing?

    In today's rule, EPA is revising a number of provisions related to 
the definition of solid waste as it applies to the regulation of 
hazardous waste under Subtitle C of RCRA (42 U.S.C. 6921 through 
6939(e)). These revisions affect certain types of hazardous secondary 
materials that are currently conditionally excluded from the definition 
of solid waste when reclaimed. These exclusions were promulgated in 
October 2008 (73 FR 64688, October 30, 2008) and were intended to 
encourage the recovery and reuse of valuable resources as an 
alternative to land disposal or incineration, while at the same time 
maintaining protection of human health and the environment. In response 
to concerns raised by stakeholders about potential increases in risks 
to human health and the environment from hazardous secondary materials, 
today's rule revises the 2008 DSW final rule in order to ensure that 
the rule, as implemented, encourages reclamation in a way that protects 
human health and the environment from the

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mismanagement of hazardous secondary materials.
    The six major regulatory areas are summarized below.\1\ The intent 
of this summary is to give a brief overview of the actions EPA is 
taking today. More detailed discussions, including the Agency's 
rationale for the changes, are found in later sections of this 
preamble.
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    \1\ Any provisions promulgated in the 2008 DSW rule that are not 
addressed in this final rule remain in effect.
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A. Exclusion for Hazardous Secondary Materials That Are Legitimately 
Reclaimed Under the Control of the Generator

    Under today's final rule, EPA is retaining the exclusion for 
hazardous secondary materials that are legitimately reclaimed under the 
control of the generator (``generator-controlled exclusion''), with 
certain revisions from the 2008 DSW final rule. These revisions include 
(1) adding a codified definition of ``contained,'' (2) adding 
recordkeeping requirements for same-company and toll manufacturing 
reclamation, (3) making notification a condition of the exclusion, (4) 
adding a requirement to document that recycling under the exclusion is 
legitimate, and (5) adding emergency preparedness and response 
conditions. In addition, we have amended the speculative accumulation 
provisions to add a recordkeeping requirement. This requirement applies 
to all persons subject to speculative accumulation.
    The generator-controlled exclusion (40 CFR 261.4(a)(23)) excludes 
certain hazardous secondary materials (i.e., listed sludges, listed by-
products, and spent materials) from the definition of solid waste if 
they are generated and legitimately reclaimed within the United States 
or its territories under the control of the generator. Specifically, 
hazardous secondary materials are excluded if (1) the reclamation 
process meets the definition of legitimate recycling under 40 CFR 
260.43; (2) the materials are not speculatively accumulated as defined 
in 40 CFR 261.1(c)(8) (including a new recordkeeping requirement, being 
finalized today); (3) they meet the notification condition under 40 CFR 
260.42; (4) they are managed in a unit that meets the new definition of 
``contained'' in 40 CFR 260.10, which specifies that storage units must 
be in good condition, properly labeled, do not hold incompatible 
materials, and address potential risks of fires or explosions; and (5) 
the generator satisfies certain emergency preparedness and response 
conditions. Further discussion of the generator-controlled exclusion 
can be found in section V of this preamble.

B. Verified Recycler Exclusion Replacing the Exclusion for Hazardous 
Secondary Materials That Are Transferred for the Purpose of Legitimate 
Reclamation

    EPA is replacing the exclusions at 40 CFR 261.4(a)(24) and (25) for 
hazardous secondary materials that are transferred from the generator 
to other persons for the purpose of reclamation with an exclusion for 
hazardous secondary materials sent for reclamation to a verified 
recycler. By this change, EPA intends to promote safe and sustainable 
reclamation of these materials. Under this new exclusion, generators 
who want to recycle their hazardous secondary materials without having 
them become hazardous wastes must send their materials to either a 
RCRA-permitted reclamation facility or to a verified recycler of 
hazardous secondary materials who has obtained a solid waste variance 
from EPA or the authorized state. In order to obtain a variance from 
EPA or the authorized state, the recycler must (1) demonstrate their 
recycling is legitimate; (2) have financial assurance in place to 
properly manage the hazardous secondary material when the facility 
closes; (3) not be subject to a formal enforcement action in the 
previous three years and not be classified as a significant non-
complier under RCRA Subtitle C, or must provide credible evidence that 
the facility will manage the hazardous secondary materials properly; 
(4) have the proper equipment and trained personnel, and meet emergency 
preparedness and response conditions to safely recycle the material; 
(5) manage the residuals from recycling properly; and (6) take steps to 
protect nearby communities and reduce risk of potential unpermitted 
releases of the hazardous secondary material to the environment (i.e., 
releases that are not covered by a permit (such as a permit to 
discharge to water or air). Further discussion of the replacement of 
the transfer-based exclusion with the verified recycler exclusion can 
be found in section VI of this preamble.

C. Remanufacturing Exclusion

    EPA is also finalizing an exclusion from the definition of solid 
waste for certain higher-value solvents transferred from one 
manufacturer to another for the purpose of extending the useful life of 
the solvent by remanufacturing the spent solvent back into the 
commercial grade solvent. This remanufacturing exclusion will help 
promote sustainable materials management by extending the productive 
use of these materials, which reduces the need for raw materials used 
and the environmental impacts associated with production of these 
materials. In addition, EPA is also making clear that a rulemaking 
petition pursuant to 40 CFR 260.20 can be submitted for adding other 
higher-value hazardous secondary materials that are destined to be 
remanufactured into similarly higher-value products. Further discussion 
of this exclusion can be found in section VII of this preamble.

D. Prohibition of Sham Recycling and Revisions to the Definition of 
Legitimacy

    In this final rulemaking, EPA is codifying in its regulations at 40 
CFR 261.2(g) the long-standing policy that hazardous secondary 
materials found to be sham recycled are discarded and solid wastes, 
thereby prohibiting materials that are sham recycled from being 
excluded from the definition of solid waste.
    In addition, EPA has changed the definition of legitimate recycling 
in Sec.  260.43 to make clear that all four factors identified in Sec.  
260.43 must be met, but also to provide some flexibility in determining 
legitimacy for certain types of recycling. In particular, in cases 
where there is no analogous product made from raw materials, EPA has 
clarified that the product of recycling is still a legitimate product 
when it meets widely recognized commodity standards (e.g., commodity-
grade scrap metal) or when the hazardous secondary material is recycled 
back into the production process from which it was generated (e.g., 
closed-loop recycling). In addition, for cases in which the product of 
the recycling process has levels of hazardous constituents that are not 
comparable to analogous products, the revised legitimacy standard 
includes a process that allows the facility to document and certify 
that the recycling is still legitimate, keep such documentation at the 
facility, and send a notification to the regulatory authority to that 
effect. Further discussion of legitimacy can be found in section VIII 
of this preamble.

E. Revisions to Solid Waste Variances and Non-Waste Determinations

    Today's rule finalizes revisions to the solid waste variances and 
non-waste determinations found in 40 CFR 260.30-260.34 in order to 
ensure protection of human health and the environment and foster 
greater consistency on the part of implementing agencies. Revisions 
include (1) requiring facilities to send a notice to the Administrator 
(or State Director, if the state is authorized) and

[[Page 1696]]

potentially re-apply for a variance in the event of a change in 
circumstances that affects how a hazardous secondary material meets the 
criteria upon which a solid waste variance has been based; (2) 
establishing a fixed term not to exceed ten years for variance and non-
waste determinations, at the end of which facilities must re-apply for 
a variance or non-waste determination, (3) requiring facilities to re-
notify every two years with updated information; (4) revising the 
criteria for the partial reclamation variance to clarify when the 
variance applies and to require, among other things, that all the 
criteria for this variance must be met; and (5) for the non-waste 
determinations in 40 CFR 260.34, requiring that petitioners demonstrate 
why the existing solid waste exclusions would not apply to their 
hazardous secondary materials. EPA is not finalizing the proposed 
change to designate the Regional Administrator as the EPA recipient of 
petitions for all variances and non-waste determinations. Further 
discussion of these revisions can be found in section IX of this 
preamble.

F. Deferral on Revisions to Pre-2008 Recycling Exclusions

    EPA is not finalizing revisions to the pre-2008 recycling 
exclusions and exemptions to include the contained standard or to 
require notification.\2\ EPA is instead deferring action until EPA can 
more adequately address commenters' concerns. For further discussion, 
see section X for more information.
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    \2\ EPA requested comment on adding these requirements to a list 
of 32 existing recycling exclusions in the 2011 proposed rule (76 FR 
44139, July 22, 2011).
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III. History of the Definition of Solid Waste

A. Background

    RCRA gives EPA the authority to regulate hazardous wastes (see RCRA 
sections 3001-3004). The original statutory designation of the subtitle 
for the hazardous waste program was Subtitle C and the national 
hazardous waste program is referred to as the RCRA Subtitle C program. 
Subtitle C is codified at 42 U.S.C. 6921 through 6939f. Subtitle C 
regulations are found at 40 CFR parts 260 through 279. Hazardous wastes 
are those that, because of their quantity, concentration, physical, or 
chemical characteristics, may (1) cause, or significantly contribute to 
an increase in mortality or an increase in serious irreversible or 
incapacitating reversible illness or (2) pose a substantial present or 
potential hazard to human health or the environment when improperly 
treated, stored, transported, or disposed of, or otherwise managed (see 
RCRA section 1004(5)). Hazardous wastes are a subset of solid wastes.
    Materials that are not solid wastes are not subject to regulation 
as hazardous wastes under RCRA Subtitle C. Thus, the definition of 
solid waste plays a key role in defining the scope of EPA's authorities 
under Subtitle C of 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)).
    Since 1980, EPA has interpreted ``solid waste'' under its Subtitle 
C regulations to encompass both materials that are destined for final, 
permanent treatment and placement in disposal units, as well as certain 
materials that are destined for recycling (see 45 FR 33090-95, May 19, 
1980; 50 FR 604-656, January 4, 1985 (see in particular pages 616-
618)). EPA has offered three arguments in support of this 
interpretation:

    <bullet> The statute and the legislative history suggest that 
Congress expected EPA to regulate certain materials that are 
destined for recycling as solid and hazardous wastes (see 45 FR 
33091, citing numerous sections of the statute and U.S. Brewers' 
Association v. EPA, 600 F. 2d 974 (D.C. Cir. 1979); 48 FR 14502-04, 
April 3, 1983; and 50 FR 616-618, January 4, 1985).
    <bullet> 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 has found that 
recycling operations have accounted for a number of significant 
damage incidents. For example, hazardous secondary materials 
destined for recycling were involved in one-third of the first 60 
filings under RCRA's imminent and substantial endangerment authority 
and in 20 of the initial 160 hazardous material sites listed for 
potential clean up under the Comprehensive Environmental Response, 
Compensation and Liability Act (CERCLA) (48 FR 14474, April 4, 
1983). Congress also cited some damage cases which involve recycling 
(H.R. Rep. 94-1491, 94th Cong., 2d Sess., at 17, 18, 22). Additional 
data (i.e., information on damage incidents occurring after 1982) 
included in the rulemaking docket for today's rule corroborate the 
fact that recycling operations can and have resulted in significant 
damage incidents.
    <bullet> 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 hazardous secondary materials intended to do with them, 
which is inconsistent with the RCRA mandate to track hazardous 
wastes and control them from ``cradle to grave.''

    Hence, RCRA confers on EPA the authority to regulate discarded 
hazardous secondary materials even if they are destined for recycling 
and may be beneficially reused. The Agency has therefore developed in 
part 261 of 40 CFR a definition of ``solid waste'' for Subtitle C 
regulatory purposes. (Note: This definition is narrower than the 
definition of ``solid waste'' for RCRA endangerment and information-
gathering authorities. (See 40 CFR 261.1(b)). Also Connecticut Coastal 
Fishermen's Association v. Remington Arms Co., 989 F.2d 1305, 1315 (2d 
Cir. 1993) holds that EPA's use of a narrower and more specific 
definition of solid waste for Subtitle C purposes is a reasonable 
interpretation of the statute. (See also Military Toxics Project v. 
EPA, 146 F.3d 948 (D.C. Cir. 1998).))
    EPA has consistently asserted that hazardous secondary materials 
are not excluded from regulation as solid wastes merely because of a 
claim that they will be recycled. EPA has consistently considered 
hazardous secondary materials intended for ``sham recycling'' (i.e., 
disposal performed in the guise of recycling) to be discarded and, 
hence, to be solid wastes for Subtitle C purposes (see 45 FR 33093, May 
19, 1980; 50 FR 638-639, January 4, 1985). The U.S. Court of Appeals 
for the D.C. Circuit has agreed that materials undergoing sham 
recycling are discarded and, consequently, are solid wastes under RCRA 
(see American Petroleum Institute v. EPA, 216 F.3d 50, 58-59 (D.C. Cir. 
2000)).

B. A Series of D.C. Circuit Court Decisions on the Definition of Solid 
Waste

    Because the interpretation of what constitutes a solid waste is the 
foundation of the hazardous waste regulatory program, there has been 
quite a bit of litigation over the meaning of ``solid waste'' under 
Subtitle C of RCRA. Specifically, industries representing mining and 
oil refining interests challenged EPA's January 1985 regulatory 
definition of solid waste. In 1987, the D.C. Circuit held that EPA 
exceeded its authority ``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 (D.C. 
Cir. 1987)). The Court held that certain materials EPA was seeking to 
regulate were not ``discarded materials'' under RCRA section

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1004(27). The Court also 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 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 held that recycled materials could be 
regulated as discarded materials. The Court mentioned at least two 
examples of recycled materials that may be regulated as wastes, noting 
that used oil can be considered a solid waste (824 F.3d at 1187 (fn 
14)). Also, the Court suggested that materials disposed of and recycled 
as part of a waste management program may be regulated as solid wastes 
(824 F. 2d at 1179).
    Subsequent decisions by the D.C. Circuit also indicate that some 
materials destined for recycling may be considered ``discarded.'' In 
particular, the Court held that emission control dust from steelmaking 
operations listed as hazardous waste ``K061'' is a solid waste, even 
when sent to a metals reclamation facility, at least where that is the 
treatment method required under EPA's land disposal restrictions 
program (American Petroleum Institute v. EPA (``API I''), 906 F.2d 729 
(D.C. Cir. 1990)). In addition, the Court held that it is reasonable 
for EPA to consider as discarded (and solid wastes) listed wastes 
managed in units that are in part wastewater treatment units, 
especially where it is not clear that the industry actually reuses the 
materials (AMC II, 907 F.2d 1179 (D.C. Cir. 1990)).
    It also is worth noting that two other Circuits also have held that 
EPA may regulate as solid wastes under RCRA at least some materials 
destined for reclamation rather than final discard. The U.S. Court of 
Appeals for the Eleventh Circuit found that ``[i]t is unnecessary to 
read into the term `discarded' a congressional intent that the waste in 
question must finally and forever be discarded'' (U.S. v. ILCO, 996 
F.2d 1126, 1132 (Eleventh Cir. 1993) (finding that used lead batteries 
sent to a reclaimer have been ``discarded once'' by the entity that 
sent the battery to the reclaimer)). In addition, the Fourth Circuit 
found that slag held on the ground untouched for six months before sale 
for use as road bed could be a solid waste (Owen Electric Steel Co. v. 
EPA, 37 F.3d 146, 150 (4th Cir. 1994)).
    In 1998, EPA promulgated a rule in which EPA regulated hazardous 
secondary materials recycled by reclamation within the mineral 
processing industry, the ``LDR Phase IV rule'' (63 FR 28556, May 26, 
1998), under Subtitle C of RCRA. In that rule, EPA promulgated a 
conditional exclusion for all types of mineral processing hazardous 
secondary materials destined for reclamation. As a condition of the 
exclusion, EPA prohibited the land-based storage of these mineral 
processing secondary materials prior to reclamation because it 
considered hazardous secondary materials from the mineral processing 
industry that were stored on the land to be solid wastes (63 FR 28581, 
May 26, 1998). 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 hazardous secondary 
materials that are removed from a production process for storage are 
not ``immediately reused,'' and therefore are ``discarded'' (63 FR 
28580, May 26, 1998).
    The mining industry challenged the rule, and the D.C. Circuit 
vacated the provisions that expanded EPA regulation over characteristic 
by-products and sludges destined for reclamation (Association of 
Battery Recyclers v. EPA (``ABR''), 208 F.3d 1047 (D.C. Cir. 2000)). 
The Court held that it had already resolved this issue 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). The Court also did 
not find that storage before reclamation automatically makes materials 
discarded. Rather, it repeated that materials reused within an ongoing 
industrial process are neither disposed of nor abandoned (208 F.3d at 
1051-52) and 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). 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).
    In its most recent opinion dealing with the definition of solid 
waste, Safe Food and Fertilizer v. EPA (``Safe Food''), 350 F.3d 1263 
(D.C. Cir. 2003), the D.C. Circuit upheld an EPA rule that excludes 
from the definition of solid waste hazardous secondary materials used 
to make zinc fertilizers, and the fertilizers themselves, as long as 
the hazardous secondary 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, July 24, 2002). EPA determined that if these conditions are 
met, the hazardous secondary materials used to make such fertilizer 
have not been discarded. The conditions also 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 
EPA-required conditions in the rule, would treat the excluded materials 
more like valuable products than like negatively-valued 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 held that 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 virgin raw 
materials (also called ``the identity principle'') as reasonable. The 
Court also held that this interpretation of ``discard'' was reasonable 
and consistent with the statutory purpose. The Court 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.
    In addition, the Court stated that it ``need not consider whether a 
material could be classified as a non-discard 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'' constitutes a reasonable set of tools to establish that

[[Page 1698]]

the recycled hazardous secondary materials and fertilizers are not 
discarded.

C. October 2003 Proposal To Revise the Definition of Solid Waste

    Prompted by concerns articulated in various Court opinions decided 
up to that point, in October 2003, EPA proposed a rule which defined 
those circumstances under which hazardous secondary materials would be 
excluded from RCRA's hazardous waste regulations because they are 
generated and reclaimed in a continuous process within the same 
industry. In addition, the Agency also clarified in a regulatory 
context the concept of ``legitimate recycling,'' which has been a key 
component of RCRA's regulatory program for hazardous material 
recycling, but which up to that point, had been implemented without 
specific regulatory criteria (68 FR 61558, October 28, 2003).
    In response to the October 2003 DSW proposal, a number of 
commenters criticized the Agency for not having conducted a study of 
the potential impacts of the proposed regulatory changes. These 
commenters expressed the general concern that deregulating hazardous 
secondary materials that are reclaimed in the manner proposed could 
result in the mismanagement of these materials and could create new 
cases of environmental damage that would require remedial action under 
federal or state authorities. Some of the commenters further cited a 
number of examples of environmental damage that were attributed to 
hazardous secondary material recycling, including sites listed on the 
Superfund National Priorities List (NPL).
    Other commenters to the 2003 DSW proposal 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 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 hazardous secondary 
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 pre-RCRA/-CERCLA era. Thus, they argued that cases of 
``historical'' recycling-related environmental damage are not 
particularly relevant when modifying the current RCRA hazardous waste 
regulations for hazardous secondary materials recycling.

D. Recycling Studies

    In light of these comments on the 2003 DSW proposal, and in 
deliberating on how to proceed with the rulemaking effort, the Agency 
decided that additional information on hazardous secondary material 
recycling would benefit its regulatory decision-making and would 
provide stakeholders with a clearer picture of the hazardous secondary 
material recycling industry in this country. Accordingly, the Agency 
examined three issues that we believed were of particular importance to 
revising the definition of solid waste:

    <bullet> How do responsible generators and recyclers of 
hazardous secondary materials ensure that recycling is done in an 
environmentally safe manner?
    <bullet> To what extent have hazardous secondary material 
recycling practices resulted in environmental problems since 
enactment of major waste management statutes, and why?
    <bullet> 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 available in the docket for 
the 2008 DSW final rule under the following titles:

<bullet> An Assessment of Good Current Practices for Recycling of 
Hazardous Secondary Materials (EPA-HQ-RCRA-2002-0031-0354) (``study 
of successful recycling'')
<bullet> An Assessment of Environmental Problems Associated With 
Recycling of Hazardous Secondary Materials (EPA-HQ-RCRA-2002-0031-
0355) (``environmental problems study'')
<bullet> A Study of Potential Effects of Market Forces on the 
Management of Hazardous Secondary Materials Intended for Recycling 
(EPA-HQ-RCRA-2002-0031-0358) (``market forces study'')

    In the study of successful recycling, 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 hazardous secondary material to determine whether the 
entity to which it is sending such material is equipped to manage it 
responsibly without the risk of releases or other environmental damage. 
These recycling and waste audits of other companies' facilities are 
common to those generators that responsibly recycle in the hazardous 
secondary 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 that can inform a generator that its hazardous 
secondary material has been properly managed.
    The goal of the environmental problems study was to identify and 
characterize environmental problems associated with some types of 
hazardous secondary material recycling that are relevant for the 
purpose of this rulemaking effort. To address commenters' concerns that 
historic damages are irrelevant to current practices because 
environmental programs (post-RCRA and -CERCLA implementation) have 
created strong incentives for proper management of recyclable hazardous 
secondary materials, EPA only included cases where damages occurred 
after 1982. The study identifies 208 cases in which environmental 
damages of some kind occurred from some type of recycling activity and 
that otherwise fit the scope of the study.\3\
---------------------------------------------------------------------------

    \3\ EPA initially identified over 800 potential damage cases, 
most of which were not included in the analysis because (1) the 
damages occurred before 1982, (2) the damages were not caused by 
recycling, or (3) there was not enough information to determine when 
the damages occurred or whether recycling contributed to the 
damages. The cases EPA considered, but did not include, were listed 
in an appendix to the report to allow the public to comment on 
whether additional cases should be included in the analysis. As a 
result of public comment to the 2011 DSW proposal, EPA has updated 
the damage case information using the same methodology, resulting in 
a total of 250 damage cases as of 2012. EPA has determined that the 
new damage case information is consistent with the damage cases 
previously cited in the study.
---------------------------------------------------------------------------

    The Agency has determined that the occurrence of certain types of 
environmental problems associated with post-1982 recycling practices 
shows that discard has occurred. In particular, instances where 
hazardous secondary materials were abandoned (e.g., in warehouses) and 
which required removal, oversight by a government agency and the 
expenditure of public funds clearly demonstrate that the hazardous 
secondary material was discarded. Of the 208 damage cases presented in 
the original damage case study, 69 cases (33%) involve abandoned 
materials. The relatively high incidence of abandoned materials likely 
reflects the fact that bankruptcies or other types of business failures 
were associated with 138 (66%) of the cases.
    In addition, the pattern of environmental damages that resulted 
from the mismanagement of recyclable

[[Page 1699]]

materials (including contamination of soils, groundwater, surface water 
and air) is a strong indication that the hazardous secondary materials 
were generally not managed as valuable commodities and were discarded. 
Of the 208 damage cases presented in the original damage case study, 81 
cases (40%) primarily resulted from the mismanagement of recyclable 
hazardous secondary materials, while mismanagement of recycling 
residuals was the primary cause in 71 cases (34%). Often, in the case 
of mismanagement of recycling residuals, reclamation processes 
generated residuals in which the toxic components of the recycled 
materials were separated from the non-toxic components, and these 
portions of the hazardous secondary material were then mismanaged and 
discarded. 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, while the drums were 
reused or recycled.
    The market forces study used accepted economic theory to describe 
how various market incentives can influence a firm's decision-making 
process when recycling hazardous secondary materials. This study helps 
explain some of the possible fundamental economic drivers of both 
successful and unsuccessful recycling practices.
    As pointed out by some commenters to the 2003 DSW proposed rule, 
the economic forces shaping the behavior of firms that recycle 
hazardous secondary materials are often different from those at play in 
manufacturing processes using virgin materials. The market forces study 
used 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 were (1) commercial recycling, where the primary business of 
the firm is the recycling of hazardous secondary materials that are 
accepted from off-site industrial sources (which usually pay a fee); 
(2) industrial intra-company recycling, where firms generate hazardous 
secondary materials as by-products of their main production processes 
and recycle the hazardous secondary materials for sale or for their own 
reuse in production; and (3) industrial inter-company recycling, where 
firms either use or recycle hazardous secondary materials obtained from 
other firms, with the objective of reducing the cost of their 
production inputs. The report also looked at how the outcome from each 
model is potentially affected by three market characteristics: (1) The 
value of the recycled product, (2) the price stability of recycling 
output or inputs, and (3) the net worth of the firm.
    An individual firm's decision-making is based on many factors and 
extrapolating a firm's likely behavior from a few factors could be an 
over-simplification. However, when used in conjunction with other 
information, the economic theory can be quite illuminating. For 
example, according to the market forces study, industrial intra- and 
inter-company recyclers have more flexibility in adjusting to unstable 
recycling markets (e.g., during price fluctuations, these companies can 
more easily switch from recycling to disposal or from recycled inputs 
to virgin inputs). Therefore, they would be expected to be less likely 
to have environmental problems from over-accumulated materials.
    On the other hand, in certain types of commercial recycling, the 
product has low value, the prices are unstable, and/or the firm has a 
low net worth. Facilities in these situations can be more susceptible 
to environmental problems from the over-accumulation or mishandling of 
hazardous secondary materials, especially when compared to recycling by 
a well-capitalized firm that yields a product with high value. In 
short, commercial recyclers depend on revenue from two sources: (1) 
Accepting hazardous secondary materials for recycling, and (2) selling 
the recycled product. When recycled product prices fall, commercial 
recyclers rely on profits from accepting hazardous waste, which can 
result in over-accumulation, mismanagement, sham recycling, and 
abandonment of hazardous secondary materials. Further, because these 
facilities often have little capital at risk, they can go bankrupt 
leaving environmental damages behind. These predicted outcomes appear 
to be supported by the results of the environmental problems study, 
which showed the vast majority of environmental damages--approximately 
94%--occur at off-site commercial recyclers.
    However, as shown by the study of successful recycling, generators 
who could 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, such as through audits to ensure that they are technically 
and financially capable of performing the recycling. In addition, we 
have seen that successful recyclers (both commercial and industrial) 
have often taken advantage of mechanisms, such as long-term contracts 
to help stabilize price fluctuations, allowing recyclers to plan their 
operations more effectively.
    Further discussion of the recycling studies, including the 
methodology and limitations of the studies, can be found in the March 
2007 DSW supplemental proposal (72 FR 14178-83) and the October 2008 
DSW final rule (73 FR 64673-74), and the studies themselves can be 
found in the docket for the 2008 DSW final rule (EPA-HQ-RCRA-2002-0031-
0355).

E. March 2007 Supplemental Proposal To Revise the Definition of Solid 
Waste

    In March 2007, EPA published a supplemental proposal that provided 
the public the opportunity to comment on these studies. The Agency also 
re-structured the proposed rule and proposed (1) two exclusions for 
hazardous secondary materials recycled under the control of the 
generator (one exclusion would apply to hazardous secondary materials 
managed in non-land-based units, and the other exclusion would apply to 
hazardous secondary materials managed in land-based units) and (2) an 
exclusion for hazardous secondary materials transferred to another 
party for reclamation. The Agency also proposed a non-waste 
determination petition process, and re-proposed the legitimacy 
criteria, with certain modifications (72 FR 14172, March 26, 2007).
    For the exclusions of hazardous secondary materials reclaimed under 
the control of the generator, EPA described three circumstances under 
which we believed that discard does not take place and where the 
potential for environmental releases is low. The three situations 
involve hazardous secondary materials that are generated and 
legitimately reclaimed at the generating facility, legitimately 
reclaimed at a different facility within the same company, or 
legitimately reclaimed through a tolling arrangement. Under all three 
circumstances, the hazardous secondary materials must be generated and 
reclaimed within the United States or its territories. Because the 
hazardous secondary material generator in these situations still 
retains control of the hazardous secondary materials, finds value in 
them, and intends to use them, EPA proposed to exclude these materials 
from the definition of solid waste and, thus, from regulation under 
Subtitle C of RCRA, provided the reclamation is legitimate and the

[[Page 1700]]

hazardous secondary materials are contained and not speculatively 
accumulated. In addition, EPA proposed that facilities generating and 
reclaiming hazardous secondary materials under the control of the 
generator must submit notification to their regulatory authority.
    For the exclusion of hazardous secondary materials transferred to 
another party for reclamation (referred to as the transfer-based 
exclusion), the Agency proposed conditions that, when met, would 
indicate that these hazardous secondary materials were not discarded. 
Specifically, the generator would need to make reasonable efforts, a 
form of due diligence, to determine that its hazardous secondary 
materials would be properly and legitimately recycled (and that the 
hazardous secondary material would not be discarded). Another condition 
would require the reclamation facility to have adequate financial 
assurance (thus demonstrating that the hazardous secondary material 
would not be abandoned). In addition, EPA proposed that both the 
generator and reclaimer would be required to maintain shipping records 
(to demonstrate that the hazardous secondary material was sent for 
reclamation and was received by the reclaimer). Furthermore, the 
reclaimer would be subject to additional storage and residual 
management standards (to address the instances of discard observed at 
off-site reclamation facilities in the damage cases). Finally, 
facilities operating under the transfer-based exclusion must also 
submit notification to their regulatory authority.
    In addition, the 2007 DSW supplemental proposal included a case-by-
case non-waste determination petition process that would allow 
applicants to receive a formal determination from EPA that their 
hazardous secondary materials were not discarded and therefore were not 
solid wastes. The case-by-case petition process would allow EPA or the 
authorized state to take into account the particular fact pattern of 
the recycling and to determine that the hazardous secondary materials 
in question were not solid wastes. The petition process for the non-
waste determination was the same as that for the variances from the 
definition of solid waste found at 40 CFR 260.31.
    Finally, EPA proposed a definition of legitimate recycling that 
restructured the legitimacy factors originally proposed in October 
2003. The proposed legitimacy factors would be used to determine that 
the recycling of hazardous secondary materials is not a ``sham'' and 
thus, does not constitute discard.

F. October 2008 Final Rule To Revise the Definition of Solid Waste

    In October 2008, EPA promulgated a final rule largely as proposed 
in March 2007, with some revisions and clarifications, including (1) 
clarifying that hazardous secondary materials held at a transfer 
facility for less than 10 days are considered to be in transport (and 
therefore such transfer facilities are not considered to be storing the 
hazardous secondary materials for the purpose of the DSW exclusion), 
(2) allowing the use of intermediate facilities that store hazardous 
secondary materials for more than 10 days under the transfer-based 
exclusion, provided the facilities comply with the same conditions 
applicable to reclamation facilities, (3) codifying financial assurance 
language in 40 CFR 261 subpart H for the transfer-based exclusion 
applicable to intermediate and reclamation facilities without RCRA 
permits, (4) requiring facilities operating under the generator-
controlled and/or the transfer-based exclusion to notify their 
regulatory authority prior to operating under the exclusion and every 
other year thereafter, and (5) making legitimacy a condition of the 
exclusions and the non-waste determinations in that rule, but not 
finalizing the legitimacy language for all recycling activities.

G. Section 7004 Petition Submitted by the Sierra Club and Industry 
Response

    On January 29, 2009, the Sierra Club submitted an administrative 
petition under RCRA section 7004(a), 42 U.S.C. 6974(a), to the 
Administrator of EPA requesting that the Agency repeal the October 2008 
revisions to the definition of solid waste rule and stay the 
implementation of the rule.
    The administrative petition was submitted at the same time that the 
American Petroleum Institute (API) and Sierra Club filed judicial 
Petitions for Review under RCRA section 7006(a), 42 U.S.C. 6976(a) 
challenging the rule in the United States Court of Appeals for the 
District of Columbia Circuit (D.C. Circuit). These cases, designated as 
Docket Nos. 09-1038 and 1041, respectively, are currently before the 
D.C. Circuit.\4\
---------------------------------------------------------------------------

    \4\ In its lawsuit, API claimed that EPA had improperly decided 
that certain petroleum catalysts, when recycled are hazardous 
wastes. See 73 FR 64714 for EPA's decision to defer a decision on 
the eligibility of those catalysts for the 2008 DSW final rule. API 
argued, among other things, that these catalysts should be treated 
the same as other materials that were receiving the transfer-based 
exclusion. API's challenge proceeded to briefing and argument before 
the Court of Appeals. By order of June 8, 2012, the Court 
reconsidered and decided to hold API's challenge in abeyance until 
EPA issued this rule in final form. Since EPA is removing the 
transfer-based exclusion and making spent petroleum catalysts 
eligible for the generator-controlled and verified recycler 
exclusions, API's challenge that the Agency failed to treat the 
catalysts as other excluded materials is now moot. See section XI 
below for further discussion on the effect of this rule on spent 
petroleum catalysts.
---------------------------------------------------------------------------

    The Sierra Club petition argued that the revised regulations are 
unlawful and that they increase threats to public health and the 
environment without producing compensatory benefits and, therefore, 
should be repealed. Among other things, the petition singled out the 
lack of regulatory definitions for key conditions of the rule and 
disagreed with the Agency's findings that the rule would have no 
adverse environmental impacts, including the finding there would be no 
adverse impact to environmental justice communities or children's 
health.
    On March 6, 2009, a coalition of industry associations (``industry 
coalition'') submitted a letter to the Administrator of EPA in response 
to the Sierra Club petition. This letter requested that EPA deny Sierra 
Club's petition on the grounds that the 2008 DSW final rule comports 
with court cases construing the scope of the definition of solid waste 
under RCRA, and that the 2008 DSW final rule achieves significant 
economic and conservation benefits, while imposing significant controls 
on the hazardous secondary material recycling industry that are fully 
protective of the environment. The letter also responds to each of the 
specific points raised by Sierra Club in its petition.

H. June 2009 Public Meeting and the Draft DSW Environmental Justice 
Analysis Methodology

    In response to Sierra Club's administrative petition and the 
industry coalition's letter to the Administrator of EPA, a May 27, 
2009, Federal Register notice (74 FR 25200) was issued describing 
possible actions and optional paths forward, as well as announcing a 
public meeting on June 30, 2009, to allow the public and interested 
stakeholders the opportunity to provide input to the decision-making 
process.
    In the May 27, 2009, Federal Register notice announcing the public 
meeting, EPA described the scope of possible actions, which is governed 
by the concept of ``discard.'' As stated in RCRA section 1004(27), 
``solid waste'' is defined 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

[[Page 1701]]

activities.'' The May 2009 public meeting notice said that

[b]ecause the final revisions to the definition of solid waste are 
closely tied to EPA's interpretation of the concept of ``discard,'' 
EPA does not plan to repeal the rule in whole or stay its 
implementation. Such an action could result in hazardous secondary 
materials that are not discarded being regulated as hazardous waste. 
In particular, EPA does not expect to repeal either the exclusion 
for hazardous secondary materials reclaimed under the control of the 
generator or the non-waste determination petition process. However, 
EPA believes there may be other opportunities to revise or clarify 
the definition of solid waste rule, particularly with respect to the 
definition of legitimacy and the transfer-based exclusion, in ways 
that could improve implementation and enforcement of the provisions, 
thus increase environmental protection, while still appropriately 
defining when a hazardous secondary material being reclaimed is a 
solid waste and subject to hazardous waste regulation. (74 FR 
25203).

    Thirty-three people spoke at the public meeting and approximately 
4,000 written comments were received, of which the majority were from 
private citizens who wrote in via a mass email campaign to repeal the 
rule. The remaining comments came from state and local governments 
(17), companies that generate hazardous secondary materials that are 
recycled (i.e., the generating industry) (28), the waste management/
recycling industry (15), environmental, public health and community 
organizations (12), and academics (2). Comments from the generating 
industry were uniformly in favor of denying the Sierra Club petition to 
repeal the rule, citing legal issues and the protectiveness of the 
rule's conditions. Environmental and community organizations, on the 
other hand, were uniformly in favor of repealing the rule, expressing 
concerns over the protectiveness, enforceability, and environmental 
justice and children's health impacts of the rule. Waste management/
recycling industry comments were split, with hazardous waste recyclers 
generally advocating that EPA retain and improve the rule with more 
stringent standards. Other waste management industry comments, 
particularly those from companies representing landfills and 
incinerators, were in favor of repealing the rule. State comments 
expressed concerns about implementing the rule, particularly given the 
economic climate, and generally were in favor of repealing or 
significantly revising the transfer-based exclusion. A copy of the 
public meeting transcript and the comments submitted in response to the 
public meeting notice are available in the docket for the public 
meeting (Docket ID number EPA-HQ-RCRA-2009-0315).
    Many of the commenters (including those at the public meeting and 
those who responded with written comments) expressed strong concerns 
that the Agency did not adequately address environmental justice in the 
rulemaking. In response to the concerns over the environmental justice 
analysis, EPA committed to perform a more rigorous and thorough 
analysis of the environmental justice impacts of the 2008 DSW final 
rule. On January 15, 2010, EPA released for public input a draft 
methodology for conducting the DSW Environmental Justice Analysis. The 
draft methodology was presented to the National Environmental Justice 
Advisory Committee (NEJAC) and discussed at three public roundtable 
meetings, and was used to develop the draft environmental justice 
analysis for the DSW rulemaking.

I. Settlement Agreement With the Sierra Club

1. Overview of Settlement Agreement
    On September 7, 2010, EPA signed a settlement agreement with the 
Sierra Club under which the Sierra Club agreed to withdraw their 
administrative petition and EPA agreed to (1) prepare a notice of 
proposed rulemaking to be signed no later than June 30, 2011,\5\ which 
would address, at a minimum, the issues raised in the Sierra Club's 
administrative petition and (2) take final administrative action 
concerning the notice of proposed rulemaking to be signed no later than 
December 31, 2012. The settlement agreement did not specify the outcome 
of the final rule or what regulatory changes EPA would propose. The 
settlement agreement was approved by the court on January 11, 2011. 
Although EPA was unable to make the settlement agreement deadline for a 
final administrative action, today's rule does address all issues 
raised in Sierra Club's administrative petition, including the four 
issues discussed in the May 27, 2009, public meeting Federal Register 
notice (74 FR 25200). Specifically, the four issues in the settlement 
agreement are (1) the definition of ``contained'' (which includes the 
issue of defining ``significant releases'') (addressed in section V of 
this preamble), (2) notification before operating under the exclusion 
(also addressed in section V of this preamble), (3) the definition of 
``legitimacy'' (addressed in section VIII of this preamble) and (4) the 
transfer-based exclusion (addressed in section VI of this preamble). 
Other issues presented in the administrative petition are discussed 
below.
---------------------------------------------------------------------------

    \5\ The proposed rulemaking was signed by the Administrator of 
EPA on June 30, 2011.
---------------------------------------------------------------------------

2. Request to Immediately Stay the Implementation of and Revoke the 
2008 DSW Rule
    The Sierra Club's administrative petition included a request to 
immediately stay and revoke the 2008 DSW final rule. To support this 
request, the petition asserted that the damage case study demonstrates 
that hazardous waste recycling has caused substantial harm to health 
and the environment and that the 2008 DSW final rule increases the 
likelihood of greater future harm. The petition also asserted that the 
2008 DSW final rule does not account for the possibility that unstable 
recycling markets or financial conditions increase the risk of 
hazardous waste abandonment. In addition, the petition asserted that 
the 2008 DSW final rule will not substantially increase recycling and 
that the economic benefits are few and will only accrue to deregulated 
industries. Furthermore, the petition claimed that there would be job 
losses in the hazardous waste treatment industry and increased worker 
health problems as a result of the rule.
    EPA addressed Sierra Club's request to revoke the 2008 DSW final 
rule in whole and stay its implementation in the May 27, 2009, public 
meeting notice, which continues to reflect EPA's current thinking. In 
that notice, EPA stated at 74 FR 25202:

    The scope of possible changes to the definition of solid waste 
is governed by the concept of ``discard.'' As discussed in the 
preamble to the DSW final rule, EPA used the concept of discard as 
the central organizing idea behind the October 2008 revisions to the 
definition of solid waste. As stated in RCRA section 1004(27), 
``solid waste'' is defined 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 
activities'' (emphasis added). Therefore, in the context of the DSW 
final rule, a key issue relates to the circumstances under which a 
hazardous secondary material that is recycled by reclamation is or 
is not discarded (73 FR 64675). In exercising its discretion in the 
DSW final rule to define what constitutes ``discard'' for hazardous 
secondary materials reclamation, EPA included an explanation of how 
each provision of the final rule relates to discard (73 FR 64676-
64679).
    For example, in the DSW final rule, EPA determined that if the 
generator maintains control over the recycled hazardous secondary 
material and if the material is legitimately recycled under the 
standards established in the final rule and not

[[Page 1702]]

speculatively accumulated within the meaning of EPA's regulations, 
then the hazardous secondary material is not discarded. This is 
because the hazardous secondary material is being treated as a 
valuable commodity rather than as a waste. By maintaining control 
over, and potential liability for, the reclamation process, the 
generator ensures that the hazardous secondary materials are not 
discarded. (See 73 FR 64676.)
    Because the final revisions to the definition of solid waste are 
closely tied to EPA's interpretation of the concept of ``discard,'' 
EPA does not plan to repeal the rule in whole or stay its 
implementation. Such an action could result in hazardous secondary 
materials that are not discarded being regulated as hazardous 
wastes. In particular, EPA does not expect to repeal either the 
exclusion for hazardous secondary materials reclaimed under the 
control of the generator or the non-waste determination petition 
process.

    Today's final rule includes several changes to the generator-
controlled exclusion and to the non-waste determination petition 
process, but, for the reasons stated above, EPA did not stay the rule 
and is not withdrawing either provision.
3. Adequacy of EPA's Analyses
    Finally, the Sierra Club's petition asserted that EPA's conclusion 
that the 2008 DSW final rule would have no adverse environmental 
impacts, and therefore would have no disproportional adverse impacts to 
minority and low-income communities, is unsupported by the 
administrative record. In response to these comments and similar 
comments by other stakeholders at the June 2009 public meeting, EPA 
committed to producing an expanded analysis of the potential 
disproportionate impacts of the 2008 DSW final rule. A draft 
methodology for the analysis was shared with the public in January 
2010, and three public roundtable discussions were held to discuss the 
draft methodology and were addressed in the development of the draft 
DSW environmental justice analysis.\6\
---------------------------------------------------------------------------

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

J. Draft DSW Environmental Justice Analysis

    As part of the development of the 2011 DSW proposal, EPA conducted 
a revised environmental justice analysis, following the methodology 
discussed with stakeholders during the 2010 roundtable discussions. The 
purpose of the draft DSW environmental justice analysis was two-fold. 
First, the analysis represents a systematic examination of the 
potential for an increase in adverse impacts under the 2008 DSW final 
rule (considered independently from which communities might be 
impacted). Second, the analysis includes a demographic assessment, 
characterizing the extent any potential adverse impacts are likely to 
affect minority and/or low-income communities. The results of this 
analysis were intended to inform EPA's decision-making on which 
regulatory options to pursue, within the scope of the Agency's 
authority to regulate hazardous waste.
    The results of the draft DSW environmental justice analysis 
demonstrate that hazardous secondary material recycling can pose 
significant potential hazards to human health and the environment, and 
that it is reasonable to conclude that the potential for hazards from 
hazardous secondary materials recycling adversely impacting human 
health and the environment could increase under the 2008 DSW final 
rule. Of particular concern are (1) the absence of required measures 
(e.g., weekly inspections, training, contingency plans) at hazardous 
secondary materials reclaimers to prevent problems (e.g., spills, 
fires, explosions), (2) the incentives to accumulate larger volumes of 
hazardous secondary materials due to longer storage time limits, and 
(3) the reduction in access to information and opportunity for public 
participation.
    Moreover, the analysis demonstrates that some of the communities 
potentially impacted are minority and low-income communities, and in 
most cases, the populations potentially impacted are disproportionately 
minority and/or low income. In particular, the population-level 
analysis shows a statistically significant potential disproportionate 
impact to minority and low-income populations. In addition, underlying 
vulnerabilities traditionally associated with minority and low-income 
communities can pose the potential to exacerbate potential adverse 
impacts of the 2008 DSW final rule. The ability of communities to 
participate in the decision-making process and the potential for 
multiple and cumulative effects are of particular concern.
    The analysis has undergone peer review, and the draft environmental 
justice analysis and peer review comments were presented for public 
comment as part of the supporting documentation for the 2011 DSW 
proposal.

K. July 2011 Proposal To Revise the Definition of Solid Waste

    On July 22, 2011, EPA published a proposal to revise the definition 
of solid waste. Comments were requested, and the comment period was 
extended until October 20, 2011. In September 2011, EPA held two public 
meetings to accept public comment on the proposal in Philadelphia, PA 
and in Chicago, IL. The goal of the 2011 DSW proposal was to re-examine 
the 2008 DSW final rule to determine if any changes are needed to 
ensure that the rule, as implemented, protects human health and the 
environment from the mismanagement of hazardous secondary materials, 
while at the same time promote sustainability by encouraging the 
reclamation of such materials. The proposed rule consisted of six 
possible actions, which are summarized below.
1. Revisions to the Exclusion for Hazardous Secondary Materials 
Reclaimed Under the Control of the Generator
    In the 2011 DSW proposal, EPA proposed to retain the exclusion for 
hazardous secondary materials reclaimed under the control of the 
generator found at 40 CFR 261.4(a)(23), with certain revisions. 
Proposed revisions to the 2008 DSW rule generator-controlled exclusion 
include (1) adding a regulatory definition of ``contained,'' (2) making 
notification a condition of the exclusion, (3) adding a recordkeeping 
requirement for speculative accumulation, and (4) adding a 
recordkeeping requirement for reclamation under toll manufacturing 
agreements. In addition, EPA requested comment on other ways to 
strengthen the generator-controlled exclusion in order to protect human 
health and the environment.
2. Exclusion for Hazardous Secondary Materials That Are Transferred for 
the Purpose of Reclamation
    EPA proposed to replace the exclusion for hazardous secondary 
materials that are transferred from the generator to other persons for 
the purpose of reclamation found at 40 CFR 261.4(a)(24) and(25) with an 
alternative Subtitle C regulatory scheme. EPA's analyses of potential 
hazards posed by the 2008 DSW rule indicate that, when implemented, the 
transfer-based exclusion may adversely impact human health and the 
environment from hazardous secondary materials that may become 
discarded, and that minority and low-income populations may be 
disproportionately affected by these impacts.
    Under the proposed alternative Subtitle C requirements, the 
hazardous recyclable materials would be managed in accordance with the 
current RCRA Subtitle C requirements, including

[[Page 1703]]

manifesting and hazardous waste permits for storage. However, an 
exception to these proposed requirements would allow generators to 
accumulate hazardous recyclable materials for up to a year without a 
RCRA permit if they make advance arrangements for legitimate 
reclamation and document those arrangements in a reclamation plan.
    EPA also requested comment on alternative approaches that would 
address the concerns regarding the potential risk under the transfer-
based exclusion to human health and the environment from discarded 
hazardous secondary material, such as including additional conditions.
3. Remanufacturing Exclusion
    In addition, EPA requested comment on an exclusion from the 
definition of solid waste for certain types of higher-value solvents 
sent for remanufacturing into similarly higher-value products. Further, 
the action requested comment on a petition process for adding other 
higher-value hazardous secondary materials that are destined to be 
remanufactured into similarly higher-value products.
4. Proposed Revisions to the Definition of Legitimacy
    EPA also proposed revisions to the definition of legitimacy found 
at 40 CFR 260.43 for the purpose of distinguishing genuine recycling 
from ``sham recycling.'' Proposed revisions to the 2008 DSW final rule 
legitimacy definition include (1) applying the codified ``legitimacy'' 
definition to all hazardous secondary material recycling activities; 
(2) making all legitimacy factors mandatory, with a petition process 
for those instances that a factor is not met even when the recycling is 
legitimate; and (3) requiring documentation of legitimacy.
5. Proposed Revisions to Solid Waste Variances and Non-Waste 
Determinations
    EPA also proposed revisions to the case-by-case solid waste 
variances and non-waste determinations found at 40 CFR 260.30-260.34 in 
order to ensure protection of human health and the environment and 
foster greater consistency among the implementing agencies. Proposed 
revisions affect both the non-waste determinations from the 2008 DSW 
final rule and pre-2008 existing variances. Specific proposed revisions 
include (1) requiring facilities which were granted a variance to re-
apply for the variance in the event of a change in circumstances that 
affects how that hazardous secondary material meets the criteria for 
the variance; (2) requiring facilities to re-notify every two years 
with updated information; (3) revising the criteria for the partial 
reclamation variance to clarify when the variance applies and to 
require, among other things, that all the criteria for this variance 
must be met; (4) revising the criteria for the non-waste determination 
in 40 CFR 260.34 to require that petitioners demonstrate why the 
existing solid waste exclusions would not apply to their hazardous 
secondary materials; and (5) designating the Regional Administrator as 
the EPA recipient of petitions for variances and non-waste 
determinations.
6. Request for Comment on Revisions to Other Recycling Exclusions and 
Exemptions
    Finally, EPA requested comment on revisions that would affect other 
(pre-2008) solid waste exclusions and hazardous waste exemptions for 
recyclable materials. These possible revisions include (1) 
recordkeeping for speculative accumulation as applicable; (2) requiring 
facilities to re-notify every two years with updated information on 
their operating status under the various exclusions and exemptions; and 
(3) containment standards for excluded hazardous secondary materials.

IV. When will the final rule become effective?

    This final rule is effective on July 13, 2015.

V. Revisions to the Exclusion for Hazardous Secondary Materials That 
Are Legitimately Reclaimed Under the Control of the Generator

    In today's final rule, EPA is retaining and revising the 
conditional exclusion from the definition of solid waste at 40 CFR 
261.4(a)(23) for those hazardous secondary materials that are 
legitimately reclaimed within the United States or its territories 
under the control of the generator. Revisions to the generator-
controlled exclusion include (1) adding a codified definition of 
``contained;'' (2) adding recordkeeping requirements for same company 
and toll manufacturing reclamation; (3) making notification a condition 
of the exclusion; (4) adding a requirement to document that recycling 
under the exclusion is legitimate; and (5) adding emergency 
preparedness and response conditions. In addition, we have amended the 
speculative accumulation provisions to add a recordkeeping requirement. 
A discussion of the public comments on the July 2011 DSW proposal and 
the Agency's responses can be found in section XIV of this preamble and 
the full response to comment document in the docket for this 
rulemaking.

A. Scope of the Exclusion

    The definition of ``hazardous secondary material generated and 
reclaimed under the control of the generator'' is found at 40 CFR 
261.4(a)(23) for both land-based and non-land-based units, since the 
requirements for both types of units are the same. A land-based unit is 
defined in 40 CFR 260.10 as an area where hazardous secondary materials 
are placed in or on the land before recycling, but this definition does 
not include land-based production units. Examples of land-based units 
include surface impoundments and piles. Examples of non-land-based 
units include tanks, containers, and containment buildings.
    Hazardous secondary materials are considered ``under the control of 
the generator'' under the following circumstances:

    <bullet> They are generated and then reclaimed at the generating 
facility; or
    <bullet> they are generated and reclaimed at different 
facilities, if the generator certifies that the hazardous secondary 
materials are sent either to a facility controlled by the generator 
or to a facility under common control with the generator, and that 
either the generator or the reclaimer has acknowledged 
responsibility for the safe management of the hazardous secondary 
materials. In addition, the generating and receiving facilities must 
maintain at their facilities for no less than three years records of 
hazardous secondary materials sent or received under this exclusion. 
The records must contain the name of the transporter, the date of 
the shipment, and the type and quantity of the hazardous secondary 
material shipped or received. The requirements may be satisfied by 
routine business records (e.g., financial records, bills of lading, 
copies of DOT shipping papers, or electronic confirmations); or
    <bullet> they are generated and reclaimed pursuant to a written 
agreement between a tolling contractor and toll manufacturer, if the 
tolling contractor certifies that it has entered into a tolling 
contract with a toll manufacturer and that the tolling contractor 
retains ownership of, and responsibility for, the hazardous 
secondary materials generated during the course of the manufacture, 
including any releases of hazardous secondary materials that occur 
during the manufacturing process. The tolling contractor and the 
toll manufacturer must maintain at their facilities for no less than 
three years records of hazardous secondary materials sent or 
received under this exclusion. The records must contain the name of 
the transporter, the date of the shipment, and the type and quantity 
of the hazardous secondary material shipped or received. The 
requirements may be satisfied by routine business records (e.g., 
financial records, bills of lading, copies of DOT shipping papers, 
or electronic confirmations).


[[Page 1704]]


    Materials subject to material-specific management conditions under 
the other exclusions of 40 CFR 261.4(a) when reclaimed and spent lead-
acid batteries are not eligible for the generator-controlled exclusion 
at 40 CFR 261.4(a)(23).
    In addition, materials managed under the generator-controlled 
exclusion at 40 CFR 261.4(a)(23) must be contained, may not be 
speculatively accumulated, and are subject to a notification provision 
and documentation of legitimacy determinations, which must be 
maintained on site. Furthermore, the generator must satisfy certain 
emergency preparedness and response conditions. These conditions and 
any changes from the 2008 DSW final rule are explained below.

B. EPA's Rationale for Retaining and Revising the Generator-Controlled 
Exclusion

    In the 2008 DSW final rule, EPA determined that if the generator 
maintains control over the recycled hazardous secondary material, the 
material is legitimately recycled under the conditions of the 
exclusion, and the material is not speculatively accumulated within the 
meaning of EPA's regulations, then the hazardous secondary material is 
not discarded. Under these circumstances, the hazardous secondary 
material is being treated as a valuable commodity rather than as a 
waste. By maintaining control over, and potential liability for, the 
recycling process, the generator ensures that the hazardous secondary 
materials are not discarded (see ABR 208 F.3d 1051 (``Rather than 
throwing these materials [destined for recycling] away, the producers 
saves them; rather than abandoning them, the producer reuses them.'')) 
(73 FR 64676-7).
    In today's final rule, EPA reaffirms its determination that when a 
generator legitimately recycles hazardous secondary materials under its 
control under the conditions of the exclusion, the generator has not 
abandoned the material and has every opportunity and incentive to 
maintain oversight of, and responsibility for, the hazardous secondary 
material that is reclaimed.
    EPA is however making several revisions to the generator-controlled 
exclusion, the rationale for each of which is explained below.
1. Contained Definition
    Under the generator-controlled exclusion, hazardous secondary 
materials must be contained pursuant to the definition in 40 CFR 
260.10, regardless of whether they are stored in land-based units or 
non-land-based units. Under that definition, a hazardous secondary 
material is contained if it is managed in a unit that meets the 
following criteria: (1) The unit is in good condition, with no leaks or 
other continuing or intermittent unpermitted releases of the hazardous 
secondary materials to the environment, and is designed, as appropriate 
for the hazardous secondary material, to prevent releases of the 
hazardous secondary materials to the environment. Unpermitted releases 
are releases that are not covered by a permit (such as a permit to 
discharge to water or air) and may include, but are not limited to, 
releases through surface transport by precipitation runoff, releases to 
soil and groundwater, wind-blown dust, fugitive air emissions, and 
catastrophic unit failures; (2) the unit is properly labeled or 
otherwise has a system (such as a log) to immediately identify the 
hazardous secondary materials in the unit; and (3) the unit holds 
hazardous secondary materials that are compatible with other hazardous 
secondary materials placed in the unit and is compatible with the 
materials used to construct the unit and addresses any potential risks 
of fires or explosions. Hazardous secondary materials in units that 
meet the applicable requirements of 40 CFR parts 264 or 265 are 
presumptively contained.
    The codification of these regulatory criteria will help regulatory 
authorities and facilities operating under the exclusion to determine 
whether a unit adequately controls the movement of hazardous secondary 
materials. The contained standard is a key provision for determining 
that a hazardous secondary material is not discarded. Hazardous 
secondary materials that are not contained and are instead released to 
the environment are not destined for recycling and are clearly 
discarded.
    In today's final rule, EPA is retaining the ``contained'' condition 
based on the rationale that hazardous secondary materials released to 
the environment are not destined for recycling and are clearly 
discarded, but is adding a regulatory definition of contained to make 
it easier for implementing agencies and the regulatory community to 
determine that a material is contained. In the preamble to the 2008 DSW 
final rule (73 FR 64681), the Agency stated that a hazardous secondary 
material is ``contained'' if it is placed in a unit that controls the 
movement of the hazardous secondary materials out of the unit and into 
the environment. However, EPA did not provide more specific guidance on 
how an implementing agency or the regulated community would determine 
if a unit did adequately control the movement of hazardous secondary 
materials and meet the contained standard.
    As EPA noted in the 2011 DSW proposal and as reflected in many of 
the public comments, of particular concern is the lack of preventative 
measures in the contained standard in the 2008 DSW final rule. This is 
noted as a major regulatory gap in EPA's assessment of the potential 
for adverse impacts from the 2008 DSW final rule, including adverse 
impacts to minority and low income communities. Given that the 
contained standard is one of the major requirements for determining 
that hazardous secondary materials reclaimed under the generator-
controlled exclusion are not discarded, this lack of specificity could 
undermine the exclusion. That is, if the primary or only way to 
determine that the hazardous secondary material is not contained is to 
wait until it is released to the environment, then the 2008 DSW final 
rule increases the likelihood of discard for these materials.
    The Agency therefore is adding a regulatory definition of 
``contained'' that resolves this uncertainty without sacrificing the 
flexibility that would allow the implementing authority to take into 
account a wide variety of case-specific circumstances when necessary. 
This definition specifies factors which, if met, demonstrate that the 
hazardous secondary materials in a unit are handled as valuable raw 
materials, intermediates, or products and thus are not being discarded. 
We note that the elements of the contained definition are all measures 
that are used to prevent releases and ensure operation and maintenance 
of the storage unit in the same manner as a production unit.
    If these criteria were not met, the materials remaining in the unit 
would be considered solid and hazardous wastes and the unit would be 
subject to the appropriate hazardous waste regulations.
    Also, to clarify the regulatory status of units from which releases 
have occurred, the Agency is also adding to 40 CFR 261.4(a)(23) the 
following language: (1) A hazardous secondary material released to the 
environment is discarded and a solid waste unless it is immediately 
recovered for the purpose of reclamation; and (2) hazardous secondary 
material managed in a unit with leaks or other continuing or 
intermittent unpermitted releases of the hazardous secondary material 
to the environment is discarded and a solid waste.

[[Page 1705]]

2. Notification as a Condition
    Under today's rule, generators, reclaimers, tolling contractors, 
and toll manufacturers operating under the generator-controlled 
exclusion at 40 CFR 261.4(a)(23) are required to submit a notification 
prior to operating under these exclusions and by March 1 of each even-
numbered year thereafter to their regulatory authority. Facilities must 
also notify their regulatory authority within 30 days of stopping 
management of hazardous secondary materials under the rule. The 
notification provisions are found at 40 CFR 260.42.
    The substance of the notification provisions is essentially the 
same as that under the 2008 DSW final rule. However, under today's 
rule, such notification is a condition of the exclusion rather than a 
requirement. At issue here are not the specifics of the notification in 
40 CFR 260.42, but rather the consequences an entity would face for 
failing to notify. Thus, if notification is a requirement under the 
authority of RCRA section 3007 (as specified under the 2008 DSW final 
rule), it means that failure to notify would constitute a violation of 
the notification regulations. On the other hand, if notification is a 
condition of the exclusion, it means failure to notify would 
potentially result in the loss of the exclusion for the hazardous 
secondary materials (i.e., the hazardous secondary materials may become 
solid and hazardous wastes and subject to full Subtitle C regulation).
    EPA is finalizing the notification provision as a condition of the 
generator-controlled exclusion because it is the only formal indication 
of a facility's intent to reclaim a hazardous secondary material under 
the conditional exclusion rather than to discard it. For example, if 
during an inspection of a large quantity generator of hazardous waste, 
EPA were to discover a hazardous secondary material that had been 
stored on-site for more than 90 days without a RCRA permit (an act that 
would typically be a violation of the hazardous waste regulations), a 
previously filed notification would be an indication that the facility 
was planning to reclaim the hazardous secondary material under the 
conditions of the exclusion. Absent such a notification, it would be 
difficult for the facility to justify its true intentions for the 
hazardous secondary material. Failure to meet the notification 
provision would be a strong indication that the facility either did not 
intend to comply with or was unaware of the provisions of the 
exclusion, since it failed to comply with the first step for claiming 
the exclusion. In both cases, the lack of notification shows that the 
hazardous secondary material may be discarded. Making notification a 
condition of the rule would further discourage facilities from trying 
to evade enforcement by not notifying because the costs of not 
notifying could be significantly higher than if notification remains a 
requirement. Finally, notification is important for informing 
regulators and the public about hazardous secondary materials activity 
and, without such notification, regulators are unable to effectively 
monitor compliance. This notification condition will keep regulators 
and the public informed about hazardous secondary materials activity 
and will enable effective compliance monitoring.
3. Recordkeeping for Speculative Accumulation
    Under today's rule, all persons subject to the speculative 
accumulation requirements at 40 CFR 261.1(c)(8) (including, but not 
limited to, persons operating under the generator-controlled exclusion 
at Sec.  261.4(a)(23)) must place materials subject to those 
requirements in a storage unit with a label indicating the first date 
that the material began to be accumulated. If placing a label on the 
storage unit is not practicable, the accumulation period must be 
documented through an inventory log or other appropriate method. This 
provision will allow inspectors and other regulatory authorities to 
quickly ascertain how long a facility has been storing an excluded 
hazardous secondary material, and, therefore, whether that facility is 
in compliance with the accumulation time limits of Sec.  261.1(c)(8).
    EPA notes that the speculative accumulation provision only applies 
to persons who are accumulating hazardous secondary materials. 
Processes involving hazardous secondary materials being returned to the 
original process via pipes are not considered to accumulate hazardous 
secondary materials and thus the speculative accumulation provision 
(and recordkeeping therein) would not apply to these scenarios.
4. Other Recordkeeping
    Today's exclusion for tolling and ``same-company'' recycling 
requires recordkeeping for shipments sent and received under the 
exclusion. The records must contain the name of the transporter, the 
date of the shipment, and the type and quantity of hazardous secondary 
material shipped or received. These records may consist of normal 
business records. Such recordkeeping will facilitate enforcement of the 
exclusion and will allow tracking of hazardous secondary materials to 
ensure that these materials remain under the control of the generator 
and are not discarded.
5. Documentation of Legitimacy Determinations
    Persons performing the recycling of hazardous secondary materials 
under the generator-controlled exclusion of 40 CFR 261.4(a)(23) must 
maintain documentation of their legitimacy determination on-site. 
Documentation must be a written description of how the recycling meets 
all four factors in 40 CFR 260.43(a), except as otherwise noted in 40 
CFR 260.43(d). Documentation must be maintained for three years after 
the recycling operation has ceased.
    The Agency has determined that requiring documentation under the 
generator-controlled exclusion to demonstrate that the hazardous 
secondary materials are legitimately recycled and not discarded is 
appropriate because this exclusion is generic and can be used by a wide 
variety of industries recycling any of a number of hazardous secondary 
materials.
6. Emergency Preparedness and Response
    Many of the environmental and human health damages identified by 
the environmental problems study were caused by fires and explosions 
and the lack of specific requirements to prevent and respond to such 
problems is a significant gap in the 2008 DSW exclusion.\7\ Fires and 
explosions at industrial recyclers can threaten the lives and health of 
both facility employees and the general public and can cause lasting 
damage to the local environment. Recent catastrophic chemical accidents 
in the United States, such as the 2013 fire and explosion in West, 
Texas, that killed 15 people, the 2010 explosion and fire at Tesoro 
Refinery in Anacortes, Washington, that killed seven employees, and the 
2012 Chevron Refinery hydrocarbon fire in Richmond, California, that 
affected 15,000 people in the surrounding area, highlight the need for 
continued improvement in a number of areas related to chemical facility 
safety. To address these concerns, the President issued Executive Order 
13650--Improving Chemical Facility Safety and

[[Page 1706]]

Security (EO) on August 1, 2013. The EO directed the Department of 
Homeland Security, EPA, the Department of Labor, the Department of 
Justice, the Department of Agriculture, and the Department of 
Transportation to identify ways to improve operational coordination 
with state, local, tribal, and territorial partners; enhance federal 
agency coordination and information sharing; modernize policies, 
regulations, and standards to enhance safety and security in chemical 
facilities; and work with stakeholders to identify best practices to 
reduce safety and security risks in the production and storage of 
potentially harmful chemicals.
---------------------------------------------------------------------------

    \7\ Taken together, leaks, spills, fires, explosions, or other 
accidents caused environmental damage at 19% of the 250 
environmental damage sites. U.S. EPA ``An Assessment of 
Environmental Problems Associated with Recycling of Hazardous 
Secondary Materials (Updated)'' December 2014.
---------------------------------------------------------------------------

    EPA finds that planning and preparing for an emergency demonstrates 
a generator's intent to not only protect human health and the 
environment but to reduce potential loss of valuable hazardous 
secondary materials. In the absence of such requirements, hazardous 
secondary materials pose a greater risk of being released and discarded 
to the environment.
    Therefore, EPA is adding a condition to the generator-controlled 
exclusion that generators must follow certain emergency preparedness 
and response regulations, found in 40 CFR part 261 subpart M, which are 
dependent on the amount of hazardous secondary material the generator 
accumulates on site at any time. Under the final rule, generators that 
accumulate less than or equal to 6,000 kg of hazardous secondary 
material on site must meet regulations like the emergency preparedness 
and response regulations currently required for small quantity 
generators of hazardous waste. Generators that accumulate more than 
6,000 kg of hazardous secondary material on site must meet regulations 
like the emergency preparedness regulations currently required for 
large quantity generators of hazardous waste. EPA chose to set the 
threshold at 6,000 kg based on the current hazardous waste generator 
regulations, which require generators that accumulate greater than 
6,000 kg of hazardous waste on site to comply with large quantity 
generator regulations, including emergency preparedness and response 
regulations. EPA finds that generators that accumulate greater amounts 
of hazardous secondary material on site inherently pose greater risk to 
human health and the environment from a potential release caused by a 
fire or explosion and thus it is more appropriate for these generators 
to take additional steps to prepare for such events.
    Specifically, EPA is requiring that generators that accumulate less 
than or equal to 6,000 kg of hazardous secondary material on site 
comply with the emergency preparedness and response requirements 
equivalent to those in part 265 subpart C, which discuss maintaining 
appropriate emergency equipment on site, having access to alarm 
systems, maintaining needed aisle space, and making arrangements with 
local emergency authorities. A generator must also have a designated 
emergency coordinator who must respond to emergencies and must post 
certain information next to the telephone in the event of an emergency.
    For generators that accumulate more than 6,000 kg of hazardous 
secondary material on site, EPA is requiring that generators comply 
with requirements equivalent to those in part 265 subparts C and D, 
which includes all the requirements already discussed above for those 
accumulating less than or equal to 6,000 kg, as well as requiring a 
contingency plan and sharing the plan with local emergency responders. 
EPA recommends that the contingency plan be based on the National 
Response Team's Integrated Contingency Plan Guidance (One Plan), 
discussed in the Federal Register on June 5, 1996 (61 FR 28642). Under 
the One Plan Guidance, the generator can develop one contingency plan 
that meets all the regulatory standards for the various statutory and 
regulatory provisions for contingency planning, such as EPA's Oil 
Pollution Prevention Regulation or Risk Management Programs 
regulations, the U.S. Coast Guard's (USCG) Facility Response Plan 
regulations, OSHA's Hazardous Waste Operations and Emergency Response 
(HAZWOPER) regulations, and several others.
    EPA has determined that adding these emergency preparedness and 
response conditions to the generator-controlled exclusion meets the 
goals of the Chemical Safety EO and also will ensure that those 
facilities managing hazardous secondary material under the exclusion 
will be doing so in a manner that allows them to safely recycle the 
hazardous secondary material and limit loss of materials that are 
supposed to be recycled into the environment. These provisions are the 
common-sense steps that a facility that manages hazardous materials 
should take to reduce risk to their workers and the public. 
Additionally, EPA has determined that structuring the emergency 
preparedness and response conditions of the generator-controlled 
exclusion after the existing hazardous waste requirements serves to 
reduce burden on generators, as generators are likely already familiar 
and complying with this regulations.

VI. Verified Recycler Exclusion Replacing the Exclusion for Hazardous 
Secondary Materials That Are Transferred for the Purpose of Reclamation

    Based on comments received and further assessment, EPA has decided 
to replace the 2008 DSW exclusion for hazardous secondary materials 
that are transferred for the purpose of legitimate reclamation (i.e., 
the transfer-based exclusion) with an exclusion for hazardous secondary 
materials sent for reclamation at a verified recycler (i.e., the 
verified recycler exclusion). The verified recycler exclusion is being 
finalized instead of the proposed Subtitle C alternative recycling 
standards because EPA has determined that such an exclusion will 
address the regulatory gaps identified in the 2008 DSW rule in a way 
that appropriately identifies hazardous secondary materials that will 
be legitimately recycled and not discarded. Based on the evidence from 
states currently implementing the transfer-based exclusion, hazardous 
secondary materials transferred to another party for recycling can be 
legitimately recycled and not discarded, provided that there is a 
mechanism for adequate oversight at the recycling facility. Subtitle C 
regulation of this activity is unnecessary and would result in EPA 
regulating as hazardous waste some materials that have not been 
discarded. By adding the condition of requiring the recycler to obtain 
a solid waste variance or have a RCRA permit, EPA is addressing the 
potential for future discard while allowing the legitimate recycling 
activities that are already occurring to continue. (A discussion of the 
public comments on the July 2011 proposal and the Agency's responses 
can be found in section XV of this preamble and the full response to 
comment document is in the docket for this rulemaking.)

A. Summary of Transfer-Based Exclusion

    The 2008 exclusion for hazardous secondary materials that are 
transferred for the purpose of legitimate reclamation, which EPA is 
withdrawing today and replacing with the verified recycler exclusion, 
applied to hazardous secondary materials (i.e., spent materials, listed 
sludges, and listed by-products) that are generated and subsequently 
transferred to a different person or company for the purpose of

[[Page 1707]]

reclamation. This exclusion was found at 40 CFR 261.4(a)(24) and 
(25).\8\
---------------------------------------------------------------------------

    \8\ 40 CFR 261.4(a)(24) is the primary transfer-based exclusion 
and 40 CFR 261.4(a)(25) contains the export requirements for the 
transfer-based exclusion.
---------------------------------------------------------------------------

    General conditions for hazardous secondary material generators, 
reclaimers, and intermediate facilities \9\ under this exclusion 
included the following:
---------------------------------------------------------------------------

    \9\ Intermediate facilities are those facilities that do not 
reclaim hazardous secondary materials, but store them for more than 
10 days.

    <bullet> Entities must submit a notification prior to operating 
under the exclusion and by March 1 of each even-numbered year 
thereafter reporting types and quantities of hazardous secondary 
materials being reclaimed, and
    <bullet> hazardous secondary materials managed at such 
facilities must not be speculatively accumulated as defined in Sec.  
261.1(c)(8) and must be legitimately reclaimed as specified in Sec.  
260.43.

    Conditions applicable to generators of hazardous secondary 
materials included the following:

    <bullet> Containment of such hazardous secondary materials,
    <bullet> reasonable efforts, a form of due diligence, to ensure 
that the intermediate facility or reclaimer intends to properly 
manage and legitimately recycle the hazardous secondary material, 
and
    <bullet> retention of records of off-site shipments for three 
years.

    Conditions applicable to intermediate facilities and reclaimers 
included the following:

    <bullet> Containment of hazardous secondary materials,
    <bullet> transmittal of confirmations of receipt to generators,
    <bullet> retention of records for hazardous secondary materials 
received and sent off-site,
    <bullet> financial assurance equivalent to that required of 
hazardous waste facilities, and
    <bullet> (for reclaimers) proper management of any residuals 
generated from the reclamation activities.

    In addition, for any hazardous secondary materials excluded under 
40 CFR 261.4(a)(24) generated and then exported to another country for 
reclamation, the exporter must notify and obtain consent from the 
receiving country and file an annual report per 40 CFR 261.4(a)(25).

B. EPA's Rationale for Requiring Conditions for Transfers of Hazardous 
Secondary Materials Sent for Reclamation

    In the 2008 DSW rule, EPA determined that, absent specific 
conditions, it is reasonable to conclude that transfers of hazardous 
secondary materials to third-party recyclers generally involve discard 
except for instances where EPA has evaluated and promulgated a case-
specific exclusion that a hazardous secondary material is not a solid 
waste. Generators of hazardous secondary materials who do not reclaim 
these materials themselves often ship these materials to a commercial 
facility or another manufacturer for reclamation in order to avoid the 
costs of disposing of the material. Because of the low commercial value 
and the high potential liability associated with most types of 
hazardous secondary materials (i.e., spent materials and listed 
hazardous waste by-products and sludges), generators will typically pay 
the reclamation facility to accept these hazardous secondary materials 
or receive a salvage fee that only partially offsets the cost of 
transporting and managing them. In such situations, the generator has 
relinquished control of the hazardous secondary materials and the 
entity receiving such materials may not have the same incentives to 
manage them as a useful product. (Note that this determination is 
unchanged from the 2008 DSW final rule; see 73 FR 64675.)
    Evidence of hazardous secondary materials not being managed as a 
valuable product is shown in the results of the environmental problems 
study, found in the docket of the 2008 DSW final rule. Of the 208 
damage cases discussed in the 2008 DSW final rule, 195 (or 
approximately 94%) were from reclamation activities of off-site third-
party recyclers, with clear instances of discard resulting in risk to 
human health and the environment, including cases of large-scale soil 
and ground water contamination with remediation costs in some instances 
in the tens of millions of dollars (73 FR 64673).
    In addition, the market forces study in the docket for the 2008 DSW 
final rule supports the conclusion that the pattern of discard at off-
site third-party reclaimers is a result of inherent differences between 
commercial recycling and normal manufacturing. As opposed to 
manufacturing, where the cost of raw materials or intermediates (or 
inputs) is greater than zero and revenue is generated primarily from 
the sale of the output, hazardous secondary materials recycling can 
involve generating revenue primarily from the receipt of the hazardous 
secondary materials. Recyclers of hazardous secondary materials in this 
situation thus respond differently than traditional manufacturers to 
economic forces and incentives, accumulating more inputs (hazardous 
secondary materials) than can be processed (reclaimed). In addition, 
commercial recyclers have less flexibility than in-house recyclers in 
changing how they manage their hazardous secondary materials (e.g., 
during price fluctuations, in-house recyclers can more easily switch 
from recycling to disposal or from recycled inputs to virgin inputs, 
while commercial recyclers cannot switch to disposal without obtaining 
a RCRA permit) (73 FR 64674). In other words, third-party recyclers 
have economic incentives to accumulate waste beyond their ability to 
deal with it.

C. Regulatory Gaps in the 2008 DSW Rule

    The 2008 DSW final rule attempted to address this pattern of 
adverse impacts to human health and the environment from hazardous 
secondary materials transferred to a third party for recycling by 
setting conditions for the transfer-based exclusion. The intent of 
these conditions was to define when transfers to third-party recyclers 
would not result in discard. The link between each of the conditions 
and their ability to prevent discard is discussed in detail in the 2008 
DSW final rule preamble at 73 FR 64675-79.
    However, EPA failed to take into account how the conditions of the 
2008 transfer-based exclusion would work when actually implemented. 
EPA's analysis of the 2008 DSW final rule was based on the assumption 
that DSW conditions would be implemented to the same degree as Subtitle 
C hazardous waste regulations, without taking into consideration 
whether the 2008 DSW rule would provide EPA and the authorized states 
the ability for the same level of oversight as the fully applicable 
Subtitle C hazardous waste regulations, which leads to the second part 
of EPA's rationale for its 2011 proposal to replace the transfer-based 
exclusion with an alternative Subtitle C regulatory scheme.
    Before excluding hazardous secondary materials that have already 
been determined to be hazardous wastes when discarded, the Agency needs 
adequate assurance that the conditional exclusion will not result in 
discarded hazardous materials posing significant risks to human health 
and the environment (e.g., fires/explosion, soil and water 
contamination, air emissions, and abandoned hazardous secondary 
materials). Because EPA has already evaluated these hazardous secondary 
materials (for example, during a hazardous waste listing determination) 
and determined them to be solid and hazardous wastes when discarded, 
the Agency must be able to reasonably expect that hazardous secondary 
materials managed under a conditional exclusion will not be discarded.

[[Page 1708]]

    Over the years, EPA has developed many such conditional exclusions 
(found in 40 CFR 261.4(a)). In each of these cases, EPA did so by 
examining the specific hazardous secondary material or the specific 
recycling practice, or both, before making a determination that the 
hazardous secondary material is not solid waste. However, unlike these 
types of specific transfer-based exclusions from the definition of 
solid waste, the 2008 transfer-based exclusion in 40 CFR 261.4(a)(24) 
and (25) did not focus on the chemical or physical properties of any 
particular type of hazardous secondary material or on how it is 
typically managed. Instead, the transfer-based exclusion is broadly 
applicable to a wide range of hazardous spent materials and listed by-
products and sludges. Thus, while other solid waste exclusions were 
developed based on EPA's knowledge of the specific hazardous secondary 
materials, the industries generating them, or the current recycling 
management practice for those hazardous secondary materials, the 2008 
DSW transfer-based exclusion relied entirely on the conditions that 
were developed by EPA operating as the Agency anticipates they should. 
The conditions themselves were developed in a reasoned manner,\10\ but 
without evidence that they would work as intended (i.e., would not 
result in significant risk to human health and the environment from 
discarded materials).
---------------------------------------------------------------------------

    \10\ See Chapter 11, Regulatory Impact Analysis: EPA's 2008 
Final Rule Amendments to the Industrial Recycling Exclusions of the 
RCRA Definition of Solid Waste, EPA-HQ-RCRA-2002-0031-0602.
---------------------------------------------------------------------------

    However, the conditions for the transfer-based exclusion in the 
2008 DSW final rule lack several important implementation provisions 
that the Subtitle C requirements for treatment, storage, and disposal 
facilities provide. These provisions ensure a greater level of 
oversight, which ensures that EPA or the state has reviewed a 
facility's planned operations before management begins and which allows 
public participation in the environmental decision-making process, 
thereby increasing the likelihood of compliance and decreasing the 
potential for risk to human health and the environment from discarded 
hazardous secondary material. EPA has performed a detailed regulatory 
comparison of the 2008 DSW final rule with the fully applicable 
Subtitle C hazardous waste regulations, identifying significant 
differences that could lead to the potential for an increased 
likelihood of environmental and public health hazards, including fires/
explosion, soil and water contamination, air emissions, and abandoned 
hazardous secondary materials.\11\
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    \11\ See Chapter 2 and Appendix A of Potential Adverse Impacts 
Under the Definition of Solid Waste Exclusions (Including Potential 
Disproportionate Adverse Impacts to Minority and Low-Income 
Populations): Volume 1--Hazard Characterization, available in the 
docket for today's rule.
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D. Rationale for the Verified Recycler Exclusion

    Based on this reconsideration of the DSW transfer-based exclusion 
conditions, EPA has determined that hazardous secondary materials 
transferred off-site to third party reclaimers for the purpose of 
legitimate reclamation are most appropriately covered under a system 
that allows for oversight and public participation prior to the start 
of operations to help ensure that (1) the hazardous secondary material 
will be legitimately reclaimed and not discarded and (2) the potential 
risk of releases from the facility impacting the surrounding community 
will be minimized. The need for such additional oversight and public 
participation is demonstrated by (1) evidence of past damage cases 
leading to significant risk to human health and the environment from 
hazardous secondary materials originally intended for recycling and (2) 
the underlying perverse incentives of the recycling market to over-
accumulate such hazardous secondary materials intended for recycling, 
resulting in discard of the material. In other words, the transfer-
based exclusion can exacerbate financial incentives for small and/or 
inexperienced businesses to take in more hazardous secondary materials 
than they actually can use, mishandle it, and even go out of business, 
as shown by the fact that bankruptcies or other types of business 
failures were associated with 66% of the recycling damage cases, 
resulting in multi-million dollar cleanups.
    At the same time, as EPA noted in the 2011 DSW proposal and as was 
echoed in the public comments, EPA has also carefully monitored the 
implementation of the 2008 DSW final rule since it came into effect in 
December 2008, and to date, no environmental problems have been 
reported by states related to 2008 transfer-based exclusion. As of 
April 2014, a total of 65 facilities are operating under the transfer-
based exclusion, 56 of which are generators transferring off-site and 7 
which are reclamation facilities.\12\ All seven reclamation facilities 
are RCRA permitted. Of the 56 generators operating under the transfer-
based exclusion, 32 generators appear to have either started or 
substantially increased their recycling as a result of the 2008 DSW 
exclusions. These include generators that had previously reported in 
their 2007, 2009, or 2011 biennial report that they sent their solvents 
off site for fuel blending, and then notified that they are sending 
their spent solvents for reclamation under the 2008 DSW final rule. In 
addition, in at least five cases, facilities have switched from sending 
spent pickle liquor to landfilling or deep well injection to recycling 
under the 2008 DSW rule. In total, the 2008 DSW notifications document 
that over 57,000 tons of hazardous secondary material were reclaimed 
under the 2008 DSW rule during 2011.\13\
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    \12\ Some of these facilities are also managing hazardous 
secondary materials under the generator-controlled exclusion.
    \13\ U.S. EPA, EPA's Evaluation of Data Collected From 
Notifications Submitted Under the 2008 Definition of Solid Waste 
Exclusions, April 11, 2014.
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    In addition, it should be noted that the Department of 
Environmental Protection for the State of Pennsylvania (PA DEP), where 
27 of the 65 facilities operating under the transfer-based exclusion 
are located, commented strongly in favor of keeping the transfer-based 
exclusion: ``PA DEP has experienced no compliance problems or issues of 
any nature with those generators or reclamation facilities operating 
under this conditional exclusion, known as the transfer-based 
exclusion. In addition, under the transfer-based exclusion, large 
quantities of hazardous solvents have been diverted to reclamation and 
reuse rather than being burned for energy recovery, resulting in 
greater resource conservation.'' \14\
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    \14\ Comment to the docket from Vincent J. Brisini, Acting 
Deputy Secretary for Waste, Air, Radiation and Remediation, 
Pennsylvania Department of Environmental Protection, October 20, 
2011 (EPA-HQ-RCRA-2010-0742-0271).
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    Given that the transfer-based exclusion has been achieving its 
intended purpose of encourage safe, legitimate recycling, withdrawing 
the transfer-based exclusion and replacing it with RCRA Subtitle C 
hazardous waste requirements is unnecessary and would result in 
hazardous secondary material that is currently being legitimately 
recycled and not discarded being regulated as hazardous waste. Because 
Subtitle C regulation would be more stringent that the current 
exclusion, if EPA were to finalize the alternative Subtitle C 
standards, Pennsylvania (and other states that have adopted the 2008 
DSW rule) would have to regulate this material as hazardous waste, 
despite the

[[Page 1709]]

fact that according to the state it is currently being legitimately 
recycled and not discarded.
    However, it is important to note that the comments from PA DEP went 
on to recommend that the transfer-based exclusion be limited to RCRA-
permitted facilities. Because all recycling under the transfer-based 
exclusion has been (to date) performed at RCRA-permitted facilities, 
EPA is unable to extrapolate what would happen at facilities without 
RCRA Subtitle C permits if the transfer-based exclusion were fully 
implemented. Given the evidence of past damage cases leading to 
significant risk to human health and the environment from hazardous 
secondary materials originally intended for recycling and the 
underlying perverse incentives of the recycling market to over-
accumulate such hazardous secondary materials intended for recycling, 
resulting in discard of the material, additional oversight of recycling 
beyond the self-implementing measures of the transfer-based exclusion 
is needed to ensure that the hazardous secondary material is 
legitimately recycled and not discarded.
    To address this issue, EPA is requiring as a condition of the new 
verified recycler exclusion that generators must send their hazardous 
secondary materials to a RCRA-permitted recycler or intermediate 
facility \15\ or to a verified hazardous secondary materials recycler 
or intermediate facility who has obtained a solid waste variance from 
EPA or the authorized state using the procedures found in 40 CFR 
260.33. The verified recycler exclusion uses the solid waste variance 
procedure to determine if a facility will properly manage the hazardous 
secondary materials as commodities and legitimately recycle rather than 
discard them. The variance addresses the same criteria currently 
required for the reasonable efforts environmental audit under the 2008 
transfer-based exclusion (see discussion below). However, the variance 
process would allow EPA or the authorized state to evaluate the 
facility before it begins recycling hazardous secondary materials and 
would also give the affected community the opportunity to provide input 
prior to a decision as to whether the variance should be granted, thus 
addressing a major regulatory gap in the transfer-based exclusion that 
could result in significant risk to human health and the environment 
from discarded hazardous secondary material.
---------------------------------------------------------------------------

    \15\ Intermediate facilities are those facilities that do not 
reclaim hazardous secondary materials, but store them for more than 
10 days.
---------------------------------------------------------------------------

    In addition, as described below, the verified recycler exclusion 
retains those conditions from the 2008 transfer-based exclusion that 
EPA determined are necessary to properly identify hazardous secondary 
material that is legitimately recycled and not discarded, and also 
includes the new conditions that apply to the generator-controlled 
exclusion being finalized today.
    EPA expects that all facilities that are currently recycling 
hazardous secondary materials under the 2008 transfer-based exclusion 
will be able to continue to recycle these materials under the verified 
recycler exclusion, because all recycling under the transfer-based 
exclusion is being done at RCRA-permitted facilities, which also 
qualify for the verified recycler exclusion. Moreover, the additional 
conditions of the verified recycler exclusion address the regulatory 
gaps EPA identified in the 2011 DSW proposal that could have resulted 
in significant risk to human health and the environment from discarded 
material, if the 2008 DSW had been fully implemented to include 
facilities without RCRA permits or other regulatory oversight prior to 
beginning recycling.
    Finally, EPA notes that facilities managing excluded hazardous 
secondary materials under the verified recycling exclusion are still 
potentially subject to RCRA enforcement actions if they fail to meet 
the conditions of the exclusion. Persons that handle these hazardous 
secondary materials are responsible for maintaining the exclusion by 
ensuring that the conditions are met. If the hazardous secondary 
materials are not managed pursuant to these restrictions, they are not 
excluded. They would then be considered solid and hazardous wastes if 
they were listed or they exhibited a hazardous waste characteristic for 
RCRA Subtitle C purposes.

E. Conditions of the Verified Recycler Exclusion

    The conditions discussed below describe EPA's evaluation of each of 
the conditions under the 2008 transfer-based exclusion that EPA is 
retaining in the verified recycler exclusion, as well as the additional 
conditions EPA has determined are necessary to address the regulatory 
gaps identified in the transfer-based exclusion in order to ensure that 
the verified recycler exclusion identifies hazardous secondary 
materials that are legitimately recycled and not discarded. By 
including these conditions, EPA is identifying those hazardous 
secondary materials that will be legitimately recycled and not 
discarded.
1. Provisions Applicable to the Hazardous Secondary Materials 
Generator, the Reclamation Facility, and any Intermediate Facility
    Prohibition on speculative accumulation. As a condition of the 
verified recycler exclusion, hazardous secondary materials cannot be 
speculatively accumulated (40 CFR 261.1(c)(8)) at the hazardous 
secondary material generator, reclamation facility, or intermediate 
facility. Restrictions on speculative accumulation have been an 
important element of the RCRA hazardous waste recycling regulations 
since they were promulgated on January 4, 1985. According to this 
regulatory provision, hazardous secondary materials are accumulated 
speculatively if the person accumulating them cannot show that the 
material is 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 is at least 75% by weight 
or volume of the amount of the hazardous secondary material present at 
the beginning of the period. It is also the same prohibition that is 
being promulgated today for the generator-controlled exclusions.
    Furthermore, under today's rule, all persons subject to the 
speculative accumulation requirements at 40 CFR 261.1(c)(8) (including, 
but not limited to, persons operating under the verified recycler 
exclusion at Sec.  261.4(a)(24)) must place materials subject to those 
requirements in a storage unit with a label indicating the first date 
that the material began to be accumulated. If placing a label on the 
storage unit is not practicable, the accumulation period must be 
documented through an inventory log or other appropriate method.
    This provision will allow inspectors and other regulatory 
authorities to quickly ascertain how long a facility has been storing 
an excluded hazardous secondary material, and, therefore, whether that 
facility is in compliance with the accumulation time limits of Sec.  
261.1(c)(8).This provision is being retained in the verified recycler 
exclusion to ensure that the hazardous secondary materials will be 
recycled rather than discarded through speculative accumulation and 
abandonment.
    Notification. Under today's verified recycler exclusion, as a 
condition of the exclusion, hazardous secondary

[[Page 1710]]

material generators, reclaimers, and intermediate facilities must send 
a notification prior to operating under this exclusion and by March 1 
of each even-numbered year thereafter to the EPA Regional Administrator 
using EPA form 8700-12. In states authorized by EPA to administer the 
RCRA Subtitle C hazardous waste program, notifications may be sent to 
the State Director. The notice must include the following:

    <bullet> The name, address, and EPA ID number (if applicable) of 
the facility;
    <bullet> The name and telephone number of a contact person;
    <bullet> The NAICS code of the facility;
    <bullet> The exclusion under which the hazardous secondary 
materials will be managed;
    <bullet> When the facility expects to begin managing the 
hazardous secondary materials in accordance with the exclusion;
    <bullet> A list of hazardous secondary materials that will be 
managed according to the exclusion (reported as the EPA hazardous 
waste numbers that would apply if the hazardous secondary materials 
were managed as hazardous waste);
    <bullet> For each hazardous secondary material, whether the 
material, or any portion thereof, will be managed in a land-based 
unit;
    <bullet> The quantity of each hazardous secondary material to be 
managed annually; and
    <bullet> The certification (included in EPA form 8700-12) signed 
and dated by an authorized representative of the facility.

    If a facility has submitted a notification, but then subsequently 
stops managing hazardous secondary materials in accordance with the 
exclusion, the facility must re-notify the Regional Administrator 
within 30 days using the same EPA Form 8700-12. We consider a facility 
to have `stopped' managing hazardous secondary materials when a 
facility no longer generates, manages and/or reclaims hazardous 
secondary materials under the exclusion and does not expect to manage 
any amount of hazardous secondary material under the exclusion for at 
least one year. Of course, a facility could certainly choose to begin 
managing hazardous secondary materials again and would simply have to 
submit a notification in compliance with 40 CFR 260.42.
    This notification condition is the same as the notification 
condition for the generator-controlled exclusion and is an indication 
that the facility is planning to legitimately recycle the hazardous 
secondary materials and not discard them. As with the generator-
controlled exclusion, EPA is finalizing the notification provision as a 
condition of the transfer-based exclusion because it is the only formal 
indication of a facility's intent to reclaim a hazardous secondary 
material under the conditional exclusion rather than to discard it. For 
further discussion on the notification, including examples of when a 
facility must re-notify that it has stopped managing hazardous 
secondary materials, see section V.B.2 of today's preamble.
    Hazardous secondary materials must be contained. Another condition 
of the verified recycler exclusion applicable to hazardous secondary 
material generators, reclamation facilities, and intermediate 
facilities is that the hazardous secondary materials must be contained 
in their management units. This provision is the same as the 
restriction that is being promulgated for the generator-controlled 
exclusion and helps ensure that the hazardous secondary material 
remains in the management unit until it is ready to be recycled and is 
not discarded. Hazardous secondary materials released to the 
environment from any unit are discarded and would be subject to the 
hazardous waste regulations, unless they are immediately cleaned up. 
Hazardous secondary materials remaining in a unit that experiences a 
release may also be considered discarded in certain cases. For further 
discussion on the containment provisions, see section V.B.1 of today's 
preamble.
    Emergency preparedness and response. As discussed above under the 
generator-controlled exclusion, one important cause of environmental 
and human health damages identified by the environmental problems study 
is fires, explosions, and accidents, with 19% of the environmental 
damage cases being associated with leaks, spills, fires, explosions, or 
other accidents, and the lack of conditions to address these problems 
is a significant regulatory gap in the 2008 DSW exclusions. In 
addition, the President recently released an Executive Order to address 
these types of concerns (EO 13650--Improving Chemical Facility Safety 
and Security). EPA finds that planning and preparing for an emergency 
demonstrates a generator's intent to not only protect human health and 
the environment, but also to reduce potential loss of valuable 
hazardous secondary materials. In the absence of such requirements, 
hazardous secondary materials pose a greater risk of being released and 
discarded to the environment.
    Therefore, EPA is requiring that generators must follow certain 
emergency preparedness and response regulations under the verified 
recycler exclusion. These regulations are found in 40 CFR part 261 
subpart M and are dependent on the amount of hazardous secondary 
material the generator accumulates on site at any time.\16\ Under the 
final rule, generators that accumulate less than or equal to 6,000 kg 
of hazardous secondary material on site must meet regulations like the 
emergency preparedness and response regulations currently required for 
small quantity generators of hazardous waste. Generators that 
accumulate more than 6,000 kg of hazardous secondary material on site 
must meet regulations like the emergency preparedness and response 
regulations currently required for large quantity generators of 
hazardous waste. EPA chose to set the threshold at 6,000 kg based on 
the current hazardous waste generator regulations, which require 
generators that accumulate greater than 6,000 kg of hazardous waste on 
site to comply with large quantity generator regulations, including 
emergency preparedness and response regulations. EPA finds that 
generators that accumulate greater amounts of hazardous secondary 
material on site inherently pose greater risk to human health and the 
environment from a potential release caused by a fire or explosion and 
thus it is more appropriate for these generators to take additional 
steps to prepare for such events.
---------------------------------------------------------------------------

    \16\ Intermediate facilities and reclamation facilities must 
also follow emergency prepared and response regulations, either 
through the requirement of their RCRA permit or through the criteria 
that must be met to obtain a verified recycler variance under 40 CFR 
260.31(d).
---------------------------------------------------------------------------

    Specifically, EPA is requiring that generators that accumulate less 
than or equal to 6,000 kg of hazardous secondary material on site 
comply with the emergency preparedness and response requirements 
equivalent to those in part 265 subpart C, which discuss maintaining 
appropriate emergency equipment on site, having access to alarm 
systems, maintaining needed aisle space, and making arrangements with 
local emergency authorities. A generator must also have a designated 
emergency coordinator who must respond to emergencies and must post 
certain information next to the telephone in the event of an emergency.
    For generators that accumulate more than 6,000 kg of hazardous 
secondary material on site, EPA is requiring that they comply with 
requirements equivalent to those in part 265 subparts C and D, which 
includes all the requirements already discussed above for those 
accumulating less than or equal to 6,000 kg, as well as requiring a 
contingency plan and sharing the plan with local emergency responders. 
EPA

[[Page 1711]]

recommends that the contingency plan be based on the National Response 
Team's Integrated Contingency Plan Guidance (One Plan), discussed in 
the Federal Register on June 5, 1996 (61 FR 28642). Under the One Plan 
Guidance, the generator can develop one contingency plan that meets all 
the regulatory standards for the various statutory and regulatory 
provisions for contingency planning, such as EPA's Oil Pollution 
Prevention Regulation or Risk Management Programs regulations, the U.S. 
Coast Guard's (USCG) Facility Response Plan regulations, OSHA's 
Hazardous Waste Operations and Emergency Response (HAZWOPER) 
regulations, and several others.
    EPA has determined that adding these emergency preparedness and 
response conditions meets the goals of the Chemical Safety EO and also 
will ensure that those facilities managing hazardous secondary material 
under the exclusion will be doing so in a manner that allows them to 
safely recycle the hazardous secondary material and limit loss into the 
environment of materials that are supposed to be recycled. These 
provisions are the common-sense steps that a facility that manages 
hazardous materials should take to reduce risk to their workers and the 
public. Additionally, structuring the emergency preparedness and 
response conditions of the verified recycler exclusion after the 
existing hazardous waste requirements serves to reduce burden on 
generators, as generators are already familiar and complying with this 
regulations.
    Exclusion is limited to recycling performed within the United 
States. Because the verified recycler exclusion requires that hazardous 
secondary materials are sent to a verified reclamation facility (or 
facilities) that has been granted either a RCRA permit or interim 
status that addresses the hazardous secondary material or has received 
a variance from EPA or the authorized state, this exclusion is limited 
to recycling performed within the United States or its territories. 
Because hazardous secondary materials that are exported for recycling 
passes out of the regulatory control of the federal government, it is 
not possible to verify whether the foreign reclaimer will safely and 
legitimately recycle the hazardous secondary material and not discard 
it.
2. Provisions Applicable to the Hazardous Secondary Material Generator
    Transport to a Verified Recycler. The hazardous secondary material 
generator must transport hazardous secondary materials to a verified 
reclamation facility (or facilities) within the United States or its 
territories. A verified reclamation facility is a facility that has 
been granted a variance by EPA or an authorized state under Sec.  
260.31(d) or a reclamation facility where the management of the 
hazardous secondary materials is addressed under a RCRA Part B permit 
or interim status standards. If the hazardous secondary material will 
be passing through an intermediate facility, the intermediate facility 
must have been granted a variance under Sec.  260.31(d) or the 
management of the hazardous secondary materials at that facility must 
be addressed under a RCRA Part B permit or interim status standards. 
The hazardous secondary material generator must also make contractual 
arrangements with the intermediate facility to ensure that the 
intermediate facility sends the hazardous secondary material to the 
verified reclamation facility identified by the hazardous secondary 
material generator.
    Note that in the case of a permitted facility the management of the 
hazardous secondary materials must be addressed under the RCRA part B 
permit or interim status standards. In other words, if the permit 
standards do not extend to the hazardous secondary materials being 
reclaimed, then the reclamation or intermediate facility is required to 
either modify the permit to cover those materials or obtain a solid 
waste variance from EPA or the authorized state before operating under 
the exclusion.
    This condition addresses the major regulatory gap in the transfer-
based exclusion of lack of oversight and public participation for 
hazardous secondary material recycling facilities that do not have RCRA 
permits. Given the evidence of past damage cases leading to significant 
risk to human health and the environment from hazardous secondary 
materials originally intended for recycling and the underlying perverse 
incentives of the recycling market to over-accumulate such hazardous 
secondary materials intended for recycling, resulting in discard of the 
material, additional oversight of recycling beyond the self-
implementing measures of the transfer-based exclusion are needed to 
ensure that the hazardous secondary material is legitimately recycled 
and not discarded.
    This condition replaces the self-implementing ``reasonable 
efforts'' environmental audits of the recycling facility required under 
the 2008 transfer-based exclusion. EPA has determined that it more 
appropriate for the state or EPA to make the determination that a 
facility can safely and legitimately recycle hazardous secondary 
material. While EPA has found that many large companies do conduct 
environmental audits of recycling facilities, many smaller generators 
would not have the technical expertise or resources to conduct such an 
effort.\17\ In addition, it is more efficient for the EPA or the 
authorized state to perform one evaluation of a recycler via the permit 
or variance process rather than have multiple evaluations of a recycler 
conducted by each generator using that recycler.
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    \17\ An Assessment of Good Current Practices for Recycling of 
Hazardous Secondary Materials (EPA-HQ-RCRA-2002-0031-0354).
---------------------------------------------------------------------------

    Recordkeeping. EPA is requiring hazardous secondary material 
generators to maintain at the generating facility certain records that 
document off-site shipments of hazardous secondary materials for a 
period of three years. Specifically, for each shipment of hazardous 
secondary material, the generator must maintain documentation of when 
the shipment occurred, who the transporter was, the name and address of 
the reclaimer(s) and, if applicable, each intermediate facility, and 
the type and quantity of the hazardous secondary materials in the 
shipment. This recordkeeping requirement may be fulfilled by ordinary 
business records, such as bills of lading.
    In addition, hazardous secondary material generators are required 
to maintain confirmations of receipt from each reclaimer and 
intermediate facility for all off-site shipments of hazardous secondary 
materials in order to verify that the hazardous secondary materials 
reached their intended destination and were not discarded. These 
receipts must be maintained at the generating facility for a period of 
three years. Specifically, the hazardous secondary material generator 
must maintain documentation of receipt that includes the name and 
address of the reclaimer or intermediate facility, the type and 
quantity of hazardous secondary materials received, and the date which 
the hazardous secondary materials were received. The Agency is not 
requiring a specific template or format for confirmations of receipt 
and anticipates that routine business records (e.g., financial records, 
bills of lading, copies of Department of Transportation (DOT) shipping 
papers, electronic confirmations of receipt) could contain the 
appropriate information sufficient for meeting this requirement.
    We recognize that, in some cases, reclamation of a hazardous 
secondary material may involve more than one

[[Page 1712]]

reclamation step. In these cases, the recordkeeping condition under the 
terms of the exclusion applies for each reclaimer and intermediate 
facility, regardless of how many reclamation steps were involved. For 
example, if a hazardous secondary material generator shipped hazardous 
secondary materials to one reclaimer for partial reclamation and then 
arranged for the partially-reclaimed material to be subsequently sent 
to another reclaimer for ``final'' reclamation, the generator must 
maintain confirmations of receipt from each reclaimer involved in the 
reclamation process.
    The recordkeeping requirements are the same as those in the 2008 
transfer-based exclusion and Agency continues to believe that the 
recordkeeping requirements in today's rule comprise the minimum 
information needed to enable effective oversight to ensure the 
hazardous secondary materials were sent for reclamation and were not 
discarded.
3. Provisions Applicable to the Transportation of Hazardous Secondary 
Materials
    Hazardous secondary materials may be stored for up to 10 days at a 
transfer facility and still be considered in transit. However, if the 
facility stores the hazardous secondary materials for more than 10 
days, then it would be considered an intermediate facility and subject 
to the conditions in 40 CFR 261.4(a)(24)(vi). While at the transfer 
facility, the hazardous secondary materials must continue to meet all 
applicable DOT standards. Hazardous secondary materials may be 
consolidated for shipping, but cannot be intermingled in a way that 
would constitute waste management. This provision is unchanged from the 
2008 transfer-based exclusion and describes the intersection of the 
RCRA and DOT requirements for these shipments.
4. Provisions Applicable to the Reclamation Facility and any 
Intermediate Facilities
    Recordkeeping. Reclaimers and intermediate facilities who operate 
under the verified recycler exclusion must maintain certain records, 
similar to the records we are requiring for hazardous secondary 
material generators. Specifically, reclaimers and intermediate 
facilities must maintain at their facilities for a period of three 
years records of all shipments of hazardous secondary materials that 
were received at the facility and, if applicable, records of all 
shipments of hazardous secondary materials sent off-site from the 
facility. For hazardous secondary materials received at the reclamation 
and intermediate facility, such records must document the name and 
address of the hazardous secondary material generator, the type and 
quantity of hazardous secondary materials received at the facility, any 
intermediate facilities that managed the hazardous secondary materials, 
the name of the transporter that brought the hazardous secondary 
materials to the facility, and the date such materials were received at 
the facility.
    For hazardous secondary materials that, after being received by the 
reclaimer or intermediate facility, are subsequently sent off-site for 
further reclamation, reclaimers and intermediate facilities must 
document the name and address of the hazardous secondary material 
generator, when the shipment occurred, who the transporter was, the 
name and address of the subsequent reclaimer and, if applicable, each 
subsequent intermediate facility, and the type and quantity of 
hazardous secondary materials in the shipment. This recordkeeping 
requirement may be fulfilled by ordinary business records, such as 
bills of lading.
    Reclaimers and intermediate facilities must also send confirmations 
of receipt to the hazardous secondary material generator for all off-
site shipments of hazardous secondary materials received at the 
facility in order to verify for the hazardous secondary material 
generator that their materials reached the intended destination and 
were not discarded. Specifically, the reclaimer (or each reclaimer, 
when more than one reclamation step is required) and, if applicable, 
each intermediate facility, must send documentation of receipt to the 
hazardous secondary material generator that includes the name and 
address of the reclaimer or intermediate facility, the type and 
quantity of the hazardous secondary materials received and the date 
which the hazardous secondary materials were received. The Agency is 
not requiring a specific template or format for confirmations of 
receipt and anticipates that routine business records (e.g., financial 
records, bills of lading, copies of DOT shipping papers, electronic 
confirmations of receipt) could contain the appropriate information 
sufficient for meeting this requirement.
    In addition, reclaimers and intermediate facilities must also meet 
the recordkeeping requirements under financial assurance discussed 
below in this section.
    Storage of Hazardous Secondary Materials. In addition to the 
condition that the hazardous secondary materials must be contained (40 
CFR 261.4(a)(24)(v)(A)), reclamation facilities and intermediate 
facilities must also manage the hazardous secondary materials in a 
manner that is at least as protective as that employed for the 
analogous raw material, where there is an analogous raw material. Where 
there is no analogous raw material, the hazardous secondary material 
must be contained.
    An ``analogous raw material'' is a material for which a hazardous 
secondary material substitutes and which 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, hazardous secondary materials with high levels of 
toxic volatile chemicals would not be considered analogous to a raw 
material that does not have these volatile chemicals or that has only 
minimal levels of volatile chemicals. Storage conditions for 
reclamation facilities and intermediate facilities that operate under 
today's exclusion demonstrate that the materials are not discarded, but 
instead are treated valuable commodities which would be used and not 
lost to the environment.
    This condition is the same as the parallel condition in the 2008 
transfer-based exclusion and is based on the fact that the great 
majority of damage cases documented in the environmental problems study 
occurred at commercial reclamation and intermediate storage facilities, 
and mismanagement of hazardous secondary materials was found to be a 
cause of environmental problems in approximately 40% of the incidents. 
Accordingly, EPA has determined that this condition for storage is 
necessary and appropriate for reclamation facilities and intermediate 
facilities that take advantage of this exclusion to show that storage 
of these materials is not just another way of disposing of them. In 
addition, it will establish an expectation for the owner/operators of 
such facilities that they must manage hazardous secondary materials in 
a manner at least as protective as they would an analogous raw material 
and in such a way that materials would not be released into the 
environment.

[[Page 1713]]

    Management of recycling residuals. Another condition of the 
verified recycler exclusion is that any residuals that are generated 
from the reclamation processes must 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 273.
    This condition is the same as the parallel condition in the 2008 
transfer-based exclusion and the purpose of this condition is to 
clarify the regulatory status of these waste materials and to emphasize 
in explicit terms that residuals that are generated from the 
reclamation of hazardous secondary materials must be managed properly 
so that the reclamation operation does not become another way of 
avoiding waste management and simply becomes another way of discarding 
unwanted material. The study of recent (i.e., post-CERCLA and 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 the 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 of on-site with little 
regard for the environmental consequences of such mismanagement or 
possible CERCLA liabilities associated with cleanup of these releases. 
By making proper management of the recycling residuals a condition of 
the exclusion, EPA ensures that the reclamation operation is not just 
another way of discarding hazardous constituents. This has the added 
benefit of ensuring that the reclamation operation does not pose a 
significant risk to human health and the environment.
    Financial Assurance. The financial assurance condition is another 
condition that is the same as the parallel condition in the transfer-
based exclusion. By obtaining financial assurance, the reclamation or 
intermediate facility is making a direct demonstration that it will not 
abandon the hazardous secondary materials, it will properly 
decontaminate equipment, and it will clean up any unacceptable 
releases, even if events beyond its control make its operations 
uneconomical. Moreover, financial assurance also addresses the 
correlation of the financial health of a reclamation or intermediate 
facility with the absence of discard. In essence, financial assurance 
will help demonstrate that the reclamation facility or intermediate 
facility owner/operators who would operate under the terms of this 
exclusion are financially sound and will not discard the hazardous 
secondary materials, or if the facility faces financial difficulties, 
that funds would have been set aside to address any issues and, 
therefore, these costs will not be imposed on the U.S. taxpayer.
    The financial assurance requirement has been retained in 40 CFR 
part 261 subpart H because the substance of the requirement is 
unchanged from the financial assurance requirement for the 2008 DSW 
transfer-based exclusion. However, the financial assurance condition is 
now one of the criteria that is evaluated under the verified recycler 
solid waste variance, allowing the state or EPA to verify that the 
financial assurance obtained by the reclamation facility or 
intermediate facility is sufficient and accessible (in contrast, the 
financial assurance condition in the 2008 DSW transfer-based exclusion 
was self-implementing and not subject to review by EPA or the 
authorized state prior to the facility beginning operation).
    A detailed discussion of the 40 CFR part 261 subpart H financial 
assurance provisions can be found in the 2008 DSW final rule at 73 FR 
64692-8, October 30, 2008.
    Verification of the Recycler. As discussed earlier, the condition 
requiring verification of the recycler is the one of the major 
differences between the transfer-based exclusion and the verified 
recycler exclusion and addresses the major regulatory gap in the 
transfer-based exclusion of lack of oversight and public participation 
for hazardous secondary material recycling facilities that do not have 
RCRA permits. The reclaimer and intermediate facility must have been 
granted a solid waste variance by EPA or an authorized state under 
Sec.  260.31(d) or must have a RCRA Part B permit or interim status 
standards that address the management of the hazardous secondary 
materials. An intermediate or reclamation facility may apply for a 
solid waste variance to accept hazardous secondary materials by 
addressing the substantive criteria of the ``reasonable efforts'' 
condition that had previously applied to the hazardous secondary 
material generator under 40 CFR 261.4(a)(24)(B). In addition, the 
variance must address the potential for risk to proximate populations 
from unpermitted releases of the hazardous secondary material to the 
environment.
    Specifically, to qualify for the solid waste variance, the facility 
must address the following criteria:
    (1) The intermediate or reclamation facility must demonstrate that 
the reclamation process for the hazardous secondary materials is 
legitimate pursuant to Sec.  260.43;
    (2) The intermediate or reclamation facility must satisfy the 
financial assurance condition in Sec.  261.4(a)(24)(vi)(F);
    (3) The intermediate or reclamation facility must not be subject to 
a formal enforcement action in the previous three years and must not be 
classified as a significant non-complier under RCRA Subtitle C, or must 
provide credible evidence that the facility will manage the hazardous 
secondary materials properly. Credible evidence may include a 
demonstration that the facility has taken remedial steps to address the 
violations and prevent future violations, or that the violations are 
not relevant to the proper management of the hazardous secondary 
materials;
    (4) The intermediate or reclamation facility must have the 
equipment and trained personnel to safely manage the hazardous 
secondary material and must meet emergency preparedness and response 
requirements;
    (5) If residuals are generated from the reclamation of the excluded 
hazardous secondary materials, the reclamation facility must have the 
permits required (if any) to manage the residuals, have a contract with 
an appropriately permitted facility to dispose of the residuals, or 
present credible evidence that the residuals will be managed in a 
manner that is protective of human health and the environment; and
    (6) The intermediate or reclamation facility must address the 
potential for risk to proximate populations from unpermitted releases 
of the hazardous secondary material to the environment (including 
releases that are not covered by a permit, such as a permit to 
discharge to water or air, and may include, but are not limited to, 
potential releases through surface transport by precipitation runoff, 
releases to soil and groundwater, wind-blown dust, fugitive air 
emissions, and catastrophic unit failures), and must include 
consideration of potential cumulative risks from other nearby potential 
stressors.
    The rationale for each of these criteria is discussed below.
    Criterion (1) is based on the first reasonable efforts question in 
the 2008

[[Page 1714]]

transfer-based exclusion and focuses on whether the reclamation 
facility receiving hazardous secondary materials from a generator 
legitimately recycles such materials. Determining whether a recycling 
operation is legitimate is a fundamental basis for establishing that a 
generator's hazardous secondary materials will not be discarded. For 
further discussion of legitimate recycling, see section VIII.
    Criterion (2) is based on the second reasonable efforts question in 
the 2008 transfer-based exclusion and addresses whether the facility 
has the necessary financial assurance to cover the costs of managing 
any hazardous secondary materials that remain if the facility closes. 
If a facility was found to have failed to meet the condition to have 
financial assurance, then it also would have failed to show a good 
faith effort towards demonstrating that it intends to recycle the 
hazardous secondary materials (or, in the case of the intermediate 
facility, properly store the hazardous secondary material) and not 
discard them. Note that the second reasonable efforts question also 
required the generator to verify that the regulatory authority had been 
notified by the recycler under the 2008 transfer-based exclusion, but 
under the verified recycler exclusion, the state or EPA can verify that 
directly, thus, it is not included here.
    Criterion (3) is based on the third reasonable efforts question in 
the transfer-based exclusion and focuses on the compliance history of 
the recycler or the intermediate facility (to the extent that the 
hazardous secondary material generator uses an intermediate facility). 
The language of this requirement has been simplified from the 
corresponding reasonable efforts question because the information is 
submitted to the regulatory agency who already has access to the 
pertinent enforcement information, rather than obtained by the 
generator who would need to rely on publicly-available data. This 
criterion requires that the facility must either not be subject to a 
formal enforcement action in the previous three years and not be 
classified as a significant non-complier under RCRA Subtitle C, or must 
provide credible evidence that the facility will manage the hazardous 
secondary materials properly.
    ``Formal enforcement'' is a written document that mandates 
compliance and/or initiates a criminal, civil or administrative 
process, with or without appeal rights before a trial of fact that 
results in an enforceable agreement or order and an appropriate 
sanction. For EPA, formal enforcement action is a referral to the U.S. 
Department of Justice for the commencement of a criminal or civil 
action in the appropriate U.S. District Court, or the filing of an 
administrative complaint, or the issuance of an order, requiring 
compliance and a sanction. For states, formal enforcement action is a 
referral to the state's Attorney General for the commencement of a 
criminal, civil or administrative action in the appropriate forum, or 
the filing of an administrative complaint, or the issuance of an order, 
requiring compliance and a sanction. ``Significant non-complier'' is a 
defined term in EPA's Hazardous Waste Civil Enforcement Response Policy 
and means the violators have caused actual exposure or a substantial 
likelihood of exposure to hazardous waste or hazardous waste 
constituents; are chronic or recalcitrant violators; or deviate 
substantially from the terms of a permit, order, agreement, or from the 
RCRA statutory or regulatory requirements. In evaluating whether there 
has been actual or likely exposure to hazardous waste or hazardous 
waste constituents, EPA and the states consider both the environmental 
and human health concerns, including the potential exposure of workers 
to hazardous waste or hazardous waste constituents. For both terms, see 
EPA's Hazardous Waste Civil Enforcement Response Policy (Dec. 2003) at 
http://www.epa.gov/compliance/resources/policies/civil/rcra/finalerp1203.pdf.
    While a facility being designated as a significant non-complier 
and/or the subject of a formal enforcement action does not 
automatically mean that the facility would not reclaim the hazardous 
secondary materials properly, it does raise questions that we believe 
the facility requesting the variance should address. That is, if any 
formal enforcement actions were taken against the facility in the 
previous three years for such non-compliance and the facility was 
alleged to be a significant non-complier, the facility must adequately 
explain how it has resolved any issues or how the reclamation facility 
will properly manage the hazardous secondary materials to avoid future 
violations and/or enforcement actions.
    Criterion (4) is based on the fourth reasonable efforts question 
from the 2008 transfer-based exclusion and addresses the technical 
capability of the recycler or intermediate facility, the most basic 
requirement for ensuring proper and legitimate recycling of hazardous 
secondary materials. If a reclamation or intermediate facility was 
found to have no equipment or inadequate equipment for storing the 
hazardous secondary material or was found to have personnel who have 
not been trained for reclaiming the hazardous secondary materials, it 
raises serious questions as to whether the facility would properly 
manage such materials and avoid discarding them to the environment. 
This criterion also includes the addition of verifying that the 
facility meets the new emergency preparedness and response condition 
discussed earlier.
    Criterion (5) is based on the fifth reasonable efforts question in 
the 2008 transfer-based exclusion and addresses another major cause of 
environmental problems from recycling hazardous secondary materials: 
the management of residuals. This criterion relates to discard through 
the concept that a generator or reclaimer may actually be discarding 
hazardous secondary materials through the release of residuals from the 
recycling process. While the product made from recycling may be a 
legitimate product, the whole recycling process could be considered 
discard if hazardous constituents from the recycled hazardous secondary 
materials are released to the environment. Roughly one-third of the 
damage cases documented in EPA's environmental problems study were 
caused by mismanagement of the residuals from recycling. To address 
criterion (5), the petitioner would need to demonstrate that the 
reclamation facility has practices in place to ensure that residuals 
are managed in a manner that is protective of human health and the 
environment and according to applicable federal or state standards.
    Criterion (6) is a new standard not included in the 2008 transfer-
based exclusion and is a case-specific performance-based criterion that 
addresses the risk to proximate populations from unpermitted releases 
of the hazardous secondary material to the environment (including 
releases that are not covered by a permit, such as a permit to 
discharge to water or air, and may include, but are not limited to, 
potential releases through surface transport by precipitation runoff, 
releases to soil and groundwater, wind-blown dust, fugitive air 
emissions, and catastrophic unit failures), and must include 
consideration of potential cumulative risks from other nearby potential 
stressors. The purpose of this criterion is to specifically address the 
differences in the preventative measures between a RCRA-permitted 
facility as compared to a facility managing excluded hazardous 
secondary material, including the lack of prescriptive standards for 
storage and containment (including air emissions standards). In 
addition, this criterion would address the finding that many of the 
populations

[[Page 1715]]

likely to be proximate to hazardous secondary materials recycling 
facilities are subject to multiple environmental stressors, including 
other industrial facilities, landfills, transportation-related air 
emissions, poor housing conditions (e.g., lead-based paint), leaking 
underground tanks, pesticides, and incompatible land uses.
    The steps the petitioner would take to address this criterion would 
depend on case-specific circumstances. For example, a facility that is 
recycling a hazardous secondary material that is not particularly 
mobile in the environment (e.g., a non-liquid material that does not 
pose a risk of wind-blown dust) and is not located near population 
centers would simply need to document these facts in order to meet this 
criterion. On the other hand, a facility recycling a hazardous 
secondary material that is volatile, ignitable, or otherwise has a high 
potential to adversely impact nearby populations in case of a release 
would need to document the specific steps taken to prevent releases. 
EPA recommends that the petitioner engage the potentially affected 
community in developing this document to ensure that they have 
addressed the concerns expressed by the community.

E. Procedure for Obtaining a Verified Recycler Solid Waste Variance

    The process for obtaining a verified recycler solid waste variance 
is the same as that for the other solid waste variances found in 40 CFR 
260.30. In order to obtain a variance, a facility that manages 
hazardous secondary materials that would otherwise be regulated under 
40 CFR part 261 as either a solid waste or a hazardous waste must apply 
to the Administrator or the authorized state per the procedures 
described in 40 CFR 260.33, which EPA is amending today to apply to 
verified recyclers and intermediate facilities. The application must 
address the relevant criteria discussed in detail above. The 
Administrator or authorized state will evaluate the submission 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 or authorized state will accept comment on 
the tentative decision for 30 days and may also hold a public hearing. 
The Administrator or authorized state will issue a final decision after 
receipt of comments and after the hearing (if held). 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 
260.30 or solid waste exclusions under 40 CFR 261.4). (Note that 
today's rule includes several modifications to the variances procedure 
in 40 CFR 260.33, which would also apply in this case. For further 
discussion see Section IX of today's preamble).

F. Termination of the Exclusion

    As with the generator-controlled exclusion (and the 2008 transfer-
based exclusion), units managing hazardous secondary materials excluded 
under the verified recycler exclusion are not subject to the closure 
regulations in 40 CFR parts 264 and 265 subpart G. However, when the 
use of these units is ultimately discontinued, owners and operators of 
reclamation facilities and intermediate facilities must manage any 
remaining hazardous secondary materials, including any residues that 
are not reclaimed, as hazardous waste and remove or decontaminate 
contaminated containment system components, equipment structures, and 
soils. These hazardous secondary materials and residues, if no longer 
intended for reclamation, would also no longer be eligible for the 
exclusion (which only applies to hazardous secondary materials that are 
reclaimed). Failure to remove these materials within a reasonable time 
frame after operations cease could cause the facility to become subject 
to the full Subtitle C requirements if the Agency determines that 
reclamation is no longer feasible. While this final rule does not set a 
specific time frame for these activities, they typically should be 
completed within the time frames established for analogous activities. 
For example, the requirements for product tanks under 40 CFR 261.4(c) 
allow 90 days for removal of hazardous material after the unit ceases 
to be operated for manufacturing. This time frame should serve as a 
guideline for regulators in determining, on a case-by-case basis, 
whether owners and operators of reclamation facilities and intermediate 
facilities have completed these activities within a reasonable time 
frame. In any event, these hazardous secondary materials remain subject 
to the speculative accumulation restrictions in 40 CFR 261.4(a)(8), 
which includes both a time limitation of recycling 75% of the hazardous 
secondary material within a year and a requirement that the facility be 
able to show there is a feasible means of recycling the hazardous 
secondary material.

VII. Remanufacturing Exclusion

    Today, EPA is also finalizing an exclusion from the definition of 
solid waste for higher-value solvents transferred from one manufacturer 
to another for the purpose of extending the useful life of the original 
solvent product by keeping such materials in commerce to reproduce a 
commercial grade of the original solvent product provided that certain 
conditions are met. For the purpose of this preamble discussion, EPA is 
defining this process as ``remanufacturing.'' Remanufacturing that 
conforms to these conditions would not involve discard, and therefore 
the hazardous secondary materials would not be regulated as solid 
waste. As with all recycling-related exclusions and exemptions, such 
excluded hazardous secondary materials would also need to be recycled 
legitimately. (A discussion of the public comments on the July 2011 
proposal and the Agency's responses can be found in section XVI of this 
preamble and the full response to comment document is in the docket for 
the rulemaking.)

A. Purpose of the Remanufacturing Exclusion

    In finalizing this conditional exclusion, EPA's objective is to 
encourage sustainable materials management by identifying specific 
types of transfers of hazardous secondary materials to third parties, 
that under appropriate conditions, do not involve discard and can 
result in extending the useful life of a commercial-grade chemical. 
Remanufacturing these higher-value hazardous secondary materials can 
have a significantly lower environmental impact than manufacturing 
these chemicals for a one-time use and then transferring them for 
disposal. Thus, remanufacturing allows the hazardous secondary material 
product to be used again, lowering their life-cycle environmental 
impacts significantly.
    Specifically, EPA has determined that, under appropriate 
conditions, the potential for discard in inter-company remanufacturing 
transfers for certain higher-value spent solvents would be low because 
they will be incorporated into the manufacturing process rather than 
accumulated or disposed of. Once these solvents are remanufactured to 
commercial grade, they can be used as replacements for virgin 
commercial grade solvents. The economic incentive for a company 
receiving the spent solvents would be to sell or directly use (avoiding 
purchase of virgin product) the remanufactured solvent products to 
realize an economic value. The company sending these higher-value spent 
solvents for remanufacturing is expected to have little economic 
incentive to pay the receiving company more than a nominal amount of 
money,

[[Page 1716]]

since it would already be transferring something of intrinsic market 
value (materials that can be easily remanufactured for profit). So, 
unlike the RCRA-permitted waste handler which can charge a considerable 
fee for receiving discarded waste, the company receiving these higher-
value spent solvents for remanufacturing is expected to realize most of 
its profit from the sale or use of the remanufactured solvents.
    Once remanufacturing processes are in place, EPA expects that 
solvent remanufacturers would be competitive with other solvent 
manufacturers even in the event of a downturn in the sizable chemical 
market. Companies would also have the flexibility to redirect 
remanufacturing capacity to manufacturing should it ever make economic 
sense to do so, leaving little economic reason to accumulate unsold or 
unused remanufactured solvents.

B. Scope and Applicability

1. Designated Solvents
    The conditional exclusion for remanufacturing applies to hazardous 
spent solvents that are currently regulated as hazardous wastes because 
their recycling involves reclamation. Only the following 18 spent 
solvents are eligible for the remanufacturing exclusion: Toluene, 
xylenes, ethylbenzene, 1,2,4-trimethylbenzene, chlorobenzene, n-hexane, 
cyclohexane, methyl tert-butyl ether, acetonitrile, chloroform, 
chloromethane, dichloromethane, methyl isobutyl ketone, NN-
dimethylformamide, tetrahydrofuran, n-butyl alcohol, ethanol, and/or 
methanol.
    These 18 solvents are used in large volumes as chemical 
manufacturing aids, chemical processing aids, and chemical formulation 
aids (generally referred to as ``processing aids'' for the purpose of 
this rule). The processing aid solvents assist in the reaction, 
extraction, purification, and blending of ingredients and reactive 
products, but are not themselves reacted. These processing aid 
solvents, once used, can then be remanufactured to commercial grade 
again. These higher-value solvents were selected because there are 
existing markets for all these solvents to be remanufactured to serve 
similar purposes to those of the original commercial-grade materials.
    Note that, as explained below, these hazardous spent solvents are 
only eligible if they are remanufactured to serve certain types of 
chemical functions, and if their originating use was of a specific 
type. This restriction limits the exclusion to higher-value materials 
and processes that resemble manufacturing rather than waste management.
    Hazardous spent solvents are particularly appropriate for the 
remanufacturing exclusion because they are derived from a non-renewable 
resource (petroleum), and they are manufactured in the industrial 
chemicals sector, which, according to EPA's report on sustainable 
materials management, ranks third overall as far as direct adverse 
overall impact to the environment.\18\
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    \18\ U.S. EPA. 2020 Vision Report: Sustainable Materials 
Management: The Road Ahead, Table 1, page 25. .www.epa.gov/waste/
inforesources/pubs/vision.htm. The other top ranked sectors are 
electric services (#1) and cotton production (#2).
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    In addition, remanufacturing these spent solvents represents an 
opportunity for risk reduction. Risk is a function of hazard and 
exposure, and, from a hazard perspective, all of these chemicals have 
suspected or recognized hazardous health effects associated with their 
manufacture, processing, and use.\19\ Although EPA and industry have 
been working to find substitutes for the more hazardous of these 
solvents, or find ways to use less of them, this has not yet been fully 
achieved.<SUP>20 21</SUP> With respect to the pharmaceutical sector in 
particular, complex chemical processes already registered with the Food 
and Drug Administration are involved, and EPA has found this a very 
challenging area to address.
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    \19\ Allen, D., Shonnard, D, Green Engineering: Environmentally 
Conscious Design of Chemical Processes, Risk Concepts, chapter 2, 
pgs 35-62, Austin, S., US EPA Editor, Published by Prentice-Hall, 
2001.
    \20\ For information on U.S. EPA's Green Chemistry Program, see 
http://www.epa.gov/gcc/.
    \21\ Information on the American Chemical Society's Green 
Chemistry Institute's Pharmaceutical Roundtable is available via the 
ACS Web site http://portal.acs.org/portal/acs/corg/content.
---------------------------------------------------------------------------

    In addition, some of these solvents are building block and primary 
intermediate chemicals, making them difficult to replace. Until lower-
risk substitutes for these solvents are found, it is appropriate from a 
health risk standpoint to minimize the volume of solvents manufactured 
and to limit exposure to those already manufactured. This is the 
intention of the remanufacturing exclusion.
    The exclusion can reduce exposure to these solvents in three ways. 
First, the exclusion would extend the useful life of existing solvents, 
which would reduce the health risks associated with their manufacture 
by slowing the rate at which they are manufactured. Second, the 
exclusion would reduce exposure to solvents already manufactured by 
reducing the fuel blending of spent solvents. That is, remanufacturing 
a spent solvent will eliminate the need for blending it with another 
spent solvent to satisfy the fuel-ratio requirements of incinerators 
and cement kilns. This, in turn, will reduce the fugitive emissions 
associated with unloading and loading containers of volatile solvents 
at fuel-blending facilities.\22\ Third and finally, the exclusion can 
reduce the potential exposure from any transportation incidents, since 
it is likely that spent solvents can be transported shorter distances 
for remanufacturing purposes than they can for disposal purposes.\23\
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    \22\ All solvents are volatile, and virtually all spent solvents 
must go through the fuel-blending process prior to disposal (U.S. 
EPA, Selection of Industry Sectors, Chemicals and Functions in the 
Remanufacturing Exclusion, June 2011).
    \23\ Id.
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2. Chemical Functions
    After remanufacturing, the continuing use of the solvent is limited 
to reacting, extracting, purifying, or blending chemicals (or for 
rinsing out the process lines associated with these functions), or 
using them as ingredients in a product in the pharmaceutical, organic 
chemical, plastics and resins manufacturing sectors, or the paint and 
coatings sector. Furthermore, the continuing use of the solvent, after 
remanufacturing, cannot involve cleaning or degreasing oil, grease, or 
similar material from textiles, glassware, metal surfaces, or other 
articles.
    EPA has selected these chemical functions because the 
remanufactured chemical product should serve a similar functional 
purpose as the original commercial-grade material so that it can 
substitute for virgin product, since it is this substitution that 
displaces some manufacturing of virgin product and fosters a system 
where the original solvent remains in commerce and is not discarded. In 
these functions, the solvents do not get contaminated by substances, 
such as inks and greases that are difficult to separate, but only get 
mixed with pure product ingredients, from which they can be separated 
readily in a commercially feasible manner.
    Furthermore, manufacturing and processing operations can be more 
easily controlled in terms of exposure and releases, whereas the spent 
solvents from downstream uses, such as degreasing and cleaning 
operations are of inherently lower-value and these downstream 
operations result in more widespread exposure and releases and a higher 
potential for discard.
    In addition, more environmental benefits will be obtained by 
maximizing the number of times a chemical product can be used at high-
purity grade as an

[[Page 1717]]

aid to chemical manufacturing and processing, before it is used for at 
lower-purity as a cleaner or degreaser. While it is possible to extend 
the product life of a used chemical as a cleaner/degreaser, it takes 
significantly less energy to bring solvents used as chemical 
manufacturing aids back to commercial grade than to bring solvents used 
as cleaners and degreasers back to lower grade functionality, making 
remanufacturing of the higher-value solvents more economically 
feasible.
3. Manufacturing Sectors
    The remanufacturing exclusion is limited to companies whose primary 
business is manufacturing, rather than waste management, as indicated 
by particular NAICS codes. Four manufacturing sectors are eligible for 
the remanufacturing exclusion: Pharmaceutical manufacturing (NAICS 
325412), basic organic chemical manufacturing (NAICS 325199), plastics 
and resins manufacturing (NAICS 325211), and the paints and coatings 
manufacturing sectors (NAICS 325510). Manufacturers within these four 
sectors all use one or more of the 18 identified solvents as chemical 
manufacturing, processing, and formulation aids in high volumes. Based 
on the Toxics Release Inventory information, these four sectors are 
also closely associated with the chemical functions identified in the 
exclusion and currently use a high volume of the solvents for the 
functional purposes included in this exclusion.\24\
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    \24\ U.S. EPA, Selection of Industry Sectors, Chemicals and 
Functions in the Remanufacturing Exclusion, June 2011.
---------------------------------------------------------------------------

    EPA is limiting the remanufacturing exclusion to companies whose 
business is primarily manufacturing because the nature of the exclusion 
relies on the fact that the eligible spent solvents are 
indistinguishable from a risk perspective from the virgin chemicals 
that manufacturers in these sectors are already accustomed to 
handling--no special equipment and personal training beyond what the 
facility already has would be needed. Chemical manufacturers in these 
sectors are also subject to the Occupational Safety and Health Act 
(OSHA) and Clean Air Act (CAA) standards that cover the management of 
these chemicals.

C. Conditions

    Facilities operating under the remanufacturing exclusions must meet 
the following conditions.
1. Notification
    Hazardous secondary material generators and remanufacturers must 
submit a notification prior to operating under the exclusion and by 
March 1 of each even-numbered year thereafter using EPA form 8700-12 to 
the EPA Regional Administrator or the State Director, in an authorized 
state. Additionally, these facilities would have to notify within 30 
days of stopping management of hazardous secondary materials under the 
exclusion.
    The intent of the notification condition is to provide basic 
information to the regulatory agencies about who will be managing the 
hazardous secondary spent solvents under the remanufacturing exclusion. 
The specific information included in the notification--that is, the 
information on EPA form 8700-12--enables regulatory agencies to monitor 
compliance and to ensure that the hazardous secondary spent solvents 
are managed in accordance with the exclusion and not discarded.\25\
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    \25\ As with the generator-controlled exclusion in 40 CFR 
261.4(a)(23), notification is a condition of the remanufacturing 
exclusion. See section XIV.F for further discussion.
---------------------------------------------------------------------------

2. Remanufacturing Plan
    A key issue for the remanufacturing exclusion is how the facilities 
operating under the exclusion would demonstrate that they meet the 
requirements (e.g., that the hazardous spent solvents, functions, and 
manufacturing sectors are those identified in the exclusion). A 
straightforward solution is requiring a remanufacturing plan to be 
prepared and maintained by both the hazardous secondary material 
generator and remanufacturer that includes information on the types and 
expected annual quantities of excluded spent solvents, the processes 
and industry sectors that generate the spent solvents, and the specific 
uses and industry sectors--for the remanufactured solvents.
    The hazardous secondary material generator is also required to make 
arrangements with the remanufacturer to jointly develop this plan and 
to verify the appropriateness of the hazardous spent solvents for the 
remanufacturing process before claiming the exclusion, thus helping 
ensure that the hazardous spent solvents will be remanufactured and not 
discarded.
    Finally, to help ensure that the remanufacturer is a legitimate 
remanufacturer, the plan must include a certification from the 
remanufacturer stating ``on behalf of [insert remanufacturer facility 
name], I certify that this facility is a remanufacturer under the 
pharmaceutical manufacturing (NAICS 325412), basic organic chemical 
manufacturing (NAICS 325199), plastics and resins manufacturing (NAICS 
325211), and/or the paints and coatings manufacturing sectors (NAICS 
325510), and will accept the spent solvent(s) for the sole purpose of 
remanufacturing into commercial-grade solvent(s) that will be used for 
reacting, extracting, purifying, or blending chemicals (or for rinsing 
out the process lines associated with these functions) or for use as 
product ingredients. I also certify that the remanufacturing equipment, 
vents, and tanks are equipped with and are operating air emission 
controls in compliance with CAA regulations under 40 CFR part 60, part 
61 or part 63,\26\ or, absent such CAA standards for the particular 
operation or piece of equipment covered by the remanufacturing 
exclusion, are in compliance with the appropriate standards in 40 CFR 
part 261 subparts AA (vents), BB (equipment) and CC (tank storage).''
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    \26\ This condition is parallel to the provisions found at 40 
CFR 264.1030(e) for AA, 40 CFR 264.1064(m) for BB, and 40 CFR 
264.1080(7) for CC.
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    One of the issues raised in the comments was concern that the 
remanufacturing plan would stifle competitiveness by locking the 
generator into a single remanufacturer for their hazardous spent 
solvents. That was not the Agency's intention, and EPA would like to 
clarify that the remanufacturing plan can be updated any time to 
reflect a new remanufacturer without triggering a re-notification 
requirement on the part of the generator. (If the new remanufacturer 
has not notified before, then he would need to do so under the 
exclusion.) As long as the remanufacturing plan that is kept on-site 
reflects the current practices, including making sure that there is a 
remanufacturer that will accept the hazardous spent solvents, the 
generator would be in compliance with this condition.
3. Record of Shipments and Confirmation of Receipts
    Under the remanufacturing exclusion, generators and remanufacturers 
need to maintain at the facility records of shipments of hazardous 
spent solvents for a period of three years. Specifically, for each 
shipment of hazardous spent solvent, the generator and remanufacturer 
need to maintain documentation of when the shipment occurred, who the 
transporter was, and the type and quantity of the hazardous spent 
solvent in the shipment. This recordkeeping requirement may be

[[Page 1718]]

fulfilled by ordinary business records, such as bills of lading.
    In addition, generators must maintain confirmations of receipt for 
all off-site shipments of hazardous spent solvent in order to verify 
that the hazardous spent solvent reached their intended destination and 
were not discarded. These receipts must be maintained at the facility 
for a period of three years from when they were created. Specifically, 
the documentation of receipt would include the name and address of the 
remanufacturer, and the type and quantity of hazardous spent solvents 
and date that the hazardous spent solvents were received. The Agency is 
not requiring a specific template or format for confirmation of receipt 
since routine business records (e.g., financial records, bills of 
lading, and electronic confirmation of receipt) would contain the 
appropriate information sufficient for meeting this requirement.
    This provision is necessary so all parties responsible for the 
excluded hazardous spent solvent would be able to demonstrate that the 
materials were in fact sent for remanufacturing and arrived at the 
intended facility and were not discarded in transit.
4. Management in Tanks and Containers
    Basic good management practices dictate that solvents, whether 
virgin or spent, are best stored in tanks or containers that possess 
inherent controls to address issues, such as volatile air emissions, 
leaks, and fires or explosions. Solvents present particular management 
challenges associated with the storage of liquids containing volatile 
organic chemicals and include both halogenated and non-halogenated 
organic chemicals, which represent a broad range of chemicals and 
associated hazards.
    By focusing on higher-value spent solvents going to 
remanufacturing, the remanufacturing exclusion reduces the chance of 
mismanagement of the spent solvents. However, given the history of 
spent solvent mismanagement, as demonstrated in the damage cases found 
in environmental problems study, EPA has determined that it is 
appropriate to make an explicit condition that spent solvents excluded 
under the remanufacturing exclusion be stored prior to remanufacturing 
in tanks or containers that are labeled and that meet technical 
standards that will ensure the hazardous spent solvents will go to 
remanufacturing and will not be discarded via leaks, spills or 
explosions.\27\
---------------------------------------------------------------------------

    \27\ U.S. EPA, An Assessment of Environmental Problems 
Associated with Recycling of Hazardous Secondary Materials 
(Updated), December 2014.
---------------------------------------------------------------------------

    For ease of implementation, EPA is establishing explicit tank and 
container standards in 40 CFR part 261 subparts I and J. These 
technical standards are the same as those found in 40 CFR part 264 
subparts I and J, except that the part 261 subparts I and J specify 
that the material is ``hazardous secondary material'' rather than 
hazardous waste, omit references to RCRA permitting requirements, and 
include other minor conforming changes, as discussed below. Although 
the 40 CFR part 264 tank and container standards were developed for 
hazardous wastes, an analysis of the full set of technical requirements 
under subparts I and J shows that they are comparable to product 
storage standards, including regulations promulgated under OSHA, DOT, 
and industry standards.\28\ In addition to being comparable to product 
storage standards, technical standards that mirror subparts I and J of 
40 CFR part 264 have the benefit of being technical standards that the 
regulated community is familiar with, and are designed to prevent the 
spent solvents from being discarded through leaks or explosions.
---------------------------------------------------------------------------

    \28\ U.S. EPA Equivalent Containment Standards for the 
Remanufacturing Exclusion, June 2011.
---------------------------------------------------------------------------

    During remanufacturing and storage prior to remanufacturing, good 
management practices also include effective controls of hazardous air 
emissions. Under the remanufacturing exclusion, this is ensured by 
requiring that the remanufacturer certifies, as part of the 
remanufacturing plan, that the remanufacturing equipment, vents, and 
tanks are equipped with and are operating air emission controls in 
compliance with CAA regulations under 40 CFR part 60, part 61 or part 
63.\29\ Absent such CAA standards for the particular operation or piece 
of equipment covered by the remanufacturing exclusion, then the 
appropriate standards in 40 CFR part 261 subparts AA (vents), BB 
(equipment) and CC (tank storage), which are equivalent to the 
technical standards found in 40 CFR part 264 and 265 subparts AA, BB, 
and CC, would apply.
---------------------------------------------------------------------------

    \29\ This condition is parallel to the provisions found at 40 
CFR 264.1030(e) for subpart AA, 40 CFR 264.1064(m) for subpart BB, 
and 40 CFR 264.1080(7) for subpart CC.
---------------------------------------------------------------------------

    The air emission requirements on remanufacturing equipment, vents, 
and tanks will ensure that the remanufactured solvents do not become 
discarded through fires and explosions, guard against the 
volatilization of hazardous spent solvents, and protect workers, 
handlers and transporters from spent solvent emissions. EPA notes that 
most manufacturers in the pharmaceutical manufacturing (NAICS 325412), 
basic organic chemical manufacturing (NAICS 325199), plastics and 
resins manufacturing (NAICS 325211), and the paints and coatings 
manufacturing sectors (NAICS 325510) will already have their solvent 
management practices covered under the CAA regulations, but for any 
remanufacturer that is not covered under CAA, 40 CFR part 261 subparts 
AA, BB, and CC will ensure that they meet good management practices 
appropriate for solvent management.
    In modifying the tank and container standards and the air emission 
standards to apply specifically to solvents being remanufactured under 
the remanufacturing exclusion, EPA has made other minor conforming 
regulatory changes to 40 CFR part 261. These changes include (1) 
reserving certain subparts, such as subparts K through L and N though 
Z, in order to maintain the same numbering as is found in part 264 for 
the tank and container standards and the air emission standards, (2) 
codifying 40 CFR 261.197 to address termination of the remanufacturing 
exclusion (rather than closure, as is required in part 264), and (3) 
deleting references to the uniform hazardous waste manifest in 40 CFR 
261.1086 because manifest requirements are not applicable under the 
remanufacturing exclusion.
5. Prohibition on Speculative Accumulation
    In addition to the other conditions, hazardous spent solvents under 
the remanufacturing exclusion are subject to the speculative 
accumulation restrictions in 40 CFR 261.1(c)(8). Speculative 
accumulation ensures that the hazardous spent solvents are 
remanufactured and not discarded.

D. Closure of Tank Units

    Units managing excluded hazardous spent solvent are not subject to 
the closure regulations in 40 CFR parts 264 and 265 subpart G. However, 
when the use of these units is ultimately discontinued, all owners and 
operators must manage any remaining hazardous spent solvents that are 
not remanufactured as hazardous waste and remove or decontaminate all 
hazardous residues and contaminated containment system components, 
equipment structures, and soils. These hazardous spent solvents and 
residues, if no longer

[[Page 1719]]

intended for remanufacturing, would also no longer be eligible for the 
exclusion (which only applies to materials that will be remanufactured) 
and would therefore be hazardous waste. These systems would be subject 
to the requirements for product tanks under 40 CFR 261.4(c), which 
allow 90 days for removal of hazardous material after the unit ceases 
to be operated for manufacturing.

E. Petition Process for Additional Remanufacturing Exclusions

    As EPA noted in the 2011 DSW proposal, it is possible that other 
hazardous secondary materials, industry sectors, and/or functional uses 
beyond those being finalized today may also be suitable candidates for 
the remanufacturing exclusion if they involve the transfer of a higher-
value hazardous secondary material from one manufacturer to another, 
for the purpose of remanufacturing a material with significant 
commercial value. In the 2011 DSW proposal, EPA requested comment on 
whether to also include a specific petition process, similar to 40 CFR 
260.20, where petitioners may apply to EPA to request a hazardous 
secondary material, industry sector, and/or functional use be added to 
the exclusion.
    After reviewing the comments, EPA has determined that a separate 
rulemaking petition process is not necessary and that the current 
process in 40 CFR 260.20, including the administrative procedure for 
processing the petition would be the best vehicle for addressing 
additional hazardous secondary materials, industry sectors, and/or 
functional uses to the remanufacturing exclusion. Given the variety of 
hazardous secondary materials, manufacturing processes, and markets for 
potential remanufactured materials, a general process gives the most 
flexibility for petitioners to submit information on potential excluded 
materials.
    In addition, the Agency would like to encourage the research, 
development, and demonstration of innovative recycling processes that 
could be used to recover higher-value hazardous secondary materials. 
Therefore EPA encourages companies to explore using the existing 
regulatory flexibilities, such as treatability study exemptions in 40 
CFR 261.4(e) and (f) and research development and demonstration permits 
allowed under 40 CFR 270.65, to assess and develop recycling 
technologies to facilitate remanufacturing of higher-value materials.
    In submitting a rulemaking petition under 40 CFR 260.20, 
petitioners must include (1) the petitioner's name and address, (2) a 
statement of the petitioner's interest in the proposed action, (3) a 
description of the proposed action, including (where appropriate) 
suggested regulatory language, and (4) a statement of the need and 
justification for the proposed action, including any supporting tests, 
studies, and other information. With respect to the fourth factor, EPA 
would encourage petitioners to provide any information they believe 
demonstrates that their hazardous secondary material is suited for a 
solid waste exclusion under the remanufacturing exclusion. Below are 
some considerations that may assist petitioners in developing their 
petitions; however, these are guidelines only and should not constrain 
suggested rulemaking revisions if the petitioner otherwise has 
information that the hazardous secondary material should be excluded 
from regulation.
    (1) Is the hazardous secondary material generated from a 
manufacturing process that results in minimal contamination, and does 
the hazardous nature of the hazardous secondary material stem chiefly 
from the inherent nature of the commercial product that is to be 
recovered, and not from any contamination?
    For example, the remanufacturing exclusion being promulgated today 
is focused on materials that originated from using commercial grade 
solvents for reacting, extracting, purifying, or blending chemicals (or 
for rinsing out the process lines associated with these functions) in 
the pharmaceutical manufacturing, organic chemical manufacturing, 
plastics and resins manufacturing, or paint and coatings sector. As a 
result, the solvents in question are only lightly contaminated, chiefly 
with other commercial-grade chemicals or minor impurities. Moreover, 
because the hazardous nature of the material stems from the recycled 
product (or at least a significant portion of the recycled product) and 
not from the contamination, the remanufacturing exclusion helps reduce 
overall risk by keeping hazardous chemicals in commerce, rather than 
discarding them.
    (2) Does the hazardous secondary material present a similar risk 
profile as an analogous raw material or product and require no special 
storage or handling beyond what is normally used for the analogous raw 
material or product?
    For example, the spent solvents eligible for the remanufacturing 
exclusion present the same risk profile as solvent products. The same 
tanks, containers, and transportation standards that are used for 
solvent products also work for the spent solvents intended for 
remanufacturing.
    (3) Is there any special equipment or personnel training required 
for the remanufacturing of the material or for the management of the 
residuals?
    For example, under the remanufacturing exclusion being promulgated 
today, the same distillation columns used to manufacture solvents from 
raw materials can be used to remanufacture spent solvents. The still 
bottoms generated from both processes can be managed in a similar 
fashion.
    (4) Is the market for the remanufactured product stable enough to 
ensure that neither the hazardous secondary material nor the 
remanufactured products are over-accumulated?
    For example, the remanufacturing exclusion being promulgated today 
focuses on solvents that are known to be widely used in a variety of 
industries for the purposes described.

VIII. Revisions to the Definition of Legitimacy and Prohibition of Sham 
Recycling

    EPA has a long-standing policy that all recycling of hazardous 
secondary materials must be legitimate, including both excluded 
recycling and the recycling of regulated hazardous wastes. The 
legitimacy provision in today's final rule is designed to distinguish 
between real recycling activities--legitimate recycling--and ``sham'' 
recycling, an activity undertaken by an entity to avoid the 
requirements of managing a hazardous secondary material as a hazardous 
waste. Because of the economic advantages in managing hazardous 
secondary materials as recycled materials rather than as hazardous 
wastes, there is an incentive for some handlers to claim they are 
recycling when, in fact, they are conducting waste treatment and/or 
disposal.
    In this final rulemaking, EPA is codifying in its regulations the 
requirement that all recycling must be legitimate by adding a 
prohibition on sham recycling to 40 CFR 261.2(g). In addition, EPA has 
changed the definition of legitimate recycling in Sec.  260.43. The new 
definition specifies four factors that must be met for recycling to be 
legitimate. However, it also provides new ways that a facility can show 
that it meets factors 3 and 4 of the legitimacy standard.
    The four legitimacy factors are as follows:

    <bullet> Factor 1: Legitimate recycling must involve a hazardous 
secondary material that

[[Page 1720]]

provides a useful contribution to the recycling process or to a 
product or intermediate of the recycling process.
    <bullet> Factor 2: The recycling process must produce a valuable 
product or intermediate.
    <bullet> Factor 3: The generator and the recycler must manage 
the hazardous secondary material as a valuable commodity when it is 
under their control.
    <bullet> Factor 4: The product of the recycling process must be 
comparable to a legitimate product or intermediate.

A. Background

    Under the RCRA Subtitle C definition of solid waste, many existing 
hazardous secondary materials are not solid wastes and, thus, are 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 more closely resembles normal industrial 
manufacturing than waste management. However, since there can be 
significant cost savings from managing hazardous secondary materials 
outside the RCRA Subtitle C regulatory system, some handlers may claim 
that they are recycling, when, in fact, they are conducting waste 
treatment and/or disposal in the guise of recycling. For example, a 
facility whose primary business was mixing electric arc furnace dust 
(K061) with agricultural lime for sale as a micronutrient lost its 
customers and could not sell its product, but continued to accept K061 
even though there was no prospect of it being used to produce a 
product. To guard against practices like these, EPA has long 
articulated the need to distinguish between ``legitimate'' (i.e., true) 
recycling and ``sham'' (i.e., fake) recycling, beginning with the 
preamble to the 1985 regulations that established the definition of 
solid waste (50 FR 638, January 4, 1985).
    The prohibition on sham recycling being finalized in this 
rulemaking is consistent with the Agency's longstanding policy and 
interpretation of legitimate recycling that has been expressed in those 
earlier preamble discussions and policy statements. The January 4, 
1985, preamble to the definition of solid waste regulations established 
EPA's concept of legitimacy and described several indicators of sham 
recycling.
    On April 26, 1989, the Office of Solid Waste (OSW) issued a 
memorandum that consolidated preamble statements concerning legitimate 
recycling that had been articulated previously into a list of criteria 
to be considered in evaluating legitimacy [OSWER directive 
9441.1989(19)]. This memorandum, known to many as the ``Lowrance 
Memo,'' has been a primary source of guidance for the regulated 
community and for implementing agencies in distinguishing between 
legitimate and sham recycling for many years. The October 2003 and 
March 2007 DSW proposals and the October 2008 DSW final rule also all 
include extensive discussions of EPA's legitimacy policy.
    In the 2008 DSW final rule, EPA promulgated a codified legitimacy 
requirement for the specific exclusions in that rulemaking. Today's 
final rule expands that legitimacy requirement to all hazardous 
secondary material recycling, as the Agency proposed to do in the July 
22, 2011, proposal (76 FR 44094). Section VIII.B discusses these final 
legitimacy provisions and describes the requirements. Section VIII.C 
discusses the changes EPA made from the proposed regulations. A 
discussion of the public comments on the July 2011 proposal and Agency 
responses can be found in section XVII of this preamble and the full 
response to comment document is in the docket for the rulemaking.

B. Legitimate Recycling Provisions Being Finalized

    This section discusses the rationale and the requirements being 
finalized in this rulemaking for ensuring that all recycling of 
hazardous secondary material is legitimate.
1. Legitimacy for All Recycling
    In today's final rule, EPA is retaining its long-standing policy 
that all recycling of hazardous secondary materials must be legitimate. 
If a facility is engaged in sham recycling, this, by definition, is not 
real recycling and that hazardous secondary material is being discarded 
and is a solid waste. Today, we are codifying that the legitimate 
recycling provision applies to all hazardous secondary materials that 
are excluded or exempted from Subtitle C regulation because they are 
recycled and that it also applies to recyclable hazardous wastes that 
remain subject to the hazardous waste regulations. However, instead of 
changing the language of each recycling exclusion or exemption to 
include the requirement as we proposed in the 2011 DSW proposal, we 
have instead added language in Sec.  261.2(g) that specifically 
prohibits sham recycling to ensure that all recycling, including 
recycling under the pre-2008 exclusions is legitimate (i.e., real 
recycling). We have also determined that documentation of legitimacy is 
not necessary or required for the pre-2008 recycling exclusions and 
exemptions, except in the rare case where the recycling is legitimate, 
but does not meet factor 4.
    EPA has determined that the four legitimacy factors being codified 
in 40 CFR 260.43 are substantively the same as the existing legitimacy 
policy. These factors are a simplification and clarification of the 
policy statements in the 1989 Lowrance Memo and in various DSW Federal 
Register notices. This policy is well understood throughout the 
regulated community and among the state implementing agencies. By 
providing one standard of legitimacy for all recycling, the Agency 
expects there will be more clarity, consistency, and predictability for 
making legitimate recycling determinations. Having one standard in the 
regulations will also lead to increased knowledge and understanding of 
the basic requirement that any recycling must be legitimate, leading to 
better implementation and enforcement of the RCRA hazardous waste 
regulations.
    In developing the codified legitimacy language, we did not intend 
to raise questions about the status of general legitimacy 
determinations that underlie existing exclusions from the definition of 
solid waste (e.g., the solid waste exclusions in 40 CFR 261.4(a)), or 
about case-specific determinations that have already been made by EPA 
or the states. Current exclusions and other prior solid waste 
determinations or variances that are based on the hazardous secondary 
material being legitimately recycled, including determinations made in 
letters of interpretation and inspection reports, remain in effect.
    Some stakeholders have raised concerns with the application of the 
codified legitimacy factors to these existing waste-specific and 
industry specific exclusions. In particular, as we noted in the October 
2003 DSW proposal and the March 2007 DSW supplemental proposal, EPA has 
examined in depth a number of waste-specific and industry-specific 
recycling activities and has promulgated specific regulatory exclusions 
or provisions that address the legitimacy of these practices in much 
more specific terms than the general legitimacy factors as described in 
40 CFR 260.43.
    EPA expects that the vast majority of recycling being performed 
under these existing exclusions is currently being undertaken 
conscientiously and would be considered legitimate under the new 
legitimacy provision with no further action required on the part of the 
company. If a company is meeting the conditions of its exclusion while 
managing the hazardous secondary material responsibly and using it to 
make a legitimate product, that company would not have to change any

[[Page 1721]]

of its existing business practices or otherwise take action to show 
that its recycling meets the legitimacy factors. EPA is not requiring 
documentation of compliance with the four legitimacy factors, except in 
the case where the recycling does not meet factor 4 on its face, but 
the facility believes that its recycling operation is nonetheless 
legitimate. Many of the measures the companies take in order to meet 
the terms of the conditional exclusions or to follow best management 
practices are the same actions that indicate that a recycling process 
is legitimate. These measures and business practices were generally 
evaluated as part of the original legitimacy determination by the 
agency, and therefore employment of those or similar practices 
indicated legitimate recycling as addressed by the original legitimacy 
determinations.
    One example is the regulation for zinc fertilizers made from 
recycled hazardous secondary materials. If the hazardous secondary 
material recycled under the exclusion contains recoverable amounts of 
zinc, which provides a useful contribution to the recycled product 
(factor 1) and results in a valuable product, i.e., zinc micronutrient 
fertilizer (factor 2), EPA would consider these legitimacy factors to 
be met. In addition, under the exclusion, the generator and recycler 
must manage the zinc-containing hazardous secondary material as a 
valuable commodity (factor 3), that is, in compliance with 
261.4(a)(20)(ii)(B): Store the excluded secondary material in tanks, 
containers, or buildings that are constructed and maintained in a way 
that prevents releases of the secondary materials into the environment. 
At a minimum, any building used for this purpose must be an engineered 
structure made of non-earthen materials that provide structural 
support, and must have a floor, walls and a roof that prevent wind 
dispersal and contact with rainwater. Tanks used for this purpose must 
be structurally sound and, if outdoors, must have roofs or covers that 
prevent contact with wind and rain. Containers used for this purpose 
must be kept closed except when it is necessary to add or remove 
material, and must be in sound condition. Containers that are stored 
outdoors must be managed within storage areas that: (1) Have 
containment structures or systems sufficiently impervious to contain 
leaks, spills and accumulated precipitation; and (2) provide for 
effective drainage and removal of leaks, spills and accumulated 
precipitation; and (3) prevent run-on into the containment system. 
Finally, in the zinc fertilizer regulation, among the requirements 
established by EPA are specific numerical limits on five heavy metal 
contaminants and dioxins in the zinc fertilizer product at 40 CFR 
261.4(a)(21). If the zinc fertilizer product meets these 
concentrations, the product would meet factor 4 (assuming other 
hazardous secondary contaminants have not been added to the product).
    Another example is shredded circuit boards excluded under 40 CFR 
261.4(a)(14). Shredded circuit boards that contain recoverable metals 
that provide a useful contribution to the product of the recycling 
process (factor 1) and go to a recycling process that produces a 
valuable metal product (factor 2) would meet these legitimacy factors. 
In addition, under the exclusion, the shredded circuit boards must be 
stored in containers sufficient to prevent a release to the environment 
prior to recovery (factor 3) and must be free of mercury switches, 
mercury relays and nickel-cadmium and lithium batteries (factor 4).
    Another example is hazardous secondary materials recycled in a 
``closed-loop'' production process under 40 CFR 261.4(a)(8). Under this 
exclusion, the hazardous secondary material is reused within the 
production process from which it came, thus providing a useful 
contribution to the product (factor 1) and also producing a valuable 
product or intermediate (factor 2) (assuming that the production 
process is, by definition, producing a product). Since the closed-loop 
exclusion requires tank storage and that the entire process through 
completion of reclamation is closed by being entirely connected with 
pipes and other comparable enclosed means of conveyance, this 
management would be considered to meet factor 3, management of the 
hazardous secondary material as a valuable commodity. The product of 
this type of recycling process would be comparable to a legitimate 
product or intermediate because the hazardous secondary materials being 
recycled are returned to the original process from which they were 
generated to be reused (factor 4).
    Another example is spent wood preserving solutions and wastewaters 
that have been reclaimed and reused onsite in the production process 
for their original intended purpose under Sec.  261.4(a)(9). Reclaimed 
wood preservatives that are used to treat wood would be making a useful 
contribution to the product (factor 1) and would produce a valuable 
product (factor 2). The conditions of the exclusion include a 
requirement that they are managed to prevent releases, and include 
specific standards for drip pads that manage the material (factor 3). 
The product of this type of recycling process would be comparable to a 
legitimate product or intermediate because the hazardous secondary 
materials being recycled are returned to the original process from 
which they were generated to be reused (factor 4).
    Another example is the long-standing exclusion for excluded scrap 
metal (processed scrap metal, unprocessed home scrap metal, and 
unprocessed prompt scrap metal) being recycled (40 CFR 261.4(a)(13)). 
Excluded scrap metal that contains recoverable metals would provide a 
useful contribution to the product of the recycling process (factor 1) 
and, as long as the recycling process produces a valuable metal product 
(factor 2), the recycling would meet the first two legitimacy factors. 
If the recycler uses appropriate handling and good management practices 
to store and manage the excluded scrap metal to prevent releases of 
hazardous secondary materials to the environment, the recycler would 
generally meet factor 3 for managing the scrap metal as a valuable 
commodity.
    EPA notes that managing scrap metal as a valuable commodity can 
include situations where it is stored on the ground. Scrap metal stored 
on the ground is subject to occasional precipitation runoff that 
consists essentially of water, with trace amounts of hazardous 
constituents. As long as the hazardous secondary material itself is not 
swept away by the runoff, this transport via precipitation runoff would 
not generally be a concern. However, if metal dust, debris and pieces 
of scrap metal were released into the environment, for example, by 
metal falling into a waterway (as has happened in one damage case 
documented by EPA), this would not be considered managed as a valuable 
commodity. Finally, as long as the recovered metal meets widely-
recognized commodity standards/specifications for the metal product, 
factor 4 would be satisfied.
    The conditions developed for the recycling exclusions in Sec.  
261.4(a) were found to be necessary under material-specific rulemakings 
that determined when the particular hazardous secondary material in 
question is not a solid waste. When EPA originally made the decision 
that these materials are not solid waste, the Agency took into account 
the relevant factors about the hazardous secondary materials, including 
how the material was managed and what toxic chemicals were present.

[[Page 1722]]

    In the 2011 DSW proposal, EPA explicitly did not reopen comment on 
any substantive provisions of the previous recycling exclusions or 
exemptions and facilities with pre-2008 exclusions can generally follow 
the normal good business practices that were considered when the 
exclusions were granted and still be considered to be legitimate 
recycling. If the facility is complying with the terms of the exclusion 
and following industry best practices to engage in legitimate recycling 
activity, this would generally not raise questions as to its 
legitimacy. All these examples support EPA's determination that most 
current recycling under existing exclusions is legitimate, and that 
companies complying with the conditions of exclusions would generally 
not need to take action to show that their recycling meets the 
legitimacy factors.
    However, at the same time, these material-specific exclusions from 
the definition of solid waste do not negate the basic requirement that 
the hazardous secondary material must be legitimately recycled. 
Recycling that is not legitimate is not recycling at all, but rather 
``sham recycling''--discard in the guise of recycling. Regarding the 
existing exclusions in the regulations, EPA acknowledges that, in 
establishing a specific exclusion, we have already determined in the 
rulemaking record that the specific recycling practice is excluded from 
the definition of solid waste provided all the conditions of the rule 
are met. However, the Agency has always enforced its rules on the basis 
that any recycling must be legitimate (See U.S. v. Self, 2 F. 3d 1071, 
1079 (10th Cir. 1993); U.S. v. Marine Shale Processors, 81 F. 3d 1361, 
1366 (5th Cir. 1996): Marine Shale Processors v. EPA, 81 F. 3d 1371, 
1381-83 (5th Cir. 1996)). This is meant to prevent a company from 
claiming to be operating under an existing exclusion and simply using 
that as a way to avoid full RCRA Subtitle C regulation.
    For example, under EPA's historic guidance, a facility could not 
plausibly claim the zinc fertilizer product exclusion at 40 CFR 
261.4(a)(21) for a hazardous secondary material that contained 
absolutely no or minimal levels of zinc, even if all the conditions of 
the zinc fertilizer exclusion were met. The exclusion was developed to 
encourage legitimate recycling of zinc-containing hazardous secondary 
materials and the legitimacy provision prevents hazardous waste from 
being discarded into purported fertilizer in the name of recycling when 
the hazardous secondary material provides no recognizable benefit to 
the product.
    Similarly, if a facility accepted zinc-containing hazardous waste, 
claiming to make zinc fertilizer, but failed to produce a product that 
was actually sold or was otherwise valuable, such a process would not 
be legitimate recycling in the historic legitimacy guidance, even if 
the management conditions and the constituent levels in the zinc 
fertilizer exclusion were met. The consequences of the latter example 
are illustrated in one of the damage cases in the environmental 
problems study. A facility whose primary business was mixing electric 
arc furnace dust (K061) with agricultural lime for sale as a 
micronutrient lost its customers and could not sell its product. 
However, the facility continued to accept K061, and, after 
approximately seven months, the facility had accepted over 60,000 tons 
of this hazardous waste and stored it on the ground in piles up to 30 
feet high, with no prospect of it being used to produce a product and, 
thus, legitimately recycled. While the initial recycling of the K061 
hazardous waste was legitimate, when the facility failed to produce a 
product that was actually sold, the K061 could no longer be considered 
legitimately recycled. Even if the recycler were to claim that the 
material may be recycled at some point in the future, the material was 
being speculatively accumulated and thus, a solid and hazardous waste 
at that point.
    In summary, all hazardous secondary materials recycling and 
hazardous waste recycling, whether such recycling remains under 
hazardous waste regulations or is excluded from the definition of solid 
waste, must be legitimate. This has been our long-standing policy and 
it is well known throughout the regulated community and the 
implementing state regulatory agencies. To reinforce that concept and 
make it clear in the regulations, we are today codifying our policy 
that hazardous secondary materials being sham recycled are discarded 
and thus, are solid waste. To do this, EPA has decided to codify the 
following statement in Sec.  261.2 (the definition of solid waste) 
instead of adding a reference to legitimacy in each of the recycling 
exclusions and exemptions (as was suggested in the proposed rule): ``A 
hazardous secondary material found to be sham recycled is considered 
discarded and a solid waste. Sham recycling is recycling that is not 
legitimate recycling as defined in Sec.  260.43.''
    For persons interested in an in-depth analysis of the evolution of 
EPA's concept of legitimate recycling from policy and preamble 
statements to regulations, EPA provided this analysis in the 2008 DSW 
final rule that described how the promulgated legitimacy factors 
compare to the previous primary guidance on legitimacy and the Lowrance 
Memo. EPA continues to maintain that the legitimate recycling provision 
is substantively the same as existing policy because we developed the 
legitimacy factors in 40 CFR 260.43 by closely examining the questions 
and sub-questions in the Lowrance Memo and in the Federal Register 
preambles and converting them into four more direct factors. For a 
detailed explanation of how each of the four factors is derived from 
the Lowrance Memo and other existing policy statements, see 73 FR 64708 
-64710, October 30, 2008.
2. All Factors Mandatory
    The structure of the legitimacy standard codified in the 2008 DSW 
final rule (specifically for the exclusions promulgated in that 
rulemaking) had two parts. The first part included a requirement that 
hazardous secondary materials being recycled must provide 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 must be valuable. At the time, EPA considered those two factors 
to make up the core of legitimacy and, therefore, a process that did 
not conform to them could not be a legitimate recycling process, but 
would be considered sham recycling. The second part of legitimacy in 
the 2008 DSW final rule included two factors that must be considered, 
but not necessarily met, when a recycler is making a legitimacy 
determination. In this final rule, the Agency is changing the structure 
and the application of the legitimate recycling provision so that all 
four factors are written as mandatory requirements that must be met, 
except as otherwise noted. The Agency has determined that this action 
will improve the effectiveness and protectiveness of the legitimacy 
provision. The Agency's experience with implementing the legitimate 
recycling structure finalized in the 2008 DSW final rule has led us to 
this realization. Even though we stressed the importance of considering 
each factor in the 2008 DSW final rule, some stakeholders continue to 
be under the mistaken impression that the factors defined as ``to be 
considered'' were actually optional and could be ignored. We made it 
clear in the 2008 DSW final rule that failing to meet a ``non-
mandatory'' factor could, in some cases, be enough to determine that a 
recycling process is not legitimate. We did not intend for the ``to-be-
considered'' factors

[[Page 1723]]

to be less important and thus, have determined that the only way to 
correct this perception and give these factors the proper weight is to 
make them requirements that must be met, except as otherwise noted, on 
equal footing with the other legitimacy factors.
    However, to address concerns raised, both factor 3 (managed as a 
valuable commodity) and factor 4 (products must have comparable levels 
of hazardous constituents) have been revised from the 2008 DSW final 
rule to add flexibility to address situations where the recycling is 
legitimate, but the specific situation might not meet the legitimacy 
factor . For example, under factor 3, we proposed and are finalizing 
the following language to more closely reflect the intent of the 
provision: ``Where there is an analogous raw material, the hazardous 
secondary material, must be managed, at a minimum, in a manner 
consistent with the management of the raw material or in an equally 
protective manner.'' Thus, a generator or recycler would meet this 
factor if their hazardous secondary material is stored in a different 
manner than the analogous raw material, as long as that storage is as 
protective as the way the analogous raw material is stored.
    Under factor 4, we have also added more explanation and flexibility 
for situations where there is no analogous product to compare to the 
product made from hazardous secondary materials. For example, in some 
cases, the Agency will consider a product of a recycling process that 
meets widely-recognized commodity standards/specifications, such as 
scrap metal, to meet factor 4. Within factor 4, the Agency is also 
creating a provision for hazardous secondary materials that are 
recycled by being returned to the original process from which they were 
generated, such as in a closed-loop recycling process, to meet the 
factor. The specific changes to factor 3 and factor 4 are described in 
greater detail below.
    In making all legitimacy factors mandatory requirements, the first 
sentence of the regulatory language of both factors was revised to 
indicate that these factors must be met. For factor 3, the first 
sentence now reads as follows: ``The generator and the recycler must 
manage the hazardous secondary material as a valuable commodity when it 
is under their control.'' For factor 4, the first sentence now reads as 
follows: ``The product of the recycling process must be comparable to a 
legitimate product or intermediate.''
    In the 2011 DSW proposal, we proposed a petition process for 
facilities that believe their recycling is legitimate despite not 
meeting one or both of these two factors. After review and 
consideration of the public comment on this issue, the Agency has 
decided that instead of a petition process, facilities that do not meet 
factor 4 and yet are still legitimately recycling must notify the 
Regional Administrator (or State Director, if the state is authorized) 
and keep documentation and a certification in their files explaining 
how the recycling is still legitimate.\30\ See section VIII.B.6 below 
for a full discussion of the documentation and notification process 
under factor 4.
---------------------------------------------------------------------------

    \30\ As noted above, and as described in more detail in Section 
VIII.B.6, products of a recycling process that meet widely-
recognized commodity standards/specifications and hazardous 
secondary materials that are recycled by being returned to the 
original process from which they were generated are considered to 
meet factor 4 of the legitimacy standard.
---------------------------------------------------------------------------

3. Factor 1: Useful Contribution--Sec.  260.43(a)(1)
    (1) Legitimate recycling must involve a hazardous secondary 
material that provides a useful contribution to the recycling process 
or to a product or intermediate of the recycling process. The hazardous 
secondary material provides a useful contribution if it:
    (i) Contributes valuable ingredients to a product or intermediate; 
or
    (ii) Replaces a catalyst or carrier in the recycling process; or
    (iii) Is the source of a valuable constituent recovered in the 
recycling process; or
    (iv) Is recovered or regenerated by the recycling process; or
    (v) Is used as an effective substitute for a commercial product.
    This factor expresses the principle that hazardous secondary 
materials must contribute value to the recycling process. Providing a 
useful contribution is an essential element to legitimate recycling 
because real or legitimate recycling is not occurring if the hazardous 
secondary material being added or recovered does not add to the 
process. This factor is intended to prevent the practice of adding a 
hazardous secondary material to a recycling process simply as a means 
of disposing of it, or recovering only small amounts of a constituent, 
which EPA would consider sham recycling.
    Paragraphs (i) through (v) of Sec.  260.43(a)(1) list five ways 
that a hazardous secondary material can provide a useful contribution: 
(i) Contributing valuable ingredients to a product or intermediate; 
(ii) replacing a catalyst or carrier in the recycling process; (iii) 
providing a valuable constituent to be recovered; (iv) being 
regenerated; or (v) being used as an effective substitute for a 
commercial product. Any one of these can demonstrate that the hazardous 
secondary material provides a useful contribution.
    An important note in applying this factor is that not every 
constituent or component of the hazardous secondary material has to 
make a contribution to the recycling activity to meet the useful 
contribution factor. For example, a legitimate recycling operation 
involving precious metals might not recover all of the components of 
the hazardous secondary material, but would recover precious metals 
with sufficient value to consider the recycling process legitimate. In 
addition, the recycling activity does not have to involve the hazardous 
component of the hazardous secondary materials if the value of the 
contribution of the non-hazardous component justifies the recycling 
activity. One example of this factor from an existing exemption is 
where hazardous secondary materials containing large amounts of zinc, a 
non-hazardous component, are recycled into zinc micronutrient 
fertilizers. However, in cases where the hazardous component is not 
being used or recycled, the Agency stresses that the recycler is 
responsible for the proper management of any hazardous residuals of the 
recycling process.
    In a situation where more than one hazardous secondary material is 
used in a single recycling process and the hazardous secondary 
materials are mixed or blended as a part of the process, each hazardous 
secondary material would need to satisfy the useful contribution 
factor. This requirement prevents situations where a worthless 
hazardous secondary material could be mixed with valuable and useful 
hazardous secondary materials in an attempt to disguise and dispose of 
it. In addition, a situation in which hazardous secondary materials 
that can be useful to a process, but are added to that process in much 
greater amounts than needed to make the end-product or to otherwise 
provide its useful contribution, would also be sham recycling.
    Another way the usefulness of the hazardous secondary material's 
contribution could be demonstrated is by looking at the efficiency of 
the material's use in the recycling process--that is, how much of the 
constituent in a hazardous secondary material is actually being used. 
As an example, if there is a constituent in the hazardous secondary 
material that could add value to the recycling process, but, due to 
process design, most of it is not being

[[Page 1724]]

recovered, but is being disposed of in the residuals, this would be a 
possible indicator of not meeting this factor and thus, could be sham 
recycling. However, this consideration must take the actual process 
being considered into account as there are certainly recycling 
scenarios where a low recovery rate could still be legitimate. For 
example, under an existing exclusion, if the concentration in a metal-
bearing hazardous secondary material is low (e.g., 2-4%) and a 
recycling process was able to recover a large percentage of the target 
metal, this factor could be met and the recycling may be legitimate 
(depending on the outcome of the analysis of the other legitimacy 
factors).
    When evaluating a hazardous secondary material's useful 
contribution, the process can be compared to typical industry recovery 
rates from raw materials to determine if the recycling process is 
reasonably efficient. This method should involve an examination of the 
overall process, not just a single step of the process. For example, if 
one step in the process recovers a small percentage of the constituent, 
but the overall process recovers a much larger percentage, the Agency 
would consider the overall efficiency of the recycling process in 
determining whether hazardous secondary materials are providing a 
useful contribution.
4. Factor 2: Valuable Product or Intermediate--Sec.  260.43(a)(2)
    The recycling process must produce a valuable product or 
intermediate. The product or intermediate is valuable if it is: (i) 
Sold to a third party or (ii) 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.
    This factor expresses the principle that the product or 
intermediate coming out of the recycling process should be a material 
of value, either to a third party who buys it from the recycler, or to 
the generator or recycler itself, who can use it as a substitute for 
another material that it would otherwise have to buy or obtain for its 
industrial process. Legitimate recycling is not occurring if the 
product or intermediate from the process is not of use to anyone and, 
therefore, is not a real product. This factor is intended to prevent 
the practice of running a hazardous secondary material through an 
industrial production process to make something just for the purpose of 
avoiding the costs of hazardous waste management, rather than for the 
purpose of using the product or intermediate of the recycling activity. 
Such a practice would be sham recycling.
    For the purpose of this factor, a recyclable product may be 
considered ``valuable'' if it can be shown to have either economic 
value or intrinsic value to the end user. Evaluations of ``valuable'' 
for the purpose of this factor should be done on a case-by-case basis, 
but one way to determine that the recycling process yields a valuable 
product would be if the product of the recycling process is sold to a 
third party. This transaction could include money changing hands or, in 
other circumstances, may involve trade or barter. A recycler that has 
not yet arranged for the sale of its product to a third party could 
establish value by demonstrating that it can replace another product or 
intermediate that is available in the marketplace. A product of the 
recycling process may be sold at a loss in some circumstances, but the 
recycler should be able to demonstrate how the product is clearly 
valuable to the purchaser.
    EPA also knows that many recycling processes produce outputs that 
are not sold or traded to another party, but are instead used by the 
generator or recycler. A product of the recycling process may be used 
as a feedstock in a manufacturing process, but have no established 
monetary value in the marketplace. Such recycled products or 
intermediates would be considered to have intrinsic value, though it 
might be less straightforward in this situation to demonstrate value if 
it is necessary to do so. Demonstrations of intrinsic value could 
involve showing that the product of the recycling process or 
intermediate replaces an alternative product that would otherwise have 
to be purchased or could involve a showing that the product of the 
recycling process or intermediate meets specific product specifications 
or specific industry standards. Another approach could be to compare 
the product or intermediate's physical and chemical properties or 
efficacy for certain uses with those of comparable products or 
intermediates made from raw materials.
    Some recycling processes may consist of multiple steps that may 
occur at separate facilities. In some cases, each processing step will 
yield a valuable product or intermediate, such as when a metal-bearing 
hazardous secondary material is processed to reclaim a precious metal 
and is then put through another process to reclaim a different mineral. 
When each step in the process yields a valuable product or intermediate 
that is salable or usable in that form, the recycling activity would 
conform to this factor.
    Like the other factors, this factor should be examined and 
evaluated on a case-by-case basis looking at the specific facts of a 
recycling activity. If, for instance, a recycling activity produces a 
product or intermediate that is used by the recycler itself, but does 
not serve any purpose and is just being used so that the product or 
intermediate appears valuable, that would be an indicator of sham 
recycling. An example of this would be a recycler that reclaims a 
hazardous secondary material and then uses that material to make blocks 
or building materials for which it has no market and then ``uses'' 
those building materials to make a warehouse in which it stores the 
remainder of the building materials that it is unable to sell.
5. Factor 3: Managed as a Valuable Commodity--Sec.  260.43(a)(3)
    The generator and the recycler must manage the hazardous secondary 
material as a valuable commodity when it is under their control. Where 
there is an analogous raw material, the hazardous secondary material 
must be managed, at a minimum, in a manner consistent with the 
management of the raw material or in an equally protective manner. 
Where there is no analogous raw material, the hazardous secondary 
material must be contained. Hazardous secondary materials that are 
released to the environment and are not recovered immediately are 
discarded.
    This factor expresses the principle that hazardous secondary 
materials being recycled should be managed in the same manner as other 
valuable materials. This factor requires those making a legitimacy 
determination to look at how the hazardous secondary material is 
managed before it enters the recycling process. In EPA's view, a 
recycler will value hazardous secondary materials that provide an 
important contribution to its process or product and, therefore, will 
manage those hazardous secondary materials in a manner consistent with 
how it manages a valuable feedstock. If, on the other hand, the 
recycler does not manage the hazardous secondary materials as it would 
a valuable feedstock, the hazardous secondary materials might not be 
recycled, but rather released into the environment and discarded, 
thereby indicating sham recycling.
    This factor may be particularly important in the case where a 
recycler has been paid by a generator to take its materials as a result 
of the economic incentives in the hazardous secondary materials market. 
By looking at the management of the hazardous secondary material before 
it enters the recycler's process, the entity making the

[[Page 1725]]

legitimacy determination can tell that a material being managed like an 
analogous raw material is, in fact, valued by the recycler. If the 
hazardous secondary material is not being managed like a valuable raw 
material because it is uncontrolled or is being released, that 
indicates that the fee the recycler obtains for taking the hazardous 
secondary material may be its only value to that recycler. If the fee 
received were the only value to the recycler, it could mean that 
discard was taking place.
    This factor addresses the management of hazardous secondary 
materials in two distinct situations. The first situation is when a 
hazardous secondary material is analogous to a raw material which it is 
replacing in the process. In this case, the hazardous secondary 
material should be managed prior to recycling similarly to the way the 
analogous raw materials are managed in the course of normal 
manufacturing, or in an equally protective manner.
    EPA expects that all parties handling hazardous secondary materials 
destined for recycling--generators, transporters, intermediate 
facilities and reclamation facilities--will handle them in generally 
the same manner in which valuable raw materials would otherwise be 
handled if used in the process. ``Analogous raw material'' is a raw 
material for which the hazardous secondary material substitutes and 
which serves the same function and has similar physical and chemical 
properties as the hazardous secondary material.
    EPA proposed and is finalizing an addition to the language of this 
factor as compared to the 2008 DSW final rule to include the words ``or 
in an equally protective manner.'' This change means that a recycling 
process would meet this factor if the hazardous secondary material is 
stored in a different manner than the analogous raw material as long as 
that storage was as protective as the way the analogous raw material 
was stored.
    For example, a hazardous secondary material in powder form that is 
shipped in a woven super sack in good condition (i.e., that does not 
leak or spill) and stored in an indoor containment area would be 
considered managed ``in an equally protective manner'' as an analogous 
raw material that is shipped and stored in drums.
    In addition, managing a hazardous secondary material in a manner 
consistent with the management of an analogous raw material can include 
situations where the raw material and the hazardous secondary material 
(e.g., scrap metal) are both stored on the ground.
    The second situation the factor addresses is the case where there 
is no analogous raw material that the hazardous secondary material is 
replacing. This could be either because the process is designed around 
a particular hazardous secondary material--that is, the hazardous 
secondary material is not replacing anything--or it could be because of 
physical or chemical differences between the hazardous secondary 
material and the raw material that are too significant for them to be 
considered ``analogous.''
    Hazardous secondary materials that have significantly different 
physical or chemical properties when compared to the raw material would 
not be considered analogous even if they serve the same function 
because it may not be appropriate to manage them in the same way. In 
this situation, the hazardous secondary material would have to be 
contained for this factor to be met. The term ``contained'' as 
discussed in section V of this preamble, means that the unit in which 
the material is stored is in good condition, with no leaks or releases 
to the environment, and that the unit is designed to prevent such 
releases. In addition, to meet the contained standard, the unit must be 
labeled or have a system to identify the hazardous secondary material 
in it and must not hold incompatible materials or pose a risk of fires. 
Hazardous secondary materials in units that meet the applicable 
requirements of 40 CFR parts 264 or 265 are presumed to be contained. 
Land-based units can meet the definition of contained.
    The requirement that a hazardous secondary material be contained 
when there is no analogous raw material to compare it to is consistent 
with the idea that normal manufacturing would ensure that the valuable 
material inputs are managed properly, rather than allow them to be 
released into the environment.
    An example of when this provision would be used would be if a 
manufacturer decided to replace a dry raw material in its process with 
a liquid having the same constituents. It would not be sufficient, nor 
would it make sense, for the liquid to be managed in supersacks, like a 
dry material might. Instead, the liquid would have to be contained (for 
example, in a tank or container).
    An important part of this factor is the statement in the regulatory 
text clarifying that hazardous secondary materials that are released to 
the environment and are not recovered immediately are discarded. 
Valuable feedstocks or products should not be allowed to escape into 
the environment through poor management and this factor clarifies that 
those hazardous secondary materials that are released (and are not 
immediately recovered) are clearly discarded and a solid waste. Either 
a large release or ongoing releases of smaller amounts could indicate 
that, in general, the hazardous secondary material is not being managed 
as a valuable product, which could indicate sham recycling. Hazardous 
secondary materials that are immediately recovered before they disperse 
into the environment--air, soil, or water--and are reintroduced in the 
recycling process are not discarded. This determination on factor 3 
must be made on a case-by-case basis, however.
    In EPA's 2008 DSW final rule, this factor was one of the two 
factors that was ``to be considered'' rather than one of the two 
mandatory factors because EPA believed that there may be some 
situations in which this factor was not met, but the recycling was 
still legitimate. With the addition of the language clarifying that the 
materials can be managed in a different way than the analogous raw 
material as long as that management system is equally protective, EPA 
has determined that there is no reason that a facility that is 
legitimately using a hazardous secondary material that has value to 
them in a recycling process would not meet this factor. EPA's intent 
with this factor is that hazardous secondary materials are managed in 
the same manner as materials that have been purchased or obtained at 
some cost, as raw materials are. Just as it is good business practice 
to ensure that raw materials enter the manufacturing process rather 
than being spilled or released, we would expect hazardous secondary 
materials to be managed effectively and efficiently in order that their 
full value to the manufacturing process would be realized.
6. Factor 4: Comparison of Toxics in the Product--Sec.  260.43(a)(4)
    The product of the recycling process must be comparable to a 
legitimate product or intermediate:
    (i) Where there is an analogous product or intermediate, the 
product of the recycling process is comparable to a legitimate product 
or intermediate if:
    (A) The product of the recycling process does not exhibit a 
hazardous characteristic (as defined in part 261 subpart C) that 
analogous products do not exhibit, and
    (B) The concentrations of any hazardous constituents found in 
Appendix VIII of part 261 of this chapter that are in the product or

[[Page 1726]]

intermediate are at levels that are comparable to or lower than those 
found in analogous products or at levels that meet widely-recognized 
commodity standards and specifications, in the case where the commodity 
standards and specifications include levels that specifically address 
those hazardous constituents.
    (ii) Where there is no analogous product, the product of the 
recycling process is comparable to a legitimate product or intermediate 
if:
    (A) The product of the recycling process is a commodity that meets 
widely recognized commodity standards and specifications (e.g., 
commodity specification grades for common metals), or
    (B) The hazardous secondary materials being recycled are returned 
to the original process or processes from which they were generated to 
be reused (e.g., closed loop recycling).
    (iii) If the product of the recycling process has levels of 
hazardous constituents that are not comparable to or unable to be 
compared to a legitimate product or intermediate per subparagraphs (i) 
or (ii) of this paragraph, the recycling still may be shown to be 
legitimate, if it meets the requirements specified below. The person 
performing the recycling must conduct the necessary assessment and 
prepare documentation showing why the recycling is, in fact, still 
legitimate. The recycling can be shown to be legitimate based on lack 
of exposure from toxics in the product, lack of the bioavailability of 
the toxics in the product, or other relevant considerations which show 
that the recycled product does not contain levels of hazardous 
constituents that pose a significant human health or environmental 
risk. The documentation must include a certification statement that the 
recycling is legitimate and must be maintained on-site for three years 
after the recycling operation has ceased. The person performing the 
recycling must notify the Regional Administrator of this activity using 
EPA Form 8700-12.
    This factor requires that those making a legitimacy determination 
look at the concentrations of the hazardous constituents found in the 
product made from hazardous secondary materials and, except where 
otherwise specified, compare them to the concentrations of hazardous 
constituents in analogous products. A product that contains high levels 
of hazardous constituents that originate in a hazardous secondary 
material feedstock could indicate that the recycler incorporated 
hazardous constituents into the final product when they were not needed 
to make that product effective as a way to avoid proper disposal of 
that material, which would be sham recycling. This factor, therefore, 
is designed to determine when toxics that are ``along for the ride'' 
are discarded in a final product and the hazardous secondary material 
is not being legitimately recycled.
    As proposed, factor 4 was unsatisfactory to many of the 
stakeholders of this rulemaking. Many representatives from the 
industrial sector argued that they would not be able to meet factor 4 
or would not be able to easily know if they met factor 4. EPA had 
expected that a small number of facilities would have this concern and 
had proposed a petition process to address this problem, but many 
commenters argued that petitions would take a long time to be 
processed, creating uncertainty in the industrial sector, and that a 
petition process would be a drain on state and industry resources.
    As a result of comments received on the proposal, EPA has made some 
revisions to this factor to ensure that long-standing legitimate 
recycling processes will still be considered legitimate under this 
factor. The requirements that are being promulgated today are described 
in full below and include different requirements for when there is an 
analogous product and when there is not, provisions for using widely-
recognized commodity standards and specifications to meet this factor, 
a provision to address recycling that includes hazardous secondary 
materials being put back into the process from which they came, and a 
documentation, certification and notification process for facilities 
that cannot meet these requirements, but still believe their recycling 
is legitimate. A full description of how the requirement being 
finalized differs from what was proposed in the 2011 DSW proposal can 
be found in section VIII.C.3 of the preamble.
    In addition to these changes, EPA has also retained the proposed 
language of this factor that states that the concentrations of 
hazardous constituents in the product of the recycling process must be 
``comparable to'' or lower than those found in analogous products. This 
is a change from the 2008 DSW final rule, which used language stating 
that the concentrations of hazardous constituents should not be 
``significantly higher'' than concentrations in analogous products.
    Factor 4 starts with the statement that the product of the 
recycling process made from hazardous secondary materials must be 
comparable to a legitimate product or intermediate. It is important to 
note that the comparison that EPA is requiring here involves the 
product that comes out of a recycling process. That is, a recycler will 
ordinarily compare the product of the recycling process to an analogous 
product made of raw materials. For example, if a recycling process 
produces paint, the levels of hazardous constituents in the paint will 
be compared with the levels of the same constituents found in similar 
paint made from virgin raw materials.
    However, a recycler is also allowed to perform this evaluation by 
comparing the hazardous constituents in the hazardous secondary 
material feedstock with those in an analogous raw material feedstock. 
If the hazardous secondary material feedstock contains concentrations 
of hazardous constituents that are comparable to or lower than the 
concentrations in the raw material feedstock, then the end product of 
the recycling process would not contain excess hazardous constituents 
``along for the ride'' either. This method of showing that the product 
meets factor 4 is acceptable. There may be cases in which it is easier 
to compare feedstocks than it is to compare products because the 
recycler knows that the hazardous secondary material is very similar in 
profile to the raw material. A comparison of feedstocks may also be 
easier in cases where the recycler creates an intermediate which is 
later processed again and may end up in two or more products, when 
there is no analogous product, or when production of the product of the 
recycling process has not yet begun. Note, however, that EPA is 
allowing other ways to make the comparable demonstration in cases where 
there is no analogous product, as described below in section 
VIII.B.6.b.
    a. Factor 4 when there is an analogous product. Paragraph 
260.43(a)(4)(i) describes how a facility can meet factor 4 when the 
recycled product can be compared to an analogous product that is made 
without the use of hazardous secondary material as a feedstock. First, 
the product of the recycling process cannot exhibit any of the 
hazardous characteristics that analogous products do not exhibit. Most 
issues associated with ``toxics along for the ride'' involve the 
presence of hazardous constituents rather than the characteristics of 
hazardous waste. It is possible, however, that the use of hazardous 
secondary materials as an ingredient could cause a product to exhibit a 
hazardous characteristic, such as corrosivity, that is not exhibited by 
analogous products.

[[Page 1727]]

    The hazardous characteristics are found in 40 CFR part 261 subpart 
C and are used to identify those materials that are hazardous wastes, 
but that EPA has not specifically listed in part 261 subpart D. The 
characteristics are ignitability, corrosivity, reactivity, and 
toxicity. The toxicity characteristic includes a list of 40 
contaminants and the levels at which the material would be considered 
hazardous waste when tested using the Toxicity Characteristic Leaching 
Procedure. If a product produced with hazardous secondary material 
exhibited a characteristic of hazardous waste that an analogous product 
did not exhibit, this would be an indication that sham recycling could 
be occurring as a significant hazardous constituent or characteristic 
would be in the product only as a result of the recycling of the 
hazardous secondary material. This requirement is in Sec.  
260.43(a)(4)(i)(A). In most cases, a recycler will be familiar enough 
with the material it is producing to be able to easily determine 
whether it would meet any of these characteristics, but if there are 
any questions, the methods for testing for the characteristics are 
found in 40 CFR part 261 subpart C.
    In addition to this requirement, the product of the recycling 
process must also meet Sec.  260.43(a)(4)(i)(B). This paragraph can be 
met in two ways. The first way is if the concentrations of any 
hazardous constituent (as defined by Appendix VIII to part 261) that is 
in the recycled product is comparable to or lower than those found in 
analogous products. This provision is what EPA proposed in the 2011 DSW 
proposal, which included a discussion of how meeting product 
specifications could indicate that a recycling process is legitimate, 
as well as a request for comments on how EPA should determine what 
``comparable'' levels of hazardous constituents are when determining 
the legitimacy of a recycling process. In response to comments received 
on this point, EPA has added to this paragraph that the product of the 
recycling process would be comparable if it meets widely-recognized 
commodity standards that include levels that specifically address the 
hazardous constituents that are in the product.
    As stated above, the first part of Sec.  260.43(a)(4)(i)(B) is 
similar to the provision that EPA proposed in the 2011 DSW proposal. In 
this provision, EPA has decided to finalize language replacing the 
terms ``significant'' and ``significantly elevated,'' which were 
promulgated in the 2008 DSW final rule, with the phrase ``comparable to 
or lower'' because it more clearly reflects the intent of this factor. 
``Comparable to or lower than'' means that any contaminants present in 
the product made from hazardous secondary materials are present at 
levels at or lower than the levels contained in an analogous product, 
or if higher, would be within a small acceptable range. This language 
is consistent with the Identification of Non-Hazardous Secondary 
Materials that are Solid Wastes final rule (76 FR 15456, March 21, 
2011). However, we are not changing the basic meaning of this factor. 
Operationally, the terms ``comparable'' and ``not significant'' or 
``not significantly elevated'' are the same for hazardous secondary 
materials recycling and the examples the Agency provided in the 2008 
DSW final rule preamble that explained how the Agency envisions this 
factor working are still appropriate. Those examples are repeated here.

    <bullet> If paint made from reclaimed solvent contains 
significant amounts of cadmium, but the same type of paint made from 
virgin raw materials does not contain cadmium, it could indicate 
that the cadmium serves no useful purpose and is being passed though 
the recycling process and discarded in the product. Thus, the levels 
of cadmium would not be considered ``comparable'' and the paint 
would fail this legitimacy factor, unless the recycler can conduct 
the necessary analysis and prepare documentation stating why the 
recycling is still legitimate. In addition, the recycler would need 
to certify and provide notice to the implementing agency of this 
activity.
    <bullet> If a lead-bearing hazardous secondary material was 
reclaimed and then that material was used as an ingredient in making 
ceramic tiles and the amount of lead in the tiles was significantly 
higher than the amount of lead found in similar tiles made from 
virgin raw materials, the recycler should look more closely at the 
factors to determine the overall legitimacy of the process. The 
significantly higher levels of lead may indicate that the recycled 
product is not comparable to an analogous product and, thus, the 
recycling process is really a sham. Alternatively, the recycler may 
be able to demonstrate the recycling is still legitimate even though 
it does not contain lead at comparable levels by, for example, 
showing the toxics are not bioavailable. If this is the case, the 
recycler would need to document the analysis and certify the 
legitimacy of the recycling practice, as well as provide notice to 
the implementing agency.
    <bullet> If zinc galvanizing metal made from hazardous secondary 
materials that are reclaimed contains 500 parts per million (ppm) of 
lead, while the same zinc product made from raw materials typically 
contains 475 ppm, the levels would be considered comparable since 
they are within a small acceptable range and, thus, the product 
would meet this factor. If, on the other hand, the lead levels in 
the zinc product made from reclaimed hazardous secondary materials 
were considerably higher, these levels may not be comparable, and 
would require the recycler to look more closely at this factor since 
it may indicate that the product was being used to illegally dispose 
of the lead and that the activity is sham recycling, unless the 
recycler can conduct the necessary assessment and prepare 
documentation stating why the recycling is still legitimate. In 
addition, the recycler would need to certify and provide notice to 
the implementing agency of this activity.
    <bullet> If a ``virgin'' solvent contains no detectable amounts 
of barium, while spent solvent that has been reclaimed contains a 
minimal amount of barium (e.g., 1 ppm), this difference would likely 
be considered comparable.

    The second part of Sec.  260.43(a)(4)(i)(B) relies not on a 
comparison of levels of hazardous constituents between a product of the 
recycling process and an analogous product, but on the product of the 
recycling process meeting widely-recognized commodity standards and 
specifications. In this case, meeting a widely-recognized standard and 
specification would indicate that the recycling is legitimate if that 
standard and specification includes levels for the hazardous 
constituents that are found in the product of the recycling process.
    EPA decided that using a product's ability to meet product 
specifications as an indicator of legitimate recycling would make the 
determination of legitimate recycling straight-forward in many cases 
where the product of the recycling is clearly a commodity in wide use 
in commerce. Although not spelled out in the regulatory language used 
in the 2008 DSW final rule, consideration of whether the product of a 
recycling process meets quality specifications has been part of the 
legitimacy determination since the Lowrance Memo in 1989, which 
included several questions to this effect as part of its determination 
of whether there is a guaranteed market for the product (i.e., Are 
there industry recognized product specifications for the product? Is it 
listed in industry news letters? Is the reclaimed product a recognized 
commodity?). Including this provision on product specifications as part 
of this final rulemaking will limit uncertainty from recyclers about 
whether their processes are legitimate.
    However, despite the value of product standards, EPA did not want 
to state that meeting any product specification was an indicator of 
legitimacy because any recycler could design its own specification and 
point to that as a way to circumvent the requirement. Therefore, this 
requirement requires that the commodity standards being met be widely-
recognized. By ``widely-recognized commodity standard,'' EPA

[[Page 1728]]

means a standard that is used throughout an industry to describe a 
certain product and that is widely-available to anyone producing the 
product. A specific example of such a widely-recognized standard agency 
would be ASTM International, which has standards covering a wide 
variety of manufactured goods.\31\ However, for specialty batch 
chemical manufacturers or other types of specialty manufacturing where 
widely-recognized commodity standards are not available, customer 
specifications would be sufficient.
---------------------------------------------------------------------------

    \31\ ASTM International, formerly known as the American Society 
for Testing and Materials (ASTM), develops and delivers 
international voluntary consensus standards. Its Web site states 
that 12,000 ASTM standards are used around the world to improve 
product quality, enhance safety, facilitate market access and trade, 
and build consumer confidence. http://www.astm.org/ABOUT/aboutASTM.html.
---------------------------------------------------------------------------

    In addition, for this part of factor 4, the commodity standards and 
specifications being referenced must specifically address those 
hazardous constituents that may be different between the analogous 
product and the product generated from using the hazardous secondary 
material in the recycling process. EPA is making this explicit in the 
regulations to avoid a situation in which a product from a process that 
is recycling hazardous secondary materials meets a widely-recognized 
product specification, but does not include any levels for the 
hazardous constituents that are in the hazardous secondary material. A 
product specification could have been developed without any thought 
that the feedstock for that product might include some hazardous 
constituents that could be toxic to human health and the environment 
and, therefore, not include them. We are concerned with the potential 
that the analogous product could be substituted with the recycled 
product without full disclosure of potential toxics that may be in the 
recycled product. Using a standard or specification that does not 
address the hazardous constituents of concern to demonstrate meeting 
factor 4 of the legitimacy requirements where there is an analogous 
product would ignore the primary concern of this factor and would allow 
elevated levels of toxics from the hazardous secondary material into 
the final product.
    b. Factor 4 when there is no analogous product. Commenters on EPA's 
2011 DSW proposal expressed concern that, in many cases of hazardous 
secondary materials recycling, there may not be an analogous product 
with which a facility can compare the product of the recycling process. 
Commenters described recycling processes that were designed to use a 
specific hazardous secondary material to make a useful product and 
processes that always incorporated a hazardous secondary material back 
into the generating process during manufacturing. Paragraph 
260.43(a)(4)(ii) describes how a facility can meet factor 4 in these 
situations.
    EPA had not previously identified a separate methodology for 
meeting factor 4 in the situation where there is no analogous product, 
but the support in the comments in response to EPA's request for input 
on the use of product specifications made it clear that this approach 
could be effective in the case where there is no analogous product. 
Therefore, EPA is stating in Sec.  260.43(a)(4)(ii)(A) that a product 
of the recycling process is comparable to a legitimate product or 
intermediate when ``the product of the recycling process is a commodity 
that meets widely-recognized commodity standards and specifications.'' 
EPA gives the example in the regulatory text of commodity specification 
grades for common metals, which would be relevant to scrap metal 
recyclers, among other metal recyclers.
    As stated above for paragraph (A), EPA decided that using a 
product's ability to meet product standards and specifications as an 
indicator of legitimate recycling would make the determination of 
legitimate recycling more straight-forward in many cases where the 
product of the recycling is clearly a commodity in wide use in 
commerce. This would limit uncertainty from recyclers about whether 
their processes are legitimate.
    However, despite the value of product standards and specifications, 
EPA did not want to state that meeting any product standard or 
specification was an indicator of legitimacy because any recycler could 
design its own specification and point to that as a way to circumvent 
the requirement. Therefore, this requirement requires that the 
commodity standards and specifications being met be widely-recognized. 
By ``widely-recognized commodity standard and specification,'' EPA 
means a standard or specification that is used throughout an industry 
to describe a certain product and that is widely-available to anyone 
producing the product. A specific example of such a widely-recognized 
standard agency would be ASTM International, which has standards 
covering a wide variety of manufactured goods. Note, for this part of 
factor 4, the commodity standard or specification must be widely 
recognized, but would not necessarily address a specific hazardous 
constituent, since there is no analogous product to compare it to. EPA 
has determined that recycled products that do not have analogous 
products can ``stand alone'' in that they are not substitutes for 
virgin products and thus, either succeed or fail based on their 
inherent characteristics, including any hazardous constituents 
contained therein. Therefore, EPA has determined that market forces 
appropriately dictate whether these types of recycled products meet the 
technical provisions of factor 4.
    EPA also wanted to address the situation in which a manufacturing 
process produces a hazardous secondary material that is then recycled 
back into the process from which they were generated. In some cases, 
the product is always manufactured using this kind of feedback loop 
and, therefore, there is no analogous product with which it can be 
compared. EPA has included in today's final rule a provision that 
states that when ``hazardous secondary materials being recycled are 
returned to the original process or processes from which there were 
generated to be reused, the product of the recycling process is 
comparable to a legitimate product or intermediate.'' That is, in those 
situations, the recycling process meets factor 4.
    Recycling that takes place under EPA's closed loop recycling 
exclusion at Sec.  261.4(a)(8) would be an example of manufacturing 
that would consistently include the hazardous secondary material being 
returned to the original process from which it was generated and that 
would meet the legitimacy factors being discussed here. Another 
situation about which commenters expressed concern was mineral 
processing to produce primary metals, because these processes always 
include materials looping back into the process to ensure that all the 
valuable metals that can be extracted from the ore are being collected 
for use. For example, in precious metals production, hazardous 
secondary materials from various stages in the process contain 
concentrations of both precious metals and hazardous constituents that 
are higher than concentrations in ore. The concentrations of hazardous 
constituents and precious metals in these hazardous secondary materials 
vary depending on the makeup of the ore from which they came. In order 
to glean the most valuable product from processing the ore, these 
hazardous secondary materials are routinely put back into the 
production units that process the virgin materials and are put

[[Page 1729]]

through the process again. Commenters from the precious metals industry 
argued in their comments that they consider this legitimate recycling 
of secondary materials (that may be hazardous) and that because of the 
variation in the makeup of the materials going back into the process, 
determining whether factor 4 has been met would be difficult. Thus, EPA 
has determined that the recycling process in these situations--that is, 
in which the hazardous secondary material is returned to the original 
production process, or the processes from which it was generated--would 
meet factor 4.
    EPA has determined that recycling hazardous secondary materials in 
this manner is not a concern as far as ``toxics along for the ride'' 
are concerned because the hazardous secondary materials came out of the 
very same process and contain the same hazardous constituents that are 
already in the manufacturing process. These hazardous constituents 
originated in the raw materials of the process that are being used with 
or without the recycling loop. Prohibiting the recycling of hazardous 
secondary materials in these situations because of factor 4 would not 
be changing the amount or nature of hazardous constituents in the 
product that comes out of the manufacturing process. In addition, that 
kind of prohibition would be misguided from a resource conservation 
perspective because it could limit the recycling of these materials 
back into a process, which leads to a more efficient process and 
therefore conserves the use of raw materials in manufacturing.
    c. Documentation, certification and notice process for factor 4. 
EPA designed the provisions above to make it more clear how a material 
can meet factor 4. In addition, they provide additional flexibility to 
this factor, where it makes environmental and economic sense. These 
added provisions address most of the comments that EPA received stating 
that a particular sector or industry would have trouble meeting factor 
4.
    EPA recognizes, however, that despite these changes, there may 
still be instances where recycling is legitimate, but is unable to meet 
the technical provisions of factor 4 as it is written because the 
product of the recycling process has levels that are not comparable to 
analogous products or because the product of the recycling process 
cannot be compared to an analogous product, but does not fit under 
Sec.  260.43(a)(4)(ii).\32\
---------------------------------------------------------------------------

    \32\ Note that a recycling facility can also compare the 
hazardous constituents in the hazardous secondary material to an 
analogous feedstock, if that approach works better for a particular 
recycling process.
---------------------------------------------------------------------------

    It is critical that the legitimacy regulations be flexible enough 
to allow for situations like this, particularly with the regulations 
applying to all recycling. In this final rulemaking, EPA has replaced 
the petition process that it proposed in the 2011 DSW proposal with a 
documentation, certification and notice process for factor 4.
    Specifically, when a recycling facility has determined that it must 
take advantage of the documentation, certification and notice process, 
either because the product of the recycling process has levels that are 
not comparable to analogous products or because the product of the 
recycling process cannot be compared to an analogous product (and Sec.  
260.43(a)(4)(ii) does not apply), it must determine that its recycling 
process is legitimate despite the levels of hazardous constituents in 
the product. The regulatory text for this provision explains that in 
doing this analysis, the facility making the determination can consider 
``lack of exposure from toxics in the product, lack of the 
bioavailability of the toxics in the product, or other relevant 
considerations which show that the recycled product does not contain 
levels of hazardous constituents that pose a significant human health 
or environmental risk.''
    A consideration of lack of exposure from the toxics in a product 
would involve an assessment of the process to determine if the 
hazardous constituents are likely to come into contact with humans or 
the environment in a way that will harm them. For example, a product 
that is more of an intermediate in a recycling process and stays within 
an industrial setting where it is contained and where everyone coming 
into contact with it is familiar with any hazards that it poses could 
be considered a candidate for this certification because there is 
limited exposure to human health and the environment from the product. 
A consumer product, on the other hand, that will be leaving an 
industrial setting and entering the market where certain hazardous 
constituents may not be expected and may not have limited exposure to 
human health and the environment is unlikely to be eligible for this 
exception to factor 4.
    For example, as previously explained in the 2008 DSW final rule and 
the 2011 DSW proposed rule, EPA has determined that the reuse of lead 
contaminated foundry sands may or may not be legitimate, depending on 
the use. The use and reuse of foundry sands for mold making in a 
facility's sand loop using a non-thermal reclamation process under 
normal industry practices has been found to be legitimate because the 
sand is part of an industrial process where there is little chance of 
the hazardous constituents being released into the environment or 
causing damage to human health and the environment when it is kept 
inside, because there is lead throughout the foundry's process, and 
because there is a clear value to reusing the sand, even though the 
levels of hazardous constituents in the sands may not be comparable to 
the analogous product. However, in the case of lead contaminated 
foundry sand used as children's play sand, the same high levels of lead 
would disqualify this use from being considered legitimate recycling.
    An assessment of lack of the bioavailability of toxics in the 
product could be a more complicated analysis that would examine whether 
the hazardous constituents in the final product are bound up with the 
other constituents in such a way that they would not be released when 
coming into contact with humans or the environment over the lifetime of 
the product. Although this would be a sophisticated assessment, a 
facility wishing to perform this kind of analysis to inform a 
legitimacy determination under this certification process can do so.
    EPA has included the phrase ``other relevant considerations which 
show that the recycled product does not contain levels of hazardous 
constituents that pose a significant human health or environmental 
risk'' in the regulation to account for other situations that may 
arise. An example that was submitted in the comments to the proposal 
that could be an ``other relevant consideration'' in making this 
determination is when the reclaimed product contains compounds that are 
not in analogous products, but the products exhibit similar physical 
and chemical risk profiles and therefore are not posing an increased 
risk. There may be other considerations regarding factor 4 like these 
that could also be relevant to the legitimacy of a recycling process; 
however, the Agency thinks these are limited.
    After determining that its process is still legitimate, the 
recycling facility would prepare documentation explaining its 
assessment. This should take the form of a description of the process 
in question and an explanation of the analysis performed to determine 
legitimacy, including any relevant diagrams and flow charts, as well as 
any

[[Page 1730]]

relevant sampling data. In addition, the documentation must include a 
certification statement that states that recycling is legitimate and 
that is signed by the responsible official at the recycling facility. 
The language for the certification is not mandated in the regulations, 
but an acceptable example would be ``I certify that the hazardous 
secondary recycling process described in these pages is a legitimate 
recycling process.''
    The documentation and certification of legitimate recycling would 
have to be maintained or available on-site for as long as the recycling 
process is operating at the site and for three years after the 
recycling operation has ceased.
    In addition to preparing and maintaining this documentation, the 
recycling facility would notify its Regional Administrator (or State 
Director, in authorized states) that it is taking advantage of this 
provision by reporting the type of hazardous secondary material and the 
recycling process being used to produce a product with elevated levels 
of hazardous constituents (or a product that has no widely-known 
commodity standards for the hazardous constituents) through EPA Form 
8700-12, otherwise known as the Site ID form.\33\ When a facility 
documents, certifies, and submits notice under factor 4, it is 
addressing factor 4 for the purposes of the introductory language of 
Sec.  260.43, which requires that all requirements of the paragraph be 
addressed.
---------------------------------------------------------------------------

    \33\ EPA will revise EPA form 8700-12 to incorporate this 
notification. In the interim, persons may notify using the 
``Comments'' box on the form.
---------------------------------------------------------------------------

    EPA has decided to finalize this self-implementing certification 
process rather than the proposed petition process to reduce burden on 
facilities who are taking advantage of this provision, as well as on 
the regulatory agencies implementing the regulations. Because this 
requirement for documentation and a certification that must be 
maintained on-site does not include an approval process, facilities do 
not have to wait for any decisions from their implementing agencies 
about whether their recycling is legitimate.
    However, the notification aspect of the legitimacy regulations 
being finalized today adds some limited, but important, oversight to a 
process that would otherwise be taking place out of sight of the 
regulating agencies all together, that is, the decision that a 
recycling process that does not meet factor 4 is still legitimate. The 
notification gives EPA and the authorized states information about 
which recycling facilities are producing products from recycled 
hazardous secondary materials that have elevated levels of hazardous 
constituents when compared to non-recycled products (or are producing 
recycled products that have no non-recycled analogue and no widely 
recognized commodity specifications). This notification facilitates 
oversight and inspections of the recycling facility concerning the 
legitimacy of the recycling process, allowing EPA and authorized states 
to continue to use existing authorities to determine whether the 
recycling is legitimate.
    EPA has chosen this approach because it maintains the self-
implementing nature of the regulations, while providing enough 
information to EPA and the authorized states to gather the necessary 
information. In these ways, this approach addresses the main concerns 
raised by the stakeholders in the comments to this rulemaking.
    A facility that claims to be operating a recycling process that is 
legitimate under this provision could be subject to an enforcement 
action if the Agency determines that the recycling is sham. As always, 
a facility with questions about the regulated status of its hazardous 
secondary material can contact its implementing agency for assistance 
in making a waste determination.

C. Changes From the Proposal

1. Prohibition of Sham Recycling
    In today's final rule, EPA is codifying the requirement that all 
hazardous secondary material recycling must be legitimate. However, 
instead of amending the text of each recycling exemption and exclusion, 
we are instead codifying a provision in Sec.  261.2(g) that states that 
any hazardous secondary material found to be sham recycled is discarded 
and thus, a solid waste. This more clearly reflects our intent and our 
long-standing policy that only those facilities truly recycling should 
be eligible for an exclusion based on recycling the hazardous secondary 
materials. We did not intend to cause facilities that are legitimately 
recycling to revisit their practices or for state agencies to revisit 
past legitimacy determinations. However, we do want to make clear that 
sham recycling is not real recycling and thus, any hazardous secondary 
material being sham recycled is a solid and potentially a hazardous 
waste. By making a clear statement in the definition of solid waste, 
the Agency is placing the appropriate emphasis on this issue, that is, 
that sham recycling is discard.
2. Documentation
    When the Agency codified the legitimacy standard in the 2008 DSW 
final rule, we did not require specific documentation regarding the 
legitimacy determination, although the regulatory language stated that 
persons claiming to be excluded from hazardous waste regulation because 
they are engaged in reclamation must be able to demonstrate that the 
recycling is legitimate. In the 2011 DSW proposal, we proposed to 
require that persons who perform recycling include documentation in 
their paperwork to explain how their hazardous secondary materials are 
legitimately recycled.
    After reviewing the public comments, we have decided that, as a 
general matter, documentation of legitimacy is not necessary for most 
hazardous secondary materials recycling. Instead, we will continue to 
rely on the current provision in Sec.  261.2(f) that requires 
respondents to demonstrate that the material is not a waste. Section 
261.2(f) requires persons claiming that materials are not solid waste 
or are conditionally exempt from RCRA Subtitle C regulation to provide 
appropriate documentation of these claims.
    However, we are finalizing two exceptions to the general case where 
documentation of legitimate recycling is not required. The first is 
that we are finalizing a requirement for facilities reclaiming 
hazardous secondary materials under the control of the generator, that 
is, any facility claiming the exclusion at Sec.  261.4(a)(23), to 
document the legitimacy of the reclamation process. We have determined 
that it is important for those facilities to document the legitimacy of 
their recycling process, given the wide variety of hazardous secondary 
materials and industrial processes that can claim to be operating under 
the generator-controlled exclusion with relatively few conditions. 
After implementing the DSW exclusions in several states since its 
promulgation in October 2008, we have determined that documentation of 
legitimacy for this particular exclusion is important in ensuring 
compliance and will make oversight and enforcement more effective. We 
are therefore requiring that persons who perform reclamation under the 
control of the generator to include documentation and explain how their 
hazardous secondary materials are legitimately reclaimed. We expect 
this documentation to be a narrative description, which could include 
photographs or other illustrations or process diagrams of how the 
reclamation of their hazardous

[[Page 1731]]

secondary materials meets the legitimacy factors. Reclaimers of 
hazardous secondary materials will need to maintain this documentation 
on-site where the reclamation occurs for the duration of the 
reclamation operations and for three years after the reclamation 
operations cease. Written documentation will provide an easily 
available explanation of the facility's rationale for the legitimacy of 
its process that is available to the implementing agency on regular 
inspections or as part of compliance assistance.
    The other exception where documentation is required is for those 
facilities whose product made from recycled hazardous secondary 
materials does not meet factor 4, but would still be considered a 
legitimately recycled product. Those facilities would need to maintain 
documentation as to why, in fact, the recycling is still legitimate as 
it relates to factor 4. For a more detailed explanation of that 
documentation requirement, refer to section VIII.B.6 above.
3. Factor 4
    In the 2011 DSW proposal, EPA's proposed factor 4 contained two 
main requirements to ensure that hazardous constituents were not 
``along for the ride'' and being discarded in a final product under the 
guise of recycling. The proposed regulation stated that the product of 
the recycling process would have to have concentrations of hazardous 
constituents that are at levels comparable to or lower than those found 
in analogous products. In addition, the proposal stated that the 
product of the recycling process could not exhibit a hazardous 
characteristic that analogous products did not also exhibit.\34\ EPA 
recognized that there would be some legitimate recycling operations 
that may not meet this requirement, and so proposed to address this 
situation through a petition process in which a facility that did not 
meet factor 4 could petition its implementing agency, whether that be a 
state environmental agency or an EPA Region, and get agreement from 
that agency that its operations were legitimate.
---------------------------------------------------------------------------

    \34\ The language in the proposed regulatory text for this 
paragraph mistakenly included an ``or'' instead of an ``and'' 
between these two requirements of factor 4 although the preamble 
discussion on page 76 FR 44124, column 2, correctly used ``and.'' 
Several commenters pointed this error out to the Agency in their 
comments.
---------------------------------------------------------------------------

    Although this approach would provide a way for operations that are 
legitimate, but don't meet factor 4 to still operate, commenters from 
both the industrial sector, as well as from state regulatory agencies, 
commented that this approach was not ideal. Commenters from industry 
suggested that there would be more petitioners under this provision 
than EPA had anticipated because certain large sectors of industry 
would likely be uncertain about whether their recycling would meet the 
factor as written and would be compelled to petition their implementing 
agencies. Commenters provided some real world examples to illustrate 
their concerns with factor 4 that EPA closely examined when redrafting 
the language for this provision.
    Commenters also were concerned that the petition process itself 
might take too long if the implementing agencies receive petitions from 
many facilities and that the response time might end up being very 
lengthy. Several of the states that could be responsible for replying 
to these petitions also commented that they were not in favor of a 
petition process because the resources that would be required to 
respond to the petitions are not available in the state program 
offices.
    EPA made several changes to factor 4 in response to these comments 
and has determined that factor 4, as we are finalizing it today, better 
addresses the wide variety of industrial recycling processes. There are 
four main changes to the final language of factor 4 as compared to the 
2011 DSW proposed regulation.
    First, instead of the two basic proposed provisions that depend on 
a comparison with an analogous product, factor 4 as finalized 
acknowledges that sometimes there is no analogous product available for 
a comparison. Subparagraph (i) covers how a recycling process meets the 
factor if there is an analogous product whereas subparagraph (ii), 
which was not part of the proposed regulatory language, covers how a 
product with no analogous product can meet factor 4.
    Secondly, the finalized regulatory language has provisions for how 
widely-recognized industry standards and specifications can be used to 
meet factor 4. EPA took comment on the usefulness of specifications for 
evaluating hazardous constituents in the product and has determined 
that as long as the standards and specifications being relied upon are 
widely recognized industry wide standards and specifications for a 
product (and in the case of (i), that they address the hazardous 
constituents in question), meeting them would be appropriate to show 
that hazardous constituents are not being discarded under the guise of 
recycling. This should make determinations regarding factor 4 simpler 
for a wide range of industries producing common industrial commodities. 
EPA did not intend to interfere with long-standing legitimate recycling 
in these industries and this addition to the regulatory language should 
clarify for those industries that when they are meeting the extensive 
commodity standards and specifications for their products, they meet 
factor 4 as well.
    The third change is the addition under Sec.  260.43(a)(4)(ii)(B) of 
language that states that hazardous secondary materials that are being 
recycled by being returned to the original process(es) from which they 
were generated meet factor 4. In closed loop recycling and in several 
other kinds of recycling, such as in mining and mineral processing, 
hazardous secondary materials generated from an industrial process are 
regularly returned to that same process to remove more of the valuable 
constituent from them. The hazardous constituents in the secondary 
material are no different than what is already in the process and 
returning them makes the entire manufacturing process more efficient 
since it requires fewer raw materials.
    EPA has stated in the past that it would not consider this practice 
a concern from the perspective of factor 4 because the comparison in 
question is supposed to be between final products, but it was clear 
from the comments to the proposal that this question was still a 
concern to many facilities. When adding subparagraph (ii) for 
situations where there is no analogous product for a comparison, EPA 
also added this language to make it clear that processes in which the 
hazardous secondary materials are returned to the original process do 
meet factor 4.
    Collectively, these changes to the language of factor 4 are an 
improvement from EPA's 2011 proposal as the changes clarify when factor 
4 is met for a wide variety of industrial processes. Furthermore, a 
generator can use its knowledge of the materials it uses and of the 
recycling process to make legitimacy determinations under factor 4. 
Thus, testing would be rarely required for a recycler to meet this 
factor because it would only be necessary when the product of the 
recycling does not meet widely-recognized specifications, is not an in-
process material, and when the recycler does not sufficiently know what 
is in their final product to make a determination using generator 
knowledge.
    Finally, EPA has changed proposed factor 4 to require any facility 
that does not meet the technical provisions of this

[[Page 1732]]

factor and yet is still legitimately recycling to document, certify, 
and provide notice that even though the recycling process does not meet 
the technical provisions of this factor, the recycling process is 
nevertheless legitimate. This requirement replaces the proposed 
petition process. The comments EPA received on the petition process 
expressed concern that the process would be expensive for facilities 
who wanted to take advantage of it and would place too much of a burden 
on implementing agencies. Comments also argued that EPA's estimate of 
the number of facilities that would be likely to submit petitions was 
overly conservative. Although the changes to factor 4 described here 
will address the concerns of many of the facilities who stated that 
they would have to submit a petition, the Agency also determined that a 
self-implementing process to allow those recyclers to address factor 4 
would be more in keeping with the existing policy on legitimacy.
    The certification process requires that a facility go through the 
same thought process and assessment about hazardous constituents that 
are incorporated into the final product that would have been required 
by the petition process (and that is currently consistent with the 
Agency's legitimacy policy in the Lowrance Memo). However, instead of 
having to submit a petition to an implementing agency when the process 
is legitimate despite not meeting the technical provisions of factor 4, 
the facility can document and certify the assessment that it has done 
and submit a notification on the Site ID form. This is a minimal 
burden, particularly as the Site ID form is a form that many of these 
facilities are already submitting to EPA for other reasons. In 
addition, these facilities are not left waiting for a response from an 
agency as they may have had to under the proposed petition procedure.
    All in all, these changes to factor 4 will make this part of the 
legitimacy requirement consistent with the current policy in the 
Lowrance Memo and Federal Register preamble discussions and allow for 
all four legitimacy factors to be requirements that must be met without 
adversely affecting existing legitimate recycling.

IX. Revisions to Solid Waste Variances and Non-Waste Determinations

    The Agency is finalizing today several modifications to the 
regulation of solid waste variances and non-waste determinations at 40 
CFR 260.31(c), 40 CFR 260.33, and 40 CFR 260.34 to ensure protection of 
human health and the environment and foster greater consistency on the 
part of implementing agencies. These final revisions include:
    (1) Revise 40 CFR 260.33(c) to require facilities to send a notice 
to the Administrator (or the State Director, if the state is 
authorized) in the event of a change in circumstances that affects how 
a hazardous secondary material meets the relevant criteria upon which a 
variance or non-waste determination has been based. The Administrator 
may issue a determination that the hazardous secondary material 
continues to meet the relevant criteria of the variance or non-waste 
determination or may require the facility to re-apply for the variance 
or non-waste determination;
    (2) Include a provision at 40 CFR 260.33(d) that variances and non-
waste determinations shall be effective for a fixed term not to exceed 
ten years. No later than six months prior to the end of this term, 
facilities must re-apply if they want to maintain the variance or non-
waste determination;
    (3) Include a provision at 40 CFR 260.33(e) stating that facilities 
receiving a variance or non-waste determination must provide 
notification as required by 40 CFR 260.42;
    (4) Revise the criteria for the partial reclamation variance in 40 
CFR 260.31(c) to clarify when the variance applies and to require, 
among other things, that the all criteria for this variance must met; 
and
    (5) Revise the criteria for the non-waste determination in 40 CFR 
260.34 to require that petitioners explain or demonstrate why their 
hazardous secondary materials cannot meet, or should not have to meet, 
the existing DSW exclusions under 40 CFR 261.2 or 261.4.
    A discussion of the public comments on the 2011 DSW proposal and 
Agency responses can be found in section XVIII of this preamble and the 
full response to comment document is in the docket for the rulemaking.

A. Revisions to Procedures for Variances and Non-Waste Determinations 
in 40 CFR 260.33

    Under the current regulatory framework, 40 CFR 260.30 provides the 
Administrator with the authority to grant a variance from the 
definition of solid waste or a non-waste determination on a case-by-
case basis if the hazardous secondary materials are recycled in a 
particular manner. The practical effect of both the solid waste 
variances and the non-waste determinations is the same; once a petition 
is granted by EPA, or the authorized state, the hazardous secondary 
material is not regulated as a solid or hazardous waste. The procedures 
for these variances and non-waste determinations are found in 40 CFR 
260.33.
    In today's rule, EPA is finalizing three changes to 40 CFR 260.33. 
First, EPA is requiring in 40 CFR 260.33(c) that facilities send a 
notice to the Administrator (or the State Director, if the state is 
authorized) in the event of a change in circumstances that affect how a 
hazardous secondary material meets the relevant criteria upon which a 
variance or non-waste determination has been based. Second, EPA is 
establishing in 40 CFR 260.33(d) an effective term limit of ten years 
for variances and non-waste determinations unless the petitioner re-
applies to the Agency to have the variance or non-waste determination 
renewed. Third, EPA is requiring in 40 CFR 260.33(e) that facilities 
re-notify every two years under 40 CFR 260.42.
1. Requirement That an Applicant Send Notice in the Event the Material 
No Longer Meets the Relevant Criteria
    EPA is modifying 40 CFR 260.33(c) to require, in the event of a 
change in circumstances that affects how a hazardous secondary material 
meets the relevant criteria contained in 40 CFR 260.31, 260.32, or 
260.34 upon which a variance or non-waste determination has been based, 
the applicant must send a description of the change in circumstances to 
the Administrator (or the State Director, if the state is authorized). 
The Administrator then may issue a determination that the hazardous 
secondary material continues to meet the relevant criteria of the 
variance or non-waste determination or may require the facility to re-
apply for the variance or non-waste determination.
    The requirement that the hazardous secondary materials must 
continue to meet the relevant criteria of a solid waste variance or 
non-waste determination is inherent in the regulations. Failure to meet 
the criteria could indicate that the hazardous secondary materials are 
discarded and a solid waste and would trigger the need to re-examine 
the circumstances of the recycling. EPA is codifying this change to 40 
CFR 260.33(c) to ensure that if there are changes that may impact how 
the hazardous secondary material meets the relevant criteria, that such 
changes be considered by the regulatory authority to ensure that those 
criteria continue to be met. This requirement will ensure clarity and 
consistency by providing an administrative procedure for reconsidering 
a variance or non-waste determination in the event that

[[Page 1733]]

the hazardous secondary material no longer meets the relative criteria.
    In some cases, a full re-application for a variance or non-waste 
determination may not be necessary. Under today's final rule, in the 
event of a change, the facility must send a description of the change 
in circumstances to the regulatory authority and it is the regulatory 
authority that will determine whether the facility must re-apply for a 
variance or non-waste determination. This change in procedure allows 
the regulatory authority to avoid spending unnecessary resources re-
reviewing petitions where the change in circumstances is found to be of 
no consequence to the original variance or non-waste determination the 
regulatory authority has granted.
2. Term Limit on Variances and Non-Waste Determinations
    EPA is adding a provision to 40 CFR 260.33(d) that solid waste 
variances and non-waste determinations shall be effective for a fixed 
term not to exceed ten years. No later than six months prior to the end 
of this term, facilities must re-apply for a variance or non-waste 
determination if they want to maintain the variance or non-waste 
determination. A facility may continue to operate under an expired 
variance or non-waste determination if they have submitted an 
application for a new variance or non-waste determination six months 
prior to the end of the term limit and have not yet received a final 
decision on that application from their regulatory authority.
    Variances and non-waste determinations are granted based on the 
case-by-case circumstances of a particular hazardous secondary material 
being recycled. Many of the variance and non-waste determination 
criteria specifically consider factors such as, the manner in which the 
hazardous secondary material is recycled, the market factors of the 
recycling process, the value of the hazardous secondary material, and 
contractual arrangements. However, these factors do not remain static 
and, instead, tend to change and evolve over time. It is therefore 
prudent that regulatory authorities periodically review these case-by-
case situations to ensure that the hazardous secondary material 
continues to meet the criteria of the variance or non-waste 
determination.
    Variances and non-waste determinations are granted for a fixed term 
not to exceed ten years from the date the facility is granted a 
variance or non-waste determination. If, for example, due to a change 
in circumstances, a facility is required to re-apply for a variance or 
non-waste determination within the 10-year time limit of its initial 
petition, then an automatic re-application would not be initiated until 
ten years after its second variance or non-waste determination is 
granted, unless otherwise specified by the regulatory authority. 
Additionally, regulators may stipulate time limits of less than 10 
years, if warranted.
3. Re-Notification Requirement
    EPA is adding a provision to 40 CFR 260.33(e) to require facilities 
receiving variances or non-waste determinations to send a notification 
of this activity prior to operating under the regulatory provision and 
by March 1 of each even-numbered year thereafter to the Regional 
Administrator (or State Director, if the state is authorized) using EPA 
Form 8700-12 in compliance with 40 CFR 260.42. Additionally, these 
facilities must notify within 30 days of stopping management of 
hazardous secondary materials under the variance or non-waste 
determination.
    The intent of the notification is to enable variances and non-waste 
determinations to be tracked nationally and over time, which 
facilitates state-to-state consistency in determinations. Additionally, 
notifications enable effective oversight of facilities receiving 
variances and non-waste determinations because it provides regulatory 
authorities with a mechanism for receiving regularly updated 
information (such as information regarding quantities of hazardous 
secondary materials managed under the determination). Additionally, 
this information can be used to identify facilities which may have 
undergone changes to their reclamation process significant enough to 
trigger a review of the determination under 40 CFR 260.33(c).
    EPA finds that the notification requirement under 40 CFR 260.42 has 
worked well in enabling regulatory authorities to monitor compliance of 
facilities operating under the 2008 DSW final rule. Regulatory 
authorities receive information on the name and location of the 
facilities operating under the exclusion and the types and quantities 
of hazardous secondary materials the facility is managing, which allows 
the regulatory authority to prioritize inspections, as well as create a 
list of facilities that would benefit from training and compliance 
assistance on the rule. Additionally, notification has allowed 
regulatory authorities to identify problems so as to intervene early to 
prevent potential mismanagement. EPA is convinced of the value of the 
notification provision in ensuring proper implementation of its rules. 
Therefore, notification for variances and non-waste determinations will 
increase transparency and oversight of facilities receiving a variance 
or non-waste determination.

B. Revisions to Partial Reclamation Variance in 40 CFR 260.30(c)

    The ``partial reclamation'' variance in 40 CFR 260.30(c) applies to 
hazardous secondary materials that have been reclaimed, but must be 
reclaimed further before the materials are completely recovered (i.e., 
``partial reclamation''). In turn, 40 CFR 260.31(c) provides the 
specific standards that a partially-reclaimed material must meet in 
order to be eligible for a variance from classification from solid 
waste.
    In this final rule, EPA is revising the partial reclamation 
variance provision of 40 CFR 260.31(c) to clarify when partially-
reclaimed materials are not solid waste because they are commodity-
like. The objectives of the revisions are to clarify the regulatory 
language, foster consistent application of the variance criteria, and 
emphasize that the variance should be granted only when partial 
reclamation has produced a commodity-like material. EPA's modifications 
to 40 CFR 260.31(c) include: (1) Revising the introductory text to 
clarify when the variance applies; (2) revising the introductory text 
to require that all of the decision criteria must be met; (3) revising 
the language of all of the decision criteria to provide greater 
clarity; and (4) eliminating the sixth criterion, ``other relevant 
factors.''
1. Purpose of Revisions to Partial Reclamation Variance
    When the partial reclamation variance was promulgated in 1985, 
EPA's original intent was to provide a mechanism for determining if a 
hazardous secondary material had undergone sufficient reclamation (a 
type of processing) to produce a material that was more like a 
commodity than a solid waste. The variance would be applicable if the 
material was commodity-like, even though some further reclamation was 
required before the material became a commercial product. EPA intended 
that the variance would be applied at the point that the commodity-like 
material was produced. After that point, the material would be managed 
as a commodity rather than as a solid and hazardous waste. Prior to the 
point that partial reclamation produced a commodity-like material, the 
material would have to be managed as a hazardous waste.

[[Page 1734]]

    However, EPA has become aware that authorized states across the 
country have applied the variance provision differently in similar 
circumstances. These differences may be due to: (1) The wide discretion 
allowed to the regulatory authority to weigh any or all of the decision 
criteria in any way it sees fit; (2) lack of clarity in the decision 
criteria themselves; or (3) the general sixth criterion ``other 
relevant factors.''
    As a result, variances have been granted under 40 CFR 260.31(c) for 
some materials that are not commodity-like. Therefore, EPA is 
finalizing revisions to the variance criteria to address the 
inconsistency among authorized states, remove ambiguities, and clearly 
convey the intent of the partial reclamation variance that only 
partially reclaimed hazardous secondary materials that have produced 
commodity-like materials are eligible for a variance from 
classification as solid waste. Consistent and appropriate application 
of the partial reclamation variance is necessary so that the hazardous 
waste program provides the level of protection of human health and the 
environment required by the RCRA statute in all communities in all 
areas of the country.
    An illustration of how the revised variance provision would be 
applied to a commonly reclaimed hazardous waste example is included in 
the ``Background Document: Providing Context--The Example of F006 
Electroplating Sludges,'' \35\ which is included in the docket for this 
rulemaking. This document includes a detailed description of how the 
revised variance provision would be used to make determinations about 
whether a variance would be appropriate for the listed hazardous waste 
F006 (wastewater treatment sludges from electroplating operations) at 
various steps in the reclamation process.
---------------------------------------------------------------------------

    \35\ Docket ID: EPA-HQ-RCRA-2010-0742-0016.
---------------------------------------------------------------------------

2. Revisions to Introductory Text of 40 CFR 260.31(c)
    EPA revised the introductory text of 40 CFR 260.31(c) to clarify 
when a partial reclamation variance is applicable and to identify what 
factors must be used to make a determination that a partially-reclaimed 
material is commodity-like. The revised text states:

    The Administrator may grant requests for a variance from 
classifying as a solid waste those hazardous secondary materials 
that have been partially reclaimed, but must be reclaimed further 
before recovery is completed, if the partial reclamation has 
produced a commodity-like material. A determination that a 
partially-reclaimed material for which the variance is sought is 
commodity-like will be based on whether the hazardous secondary 
material is legitimately recycled as specified in Sec.  260.43 of 
this part and on whether all of the following decision criteria are 
satisfied:

As noted above, the revised text replaces the word ``reclaimed'' with 
``partially-reclaimed'' and clarifies that the variance is applicable 
at the point that partial reclamation ``has produced a commodity-like 
material.'' These changes clarify and reflect EPA's intent that the 
variance applies only after partial reclamation has produced a 
commodity-like material and does not apply prior to producing a 
commodity-like material.
    To make a determination that a partially-reclaimed material is 
commodity-like, EPA revised the introductory text to require that such 
a determination will be based on whether the hazardous secondary 
material is legitimately recycled and whether all the decision criteria 
are satisfied.
3. Revisions to Criteria for Partial Reclamation Variance
    Each criterion under 40 CFR 260.31(c) has been revised to begin 
with the word ``whether'' to require that the regulatory authority must 
make a yes or no determination as to whether the material meets each 
criterion. In addition, each criterion has been revised to clarify and 
incorporate the characteristics of a commodity-like material.
    The first criterion in 40 CFR 260.31(c)(1) asks whether the degree 
of partial reclamation the material has undergone is substantial as 
demonstrated by using a partial reclamation process other than the 
process that generated the hazardous waste. By using a partial 
reclamation process other than the process that generated the hazardous 
waste, the more likely that the material will be commodity-like. 
Changes from the original language of the criterion include (1) 
replacing the general word ``processing'' with the words ``partial 
reclamation''; and (2) removing from the criterion ambiguity that could 
lead a regulatory authority to apply the variance after the initial 
partial reclamation process when a commodity-like material is not 
produced until completion of further reclamation.
    The second criterion in 40 CFR 261.31(c)(2) asks whether the 
partially-reclaimed material has sufficient economic value that it will 
be purchased for further reclamation. Changes from the original 
language of the criteria include: (1) Adding the word ``partially-'' 
before the word ``reclaimed'' to clarify that the criterion applies to 
the partially-reclaimed material, not the fully-reclaimed material 
produced later in the process; and (2) revising the wording to reflect 
the fundamental characteristic that a commodity-like material has 
sufficient economic value that it will be purchased for further 
reclamation. EPA notes that the value of a material produced at a later 
stage of reclamation cannot be used to justify a variance for the 
partially-reclaimed material produced earlier in the process. In other 
words, the criterion must be applied to the ``partially-reclaimed'' 
material at the specific point in the reclamation process where 
application of the variance is requested. Evidence to support this 
criterion may include sales information; demand for the materials; and 
business contracts, such as contracts specifying quantities of material 
sold, details of the transaction, and the effective price paid for the 
partially-reclaimed material by purchasers. The price paid for the 
partially-reclaimed material should be calculated after subtracting 
transportation costs and any other goods or services rendered in 
exchange for the material purchased.
    The third criterion in 40 CFR 260.31(c)(3) asks whether the 
partially-reclaimed material is a viable substitute for a product or 
intermediate produced from virgin or raw materials and which is used in 
subsequent production steps. Changes from the original language of the 
criteria include (1) adding the word ``partially-'' before the word 
``reclaimed'' to clarify that the criterion applies to the partially-
reclaimed material, not the fully-reclaimed material produced later in 
the process; and (2) replacing the phrase ``is like an analogous raw 
material'' with the phrase ``is a viable substitute for a product or 
intermediate produced from virgin or raw materials which is used in 
subsequent production steps.'' This revision is intended to demonstrate 
that a partially-reclaimed, commodity-like material is one that will be 
used as a viable substitute for a product or intermediate in 
production. Evidence to support this criterion would include a 
comparison of the physical and chemical characteristics of the 
partially-reclaimed material being considered for the variance to those 
of products or intermediates produced from virgin raw materials.
    The fourth criterion in 40 CFR 260.31(c)(4) asks whether there is a 
market for the partially-reclaimed material as demonstrated by known 
customer(s) who are further reclaiming the material (e.g., records of 
sales and/or contracts and evidence of subsequent

[[Page 1735]]

use, such as bills of lading). Changes from the original language of 
the criteria include (1) adding the word ``partially-'' before the word 
``reclaimed'' to clarify that the criterion applies to the partially-
reclaimed material, not the fully-reclaimed material produced later in 
the process; (2) deleting the word ``guaranteed'' since markets are 
often unpredictable; (3) deleting the word ``end'' prior to the word 
``market'' since the partially-reclaimed material could be sold to 
another reclaimer before it is sold to a final manufacturer or final 
reclaimer; and (4) adding the phrase, ``as demonstrated by known 
customer(s) who are further reclaiming the material (e.g. record of 
sales and/or contracts, and evidence of subsequent use, such as bills 
of lading),'' to clarify how a facility may demonstrate a market for 
the partially-reclaimed material. Additionally, this change ensures 
that the partially-reclaimed material is being shipped for further 
reclamation rather than being potentially stockpiled by the partial 
reclaimer. Evidence to support this criterion may include the 
material's value as an input to a production process; traditional usage 
of quantities of the partially-reclaimed material; and the likely 
stability of markets for the material. A market for further reclaimed 
material produced at a later stage of reclamation cannot be used to 
justify a variance for a partially-reclaimed material. For example, if 
a facility requests a variance for an incoming partially-reclaimed 
hazardous waste, the market that would have to be evaluated is the 
market for the incoming partially-reclaimed hazardous waste itself, not 
the final product.
    The fifth criterion in 40 CFR 260.31(c)(5) asks whether the 
partially-reclaimed material is handled to minimize loss. Changes from 
the original language of the criteria includes adding the word 
``partially-'' before the word ``reclaimed'' to clarify that the 
criterion applies to the partially-reclaimed material, not the fully-
reclaimed material produced later in the process. Specifically, this 
criterion requires evaluation of how the partially-reclaimed material 
is handled before it is further reclaimed. Handling a partially-
reclaimed material to minimize loss indicates that the material is 
commodity-like. Generally, persons handling hazardous secondary 
materials with little or no economic value do not have the same 
incentives to minimize loss as persons handling commodities. The 
management of materials produced at later stages of the reclamation 
process is not relevant to whether the partially-reclaimed material is 
eligible for a variance. Evidence to support this criterion may include 
documentation of facility procedures used to minimize loss (e.g., 
inspections, training) and storage and management equipment designed to 
minimize loss.
    Finally, in today's final rule, EPA is removing the sixth criterion 
in 40 CFR 260.31(c)(6), which allowed the regulatory authority to 
consider other relevant factors when deciding whether a partially-
reclaimed materials is commodity-like. When the partial reclamation 
variance was promulgated in 1985, EPA believed that this criterion 
could help determine whether a material is commodity-like. However, 
based on experience with the variance provision, EPA has learned that 
this criterion may have contributed to different determinations of 
whether the same partially-reclaimed material is commodity-like. 
Accordingly, EPA has determined that the appropriate and complete set 
of criteria to consider when determining whether a partially-reclaimed 
material is commodity-like are criteria (1)-(5).

C. Revisions to Non-Waste Determinations Found in 40 CFR 260.34

    In today's final rule, EPA is adding a criterion to non-waste 
determinations in 40 CFR 260.34 that require facilities applying for a 
non-waste determination to explain or demonstrate why they cannot meet, 
or should not have to meet, the existing DSW exclusions under 40 CFR 
261.2 or 261.4.\36\ Commenters to the 2009 DSW public meeting notice 
have argued that the non-waste determinations may be burdensome to 
states, and thus, requiring applicants to formally consider and explain 
why they are not eligible for an existing DSW exclusion will reduce the 
burden on states in two ways: (1) It requires facilities to consider 
existing exclusions and standards first, before pursuing a non-waste 
determination, which can, in turn, lead to facilities discovering that 
their intended recycling fits under an existing exclusion and therefore 
a non-waste determination petition is not needed; and (2) this 
criterion informs the regulatory authority why a facility believes it 
cannot meet an existing exclusion, which is likely to be the regulatory 
authority's first question before evaluating a non-waste determination 
petition. Petitioners also would be allowed to seek a non-waste 
determination if they could demonstrate that they should not have to 
meet the conditions of another exclusion, but rather should be allowed 
to operate under a non-waste determination with fewer or different 
conditions. However, if EPA or the authorized state determines that an 
applicant may, in fact, use an existing solid waste exclusion under 40 
CFR 261.2 or 261.4, this may be grounds for denying a non-waste 
determination on the basis that regulatory relief has already been 
provided.
---------------------------------------------------------------------------

    \36\ The two types of non-waste determinations are (1) a 
determination for hazardous secondary materials reclaimed in a 
continuous industrial process and (2) a determination for hazardous 
secondary materials that are indistinguishable in all relevant 
aspects from a product or intermediate.
---------------------------------------------------------------------------

X. Effect on Facilities Currently Operating Under Solid Waste 
Exclusions

A. Effect on Pre-2008 Solid Waste Exclusions

    The final rule does not supersede any of the pre-2008 solid waste 
exclusions or other prior solid waste determinations or variances, 
including determinations made in letters of interpretation and 
inspection reports. If a hazardous secondary material has been 
determined not to be a solid waste for whatever reason, such a 
determination remains in effect, unless the authorized state decides to 
revisit the regulatory determination under their current authority. In 
addition, if a hazardous secondary material has been excluded from 
hazardous waste regulations--for example, under the Bevill exclusion in 
40 CFR 261.4(b)(7)--the regulatory status of that material will not be 
affected by today's rule.
    However, there are two revisions to the regulations that, while 
they do not directly affect the regulatory status of excluded hazardous 
secondary materials, may impact facilities' responsibilities under an 
existing exclusion. These two revisions are (1) a new recordkeeping 
requirement for speculative accumulation; and (2) a documentation, 
certification, and notification requirement for recycling processes 
which are legitimate despite having levels of hazardous constituents 
that are not comparable to or unable to be compared to a legitimate 
product. These requirements must be met by the effective date of the 
rule, which is July 13, 2015.
1. Revised Speculative Accumulation Requirement
    Under the revised speculative accumulation requirement in Sec.  
261.1(c)(8), all persons subject to the speculative accumulation 
requirements (for example, persons reclaiming characteristic by-
products and sludges under 40 CFR 261.2(c)(3) and persons reclaiming 
hazardous secondary

[[Page 1736]]

materials under a definition of solid waste exclusion under 40 CFR 
261.4(a), such as the sulfuric acid exclusion at Sec.  261.4(a)(7) or 
the generator-controlled exclusion at Sec.  261.4(a)(23)) must label 
their storage unit(s) by indicating the first date that the material 
began to be accumulated. If placing a label on the storage unit is not 
practicable, the accumulation period must be documented through an 
inventory log or other appropriate method.
2. Prohibition of Sham Recycling and Definition of Legitimate Recycling
    The codification of the prohibition of sham recycling (Sec.  
261.2(g)), and the definition of legitimate recycling (Sec.  260.43) 
being finalized today will not impose any new requirements on persons 
recycling under the pre-2008 recycling exclusions, except in the case 
where the product of the recycling process (1) has levels of hazardous 
constituents that are not comparable to or lower than those in a 
legitimate product (i.e., are significantly elevated) or (2) is unable 
to be compared to a legitimate product and the product of the recycling 
process is not a widely recognized commodity (e.g., scrap metal) and is 
not returned to the original production process (e.g., closed loop 
recycling).
    In this case, the person performing the recycling must conduct the 
necessary analysis and prepare documentation stating why the recycling 
is still legitimate. Persons may consider exposure from toxics in the 
product, the bioavailability of the toxics in the product, and other 
relevant considerations which show that the recycled product does not 
contain levels of hazardous constituents that pose a significant human 
health or environmental risk. The documentation must include a 
certification statement that the recycling is legitimate and must be 
maintained on-site. The person performing the recycling must also 
notify his Regional Administrator (or State Director, if the state is 
authorized) of this activity using EPA Form 8700-12.

B. Effect on Facilities Operating Under the 2008 Solid Waste Exclusions

1. Facilities Operating Under Generator-Controlled Exclusion (40 CFR 
261.2(a)(2)(ii) or 261.4(a)(23)) \37\
---------------------------------------------------------------------------

    \37\ Today's rule consolidates the 2008 generator-controlled 
exclusion at 40 CFR 261.2(a)(2)(ii) and 40 CFR 261.4(a)(23) into one 
exclusion at 40 CFR 261.4(a)(23).
---------------------------------------------------------------------------

    Because today's rule includes more stringent standards for the 
generator-controlled exclusion at 40 CFR 261.4(a)(23), facilities that 
are currently managing hazardous secondary materials under these 
provisions must ensure they are complying with the more stringent 
standards by the effective date of the rule, which is July 13, 2015 (or 
in an authorized state, by the effective date in that state). The new 
provisions include (1) complying with the regulatory definition of 
``contained'' found in 40 CFR 260.10; (2) maintaining shipping records 
for reclamation under same-company and toll manufacturing agreements; 
(3) (for the person performing the recycling) documenting how the 
recycling meets all four factors of the legitimacy definition in 40 CFR 
260.43,\38\ and (4) meeting the new emergency preparedness and response 
conditions.
---------------------------------------------------------------------------

    \38\ As part of the requirement of meeting 40 CFR 260.43, if the 
product of recycling contains levels of hazardous constituents that 
are not comparable to or are unable to be compared to a legitimate 
product, the person performing the recycling must document, certify 
and notify the appropriate Regional Administrator of why the 
recycling is still legitimate. Where there is no analogous product 
made from virgin materials, the product of the recycling process is 
comparable to a legitimate product or intermediate if the product of 
the recycling process is a commodity that meets widely recognized 
commodity standards and specifications, or the hazardous secondary 
materials being recycled are returned to the original process or 
processes from which they were generated to be reused.
---------------------------------------------------------------------------

    Under the new regulatory definition of contained, a hazardous 
secondary material is contained if it is managed in a unit (which can 
include a land-based unit such as a pile) that meets the following 
criteria: (1) The unit is in good condition, with no leaks or other 
continuing or intermittent unpermitted releases of the hazardous 
secondary materials to the environment, and is designed, as appropriate 
for the hazardous secondary material, to prevent releases of the 
hazardous secondary material to the environment. Unpermitted releases 
are releases that are not covered by a permit (such as a permit to 
discharge to water or air) and may include, but are not limited to, 
releases through surface transport by precipitation runoff, releases to 
soil and groundwater, wind-blown dust, fugitive air emissions, and 
catastrophic unit failures; (2) the unit is properly labeled or 
otherwise has a system (such as a log) to immediately identify the 
hazardous secondary materials in the unit; and (3) the unit holds 
hazardous secondary materials that are compatible with other hazardous 
secondary materials placed in the unit and is compatible with the 
materials used to construct the unit and addresses any potential risks 
of fires or explosions. Hazardous secondary materials in units that 
meet the applicable requirements of 40 CFR part 264 or 265 (e.g., tanks 
and containers) are presumptively contained.
    Under the new requirements to document shipments for reclamation 
performed under the same-company and toll manufacturing provisions of 
the generator-controlled exclusion at 40 CFR 261.4(a)(23), generating 
and receiving facilities must maintain records of hazardous secondary 
materials sent or received under this exclusion at their facilities for 
no less than three years. The records must contain the name of the 
transporter, the date of the shipment, and the type and quantity of the 
hazardous secondary material shipped or received. The requirements may 
be satisfied by routine business records (e.g., financial records, 
bills of lading, copies of DOT shipping papers, or electronic 
confirmations).
    Persons performing the recycling of hazardous secondary materials 
under the generator-controlled exclusion of 40 CFR 261.4(a)(23) must 
also maintain documentation of their legitimacy determination on-site. 
Documentation must be a written description of how the recycling meets 
all four factors in 40 CFR 260.43(a). Documentation must be maintained 
for three years after the recycling operation has ceased.
    The Agency is not requiring any particular format for the 
documentation of legitimacy; however, we expect that the recycler would 
have written documentation describing the recycling process and how it 
meets each legitimacy factor. For example:

    <bullet> Useful contribution legitimacy factor--the recycler 
would document how the hazardous secondary material(s) provides a 
useful contribution to the recycling process or to the product or 
intermediate of the recycling process. The regulatory text for this 
factor provides five ways in which a useful contribution can be 
achieved. The recycler would need to document how the hazardous 
secondary material(s) add value and/or are useful to the recycling 
process in one or more of these ways: (i) Contributing valuable 
ingredients to a product or intermediate; (ii) replacing a catalyst 
or carrier in the recycling process; (iii) providing a valuable 
constituent to be recovered; (iv) being regenerated; or (v) being 
used as an effective substitute for a commercial product. For 
example, if the hazardous secondary material is a source of a 
valuable constituent, such as a precious metal, the document would 
explain the specific precious metal(s) recovered and their value to 
the process.
    <bullet> Valuable product or intermediate legitimacy factor--the 
recycler would explain how the product or intermediate made from 
hazardous secondary material is valuable, either in a monetary sense 
or through its intrinsic value. If the product made from hazardous 
secondary material is sold, the

[[Page 1737]]

documentation of sale could be proof of the value of the material to 
a third party. Such documentation could be in the form of a 
selection of receipts or contracts and agreements that establish the 
terms of the sale or transaction. A recycler that has not yet 
arranged for the sale also could demonstrate value by showing that 
the product or intermediate can replace another product or 
intermediate that is available in the marketplace. Demonstrating 
intrinsic value may be less straightforward than demonstrating the 
value of products that are sold in the marketplace, but could 
involve an explanation of the industrial process that shows how the 
product of the recycling process or intermediate replaces an 
alternative product that would otherwise have to be purchased.
    <bullet> Managed as a valuable commodity legitimacy factor--the 
recycler would include a description of how the hazardous secondary 
material is managed and explain how this management is similar or 
provides equivalent protection to the management of an analogous raw 
material. That is, the documentation would describe how the 
hazardous secondary material is stored and handled prior to being 
inserted into the recycling process. Where there is no analogous raw 
material, the recycler would explain how the management of the 
hazardous secondary material ensures that the material is contained 
as discussed in 40 CFR 260.10.

    Comparison of comparability of the product of recycling to a 
legitimate product factor--the recycler would include any data or 
information that shows that (1) the levels of hazardous constituents in 
the product are comparable to or lower than those found in analogous 
products, or are comparable to levels that meet widely-recognized 
commodity standards (in the case where the commodity standards include 
levels that specifically address those hazardous constituents), or (2) 
if there is no analogous product, that the product meets widely 
recognized commodity standards, or that hazardous secondary materials 
being recycled are returned to the original process or processes from 
which they were generated to be reused. If the product of the recycling 
process has levels of hazardous constituents that are not comparable to 
or unable to be compared to a legitimate product, but the recycling is 
still legitimate, the person performing the recycling must conduct the 
necessary analysis and prepare documentation stating why the recycling 
is, in fact, still legitimate. Persons can consider exposure from 
toxics in the product, the bioavailability of the toxics in the 
product, and other relevant considerations which show that the recycled 
product does not contain levels of hazardous constituents that pose a 
significant human health or environmental risk. The documentation must 
include a certification statement that the recycling is legitimate and 
must be maintained on-site. In addition, the person performing the 
recycling must notify his Regional Administrator (or the State 
Director, if the state is authorized) of this activity using EPA Form 
8700-12.
    Finally, under the new standards for emergency preparedness and 
response found in 40 CFR part 261 subpart M, generators that accumulate 
less than or equal to 6,000 kg of hazardous secondary material on site 
must comply with the emergency preparedness and response requirements 
equivalent to those in part 265 subpart C, which discuss maintaining 
appropriate emergency equipment on site, having access to alarm 
systems, maintaining needed aisle space, and making arrangements with 
local emergency authorities. A generator must also have a designated 
emergency coordinator who must respond to emergencies and must post 
certain information next to the telephone in the event of an emergency. 
For generators that accumulate more than 6,000 kg of hazardous 
secondary material on site, EPA is requiring that generators comply 
with requirements equivalent to those in part 265 subparts C and D, 
which includes all the requirements already discussed above for those 
accumulating less than or equal to 6,000 kg, as well as requiring a 
contingency plan and sharing the plan with local emergency responders.
2. Facilities Operating Under Transfer-Based Exclusion (40 CFR 
261.4(a)(24) or (25))
    Because today's rule replaces the transfer-based exclusion at 40 
CFR 261.4(a)(24) and (25) with a verified recycler exclusion, 
facilities that are currently managing hazardous secondary materials 
under the transfer-based exclusion at 40 CFR 261.4(a)(24) must meet the 
terms of the verified recycler exclusion by the effective date of the 
rule, which is July 13, 2015 (or in an authorized state, by the 
effective date in that state). That is, facilities operating under the 
transfer-based exclusion who wish to continue operating under the 
verified recycler exclusion must send in a new notification form and 
meet the additional conditions in the verified recycler exclusion, 
including the emergency preparedness and response condition. In 
addition, any reclamation facility or intermediate facility that does 
not have a RCRA permit or is not operating under interim status must 
stop managing the hazardous secondary material under the transfer-based 
exclusion until they apply for and receive a variance from either EPA 
or the authorized state under the verified recycling exclusion. (As of 
February 2014, there were no facilities without a RCRA Subtitle C 
permit recycling under the transfer-based exclusion, so EPA does not 
expect this impact to occur).
    Because the verified recycler exclusion is limited to recycling in 
the United States, facilities exporting hazardous secondary material 
under 40 CFR 261.4(a)(25) must cease operating under this exclusion by 
the effective date of the rule. The facility must notify his Regional 
Administrator (or State Director, if the state is authorized) using EPA 
Form 8700-12 that they have stopped managing hazardous secondary 
materials under the exclusion in accordance with 40 CFR 260.42(b). 
Facilities must submit this notification within 30 days of stopping 
management of hazardous secondary materials under this exclusion. Note 
that facilities that manage hazardous secondary materials under both 
the export exclusion at 40 CFR 261.4(a)(25) and the transfer-based 
exclusion at 40 CFR 261.4(a)(24) and/or and the generator-controlled 
exclusion at 40 CFR 261.4(a)(23) would not notify that they have 
stopped managing hazardous secondary materials, but would instead 
update their notification to make it clear they are no longer using the 
export exclusion at 40 CFR 261.4(a)(25).

XI. Effect on Spent Petroleum Catalysts

    In the 2008 DSW final rule, EPA deferred the question of whether 
spent petroleum catalysts should be eligible for the exclusions pending 
further consideration of the pyrophoric properties of the spent 
petroleum catalysts (73 FR 64714). EPA noted that the Agency was 
planning to propose--in a separate rulemaking from the 2008 DSW final 
rule--an amendment to its hazardous waste regulations to conditionally 
exclude from the definition of solid waste spent hydrotreating and 
hydrorefining catalysts generated in the petroleum refining industry 
when these hazardous secondary materials are reclaimed. Spent 
hydrotreating and hydrorefining catalysts generated in the petroleum 
refining industry are routinely recycled by regenerating the catalyst 
so that it may be used again as a catalyst. When regeneration is no 
longer possible, these spent catalysts are either treated and disposed 
of as listed hazardous wastes or sent to RCRA-permitted reclamation 
facilities, where metals, such as vanadium, molybdenum, cobalt, and 
nickel are reclaimed from the spent catalysts. EPA originally added 
spent

[[Page 1738]]

hydrotreating and hydrorefining catalysts (waste codes K171 and K172) 
to the list of RCRA hazardous wastes found in 40 CFR 261.31 on the 
basis of toxicity (i.e., these materials were shown to pose 
unacceptable risk to human health and the environment when mismanaged) 
(63 FR 42110, August 6, 1998). In addition, EPA based its decision to 
list these materials as hazardous due to the fact that these spent 
catalysts can at times exhibit pyrophoric properties (i.e., can ignite 
spontaneously in contact with air).
    It was largely because of these pyrophoric properties that the 
spent petroleum catalysts exhibit that EPA deferred the question of 
whether spent petroleum catalysts should be included in the 2008 DSW 
final rule exclusions. While spent petroleum catalysts can be a 
valuable source of recoverable metals, the risk of these hazardous 
secondary materials spontaneously igniting when in contact with air is 
not a property that most metal recyclers would be expected to address, 
and thus, present additional risks that are not presented by other 
types of metal-bearing hazardous secondary materials and therefore may 
be most appropriately managed as hazardous waste when recycled.
    Under today's final rule, EPA has added a regulatory definition of 
the ``contained'' standard as it applied to the generator controlled 
exclusion (40 CFR 261.4(a)(23)) and to the verified recycler exclusion 
(40 CFR 261.4(a)(24)). This new definition includes a requirement to 
address the risk of fires and explosions. This provision addresses the 
pyrophoric properties of the spent petroleum catalysts (as well as 
other types of ignitibility or reactivity) for the purposes of the 
generator-controlled exclusion and the verified recycler exclusion. 
Therefore, EPA has revised the generator-controlled exclusion to allow 
spent petroleum catalysts to be eligible for that exclusion, and is 
also allowing spent petroleum catalysts to be eligible for the verified 
recycler exclusion.

XII. Effect on CERCLA

    A primary purpose of today's final rule is to encourage the safe, 
beneficial reclamation of hazardous secondary materials. In 1999, 
Congress enacted the Superfund Recycling Equity Act (SREA), explicitly 
defining those hazardous substance recycling activities that may be 
exempted from liability under the Comprehensive Environmental Response, 
Compensation and Liability Act (CERCLA) (CERCLA section 127). Today's 
final rule does not change the universe of recycling activities that 
could be exempted from CERCLA liability pursuant to CERCLA section 127. 
Today's final rule only changes the definition of solid waste for 
purposes of the RCRA Subtitle C requirements. The final rule 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.

XIII. General Comments on the 2011 Proposed Revisions to the Definition 
of Solid Waste

    EPA received hundreds of comments on the July 2011 DSW proposal, 
most of which were quite detailed and raised multiple issues. Below is 
an overview of some of the major comments on general aspects of the 
proposals and a summary of EPA's responses to those comments. For a 
complete discussion of all the comments and EPA's responses to those 
comments, please see 2014 Revisions to the Definition of Solid Waste 
Final Rule Response to Comment Document found in the docket for today's 
rulemaking.

A. EPA's Legal Authority To Regulate Hazardous Waste Recycling

Comments: EPA's Authority
    EPA received many comments that asserted that EPA has no authority 
to regulate legitimate recycling, because commenters believe that 
hazardous secondary materials sent for recycling are not discarded and 
therefore, are not solid wastes. The comments state that EPA has 
misread the intent of Congress, citing previous court cases, noting the 
``analysis of the statute reveals clear Congressional intent to extend 
EPA's authority only to materials that are truly discarded, disposed 
of, thrown away, or abandoned'' (AMC I, 824 F.2d at 1190). They go on 
to argue that materials being recycled do not fall into one of these 
enumerated activities.
    Specifically, many of the comments cite the ABR decision (which in 
turn cites earlier court decisions), where the court noted that EPA's 
authority is ``limited to materials that are `discarded' by virtue of 
being disposed of, abandoned, or thrown away'' and that ``[s]econdary 
materials destined for recycling are obviously not of that sort. Rather 
than throwing them away, the producer saves them, rather than 
abandoning them, the producer reuses them'' (ABR 208 F.3d at 1051). The 
court also noted that ``To say that when something is saved it is 
thrown away is an extraordinary distortion of the English language'' 
(Id. at 1053).
    Many commenters took issue with EPA's decision to withdraw the 
transfer-based exclusion. These comments criticize EPA's rationale that 
``subsequent activities are more likely to involve discard, given that 
the generator has relinquished control of the hazardous secondary 
material'' (72 FR 14178). In particular, commenters cited Safe Food and 
Fertilizer, stating that the D.C. Circuit addressed an argument by the 
petitioners in the case that ``material that is transferred to another 
firm or industry for subsequent recycling'' is discarded and subject to 
RCRA regulation. 350 F.3d 1263, 1268 (D.C. Cir. 2003). The court said:

    [W]e have never said that RCRA compels the conclusion that 
material destined for recycling in another industry is necessarily 
`discarded.' . . . Although ordinary language seems inconsistent 
with treating immediate reuse within an industry's ongoing 
industrial process as a `discard' . . . the converse is not true. As 
firms have ample reasons to avoid complete vertical integration . . 
. firm-to-firm transfers are hardly good indicia of a `discard' as 
the term is ordinarily understood. Id.

EPA's Response: EPA's Authority
    EPA disagrees with the comments that Congress did not intend to 
give EPA the authority to regulate hazardous waste recycling. As EPA 
noted in the July 2011 DSW proposal, the RCRA 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 76 FR 44097, citing numerous sections of the statute and 
U.S. Brewers' Association v. EPA, 600 F. 2d 974 (D.C. Cir. 1979); 48 FR 
14502-04, April 3, 1983; and 50 FR 616-618). Moreover, the case law 
discussed above clearly shows instances where EPA properly regulated 
the recycling of solid and hazardous wastes.
    EPA also disagrees with comments that EPA cannot consider the fact 
that the generator has relinquished control of the hazardous secondary 
material (along with other factors that indicate discard) in deciding 
to withdraw the transfer-based exclusion. EPA's authority to regulate 
such transfers is clear: As the Court noted in Safe Food, ``materials 
destined for future recycling by another industry may be considered 
`discarded'; the statutory definition does not preclude application of 
RCRA to such materials if they can reasonably be considered part of the 
waste disposal problem'' (350 F.3d at 1268).
    EPA's record for today's rulemaking demonstrates that third-party 
recycling of hazardous secondary materials has been and continues to be 
part of the waste disposal problem. As noted in the July 2011 DSW 
proposal, EPA has already evaluated these hazardous

[[Page 1739]]

secondary materials (for example, during a hazardous waste listing 
determination) and determined them to be solid and hazardous wastes. 
(76 FR 44109) Therefore, a conditional exclusion must reasonably be 
expected not to result in the excluded hazardous secondary material 
being discarded. Of the 250 damage cases evaluated in the 2014 
environmental problems study, 229 (or approximately 92%) were from 
reclamation activities of off-site third-party recyclers, with clear 
instances of discard resulting in risk to human health and the 
environment, including cases of large-scale soil and ground water 
contamination with remediation costs in some instances in the tens of 
millions of dollars.\39\
---------------------------------------------------------------------------

    \39\ U.S. EPA, An Assessment of Environmental Problems 
Associated with Recycling of Hazardous Secondary Materials (Updated) 
December 2014.
---------------------------------------------------------------------------

    In addition, the market forces study in the docket for the 2008 DSW 
final rule supports the conclusion that the pattern of discard at off-
site, third-party reclaimers is a result of inherent differences 
between commercial recycling and normal manufacturing. As opposed to 
manufacturing, where the cost of raw materials or intermediates (or 
inputs) is greater than zero and revenue is generated primarily from 
the sale of the output, hazardous secondary materials recycling can 
involve generating revenue primarily from the 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, accumulating more inputs (hazardous 
secondary materials) than can be processed (reclaimed). In addition, 
commercial third-party recyclers have less flexibility than in-house 
recyclers in changing how they manage their hazardous secondary 
materials (e.g., during price fluctuations, in-house recyclers can more 
easily switch from recycling to disposal or from recycled inputs to 
virgin inputs, while commercial third-party recyclers cannot switch to 
disposal without obtaining a RCRA permit) (73 FR 64674).

B. Supporting Record

Comments: Environmental Problems Study
    Many commenters raised issues with EPA's use of the environmental 
problems study as part of the record for today's rule.\40\ Some 
commenters argued that EPA should not use 1982 as the cut-off year for 
investigating ``relatively recent'' damage cases. These commenters said 
that, given that the first major set of Subtitle C regulations were 
promulgated in 1980, going back to 1982 unfairly and inappropriately 
stacks the deck in favor of finding a higher number of damage cases 
because it took many years for companies to figure out who was subject 
to the RCRA Subtitle C regulations. Additionally, these commenters 
noted that the vast majority of damage cases began operation prior to 
1982 and thus contamination on these sites was likely the result of 
historic poor management during a period of little to no oversight. 
Commenters believed that the early 1990s would be a more appropriate 
cut-off date than 1982. One of the commenters also argued that the 
damage cases are not reliable, either from a lack of information, 
because they reflect outdated and inapplicable management practices, or 
have been greatly mischaracterized and should not be used to support 
any of the proposed changes to the DSW rule.
---------------------------------------------------------------------------

    \40\ An Assessment of Environmental Problems Associated With 
Recycling of Hazardous Secondary Materials (EPA-HQ-RCRA-2002-0031-
0355).
---------------------------------------------------------------------------

    Other commenters argued that the large majority of damage cases 
identified by EPA were caused by either a lack of knowledge of RCRA, 
blatant disregard for the law, or unavoidable accidents. These 
commenters noted that many of the damage cases involved civil or 
criminal violations, indicating that the problem was non-compliance 
with the regulations, not from a lack of regulations.
    Another commenter disagreed with EPA's negative portrayal of the 
waste management industry and argued that EPA should have conducted 
more research to obtain an understanding of the necessary and positive 
role of the hazardous waste management industry.
EPA's Response: Environmental Problems Study
    The Agency maintains that the scope of the environmental problems 
study is appropriate for the purpose of the DSW rulemaking effort. 
Specifically, we continue to find that 1982 is an appropriate cut-off 
year for the damage case study as it best reflects the point where 
companies became aware of their responsibilities and liabilities for 
safe management of their hazardous secondary materials intended for 
recycling.\41\ While the CERCLA statute and the initial RCRA hazardous 
waste regulations became effective in 1980, there was an initial 
``phase in'' period during which industry and other affected entities 
began to change their practices with regard to hazardous material 
recycling, and during which federal and state agencies were developing 
guidelines and procedures for implementing these new authorities. Thus, 
we deliberately did not include a number of recycling damage cases that 
occurred during the early 1980s that appeared to have been caused by 
companies and individuals who were not cognizant of their new 
responsibilities and potential liabilities under RCRA and CERCLA.
---------------------------------------------------------------------------

    \41\ We would note, however, that even if EPA changed the date 
to the 1990's, EPA still identified dozens of damage cases, and 
thus, changing the cut-off date, as some commenters suggest, would 
not impact the study's overall findings.
---------------------------------------------------------------------------

    As to the issue that there are facilities in the report that began 
operations prior to 1982, we agree that the facilities themselves may 
have begun operating earlier than the timeframe. However, the 
methodology for the analysis only includes facilities where the 
recycling operations occurred after 1982, and the environmental damages 
associated with those operations occurred after 1982. As a result, more 
than 600 damage cases were removed from consideration, leaving only 
those cases that EPA was confident have a clear link between post-1982 
recycling practices and environmental damage.
    Of the damage cases that met our criteria, we agree that for 
certain types of damage, such as groundwater or soil contamination, 
determining when exactly the damage occurred and which property owner 
caused the damage is difficult. However, in general, the damage cases 
include multiple types of damage and certain damage, such as 
abandonment of materials or observed violations of proper storage and 
containment, can be easily attributed to current facility owners and to 
post-1982 activities. For example, Alco Pacific, a lead recycling 
facility may have started operations in 1954, but it was 1990 when the 
company abandoned 98 drums and left over 1,300 cubic yards of lead-
contaminated rubber debris and sand with no containment to prevent 
dispersal from wind or rainwater. Additionally, it was 1989 when Myers 
Drum, a drum reconditioning facility, was found to be storing 95% of 
their 20,000 drums on their side and that spillage, sump overflows, and 
structural failures were observed. In 1986, Continental Steel, which 
manufactured wire and rod products from scrap metal, abandoned their 
facility leaving 220 drums of product material and 50 containers of 
lead-cadmium batteries on-site. These damages occurred well after RCRA 
and CERCLA became effective.
    Regarding the lack of information in some of its damage cases, as 
EPA stated in its 2007 environmental problem

[[Page 1740]]

study, many of the cases that were investigated were well documented. 
This was the case, for example, for many of the Superfund National 
Priority List (NPL) sites. However, in many other cases, it was not 
possible given the limitations of the study to document all facts. 
Often, there was considerable technical information as to the nature 
and extent of the contamination at the site, but relatively little 
information regarding the activities and circumstances that originally 
caused it. For some of the sites, we were able to collect only very 
basic information. However, for each site that was identified in the 
environmental problems study, we had sufficient information to 
determine that the damage resulted from recycling operations. Thus, we 
continue to maintain that the environmental problems study is 
appropriate to use in the development of the final rule.
    EPA also disagrees with the commenter who argued that the 
environmental problems study only demonstrates non-compliance of 
existing regulations and therefore does not justify the promulgation of 
tighter requirements under today's final rule. On the contrary, the 
frequency of the damage cases, including violations of regulations 
demonstrates the need for greater, not less, oversight.
    Furthermore, as part of a separate analysis, EPA has considered 
whether recycling of hazardous secondary materials under the 2008 DSW 
final rule could result in increased risk to human health and the 
environment and determined it is a complex issue because of the 
interactions between how the regulations are written and how they are 
implemented. Under the 2008 DSW final rule, EPA presumed that the 
conditions of the rule would prevent any increase in risk. However, 
what the 2008 DSW analysis failed to take into account was whether the 
conditions of the rule would operate as effectively in the real world 
as the more detailed requirements of the RCRA hazardous waste 
regulations.
    A more detailed comparative analysis of the regulatory requirements 
under the 2008 DSW final rule with the hazardous waste regulations 
reveals potentially significant gaps in environmental protection under 
the 2008 DSW final rule. Examples of these gaps include the absence of 
measures to ensure compliance, incentives to accumulate larger volumes 
of hazardous secondary materials, the potential for increased releases, 
such as during storage and transportation of the hazardous secondary 
materials, the lack of prescriptive standards for storage and 
containment, potential issues associated with the interstate transport 
of hazardous secondary materials for recycling, and reduction in access 
to information and the opportunity for public participation. RCRA is a 
preventative statute and by design seeks to prevent damage before it 
occurs; relying solely on enforcement without addressing the root 
causes of the damage could needlessly increase the frequency, severity, 
and cost of damage cases. Therefore, EPA has chosen to finalize the 
changes to the 2008 DSW final rule being promulgated today.
    Finally, EPA disagrees with comments stating we have not considered 
the positive role of the hazardous waste management industry. In 
development of the DSW rulemakings, the Agency specifically conducted a 
study of successful recycling that examined how responsible generators 
and recyclers of hazardous secondary materials ensures that recycling 
is done in an environmentally safe manner.\42\ However, as EPA noted in 
the 2008 DSW final rule, the successful recycling study indicates that 
many responsible generators examine the recycler's technical 
capabilities, business viability, environmental track record, and other 
relevant questions before sending hazardous secondary materials for 
recycling. Currently, 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 the release of material 
to the environment. However, 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. (73 FR 64683)
---------------------------------------------------------------------------

    \42\ U.S. EPA, An Assessment of Good Current Practices for 
Recycling of Hazardous Secondary Materials, November 2006 (EPA-HQ-
RCRA-2002-0031-0354).
---------------------------------------------------------------------------

Comments: Correlation of Recycling Damage Cases With Regulatory 
Exclusions, Exemptions or Alternative Standards
    Although at least one commenter supported the analysis titled 
``Correlation of Recycling Damage Cases with Regulatory Exclusions, 
Exemptions, or Alternative Standards,'' \43\ which is included in the 
docket for this rulemaking. However, most commenters argued that this 
analysis was flawed and that EPA should gather information in a more 
responsible manner, such as with an information collection request 
(ICR).
---------------------------------------------------------------------------

    \43\ Docket ID: EPA-HQ-RCRA-2010-0742-0010.
---------------------------------------------------------------------------

    Many commenters pointed out that EPA only identified seven 
exclusions that were ``likely'' correlated to some damage cases, yet 
EPA in its 2011 DSW proposal considered adding requirements to 32 
exclusions. These commenters argued that this record was insufficient 
for justifying additional conditions.
    Some commenters also took issue with how EPA assigned regulatory 
exclusions to certain damage cases. For example, a few commenters said 
that none of the five damage cases correlated to precious metals 
involved recycling of in-process secondary materials as part of 
precious metals mining and primary mineral processing, but rather 
involved off-site entities that were attempting to recover precious 
metals from photographic film, circuit boards, and other secondary 
materials generated by industry.
    One commenter said that EPA identifies 35 cases that allegedly 
involve spent batteries; however, two of these involve non-lead 
batteries and thus are irrelevant and a third involves printed circuit 
boards. This commenter goes on to say that, of the remaining 32 lead-
acid battery-related facilities for which EPA has identified known 
dates of operation, none began business operations after the 1982 and 
1985 adoption of the RCRA regulations that control lead-acid battery 
collection and recycling. This commenter believed that the primary 
contamination at these sites almost certainly pre-dated RCRA and thus 
EPA cannot use these cases to support changes to 40 CFR 266.80. Another 
commenter said that none of the environmental damage associated with 52 
damage cases could be shown to be the result of companies ``likely'' 
operating under the 261.4(a)(13) scrap metal exclusion and/or the 
261.6(a)(3)(ii) scrap metal recycling exemption.
    A few commenters argued that EPA has not compared the number of 
damage cases to the total number of recyclers and thus we do not know 
what percentage of all facilities the damage cases represent. Another 
commenter noted that the 132 damage cases that EPA correlated to the 
pre-2008 recycling exclusions makes up only 2.5% of the 5,321 
facilities that EPA estimates are using the exclusions (a total number 
which this commenter believes EPA underestimates).

[[Page 1741]]

EPA's Response: Correlation of Recycling Damage Cases With Regulatory 
Exclusions, Exemptions or Alternative Standards
    The goal of EPA's analysis to correlate damage cases with existing 
exclusions was to assess whether certain hazardous secondary material 
recycling exclusions, exemptions, or alternate standards are adequately 
protecting human health and the environment. Because the majority of 
exclusions, exemptions, and alternative standards do not include 
notification requirements, EPA does not have precise data regarding 
which and how many facilities are recycling hazardous secondary 
materials under reduced regulation. This lack of data hinders EPA's 
ability to collect information regarding what regulations a specific 
facility was operating under when damage occurred. Because this 
information is limited, the Agency had developed a methodology that 
correlates the type of hazardous secondary materials identified in the 
damage cases to regulations that likely governed the management of the 
hazardous secondary material. EPA used this methodology to identify 
patterns related to the types of hazardous secondary material involved 
in damage cases and whether those materials were likely to be managed 
under an exclusion, exemption, or alternate standard.
    EPA understands commenters' concerns regarding the limitations of 
this analysis, including that EPA could only correlate with confidence 
7 of the 32 recycling exclusions to damage cases in its environmental 
problems study. This result is more a lack of precision in the data and 
less that some recycling exclusions have no damage cases. For example, 
because notification is not required for these exclusions, we can only 
conservatively identify damage case correlations where the type of 
hazardous secondary material very clearly matches to an exclusion 
(e.g., scrap metal). We lack information to make inferences for broadly 
applicable exclusions, (e.g., use/reuse) or for broadly defined 
hazardous secondary materials (e.g., metal-bearing wastes). Therefore, 
by virtue of some exclusions' broad applicability, we were unable to 
correlate them to specific damage cases. Additionally, due to the lack 
of data, it is difficult to analyze current trends in damage cases, and 
thus even more difficult to accurately project what the number of 
future damage cases might be under different scenarios. However, 
although it is difficult to assign specific damage cases to certain 
exclusions, we note that in the environmental problems study only nine 
of the damage cases were operating under a RCRA permit at the time of 
damage. Thus, EPA can generally conclude that the majority of the 
damage cases at third party recyclers were operating outside of RCRA, 
inferring these facilities were either operating illegally or operating 
under an exclusion, exemption, or alternate standard, or no standard.
    Regarding other comments on the analysis, including comments on 
specific damage case-to-exclusion pairings and on comparing the number 
of damage cases to the total number of affected entities, EPA agrees 
with commenters that more information is needed prior to taking final 
action on specific conditions of the pre-2008 recycling provisions. EPA 
finds it may need to consider each exclusion in terms of evaluating 
specific regulatory gaps and whether additional conditions are needed 
to ensure protection of human health and the environment. Therefore, we 
are not finalizing specific conditions for the pre-2008 recycling 
provisions in today's rule and are instead deferring action until EPA 
can more adequately address commenters' concerns, including comments on 
the record. Before the Agency would take any such action, the Agency 
would provide the regulated community, as well as other stakeholders 
the opportunity for notice and comment.

XIV. Major Comments on the Exclusion for Hazardous Secondary Materials 
Legitimately Reclaimed Under the Control of the Generator and 
Recordkeeping for Speculative Accumulation

A. Proposed Changes to 2008 Final Rule

    In its July 2011 DSW proposal, EPA proposed or solicited comment on 
certain changes to the 2008 DSW exclusion from the definition of solid 
waste for hazardous secondary materials legitimately reclaimed under 
the control of the generator. The first change was adding a regulatory 
definition of ``contained'' for units storing hazardous secondary 
materials. The definition included factors which, if met, would 
demonstrate that the unit was contained. Under the proposal, a storage 
unit is contained if it is in good condition, with no leaks or other 
continuing or intermittent unpermitted releases of the hazardous 
secondary material to the environment, and is designed, as appropriate 
for the hazardous secondary materials to prevent releases of hazardous 
secondary material to the environment. Such releases may include, but 
are not limited to, releases through surface transport by precipitation 
runoff, releases to soil and groundwater, wind-blown dust, fugitive air 
emissions, and catastrophic unit failures. The unit must also be 
properly labeled or otherwise have a system (such as a log) to 
immediately identify the hazardous secondary materials in the unit. 
Finally, the unit must not hold incompatible materials and must address 
any potential risks of fires or explosions. The definition also stated 
that hazardous secondary materials stored in units that meet the 
applicable requirements of 40 CFR parts 264 or 265 are considered to be 
contained.
    The second change concerned new recordkeeping requirements for 
speculative accumulation, ``same-company'' recycling, and recycling 
under certain tolling arrangements. With respect to speculative 
accumulation, EPA proposed to require generators and reclaimers 
operating under the generator-controlled exclusion to post accumulation 
start dates to allow inspectors and other regulatory authorities to 
quickly ascertain how long hazardous secondary materials had been in 
storage. If placing a label on the storage unit is not practicable, the 
first date that the excluded hazardous secondary material began to be 
accumulated must be entered in an inventory log. We also solicited 
comment on whether to add the proposed recordkeeping requirement to the 
general speculative accumulation provision at 40 CFR 261.1(c)(8), 
thereby extending the requirement to all recyclers subject to that 
provision. We also proposed a recordkeeping requirement for tolling 
contractors and toll manufacturers operating under the tolling 
exclusion, which would require maintaining records of hazardous 
secondary materials sent or received pursuant to the tolling contract. 
We also solicited comment on whether to add a similar recordkeeping 
requirement to generators and reclaimers operating under the ``same-
company'' exclusion.
    The third change concerned making notification a condition rather 
than a requirement of the exclusions. In addition, we proposed two 
structural changes. These were (1) placing the requirements for land-
based units and non-land-based units in one regulatory provision (40 
CFR 261.4(a)(23)), since the requirements for both types of units are 
the same; and (2) placing most definitions applicable to the generator-
controlled exclusion in 40 CFR 261.4(a)(23) (together with the 
requirements) instead of in 40 CFR 260.10.

[[Page 1742]]

Comments: Authority for Proposed Changes
    Many commenters supported all or some of these changes, either as 
proposed or with suggested modifications. Their comments are discussed 
below in reference to the specific changes that the Agency proposed. 
Some commenters, however, stated that EPA did not have the authority to 
impose conditions (particularly the ``contained'' standard) on 
hazardous secondary materials recycled under the control of the 
generator. These commenters generally believed that materials recycled 
under these exclusions are not discarded, and that EPA provided no new 
evidence that would justify the proposed changes. According to these 
commenters, the proposed changes are tantamount to treating the 
materials as wastes instead of valuable commodities, and are 
inconsistent with the ABR decision. One commenter noted that generators 
already have incentives to prevent releases of hazardous secondary 
materials because of potential liability, corporate values of 
stewardship and environmental responsibility, and public relations.
EPA's Response: Authority for Proposed Changes
    The Agency has determined that the conditions proposed in our July 
2011 DSW proposal are needed in order to ensure that the exclusion 
operates as intended and does not result in discarded hazardous 
secondary material posing significant risk to human health and the 
environment. We agree that generators and reclaimers operating under 
the generator-controlled exclusion have incentives to ensure that the 
hazardous secondary materials are safely managed. Nevertheless, the 
conditions we proposed are needed to ensure that the generator-
controlled exclusion will correctly function to exclude only hazardous 
secondary material that is not discarded.
    Specifically, the proposed ``contained'' requirement is a key 
provision for determining whether a hazardous secondary material is 
being managed as a valuable commodity. Such materials that are not 
contained and are instead released to the environment are not destined 
for recycling and are clearly discarded. The proposed definition 
specifies factors which, if met, demonstrate that the hazardous 
secondary materials in a unit are handled as valuable raw materials, 
intermediates, or products and thus are not discarded. We note that the 
criteria in proposed 40 CFR 261.4(a)(23)(i) are all performance 
measures, as opposed to specific technical standards, suggested by 
commenters in response to the June 2009 public meeting on the 2008 DSW 
final rule. These criteria also exemplify practices discussed in the 
preamble to the 2008 DSW final rule regarding containment of hazardous 
secondary materials, such as ways to prevent releases and operation and 
maintenance of the storage unit in the same manner as a production 
unit.
    The proposed recordkeeping requirement for speculative accumulation 
(which would require posting of accumulation start dates on the storage 
unit or in an inventory log) would allow inspectors and other 
regulatory authorities to quickly ascertain how long a facility has 
been storing an excluded hazardous secondary material, and whether the 
storage time exceeds existing limits under 40 CFR 261.1(c)(8). If such 
limits have been exceeded, the material would be discarded. The 
proposed recordkeeping requirement for the tolling exclusion (which 
would require records of shipments sent and received under tolling 
contracts) would also aid regulatory agencies in determining if tolling 
contractors and manufacturers are in compliance with the requirements 
for the exclusion and whether the hazardous secondary materials in 
question have been properly accounted for. A similar requirement to 
keep records of shipments sent and received under ``same-company'' 
recycling (for which the Agency solicited comment in the July 2011 DSW 
proposal) would serve the same purpose. Finally, submitting a 
notification to EPA is the only formal indication of a facility's 
prospective intent to reclaim a hazardous secondary material under this 
exclusion. For these reasons, EPA has determined that its proposed 
changes to the generator-controlled exclusion are necessary to 
demonstrate that hazardous secondary materials have not been discarded. 
The changes are therefore within the Agency's RCRA authority.
Comments: Scope of Proposed Changes
    One commenter noted that the proposed rule would allow lead-acid 
battery recyclers to operate under the generator-controlled exclusion 
instead of the requirements in 40 CFR 266.80(b). This commenter 
believed that the latter requirements, specifically tailored to battery 
recyclers, are more appropriate for these facilities.
EPA's Response: Scope of Proposed Changes
    In response to this comment, it was not the Agency's intent that 
spent lead-acid batteries be managed under the generator-controlled 
exclusion. The 2008 DSW final rule contained a provision (40 CFR 
261.2(c)(4)(iv)) stating that spent lead-acid batteries were not 
eligible for the generator-controlled exclusion (nor were materials 
subject to material-specific standards under 261.4(a) or the listed 
hazardous wastes K171 or K172). The omission of this provision from the 
July 2011 DSW proposal as related to spent lead-acid batteries and 
material-specific standards was inadvertent, and EPA is therefore 
retaining it in this final rule (see 40 CFR 261.4(a)(23)(ii)(E)). 
However, for reasons discussed in section XI of this preamble, listed 
hazardous wastes K171 and K172 should be eligible for the generator-
controlled exclusion; therefore, we are not including those wastes in 
this provision.
Comments: Exports
    Another commenter noted that the text of proposed 40 CFR 
261.4(a)(23)(i)(B) could initially be read to suggest that hazardous 
secondary materials may be transferred to a location outside the United 
States or its territories as long as the foreign receiving facility is 
under the control of the generator. It is not until one reads proposed 
40 CFR 261.4(a)(23)(ii)(A) that the reader learns that the receiving 
facility must be in the United States or its territories. This 
commenter suggested revising the introductory text of 40 CFR 
261.4(a)(23) to refer to recycling within the United States or its 
territories and deleting the subsequent condition.
EPA's Response: Exports
    EPA agrees with this commenter who suggested modifying the 
introductory text of the generator-controlled exclusion to include a 
reference to the requirement that hazardous secondary materials 
legitimately reclaimed under the exclusions must be recycled within the 
United States or its territories. We have therefore revised 40 CFR 
261.4(a)(23) to read as follows: ``Hazardous secondary material 
generated and legitimately reclaimed within the United States or its 
territories and under the control of the generator, provided that the 
material complies with paragraphs (a)(23)(i) and (ii) of this 
section.'' We have also deleted the condition in proposed CFR 
261.4(a)(23)(ii)(A) and renumbered the following subparagraphs.

[[Page 1743]]

B. Exclusion for Materials Recycled On-Site

Comments: On-Site Exclusion
    In the 2008 DSW final rule, EPA promulgated an exclusion from the 
definition of solid waste for hazardous secondary materials that are 
generated and legitimately reclaimed at the generating facility. In the 
July 2011 DSW proposal, the Agency did not propose any changes to the 
scope of this exclusion. Commenters on the proposal generally supported 
excluding on-site recycling from the definition of solid waste, stating 
that such recycling did not involve discard and was not likely to pose 
environmental risks. However, one commenter argued that the exclusion 
for hazardous secondary materials recycled under the control of the 
generator was too broad and should be narrowed to materials recycled 
under a ``continuous industrial process,'' i.e., recycled in the same 
process of which they are a byproduct, by the same generator, and at 
the same generating facility. If the exclusion was narrowed to this 
extent, it would preclude ``same-company'' or tolling recycling from 
being eligible for the exclusions. It would presumably also preclude 
certain types of on-site recycling that might involve different 
processes from being excluded under the definition of solid waste.
EPA's Response: On-Site Exclusion
    EPA has determined that if hazardous secondary materials are 
generated and legitimately reclaimed at the generating facility (as 
well as a facility within the same company) under the conditions 
specified in today's rule, these materials have not been discarded. We 
do not agree with the comment that the exclusion should be limited to 
recycling of hazardous secondary materials under a ``continuous 
industrial process,'' i.e., it takes place in the same process of which 
the materials are a byproduct, by the same generator and at the same 
generating facility. If hazardous secondary materials are recycled on-
site at the generating facility using different processes, this 
circumstance does not mean that the generator has relinquished control 
of the materials or that they have been discarded. We are therefore 
finalizing this provision as proposed at 40 CFR 261.4(23)(i)(A).

C. Exclusion for Materials Recycled by the Same Company

    In the 2008 DSW final rule, EPA promulgated an exclusion from the 
definition of solid waste for hazardous secondary materials that were 
generated and legitimately reclaimed off-site by the same ``person'' as 
defined in 40 CFR 260.10, if the generator performed one of two 
certifications. Under the first certification, the generating facility 
certified that it controlled the reclaiming facility; under the second 
certification, the generating facility certified that it was under 
common control with the reclaiming facility. In the July 2011 DSW 
proposal, the Agency solicited comment on whether to add a 
recordkeeping requirement to this exclusion that would require both the 
generating and reclaiming facilities to retain records for no less than 
three years of all hazardous secondary material shipped under the 
exclusion. The records would have to contain information which could be 
satisfied by routine business records (e.g., financial records, bills 
of lading, copies of DOT shipping papers, or electronic confirmations). 
There was general support for this condition from those commenters who 
addressed it.
Comments: Same-Company Exclusion
    Some commenters supported this exclusion. They believed that 
generators using the exclusion have strong incentives to ensure that 
hazardous secondary materials are not discarded by maintaining control 
over, and potential liability for, the reclamation process. However, 
other commenters believed that any off-site transport of hazardous 
secondary materials involved environmental risks that should be 
addressed by (at the least) requiring a hazardous waste manifest or by 
subjecting ``same-company'' off-site recycling to the proposed 
alternative Subtitle C standards for hazardous secondary materials that 
are transferred for the purpose of reclamation. Some commenters said 
that when hazardous secondary materials are transported off-site, the 
generator has little de facto control over such materials.
    One commenter noted that proposed 40 CFR 261.4(a)(23)(i)(B) omitted 
the alternative certification for same-company recycling that occurs 
when the generating facility and the reclaiming facility are under 
common control. This certification was included in the 2008 DSW final 
rule.
EPA's Response: Same-Company Exclusion
    The Agency continues to find that same-company recycling does not 
involve discard since it occurs under the control of the generator. 
Such control means that both the generating facility and the 
reclamation facility are familiar with the hazardous secondary 
materials and the company would be ultimately liable for any 
mismanagement of the hazardous secondary materials. Under these 
circumstances, the incentive to avoid such mismanagement would be 
sufficiently strong to greatly reduce the risks of transport, thus 
rendering unnecessary the use of the hazardous waste manifest or 
requiring the hazardous secondary materials to be reclaimed under the 
verified recycling exclusion. However, as noted above, the Agency 
solicited comment in its July 2011 DSW proposal on a recordkeeping 
requirement that would require both the generating and reclaiming 
facilities to retain records for no less than three years of all 
hazardous secondary material shipped under the exclusion. The records 
would have to contain the name of the transporter, the date of the 
shipment, and the type and quantity of the hazardous secondary material 
shipped or received under the exclusion. This requirement could be 
satisfied by routine business records (e.g., financial records, bills 
of lading, copies of DOT shipping papers, or electronic confirmations). 
Such a provision would facilitate enforcement of the same-company 
exclusion and would allow tracking of all hazardous secondary materials 
recycled under the exclusion to ensure that such materials were 
properly accounted for. EPA agrees with the commenters who supported 
this requirement and finds that adding this recordkeeping requirement 
to the same-company exclusion is sufficient to address any risks 
involved in off-site transport of hazardous secondary materials. We are 
therefore finalizing the same company exclusion to include this 
requirement (see 40 CFR 261.4(a)(23)(i)(B)).
    The Agency also agrees with the commenter who suggested that the 
alternative certification for facilities under common control that was 
included in the 2008 DSW final rule should be added to the exclusion. 
The omission of this provision from the July 2011 DSW proposal was 
inadvertent and the Agency will therefore simply retain the alternative 
certification in the regulations (see 40 CFR 261.4(a)(23)(i)(B)).

D. Tolling Exclusion

    In its July 2011 DSW proposal, EPA proposed to add a recordkeeping 
requirement to the exclusion for hazardous secondary materials 
legitimately reclaimed under certain contractual tolling arrangements. 
Specifically, we proposed to require the tolling contractor to maintain 
at its facility for no less than three years records of all hazardous 
secondary materials received pursuant to the

[[Page 1744]]

written contract with the tolling manufacturer. It would also require 
the tolling manufacturer to maintain at its facility for no less than 
three years records of materials shipped pursuant to its written 
contract with the tolling contractor. In both cases, the records must 
contain the name of the transporter, the date of the shipment, and the 
type and quantity of the hazardous secondary material shipped or 
received pursuant to the written contract. These requirements may be 
satisfied by routine business records (e.g., financial records, bills 
of lading, copies of DOT shipping papers, or electronic confirmations). 
EPA solicited comment on whether the proposed requirement would make 
the exclusion easier to enforce. We also solicited comment on whether 
the tolling exclusion should be retained or eliminated. We noted that 
no facilities appeared to be operating under the tolling exclusion as 
of the date of the proposed rule, and that the definitions and 
certifications involved in this exclusion were complicated. However, we 
also noted that if the tolling exclusion were eliminated, the tolling 
contractor conducting the reclamation might need to obtain a RCRA 
storage permit. This necessity could discourage recycling under tolling 
arrangements and prevent sustainable reclamation practices.
Comments: Tolling Exclusion
    Those commenters who addressed the proposed recordkeeping 
requirement generally supported it, but many commenters believed that 
the tolling exclusion should be eliminated and that tolling should be 
regulated under EPA's proposed alternative Subtitle C regulatory 
standards for hazardous recyclable materials. Another commenter argued 
that if the Agency retained the tolling exclusion, we should require 
use of the hazardous waste manifest, financial assurance, and other 
Subtitle C requirements. Some of these commenters emphasized the 
absence of utilization of the tolling exclusion and said that federal 
regulations should address activities of national importance. One 
commenter noted that the exclusion could result in an inefficient use 
of enforcement resources as regulators would have to be trained and 
familiar with a regulatory concept with which they are not familiar. 
Another commenter argued that the assumption of liability for 
mismanagement by the tolling contractor was unlikely and could result 
in litigation. Other commenters emphasized environmental concerns with 
the tolling exclusion. These commenters doubted that recycling under 
tolling arrangements was actually under the ``control'' of the tolling 
contractor, given that a different corporate entity at a different 
physical location operates the production process. Some commenters 
raised similar concerns with the risks involved in off-site 
transportation of hazardous secondary materials that were raised in 
connection with ``same-company'' recycling.
    Some commenters, on the other hand, urged EPA to retain the 
exclusion for tolling contracts. These commenters argued that hazardous 
secondary materials legitimately reclaimed under the tolling exclusion 
are managed as valuable products and not discarded. They also said that 
utilization of the exclusion could increase with time, particularly if 
more states picked up EPA's revisions to the definition of solid waste 
and if regulatory uncertainty were avoided. One commenter noted that 
the economic incentives under tolling contracts are such that there is 
no incentive for discard, since the tolling manufacturer is paid when 
it returns the hazardous secondary material to the contractor. Some 
commenters indicated that eliminating the tolling exclusion, by 
requiring tolling contractors to obtain RCRA storage permits, would 
operate as a severe disincentive to reclamation under tolling 
arrangements.
EPA's Response: Tolling Exclusion
    EPA generally agrees with the commenters who supported retention of 
the tolling exclusion. We find that hazardous secondary materials are 
not discarded if they are legitimately reclaimed under the conditions 
specified in our tolling exclusion, particularly since participants in 
tolling contracts have strong incentives to handle such materials as 
valuable commodities rather than mismanage them. We also have 
determined that the conditions of the generator-controlled tolling 
exclusion, including the recordkeeping requirement for hazardous 
secondary materials sent and received under tolling contracts, are 
sufficient to prevent discard, thus rendering unnecessary the use of 
the hazardous waste manifest or other RCRA permit requirements for 
reclaimers. We have also concluded that retention or elimination of 
this exclusion should not depend on how frequently the exclusion is 
currently utilized, because determining frequency of utilization in the 
future is necessarily speculative. Additional states could pick up 
EPA's revisions to the definition of solid waste, and tolling 
arrangements could become more common due to increases in certain kinds 
of manufacturing or other technological developments. Regulatory 
authorities would then become more familiar with implementation of the 
provision. We are also concerned that eliminating the tolling exclusion 
could discourage the reclamation of valuable hazardous secondary 
materials that might otherwise be destroyed by incineration. This 
result would be inconsistent with our goal of encouraging the 
sustainable management of hazardous secondary materials. For these 
reasons, we are retaining the tolling exclusion in this final rule and 
finalizing the proposed recordkeeping requirement for this exclusion 
(see 40 CFR 261.4(a)(23)(i)(C)).

E. The Contained Standard

    In its July 2011 DSW proposal, EPA proposed a regulatory definition 
of the contained standard. Under this proposed definition, a unit 
storing hazardous secondary materials is ``contained'' if it is in good 
condition, with no leaks or other continuing or intermittent 
unpermitted releases of the hazardous secondary materials to the 
environment, and is designed, as appropriate for the hazardous 
secondary materials, to prevent releases of hazardous secondary 
materials to the environment. Such releases may include, but are not 
limited to, releases through surface transport by precipitation runoff, 
releases to soil and groundwater, wind-blown dust, fugitive air 
emissions, and catastrophic unit failures. The unit must also be 
properly labeled or otherwise have a system (such as a log) to 
immediately identify the hazardous secondary materials in the unit. 
Finally, the unit must not hold incompatible materials and must address 
any potential risks of fires or explosions. Hazardous secondary 
materials stored in units that meet the applicable requirements of 40 
CFR parts 264 or 265 are considered to be contained.
    In addition, the Agency also proposed placing the requirements for 
land-based units and non-land-based units in one regulatory provision 
(40 CFR 261.4(a)(23)), since the requirements for both types of units 
are the same. To clarify the regulatory status of units from which 
releases have occurred, the Agency also proposed a provision stating 
that: (1) A hazardous secondary material released to the environment is 
discarded and a solid waste unless it is immediately recovered for the 
purpose of reclamation and (2) hazardous secondary material managed in 
a unit with leaks or other continuing or intermittent releases of the 
hazardous

[[Page 1745]]

secondary material to the environment is discarded and a solid waste.
Comments: Codification of the Contained Standard
    Many commenters (particularly states) supported the codification of 
the contained standard. Under the 2008 DSW final rule, these commenters 
argued the only definitive way to determine whether a material was 
contained was an evaluation after a release had already occurred. They 
believed that codifying a definition of ``contained'' would make it 
easier for regulatory authorities and the regulated community to decide 
whether a unit meets the standard. Some commenters, however, believed 
that a regulatory definition of ``contained'' was not needed because 
the concept of what is contained was self-evident: To the extent 
clarification is needed, it could be provided in guidance.
EPA's Response: Codification of the Contained Standard
    EPA agrees with those commenters who argued that codification of 
the contained standard is desirable. Based on comments and inquiries 
received from regulatory authorities and the regulated community after 
promulgation of the 2008 DSW final rule, we have determined that merely 
requiring that a unit be ``contained'' (without providing a regulatory 
definition) does not give regulatory certainty about how to comply with 
the standard. The number of comments and inquiries to this effect would 
seem to refute the idea that the concept of contained is self-evident. 
It was never the Agency's intent that violation of the standard could 
be addressed only after a significant release and subsequent 
environmental damage had occurred. More detailed regulatory criteria, 
such as those proposed in our July 2011 DSW proposal, will help all 
affected parties determine whether a unit adequately controls the 
movement of hazardous secondary materials. Such determinations will be 
of great benefit to regulatory authorities and to facilities operating 
under the generator-controlled exclusion. We are therefore retaining 
the codification of contained in this final rule.
Comments: Land-Based Storage
    Some commenters believed that storage in land-based units should be 
prohibited completely under the generator-controlled exclusion. Other 
commenters supported allowing land-based units, but only if the Agency 
required periodic inspections, groundwater monitoring, or other 
measures. Other commenters emphasized that the Agency had no 
jurisdiction over land-based production units, and requested that EPA 
clarify in the preamble that we do not regulate such units.
EPA's Response: Land-Based Storage
    EPA does not agree that land-based units should be categorically 
prohibited under the generator-controlled exclusion. We have determined 
that hazardous secondary materials, if they are stored in land-based 
units that meet the conditions specified in today's rule, have not been 
discarded. That is, if they are legitimately reclaimed as specified in 
today's rule, if they are contained and not speculatively accumulated, 
and if they have submitted the required notification, they are being 
managed as valuable commodities, rather than wastes. Indeed, the ABR 
decision expressed criticism of EPA for prohibiting any land placement, 
even ``for a few minutes''. 208 F.3rd at 1051. EPA interprets the 
court's discussion as a warning to the Agency to examine all factors, 
not just one (e.g., land placement), when deciding whether a material 
is a waste. For the same reason, we do not find that it is necessary or 
appropriate to require groundwater monitoring, inspections at specified 
intervals, or other Subtitle C controls for hazardous secondary 
materials that are legitimately reclaimed under the control of the 
generator under these conditions, even for land-based units. These 
hazardous secondary materials are being managed under the control of 
the generator; by maintaining control over, and potential liability 
for, the hazardous secondary materials and the reclamation process, the 
generator ensures that such materials have not been discarded. We also 
note that the definition of ``land-based unit'' in 40 CFR 260.10 means 
an area where hazardous secondary materials are placed in or on the 
land before recycling, but the definition explicitly excludes land-
based production units. Examples of land-based units include surface 
impoundments and piles.
Comments: Requirements for Non-Land-Based Units
    Some commenters believed that the proposed standard was still too 
imprecise, or not sufficiently protective. These commenters generally 
suggested that EPA require storage units to meet the standards of 40 
CFR 262.34(a)(1), or parts 264 or 265 for tanks, containers, or 
containment buildings. Some of these commenters argued that since 
hazardous secondary materials sent for reclamation were identical in 
composition to analogous materials sent for disposal, the storage 
standards should be the same for both disposal and recycling. Another 
commenter noted that EPA was considering tank standards for solvents 
under the proposed remanufacturing exclusion, and said that standards 
at least as stringent should be considered for other hazardous 
secondary materials sent for reclamation. Commenters also emphasized 
the ease of enforceability and implementation of standards with which 
the regulatory authorities and the regulated community are already 
familiar.
EPA's Response: Requirements for Non-Land-Based Units
    In response to those commenters who suggested Subtitle C 
requirements for non-land-based units (such as tanks, containers and 
containment buildings) that store hazardous secondary materials under 
the generator-controlled exclusion, the Agency also finds that imposing 
these requirements is unnecessary for such materials meeting the 
conditions of the exclusion promulgated today. EPA is aware that 
implementation of program requirements would be simpler if units 
storing hazardous waste and those storing hazardous secondary materials 
were subject to the same requirements, and we are also aware that the 
chemical composition of hazardous secondary materials sent for disposal 
can be similar to that of hazardous secondary materials sent for 
legitimate recycling. Nevertheless, hazardous secondary materials that 
are legitimately reclaimed under the control of the generator have not 
been discarded, and such materials have value that provides generators 
with strong incentives to maintain safe management and handling. 
Imposing the Subtitle C requirements on these hazardous secondary 
materials could discourage legitimate reclamation, encourage disposal, 
and would be inconsistent with EPA's goal of fostering sustainable 
materials management. In response to the commenter who suggested that 
such requirements should be imposed because the Agency was considering 
them for the remanufacturing exclusion, we note that the generator-
controlled exclusion covers a wide variety of hazardous secondary 
materials, rather than the solvents covered by the remanufacturing 
exclusion, for which tanks or container standards are appropriate for 
reasons described in section VII of this preamble.
Comments: Releases
    Some commenters believed that the proposed regulatory definition of

[[Page 1746]]

``contained'' constituted a ``no-leak'' standard (including storm water 
runoff or fugitive air emissions) and that even a single release that 
was immediately recovered could lead to the hazardous secondary 
material remaining in the unit being considered discarded and a solid 
waste. Other commenters, however, said that all units will suffer a 
release at some point and that it would be unreasonable to 
categorically classify any release of whatever nature as discard.
    In the preamble to the 2011 DSW proposal, EPA stated that certain 
units may be subject to occasional precipitation runoff that consists 
essentially of water, with trace amounts of hazardous constituents. The 
Agency noted that as long as such runoff does not contain hazardous 
secondary materials (e.g., it is essentially rainwater with trace 
amounts of metals), it would not be considered a ``release of a 
hazardous secondary material.'' On the other hand, if the hazardous 
secondary material itself is swept away by the runoff (e.g., if the 
hazardous secondary material consists of fine particulate matter, such 
as electric arc furnace dust), this transport via precipitation runoff 
could be considered a ``release of a hazardous secondary material'' and 
that pile may not be considered contained. Some commenters argued that 
even trace amounts of hazardous substances (such as through stormwater 
runoff) should be considered illegal releases from storage units. One 
of these commenters objected to our regulatory definition partly 
because it would allow releases that were not ``continuing'' or 
``intermittent.''
    Another commenter, however, argued that the existence of stormwater 
runoff (regulated under the Clean Water Act) or fugitive air emissions 
and dust (regulated under the Clean Air Act) does not mean that 
materials are not being managed as a valuable commodity and so cannot 
be used to justify a determination that a hazardous secondary material 
is subject to the fully applicable Subtitle C RCRA requirements. This 
interpretation would amount to an illegal expansion of RCRA authority, 
according to the commenter. The commenter also noted that EPA's 
distinction between runoff containing hazardous constituents and runoff 
containing the waste itself was irrelevant and that EPA should return 
to the ``significant release'' standard of the 2008 DSW final rule. 
Another commenter suggested that the Agency specify what concentration 
of hazardous secondary material would need to be detected to constitute 
a release.
EPA's Response: Releases
    EPA does not agree with those commenters who argued that the 
proposed definition of ``contained'' imposed a strict, categorical, and 
impracticable ``no leaks'' standard, either for land-based units or 
non-land-based units. We note that the language of the proposed 
definition reads that the unit must be in good condition, ``with no 
leaks or other continuing or intermittent unpermitted releases of 
hazardous secondary materials to the environment. . .'' (emphasis 
added). This language clearly does not mean that any single release of 
whatever nature would automatically place the hazardous secondary 
materials remaining in the unit under Subtitle C regulation. In fact, 
we agree with those commenters who argue that most units will suffer a 
release at some point and that it would be unreasonable to 
categorically classify any release of whatever nature as discard.
    Nor does EPA agree with those commenters who appeared to believe 
that any release should lead to loss of the generator-controlled 
exclusion and full regulation under RCRA Subtitle C. A single release 
that is quickly cleaned up would not generally affect the regulatory 
status of the hazardous secondary materials still contained in the 
unit. For example, sometimes a hazardous secondary material may escape 
from primary containment and may be captured by secondary containment 
or some other mechanism that would prevent the hazardous secondary 
materials from being released to the environment or would allow 
immediate recovery of the materials. In that case, the unit would not 
be subject to the RCRA hazardous waste regulations and the hazardous 
secondary materials in the unit would still be excluded from the 
definition of solid waste, even though any such materials that had been 
released and not immediately recovered would be considered discarded.
    With respect to precipitation runoff, the Agency does not agree 
with those commenters who said that even trace amounts of hazardous 
substances (such as through stormwater runoff) should be considered 
illegal releases from storage units. Some units are inevitably subject 
to occasional precipitation runoff that consists essentially of water, 
with trace amounts of hazardous constituents. As long as the hazardous 
secondary material itself is not swept away by the runoff, this 
transport via precipitation runoff would not be a release of such a 
material and the unit could be considered contained. A contrary 
interpretation could place all such units under Subtitle C regulation 
and eliminate their eligibility for the generator-controlled exclusion, 
which is not the Agency's intent. EPA has determined that hazardous 
secondary materials placed in such units that are destined for 
legitimate recycling have not been discarded if they meet the 
conditions of these exclusions. EPA also agrees with the commenter who 
said that the existence of stormwater runoff (regulated under the Clean 
Water Act) and fugitive air emissions and dust (regulated under the 
Clean Air Act) does not automatically mean that materials are not being 
managed as a valuable commodity.
    EPA also does not agree with the commenter who suggested that the 
Agency should return to the ``significance'' criterion for determining 
whether a release has occurred (in part to distinguish between runoff 
containing hazardous constituents and runoff containing the hazardous 
secondary material itself). The Agency does not agree that using this 
criterion, without further definition, would clarify this distinction. 
We also do not find that it is practicable to establish a concentration 
of hazardous secondary materials that could be used to determine 
whether a release has occurred, since such appropriate concentrations 
would vary for different materials and a single concentration limit 
would not be flexible enough to allow an accurate determination of 
``contained'' for the wide variety of hazardous secondary materials.
Comments: Other ``Contained'' Issues
    A few commenters suggested that EPA establish a petition process or 
a site-specific variance for facilities to demonstrate the 
appropriateness of site-specific alternative storage standards for 
their units (including land-based units). Some commenters believed that 
our reference to 40 CFR parts 264 and 265 meant that units were 
required to comply with those provisions. One of these commenters 
suggested that we specify that units meeting the requirements of 40 CFR 
parts 264 or 265 are ``presumptively'' contained. Other commenters said 
that the proposed definition of ``contained'' seemed more appropriate 
for hazardous secondary materials in flowable form, but not for solid 
materials such as scrap metal, for which a container is not necessarily 
needed. One of these commenters suggested that we clarify that a 
``unit'' may include a designated location.
    A few commenters suggested editorial revisions to the definition of 
contained. One commenter said that EPA should

[[Page 1747]]

clarify this provision to better indicate that the unit must not 
contain materials that are incompatible with the other wastes or 
materials placed in the unit or the materials of construction that 
comprise the unit. Another commenter said the examples of release 
should include soil contamination because contamination should not be 
allowed to pass through the soil to the groundwater before it is 
considered a release. Two commenters said the proposed text at 40 CFR 
261.4(a)(23)(ii)(B) uses the word ``recycling'' in place of 
``reclamation'' and omits the phrase ``or intermittent unpermitted,'' 
which does not comport with the preamble language.
EPA's Response: Other ``Contained'' Issues
    In response to those commenters who suggested a mechanism (such as 
a petition process or variance) to provide alternative or site-specific 
containment requirements for certain facilities, such a mechanism is 
unnecessary because the definition of ``contained' in today's rule 
establishes minimum requirements that all units storing hazardous 
secondary materials should be able to meet. We have designed the 
``contained'' criteria to be flexible enough to cover a wide range of 
units.
    In response to comments that suggested the reference to 40 CFR 
parts 264 and 265 means that units were required to comply with those 
provisions, EPA did not intend to imply that meeting such standards was 
required. In response to the commenter who suggested stating that units 
meeting the applicable requirements of 40 CFR parts 264 or 265 are 
``presumptively'' contained, EPA agrees that this language better 
reflects EPA's intent than the proposed language and is changing the 
proposed definition of ``contained'' accordingly. However, we do not 
agree with the commenter who suggested adding that solid hazardous 
secondary materials may be stored in ``designated locations.'' We have 
determined that our definition of ``contained'' (which includes land-
based units) is sufficiently flexible to cover solid material, such as 
scrap metal or furnace bricks which are not stored in tanks, 
containers, or containment buildings. We have also made clear in the 
preamble the circumstances under which such materials could be 
considered ``contained.''
    For the reasons stated above, EPA is finalizing the definition of 
``contained'' as proposed, but replacing the statement that ``hazardous 
secondary materials meeting the applicable requirements of 40 CFR parts 
264 or 265 are considered to be contained'' with ``hazardous secondary 
materials that meet the applicable requirements of 40 CFR parts 264 or 
265 are presumptively contained'' (see 40 CFR 260.10).
    EPA agrees with commenters who suggested editorial changes to the 
definition of contained and has incorporated these changes into today's 
rule.

F. Notification as a Condition

    In the July 2011 proposal, EPA proposed to make the notification 
requirement in 40 CFR 260.42 a condition, rather than a requirement, of 
the generator-controlled exclusion in 40 CFR 261.4(a)(23). At issue are 
the consequences an entity would face for failing to notify. Thus, 
notification as a requirement of the exclusion means that failure to 
notify would constitute a violation of the notification regulations. On 
the other hand, notification as a condition of the exclusion means 
failure to notify could potentially result in the loss of the exclusion 
for the hazardous secondary materials (i.e., the hazardous secondary 
materials would become solid and hazardous wastes and subject to full 
Subtitle C requirements). EPA also requested comment on whether 
notification should be a condition of the remanufacturing exclusion and 
of the pre-2008 recycling exclusions. (For EPA's response to comments 
for notification as a condition of the pre-2008 recycling exclusions, 
see section XIX.)
Comments: Notification as a Condition
    Commenters were split on this issue. Many commenters supported 
EPA's proposed change to make notification a condition of the 
exclusion. These commenters argued that notification as a condition 
would decrease the incentives for a facility to evade enforcement by 
not notifying. A few commenters agreed that states would use 
enforcement discretion to distinguish between facilities that failed to 
notify due to an inadvertent oversight or from a blatant disregard for 
the requirement. One commenter urged EPA to clarify that a facility 
submitting a notification does not need to wait for any response from 
the implementing agency prior to using exclusion.
    On the other hand, many commenters did not support this proposed 
change and argued that notification should remain a requirement of the 
exclusion, as it is currently. These commenters argued that 
notification, or the absence thereof, is not indicative of discard and 
that the information of who is using the exclusion should not impact 
the determination of whether a material is discarded. Some commenters 
argued that enforcement discretion is not exercised in a consistent and 
reasonable manner and that the proposed change would subject generators 
who are legitimately recycling their hazardous secondary materials to 
undue severe enforcement consequences. Other commenters argued that 
there are innocent reasons why a facility would not notify, for 
example, because of confusion surrounding the point when a virgin 
material becomes a secondary material. Still other commenters believed 
that it is highly unrealistic to believe that any facility operating 
under the provisions would intentionally fail to notify EPA in an 
attempt to evade enforcement. Other commenters argued that there is 
already sufficient incentive to notify because facilities' would 
already incur significant penalties under RCRA 3007 for failing to 
notify. Additionally, one commenter noted that making notification a 
condition of the exclusion differs from how other paperwork violations 
are treated.
EPA's Response: Notification as a Condition
    EPA agrees with commenters who supported making notification a 
condition of the exclusion. The notification provision is the only 
formal indication of a facility's intent to reclaim a hazardous 
secondary material under the conditional exclusion. For example, if 
during an inspection of a large quantity generator of hazardous waste, 
EPA were to discover a hazardous secondary material that had been 
stored on-site for more than 90 days without a RCRA permit (an act that 
would typically be a violation of the hazardous waste regulations), a 
previously filed notification would be an indication that the facility 
was planning to reclaim the hazardous secondary material under the 
conditions of the exclusion. Absent such notification, it would be 
difficult for the facility to justify its true intentions for the 
hazardous secondary material. Failure to meet the notification 
provision is a strong indication that the facility either did not 
intend to comply with or was unaware of the provisions of the 
exclusion. In both cases, the lack of notification could indicate that 
the hazardous secondary material was being mismanaged.
    EPA agrees with commenters that making notification a condition of 
the rule would further discourage facilities from trying to evade 
enforcement by not notifying because, under the final rule, the costs 
and consequences of not notifying are significantly higher than if 
notification remains a requirement. Notification is essential to keep

[[Page 1748]]

regulators and the public informed about hazardous secondary materials 
activity and to enable effective compliance monitoring. Making 
notification a condition provides states and EPA the ability to 
properly enforce those that intentionally fail to notify in order to 
evade enforcement, while leaving the flexibility to tailor enforcement 
appropriately in those cases involving an unintentional oversight. 
Therefore, EPA is making the notification provision in 40 CFR 260.42 a 
condition of the generator-controlled exclusion in 40 CFR 261.4(a)(23), 
as well as a condition of the remanufacturing exclusion in 40 CFR 
261.4(a)(27).
    In response to opposing comments, EPA does not agree that failing 
to notify is not indicative of discard. As noted, notification serves 
as a formal declaration that a facility is not managing a hazardous 
waste but, rather, an excluded hazardous secondary material under the 
conditions of the exclusion. Notification, thus, documents the 
generator's decision to not discard its hazardous secondary materials, 
which is the inherent first step in any exclusion from the definition 
of solid waste.
    EPA also does not agree that the notification condition would be 
inappropriately enforced. EPA notes that notification as a condition 
subjects only those generators who failed to notify to enforcement 
consequences; generators who submit notifications as required, and meet 
the conditions of the final rule exclusions, would not face enforcement 
consequences. EPA does not find this to be unduly burdensome to the 
regulated community.
    EPA also finds that the commenter's example of an innocent reason 
for failing to notify (because of confusion surrounding the point when 
a virgin material becomes a secondary material) as further reason to 
strengthen the notification provision. That is, in order to comply with 
the final rule, a generator must know which hazardous secondary 
materials are being managed according to the specific conditions of the 
exclusion. In other words, a generator has to make a choice to manage 
hazardous secondary materials under the conditions of the rule before 
they are considered ``excluded.'' (Notification, in fact, clearly 
documents this choice.) Therefore, EPA finds it difficult to believe 
that a generator could innocently fail to notify under the final rule 
because the generator is unclear about when a virgin material becomes a 
hazardous secondary material that it must manage under the exclusion. 
These ambiguities must be resolved prior to the facility availing 
itself of the exclusion.
    EPA also disagrees with commenters that argued it is highly 
unrealistic to believe that any facility operating under the provisions 
would intentionally fail to notify EPA, as well as commenters that 
argued that sufficient incentives to notify already exist. We note that 
there is likely an economic incentive for some facilities to fail to 
notify and simply consider the paperwork violation as a cost of doing 
business. Where an economic incentive exists, EPA maintains that 
regulation is appropriate in order to adequately discourage undesirable 
behavior.
    Finally, although notification as a condition may differ from how 
other paperwork requirements are applied in the hazardous waste 
regulations, it does not differ from how other paperwork requirements 
are applied in conditional exclusions from the definition of solid 
waste. For example, notification is a condition of the zinc fertilizer 
exclusion in 40 CFR 261.4(a)(20). Additionally, EPA confirms that the 
conditional exclusions at 40 CFR 261.4(a)(23) and 40 CFR 261.4(a)(27) 
are self-implementing and thus facilities do not need to wait for any 
response from the implementing agency prior to using exclusion.

G. Recordkeeping for Speculative Accumulation

    In the July 2011 DSW proposal, EPA proposed to amend the generator-
controlled exclusion to require persons operating under the exclusion 
to place a label on the storage unit indicating the first date that the 
excluded hazardous secondary material began to be accumulated. In cases 
where placing a label on the storage unit is not practicable (e.g., if 
the hazardous secondary materials are stored in a surface impoundment), 
we proposed as an alternative to require persons operating under the 
generator-controlled exclusion to document in an inventory log the 
first date that the excluded hazardous secondary material began to be 
accumulated. EPA noted that enforcement personnel had suggested that 
ease of enforcement would be greatly facilitated if persons subject to 
the speculative accumulation requirement were required to post a start 
date for the accumulation. In this way, inspectors and other regulatory 
authorities could quickly ascertain how long a facility has been 
storing an excluded hazardous secondary material, and, therefore, 
whether that facility was in compliance with the applicable storage 
time. The Agency also noted that placing labels on storage units or 
entering accumulation start dates in inventory logs is likely to be 
already part of normal business operations at many facilities. For this 
reason, the proposed requirement would not be unduly burdensome and 
would provide a greater degree of clarity both to the regulated 
community and to regulatory authorities who need to determine whether 
excluded hazardous secondary materials meet the speculative 
accumulation limits.
    Since the same arguments for tracking accumulation start dates 
could be made more broadly for all recycling subject to the speculative 
accumulation limits, EPA also requested comment on whether to add this 
recordkeeping requirement to the speculative accumulation provision in 
40 CFR 261.1(c)(8) itself. The Agency did not propose or solicit 
comment on changing the substantive requirements of the speculative 
accumulation provision, such as the time allowed for storage or the 
amount that is required to be recycled within a calendar year.
Comments: Recordkeeping for Speculative Accumulation
    Many commenters, particularly states, supported the proposed 
recordkeeping requirement and also supported extending the requirement 
to all persons currently subject to the speculative accumulation 
requirements at 40 CFR 261.1(c)(8). These commenters generally believed 
that posting accumulation start dates (or using some other mechanism, 
such as an inventory log) provides assurance both to generators and 
inspectors that the generator in question is in compliance with the 
speculative accumulation provision, and that the proposed requirement 
would not be burdensome to the regulated community. One commenter 
supported requiring accumulation start dates to be posted in storage 
areas within a specified number of feet from the storage unit, since 
reference to logs distant from storage units could make enforcement 
difficult. Facilities that prefer a centrally located log could 
maintain such a ``master'' log in addition to the record maintained 
near the actual storage unit, this commenter suggested.
    Some commenters, however, opposed the proposed recordkeeping 
provision for speculative accumulation, either for the generator-
controlled exclusion or for other persons subject to 40 CFR 
261.1(c)(8). Some of these commenters argued that 40 CFR 261.2(f) 
already requires respondents in enforcement actions who are claiming 
that a material is not a solid waste to demonstrate that they meet the 
terms of an exclusion or

[[Page 1749]]

exemption, by, among other things, providing appropriate documentation. 
Some commenters apparently believed that the proposed requirement would 
mandate sending a notification to EPA, or posting the quantity of the 
hazardous secondary material and the precise time it was generated, or 
posting ``finish'' dates, as well as ``start'' dates for accumulation. 
In addition, some commenters expressed concern about the potential 
difficulty of posting accumulation start dates for hazardous secondary 
materials that are recycled rapidly in continuous processes with little 
or no prior storage.
EPA's Response: Recordkeeping for Speculative Accumulation
    After evaluating the comments received, EPA has concluded that the 
proposed recordkeeping requirements for speculative accumulation 
provide considerable benefits to both regulatory authorities and the 
regulated community and that the burden on the regulated community will 
be minimal. Posting accumulation start dates (or using another 
mechanism, such as an inventory log) is a simple and effective way to 
provide useful information about likely compliance with the speculative 
accumulation provision, and that the cost to facilities does not 
outweigh this benefit. We also find that all of the reasons for 
adopting this requirement for the generator-controlled exclusion apply 
equally to the question of whether to adopt it for all persons subject 
to 40 CFR 261.1(c)(8). In response to the commenter who supported also 
requiring the posting of accumulation start dates in storage areas 
within a specified number of feet from the storage unit, EPA is not 
convinced that such a requirement would be necessary for all 
facilities, and the appropriate distance from the storage unit might 
also vary for different facilities. We are therefore not adopting this 
requirement.
    In response to those commenters who argued that the proposed 
recordkeeping requirement is redundant with Sec.  261.2(f), we note 
that that provision applies to respondents in enforcement actions and 
does not provide specific guidance on how to determine compliance with 
the speculative accumulation provisions in the case of routine 
inspections. We therefore do not agree that the proposed recordkeeping 
requirement is redundant with 40 CFR 261.2(f). Today's revision to the 
speculative accumulation provision at 40 CFR 261.1(c)(8) does not 
entail submitting notifications to EPA, posting the quantity of the 
hazardous secondary material and the time it was generated, or posting 
finish dates. The final definition of ``contained'' specifies that a 
unit must be properly labeled or otherwise have a system (such as a 
log) to immediately identify the hazardous secondary materials in the 
unit. Neither such a label nor the posting of an accumulation start 
date requires detailed information. In response to the commenters who 
were concerned about hazardous secondary materials that were 
continuously recycled without prior storage, we agree with those 
commenters and are revising the proposed recordkeeping requirement to 
allow ``other appropriate methods'' to be used to document the 
accumulation period.
    For the reasons given above, EPA is amending 40 CFR 261.1(c)(8) to 
require that all persons subject to that provision must place materials 
in a storage unit with a label indicating the first date that the 
excluded hazardous secondary material began to be accumulated. If 
placing a label on the storage unit is not practicable, the 
accumulation period must be documented through an inventory log or 
other appropriate method.

XV. Major Comments on the Replacement of the Exclusion for Hazardous 
Secondary Materials That Are Transferred for the Purpose of Reclamation

Summary of Comments: Replacement of the Transfer-Based Exclusion With 
the Alternative Subtitle C Recycling Standards
    Environmental and community organizations, as well as many state 
commenters, supported withdrawing the transfer-based exclusion because 
this would remove the possibility of hazardous secondary materials 
being sent to unpermitted reclaimers without a manifest. These 
commenters agreed with EPA's rationale that transfers of most types of 
hazardous secondary materials to other companies for reclamation 
involve discard, and that the 2008 DSW transfer-based exclusion could 
result in adverse impacts to human health and the environment from 
discarded material. Commenters noted that, prior to reclamation 
occurring, hazardous secondary materials have limited inherent value. 
Some commenters in particular were concerned about how the transfer-
based exclusion made the generator responsible for verifying the safety 
and legitimacy of the recycler's operations, when most generators would 
not have the expertise to make such a determination. One commenter 
examined the compliance history of the facilities currently operating 
under the 2008 DSW exclusions and noted that a large percentage have 
been the subject of enforcement actions in the past five years, and 
many have been subject to clean-up authorities under either RCRA or 
CERCLA for past contamination.
    Most states supported the alternative hazardous waste standards as 
a replacement for the transfer-based exclusion as an approach that 
would help encourage recycling, while maintaining protection of human 
health and the environment. States generally supported the longer 
accumulation period, but some state commenters suggested replacing it 
with the speculative accumulation limits. Finally, while, as noted 
above, environmental groups supported removing the transfer-based 
exclusion because of the potential hazards from third-party recycling, 
they did not support the alternative standards because they believed 
that the longer accumulation times would not be as protective as full 
Subtitle C regulation.
    In contrast, most industry commenters and a few states opposed 
replacing the transfer-based exclusion with alternative hazardous waste 
standards. These commenters argued that the withdrawal would 
significantly hinder reclamation and therefore, the lifecycle 
environmental benefits from recycling, contrary to the resource 
conservation goals of RCRA. One commenter reported that retaining the 
generator-controlled exclusion but not allowing off-site transfers 
limits generator flexibility if, due to unforeseen circumstances (e.g., 
equipment malfunctions), the generator is not able to recycle on-site. 
Several industry commenters opposed the alternative standards, saying 
that the added compliance requirements (e.g., the reclamation plan) are 
likely to outweigh any benefit provided by the relaxed accumulation 
time limits. Two commenters suggested that EPA apply the alternative 
standards to the reclamation facility, but reduce the requirements that 
apply to the generator, given that the majority of the damage cases 
occurred at the recycling facility.
    Commenters also argued that EPA's record does not support repealing 
the transfer-based exclusion, stating that EPA did not present any new 
data that the 2008 DSW transfer-based exclusion would cause 
environmental harm and noting that the 2011 DSW proposal stated that 
facilities currently operating under the exclusion do not appear to 
have any problems from hazardous materials recycling. Comments included 
discussions of the conditions of the 2008 DSW transfer-based exclusion 
and

[[Page 1750]]

why such conditions would be adequate to protect human health and the 
environment, and suggested if EPA was concerned about the conditions, 
the solution would be to strengthen the conditions, not withdraw the 
exclusion. In particular, the Pennsylvania Department of Environmental 
Protection, which oversees 27 of the 65 facilities operating under the 
transfer-based exclusion, commented strongly in favor of keeping the 
transfer-based exclusion and suggested that EPA add a condition that 
recyclers have a RCRA Subtitle C permit.
    EPA's Response: EPA agrees with those comments stating that the 
2008 transfer-based exclusion could result in adverse impacts to human 
health and the environment from discarded material, but disagrees that 
all off-site transfers for reclamation requires Subtitle C hazardous 
waste regulation, because imposing Subtitle C hazardous waste 
regulation would result in regulating hazardous secondary material that 
is currently being legitimately recycled and not discarded as hazardous 
waste. Instead, EPA agrees with those commenters that support retaining 
an exclusion from the definition of solid waste for off-site recycling 
with additional conditions which will address the potential for discard 
happening in the future.
    As discussed in more detail in Section VI of this preamble, EPA has 
identified several regulatory gaps in the 2008 transfer-based exclusion 
that could result in significant risk to human health and the 
environment from discarded material. Specifically, the conditions for 
the transfer-based exclusion for recyclers lack the ability to provide 
oversight before management begins and do not allow public 
participation in the environmental decision-making process, thereby 
decreasing the likelihood of compliance and increasing the potential 
for risk to human health and the environment from discarded hazardous 
secondary material. The evidence of past damage cases at third-party 
recycling facilities leading to significant risk to human health and 
the environment from hazardous secondary materials originally intended 
for recycling and the underlying perverse incentives of the recycling 
market to over-accumulate such hazardous secondary materials intended 
for recycling, resulting in discard of the material, demonstrates the 
need for such additional oversight and public participation. In other 
words, the transfer-based exclusion can exacerbate financial incentives 
for small and/or inexperienced businesses to take in more hazardous 
secondary materials than they actually can use, mishandle it, and even 
go out of business, as shown by the fact that bankruptcies or other 
types of business failures were associated with 66% of the recycling 
damage cases, resulting in multi-million dollar cleanups.
    At the same time, as EPA noted in the 2011 DSW proposal and as was 
echoed in the public comments, EPA has also carefully monitored the 
implementation of the 2008 DSW final rule since it came into effect in 
December 2008, and to date, no environmental problems have been 
reported at facilities claiming the DSW exclusions. As of April 2014, a 
total of 65 facilities are operating under the transfer-based 
exclusion, 56 of which are generators transferring off-site and 7 which 
are reclamation facilities.\44\ All seven reclamation facilities are 
RCRA permitted. (There are no reclaimers without a Subtitle C permit 
currently operating under the transfer-based exclusion). Of the 56 
generators operating under the transfer-based exclusion, 32 generators 
appear to have either started or substantially increased their 
recycling as a result of the 2008 DSW exclusions. These include 
generators that had previously reported in their 2007, 2009, or 2011 
biennial report that they sent their solvents offsite for fuel 
blending, and then notified that they are sending their spent solvents 
for reclamation under the 2008 DSW final rule. In addition, in at least 
five cases, facilities have switched from sending spent pickle liquor 
to landfilling or deep well injection to recycling under the 2008 DSW 
rule. In total, the 2008 DSW notifications document that over 57,000 
tons of hazardous secondary material were reclaimed under the 2008 DSW 
rule during 2011.\45\ In addition, the fact that the Pennsylvania 
Department of Environmental Protection (PA DEP), which oversees 27 of 
the 65 facilities operating under the transfer-based exclusion, 
commented strongly in favor of keeping the transfer-based exclusion, 
supports the idea that an exclusion for off-site reclamation can be 
safely implemented. At the same time, given that the transfer-based 
exclusion has been achieving its intended purpose of encourage safe, 
legitimate recycling, withdrawing the transfer-based exclusion and 
replacing it with RCRA Subtitle C hazardous waste requirements is 
unnecessary and would result in hazardous secondary material that is 
currently being legitimately recycled and not discarded being regulated 
as hazardous waste. Because Subtitle C regulation would be more 
stringent than the current exclusion, if EPA were to finalize the 
alternative Subtitle C standards, Pennsylvania (and other states that 
have adopted the 2008 DSW rule) would have to change their programs and 
regulate this material as hazardous waste, despite the fact that it is 
currently being legitimately recycled and not discarded.
---------------------------------------------------------------------------

    \44\ Some of these facilities are also managing hazardous 
secondary materials under the generator-controlled exclusion.
    \45\ U.S. EPA, EPA's Evaluation of Data Collected from 
Notifications Submitted under the 2008 Definition of Solid Waste 
Exclusions, April 11, 2014.
---------------------------------------------------------------------------

    However, the fact that the comments from PA DEP went on to 
recommend that the transfer-based exclusion be limited to RCRA-
permitted recycling facilities also supports EPA's determination that 
the self-implementing measures of the transfer-based exclusion have the 
potential to result in significant risk to human health and the 
environment. Because all recycling under the transfer-based exclusion 
has been (to date) performed at RCRA permitted facilities, EPA is 
unable to extrapolate what would happen at facilities without a RCRA 
Subtitle C permit if the transfer-based exclusion were fully 
implemented. Given the evidence of past damage cases leading to 
significant risk to human health and the environment from hazardous 
secondary materials originally intended for recycling and the 
underlying perverse incentives of the recycling market to over-
accumulate such hazardous secondary materials intended for recycling, 
resulting in discard of the material, additional oversight of recycling 
beyond the self-implementing measures of the transfer-based exclusion 
are needed to ensure that the hazardous secondary material is 
legitimately recycled and not discarded.
    EPA is therefore replacing the transfer-based exclusion currently 
found in 40 CFR 261.4(a)(24) and (25) with the verified recycler 
exclusion in 40 CFR 261.4(a)(24). This replacement strikes an 
appropriate balance between encouraging the safe and legitimate 
recycling of hazardous secondary materials and allowing the appropriate 
oversight to ensure the exclusion works as intended. It also addresses 
the issue of allowing a generator flexibility to recycle on site or off 
site as circumstances require (as long as the generator notifies under 
both the generator-controlled exclusion and the verified recycler 
exclusion). As discussed in section VI. D of the preamble, the verified 
recycler exclusion retains the conditions from the transfer-based 
exclusion that were intended to help identify hazardous secondary 
material that is legitimate

[[Page 1751]]

recycled and not discarded, and adds conditions that address the 
regulatory gaps identified in the 2011 DSW proposal.

XVI. Major Comments on the Remanufacturing Exclusion

A. List of Eligible Solvents

    In the July 2011 DSW proposal, EPA requested comments on excluding 
18 spent solvents when they are remanufactured back into higher value 
commercial-grade solvents under the conditions of the exclusion. The 
solvents were: Toluene, xylenes, ethylbenzene, 1,2,4-trimethylbenzene, 
chlorobenzene, n-hexane, cyclohexane, methyl tert-butyl ether, 
acetonitrile, chloroform, chloromethane, dichloromethane, methyl 
isobutyl ketone, N,N-dimethylformamide, tetrahydrofuran, n-butyl 
alcohol, ethanol, and methanol. EPA chose these 18 spent solvent 
chemicals to limit the exclusion to higher-value materials and 
processes that resemble manufacturing more than waste management. EPA 
also requested comment on whether there are other solvents, chemicals 
or other types of hazardous secondary materials that should be included 
in the remanufacturing exclusion. In particular, EPA requested comments 
on opportunities for remanufacturing other types of non-renewable 
hazardous secondary materials, such as metal catalysts or other types 
of metal-bearing hazardous secondary materials.
Comments: List of Eligible Solvents
    Many commenters supported the current list of spent solvents and 
did not support expanding the list in any way. These commenters 
cautioned against expanding the list of chemicals until EPA could 
determine the effectiveness of this exclusion. Several other comments 
did not focus on adding solvents or other hazardous secondary 
materials, but focused on the toxicity or market structure of the 18 
listed spent solvents. One commenter questioned the claim of ``higher-
value'' for chloroform, chloromethane, ethyl benzene, xylene, methanol 
and MTBE. Another commenter stated they no longer use many of the 18 
listed spent solvents because the solvents are defined as a toxic 
substance and a hazardous air pollutant under other environmental 
statutes. The commenter continued by saying that members of their 
association now use more ``environmentally friendly'' solvents.
    The remaining commenters discussed adding solvents or other 
hazardous secondary materials. Some commenters suggested expanding the 
solvent list to include benzene, acetone, isopropyl alcohol, or all 
solvents used in reactors, extractors, purifiers or blending equipment 
in pharmaceutical, organic, chemical, or plastics and resins 
manufacturing. Finally other commenters suggested adding additional 
hazardous secondary materials that were not solvents. The hazardous 
secondary materials suggested for addition were metal-bearing hazardous 
secondary material, F006 and spent hydroprocessing catalysts.
EPA's Response: List of Eligible Solvents
    EPA agrees with those commenters who supported the remanufacturing 
exclusion and limiting it to the list of 18 spent solvents, at least at 
this point in time. EPA determined that these 18 spent solvents are 
good candidates for remanufacturing because they are used in large 
volumes as processing aids and because there are existing markets for 
all these solvents to be remanufactured to serve similar purposes to 
those of the original commercial-grade materials. EPA does not agree 
with comments that suggested adding chemicals to the list, but did not 
provide specific data or information that would lead the Agency to add 
these chemicals to the list at this point in time. While EPA may expand 
the list of eligible hazardous secondary materials for the 
remanufacturing exclusion based on additional data (see section VII of 
this preamble), the currently available information only supports the 
inclusion of the proposed list of 18 spent solvents.
    EPA disagrees with those commenters who did not support including 
many of the identified solvents on the list because of their toxicity. 
In the 2011 DSW proposal, EPA acknowledged that the eligible solvents 
have suspected or recognized hazardous health effects associated with 
their manufacture, processing, and use.\46\ Although EPA and industry 
have been working to find substitutes for the more hazardous of these 
solvents, or find ways to use less of them, this has not yet been 
widely achieved.<SUP>47 48</SUP> With respect to the pharmaceutical 
sector in particular, complex chemical processes already registered 
with the Food and Drug Administration are involved, and EPA has found 
this a very challenging area to address in terms of chemical 
substitution and process changes. In addition, some of these solvents 
are building blocks and primary intermediate chemicals, making them 
difficult to replace. Until lower-risk substitutes for these solvents 
are found, it is helpful from a health risk standpoint to minimize the 
volume of solvents manufactured and to limit exposure to those already 
manufactured. This is something that the remanufacturing exclusion can 
achieve.
---------------------------------------------------------------------------

    \46\ Allen, D., Shonnard, D., Green Engineering: Environmentally 
Conscious Design of Chemical Processes, Risk Concepts, chapter 2, 
pgs 35-62, Austin, S., U.S. EPA Editor, Published by Prentice-Hall, 
2001.
    \47\ For information on U.S. EPA's Green Chemistry Program, see 
http://www.epa.gov/gcc/.
    \48\ Information on the American Chemical Society's Green 
Chemistry Institute's Pharmaceutical Roundtable is available via the 
ACS Web site http://portal.acs.org/portal/acs/corg/content.
---------------------------------------------------------------------------

B. List of Eligible Industry Sectors

    Under the 2011 DSW proposal, EPA identified the operations of four 
manufacturing sectors as candidates for the remanufacturing exclusion. 
The eligible sectors were pharmaceutical manufacturing (NAICS 325412), 
basic organic chemical manufacturing (NAICS 325199), plastics and 
resins manufacturing (NAICS 325211), and the paints and coatings 
manufacturing sector (NAICS 325510). These four sectors were selected 
because their primary business is manufacturing rather than waste 
management. Furthermore, these sectors are closely associated with the 
chemical functions identified in the remanufacturing exclusion and 
currently use a high volume of the solvents identified for the 
functional purposes included in this exclusion. EPA also asked for 
comment on whether there were other industry sectors that should be 
included in the remanufacturing exclusion.
Comments: List of Eligible Industry Sectors
    Several commenters suggested specific industries for EPA to add to 
the remanufacturing exclusion. The suggested industries were K061 
recyclers, the biofuels sector, recyclers with a part B permit like 
Safety-Kleen, petroleum refineries (NAICS 324110), petrochemical 
manufacturers (NAICS 325110), synthetic rubber manufacturers (NAICS 
325212), fiber glass manufacturers, and electronic manufacturers. K061 
recyclers and the biofuels sector were suggested due to their active 
markets and potential impacts on the environment if hazardous secondary 
materials were managed improperly. Companies, such as Safety-Kleen, 
with a part B permit, were suggested because these recyclers encourage 
sustainable materials management through remanufacturing. Petroleum 
refineries (NAICS 324110), petrochemical manufacturers (NAICS 325110) 
and synthetic rubber

[[Page 1752]]

manufacturers (NAICS 325212) were suggested due to their significant 
generation of spent solvents. The commenter believed these industry 
sectors' spent solvents should be eligible just like the solvents from 
the proposed industry sectors. Another commenter suggested adding fiber 
glass manufacturers because they operate refractory recycling programs 
and refractories are higher-value hazardous secondary materials. 
Finally, the electronics sector was recommended for its recycling of 
precious metals.
EPA's Response: List of Eligible Industry Sectors
    EPA acknowledges that the industry sectors that were nominated for 
inclusion in the remanufacturing exclusion participate in recycling 
activities; however, these sectors' recycling activities do not include 
the types of practices or functions that were within the scope of the 
remanufacturing exclusion. Under the remanufacturing exclusion, a 
manufacturer may send their hazardous secondary material to another 
manufacturer, from one of the permissible industry sectors, provided 
that the remanufacturer uses the hazardous secondary material in one of 
the four permissible functions. The commenters all suggested industries 
that send their hazardous secondary materials to a third party, who is 
not necessarily a manufacturer, but a facility that would recover the 
solvent or other hazardous secondary material and who would then sell 
the recycled product to another person.
    As discussed in the market forces study, it is generally in the 
best interest of commercial third party recyclers to maximize the 
amount of hazardous secondary material they can accept to increase 
profits. This market structure creates a perverse market incentive to 
over-accumulate hazardous secondary materials, which can result in 
discard, which the remanufacturing exclusion seeks to avoid. In 
contrast, the market forces study shows that facilities engaged in 
industrial intra-company recycling, where companies generate hazardous 
secondary materials as by-products of their main production processes 
and recycle the hazardous secondary materials used in production, have 
more flexibility in waste management decisions than a commercial 
recycler does. When a commercial recycler's primary or entire income is 
from accepting hazardous secondary materials for recycling and selling 
recycled products, there is no economic alternative if the market 
crashes to stay in business unless the company can afford the cost of a 
hazardous waste management permit and the cost of becoming a hazardous 
waste disposal facility. Remanufacturers, on the other hand, as a type 
of intra-industry recycler, profit primarily from the sale of their 
product and can switch their inputs between raw materials and hazardous 
secondary materials if market conditions shift.
    It is also not clear that the suggested industry sectors will know 
what function their hazardous secondary materials will be used for 
after remanufacturing. As discussed previously, the remanufacturing 
exclusion encourages higher-value materials to be remanufactured and 
then used in high-value processes again. Furthermore, this exclusion 
focuses on the functions of aiding chemical manufacturing and 
processing because the solvents performing these functions retain their 
original physical and chemical properties. In these functions, the 
solvents are not contaminated by substances, such as inks and greases, 
which are difficult to separate, but only mixed with pure product 
ingredients, from which they can be separated readily in a commercially 
feasible manner. Unfortunately, the suggested industry sectors provided 
by commenters do not appear to coincide with the intent of 
remanufacturing hazardous secondary materials that retain their 
original physical and chemical properties. Therefore, these additional 
sectors will not be included in the remanufacturing exclusion.
    However, EPA notes that these sectors would be eligible to 
participate in the verified recycler exclusion (40 CFR 261.4(a)(24)) if 
they meet the conditions of that exclusion.

C. Regulatory Language

    In the July 2011 DSW proposal, EPA did not specifically include 
regulatory language for the remanufacturing exclusion, but EPA did 
include a streamlined version of the scope, applicability and 
conditions of the exclusion followed by a very detailed explanation of 
the exclusion that included the reasoning for each condition.
Comments: Regulatory Language
    Many commenters said they were unable to comment on the 
remanufacturing exclusion because there was no regulatory language 
included in the proposal. Almost all commenters supported the concept 
of the remanufacturing exclusion, but requested that EPA re-propose the 
remanufacturing exclusion in a separate rulemaking with regulatory 
text, so commenters could accurately comment on the exclusion.
EPA's Response: Regulatory Language
    The preamble language discussing the remanufacturing exclusion 
contained adequate detail and information to allow comment on the 
proposed remanufacturing exclusion. In the July 2011 DSW proposal, the 
remanufacturing exclusion was presented in a narrative form that 
closely resembles the regulatory language being finalized today. The 
proposed rule also included a large amount of detail on the scope, 
applicability, and conditions of the remanufacturing exclusion. The 
proposal laid out exactly what solvents, industry sectors, and chemical 
functions were permissible in the remanufacturing exclusion. The 
proposal then clearly stated what was required for the notification, 
remanufacturing plan, records of shipments and confirmations of 
receipts, tanks and container management standards and the speculative 
accumulation requirement. EPA has determined that between the narrative 
and detailed explanation of the remanufacturing exclusion, commenters 
were provided more than enough information to comment on the 
remanufacturing exclusion, and thus, we are finalizing it in today's 
final rule.

XVII. Major Comments on Legitimacy

A. Codifying Legitimacy for All Recycling

Comments: Codification of Legitimacy
    Comments from industry across the board (including waste management 
companies) vehemently opposed codifying the legitimacy provision at 
Sec.  260.43 for the pre-2008 recycling exclusions and exemptions, 
arguing that this action, combined with making factor 3 and factor 4 
mandatory, is a drastic change in policy and likely will end much of 
the current recycling that is occurring under RCRA. Industry commenters 
argued that this would be a huge administrative burden with little 
environmental benefit and that recycling has been taking place under 
these exclusions largely without problems for many years. Some industry 
commenters expressed their opinion that the codified legitimacy factors 
are significantly different than EPA's existing legitimacy policy and 
therefore, the legitimacy analysis that would have to be undertaken is 
not substantively the same. Other commenters opined that applying the 
codified legitimacy standard to the pre-2008 exclusions and exemptions 
would function as a disincentive to recycling by adding

[[Page 1753]]

paperwork burden and increasing compliance difficulties, especially for 
generators who would be exposed to potential RCRA enforcement due to 
subsequent noncompliance by the recycler. One commenter stated that 
inspectors could miss the more obvious cases of sham recycling because 
Agency resources would be expended in reviewing the large amount of 
required documentation and inspecting the more frequently used pre-
existing exclusions, such as the use/reuse exclusion in 261.2(e) and 
the closed loop recycling exclusion in 261.4(a)(8) to the detriment of 
investigating other potentially more problematic recycling.
    Many of the specific industry commenters on this issue were scrap 
metal recyclers who argued that although they have been legitimately 
recycling for decades, expecting them to prove that their recycling 
operations were legitimate for the first time would be prohibitively 
expensive, time-consuming and unworkable. The scrap metal recycling 
industry had particular issues with factor 4 as drafted in the 2011 DSW 
proposal and had many questions on how to do the comparable 
demonstration.
    With respect to the states, a number of states were supportive of 
codifying one legitimacy standard for all hazardous secondary material 
recycling activities. They argued that codifying the legitimacy 
provision would give industry and states a definitive standard to 
evaluate recycling and that industries operating under the pre-2008 
recycling exclusions and exemptions should not have any problems 
documenting compliance with the legitimate recycling provision of Sec.  
260.43, if their recycling is truly legitimate. On the other hand, a 
number of states, the Association of State and Territorial Solid Waste 
Management Officials (ASTSWMO), and the Northeast Waste Management 
Officials' Association (NEWMOA) all expressed concerns over applying 
the codified legitimacy standard to certain long-standing recycling 
exclusions, including lead-acid batteries, circuit boards, scrap metal, 
and closed loop recycling, with one state arguing that this additional 
regulatory burden was not necessary for the 2008 pre-existing 
exclusions and exemptions.
    Several environmental and community organizations supported 
codification of the legitimate recycling provision for all hazardous 
secondary materials recycling, but did not provide a detailed 
explanation of their position. In addition, whereas one environmental 
organization acknowledged that EPA did not solicit comment on the 
elimination of these exclusions, this organization stated that they 
believed a re-examination of all of the exclusions by the Agency, 
including the pre-2008 exclusions and exemptions should be conducted as 
soon as possible.
EPA's Response: Codification of Legitimacy
    In response to the many comments that were submitted, the Agency is 
making a number of changes to the 2011 DSW proposal. Specifically, EPA 
is codifying a general statement in Sec.  261.2(g) that makes it clear 
that a hazardous secondary material found to be sham recycled is 
discarded and thus, is a solid waste. However, we are not codifying a 
reference to the legitimacy provisions at 40 CFR 260.43 in each of the 
pre-2008 recycling exclusions/exemptions, as we proposed to do in the 
2011 DSW proposal. On further reflection, we have determined that the 
sham recycling prohibition in Sec.  261.2(g) more clearly defines the 
Agency's view on legitimate recycling and the pre-2008 recycling 
exclusions and exemptions. We also agree with those commenters who 
pointed out that we generally looked at the legitimacy of the recycling 
activity when we promulgated the material-specific or industry-specific 
exclusions and, therefore, we are not requiring facilities to revisit 
past legitimacy determinations. However, by codifying a prohibition on 
sham recycling that applies to all hazardous secondary materials being 
recycled, we are confirming that we expect anyone operating under a 
recycling exclusion or exemption to do so legitimately. (As we discuss 
later in this section and in section VIII, the Agency also has made a 
number of other revisions to the legitimacy standard to address the 
concerns raised in the comments.)
Comments: Effect on Existing Legitimacy Determinations
    Many industry commenters argued that EPA or the states have already 
made legitimate recycling determinations for their specific recyclable 
materials. Some commenters also noted that EPA considered legitimacy at 
the time their material-specific exclusion was promulgated and had 
already made legitimacy determinations for those recyclable materials 
(e.g., the zinc fertilizer exclusion, precious metal exclusion, etc.). 
These commenters also argued that as part of rulemaking for the 
material-specific exclusions, the Agency had determined what conditions 
were necessary to ensure legitimacy. Some argued that overlaying the 
general legitimacy factors on the 2008 pre-existing conditional 
exclusions and exemptions is unnecessary and duplicative and would 
create significant disincentives to recycling.
EPA's Response: Effect on Current Legitimacy Determinations
    In response to the concerns expressed that the codified legitimacy 
factors would lead to practices previously considered legitimate now 
being considered sham operations, in general, the Agency is clarifying 
that it does not intend for the current recycling legitimacy 
determinations to change due to the codification of the legitimacy 
factors. We consider the factors we are finalizing today to be 
consistent with the criteria in the Lowrance Memo and previous preamble 
statements on legitimate recycling. Therefore, we generally do not 
anticipate that implementing agencies will revisit past legitimacy 
determinations. If recycling was considered legitimate under the 
Lowrance Memo, its status should not change as a result of today's 
rule. To make its intent more clear, the Agency is codifying a 
prohibition against sham recycling in Sec.  261.2(g) instead of adding 
a provision in each of the pre-2008 exclusions and exemptions referring 
to the legitimacy provision in Sec.  260.43. This codification will 
give implementing agencies a clear regulatory statement that can be 
used to enforce against sham recyclers, yet not require the vast 
majority of recyclers that are performing legitimate recycling under 
the pre-2008 exclusions and exemptions to revisit previously-made 
legitimacy determinations.
    Any existing legitimate recycling determination should not change 
due to the codification of the legitimacy factors. In addition, 
examples that were provided in the public comments helped inform our 
decision-making and led us to revise factor 4 significantly to address 
this issue. The final regulatory text is consistent with the pre-
existing legitimacy guidance and the manner in which legitimacy 
determinations have been made by the EPA Regions and authorized states. 
Thus, we do not expect implementing agencies to revisit past legitimacy 
determinations.
    Regarding the existing exclusions and exemptions in the 
regulations, EPA acknowledges that, in establishing a specific 
exclusion or exemption, we have already determined in the rulemaking 
record that the specific recycling practice is excluded from the 
definition of solid waste provided all the conditions of the rule are 
met. However, the Agency has always enforced its rules on the basis 
that any recycling must be legitimate (See U.S. v.

[[Page 1754]]

Self, 2 F.3d 1071, 1079 (10th Cir. 1993); U.S. v. Marine Shale 
Processors, 81 F.3d 1361, 1366 (5th Cir. 1996); Marine Shale Processors 
v. EPA, 81 F.3d 1371, 1381-83 (5th Cir. 1996)). This is meant to 
prevent a company from claiming to be operating under an existing 
exclusion or exemption and simply using that as a way to avoid full 
RCRA Subtitle C regulation. Thus, since EPA is not modifying the 
existing exclusions and exemptions, there is no change regarding 
legitimacy determinations, except that the factors are now codified. A 
company's ability to claim a recycling exclusion or exemption has 
always depended on the recycling being legitimate.

B. Making All Four Legitimacy Factors Mandatory

Comments: Mandatory Factors
    For the most part, states commenting on this part of the proposal 
supported all the legitimacy factors being mandatory (the exceptions 
being Tennessee and Louisiana), although several states went on to say 
that they either opposed the petition process or are concerned about it 
for the following reasons: (1) The resources necessary for addressing 
incoming petitions, (2) the possibility of using the petition process 
as a potential backdoor out of legitimacy, and/or (3) the potential for 
the petition process to lead to inconsistencies among states on 
legitimacy determinations. Most states have supported making all four 
factors mandatory in past proposals and continue to do so here, arguing 
that codifying the legitimacy factors in the rule (instead of only in 
rule preamble and in policy documents) will provide clearer instruction 
to the regulated community and will strengthen the ability of state 
programs to enforce the criteria in situations where recycling is not 
legitimate. This, the states claim, will reduce the potential risk to 
human health and the environment from mismanagement of hazardous 
secondary materials and from elevated concentrations of contaminants in 
recycled products. They also argue that making all four factors 
mandatory will remove a serious flaw in the enforceability of 
legitimacy. Other commenters noted that requiring all four legitimacy 
factors to be met is critical to ensure reclamation is being conducted 
at a qualified facility and to minimize the potential for creation of 
future damage cases. Most states found it hard to conceive of a 
legitimate recycler that would not be able to satisfy all four factors.
    Although some commenters representing the hazardous waste recycling 
industry did support making all the factors mandatory, the majority of 
industry commenters did not support this provision. Those commenters 
who did support a requirement that all four factors be met argued that 
this structure would be fairer and more enforceable. On the other hand, 
many of the commenters that argued against making all factors mandatory 
stated that this would discourage much of the current recycling and 
would be too hard to meet. Commenters particularly singled out factor 4 
(toxics along for the ride) as problematic for implementation. 
Specifically, we got comments from multiple members of the mining and 
mineral processing industry arguing that factor 4 is not applicable to 
their industry and from scrap metal recyclers asking how factor 4 would 
apply at their facilities.
    Many commenters also argued that the petition process was not an 
adequate mechanism for those processes that do not meet all four 
factors because there will be too many petitions for the states and EPA 
to be able to process and because shutting down recycling operations 
during the time spent waiting for petitions to be processed would be 
very expensive and wasteful.
    Another important consideration is what the Agency has learned 
since implementing the 2008 DSW final rule, which finalized the 
legitimacy factors as a condition of the generator-controlled and 
transfer-based exclusions, with two factors that are mandatory and two 
factors that must be considered. Since that rule became effective, the 
Agency has become aware of a misconception regarding the ``to be 
considered'' factors. It has become clear that some industry 
stakeholders believe those factors to be less important, stating that 
they are optional or even can be ignored. This was not the Agency's 
intention at all. The Agency tried to make it clear that they must be 
considered and could, in fact, indicate sham recycling on their own. 
However, through public comment and stakeholder meetings, we have 
repeatedly heard that industry views these factors as optional.
    Another argument against making all the factors mandatory 
requirements is that the overall determination is made on a case-by-
case basis, which is often facility-specific, and not all legitimate 
recycling can fit into such a rigid system. Commenters argue that 
making all four factors mandatory removes the flexibility necessary for 
the broad universe of hazardous secondary materials being recycled.
EPA's Response: Mandatory Factors
    After much consideration and review of the public comments, the 
Agency has decided to make all four legitimacy factors mandatory with 
adjustments to the factors themselves to account for the variability 
and diversity of legitimate hazardous secondary material recycling. As 
explained above in sections VIII.B.5 and VIII.B.6, we have adjusted the 
regulatory language of factor 4 to build in more flexibility for 
meeting this factor,\49\ but are also making it clear in the regulatory 
language that it is important that each factor be met, except as 
otherwise noted.\50\ Since finalizing the legitimacy factors in the 
2008 DSW final rule, our experience with implementation has made us 
realize the importance of requiring all factors be met. Even though we 
stressed the importance of considering each factor in the 2008 DSW 
final rule, many of the stakeholders are under the misimpression that 
the factors that were to be considered could actually be ignored. We 
did not mean to give the impression that factor 3 and factor 4 were 
optional and thus, have decided that the best way to give the proper 
weight to these factors is to make them mandatory with additional 
flexibility to address the various recycling scenarios.
---------------------------------------------------------------------------

    \49\ In addition, we are also finalizing in the regulatory 
language the additional flexibility that was proposed in factor 3 to 
the legitimacy provision.
    \50\ As we discuss in Section VIII.B.6.c, the Agency has 
included a self-implementing process that would allow the person 
performing the recycling to document, certify, and notify the 
appropriate Regional Administrator that even though the hazardous 
secondary material does not meet factor 4, the recycling is still 
considered legitimate.
---------------------------------------------------------------------------

    In addition, instead of a petition process for those legitimate 
recycling scenarios that don't meet factor 4, we are finalizing a 
documentation, certification, and notification process. We continue to 
find that legitimacy determinations are best made on a case-by-case 
basis, which has always been the case, with the facts of a specific 
recycling situation in hand. If a person has any questions as to the 
legitimacy of a particular recycling activity, he can always approach 
the appropriate regulatory agency for assistance in making a legitimacy 
determination.

C. Documentation of Legitimate Recycling

    When the Agency codified the legitimacy standard in the 2008 DSW 
final rule, we did not require specific documentation regarding the 
legitimate recycling determination. In the 2011 DSW proposal, in 
addition to proposing that the legitimacy standard apply to all

[[Page 1755]]

hazardous secondary material recycling and that all four legitimacy 
factors must be met, EPA proposed a new documentation requirement for 
persons performing the recycling. We proposed that the recyclers 
include a narrative description of how their hazardous secondary 
materials are legitimately recycled and that this documentation be 
maintained on-site for the duration of the recycling operations and for 
three years after the recycling operations cease. However, as explained 
above in section VIII.C.2, we are only finalizing the requirement to 
document a legitimate recycling determination for those recyclers 
operating under the generator-controlled exclusion and for those 
recyclers that are legitimately recycling, but do not meet factor 4--
that is, they must document why the recycling operation is legitimate 
even if they do not meet factor 4.
Comments: Documentation
    ASTSWMO, NEWMOA, and most other states supported requiring 
documentation of legitimate recycling for both the generator and 
recycler (with exceptions noted in their comments about certain long-
standing recycling exclusions and exemptions, including lead-acid 
batteries, circuit boards, scrap metal, and closed loop recycling). 
Most state environmental agencies cited the ability to implement and 
enforce the RCRA recycling program as the primary reason why 
documentation is needed. However, a few states did not support 
requiring documentation for any of the pre-2008 recycling exclusions 
and exemptions. One state agreed that some documentation may be 
necessary for inspections, but also stated that common business records 
would likely suffice in most cases. An environmental organization 
coalition suggested we provide a consistent format and require 
documentation of both generators and recyclers. Industry generally 
opposed the documentation requirement and felt that it would pose 
significant practical challenges, especially for factor 4. Some 
industry commenters felt that ``up-front'' documentation is not 
necessary since EPA can rely on Sec.  261.2(f) for documentation. Other 
commenters argued that for companies that rely heavily on the existing 
exclusions and exemptions, it would be easy to inadvertently miss 
documenting every instance (i.e., closed loop recycling) and the 
consequences could be severe. In fact, one industry association argued 
that documentation may actually cause more non-compliance due to the 
huge administrative burden, especially for large facilities that 
utilize many of the recycling exclusions and that the voluminous 
paperwork could result in inspectors missing more obvious sham 
recycling.
    Other commenters objected to any recordkeeping requirements 
documenting that a recycling activity is legitimate, arguing the policy 
is not new so, therefore, no new documentation should be required. They 
argued that since EPA already believes most recycling is legitimate, 
requiring documentation for all recycling is overly burdensome, 
expensive, and not necessary. Some industry commenters argued that EPA 
offered no evidence in the record that documenting the legitimacy of a 
recycling practice would have any additional environmental benefit. A 
few commenters asserted that requiring documentation for all recycling 
might actually cause more non-compliance, especially for the more 
frequently used recycling exclusions, such as the use/reuse and closed-
loop recycling exclusions.
    Finally, there was ample confusion in the comments on who would be 
required to put together and provide the documentation. The Agency 
proposed that the requirement would apply to the ``persons performing 
the recycling.'' That is, if the generator sent his hazardous secondary 
materials off-site to a recycler, then the recycler would be the one 
responsible for maintaining the documentation. If, on the other hand, 
the generator recycled his hazardous secondary materials on-site, then 
the generator would be responsible for documenting that the recycling 
activity was legitimate. However, some commenters still expressed 
confusion over who would be responsible for the documentation.
EPA's Response: Documentation
    As discussed previously, the Agency has determined that, for 
purposes of the existing pre-2008 recycling exclusions and exemptions, 
documentation is not required, unless the facility has determined it is 
legitimately recycling, but does not meet Factor 4. In the vast 
majority of cases, recycling under the existing exclusions is 
legitimate and documentation is not necessary. The Agency has 
previously acknowledged the legitimacy of these recycling practices 
when it first promulgated the material-specific and industry-specific 
exclusions and exemptions, when at that time it took into consideration 
the legitimacy of the recycling practices. After review of the public 
comment, the Agency has determined that routine documentation of 
legitimacy is an unnecessary burden for persons legitimately recycling 
under the pre-2008 recycling exclusions and exemptions.
    However, the Agency is requiring documentation on legitimacy 
determinations under two circumstances: (1) Persons operating under the 
generator-controlled exclusion originally finalized in the 2008 DSW 
final rule, and (2) persons legitimately recycling under any recycling 
exclusion or exemption where the hazardous constituents in the recycled 
products are not comparable or are unable to be compared to those in 
analogous products (unless the recycled product meets widely recognized 
commodity specifications or the hazardous secondary material is 
returned to the production process). In these cases, the persons 
recycling would be required to keep documentation of the legitimacy of 
their recycling.
    Specifically, the Agency has determined that requiring 
documentation under the generator-controlled exclusion is appropriate 
because this exclusion is generic and can be used by a wide variety of 
industries recycling any of a number of hazardous secondary materials. 
In addition, as explained above in section VIII.B.6.c, the Agency has 
also determined that documentation is necessary for those rare cases of 
legitimate recycling that has significantly higher levels of hazardous 
constituents in the recycled product than in an analogous product, or 
has no analogous product, has no widely-recognized commodity 
specifications for the recycled product, and is not returned to the 
production process. In those cases, due to the self-implementing nature 
of the legitimacy determinations, it is important that the recycler 
perform the proper assessment and document how the recycling is still 
legitimate.
    Finally we would note that 40 CFR 261.2(f) applies whenever a 
person is claiming that a hazardous secondary material is not a solid 
waste, which oftentimes is because the material is being recycled. 
Section 261.2(f) states that, in the context of an enforcement action 
to implement Subtitle C of RCRA, a person claiming that a material is 
not a solid waste or is conditionally exempt from regulation is 
responsible for showing that they meet the terms of the exclusion or 
exemption and must provide appropriate documentation to show why they 
are eligible. For the legitimacy requirement finalized today, under 
Sec.  261.2(f), in the event of an enforcement action, persons claiming 
that their recycling activity is legitimate would have the burden to 
provide documentation showing how the

[[Page 1756]]

recycling meets all four factors, except as otherwise noted. That is, 
they would need to show how the recyclable hazardous secondary 
materials provide a useful contribution to the recycling process and 
are stored as valuable commodities, and how the product of the 
recycling activity is valuable and comparable to a legitimate product.

D. Factor 3: Language and Implementation

Comments: Factor 3
    Many commenters supported the regulatory language revisions to 
factor 3, particularly the following additional italicized language: 
``Where there is an analogous raw material, the hazardous secondary 
material, must be managed, at a minimum, in a manner consistent with 
the management of the raw material or in an equally protective 
manner.'' Some commenters argued, however, that the real change to 
factor 3 was the proposed revision to the contained standard because 
the second part of factor 3 reads: ``Where there is no analogous raw 
material, the hazardous secondary material must be contained.'' These 
commenters expressed concern that by making factor 3 mandatory and by 
revising the contained definition, the Agency was in effect making 
factor 3 more stringent.
EPA's Response: Factor 3
    The Agency disagrees with the comments that the revised contained 
standard is more stringent and thus, results in a more stringent factor 
3. First, as noted by the commenters, the contained standard only 
applies in cases where there is no analogous raw material to compare 
the management of the hazardous secondary material to. More 
importantly, however, as explained in more detail is section V, while 
the revised contained standard is more clear and more definitive, it is 
not more stringent, but is consistent with the contained standard 
previously discussed and described in the preamble to the 2008 DSW 
final rule. Thus, EPA finds that overall the revisions to factor 3 are 
reasonable and consistent with the Agency's previous positions on 
legitimacy. Therefore, the Agency is finalizing the regulatory language 
for factor 3 as proposed and has determined the added flexibility will 
allow existing legitimate recycling to continue without any negative 
impact on environmental protection.

E. Factor 4: Language and Implementation

    In the 2011 DSW proposal, EPA proposed to change the wording within 
the regulatory language for factor 4 from ``significant'' and 
``significantly elevated'' to ``comparable to or lower than'' and 
explained that this language more clearly reflects the intent of this 
factor. In addition to this language change, other proposed changes to 
the legitimacy provision impact the design and implementation of factor 
4. The proposal to make all four legitimacy factors mandatory led many 
commenters to discuss specific concerns they had about factor 4 and 
what problems they would have meeting the factor as it was proposed. In 
this section, EPA examines some of those comments, as well as provides 
the Agency's responses and the changes that were made to the proposal 
in this final rule to make factor 4 more workable.
    In concert with many of the comments about the difficulties of 
meeting the proposed factor 4, EPA also received many comments about 
its proposed petition process for when a recycling process does not 
meet either factor 3 or factor 4. EPA is thus, also addressing those 
comments in this section of the preamble because the documentation, 
certification and notification process that will be replacing the 
proposed petition process is found within factor 4 of the legitimacy 
provision.
Comments: ``Comparable''
    EPA's proposal to change the language within factor 4 that 
describes the comparison of levels of contaminants between products 
made from recycling of hazardous secondary materials and products using 
raw materials was supported by most of the states that commented on 
factor 4 and opposed by many of the industry commenters. The states 
that supported the change stated that the term ``comparable'' is better 
because it is more specific, though several of these commenters also 
asked for further guidance on the language.
    Industry commenters who opposed this change to factor 4 stated that 
there was not a good reason in the preamble for the change in the 
language and that they do not think that ``comparable'' means the same 
thing as ``not significantly higher,'' arguing that if the terms mean 
the same thing there was no reason for EPA to change them. Several 
commenters argued that this change in language makes the factor more 
stringent and/or less flexible.
EPA's Response: ``Comparable''
    EPA is finalizing the proposed language in this factor and using 
the term ``comparable'' in discussing levels of hazardous constituents. 
This term means any contaminants present in the product made from 
hazardous secondary materials are present at levels comparable to or 
lower than the levels in the analogous product, although levels can be 
slightly higher than those found in the analogous product, but must be 
within a small acceptable range. This change in language is not a 
change from its long-standing policy and it is also consistent with the 
legitimacy provisions in the Identification of Non-Hazardous Secondary 
Materials that are Solid Wastes final rule (76 FR 15456, March 21, 
2011).
    In response to comments requesting further guidance and those that 
state that this language change is making factor 4 too stringent, first 
we have repeated in section VIII of the preamble the examples that we 
included in the 2008 DSW final rule which explains how the Agency 
envisions this factor working. Moreover, the additional changes that it 
made to factor 4 in this final rule, describing several situations 
under which a product of a recycling process would be considered 
comparable to a legitimate product or intermediate, address both these 
concerns. As EPA determined in previous rulemakings, promulgating an 
exact numerical cut-off for what would be considered ``comparable'' is 
not practicable for the legitimacy provision because it applies to a 
wide variety of recycling scenarios. EPA may provide future guidance on 
the application of this provision if needed.
Comments: Uncertainty About Compliance
    Many of the comments that EPA received from industry regarding 
factor 4 stated that facilities are concerned about this factor, 
particularly if it were to become mandatory, because it would be 
difficult to determine if a given recycling process is in compliance. 
Many of these commenters stated the high cost of testing for 40 CFR 
part 261 Appendix VIII constituents as one of their concerns.
EPA's Response: Uncertainty About Compliance
    First, we are reiterating in this final rule that testing of the 
recycled product is generally not required under factor 4 of 
legitimacy. A generator can use its knowledge of the materials it uses 
and of the recycling process to make legitimacy determinations, 
although they may choose to test if they are uncertain if the product 
from their hazardous secondary materials contains elevated levels of 
hazardous constituents when compared to non-recycled products. In 
addition, factor 4

[[Page 1757]]

as finalized today presents no greater compliance issues than it would 
under the 2008 DSW final rule, because under the 2008 legitimacy 
definition, a facility still had to consider the hazardous constituents 
in Appendix VIII of part 261 in determining whether factor 4 is met, 
and be able to demonstrate why recycling was still legitimate even if 
it was not met. Furthermore, as we have noted elsewhere, we have made 
certain revisions to factor 4, in response to comments, for facilities 
to determine that they are in compliance with this factor. 
Specifically, the provisions in Sec.  260.43(a)(4) state that products 
that meet widely recognized commodity standards and specifications 
would be considered comparable and meet factor 4 and hazardous 
secondary materials that are recycled back into the original generating 
process would be considered comparable and also meet factor 4, which is 
intended to make compliance with factor 4 simpler across many of the 
industries in which much industrial recycling takes place.
Comments: No Analogous Product To Compare
    Many of the comments regarding factor 4, including many of the 
examples that were sent in to describe the difficulties of complying 
with factor 4, described recycling situations in which there is no 
analogous product and argued that it would be very difficult to meet 
the proposed factor 4 in a situation where there is no analogous 
product.
EPA's Response: No Analogous Product To Compare
    After examining the comments submitted, including the examples 
provided, EPA agrees with the commenters that the design of proposed 
factor 4 did not adequately take into consideration recycling scenarios 
that either always includes some form of recycled hazardous secondary 
material or that would be considered closed loop recycling. As a result 
of these comments, EPA modified the structure of factor 4 to include 
provisions specifically for the situation where there are no analogous 
products, (found in Sec.  260.43(a)(4)(ii)). The finalized provisions 
state that when there is no analogous product, the product of the 
recycling process is comparable to a legitimate product or intermediate 
when the product is a commodity meeting widely recognized commodity 
standards and specifications or when the hazardous secondary materials 
being recycling are returned to the original process or processes from 
which they were generated.
    This change to factor 4 provides the necessary flexibility to those 
persons who recycle hazardous secondary materials for which there is 
not an analogous product for comparison. However, EPA has also included 
a documentation, certification, and notice provision for cases that do 
not fit these two scenarios. Under this provision, the recycler can 
perform an assessment of the hazardous secondary material and still 
determine that its recycling is legitimate despite not meeting factor 
4. This finding must be documented and certified by a responsible 
facility official and a copy kept on-site for as long as the recycling 
continues, and for 3 years after the recycling operations cease. Also, 
a notice of this finding must be sent to the appropriate Regional 
Administrator (or State Director, in an authorized state), using the 
Site ID form.
Comments: Petition Process
    As stated above in this section, many commenters argued that the 
petition process was not an adequate mechanism for relief for those 
processes that do not meet all four factors and therefore, they opposed 
the proposed petition process. They argued that there would be too many 
petitions for the states and EPA to process efficiently, which could 
result in shutting down recycling operations during the time spent 
waiting for petitions to be processed, which would be very expensive 
and wasteful. States were particularly concerned about the amount of 
resources that would be needed to process the incoming petitions.
EPA's Response: Petition Process
    In response to the arguments presented by the commenters in 
opposition to the petition process and the concerns with how 
implementation of the petition process could impact recycling, EPA is 
not finalizing the petition process in this final rule. Instead, EPA 
has made two changes to its proposal to account for the situations that 
the petition process was meant to cover. The first is the additional 
provisions in factor 4 (already discussed above in this section) that 
describe the specific situations in which EPA considers a product of a 
recycling process to be comparable to an analogous product or 
intermediate. The second is the documentation, certification, and 
notice provision for products that have levels of hazardous 
constituents that are not comparable to or lower than an analogous 
product or intermediate or that are unable to be compared, but which 
are not covered by the new provisions.
    Under the documentation, certification, and notice process, a 
recycler must determine that its recycling is still legitimate despite 
the levels of hazardous constituents in the recycled product not being 
comparable to those in an analogous product or intermediate. This 
determination can take into account exposure of toxics in the product, 
bioavailability of toxics in the product or other relevant 
considerations that show the recycled product does not contain levels 
of hazardous constituents that pose a risk to human health or the 
environment. The facility then must prepare documentation explaining 
its assessment and include a certification that the recycling is 
legitimate. In addition, the facility would need to notify the 
appropriate Regional Administrator (or State Director, in an authorized 
state) of this finding.
    This provision is a less burdensome process for both recyclers and 
the states implementing the RCRA program because it maintains the self-
implementing nature of the legitimacy requirement. However, because 
facilities will still have to provide notice to the regulatory agency, 
it also allows implementing agencies to perform oversight and 
inspections of recycling facilities if they are concerned about the 
legitimacy of a specific recycling process.

XVIII. Major Comments on the Revisions to Solid Waste Variances and 
Non-Waste Determinations

    In the July 2011 DSW proposed rule, EPA proposed several 
modifications to the existing regulations for solid waste variances and 
non-waste determinations in 40 CFR 260.31(c), 40 CFR 260.33 and 40 CFR 
260.34 to ensure protection of human health and the environment and 
foster greater consistency on the part of implementing agencies.

A. Requiring Facilities To Re-Apply for a Variance or Non-Waste 
Determination

    In the July 2011 DSW proposal, EPA proposed to revise 40 CFR 
260.33(c) to require facilities to re-apply for a variance in the event 
of a change in circumstances that affects how a material meets the 
criteria upon which a solid waste variance has been based, as is 
currently required for non-waste determinations. Additionally, EPA 
requested comment on whether to require variances and non-waste 
determinations to be renewed periodically, and, if so, what time period 
would be appropriate (e.g., two or five years as suggested in the 
preamble to the 2011 July DSW proposal).

[[Page 1758]]

Comments: Re-Apply for a Variance in the Event of a Change
    The majority of commenters supported EPA's proposed change to 
require facilities to re-apply for a variance in the event of change in 
circumstances that affects how a hazardous secondary material meets the 
criteria upon which a solid waste variance has been based. The 
commenters believe the change promoted clarity and consistency in the 
regulations and that it made sense to ensure the hazardous secondary 
materials continued to meet the conditions of the exclusion over time. 
Other commenters, however, while supporting such a provision, urged EPA 
to require a re-certification rather than a full application process so 
as to reduce the burden on states and the regulated community.
    A few commenters disagreed with this provision, as they argued that 
administrative authorities already use discretion to review changes in 
circumstances.
EPA's Response: Re-Apply for a Variance in the Event of a Change
    EPA agrees with the majority of commenters that finalizing a 
requirement to require facilities to take action in the event of a 
change in circumstances will ensure the hazardous secondary material 
remains eligible for a variance and continues to meet the variance 
criteria over time. EPA also agrees with those commenters that 
suggested ways to reduce the administrative burden on states and the 
regulated community. Therefore, in today's final rule, EPA is requiring 
that, in the event of a change, the facility must send a description of 
the change to the regulatory authority and the regulatory authority 
will determine whether the facility must re-apply for a variance. This 
change in procedure allows both the regulatory authority and regulated 
community to avoid spending unnecessary resources where the change in 
circumstances is found to be of no consequence to the original variance 
that the regulatory authority has granted. EPA notes that re-applying 
for a variance should be less burdensome than the initial application 
because a facility would only have to update its original application.
    EPA disagrees with those commenters who opposed this change on the 
basis that regulatory authorities already use discretion to review 
changes in circumstances. First, the changes that EPA made to the final 
rule would not automatically require a person to re-apply for the 
variance, but make the regulatory authority aware of the change so that 
an informed decision could be made as to whether the variance is still 
appropriate. Moreover, relying on case-by-case discretion to require 
notice in the event of a change could allow certain hazardous secondary 
materials to remain excluded from regulation under Subtitle C of RCRA, 
even though based on the changed circumstances, the variance is no 
longer appropriate, and could present a risk to human health and the 
environment. It would also contradict the Agency's goal to foster 
greater consistency on the part of implementing agencies.
Comments: Periodic Renewal of Variances and Non-Waste Determinations
    A number of commenters did not support requiring periodic renewals 
of variances and non-waste determinations. Commenters opposed this 
change because of the additional burden on both the states and the 
regulated community and the fact that this would not be needed if EPA 
finalized its proposed change to require a renewal or recertification 
in the event of a change. Additionally, some commenters argued that the 
administrative authority already has discretion to set renewal 
timeframes as a condition of the variance. One commenter argued that 
facilities make significant business investments based on regulatory 
certainty and, thus, if variances are subject to repeal, this may 
prevent investment in recycling activities.
    A few commenters, however, supported a renewal requirement and 
argued that reapplying in the event of a change is not the same as a 
periodic renewal. This commenter argued that the requirement to re-
apply in the event of a change relies almost entirely on the facility 
to self-report on a change in circumstances, of which the facility may 
have an economic incentive not to do. Other commenters suggested that 
generators ``re-certify,'' rather than re-apply, on an annual or 
biennial basis that they continue to meet the conditions of a variance 
or non-waste determination in order to reduce administrative burden.
EPA's Response: Periodic Renewal of Variances and Non-Waste 
Determinations
    EPA agrees with the commenters that supported a renewal requirement 
for solid waste variances and non-waste determinations. Variances and 
non-waste determinations are granted based on case-specific 
circumstances of a particular hazardous secondary material being 
recycled. Many of the variance and non-waste determination criteria 
specifically consider factors such as, the manner in which the 
hazardous secondary material is recycled, the market factors of the 
recycling process, the value of the hazardous secondary material, and 
contractual arrangements. However, these factors are not static and, 
instead, change and evolve over time. It is therefore prudent that 
regulatory authorities periodically review these case-specific 
situations to ensure that the hazardous secondary material continues to 
meet the criteria of the variance or non-waste determination. 
Therefore, EPA is adding a provision to 40 CFR 260.33(d) that solid 
waste variances and non-waste determinations shall be effective for a 
fixed term not to exceed 10 years, which is the same term limit for 
RCRA hazardous waste permits under 40 CFR 270.50(a).
    EPA is establishing a time limit of 10 years (rather than two or 
five years, as suggested in the July 2011 proposal) considering the 
need to provide regulatory certainty to support business investment, as 
well as the fact that 10 years is the same as the duration of RCRA 
permits under 40 CFR 270.50(a). The 10-year time frame also ensures 
that renewals occur regularly enough in order to evaluate significant 
changes in recycling processes, technologies, and market factors that 
may affect the terms of a variance or non-waste determination.
    EPA disagrees with those commenters who argued that periodic 
renewals would not be needed if EPA finalized the proposed change to 
require notice in the event of a change in circumstances that affect 
how a hazardous secondary material meets the conditions of a variance 
or, as currently required for a non-waste determination. As one 
commenter noted, the requirement to provide notice in the event of a 
change relies on a facility self-reporting that change and thus, this 
requirement may not be consistently implemented. A periodic time limit, 
in this case 10 years, however, triggers a re-review of the 
circumstances without relying on self-reporting by the facility. 
Furthermore, EPA disagrees with commenters who opposed this change on 
the basis that regulatory authorities already use discretion to review 
changes in circumstances. (See response to this comment in EPA's 
Response to ``Re-Apply for a Variance in the Event of a Change.) 
Regarding the commenter that argued that periodic renewals would 
disrupt business investment, EPA finds that a time limit of ten years 
(rather than two or five years, as suggested in the

[[Page 1759]]

July 2011 proposal) is a sufficient amount of time to provide 
regulatory certainty to support business investment, given that ten 
years is the same as the duration of RCRA permits.

B. Requiring Notification for Facilities Operating Under Variances and 
Non-Waste Determinations

    In the July 2011 DSW proposal, EPA proposed to add a provision 
under 40 CFR 260.33 stating that facilities receiving a variance or 
non-waste determination must provide notification as required under 40 
CFR 260.42. This would require facilities to send a notification prior 
to operating under the regulatory provision and by March 1 of each 
even-numbered year thereafter to the EPA or the State Director, if the 
state was authorized, using EPA Form 8700-12.
Comments: Requiring Notification for Facilities Operating Under 
Variances and Non-Waste Determinations
    Commenters were split on this issue. Many commenters supported 
requiring facilities receiving a solid waste variance or non-waste 
determination to submit notifications in compliance with 40 CFR 260.42. 
These commenters believed that the notification would provide updated 
information about a facility's activities and would enable better 
compliance monitoring. These commenters also agreed that notification 
would improve transparency, because the notifications could be 
available online.
    However, many commenters opposed requiring facilities that receive 
a variance from being a solid waste or non-waste determination to 
submit notifications. These commenters argued that the act of applying 
for and receiving a variance or non-waste determination constitutes 
adequate notification for regulatory authorities. These commenters also 
argued that notification would increase the burden on facilities and 
was not necessary if EPA finalized its proposal to require facilities 
to re-apply in the event of a change.
EPA's Response: Requiring Notification for Facilities Operating Under 
Variances and Non-Waste Determinations
    Although EPA recognizes the arguments both for and against 
notification, EPA agrees with those commenters who support notification 
in order to enable better compliance monitoring and to improve 
transparency. Therefore, EPA is finalizing a requirement in 40 CFR 
260.33(e) that facilities receiving a variance or non-waste 
determination must provide notification as required by 40 CFR 260.42.
    This requirement serves to meet EPA's goal to foster greater 
consistency on the part of implementing agencies and to help ensure the 
proper implementation of the solid waste variances and non-waste 
determinations. The intent of the notification is to enable variances 
and non-waste determinations to be tracked nationally and over time, 
which facilitates state-to-state consistency in determinations. 
Additionally, notification enables effective oversight of facilities 
receiving solid waste variances and non-waste determinations because it 
provides regulatory authorities with a mechanism for receiving 
regularly updated information (such as information regarding quantities 
of hazardous secondary materials managed under the determination). 
Furthermore, this information can be used to identify facilities which 
may have undergone changes to their reclamation process significant 
enough to trigger a review of the determination under 40 CFR 260.33(c).
    EPA does not agree that the solid waste variance or non-waste 
determination application itself constitutes adequate notification. 
Currently, individual facility applications are not tracked nationally 
and there exist no consolidated list of facilities operating under a 
solid waste variance or non-waste determination. Notification, using 
EPA Form 8700-12, ensures that standard information regarding 
facilities receiving solid waste variances and non-waste determinations 
can be collected, stored, and used to enable compliance monitoring and 
to foster consistency in implementing the regulations.
    We also do not agree that the notification requirement is 
duplicative of the requirement to send notice in the event of a change 
because the two requirements serve different purposes and require 
different information. In the event of a change, facilities must send a 
description of the change in circumstances to EPA or the authorized 
state, who then make an evaluation as to whether a facility should re-
apply for a solid waste variance or non-waste determination. Under 40 
CFR 260.42, facilities submit information, such as type and quantity of 
hazardous secondary material being managed, using EPA Form 8700-12, 
which enables the information to be entered into EPA's database where 
it can be accessed by both EPA and state regulatory authorities.
    Furthermore, EPA does not agree that notification using EPA Form 
8700-12 poses an undue burden. The form is relatively simple to 
complete and is currently being used for facilities excluded from the 
definition of solid waste under 40 CFR 261.4(a)(23). Additionally, EPA 
is currently developing an electronic submission process, which will 
further reduce reporting burden.

C. Revisions to the Partial Reclamation Variance

    In the July 2011 DSW proposal, EPA proposed to revise the partial 
reclamation variance provision of 40 CFR 260.31(c) to clarify when 
partially-reclaimed materials are not solid waste because they are 
commodity-like. Specifically, EPA proposed to: (1) Revise the 
introductory text to clarify when the variance applies; (2) revise the 
introductory text to require that all of the decision criteria must be 
met; (3) revise the language of all of the decision criteria; and (4) 
eliminate the sixth criterion, that is, ``other relevant factors.''
Comments: General Comments on Proposed Changes to Partial Reclamation 
Variance
    Many commenters supported EPA's proposed changes to the partial 
reclamation variance. In fact, two of these commenters argued that 
existing variances that do not meet the new criteria should be 
rescinded or revised.
    A few commenters, however, did not support the proposed changes. 
These commenters argued that EPA does not have the record to support 
its finding that states are inconsistently and incorrectly applying the 
partial reclamation variance criteria and that variances granted by the 
states are not protective of human health and the environment. 
Additionally, one commenter argued that EPA provided no documentation 
for public review to substantiate how EPA intended the variance 
criteria to apply when it promulgated the variance in 1985. Another 
commenter argued that the proposed changes will restrict recycling.
EPA's Response: General Comments on Proposed Changes to Partial 
Reclamation Variance
    EPA agrees with commenters who supported the proposed changes. Not 
finalizing the proposed revisions to the partial reclamation variance 
would only result in a continuation of inconsistency among state 
determinations, which in some cases, allow partially-reclaimed 
materials to be excluded from the definition of solid waste when they 
are

[[Page 1760]]

clearly not commodity-like, but rather hazardous wastes. EPA notes, 
however, that the final changes to the partial reclamation variance 
criteria only apply to facilities receiving variances after the 
effective date of today's rule. The changes are not retroactive and 
thus would not apply to facilities currently operating under existing 
partial reclamation variances, unless and until the facility's variance 
came up for renewal. Thus, the Agency does not agree with those 
commenters who suggested that any variance that does not meet the 
revised criteria should be rescinded or revised immediately.
    EPA estimates that the states have granted between 15 to 20 partial 
reclamation variances, including variances granted in Indiana, 
Louisiana, Ohio, Oregon, Pennsylvania, Texas and Washington. EPA itself 
has also issued a partial reclamation variance to World Resource 
Company (WRC) in Arizona. (See list of partial reclamation variances 
issues by the states in today's docket.) Some of the partial 
reclamation variances were granted as the Agency intended and have 
required RCRA Part B storage and treatment permits for the incoming 
hazardous waste material. Other states, however, have issued partial 
reclamation variances which contradict the intention of the partial 
reclamation variance. For example, EPA publicly expressed its 
disagreement in a November 18, 2010, letter to Indiana's Department of 
Environmental Management (IDEM) concerning the tentative approval of a 
facility's request for a partial reclamation variance, a copy of which 
is found in today's docket. In our letter, we made clear that we did 
not believe IDEM should grant a partial reclamation variance to 
incoming hazardous wastes that were not ``sufficiently commodity-like 
to qualify for the variance.''
    EPA also disagrees with commenters who argued that EPA's record 
does not provide adequate basis for how the Agency intended the partial 
reclamation variance to operate. In the preamble to the 1985 DSW final 
rule (January 4, 1985; 50 FR 655), the Agency made clear that incoming 
materials to a partial reclamation facility were hazardous wastes and 
that the facility processing these incoming materials must obtain 
appropriate RCRA Part B storage and treatment permits. (Furthermore, 
these facilities are also subject to biennial reporting under 40 CFR 
264.75.) Additionally, the Agency points to the partial reclamation 
variance it issued to WRC on August 13, 2002 (67 FR 52617) as a public 
example of the how the Agency intended for the partial reclamation 
variance to be implemented. In this case, the Agency's partial 
reclamation variance to WRC for the partial reclamation of F006 
electroplating sludges required WRC to obtain RCRA Part B storage and 
treatment permits for the incoming hazardous waste.
    In addition, EPA disagrees that the final rule changes will 
unnecessarily restrict recycling. Today's changes clarify how the 
partial reclamation variance has always been intended to operate; thus, 
any recycling that is consequentially restricted from the variance as a 
result of the changes was never intended to be excluded from hazardous 
waste requirements. EPA maintains that hazardous waste must be managed 
under appropriate hazardous waste requirements in order to ensure 
protection of human health and the environment.
Comments: Revisions to Introductory Text
    Most commenters supported the proposed changes to the introductory 
text, including requiring that all criteria must be met and requiring 
compliance with the legitimacy criteria in 40 CFR 260.43. One 
commenter, while supporting the proposed changes said that EPA should 
define vague words such as ``commodity-like,'' ``sufficient economic 
value,'' and ``substantial.'' Another commenter said that commodity-
like partially-reclaimed material must be marketable to the general 
public, that is, it must be a material that could be marketed to more 
than one facility.
    Some commenters did not agree that all the criteria must be met. 
One commenter argued that this conflicts with EPA's 1985 preamble in 
which EPA said the Regional Administrator can weigh factors and may 
rely on any or all of them to reach a decision. Additionally, the WRC 
variance that EPA issued acknowledged that the partial reclamation 
steps being performed were ``not elaborate.'' However, the partial 
reclamation involved by WRC was sufficiently substantial to produce a 
commodity-like material as verified by contracts, sales, and subsequent 
management of the commodity-like material. Other commenters believed 
EPA's proposed changes to the introductory text imposed prescriptive 
conditions which conflict with the intent of the variance by 
restricting the administrative authority's decision-making discretion.
EPA's Response: Revisions to Introductory Text
    EPA agrees with those commenters who supported the proposed changes 
to the introductory text, including requiring that all criteria must be 
met and requiring compliance with the legitimacy factors in 40 CFR 
260.43. In response to the one commenter who believed that certain 
terms are vague, it is EPA's intent with this final rule to clarify how 
the partial reclamation variance should be applied. Although, specific 
definitions would be difficult to promulgate given the broad 
applicability of the terms, EPA notes that today's preamble discussion 
along with today's regulatory revisions to the variance criteria serve 
to better define how EPA is using these terms in the partial 
reclamation variance, particularly when a material becomes commodity-
like. For example, EPA notes in its preamble that criteria 2-5 define 
the fundamental characteristics that indicate whether a partially-
reclaimed material is ``commodity-like.''
    Regarding comments that argued against requiring all criteria to be 
met, EPA has determined that in order to reduce the inconsistency in 
state-to-state partial reclamation variances, the criteria must be made 
more prescriptive. Balancing the factors, as was EPA's original 
direction in 1985, has resulted in subjective interpretations that 
differ across states and which, in some cases, do not align with the 
original intent of the partial reclamation variance. EPA finds that 
requiring all criteria to be met is a more effective framework for 
determining when a partially-reclaimed material is commodity-like and 
therefore not a solid waste.
Comments: General Comments on Revisions to Variance Criteria
    Many commenters supported the changes to the criteria of the 
partial reclamation variance. However, a few commenters disagreed with 
inserting the word ``whether'' at the beginning of each criterion 
because it implied the criterion was more prescriptive. A few 
commenters also argued that EPA's proposed insertion of the word 
``partially'' before ``reclaimed'' disregards the fact that EPA has 
acknowledged that more than one processing step may be necessary before 
the inherent value of a usable product is recovered.
EPA's Response: General Comments on Revisions to Variance Criteria
    EPA agrees with the many commenters that supported the proposed 
changes to the variance criteria. Regarding EPA's proposed insertion of 
the word ``whether'' in each criterion, the intent of this change is to 
make the criteria more prescriptive in order to reduce the 
inconsistency of

[[Page 1761]]

partial reclamation variance determinations. EPA also disagrees that 
adding the word ``partially'' in front of ``reclaimed'' disregards the 
fact that EPA has acknowledged that more than one processing step may 
be necessary before the inherent value of a usable product is 
recovered. EPA recognizes that reclamation of hazardous secondary 
materials may involve multiple steps and hazardous waste may be 
recycled in any number of steps in accordance with the hazardous waste 
regulations. However, EPA maintains that a variance from the definition 
of solid waste is appropriate only for partially-reclaimed material 
that is commodity-like, as demonstrated by satisfaction of the partial 
reclamation criteria.
Comments: Proposed Criterion (1)--Whether the Degree of Partial 
Reclamation the Material Has Undergone Is Substantial
    For the first proposed criterion, two commenters argued that EPA's 
use of ``partial reclamation'' in place of ``processing'' did not 
provide additional clarification. Another commenter stated the 
criterion should state EPA's intent on 76 FR 44129 and read ``whether 
the degree of partial reclamation the material has undergone is 
substantial and the material produced is not the original hazardous 
waste.'' Other commenters were concerned regarding the term 
``substantial,'' because it is subjective and needs a better 
definition. These commenters argued that EPA has not provided a 
standard regarding when a material is ``no longer the original 
hazardous waste.''
EPA's Response: Proposed Criterion (1)--Whether the Degree of Partial 
Reclamation the Material Has Undergone Is Substantial
    EPA disagrees with those commenters who argued that EPA's use of 
``partial reclamation'' in place of ``processing'' did not provide 
additional clarification. The term ``processing'' is a broad, general 
term that can refer to a number of processes, such as the process used 
to generate the hazardous waste. However, the intention of the partial 
reclamation variance is to evaluate, specifically, the degree of 
partial reclamation and therefore it makes sense to use ``partial 
reclamation'' in criterion 1. Additionally, this revised language for 
the first criterion conforms to the revised changes in the introductory 
text of the partial reclamation variance.
    EPA agrees with commenters that adding a clarifying statement to 
criterion (1) is helpful and has added ``as demonstrated by using a 
partial reclamation process other than the process that generated the 
hazardous waste'' after ``substantial.'' We believe this language 
clarifies (and responds to the comment regarding the term 
``substantial'') that the process used to generate the hazardous waste 
(such as dewatering of sludge) would not be considered ``substantial'' 
under this criterion. Therefore, by emphasizing that the partial 
reclamation process must be substantial in the first criterion, the 
Agency is reiterating that the material produced by the partial 
reclamation process must be commodity-like as supported by also meeting 
criteria (2)-(5).
    Under the final rule, EPA is finalizing the first criterion to 
read: ``Whether the degree of partial reclamation the material has 
undergone is substantial as demonstrated by using a partial reclamation 
process other than the process that generated the hazardous waste.''
Comments: Proposed Criterion (2)--Whether the Partially-Reclaimed 
Material Has Sufficient Economic Value That it Will Be Purchased for 
Final Reclamation
    For the second proposed criterion, one commenter supported EPA's 
emphasis in the preamble on the existence of contracts for the sale of 
the partially-reclaimed material. This commenter argued that such 
emphasis is important to ensure that partial reclaimers do not 
accumulate significant quantities of material without assurance that a 
willing buyer actually exists. This commenter stated that an example of 
excess accumulation risk is shown by the variance recently granted by 
IDEM to the facility, ShoreMet, in which the variance was granted on 
the basis that a market for the partially-reclaimed material would 
exist solely because other reclaimers had sold fully-reclaimed F006 
(wastewater treatment sludges from electroplating operations) and F019 
(wastewater treatment sludges from aluminum coating processes). This 
commenter argued that such an analysis does not ensure that ShoreMet 
can market its partially-reclaimed material.
    Another commenter argued that reclamation may involve more than one 
processing step and that the proposed changes to this criterion limit 
the administrative authority's ability to consider the value of the 
partially-reclaimed material and the usable end products. This 
commenter also argued that the term ``value'' in 40 CFR 260.43 means 
sold to a third party or used as an effective substitute, which may not 
apply here. Still another commenter noted the F006 reclamation guidance 
\51\ allows the use of theoretical ``on paper'' value of precious 
metals present, despite that substantial processing might be needed 
before those precious metals realize market value.
---------------------------------------------------------------------------

    \51\ U.S. EPA, ``Background Document: Providing Context--The 
Example of F006 Electroplating Sludges,'' June 2011. Docket ID: EPA-
HQ-RCRA-2010-0742-0016.
---------------------------------------------------------------------------

EPA's Response: Proposed Criterion (2)--Whether the Partially-Reclaimed 
Material Has Sufficient Economic Value That it Will Be Purchased for 
Final Reclamation
    EPA agrees with the commenter that supported EPA's emphasis in the 
preamble on the existence of contracts for the sale of the partially-
reclaimed material as demonstrating the second criterion is being met.
    As we have stated previously, the partial reclamation variance is 
for those hazardous secondary materials that have been partially-
reclaimed but, must be reclaimed further, as long as the partial 
reclamation has produced a commodity-like material. That is, if the 
partially-reclaimed material is being purchased for further 
reclamation, the Agency considers the partially-reclaimed material to 
have sufficient economic value, regardless of how each party calculates 
the value to be paid. Evidence to support this criterion may include 
sales information; demand for the materials; and business contracts, 
such as contracts specifying quantities of material sold, details of 
the transaction, and the effective price paid for the partially 
reclaimed material by purchasers (i.e., after subtracting 
transportation costs and any other goods or services rendered in 
exchange for the material purchased).
    EPA is making one change to the proposed second criterion. As noted 
above, EPA understands that reclamation of hazardous waste may involve 
multiple steps and thus EPA finds it is more appropriate to ensure that 
the partially-reclaimed material is purchased for ``further 
reclamation'' rather than ``final reclamation'' to allow for processes 
that use more than one reclamation step in processing the partially-
reclaimed material. Therefore, the final second criterion in today's 
rule reads: ``Whether the partially-reclaimed material has sufficient 
economic value that it will be purchased for further reclamation.''

[[Page 1762]]

Comments: Proposed Criterion (3)--Whether the Partially-Reclaimed 
Material Is a Viable Substitute for a Product or Intermediate Produced 
From Virgin or Raw Materials Which Feeds Subsequent Production Steps
    For the third criterion, one commenter disagreed with the proposed 
wording change because it restricts the authority's ability to consider 
the benefit provided by subsequent processing of the partially-
reclaimed material and directs the authority only to consider whether 
it is immediately a substitute or product before further processing. 
Another commenter suggested replacing the phrase ``which feed 
subsequent production steps'' with the phrase ``that is used in a 
subsequent manufacturing process'' to be more clear. Still another 
commenter suggested that this criterion should state more plainly that 
``it is a substitute for ingredients, intermediates, or commercially 
available virgin/raw materials.''
EPA's Response: Proposed Criterion (3)--Whether the Partially-Reclaimed 
Material Is a Viable Substitute for a Product or Intermediate Produced 
From Virgin or Raw Materials Which Feeds Subsequent Production Steps
    EPA maintains that the partial reclamation variance is for those 
materials that have been partially-reclaimed, but must be reclaimed 
further, as long as the partial reclamation has produced a commodity-
like material. Thus, whether or not a material is produced at a later 
stage of reclamation as a viable substitute for a product or 
intermediate is not relevant in determining whether a partially-
reclaimed material produced earlier is commodity-like.
    EPA agrees with the commenter who suggested replacing the phrase 
``which feed subsequent production steps,'' with the commenters 
suggested wording, with certain modifications, in order to improve 
clarity. Therefore, the Agency is modifying this criterion to read, 
``whether the partially-reclaimed material is a viable substitute for a 
product or intermediate produced from virgin or raw materials, which is 
used in subsequent production steps.'' With this clarification, the 
Agency is making clear that, while multiple steps may be involved in 
producing a commodity-like material, it is only when the partially-
reclaimed material is a viable substitute for a product or intermediate 
is it considered ``commodity-like.''
    EPA is not making the suggested change to state that the partially-
reclaimed material ``is a substitute for ingredients, intermediates, or 
commercially available virgin/raw materials'' because EPA is concerned 
that this language may introduce confusion in distinguishing between 
when a partially-reclaimed material is ``commodity-like'' as compared 
to raw or virgin material that would need to undergo substantial 
processing before meeting this definition. Therefore, EPA is 
maintaining the proposed language to read ``is a viable substitute for 
a product or intermediate produced from virgin or raw materials.''
Comments: Proposed Criterion (4)--Whether There Is a Guaranteed Market 
for the Partially-Reclaimed Material
    For the fourth proposed criterion, whether there is a guaranteed 
market for the partially-reclaimed material, a few commenters argued 
that EPA is not specific enough to meet its objective and suggested 
that the criterion should read ``whether there is a guaranteed and 
secure long-term market for the partially-reclaimed material.'' These 
commenters also stated that EPA should include in the final rule more 
empirical and measurable ways to define this concept, for example 
including markets with consistent positive profit margins for a minimum 
of ten years.
EPA's Response: Proposed Criterion (4)--Whether There Is a Guaranteed 
Market for the Partially-Reclaimed Material
    EPA agrees that clarity is needed and has modified the fourth 
criterion to include examples of how a market for the partially-
reclaimed material can be demonstrated. The fourth criterion now reads, 
``whether there is a market for the partially-reclaimed material as 
demonstrated by known customer(s) who are further reclaiming the 
material (e.g. record of sales and/or contracts, and evidence of 
subsequent use, such as bills of lading).'' In response to the 
commenter who urged EPA to include more empirical and measurable ways 
to define this concept, the Agency has determined that examination of 
the contracts, record of sales, and bills of lading between the partial 
reclaimer and its customers will provide adequate evidence of whether 
this criterion is satisfied.
Comments: Proposed Criterion (5)--Whether the Partially-Reclaimed 
Material Is Handled To Minimize Loss
    For the fifth proposed criterion, one commenter argued that 
``minimize loss'' should be better defined and that, at a minimum, the 
partially-reclaimed material should meet the ``contained'' standard for 
hazardous secondary materials and be managed exactly like any other 
commodity.
EPA's Response: Proposed Criterion (5)--Whether the Partially-Reclaimed 
Material Is Handled To Minimize Loss
    EPA does not find that the phrase ``minimize loss'' needs to be 
better defined. As we have discussed elsewhere and in the preamble to 
the 2011 July DSW proposal, evidence to support this criterion may 
include documentation of facility procedures used to minimize loss 
(e.g., inspections, training) and storage and management equipment 
designed to minimize loss. Additionally, under today's final rule, 
partially-reclaimed materials must meet the legitimate recycling 
standard in 40 CFR 260.43, which requires that the hazardous secondary 
materials be managed as a valuable commodity. This criterion explains 
that, where there is an analogous raw material, the hazardous secondary 
materials must be managed, at a minimum, in a manner consistent with 
the management of the raw material or in an equally protective manner. 
Where there is no analogous raw material, the hazardous secondary 
material should be contained, as defined in 40 CFR 260.10.
Comments: Revision To Eliminate Sixth Criterion
    Many commenters supported EPA's proposal to eliminate the sixth 
criterion concerning other relevant factors. One commenter stated that 
criterion six has been and is currently being used as a primary basis 
for granting partial reclamation variances for hazardous secondary 
materials, and has led to the creation of unfair and illegal advantages 
for some reclaimers.
    A few commenters, however, disagreed with the proposed change. One 
commenter argued that removing criterion six conflicts with the intent 
of the partial reclamation variance by restricting the administrative 
authority's discretion. Other commenters argued that the overall 
situation should be considered and that an applicant's history of 
compliance would be an ``other relevant factor'' that should be 
considered when evaluating an application for a partial reclamation 
variance.
EPA's Response: Revision To Eliminate Sixth Criterion
    EPA agrees with those commenters that supported the elimination of 
the sixth criterion. The sixth criterion has resulted in subjective 
interpretations which have led, in the Agency's view, to incorrect 
application of the partial reclamation variance and therefore, EPA

[[Page 1763]]

is removing it from the list of criteria. We do not agree with the 
commenter who argued that removing this criterion would restrict the 
administrative authority's discretion. For example, EPA agrees with 
those commenters who said that an applicant's history of compliance 
could be considered as part of a partial reclamation variance 
determination. However, rather than requiring that compliance be 
considered under a sixth criterion, EPA notes that compliance would 
likely be a factor in determining how the facility is meeting the 
legitimate recycling factors in 40 CFR 260.43 and the partial 
reclamation variance criteria (1)-(5). For example, regulatory 
compliance could be used regarding whether the partially-reclaimed 
material is handled to minimize loss.

D. Revision to the Criteria for Non-Waste Determinations To Require 
Petitioners To Demonstrate Why Their Material Cannot Meet an Existing 
Exclusion

    EPA proposed to revise the criteria for the non-waste determination 
in 40 CFR 260.34 to require that petitioners explain or demonstrate why 
their hazardous secondary materials cannot meet, or should not have to 
meet, the existing DSW exclusions under 40 CFR 261.2 or 40 CFR 261.4.
Comments: Non-Waste Determination Criteria To Require Petitioners To 
Demonstrate Why Their Material Cannot Meet an Existing Exclusion
    Many commenters agreed with this proposed change. These commenters 
noted that, as a practical matter, it would seem facilities seeking 
such a determination would have already evaluated the existing 
exclusions and thus, requiring this information should not be overly 
burdensome.
    A few commenters, however, disagreed with this proposed change. One 
commenter argued that petitioners will be unwilling to provide 
justification at the risk of disqualification of an accepted exclusion 
in another state or EPA region for the same process. Another commenter 
noted that there may be legitimate reasons where the use of an 
exclusion might be too close to call and the facility wants greater 
comfort in a determination. A third commenter argued it is unreasonable 
for EPA to place the burden of interpreting EPA's regulations on those 
who are regulated prior to consenting to review a request for a non-
waste determination.
EPA's Response: Non-Waste Determination Criteria To Require Petitioners 
To Demonstrate Why Their Material Cannot Meet an Existing Exclusion
    EPA agrees with those commenters who supported this proposed change 
to require that petitioners explain or demonstrate why their hazardous 
secondary materials cannot meet, or should not have to meet, the 
existing DSW exclusions under 40 CFR 261.2 or 40 CFR 261.4. EPA agrees 
that this type of evaluation should already have been conducted by 
facilities that are formally petitioning the state or EPA for a non-
waste determination. This provision provides the regulatory authority 
with the information it needs, while helping to reduce the number of 
applications because facilities will be forced to evaluate whether an 
existing self-implementing exclusion may be used.
    EPA does not agree with the opposing arguments presented by the 
commenters as a basis for not finalizing the proposed change. These 
arguments, including that a facility may want more comfort in a 
determination and that EPA shouldn't put the burden on facilities to 
interpret regulations, are precisely why EPA and authorized states 
would benefit from receiving an explanation or demonstration from the 
facility why they cannot or should not have to meet an existing 
exclusion. This information would enable regulatory authorities to 
review and resolve questions regarding whether a non-waste 
determination may be warranted. Additionally, EPA does not find 
convincing the argument that a facility may be unwilling to provide 
justification at the risk of disqualification of an accepted exclusion 
in another state or EPA region. In fact, by finalizing this change, EPA 
is fostering greater consistency in state-to-state interpretations.

E. Designation of the Regional Administrator as the EPA Recipient of 
Petitions for Variances and Non-Waste Determinations

    In the July 2011 DSW proposal, EPA proposed to change the word 
``Administrator'' to ``Regional Administrator'' in 40 CFR 260.30, 
260.31, 260.32, 260.33, and 260.34. Due to the case-specific nature of 
the variances and non-waste determinations, EPA believed that these 
decisions may be better made by the Regional Administrator.
Comments: Designation of the Regional Administrator as the EPA 
Recipient of Petitions for Variance and Non-Waste Determinations
    Most of the comments on this issue opposed the proposed change 
arguing that there are significant differences in regional 
interpretations just as there are differences in state interpretations 
and that the change will lead to increased inconsistency in the 
implementation of variances and non-waste determinations. Other 
commenters urged EPA to clarify that petitions for solid waste 
variances and non-waste determinations may be sent to Directors of 
authorized states, just as the petition process works currently. These 
commenters argued that states are delegated by EPA to administer the 
hazardous waste regulations and, therefore, states have a role in 
reviewing solid waste variance and non-waste determination petitions.
    Only a few commenters supported the proposed change.
EPA's Response: Designation of the Regional Administrator as the EPA 
Recipient of Petitions for Variance and Non-Waste Determinations
    EPA recognizes the commenters' concerns who argued that designating 
the Regional Administrator, rather than the Administrator, as the 
person responsible for evaluating such petitions and deciding whether 
to grant a solid waste variance or a non-waste determination may 
increase inconsistency by virtue of there being ten Regional 
Administrators as compared to the one Administrator. Because the Agency 
is striving for as much consistency as possible, we have decided not to 
finalize this proposed change. We would also note that the rule does 
not change in any way the delegation of authority to states authorized 
to administer the hazardous waste regulations and thus, authorized 
states that have adopted these provisions may continue to evaluate and 
decide whether to grant a solid waste variance or a non-waste 
determination, as they do currently.

F. Requirement To Share Copies of Variances and Non-Waste 
Determinations

    In the July 2011 DSW proposal, EPA requested comment on whether to 
require states to share copies of any solid waste variance and non-
waste determination petitions and the tentative decisions with EPA for 
review and comment in order to encourage collaboration and national 
consistency. Formalizing collaboration would have

[[Page 1764]]

the benefit of reinforcing existing working relationships between EPA 
and the states.
Comments: Requirement To Share Copies of Variances and Non-Waste 
Determinations
    A number of comments did not support a requirement for states to 
share copies of solid waste variance and non-waste determination 
petitions with EPA for comment. These commenters argued that another 
layer of bureaucracy would delay the process. One commenter was 
concerned with protecting a company's confidential business 
information. Another commenter argued that EPA has not made an adequate 
case for the need for national approvals and that there may be 
legitimate reasons for arriving at different conclusions, for different 
variance petitions.
    Some commenters, however, supported EPA's efforts to collect solid 
waste variance and non-waste determination decisions and to share the 
information with other states.
EPA's Response: Requirement To Share Copies of Variances and Non-Waste 
Determinations
    EPA recognizes commenters' concerns who argued that requiring 
states to share copies of solid waste variance and non-waste 
determination petitions with EPA for review and comment would likely 
increase the duration of the petition process. Therefore, EPA is not 
codifying this requirement in the final rule. EPA, however, will likely 
continue to work with the states in order to increase state-to-state 
consistency in such determinations and may pursue non-regulatory 
efforts to collect and share solid waste variances and non-waste 
determinations as part of implementing the final rule.

XIX. Major Comments on the Proposed Revisions to Pre-2008 Recycling 
Exclusions

    In the 2011 DSW proposed rule, EPA considered whether additional 
requirements should be codified for recycling exclusions and exemptions 
that EPA promulgated prior to the 2008 DSW final rule. Specifically, 
EPA requested comment on codifying the legitimate recycling standard in 
40 CFR 260.43, the contained standard in 40 CFR 260.10, and the 
notification provision in 40 CFR 260.42 for 32 regulatory provisions 
that exclude or exempt certain types of recycling from full Subtitle C 
regulations.\52\
---------------------------------------------------------------------------

    \52\ EPA also proposed additional recordkeeping requirements in 
the speculative accumulation standard in 40 CFR 261.1(c)(8). See 
section XIV for responses to these comments.
---------------------------------------------------------------------------

    However, EPA explicitly did not reopen comment on any substantive 
provisions of the regulatory exclusions or exemptions. The inclusion of 
requirements for legitimacy, containment, and notification were 
strictly meant as means to better enforce the regulations.
    The request for comment stemmed from EPA's analysis of a report it 
developed as part of the DSW rulemaking, ``An Assessment of 
Environmental Problems Associated with Recycling of Hazardous Secondary 
Materials'' (environmental problems study), which analyzed 218 
recycling damage cases.\53\ The goal of the environmental problems 
study was to identify and characterize environmental problems that have 
been attributed to hazardous secondary material recycling activities. 
EPA then used the findings from this study to craft a number of 
conditions for the 2008 DSW final rule, which were specifically 
designed to target the major causes of damage and thus help define 
``discard'' of hazardous secondary materials. These conditions, 
however, were applied only to the 2008 DSW exclusions.
---------------------------------------------------------------------------

    \53\ The original environmental problems study, published 
January 11, 2007, reviewed 208 damage cases. Based on information 
submitted by commenters to the 2007 DSW supplemental proposed rule, 
EPA reviewed an additional ten recycling damage cases in an addendum 
to the environmental problems study, published July 14, 2008. A 
second addendum was published in June 2011. As part of this DSW 
final rule, EPA updated the environmental problems study to combine 
all of the information compiled from the 2007 study, the 2008 and 
2011 addenda, and new information collected by EPA since June 2011. 
This 2014 updated study includes information on 250 damage cases and 
can be found in the docket for today's rule.
---------------------------------------------------------------------------

    EPA reviewed and analyzed each damage case in the environmental 
problems study and determined the regulatory provision that likely, or 
potentially, governed the management of the hazardous secondary 
materials.\54\ This analysis was based on the type of hazardous 
secondary material and the date of the damage case related to the 
effective date of the regulatory provision. From this analysis, EPA had 
concluded that over half of the damage cases in the environmental 
problems study were associated with hazardous secondary materials that 
were likely excluded or exempted from Subtitle C regulation under an 
existing (pre-2008) regulatory provision.\55\ For example, EPA reported 
in the 2011 DSW proposed rule that 52 damage cases (23%) are associated 
with scrap metal that is likely excluded under Sec.  261.4(a)(13) and/
or Sec.  261.6(a)(3)(ii), while drum reconditioning accounted for 23 
damage cases (10%), in which the residuals are likely excluded under 40 
CFR 261.7. Additionally, 35 damage cases (16%) were associated with 
batteries that are likely managed under 40 CFR 273.2 and/or 40 CFR part 
266 subpart G. Based on these results, and given that many of the pre-
2008 recycling exclusions do not directly specify conditions that are 
necessary to ensure discard is not occurring, we concluded that these 
provisions may not be adequately enforceable in order to protect human 
health and the environment. Thus, in the 2011 DSW proposal, we 
requested comment on whether EPA should codify additional conditions 
for these recycling exclusions.
---------------------------------------------------------------------------

    \54\ U.S. EPA Correlation of Recycling Damage Cases with 
Regulatory Exclusions, Exemptions or Alternative Standards.
    \55\ The determination that the hazardous secondary materials 
were ``likely'' associated with pre-2008 recycling exclusions and 
exemptions was based on the waste description and the fact that most 
recyclers did not appear to have a RCRA permit. EPA did not 
specifically verify if the damage case facility was operating under 
an exclusion or exemption.
---------------------------------------------------------------------------

    Many comments in response to EPA's request for comment on whether 
the Agency should codify additional conditions to the pre-2008 
recycling provisions were unfavorable, although a number of comments 
indicated support for the codification.
Comments: Potential Impact of Additional Requirements
    Industry commenters, and scrap metal recyclers in particular, 
strongly opposed adding conditions, arguing that the additional 
conditions will pose an undue burden on businesses without any 
environmental benefit and will discourage recycling. For example, 
commenters argued that scrap metal recyclers go to great lengths to 
ensure that they do not handle hazardous waste. These commenters said 
that, if EPA were to add conditions to the scrap metal exclusion, a 
scrap metal recycler would be required to obtain additional insurance, 
local licenses, training, new inspection procedures, lawyers, and 
consultants in order to maintain compliance and to prepare for an 
inadvertent loss of the exclusion, which would make it a handler of 
hazardous waste. Commenters argued that many scrap metal businesses are 
small and family-owned and cannot afford these new requirements and 
thus, these regulations will severely affect business and jobs.
    Many commenters also argued that the contained standard is not 
necessary or practical and would be expensive. Commenters believed that 
the one-size-

[[Page 1765]]

fits-all approach that EPA requested comment on fails to reflect EPA's 
recognition over the years of the need to tailor any conditions for 
regulatory exclusions to the specific characteristics of the recycling 
activities. For example, one commenter argued that the contained 
standard is redundant for the spent wood preservatives exclusion under 
40 CFR 261.4(a)(9), which already requires facilities to manage 
solutions and wastewater ``to prevent release to either land or 
groundwater or both'' and to construct recycling units so ``prior to 
reuse they can be visually or otherwise determined to prevent such 
release.'' This commenter also noted that drip pads must comply with 40 
CFR part 265 subpart W. Other commenters noted that applying the 
contained standard to lead-acid batteries is inappropriate and 
unnecessary because EPA, on several occasions, has recognized that 
individual lead-acid batteries qualify as ``containers,'' citing a 
November 17, 1989, memo from Sylvia Lowrance (RO 13339). Furthermore, 
these commenters argued that the contained standard duplicates Sec.  
266.80(b).
    Regarding notification, many commenters did not support adding 
notification to the pre-2008 exclusions. These commenters argued that 
the EPA Form 8700-12 (Site Identification Form) and, in particular the 
Addendum to the Site Identification Form, which is used to notify under 
40 CFR 260.42, is too burdensome for facilities operating under a pre-
2008 exemption/exclusion. For example, the Addendum requires facilities 
to list their hazardous secondary materials using EPA hazardous waste 
codes. In some cases, particularly for scrap metal recyclers, 
facilities would be required to determine which secondary material 
would be considered a hazardous secondary material, which may involve 
extensive testing in order to determine which hazardous waste code to 
report on the form. Additionally, the Addendum also requires facilities 
to report quantities of hazardous secondary material managed under the 
exclusions, but commenters explained that facilities operating under a 
pre-2008 exclusion have not generally determined which secondary 
material would be considered a hazardous secondary material, and 
therefore, any quantity estimates, which are required on the Addendum, 
would not be reliable for programmatic decisions. Moreover, commenters 
argued that notification would be difficult for facilities with 
multiple excluded processes. For example, one commenter explained that 
one facility in Tennessee has more than a hundred closed-loop recycling 
processes and thus it would be extremely onerous to report each process 
on a notification.
    Commenters also argued that it is difficult to estimate the number 
of facilities operating under the exclusions and thus the impact on the 
state implementers of the notification program is uncertain. For 
example, notification would impact all forms of scrap metal handling 
(junk yards, scrap dealers, steel-makers), generators and handlers 
managing lead-acid batteries (vehicle repair facilities, retailers) and 
precious metals destined for reclamation (x-ray facilities, dentists, 
vets, jewelers). These commenters argued that most states are already 
under resource constraints and will be unable to cope with the tens of 
thousands of new forms that would need processing if EPA were to codify 
notification as a condition of the exclusions. Some state commenters 
suggested ways to reduce the burden on states, including not requiring 
periodic notifications on the same day that biennial reports are due 
and by implementing a process whereby notifications could be submitted 
electronically. Commenters also noted that the re-notification 
requirement for excluded facilities would be more stringent than what 
is currently required for hazardous waste small quantity generators.
EPA's Response: Potential Impact of Additional Requirements
    EPA did not believe at the time of the proposal that the additional 
requirements--meeting the legitimate recycling standard, the contained 
standard, and the notification requirement--would present an undue 
burden on facilities. As discussed in more detail below, this is 
because EPA considers certain requirements, like legitimate recycling 
and containment, inherent in the definition of solid waste recycling 
exclusions and assumes that the regulated community already meets these 
standards. Notification was considered to be a simple reporting 
requirement that would pose minimal additional burden.
    However, upon reviewing the comments, EPA has determined that more 
study is needed before taking action. Therefore, EPA is not making any 
changes to the language of the 32 recycling exclusions and exemptions 
at this time. In the case of the legitimacy provision, EPA is instead 
codifying a general prohibition against sham recycling. In the case of 
the contained standard and notification requirement, EPA is deferring 
any action until further study is conducted. EPA's response to comments 
regarding burden implications of each of the provisions is discussed in 
more detail below.
    (1) Legitimacy. With respect to legitimacy, it has been EPA's long-
standing policy that all recycling of hazardous secondary materials 
must be legitimate. If a facility is engaged in sham recycling, this, 
by definition, is not real recycling and that material is being 
discarded. Additionally, EPA considers the four legitimacy factors 
codified in 40 CFR 260.43 to be substantively the same as the existing 
legitimacy policy, which has been articulated in the 1989 Lowrance Memo 
and in various DSW Federal Register notices.
    In proposing to codify the legitimate recycling standard for all 
exclusions, we did not intend to raise questions about the status of 
general legitimacy determinations that underlie these existing 
exclusions from the definition of solid waste, or about case-specific 
determinations that have already been made by EPA or the states. As 
noted in the comments, EPA generally considered the legitimacy of the 
recycling process when the original determinations were promulgated, 
and the Agency did not intend to force companies to have to reexamine 
long standing legitimate recycling practices. Therefore EPA is not 
revising the pre-2008 exclusions and exemptions to include a legitimacy 
requirement.
    However, as discussed in section VIII, these material-specific 
exclusions from the definition of solid waste do not negate the basic 
requirement that the hazardous secondary material must be legitimately 
recycled. Therefore, EPA is codifying a general statement in Sec.  
261.2(g) that makes it clear that a hazardous secondary material found 
to be sham recycled is discarded and thus, is a solid waste. By 
codifying a prohibition on sham recycling that applies to all hazardous 
secondary materials being recycled, we are confirming that we expect 
anyone operating under a recycling exclusion or exemption to be doing 
so legitimately. EPA finds that this will give implementing agencies a 
clear regulatory statement that can be used to enforce against sham 
recyclers, yet not require the vast majority of recyclers that are 
performing legitimate recycling under the pre-2008 exclusions and 
exemptions to revisit previously-made legitimacy determinations.
    Additionally, the Agency has, based on the public comments, made 
adjustments to the legitimacy factors to build in more flexibility for 
meeting each factor and thus, ease the use of the

[[Page 1766]]

standard. For example, EPA has modified factor 4 to rely on widely-
recognized commodity standards and specifications in the case where 
there is no analogous product as a way of recognizing industry 
standards that ensure their products are legitimate. EPA gives the 
example in the regulatory text of commodity specification grades for 
common metals, which would be relevant to scrap metal recyclers, among 
other metal recyclers. EPA has also included a provision that states 
that when ``hazardous secondary materials being recycled are returned 
to the original process or processes from which they were generated to 
be reused, the product of the recycling process is comparable to a 
legitimate product or intermediate,'' and thus would meet factor 4. 
This revision addresses concerns regarding the closed loop exemption at 
Sec.  261.4(a)(8), as well as mineral processing to produce primary 
metals, because these processes always include materials looping back 
into the process to ensure that all the valuable metals that can be 
extracted from the ore are being collected for use.
    For more information and responses to comments on legitimacy, 
please see section XVII in today's preamble.
    (2) Contained. With respect to the contained standard, EPA has long 
determined that hazardous secondary materials that are released to the 
environment and are not destined for recycling are clearly discarded. 
Based on the environmental problems study, the results of which showed 
mismanagement of hazardous secondary materials as one of the major 
causes of damage, EPA requested comment in the 2011 DSW proposed rule 
on applying the proposed contained standard to all hazardous secondary 
materials. EPA assumes that the vast majority of recycling facilities 
``contain'' their hazardous secondary materials and thus would already 
meet the contained standard. Therefore, EPA assumed that the contained 
standard would not present any additional burden to the regulated 
community, especially since the contained standard is ``performance-
based'' and provides much flexibility, but could be used to enforce 
against those facilities that were mismanaging their materials.
    However, as the commenters' noted, EPA has already promulgated 
certain management standards for some exclusions based on the case-
specific characteristics of the hazardous secondary material or 
recycling process (e.g., drip pads used to manage wastewaters and/or 
spent wood preserving solutions under 40 CFR 261.4(a)(9)). Thus, EPA 
understands that simply applying the contained standard wholesale 
across the 32 recycling provisions, may not be the most efficient or 
effective course of action as EPA would not be considering how the 
contained standard would work within each specific exclusion and its 
existing conditions. Therefore, EPA is deferring action on applying the 
contained standard to the pre-2008 exclusions and exemptions until we 
can more adequately address commenters' concerns.
    (3) Notification. With respect to notification, EPA's intent was to 
provide basic information to regulatory authorities in order to enable 
adequate compliance monitoring of the exclusions. EPA had requested 
comment on requiring notification under 40 CFR 260.42 using the Site ID 
Form (EPA Form 8700-12), which is the same provision used for the 2008 
DSW final rule exclusions. Given that this form is familiar to the 
regulated community, we had not considered this requirement to pose an 
undue burden.
    However, based on comments we received, we understand that using 
the same notification requirement developed for hazardous secondary 
materials that were recently excluded in 2008 presents challenges when 
used for hazardous secondary materials that have been excluded for many 
decades. For example, the notification provision in 40 CFR 260.42 
requires information on types of hazardous secondary materials (using 
hazardous waste codes) and quantities of these materials. However, as 
noted by commenters, this is difficult, for example, for scrap metal 
recyclers, because these facilities currently do not distinguish 
between non-hazardous scrap metal and scrap metal that would be 
hazardous waste were it not for the exclusion. Requiring notification 
in this instance may infer that scrap metal recyclers would be required 
to extensively test their hazardous secondary material in order to 
determine if the scrap metal was hazardous, and therefore excluded, and 
to determine which hazardous waste code to report on the form. 
Additionally, the notification presents challenges for facilities with 
numerous closed-loop recycling processes because the form would require 
these facilities to specifically list each process. We also understand 
commenters' concerns regarding the burden on states that must review 
and process these forms. Because the majority of the pre-2008 
exclusions and exemptions do not include notification requirements, EPA 
does not have precise data regarding how many facilities are recycling 
hazardous secondary materials under these exclusions and exemptions. 
This lack of data hinders EPA's ability to more precisely estimate the 
burden on states and whether such a requirement would be 
environmentally beneficial. Therefore, EPA is deferring action on 
applying notification to the pre-2008 exclusions and exemptions until 
we can more adequately address commenters' concerns.
Comments: EPA's Authority To Add Requirements to Pre-2008 Exclusions
    Commenters stated that EPA lacks jurisdiction to add requirements 
to materials that are not solid wastes and, if EPA is changing its 
position on the waste status of these materials, the Agency must 
provide a reasoned explanation for disregarding facts and circumstances 
that underlay the prior policy. Some commenters argued that EPA had 
evaluated each of the hazardous secondary materials at the time it 
promulgated the exclusions and thus, EPA must demonstrate why 
management in compliance with the existing conditions constitutes 
discard.
EPA's Response: EPA's Authority To Add Requirements to Pre-2008 
Exclusions
    EPA disagrees with comments that argue that EPA does not have the 
authority to require conditions for hazardous secondary materials being 
recycled. As noted in the Background section of this preamble, in the 
Safe Food court case, the D.C. Circuit upheld an EPA rule that excludes 
from the definition of solid waste hazardous secondary materials used 
to make zinc fertilizers, and the fertilizers themselves, as long as 
the recycled materials meet certain handling, storage, and reporting 
conditions and the resulting fertilizers have concentration levels for 
certain hazardous constituents that fall below specified thresholds. It 
is therefore within EPA's discretion to determine conditions under 
which a hazardous secondary material is not being discarded and thus 
may be excluded from hazardous waste regulation.
    However, EPA agrees that more information is needed before 
determining whether adding requirements to the pre-2008 exclusions and 
exemptions is needed to make them more enforceable. EPA's request for 
comment on this issue was based on conclusions drawn from the 
environmental problems study, which evaluated over 200 damage cases, 
and the Correlation of Recycling Damage Cases with Regulatory 
Exclusions, Exemptions or Alternative Standards, which analyzed which 
damage cases

[[Page 1767]]

were likely operating under a pre-2008 exclusion and exemption. From 
these studies, EPA concluded that over half of the damage cases were 
likely operating under an existing exclusion and exemption. However, 
EPA did not examine the specific underlying causes of the damage cases 
(whether they were based on the lack of oversight of the pre-2008 
exclusions and exemptions or on other causes). Thus EPA has decided 
that additional information is needed to determine whether additional 
regulatory action is needed, or whether the problems should be 
addressed through some other method, such as outreach and compliance 
assistance.
Comments: Record Support
    Many commenters argued that EPA's record does not support this 
regulatory change and that EPA failed to conduct a thorough analysis. 
For example, commenters argued that EPA's record needs to show that 
significant environmental problems have been caused by a meaningful 
number of facilities operating in compliance with the pre-2008 
exclusions and exemptions. These commenters noted that many of the 
damage cases involve civil or criminal violations, indicating that the 
problem was non-compliance with the regulations, not from a lack of 
regulations. Thus, these commenters believed that EPA already has 
sufficient authority to enforce against bad actors. Additionally, EPA's 
own analysis only links damage cases to just seven exclusions, yet EPA 
is considering adding conditions to 32 exclusions.
EPA's Response: Record Support
    EPA disagrees with comments that argue that since the environmental 
problems study includes cases with civil or criminal violations, this 
demonstrates existing regulations are adequately enforceable. On the 
contrary, the frequency of violations in the damage cases may 
demonstrate the need for greater, not less, oversight, particularly in 
the case of sham recycling, where discard via over-accumulation of 
material can become a major problem before the Agency can take action.
    For example, in one of the damage cases, a facility whose primary 
business was mixing electric arc furnace dust (K061) with agricultural 
lime for sale as a micronutrient lost its customers and could not sell 
its product. However, the facility continued to accept K061, and, after 
approximately seven months, the facility had accepted over 60,000 tons 
of this hazardous waste and stored it on the ground in piles up to 30 
feet high, with no prospect of it being used to produce a product and, 
thus, legitimately recycled. While the initial recycling of the K061 
hazardous waste was legitimate, when the facility failed to produce a 
product that was actually sold, the K061 could no longer be considered 
legitimately recycled, resulting in significant risk to human health 
and the environment from discarded material. Therefore EPA is codifying 
a general probation against sham recycling, in order to prevent such 
cases from occurring.
    However, in the case of containment and notification, EPA agrees 
with commenters and has determined that additional information about 
the underlying causes of the damage cases would be useful to determine 
whether additional regulatory action is needed, or whether the problems 
should be addressed through some other method, such as outreach and 
compliance assistance.
    EPA also understands commenters' concerns regarding the limitations 
of the correlation analysis, including the fact that EPA could only 
correlate with confidence 7 of the 32 recycling exclusions and 
exemptions to damage cases in its environmental problems study. The 
analysis was hampered by a lack of precision in the data. For example, 
because notification is not required for the majority of pre-2008 
exclusions and exemptions, we can only conservatively identify damage 
case correlations where the type of hazardous secondary material very 
clearly matches to an exclusion (e.g., scrap metal). We lack 
information to make inferences for broadly applicable exclusions, 
(e.g., use/reuse) or for broadly defined hazardous secondary materials 
(e.g., metal-bearing wastes). Therefore, by virtue of some exclusions' 
broad applicability, we were unable to correlate them to specific 
damage cases.
    Although it is difficult to assign specific damage cases to certain 
exclusions, we note that in the environmental problems study only nine 
of the damage cases were operating under a RCRA permit at the time of 
damage. Thus, EPA can generally conclude that the majority of the 
damage cases were operating outside of RCRA, inferring these facilities 
were either operating illegally or likely operating under an exclusion, 
exemption, alternate standard, or no standard at all. In the case of 
containment and notification, EPA has determined that additional 
information about the underlying causes of the damage cases would be 
useful to determine whether additional regulatory action is needed, or 
whether the problems should be addressed through some other method, 
such as outreach and compliance assistance.
Comments: Time To Comment
    Industry commenters argued that they did not have adequate time to 
comment. Further, they had no forewarning of the changes EPA was 
considering before the proposal was issued. EPA's request for comment 
did not involve prior discussions with stakeholders, as is typical when 
developing proposed rules. Moreover, this issue was not part of the 
2008 DSW final rulemaking, Sierra Club's petition, or part of EPA's 
settlement agreement with the Sierra Club. Many commenters urged EPA to 
meet with industry representatives in order to better understand 
industry practices.
    Commenters also argued that if EPA codified a notification as a 
condition of the exclusions, thousands of facilities would be at risk 
of losing the exclusion due to failure to notify, which could result in 
civil fines and solid waste management fees for the facility. These 
commenters stated that notification as a condition in this instance 
presents acute risks to facilities operating under an exclusion, 
because, up to this point, these facilities have not been required to 
comply with the RCRA hazardous waste requirements. Thus, commenters 
said many facilities may fail to notify simply because they were 
unaware the regulations had changed.
EPA's Response: Time To Comment
    EPA understands commenters that argued they did not have adequate 
time to comment on applying the contained standard and notification for 
pre-2008 recycling exclusions and exemptions. Contrary to the 
legitimate recycling standard, which has been EPA's long-standing 
policy and has been articulated in the 1989 Lowrance memo and various 
Federal Register notices, EPA had not previously indicated it was 
considering the contained standard and notification for pre-2008 
exclusions and exemptions prior to the 2011 DSW proposal. Although the 
2011 proposed rule provided an opportunity for public comment, EPA 
understands commenters' concerns, with notification in particular, as 
these provisions would impact thousands of businesses, many of which 
may not be closely following DSW rulemaking activity. EPA agrees that a 
more inclusive approach to a potential rulemaking that involves 
stakeholders in upfront discussions would likely result in gainful 
information, more effective strategies for addressing issues, and 
better communication with the regulated community.

[[Page 1768]]

Comments: Support for Adding Requirements to Existing Exclusions
    Some commenters, including environmental organizations, supported 
adding conditions to the pre-2008 exclusions and exemptions, arguing 
that EPA must adopt the regulatory conditions, including the legitimacy 
standard in light of the risks posed by the 32 recycling exclusions and 
the historical pattern of environmental contamination at facilities 
that are exempt from RCRA. These commenters believed that the 
prevention of one damage case every two years would more than offset 
the compliance costs. Some state commenters also supported adding 
conditions to the pre-2008 exclusions and exemptions, although some 
argued that EPA should exempt certain types of hazardous secondary 
materials, like scrap metal, spent lead-acid batteries, closed-loop 
recycling, and printed circuit boards, from the requirements.
    Other commenters supported adding notification to the pre-2008 
recycling provisions. These commenters argued that states may not be 
aware of excluded activities unless they are occurring at facilities 
that are otherwise regulated or are the subject of a citizen complaint. 
These commenters said that notifications would allow states to 
periodically evaluate these facilities to ensure they are meeting the 
terms of the exclusion and that, while the initial burden on states 
might be quite heavy, the long-term benefit of knowing where these 
facilities are justifies this burden.
EPA's Response: Support for Adding Requirements to Existing Exclusions
    EPA acknowledges commenters who support additional requirements for 
the pre-2008 exclusions and exemptions in order to avoid potential 
damage cases and protect human health and the environment. However, 
based on the comments received, the EPA has determined that it does not 
have enough information to determine if adding requirements to the 
existing pre-2008 recycling exclusions and exemptions would be the most 
effective method for addressing the damage cases or whether a more 
targeted approach would be more appropriate.
    Regarding legitimacy, in lieu of adding a legitimacy requirement to 
the specific recycling exclusions, EPA is instead codifying a general 
statement in Sec.  261.2(g) that makes it clear that a hazardous 
secondary material found to be sham recycled is discarded and thus, is 
a solid waste. EPA finds that this will give implementing agencies a 
clear regulatory statement that can be used to enforce against sham 
recyclers, yet not require the vast majority of recyclers that are 
performing legitimate recycling under the pre-2008 exclusions and 
exemptions to revisit previously-made legitimacy determinations. EPA 
also notes that today's final legitimacy standard includes 
modifications that address implementation concerns for certain 
hazardous secondary materials and processes, such as scrap metal and 
closed-loop recycling. For more information on these modifications, 
please see the other sections on legitimacy in this preamble.
    Regarding the contained standard and notification, for reasons 
stated above, the Agency is deferring action on applying the contained 
standard and notification to the pre-2008 exclusions and exemptions in 
order to consider how best to implement these conditions in the context 
of the case-specific circumstances of the regulatory provisions.

XX. State Authorization

A. Applicability of Rules in Authorized States

    Under section 3006 of RCRA, EPA may authorize a qualified state to 
administer and enforce a hazardous waste program within the state in 
lieu of the federal program, and to issue and enforce permits in the 
state. A state may receive authorization by following the approval 
process described in 40 CFR 271.21 (see 40 CFR part 271 for the overall 
standards and requirements for authorization). EPA continues to have 
independent authority to bring enforcement actions under RCRA sections 
3007, 3008, 3013, and 7003. An authorized state also continues to have 
independent authority to bring enforcement actions under state law.
    After a state receives initial authorization, new federal 
requirements promulgated under RCRA authority existing prior to the 
1984 Hazardous and Solid Waste Amendments (HSWA) do not apply in that 
state until the state adopts and receives authorization for equivalent 
state requirements. In contrast, under RCRA section 3006(g) (42 U.S.C. 
6926(g)), new federal requirements and prohibitions promulgated 
pursuant to HSWA provisions take effect in authorized states at the 
same time that they take effect in unauthorized states. As such, EPA 
carries out the HSWA requirements and prohibitions in authorized 
states, including the issuance of new permits implementing those 
requirements, until EPA authorizes the state to do so.
    Authorized states are required to modify their programs only when 
EPA enacts federal requirements that are more stringent or broader in 
scope than the existing federal requirements. RCRA section 3009 allows 
the states to impose standards more stringent than those in the federal 
program (see also 40 FR 271.1(i)). Therefore, authorized states are not 
required to adopt federal regulations, both HSWA and non-HSWA, that are 
considered less stringent than previous federal regulations or that 
narrow the scope of the RCRA program and Subtitle C hazardous waste 
regulations would continue to apply in those states.

B. Effect on State Authorization of Final Rule

    The regulations finalized in today's notice are not promulgated 
under the authority of HSWA. Thus, the standards will be applicable on 
the effective date only in those states that do not have final 
authorization of their base RCRA programs. Moreover, authorized states 
are required to modify their programs only when EPA promulgates federal 
regulations that are more stringent or broader in scope than the 
authorized state regulations. For those changes that are less 
stringent, states are not required to modify their program. This is a 
result of section 3009 of RCRA, which allows states to impose more 
stringent regulations than the federal program.
    The revisions to the definition of solid waste being finalized 
today are more stringent than those promulgated under the 2008 DSW 
final rule, so those states which have adopted the 2008 DSW final rule 
would be required to modify their programs. However, when compared to 
the federal program that was in place when the 2008 DSW final rule was 
finalized, many of today's revisions would be considered less stringent 
(e.g., the revised generator-controlled exclusion, the verified 
recycler exclusion, and the remanufacturing exclusion). Therefore, 
authorized states that have not adopted the 2008 DSW final rule are not 
required to modify their programs to adopt these exclusions and the 
federally authorized state hazardous waste regulations applying the 
full subtitle C requirements will continue to apply in those states. As 
noted in footnote 58 of the proposed rule, final decisions regarding 
whether a state rule is more stringent under 40 CFR 271.1(i)(1) or 
broader in scope than the federal program under 40 CFR 271.1(i)(2) are 
made when the Agency authorizes state programs. However, the revisions 
to the definition of legitimacy and the prohibition of sham recycling, 
as discussed in section VIII of the preamble, are more stringent than 
the current federal hazardous waste

[[Page 1769]]

program because they codify implicit requirements that have been 
largely implemented through guidance. Also, the additional 
recordkeeping requirement in the speculative accumulation provision in 
40 CFR 261.1(c)(8), as discussed in section V of the preamble, is also 
more stringent than the current federal hazardous waste program. 
Finally, the changes to the standards and criteria for variances from 
classification as a solid waste discussed in section IX are more 
stringent than the current federal hazardous waste program. In these 
cases, all authorized states will be required to modify their programs 
to adopt equivalent, consistent and no less stringent requirements.

XXI. Statutory and Executive Order (EO) Reviews

A. Executive Order 12866: Regulatory Planning and Review and Executive 
Order 13563: Improving Regulation and Regulatory Review

    Under Executive Order 12866 (58 FR 51735, October 4, 1993), this 
action is a ``significant regulatory action'' because it is likely to 
``raise novel legal or policy issues'' under section 3(f)(4) of 
Executive Order 12866. Accordingly, EPA submitted this action to the 
Office of Management and Budget (OMB) for review under Executive Orders 
12866 and 13563 (76 FR 3821, January 21, 2011) and any changes made in 
response to OMB recommendations have been documented in the docket for 
this action.
    In addition, EPA prepared an analysis of the potential costs and 
benefits associated with this action. This analysis is contained in 
EPA's background document for today's action titled ``Regulatory Impact 
Analysis'' (RIA). A copy of the analysis is available in the docket for 
this action and the analysis is briefly summarized here. EPA estimates 
that the 2014 DSW rule will result in a future annual costs savings of 
$1.0 to $2.0 million per year, depending on discount rate used, as 
compared to a baseline of full implementation of the 2008 DSW rule. 
This cost savings is based on the assumption that same number of states 
would adopt the 2014 DSW rule as would adopt the 2008 DSW rule. 
However, because the 2014 DSW rule addresses many of the concerns 
states raised about the 2008 DSW rule, there is a potential that more 
states would adopt it, thus increasing the upper bound of annual cost 
savings to $17.5 million to $59 million per year.
    In addition to estimating the cost savings of today's action, the 
RIA also provides qualitative (i.e., non-monetized) descriptions of 
three categories of expected future benefits for today's action 
consisting of: (1) Reduction in future environmental damages associated 
with industrial recycling of hazardous secondary materials; (2) 
improved industry environmental compliance; (3) indirect legal & 
financial benefits to industry consisting of reduced liability, less 
uncertainty for regulated entities, and lower legal and financial 
credit costs.

B. Paperwork Reduction Act (Information Collection Request)

    The information collection requirements in this rule will be 
submitted for approval to the Office of Management and Budget (OMB) 
under the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. The 
information collection requirements are not enforceable until OMB 
approves them. The information collection request has been updated 
since the July 22 proposed rule to reflect the final rule requirements 
and to respond to public comments. The EPA ICR number for this next 
submission will be 2310.03 and the OMB control number will be 2050-
0202.
    Several information requirements established for this action are 
voluntary to the extent that the conditional exclusions being finalized 
today are voluntary and represent an overall reduction in burden, as 
compared with the alternative information requirements associated with 
managing hazardous secondary materials as hazardous waste. The 
information requirements help ensure that: (1) Entities operating under 
today's rule are held accountable to the applicable requirements; and 
(2) inspectors can verify compliance with the conditions of today's 
rule when needed.
    EPA estimates the total annual burden to respondents under the new 
paperwork requirements as a result of the final rule changes to be 
34,454 hours and $68,071 in operations and maintenance costs 
($2,378,111, including labor costs), respectively. Burden and costs 
continuing from the 2008 ICR No. 2310.02 include 2,034 hours and $299 
in operations and maintenance ($144,235, including labor costs), 
respectively. The total annual burden and operations and maintenance 
costs are estimated at 36,488 hours and $68,370 in operations and 
maintenance costs, or 109,464 hours and $205,110 in operations and 
maintenance over three years. Burden is defined at 5 CFR 1320.3(b).
    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 in 40 CFR are listed in 40 CFR part 9. When this ICR is 
approved by OMB, the Agency will publish a technical amendment to 40 
CFR part 9 in the Federal Register to display the OMB control number 
for the approved information collection requirements contained in this 
final rule.

C. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) 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.
    For purposes of assessing the impacts of today's rule on small 
entities, small entity is defined as: (1) A small business based on 
small size standards defined by the Small Business Administration's 
(SBA) regulations at 13 CFR 121.201 for 27 NAICS codes with the largest 
number of affected entities; (2) a small governmental jurisdiction that 
is a government of a city, county, town, school district or special 
district with a population of less than 50,000; and (3) a small 
organization that is any not-for-profit enterprise which is 
independently owned and operated and is not dominant in its field.
    After considering the economic impacts of today's final rule on 
small entities, I certify that this action will not have a significant 
economic impact on a substantial number of small entities. The small 
entities directly regulated by this final rule are primarily small 
businesses in the manufacturing sector (i.e., NAICS codes 32 and 33). 
We have determined that the average annual impact on small businesses 
is estimated to be significantly less than 1% of annual business sales 
for all small entities.
    Although this final rule will not have a significant economic 
impact on a substantial number of small entities, EPA nonetheless has 
tried to reduce the impact of this rule on small entities. Comments 
were requested, and the comment period was extended once until October 
20, 2011. In September 2011, EPA held two public meetings to accept 
public comment on the proposal in Philadelphia, PA and in Chicago, IL.

[[Page 1770]]

D. Unfunded Mandates Reform Act

    This rule does not contain a Federal mandate that may result in 
expenditures of $100 million or more for state, local, and Tribal 
governments, in the aggregate, or the private sector in any one year. 
EPA's RIA for today's action estimates the maximum state government 
share of future direct costs for complying with today's action is $0.3 
million per year. No impacts are expected for local or Tribal 
governments. Because these direct costs are well below the $100 million 
annual direct cost threshold, this rule is not subject to the 
requirements of sections 202 or 205 of UMRA.
    This rule is also not subject to the requirements of section 203 of 
UMRA because it contains no regulatory requirements that might 
significantly or uniquely affect small governments.

E. Executive Order 13132: Federalism

    This action does not have federalism implications. It will not have 
substantial direct effects on the States, on the relationship between 
the national government and the States, or on the distribution of power 
and responsibilities among the various levels of government, as 
specified in Executive Order 13132.
    The RIA estimates that the state government share of future 
annualized direct costs is $0.3 million per year. No added costs are 
expected for local or tribal governments. Because these direct costs 
are well below the $25 million Federalism test threshold, EPA concludes 
that Executive Order 13132 does not apply to today's action.

F. Executive Order 13175: Consultation and Coordination With Indian 
Tribal Governments

    Subject to the Executive Order 13175 (65 FR 67249, November 9, 
2000), EPA may not issue a regulation that has tribal implications, 
that imposes substantial direct compliance costs, and that is not 
required by statute, unless the Federal government provides the funds 
necessary to pay the direct compliance costs incurred by tribal 
governments, or EPA consults with tribal officials early in the process 
of developing the regulation and develops a tribal summary impact 
statement.
    EPA has concluded that this action may have tribal implications. 
However, it will neither impose substantial direct compliance costs on 
tribal governments, nor preempt tribal law. Under the RCRA statute, the 
federal government implements hazardous waste regulations directly in 
Indian Country. Thus, the changes to the hazardous waste regulations 
promulgated today would not impose any direct costs on tribal 
governments. In addition, currently there are no facilities operating 
on land controlled by tribal governments, but if such facilities did 
locate in such areas, then this action could have tribal implications, 
to the extent that the rule is intended to address potential adverse 
impacts of the 2008 DSW final rule.
    EPA consulted with tribal officials early in the process of 
developing this regulation to ensure they had an opportunity for 
meaningful and timely input into its development. Specifically, tribal 
representatives participated in the public meetings EPA held on the 
draft environmental justice methodology and noted that the Bureau of 
Census data used as the basis for the demographic analysis may 
undercount indigenous populations. EPA also sent a consultation letter 
to all federally recognized tribes requesting a consultation on the 
2011 DSW proposal and held a tribes-only live webinar on August 11, 
2011 to allow tribal official the opportunity to ask questions and 
offer input into the proposed rule. EPA did not receive formal comments 
from tribal officials during the consultation process.

G. Executive Order 13045: Protection of Children From Environmental 
Health Risks and Safety Risks

    This action is not subject to EO 13045 (62 FR 19885, April 23, 
1997) because it is not economically significant as defined in EO 
12866, and because the Agency does not believe the environmental health 
or safety risks addressed by this action present a disproportionate 
risk to children. This action's health and risk assessments are 
contained in the Potential Adverse Impacts Under the Definition of 
Solid Waste Exclusions (Including Potential Disproportionate Adverse 
Impacts to Minority and Low-Income Populations) in the docket for 
today's rule.

H. Executive Order 13211: Actions That Significantly Affect Energy 
Supply, Distribution, or Use

    This action is not a ``significant energy action'' as defined in 
Executive Order 13211 (66 FR 28355, May 22, 2001), because it is not 
likely to have a significant adverse effect on the supply, 
distribution, or use of energy. EPA does not expect today's final rule 
to adversely affect the supply, distribution, or use of energy.
    On the contrary, EPA expects that at least two elements of today's 
final rule may provide future annual energy savings by (a) inducing 
under today's solvent remanufacturing exclusion larger future annual 
quantities of industrial processing solvents which get recycled rather 
than disposed (i.e., incinerated) thereby reducing the relatively 
higher lifecycle energy and other lifecycle resource impacts associated 
with manufacturing virgin solvents, and (b) inducing more state 
governments to adopt the other DSW exclusions which are revised under 
today's final rule, thereby generally stimulating other types of 
industrial recycling of hazardous secondary materials (HSM), which EPA 
also expects may reduce adverse lifecycle impacts on the economy and 
environment compared to the lifecycle impacts of producing virgin 
materials for which larger future annual quantities of recycled HSM may 
substitute. Thus, Executive Order 13211 does not apply to this rule.

I. National Technology Transfer and Advancement Act

    Section 12(d) of the National Technology Transfer and Advancement 
Act of 1995 (NTTAA), Public Law 104-113, 12(d) (15 U.S.C. 272 note) 
directs EPA to use voluntary consensus standards in its regulatory 
activities unless to do so would be inconsistent with applicable law or 
otherwise impractical. Voluntary consensus standards are technical 
standards (e.g., materials specifications, test methods, sampling 
procedures, and business practices) that are developed or adopted by 
voluntary consensus standards bodies. NTTAA directs EPA to provide 
Congress, through OMB, explanations when the Agency decides not to use 
available and applicable voluntary consensus standards.
    This action does not involve technical standards. Therefore, EPA 
did not consider the use of any voluntary consensus standards.

J. Executive Order 12898: Environmental Justice

    Executive Order 12898 (59 FR 7629 (Feb. 16, 1994)) establishes 
federal executive policy on environmental justice. Its main provision 
directs federal agencies, to the greatest extent practicable and 
permitted by law, to make environmental justice part of their mission 
by identifying and addressing, as appropriate, disproportionately high 
and adverse human health or environmental effects of their programs, 
policies, and activities on minority populations and low-income 
populations in the United States.
    EPA has determined that this final rule will not have 
disproportionately high and adverse human health or

[[Page 1771]]

environmental effects on minority or low-income populations because it 
increases the level of environmental protection for all affected 
populations without having any disproportionately high and adverse 
human health or environmental effects on any population, including any 
minority or low-income population. The purpose of this final rule is to 
revise the 2008 DSW final rule in such a way that reduces potential 
adverse impacts, including potential disproportionate impacts to 
minority and low-impact communities. For further information on the 
potential for disproportionate impacts to minority and low-income 
populations, see the Potential Adverse Impacts Under the Definition of 
Solid Waste Exclusions (Including Potential Disproportionate Adverse 
Impacts to Minority and Low-Income Populations) in the docket for 
today's rule.

K. Congressional Review Act

    The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the 
Small Business Regulatory Enforcement Fairness Act of 1996, generally 
provides that before a rule may take effect, the agency promulgating 
the rule must submit a rule report, which includes a copy of the rule, 
to each House of the Congress and to the Comptroller General of the 
United States. EPA will submit a report containing this rule and other 
required information to the U.S. Senate, the U.S. House of 
Representatives, and the Comptroller General of the United States prior 
to publication of the rule in the Federal Register. A Major rule cannot 
take effect until 60 days after it is published in the Federal 
Register. This action is not a ``major rule'' as defined by 5 U.S.C. 
804(2). This rule will be effective on July 13, 2015.

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, Incorporation by 
reference, Recycling, Solid waste.

    Dated: December 10, 2014.
Gina McCarthy,
Administrator.

    For the reasons set out in the preamble, title 40, chapter I of the 
Code of Federal Regulations is amended as follows:

PART 260--HAZARDOUS WASTE MANAGEMENT SYSTEM: GENERAL

0
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

0
2. Section 260.10 is amended as follows:
0
a. Add in alphabetical order the definition of ``Contained;''
0
b. Remove the definition of ``Hazardous secondary material generated 
and reclaimed under the control of the generator;'' and
0
c. Add in alphabetical order the definition of ``Remanufacturing,''
    The additions read as follows:


Sec.  260.10  Definitions

* * * * *
    Contained means held in a unit (including a land-based unit as 
defined in this subpart) that meets the following criteria:
    (1) The unit is in good condition, with no leaks or other 
continuing or intermittent unpermitted releases of the hazardous 
secondary materials to the environment, and is designed, as appropriate 
for the hazardous secondary materials, to prevent releases of hazardous 
secondary materials to the environment. Unpermitted releases are 
releases that are not covered by a permit (such as a permit to 
discharge to water or air) and may include, but are not limited to, 
releases through surface transport by precipitation runoff, releases to 
soil and groundwater, wind-blown dust, fugitive air emissions, and 
catastrophic unit failures;
    (2) The unit is properly labeled or otherwise has a system (such as 
a log) to immediately identify the hazardous secondary materials in the 
unit; and
    (3) The unit holds hazardous secondary materials that are 
compatible with other hazardous secondary materials placed in the unit 
and is compatible with the materials used to construct the unit and 
addresses any potential risks of fires or explosions.
    (4) Hazardous secondary materials in units that meet the applicable 
requirements of 40 CFR parts 264 or 265 are presumptively contained.
* * * * *
    Remanufacturing means processing a higher-value hazardous secondary 
material in order to manufacture a product that serves a similar 
functional purpose as the original commercial-grade material. For the 
purpose of this definition, a hazardous secondary material is 
considered higher-value if it was generated from the use of a 
commercial-grade material in a manufacturing process and can be 
remanufactured into a similar commercial-grade material.
* * * * *

Subpart C--Rulemaking Petitions

0
3. Section 260.30 is amended by adding paragraph (f) to read as 
follows:


Sec.  260.30  Non-waste determinations and variances from 
classification as a solid waste.

* * * * *
    (f) Hazardous secondary materials that are transferred for 
reclamation under Sec.  261.4(a)(24) and are managed at a verified 
reclamation facility or intermediate facility where the management of 
the hazardous secondary materials is not addressed under a RCRA Part B 
permit or interim status standards.

0
4. Section 260.31 is amended by revising paragraph (c) and adding 
paragraph (d) to read as follows:


Sec.  260.31  Standards and criteria for variances from classification 
as a solid waste.

* * * * *
    (c) The Administrator may grant requests for a variance from 
classifying as a solid waste those hazardous secondary materials that 
have been partially reclaimed, but must be reclaimed further before 
recovery is completed, if the partial reclamation has produced a 
commodity-like material. A determination that a partially-reclaimed 
material for which the variance is sought is commodity-like will be 
based on whether the hazardous secondary material is legitimately 
recycled as specified in Sec.  260.43 of this part and on whether all 
of the following decision criteria are satisfied:
    (1) Whether the degree of partial reclamation the material has 
undergone is substantial as demonstrated by using a partial reclamation 
process other than the process that generated the hazardous waste;
    (2) Whether the partially-reclaimed material has sufficient 
economic value that it will be purchased for further reclamation;
    (3) Whether the partially-reclaimed material is a viable substitute 
for a product or intermediate produced from virgin or raw materials 
which is used in subsequent production steps;
    (4) Whether there is a market for the partially-reclaimed material 
as demonstrated by known customer(s) who are further reclaiming the 
material (e.g., records of sales and/or contracts

[[Page 1772]]

and evidence of subsequent use, such as bills of lading);
    (5) Whether the partially-reclaimed material is handled to minimize 
loss.
    (d) The Administrator may grant requests for a variance from 
classifying as a solid waste those hazardous secondary materials that 
are transferred for reclamation under Sec.  261.4(a)(24) and are 
managed at a verified reclamation facility or intermediate facility 
where the management of the hazardous secondary materials is not 
addressed under a RCRA Part B permit or interim status standards. The 
Administrator's decision will be based on the following criteria:
    (1) The reclamation facility or intermediate facility must 
demonstrate that the reclamation process for the hazardous secondary 
materials is legitimate pursuant to Sec.  260.43;
    (2) The reclamation facility or intermediate facility must satisfy 
the financial assurance condition in Sec.  261.4(a)(24)(vi)(F);
    (3) The reclamation facility or intermediate facility must not be 
subject to a formal enforcement action in the previous three years and 
not be classified as a significant non-complier under RCRA Subtitle C, 
or must provide credible evidence that the facility will manage the 
hazardous secondary materials properly. Credible evidence may include a 
demonstration that the facility has taken remedial steps to address the 
violations and prevent future violations, or that the violations are 
not relevant to the proper management of the hazardous secondary 
materials;
    (4) The intermediate or reclamation facility must have the 
equipment and trained personnel needed to safely manage the hazardous 
secondary material and must meet emergency preparedness and response 
requirements under 40 CFR part 261 subpart M;
    (5) If residuals are generated from the reclamation of the excluded 
hazardous secondary materials, the reclamation facility must have the 
permits required (if any) to manage the residuals, have a contract with 
an appropriately permitted facility to dispose of the residuals or 
present credible evidence that the residuals will be managed in a 
manner that is protective of human health and the environment, and
    (6) The intermediate or reclamation facility must address the 
potential for risk to proximate populations from unpermitted releases 
of the hazardous secondary material to the environment (i.e., releases 
that are not covered by a permit, such as a permit to discharge to 
water or air), which may include, but are not limited to, potential 
releases through surface transport by precipitation runoff, releases to 
soil and groundwater, wind-blown dust, fugitive air emissions, and 
catastrophic unit failures), and must include consideration of 
potential cumulative risks from other nearby potential stressors.


0
5. Section 260.33 is amended by revising paragraph (c) and adding 
paragraphs (d) and (e) to read as follows:


Sec.  260.33  Procedures for variances from classification as a solid 
waste, for variances to be classified as a boiler, or for non-waste 
determinations.

* * * * *
    (c) In the event of a change in circumstances that affect how a 
hazardous secondary material meets the relevant criteria contained in 
Sec.  260.31, Sec.  260.32, or Sec.  260.34 upon which a variance or 
non-waste determination has been based, the applicant must send a 
description of the change in circumstances to the Administrator. The 
Administrator may issue a determination that the hazardous secondary 
material continues to meet the relevant criteria of the variance or 
non-waste determination or may require the facility to re-apply for the 
variance or non-waste determination.
    (d) Variances and non-waste determinations shall be effective for a 
fixed term not to exceed ten years. No later than six months prior to 
the end of this term, facilities must re-apply for a variance or non-
waste determination. If a facility re-applies for a variance or non-
waste determination within six months, the facility may continue to 
operate under an expired variance or non-waste determination until 
receiving a decision on their re-application from the Administrator.
    (e) Facilities receiving a variance or non-waste determination must 
provide notification as required by Sec.  260.42 of this chapter.


0
6. Section 260.34 is amended by revising paragraphs (b)(4) and (c)(5) 
to read as follows:


Sec.  260.34  Standards and criteria for non-waste determinations.

* * * * *
    (b) * * *
    (4) Other relevant factors that demonstrate the hazardous secondary 
material is not discarded, including why the hazardous secondary 
material cannot meet, or should not have to meet, the conditions of an 
exclusion under Sec.  261.2 or Sec.  261.4 of this chapter.
    (c) * * *
    (5) Other relevant factors that demonstrate the hazardous secondary 
material is not discarded, including why the hazardous secondary 
material cannot meet, or should not have to meet, the conditions of an 
exclusion under Sec.  261.2 or Sec.  261.4 of this chapter.


0
7. Section 260.42 is amended by revising paragraphs (a) introductory 
text, (a)(4) through (9), removing paragraph (a)(10), and revising 
paragraph (b).
    The revisions read as follows:


Sec.  260.42  Notification requirement for hazardous secondary 
materials.

    (a) Facilities managing hazardous secondary materials under 
Sec. Sec.  260.30, 261.4(a)(23), 261.4(a)(24), or 261.4(a)(27) must 
send a notification prior to operating under the regulatory provision 
and by March 1 of each even-numbered year thereafter to the Regional 
Administrator using EPA Form 8700-12 that includes the following 
information:
* * * * *
    (4) The regulation under which the hazardous secondary materials 
will be managed;
    (5) When the facility began or expects to begin managing the 
hazardous secondary materials in accordance with the regulation;
    (6) A list of hazardous secondary materials that will be managed 
according to the regulation (reported as the EPA hazardous waste 
numbers that would apply if the hazardous secondary materials were 
managed as hazardous wastes);
    (7) For each hazardous secondary material, whether the hazardous 
secondary material, or any portion thereof, will be managed in a land-
based unit;
    (8) The quantity of each hazardous secondary material to be managed 
annually; and
    (9) The certification (included in EPA Form 8700-12) signed and 
dated by an authorized representative of the facility.
    (b) If a facility managing hazardous secondary materials has 
submitted a notification, but then subsequently stops managing 
hazardous secondary materials in accordance with the regulation(s) 
listed above, the facility must notify the Regional Administrator 
within thirty (30) days using EPA Form 8700-12. For purposes of this 
section, a facility has stopped managing hazardous secondary materials 
if the facility no longer generates, manages and/or reclaims hazardous 
secondary materials under the regulation(s) above and does not expect 
to manage any amount of hazardous secondary materials for at least 1 
year.


0
 8. Section 260.43 is amended by revising the section heading and

[[Page 1773]]

paragraph (a) and removing and reserving paragraphs (b) and (c).
    The revision reads as follows:


Sec.  260.43  Legitimate recycling of hazardous secondary materials.

    (a) Recycling of hazardous secondary materials for the purpose of 
the exclusions or exemptions from the hazardous waste regulations must 
be legitimate. Hazardous secondary material that is not legitimately 
recycled is discarded material and is a solid waste. In determining if 
their recycling is legitimate, persons must address all the 
requirements of this paragraph.
    (1) Legitimate recycling must involve a hazardous secondary 
material that provides a useful contribution to the recycling process 
or to a product or intermediate of the recycling process. The hazardous 
secondary material provides a useful contribution if it:
    (i) Contributes valuable ingredients to a product or intermediate; 
or
    (ii) Replaces a catalyst or carrier in the recycling process; or
    (iii) Is the source of a valuable constituent recovered in the 
recycling process; or
    (iv) Is recovered or regenerated by the recycling process; or
    (v) Is used as an effective substitute for a commercial product.
    (2) The recycling process must produce a valuable product or 
intermediate. The product or intermediate is valuable if it is:
    (i) Sold to a third party; or
    (ii) 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 generator and the recycler must manage the hazardous 
secondary material as a valuable commodity when it is under their 
control. Where there is an analogous raw material, the hazardous 
secondary material must be managed, at a minimum, in a manner 
consistent with the management of the raw material or in an equally 
protective manner. Where there is no analogous raw material, the 
hazardous secondary material must be contained. Hazardous secondary 
materials that are released to the environment and are not recovered 
immediately are discarded.
    (4) The product of the recycling process must be comparable to a 
legitimate product or intermediate:
    (i) Where there is an analogous product or intermediate, the 
product of the recycling process is comparable to a legitimate product 
or intermediate if:
    (A) The product of the recycling process does not exhibit a 
hazardous characteristic (as defined in part 261 subpart C) that 
analogous products do not exhibit, and
    (B) The concentrations of any hazardous constituents found in 
appendix VIII of part 261 of this chapter that are in the product or 
intermediate are at levels that are comparable to or lower than those 
found in analogous products or at levels that meet widely-recognized 
commodity standards and specifications, in the case where the commodity 
standards and specifications include levels that specifically address 
those hazardous constituents.
    (ii) Where there is no analogous product, the product of the 
recycling process is comparable to a legitimate product or intermediate 
if:
    (A) The product of the recycling process is a commodity that meets 
widely recognized commodity standards and specifications (e.g., 
commodity specification grades for common metals), or
    (B) The hazardous secondary materials being recycled are returned 
to the original process or processes from which they were generated to 
be reused (e.g., closed loop recycling).
    (iii) If the product of the recycling process has levels of 
hazardous constituents that are not comparable to or unable to be 
compared to a legitimate product or intermediate per paragraph 
(a)(4)(i) or (ii) of this section, the recycling still may be shown to 
be legitimate, if it meets the following specified requirements. The 
person performing the recycling must conduct the necessary assessment 
and prepare documentation showing why the recycling is, in fact, still 
legitimate. The recycling can be shown to be legitimate based on lack 
of exposure from toxics in the product, lack of the bioavailability of 
the toxics in the product, or other relevant considerations which show 
that the recycled product does not contain levels of hazardous 
constituents that pose a significant human health or environmental 
risk. The documentation must include a certification statement that the 
recycling is legitimate and must be maintained on-site for three years 
after the recycling operation has ceased. The person performing the 
recycling must notify the Regional Administrator of this activity using 
EPA Form 8700-12.
* * * * *

PART 261--IDENTIFICATION AND LISTING OF HAZARDOUS WASTE

0
9. 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--General

0
10. Section 261.1 is amended by revising paragraphs (c)(4) and (8) to 
read as follows:


Sec.  261.1  Purpose and scope.

* * * * *
    (c) * * *
    (4) A material is ``reclaimed'' if it is processed to recover a 
usable product, or if it is regenerated. Examples are recovery of lead 
values from spent batteries and regeneration of spent solvents. In 
addition, for purposes of Sec.  261.4(a)(23) and (24), smelting, 
melting, and refining furnaces are considered to be solely engaged in 
metals reclamation if the metal recovery from the hazardous secondary 
materials meets the same requirements as those specified for metals 
recovery from hazardous waste found in Sec.  266.100(d)(1) through (3) 
of this chapter, and if the residuals meet the requirements specified 
in Sec.  266.112 of this chapter.
* * * * *
    (8) A material is ``accumulated speculatively'' if it is 
accumulated before being recycled. A material is not accumulated 
speculatively, however, if the person accumulating it can show that the 
material is potentially recyclable and has a feasible means of being 
recycled; and that--during the calendar year (commencing on January 
1)--the amount of material that is recycled, or transferred to a 
different site for recycling, equals at least 75 percent by weight or 
volume of the amount of that material accumulated at the beginning of 
the period. Materials must be placed in a storage unit with a label 
indicating the first date that the material began to be accumulated. If 
placing a label on the storage unit is not practicable, the 
accumulation period must be documented through an inventory log or 
other appropriate method. In calculating the percentage of turnover, 
the 75 percent requirement is to be applied to each material of the 
same type (e.g., slags from a single smelting process) that is recycled 
in the same way (i.e., from which the same material is recovered or 
that is used in the same way). Materials accumulating in units that 
would be exempt from regulation under Sec.  261.4(c) are not to be 
included in making the calculation. Materials that are already defined 
as solid wastes also are not to be included in making the calculation. 
Materials are no longer in this category once they are removed from 
accumulation for recycling, however.
* * * * *

[[Page 1774]]


0
11. Section 261.2 is amended as follows:
0
a. Remove and reserve paragraph (a)(2)(ii);
0
b. Revise paragraph (b)(3);
0
c. Add paragraph (b)(4);
0
d. Revise paragraph (c)(3) and table 1 in paragraph (c)(4); and
0
e. Add paragraph (g).
    The revisions and additions text reads as follows:


Sec.  261.2  Definition of solid waste.

* * * * *
    (b) * * *
    (3) Accumulated, stored, or treated (but not recycled) before or in 
lieu of being abandoned by being disposed of, burned or incinerated; or
    (4) Sham recycled, as explained in paragraph (g) of this section.
* * * * *
    (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 Sec. Sec.  261.4(a)(17), or 261.4(a)(23), 
261.4(a)(24), or 261.4(a)(27).
    (4) * * *

                                                     Table 1
----------------------------------------------------------------------------------------------------------------
                                                                                  Reclamation
                                                                                     (Sec.
                                                                                 261.2(c)(3)),
                                                    Use             Energy         except as       Speculative
                                                constituting    recovery/fuel     provided in      accumulation
                                               disposal (Sec.       (Sec.          Sec.  Sec.         (Sec.
                                                261.2(c)(1))     261.2(c)(2))    261.4(a)(17),     261.2(c)(4))
                                                                                 261.4(a)(23),
                                                                                261.4(a)(24) or
                                                                                  261.4(a)(27)
----------------------------------------------------------------------------------------------------------------
                                                     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 that is not excluded under 40                (*)              (*)              (*)              (*)
 CFR 261.4(a)(13)...........................
----------------------------------------------------------------------------------------------------------------
Note: The terms ``spent materials,'' ``sludges,'' ``by-products,'' and ``scrap metal'' and ``processed scrap
  metal'' are defined in Sec.   261.1.

* * * * *
    (g) Sham recycling. A hazardous secondary material found to be sham 
recycled is considered discarded and a solid waste. Sham recycling is 
recycling that is not legitimate recycling as defined in Sec.  260.43.

0
12. Section 261.4 is amended as follows:
0
a. Republish paragraph (a) introductory text;
0
b. Revise paragraph (a)(23) and (24);
0
c. Remove and reserve paragraph (a)(25); and
0
d. Add paragraph (a)(27).
    The revisions and addition as follows:


Sec.  261.4  Exclusions.

    (a) Materials which are not solid wastes. The following materials 
are not solid wastes for the purpose of this part:
* * * * *
    (23) Hazardous secondary material generated and legitimately 
reclaimed within the United States or its territories and under the 
control of the generator, provided that the material complies with 
paragraphs (a)(23)(i) and (ii) of this section:
    (i)(A) The hazardous secondary material is generated and reclaimed 
at the generating facility (for purposes of this definition, generating 
facility means all contiguous property owned, leased, or otherwise 
controlled by the hazardous secondary material generator); or
    (B) The hazardous secondary material is generated and reclaimed at 
different facilities, if the reclaiming facility is controlled by the 
generator or if both the generating facility and the reclaiming 
facility are controlled by a person as defined in Sec.  260.10 of this 
chapter, and if the generator provides one of the following 
certifications: ``on behalf of [insert generator facility name], I 
certify that this facility will send the indicated hazardous secondary 
material to [insert reclaimer facility name], which is controlled by 
[insert generator facility name] and that [insert name of either 
facility] has acknowledged full responsibility for the safe management 
of the hazardous secondary material,'' or ``on behalf of [insert 
generator facility name], I certify that this facility will send the 
indicated hazardous secondary material to [insert reclaimer facility 
name], that both facilities are under common control, and that [insert 
name of either facility] has acknowledged full responsibility for the 
safe management of the hazardous secondary material.'' For purposes of 
this paragraph, ``control'' means the power to direct the policies of 
the facility, whether by the ownership of stock, voting rights, or 
otherwise, except that contractors who operate facilities on behalf of 
a different person as defined in Sec.  260.10 shall not be deemed to 
``control'' such facilities. The generating and receiving facilities 
must both maintain at their facilities for no less than three years 
records of hazardous secondary materials sent or received under this 
exclusion. In both cases, the records must contain the name of the 
transporter, the date of the shipment, and the type and quantity of the 
hazardous secondary material shipped or received under the exclusion. 
These requirements may be satisfied by routine business records (e.g., 
financial records, bills of lading, copies of DOT shipping papers, or 
electronic confirmations); or
    (C) The hazardous secondary material is generated pursuant to a 
written contract between a tolling contractor and a toll manufacturer 
and is reclaimed by the tolling contractor, if the tolling contractor 
certifies the following: ``On behalf of [insert tolling contractor 
name], I certify that [insert tolling contractor name] has a written 
contract with [insert toll manufacturer name] to manufacture [insert 
name of product or intermediate] which is made from specified unused 
materials, and that [insert tolling contractor name] will reclaim the 
hazardous secondary materials generated during this manufacture. On 
behalf of [insert tolling contractor name], I also certify that [insert 
tolling contractor name] retains ownership of, and responsibility for, 
the

[[Page 1775]]

hazardous secondary materials that are generated during the course of 
the manufacture, including any releases of hazardous secondary 
materials that occur during the manufacturing process''. The tolling 
contractor must maintain at its facility for no less than three years 
records of hazardous secondary materials received pursuant to its 
written contract with the tolling manufacturer, and the tolling 
manufacturer must maintain at its facility for no less than three years 
records of hazardous secondary materials shipped pursuant to its 
written contract with the tolling contractor. In both cases, the 
records must contain the name of the transporter, the date of the 
shipment, and the type and quantity of the hazardous secondary material 
shipped or received pursuant to the written contract. These 
requirements may be satisfied by routine business records (e.g., 
financial records, bills of lading, copies of DOT shipping papers, or 
electronic confirmations). For purposes of this paragraph, tolling 
contractor means a person who arranges for the production of a product 
or intermediate made from specified unused materials through a written 
contract with a toll manufacturer. Toll manufacturer means a person who 
produces a product or intermediate made from specified unused materials 
pursuant to a written contract with a tolling contractor.
    (ii)(A) The hazardous secondary material is contained as defined in 
Sec.  260.10 of this chapter. A hazardous secondary material released 
to the environment is discarded and a solid waste unless it is 
immediately recovered for the purpose of reclamation. Hazardous 
secondary material managed in a unit with leaks or other continuing or 
intermittent unpermitted releases is discarded and a solid waste.
    (B) The hazardous secondary material is not speculatively 
accumulated, as defined in Sec.  261.1(c)(8).
    (C) Notice is provided as required by Sec.  260.42 of this chapter.
    (D) The material is not otherwise subject to material-specific 
management conditions under paragraph (a) of this section when 
reclaimed, and it is not a spent lead-acid battery (see Sec.  266.80 
and Sec.  273.2 of this chapter).
    (E) Persons performing the recycling of hazardous secondary 
materials under this exclusion must maintain documentation of their 
legitimacy determination on-site. Documentation must be a written 
description of how the recycling meets all four factors in Sec.  
260.43(a). Documentation must be maintained for three years after the 
recycling operation has ceased.
    (F) The emergency preparedness and response requirements found in 
subpart M of this part are met.
    (24) Hazardous secondary material that is generated and then 
transferred to a verified reclamation facility for the purpose of 
reclamation is not a solid waste, provided that:
    (i) The material is not speculatively accumulated, as defined in 
Sec.  261.1(c)(8);
    (ii) The material is not handled by any person or facility other 
than the hazardous secondary material generator, the transporter, an 
intermediate facility or a reclaimer, and, while in transport, is not 
stored for more than 10 days at a transfer facility, as defined in 
Sec.  260.10 of this chapter, and is packaged according to applicable 
Department of Transportation regulations at 49 CFR parts 173, 178, and 
179 while in transport;
    (iii) The material is not otherwise subject to material-specific 
management conditions under this paragraph (a) when reclaimed, and it 
is not a spent lead-acid battery (see Sec. Sec.  266.80 and 273.2 of 
this chapter);
    (iv) The reclamation of the material is legitimate, as specified 
under Sec.  260.43 of this chapter;
    (v) The hazardous secondary material generator satisfies all of the 
following conditions:
    (A) The material must be contained as defined in Sec.  260.10. A 
hazardous secondary material released to the environment is discarded 
and a solid waste unless it is immediately recovered for the purpose of 
recycling. Hazardous secondary material managed in a unit with leaks or 
other continuing releases is discarded and a solid waste.
    (B) The hazardous secondary material generator must arrange for 
transport of hazardous secondary materials to a verified reclamation 
facility (or facilities) in the United States. A verified reclamation 
facility is a facility that has been granted a variance under Sec.  
260.31(d), or a reclamation facility where the management of the 
hazardous secondary materials is addressed under a RCRA Part B permit 
or interim status standards. If the hazardous secondary material will 
be passing through an intermediate facility, the intermediate facility 
must have been granted a variance under Sec.  260.31(d) or the 
management of the hazardous secondary materials at that facility must 
be addressed under a RCRA Part B permit or interim status standards, 
and the hazardous secondary material generator must make contractual 
arrangements with the intermediate facility to ensure that the 
hazardous secondary material is sent to the reclamation facility 
identified by the hazardous secondary material generator.
    (C) The hazardous secondary material generator must maintain at the 
generating facility for no less than three (3) years records of all 
off-site shipments of hazardous secondary materials. 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 each reclaimer and, if applicable, the name 
and address of each intermediate facility to which the hazardous 
secondary material was sent;
    (3) The type and quantity of hazardous secondary material in the 
shipment.
    (D) The hazardous secondary material generator must maintain at the 
generating facility for no less than three (3) years confirmations of 
receipt from each reclaimer and, if applicable, each intermediate 
facility for all off-site shipments of hazardous secondary materials. 
Confirmations of receipt must include the name and address of the 
reclaimer (or intermediate facility), the type and quantity of the 
hazardous secondary materials received and the date which the hazardous 
secondary materials were received. This requirement may be satisfied by 
routine business records (e.g., financial records, bills of lading, 
copies of DOT shipping papers, or electronic confirmations of receipt);
    (E) The hazardous secondary material generator must comply with the 
emergency preparedness and response conditions in subpart M of this 
part.
    (vi) Reclaimers of hazardous secondary material excluded from 
regulation under this exclusion and intermediate facilities as defined 
in Sec.  260.10 of this chapter satisfy all of the following 
conditions:
    (A) The reclaimer and intermediate facility must maintain at its 
facility for no less than three (3) years records of all shipments of 
hazardous secondary material that were received at the facility and, if 
applicable, for all shipments of hazardous secondary materials that 
were received and subsequently sent off-site from the facility for 
further reclamation. 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 hazardous secondary material generator 
and, if applicable, the name and address of the reclaimer or 
intermediate facility

[[Page 1776]]

which the hazardous secondary materials were received from;
    (3) The type and quantity of hazardous secondary material in the 
shipment; and
    (4) For hazardous secondary materials that, after being received by 
the reclaimer or intermediate facility, were subsequently transferred 
off-site for further reclamation, the name and address of the 
(subsequent) reclaimer and, if applicable, the name and address of each 
intermediate facility to which the hazardous secondary material was 
sent.
    (B) The intermediate facility must send the hazardous secondary 
material to the reclaimer(s) designated by the hazardous secondary 
materials generator.
    (C) The reclaimer and intermediate facility must send to the 
hazardous secondary material generator confirmations of receipt for all 
off-site shipments of hazardous secondary materials. Confirmations of 
receipt must include the name and address of the reclaimer (or 
intermediate facility), the type and quantity of the hazardous 
secondary materials received and the date which the hazardous secondary 
materials were received. This requirement may be satisfied by routine 
business records (e.g., financial records, bills of lading, copies of 
DOT shipping papers, or electronic confirmations of receipt).
    (D) The reclaimer and intermediate facility must manage the 
hazardous secondary material in a manner that is at least as protective 
as that employed for analogous raw material and must be 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.
    (E) 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 in accordance with the applicable 
requirements of 40 CFR parts 260 through 272.
    (F) The reclaimer and intermediate facility have financial 
assurance as required under subpart H of 40 CFR part 261,
    (G) The reclaimer and intermediate facility have been granted a 
variance under Sec.  260.31(d) or have a RCRA Part B permit or interim 
status standards that address the management of the hazardous secondary 
materials; and
    (vii) All persons claiming the exclusion under this paragraph 
(a)(24) of this section provide notification as required under Sec.  
260.42 of this chapter.
* * * * *
    (27) Hazardous secondary material that is generated and then 
transferred to another person for the purpose of remanufacturing is not 
a solid waste, provided that:
    (i) The hazardous secondary material consists of one or more of the 
following spent solvents: Toluene, xylenes, ethylbenzene, 1,2,4-
trimethylbenzene, chlorobenzene, n-hexane, cyclohexane, methyl tert-
butyl ether, acetonitrile, chloroform, chloromethane, dichloromethane, 
methyl isobutyl ketone, NN-dimethylformamide, tetrahydrofuran, n-butyl 
alcohol, ethanol, and/or methanol;
    (ii) The hazardous secondary material originated from using one or 
more of the solvents listed in paragraph (a)(27)(i) of this section in 
a commercial grade for reacting, extracting, purifying, or blending 
chemicals (or for rinsing out the process lines associated with these 
functions) in the pharmaceutical manufacturing (NAICS 325412), basic 
organic chemical manufacturing (NAICS 325199), plastics and resins 
manufacturing (NAICS 325211), and/or the paints and coatings 
manufacturing sectors (NAICS 325510).
    (iii) The hazardous secondary material generator sends the 
hazardous secondary material spent solvents listed in paragraph 
(a)(27)(i) of this section to a remanufacturer in the pharmaceutical 
manufacturing (NAICS 325412), basic organic chemical manufacturing 
(NAICS 325199), plastics and resins manufacturing (NAICS 325211), and/
or the paints and coatings manufacturing sectors (NAICS 325510).
    (iv) After remanufacturing one or more of the solvents listed in 
paragraph (a)(27)(i) of this section, the use of the remanufactured 
solvent shall be limited to reacting, extracting, purifying, or 
blending chemicals (or for rinsing out the process lines associated 
with these functions) in the pharmaceutical manufacturing (NAICS 
325412), basic organic chemical manufacturing (NAICS 325199), plastics 
and resins manufacturing (NAICS 325211), and the paints and coatings 
manufacturing sectors (NAICS 325510) or to using them as ingredients in 
a product. These allowed uses correspond to chemical functional uses 
enumerated under the Chemical Data Reporting Rule of the Toxic 
Substances Control Act (40 CFR parts 704, 710-711), including 
Industrial Function Codes U015 (solvents consumed in a reaction to 
produce other chemicals) and U030 (solvents become part of the 
mixture);
    (v) After remanufacturing one or more of the solvents listed in 
paragraph (a)(27)(i) of this section, the use of the remanufactured 
solvent does not involve cleaning or degreasing oil, grease, or similar 
material from textiles, glassware, metal surfaces, or other articles. 
(These disallowed continuing uses correspond to chemical functional 
uses in Industrial Function Code U029 under the Chemical Data Reporting 
Rule of the Toxics Substances Control Act.); and
    (vi) Both the hazardous secondary material generator and the 
remanufacturer must:
    (A) Notify EPA or the State Director, if the state is authorized 
for the program, and update the notification every two years per 40 CFR 
260.42;
    (B) Develop and maintain an up-to-date remanufacturing plan which 
identifies:
    (1) The name, address and EPA ID number of the generator(s) and the 
remanufacturer(s),
    (2) The types and estimated annual volumes of spent solvents to be 
remanufactured,
    (3) The processes and industry sectors that generate the spent 
solvents,
    (4) The specific uses and industry sectors for the remanufactured 
solvents, and
    (5) A certification from the remanufacturer stating ``on behalf of 
[insert remanufacturer facility name], I certify that this facility is 
a remanufacturer under pharmaceutical manufacturing (NAICS 325412), 
basic organic chemical manufacturing (NAICS 325199), plastics and 
resins manufacturing (NAICS 325211), and/or the paints and coatings 
manufacturing sectors (NAICS 325510), and will accept the spent 
solvent(s) for the sole purpose of remanufacturing into commercial-
grade solvent(s) that will be used for reacting, extracting, purifying, 
or blending chemicals (or for rinsing out the process lines associated 
with these functions) or for use as product ingredient(s). I also 
certify that the remanufacturing equipment, vents, and tanks are 
equipped with and are operating air emission controls in compliance 
with the appropriate Clean Air Act regulations under 40 CFR part 60, 
part 61 or part 63, or, absent such Clean Air Act standards for the 
particular operation or piece of equipment covered by the 
remanufacturing exclusion, are in compliance with the appropriate 
standards in 40 CFR part 261, subparts

[[Page 1777]]

AA (vents), BB (equipment) and CC (tank storage),'';
    (C) Maintain records of shipments and confirmations of receipts for 
a period of three years from the dates of the shipments;
    (D) Prior to remanufacturing, store the hazardous spent solvents in 
tanks or containers that meet technical standards found in subparts I 
and J of 40 CFR part 261, with the tanks and containers being labeled 
or otherwise having an immediately available record of the material 
being stored;
    (E) During remanufacturing, and during storage of the hazardous 
secondary materials prior to remanufacturing, the remanufacturer 
certifies that the remanufacturing equipment, vents, and tanks are 
equipped with and are operating air emission controls in compliance 
with the appropriate Clean Air Act regulations under 40 CFR part 60, 
part 61 or part 63; or, absent such Clean Air Act standards for the 
particular operation or piece of equipment covered by the 
remanufacturing exclusion, are in compliance with the appropriate 
standards in 40 CFR part 261 subparts AA (vents), BB (equipment) and CC 
(tank storage); and
    (F) Meet the requirements prohibiting speculative accumulation per 
40 CFR 261.1(c)(8).
* * * * *

0
13. Part 261 is amended by:
0
a. Adding Subparts I and J;
0
b. Adding reserved Subparts K and L;
0
c. Adding Subpart M;
0
d. Adding reserved Subparts N through Z; and
0
e. Adding Subparts AA through CC.
    The additions read as follows:
Subpart I--Use and Management of Containers
Sec.
261.170 Applicability.
261.171 Condition of containers.
261.172 Compatibility of hazardous secondary materials with 
containers.
261.173 Management of containers.
261.175 Containment.
261.176 Special requirements for ignitable or reactive hazardous 
secondary material.
261.177 Special requirements for incompatible materials.
261.179 Air emission standards.
Subpart J--Tank Systems
261.190 Applicability.
261.191 Assessment of existing tank system's integrity.
261.192 [Reserved]
261.193 Containment and detection of releases.
261.194 General operating requirements.
261.195 [Reserved]
261.196 Response to leaks or spills and disposition of leaking or 
unfit-for-use tank systems.
261.197 Termination of remanufacturing exclusion.
261.198 Special requirements for ignitable or reactive materials.
261.199 Special requirements for incompatible materials.
261.200 Air emission standards.
Subparts K-L [Reserved]
Subpart M--Emergency Preparedness and Response for Management of 
Excluded Hazardous Secondary Materials
261.400 Applicability.
261.410 Preparedness and prevention
261.411 Emergency procedures for facilities generating or 
accumulating of 6000 kg or less of hazardous secondary material.
261.420 Contingency planning and emergency procedures for facilities 
generating or accumulating more than 6000 kg of hazardous secondary 
material.
Subparts N-Z [Reserved]
Subpart AA--Air Emission Standards for Process Vents
261.1030 Applicability.
261.1031 Definitions.
261.1032 Standards: Process vents.
261.1033 Standards: Closed-vent systems and control devices.
261.1034 Test methods and procedures.
261.1035 Recordkeeping requirements.
261.1036-261.1049 [Reserved]
Subpart BB--Air Emission Standards for Equipment Leaks
261.1050 Applicability.
261.1051 Definitions.
261.1052 Standards: Pumps in light liquid service.
261.1053 Standards: Compressors.
261.1054 Standards: Pressure relief devices in gas/vapor service.
261.1055 Standards: Sampling connection systems.
261.1056 Standards: Open-ended valves or lines.
261.1057 Standards: Valves in gas/vapor service or in light liquid 
service.
261.1058 Standards: Pumps and valves in heavy liquid service, 
pressure relief devices in light liquid or heavy liquid service, and 
flanges and other connectors.
261.1059 Standards: Delay of repair.
261.1060 Standards: Closed-vent systems and control devices.
261.1061 Alternative standards for valves in gas/vapor service or in 
light liquid service: percentage of valves allowed to leak.
261.1062 Alternative standards for valves in gas/vapor service or in 
light liquid service: skip period leak detection and repair.
261.1063 Test methods and procedures.
261.1064 Recordkeeping requirements.
261.1065-261.1079 [Reserved]
Subpart CC--Air Emission Standards for Tanks and Containers
261.1080 Applicability.
261.1081 Definitions.
261.1082 Standards: General.
261.1083 Material determination procedures.
261.1084 Standards: Tanks.
261.1085 [Reserved]
261.1086 Standards: Containers.
261.1087 Standards: Closed-vent systems and control devices.
261.1088 Inspection and monitoring requirements.
261.1089 Recordkeeping requirements.
261.1090 [Reserved]

Subpart I--Use and Management of Containers


Sec.  261.170  Applicability.

    This subpart applies to hazardous secondary materials excluded 
under the remanufacturing exclusion at Sec.  261.4(a)(27) and stored in 
containers.


Sec.  261.171  Condition of containers.

    If a container holding hazardous secondary material is not in good 
condition (e.g., severe rusting, apparent structural defects) or if it 
begins to leak, the hazardous secondary material must be transferred 
from this container to a container that is in good condition or managed 
in some other way that complies with the requirements of this part.


Sec.  261.172  Compatibility of hazardous secondary materials with 
containers.

    The container must be made of or lined with materials which will 
not react with, and are otherwise compatible with, the hazardous 
secondary material to be stored, so that the ability of the container 
to contain the material is not impaired.


Sec.  261.173  Management of containers.

    (a) A container holding hazardous secondary material must always be 
closed during storage, except when it is necessary to add or remove the 
hazardous secondary material.
    (b) A container holding hazardous secondary material must not be 
opened, handled, or stored in a manner which may rupture the container 
or cause it to leak.


Sec.  261.175  Containment.

    (a) Container storage areas must have a containment system that is 
designed and operated in accordance with paragraph (b) of this section.
    (b) A containment system must be designed and operated as follows:
    (1) A base must underlie the containers which is free of cracks or 
gaps and is sufficiently impervious to contain leaks, spills, and 
accumulated precipitation until the collected material is detected and 
removed;
    (2) The base must be sloped or the containment system must be 
otherwise

[[Page 1778]]

designed and operated to drain and remove liquids resulting from leaks, 
spills, or precipitation, unless the containers are elevated or are 
otherwise protected from contact with accumulated liquids;
    (3) The containment system must have sufficient capacity to contain 
10% of the volume of containers or the volume of the largest container, 
whichever is greater.
    (4) Run-on into the containment system must be prevented unless the 
collection system has sufficient excess capacity in addition to that 
required in paragraph (b)(3) of this section to contain any run-on 
which might enter the system; and
    (5) Spilled or leaked material and accumulated precipitation must 
be removed from the sump or collection area in as timely a manner as is 
necessary to prevent overflow of the collection system.


Sec.  261.176  Special requirements for ignitable or reactive hazardous 
secondary material.

    Containers holding ignitable or reactive hazardous secondary 
material must be located at least 15 meters (50 feet) from the 
facility's property line.


Sec.  261.177  Special requirements for incompatible materials.

    (a) Incompatible materials must not be placed in the same 
container.
    (b) Hazardous secondary material must not be placed in an unwashed 
container that previously held an incompatible material.
    (c) A storage container holding a hazardous secondary material that 
is incompatible with any other materials stored nearby must be 
separated from the other materials or protected from them by means of a 
dike, berm, wall, or other device.


Sec.  261.179  Air emission standards.

    The remanufacturer or other person that stores or treats the 
hazardous secondary material shall manage all hazardous secondary 
material placed in a container in accordance with the applicable 
requirements of subparts AA, BB, and CC of this part.

Subpart J--Tank Systems


Sec.  261.190  Applicability.

    (a) The requirements of this subpart apply to tank systems for 
storing or treating hazardous secondary material excluded under the 
remanufacturing exclusion at Sec.  261.4(a)(27).
    (b) Tank systems, including sumps, as defined in Sec.  260.10, that 
serve as part of a secondary containment system to collect or contain 
releases of hazardous secondary materials are exempted from the 
requirements in Sec.  261.193(a).


Sec.  261.191  Assessment of existing tank system's integrity.

    (a) Tank systems must meet the secondary containment requirements 
of Sec.  261.193, or the remanufacturer or other person that handles 
the hazardous secondary material must determine that the tank system is 
not leaking or is unfit for use. Except as provided in paragraph (c) of 
this section, a written assessment reviewed and certified by a 
qualified Professional Engineer must be kept on file at the 
remanufacturer's facility or other facility that stores or treats the 
hazardous secondary material that attests to the tank system's 
integrity.
    (b) This assessment must determine that the tank system is 
adequately designed and has sufficient structural strength and 
compatibility with the material(s) to be stored or treated, to ensure 
that it will not collapse, rupture, or fail. At a minimum, this 
assessment must consider the following:
    (1) Design standard(s), if available, according to which the tank 
and ancillary equipment were constructed;
    (2) Hazardous characteristics of the material(s) that have been and 
will be handled;
    (3) Existing corrosion protection measures;
    (4) Documented age of the tank system, if available (otherwise, an 
estimate of the age); and
    (5) Results of a leak test, internal inspection, or other tank 
integrity examination such that:
    (i) For non-enterable underground tanks, the assessment must 
include a leak test that is capable of taking into account the effects 
of temperature variations, tank end deflection, vapor pockets, and high 
water table effects, and
    (ii) For other than non-enterable underground tanks and for 
ancillary equipment, this assessment must include either a leak test, 
as described above, or other integrity examination that is certified by 
a qualified Professional Engineer that addresses cracks, leaks, 
corrosion, and erosion.

    Note to paragraph (b)(5)(ii):  The practices described in the 
American Petroleum Institute (API) Publication, Guide for Inspection 
of Refinery Equipment, Chapter XIII, ``Atmospheric and Low-Pressure 
Storage Tanks,'' 4th edition, 1981, may be used, where applicable, 
as guidelines in conducting other than a leak test.

    (c) If, as a result of the assessment conducted in accordance with 
paragraph (a) of this section, a tank system is found to be leaking or 
unfit for use, the remanufacturer or other person that stores or treats 
the hazardous secondary material must comply with the requirements of 
Sec.  261.196.


Sec.  261.192  [Reserved]


Sec.  261.193  Containment and detection of releases.

    (a) Secondary containment systems must be:
    (1) Designed, installed, and operated to prevent any migration of 
materials or accumulated liquid out of the system to the soil, ground 
water, or surface water at any time during the use of the tank system; 
and
    (2) Capable of detecting and collecting releases and accumulated 
liquids until the collected material is removed.

    Note to paragraph (a):  If the collected material is a hazardous 
waste under part 261 of this chapter, it is subject to management as 
a hazardous waste in accordance with all applicable requirements of 
parts 262 through 265, 266, and 268 of this chapter. If the 
collected material is discharged through a point source to waters of 
the United States, it is subject to the requirements of sections 
301, 304, and 402 of the Clean Water Act, as amended. If discharged 
to a Publicly Owned Treatment Works (POTW), it is subject to the 
requirements of section 307 of the Clean Water Act, as amended. If 
the collected material is released to the environment, it may be 
subject to the reporting requirements of 40 CFR part 302.

    (b) To meet the requirements of paragraph (a) of this section, 
secondary containment systems must be at a minimum:
    (1) Constructed of or lined with materials that are compatible with 
the materials(s) to be placed in the tank system and must have 
sufficient strength and thickness to prevent failure owing to pressure 
gradients (including static head and external hydrological forces), 
physical contact with the material to which it is exposed, climatic 
conditions, and the stress of daily operation (including stresses from 
nearby vehicular traffic);
    (2) Placed on a foundation or base capable of providing support to 
the secondary containment system, resistance to pressure gradients 
above and below the system, and capable of preventing failure due to 
settlement, compression, or uplift;
    (3) Provided with a leak-detection system that is designed and 
operated so that it will detect the failure of either the primary or 
secondary containment structure or the presence of any release of 
hazardous secondary material or accumulated liquid in the secondary 
containment system at the earliest practicable time; and
    (4) Sloped or otherwise designed or operated to drain and remove 
liquids

[[Page 1779]]

resulting from leaks, spills, or precipitation. Spilled or leaked 
material and accumulated precipitation must be removed from the 
secondary containment system within 24 hours, or in as timely a manner 
as is possible to prevent harm to human health and the environment.
    (c) Secondary containment for tanks must include one or more of the 
following devices:
    (1) A liner (external to the tank);
    (2) A vault; or
    (3) A double-walled tank.
    (d) In addition to the requirements of paragraphs (a), (b), and (c) 
of this section, secondary containment systems must satisfy the 
following requirements:
    (1) External liner systems must be:
    (i) Designed or operated to contain 100 percent of the capacity of 
the largest tank within its boundary;
    (ii) Designed or operated to prevent run-on or infiltration of 
precipitation into the secondary containment system unless the 
collection system has sufficient excess capacity to contain run-on or 
infiltration. Such additional capacity must be sufficient to contain 
precipitation from a 25-year, 24-hour rainfall event.
    (iii) Free of cracks or gaps; and
    (iv) Designed and installed to surround the tank completely and to 
cover all surrounding earth likely to come into contact with the 
material if the material is released from the tank(s) (i.e., capable of 
preventing lateral as well as vertical migration of the material).
    (2) Vault systems must be:
    (i) Designed or operated to contain 100 percent of the capacity of 
the largest tank within its boundary;
    (ii) Designed or operated to prevent run-on or infiltration of 
precipitation into the secondary containment system unless the 
collection system has sufficient excess capacity to contain run-on or 
infiltration. Such additional capacity must be sufficient to contain 
precipitation from a 25-year, 24-hour rainfall event;
    (iii) Constructed with chemical-resistant water stops in place at 
all joints (if any);
    (iv) Provided with an impermeable interior coating or lining that 
is compatible with the stored material and that will prevent migration 
of material into the concrete;
    (v) Provided with a means to protect against the formation of and 
ignition of vapors within the vault, if the material being stored or 
treated is ignitable or reactive; and
    (vi) Provided with an exterior moisture barrier or be otherwise 
designed or operated to prevent migration of moisture into the vault if 
the vault is subject to hydraulic pressure.
    (3) Double-walled tanks must be:
    (i) Designed as an integral structure (i.e., an inner tank 
completely enveloped within an outer shell) so that any release from 
the inner tank is contained by the outer shell;
    (ii) Protected, if constructed of metal, from both corrosion of the 
primary tank interior and of the external surface of the outer shell; 
and
    (iii) Provided with a built-in continuous leak detection system 
capable of detecting a release within 24 hours, or at the earliest 
practicable time.

    Note to paragraph (d)(3): The provisions outlined in the Steel 
Tank Institute's (STI) ``Standard for Dual Wall Underground Steel 
Storage Tanks'' may be used as guidelines for aspects of the design 
of underground steel double-walled tanks.

    (e) [Reserved]
    (f) Ancillary equipment must be provided with secondary containment 
(e.g., trench, jacketing, double-walled piping) that meets the 
requirements of paragraphs (a) and (b) of this section except for:
    (1) Aboveground piping (exclusive of flanges, joints, valves, and 
other connections) that are visually inspected for leaks on a daily 
basis;
    (2) Welded flanges, welded joints, and welded connections that are 
visually inspected for leaks on a daily basis;
    (3) Sealless or magnetic coupling pumps and sealless valves that 
are visually inspected for leaks on a daily basis; and
    (4) Pressurized aboveground piping systems with automatic shut-off 
devices (e.g., excess flow check valves, flow metering shutdown 
devices, loss of pressure actuated shut-off devices) that are visually 
inspected for leaks on a daily basis.


Sec.  261.194  General operating requirements.

    (a) Hazardous secondary materials or treatment reagents must not be 
placed in a tank system if they could cause the tank, its ancillary 
equipment, or the containment system to rupture, leak, corrode, or 
otherwise fail.
    (b) The remanufacturer or other person that stores or treats the 
hazardous secondary material must use appropriate controls and 
practices to prevent spills and overflows from tank or containment 
systems. These include at a minimum:
    (1) Spill prevention controls (e.g., check valves, dry disconnect 
couplings);
    (2) Overfill prevention controls (e.g., level sensing devices, high 
level alarms, automatic feed cutoff, or bypass to a standby tank); and
    (3) Maintenance of sufficient freeboard in uncovered tanks to 
prevent overtopping by wave or wind action or by precipitation.
    (c) The remanufacturer or other person that stores or treats the 
hazardous secondary material must comply with the requirements of Sec.  
261.196 of this subpart if a leak or spill occurs in the tank system.


Sec.  261.195  [Reserved]


Sec.  261.196  Response to leaks or spills and disposition of leaking 
or unfit-for-use tank systems.

    A tank system or secondary containment system from which there has 
been a leak or spill, or which is unfit for use, must be removed from 
service immediately, and the remanufacturer or other person that stores 
or treats the hazardous secondary material must satisfy the following 
requirements:
    (a) Cessation of use; prevent flow or addition of materials. The 
remanufacturer or other person that stores or treats the hazardous 
secondary material must immediately stop the flow of hazardous 
secondary material into the tank system or secondary containment system 
and inspect the system to determine the cause of the release.
    (b) Removal of material from tank system or secondary containment 
system. (1) If the release was from the tank system, the remanufacturer 
or other person that stores or treats the hazardous secondary material 
must, within 24 hours after detection of the leak or, if the 
remanufacturer or other person that stores or treats the hazardous 
secondary material demonstrates that it is not possible, at the 
earliest practicable time, remove as much of the material as is 
necessary to prevent further release of hazardous secondary material to 
the environment and to allow inspection and repair of the tank system 
to be performed.
    (2) If the material released was to a secondary containment system, 
all released materials must be removed within 24 hours or in as timely 
a manner as is possible to prevent harm to human health and the 
environment.
    (c) Containment of visible releases to the environment. The 
remanufacturer or other person that stores or treats the hazardous 
secondary material must immediately conduct a visual inspection of the 
release and, based upon that inspection:
    (1) Prevent further migration of the leak or spill to soils or 
surface water; and

[[Page 1780]]

    (2) Remove, and properly dispose of, any visible contamination of 
the soil or surface water.
    (d) Notifications, reports. (1) Any release to the environment, 
except as provided in paragraph (d)(2) of this section, must be 
reported to the Regional Administrator within 24 hours of its 
detection. If the release has been reported pursuant to 40 CFR part 
302, that report will satisfy this requirement.
    (2) A leak or spill of hazardous secondary material is exempted 
from the requirements of this paragraph if it is:
    (i) Less than or equal to a quantity of 1 pound, and
    (ii) Immediately contained and cleaned up.
    (3) Within 30 days of detection of a release to the environment, a 
report containing the following information must be submitted to the 
Regional Administrator:
    (i) Likely route of migration of the release;
    (ii) Characteristics of the surrounding soil (soil composition, 
geology, hydrogeology, climate);
    (iii) Results of any monitoring or sampling conducted in connection 
with the release (if available). If sampling or monitoring data 
relating to the release are not available within 30 days, these data 
must be submitted to the Regional Administrator as soon as they become 
available.
    (iv) Proximity to downgradient drinking water, surface water, and 
populated areas; and
    (v) Description of response actions taken or planned.
    (e) Provision of secondary containment, repair, or closure. (1) 
Unless the remanufacturer or other person that stores or treats the 
hazardous secondary material satisfies the requirements of paragraphs 
(e)(2) through (4) of this section, the tank system must cease to 
operate under the remanufacturing exclusion at 40 CFR 261.4(a)(27).
    (2) If the cause of the release was a spill that has not damaged 
the integrity of the system, the remanufacturer or other person that 
stores or treats the hazardous secondary material may return the system 
to service as soon as the released material is removed and repairs, if 
necessary, are made.
    (3) If the cause of the release was a leak from the primary tank 
system into the secondary containment system, the system must be 
repaired prior to returning the tank system to service.
    (4) If the source of the release was a leak to the environment from 
a component of a tank system without secondary containment, the 
remanufacturer or other person that stores or treats the hazardous 
secondary material must provide the component of the system from which 
the leak occurred with secondary containment that satisfies the 
requirements of Sec.  261.193 before it can be returned to service, 
unless the source of the leak is an aboveground portion of a tank 
system that can be inspected visually. If the source is an aboveground 
component that can be inspected visually, the component must be 
repaired and may be returned to service without secondary containment 
as long as the requirements of paragraph (f) of this section are 
satisfied. Additionally, if a leak has occurred in any portion of a 
tank system component that is not readily accessible for visual 
inspection (e.g., the bottom of an inground or onground tank), the 
entire component must be provided with secondary containment in 
accordance with Sec.  261.193 of this subpart prior to being returned 
to use.
    (f) Certification of major repairs. If the remanufacturer or other 
person that stores or treats the hazardous secondary material has 
repaired a tank system in accordance with paragraph (e) of this 
section, and the repair has been extensive (e.g., installation of an 
internal liner; repair of a ruptured primary containment or secondary 
containment vessel), the tank system must not be returned to service 
unless the remanufacturer or other person that stores or treats the 
hazardous secondary material has obtained a certification by a 
qualified Professional Engineer that the repaired system is capable of 
handling hazardous secondary materials without release for the intended 
life of the system. This certification must be kept on file at the 
facility and maintained until closure of the facility.

    Note 1 to Sec.  261.196: The Regional Administrator may, on the 
basis of any information received that there is or has been a 
release of hazardous secondary material or hazardous constituents 
into the environment, issue an order under RCRA section 7003(a) 
requiring corrective action or such other response as deemed 
necessary to protect human health or the environment.


    Note 2 to Sec.  261.196: 40 CFR part 302 may require the owner 
or operator to notify the National Response Center of certain 
releases.

Sec.  261.197  Termination of remanufacturing exclusion.

    Hazardous secondary material stored in units more than 90 days 
after the unit ceases to operate under the remanufacturing exclusion at 
40 CFR 261.4(a)(27) or otherwise ceases to be operated for 
manufacturing, or for storage of a product or a raw material, then 
becomes subject to regulation as hazardous waste under parts 261 
through 266, 268, 270, 271, and 124 of this chapter, as applicable.


Sec.  261.198  Special requirements for ignitable or reactive 
materials.

    (a) Ignitable or reactive material must not be placed in tank 
systems, unless the material is stored or treated in such a way that it 
is protected from any material or conditions that may cause the 
material to ignite or react.
    (b) The remanufacturer or other person that stores or treats 
hazardous secondary material which is ignitable or reactive must store 
or treat the hazardous secondary material in a tank that is in 
compliance with the requirements for the maintenance of protective 
distances between the material management area and any public ways, 
streets, alleys, or an adjoining property line that can be built upon 
as required in Tables 2-1 through 2-6 of the National Fire Protection 
Association's ``Flammable and Combustible Liquids Code,'' (1977 or 
1981), (incorporated by reference, see Sec.  260.11).


Sec.  261.199  Special requirements for incompatible materials.

    (a) Incompatible materials must not be placed in the same tank 
system.
    (b) Hazardous secondary material must not be placed in a tank 
system that has not been decontaminated and that previously held an 
incompatible material.


Sec.  261.200  Air emission standards.

    The remanufacturer or other person that stores or treats the 
hazardous secondary material shall manage all hazardous secondary 
material placed in a tank in accordance with the applicable 
requirements of subparts AA, BB, and CC of this part.

Subparts K-L [Reserved]

Subpart M--Emergency Preparedness and Response for Management of 
Excluded Hazardous Secondary Materials


Sec.  261.400  Applicability.

    The requirements of this subpart apply to those areas of an entity 
managing hazardous secondary materials excluded under Sec.  
261.4(a)(23) and/or (24) where hazardous secondary materials are 
generated or accumulated on site.
    (a) A generator of hazardous secondary material, or an intermediate 
or reclamation facility operating under a verified recycler variance 
under Sec.  260.31(d), that accumulates 6000 kg or

[[Page 1781]]

less of hazardous secondary material at any time must comply with 
Sec. Sec.  261.410 and 261.411.
    (b) A generator of hazardous secondary material, or an intermediate 
or reclamation facility operating under a verified recycler variance 
under Sec.  260.31(d) that accumulates more than 6000 kg of hazardous 
secondary material at any time must comply with Sec. Sec.  261.410 and 
261.420.


Sec.  261.410  Preparedness and prevention.

    (a) Maintenance and operation of facility. Facilities generating or 
accumulating hazardous secondary material must be maintained and 
operated to minimize the possibility of a fire, explosion, or any 
unplanned sudden or non-sudden release of hazardous secondary materials 
or hazardous secondary material constituents to air, soil, or surface 
water which could threaten human health or the environment.
    (b) Required equipment. All facilities generating or accumulating 
hazardous secondary material must be equipped with the following, 
unless none of the hazards posed by hazardous secondary material 
handled at the facility could require a particular kind of equipment 
specified below:
    (1) An internal communications or alarm system capable of providing 
immediate emergency instruction (voice or signal) to facility 
personnel;
    (2) A device, such as a telephone (immediately available at the 
scene of operations) or a hand-held two-way radio, capable of summoning 
emergency assistance from local police departments, fire departments, 
or state or local emergency response teams;
    (3) Portable fire extinguishers, fire control equipment (including 
special extinguishing equipment, such as that using foam, inert gas, or 
dry chemicals), spill control equipment, and decontamination equipment; 
and
    (4) Water at adequate volume and pressure to supply water hose 
streams, or foam producing equipment, or automatic sprinklers, or water 
spray systems.
    (c) Testing and maintenance of equipment. All facility 
communications or alarm systems, fire protection equipment, spill 
control equipment, and decontamination equipment, where required, must 
be tested and maintained as necessary to assure its proper operation in 
time of emergency.
    (d) Access to communications or alarm system. (1) Whenever 
hazardous secondary material is being poured, mixed, spread, or 
otherwise handled, all personnel involved in the operation must have 
immediate access to an internal alarm or emergency communication 
device, either directly or through visual or voice contact with another 
employee, unless such a device is not required under paragraph (b) of 
this section.
    (2) If there is ever just one employee on the premises while the 
facility is operating, he must have immediate access to a device, such 
as a telephone (immediately available at the scene of operation) or a 
hand-held two-way radio, capable of summoning external emergency 
assistance, unless such a device is not required under paragraph (b) of 
this section.
    (e) Required aisle space. The hazardous secondary material 
generator or intermediate or reclamation facility operating under a 
verified recycler variance under Sec.  260.31(d) must maintain aisle 
space to allow the unobstructed movement of personnel, fire protection 
equipment, spill control equipment, and decontamination equipment to 
any area of facility operation in an emergency, unless aisle space is 
not needed for any of these purposes.
    (f) Arrangements with local authorities. (1) The hazardous 
secondary material generator or an intermediate or reclamation facility 
operating under a verified recycler variance under Sec.  260.31(d) must 
attempt to make the following arrangements, as appropriate for the type 
of waste handled at his facility and the potential need for the 
services of these organizations:
    (i) Arrangements to familiarize police, fire departments, and 
emergency response teams with the layout of the facility, properties of 
hazardous secondary material handled at the facility and associated 
hazards, places where facility personnel would normally be working, 
entrances to roads inside the facility, and possible evacuation routes;
    (ii) Where more than one police and fire department might respond 
to an emergency, agreements designating primary emergency authority to 
a specific police and a specific fire department, and agreements with 
any others to provide support to the primary emergency authority;
    (iii) Agreements with state emergency response teams, emergency 
response contractors, and equipment suppliers; and
    (iv) Arrangements to familiarize local hospitals with the 
properties of hazardous waste handled at the facility and the types of 
injuries or illnesses which could result from fires, explosions, or 
releases at the facility.
    (2) Where state or local authorities decline to enter into such 
arrangements, the hazardous secondary material generator or an 
intermediate or reclamation facility operating under a verified 
recycler variance under Sec.  260.31(d) must document the refusal in 
the operating record.


Sec.  261.411  Emergency procedures for facilities generating or 
accumulating 6000 kg or less of hazardous secondary material.

    A generator or an intermediate or reclamation facility operating 
under a verified recycler variance under Sec.  260.31(d) that generates 
or accumulates 6000 kg or less of hazardous secondary material must 
comply with the following requirements:
    (a) At all times there must be at least one employee either on the 
premises or on call (i.e., available to respond to an emergency by 
reaching the facility within a short period of time) with the 
responsibility for coordinating all emergency response measures 
specified in paragraph (d) of this section. This employee is the 
emergency coordinator.
    (b) The generator or intermediate or reclamation facility operating 
under a verified recycler variance under Sec.  260.31(d) must post the 
following information next to the telephone:
    (1) The name and telephone number of the emergency coordinator;
    (2) Location of fire extinguishers and spill control material, and, 
if present, fire alarm; and
    (3) The telephone number of the fire department, unless the 
facility has a direct alarm.
    (c) The generator or an intermediate or reclamation facility 
operating under a verified recycler variance under Sec.  260.31(d) must 
ensure that all employees are thoroughly familiar with proper waste 
handling and emergency procedures, relevant to their responsibilities 
during normal facility operations and emergencies;
    (d) The emergency coordinator or his designee must respond to any 
emergencies that arise. The applicable responses are as follows:
    (1) In the event of a fire, call the fire department or attempt to 
extinguish it using a fire extinguisher;
    (2) In the event of a spill, contain the flow of hazardous waste to 
the extent possible, and as soon as is practicable, clean up the 
hazardous waste and any contaminated materials or soil;
    (3) In the event of a fire, explosion, or other release which could 
threaten human health outside the facility or when the generator or an 
intermediate or reclamation facility operating under a verified 
recycler variance under

[[Page 1782]]

Sec.  260.31(d) has knowledge that a spill has reached surface water, 
the generator or an intermediate or reclamation facility operating 
under a verified recycler variance under Sec.  260.31(d) must 
immediately notify the National Response Center (using their 24-hour 
toll free number 800/424-8802). The report must include the following 
information:
    (i) The name, address, and U.S. EPA Identification Number of the 
facility;
    (ii) Date, time, and type of incident (e.g., spill or fire);
    (iii) Quantity and type of hazardous waste involved in the 
incident;
    (iv) Extent of injuries, if any; and
    (v) Estimated quantity and disposition of recovered materials, if 
any.


Sec.  261.420  Contingency planning and emergency procedures for 
facilities generating or accumulating more than 6000 kg of hazardous 
secondary material.

    A generator or an intermediate or reclamation facility operating 
under a verified recycler variance under Sec.  260.31(d) that generates 
or accumulates more than 6000 kg of hazardous secondary material must 
comply with the following requirements:
    (a) Purpose and implementation of contingency plan. (1) Each 
generator or an intermediate or reclamation facility operating under a 
verified recycler variance under Sec.  260.31(d) that accumulates more 
than 6000 kg of hazardous secondary material must have a contingency 
plan for his facility. The contingency plan must be designed to 
minimize hazards to human health or the environment from fires, 
explosions, or any unplanned sudden or non-sudden release of hazardous 
secondary material or hazardous secondary material constituents to air, 
soil, or surface water.
    (2) The provisions of the plan must be carried out immediately 
whenever there is a fire, explosion, or release of hazardous secondary 
material or hazardous secondary material constituents which could 
threaten human health or the environment.
    (b) Content of contingency plan. (1) The contingency plan must 
describe the actions facility personnel must take to comply with 
paragraphs (a) and (f) in response to fires, explosions, or any 
unplanned sudden or non-sudden release of hazardous secondary material 
or hazardous secondary material constituents to air, soil, or surface 
water at the facility.
    (2) If the generator or an intermediate or reclamation facility 
operating under a verified recycler variance under Sec.  260.31(d) 
accumulating more than 6000 kg of hazardous secondary material has 
already prepared a Spill Prevention, Control, and Countermeasures 
(SPCC) Plan in accordance with part 112 of this chapter, or some other 
emergency or contingency plan, he need only amend that plan to 
incorporate hazardous waste management provisions that are sufficient 
to comply with the requirements of this part. The hazardous secondary 
material generator or an intermediate or reclamation facility operating 
under a verified recycler variance under Sec.  260.31(d) may develop 
one contingency plan which meets all regulatory requirements. EPA 
recommends that the plan be based on the National Response Team's 
Integrated Contingency Plan Guidance (``One Plan''). When modifications 
are made to non-RCRA provisions in an integrated contingency plan, the 
changes do not trigger the need for a RCRA permit modification.
    (3) The plan must describe arrangements agreed to by local police 
departments, fire departments, hospitals, contractors, and State and 
local emergency response teams to coordinate emergency services, 
pursuant to Sec.  262.410(f).
    (4) The plan must list names, addresses, and phone numbers (office 
and home) of all persons qualified to act as emergency coordinator (see 
paragraph (e) of this section), and this list must be kept up-to-date. 
Where more than one person is listed, one must be named as primary 
emergency coordinator and others must be listed in the order in which 
they will assume responsibility as alternates.
    (5) The plan must include a list of all emergency equipment at the 
facility (such as fire extinguishing systems, spill control equipment, 
communications and alarm systems (internal and external), and 
decontamination equipment), where this equipment is required. This list 
must be kept up to date. In addition, the plan must include the 
location and a physical description of each item on the list, and a 
brief outline of its capabilities.
    (6) The plan must include an evacuation plan for facility personnel 
where there is a possibility that evacuation could be necessary. This 
plan must describe signal(s) to be used to begin evacuation, evacuation 
routes, and alternate evacuation routes (in cases where the primary 
routes could be blocked by releases of hazardous waste or fires).
    (c) Copies of contingency plan. A copy of the contingency plan and 
all revisions to the plan must be:
    (1) Maintained at the facility; and
    (2) Submitted to all local police departments, fire departments, 
hospitals, and State and local emergency response teams that may be 
called upon to provide emergency services.
    (d) Amendment of contingency plan. The contingency plan must be 
reviewed, and immediately amended, if necessary, whenever:
    (1) Applicable regulations are revised;
    (2) The plan fails in an emergency;
    (3) The facility changes--in its design, construction, operation, 
maintenance, or other circumstances--in a way that materially increases 
the potential for fires, explosions, or releases of hazardous secondary 
material or hazardous secondary material constituents, or changes the 
response necessary in an emergency;
    (4) The list of emergency coordinators changes; or
    (5) The list of emergency equipment changes.
    (e) Emergency coordinator. At all times, there must be at least one 
employee either on the facility premises or on call (i.e., available to 
respond to an emergency by reaching the facility within a short period 
of time) with the responsibility for coordinating all emergency 
response measures. This emergency coordinator must be thoroughly 
familiar with all aspects of the facility's contingency plan, all 
operations and activities at the facility, the location and 
characteristics of waste handled, the location of all records within 
the facility, and the facility layout. In addition, this person must 
have the authority to commit the resources needed to carry out the 
contingency plan. The emergency coordinator's responsibilities are more 
fully spelled out in paragraph (f). Applicable responsibilities for the 
emergency coordinator vary, depending on factors such as type and 
variety of hazardous secondary material(s) handled by the facility, and 
type and complexity of the facility.
    (f) Emergency procedures. (1) Whenever there is an imminent or 
actual emergency situation, the emergency coordinator (or his designee 
when the emergency coordinator is on call) must immediately:
    (i) Activate internal facility alarms or communication systems, 
where applicable, to notify all facility personnel; and
    (ii) Notify appropriate State or local agencies with designated 
response roles if their help is needed.
    (2) Whenever there is a release, fire, or explosion, the emergency 
coordinator must immediately identify the character, exact source, 
amount, and

[[Page 1783]]

areal extent of any released materials. He may do this by observation 
or review of facility records or manifests and, if necessary, by 
chemical analysis.
    (3) Concurrently, the emergency coordinator must assess possible 
hazards to human health or the environment that may result from the 
release, fire, or explosion. This assessment must consider both direct 
and indirect effects of the release, fire, or explosion (e.g., the 
effects of any toxic, irritating, or asphyxiating gases that are 
generated, or the effects of any hazardous surface water run-offs from 
water or chemical agents used to control fire and heat-induced 
explosions).
    (4) If the emergency coordinator determines that the facility has 
had a release, fire, or explosion which could threaten human health, or 
the environment, outside the facility, he must report his findings as 
follows:
    (i) If his assessment indicates that evacuation of local areas may 
be advisable, he must immediately notify appropriate local authorities. 
He must be available to help appropriate officials decide whether local 
areas should be evacuated; and
    (ii) He must immediately notify either the government official 
designated as the on-scene coordinator for that geographical area, or 
the National Response Center (using their 24-hour toll free number 800/
424-8802). The report must include:
    (A) Name and telephone number of reporter;
    (B) Name and address of facility;
    (C) Time and type of incident (e.g., release, fire);
    (D) Name and quantity of material(s) involved, to the extent known;
    (E) The extent of injuries, if any; and
    (F) The possible hazards to human health, or the environment, 
outside the facility.
    (5) During an emergency, the emergency coordinator must take all 
reasonable measures necessary to ensure that fires, explosions, and 
releases do not occur, recur, or spread to other hazardous secondary 
material at the facility. These measures must include, where 
applicable, stopping processes and operations, collecting and 
containing released material, and removing or isolating containers.
    (6) If the facility stops operations in response to a fire, 
explosion or release, the emergency coordinator must monitor for leaks, 
pressure buildup, gas generation, or ruptures in valves, pipes, or 
other equipment, wherever this is appropriate.
    (7) Immediately after an emergency, the emergency coordinator must 
provide for treating, storing, or disposing of recovered secondary 
material, contaminated soil or surface water, or any other material 
that results from a release, fire, or explosion at the facility. Unless 
the hazardous secondary material generator can demonstrate, in 
accordance with Sec.  261.3(c) or (d) of this chapter, that the 
recovered material is not a hazardous waste, the owner or operator 
becomes a generator of hazardous waste and must manage it in accordance 
with all applicable requirements of parts 262, 263, and 265 of this 
chapter.
    (8) The emergency coordinator must ensure that, in the affected 
area(s) of the facility:
    (i) No secondary material that may be incompatible with the 
released material is treated, stored, or disposed of until cleanup 
procedures are completed; and
    (ii) All emergency equipment listed in the contingency plan is 
cleaned and fit for its intended use before operations are resumed.
    (9) The hazardous secondary material generator must note in the 
operating record the time, date, and details of any incident that 
requires implementing the contingency plan. Within 15 days after the 
incident, he must submit a written report on the incident to the 
Regional Administrator. The report must include:
    (i) Name, address, and telephone number of the hazardous secondary 
material generator;
    (ii) Name, address, and telephone number of the facility;
    (iii) Date, time, and type of incident (e.g., fire, explosion);
    (iv) Name and quantity of material(s) involved;
    (v) The extent of injuries, if any;
    (vi) An assessment of actual or potential hazards to human health 
or the environment, where this is applicable; and
    (vii) Estimated quantity and disposition of recovered material that 
resulted from the incident.

Subparts N-Z [Reserved]

Subpart AA--Air Emission Standards for Process Vents


Sec.  261.1030  Applicability.

    The regulations in this subpart apply to process vents associated 
with distillation, fractionation, thin-film evaporation, solvent 
extraction, or air or stream stripping operations that manage hazardous 
secondary materials excluded under the remanufacturing exclusion at 
Sec.  261.4(a)(27) with concentrations of at least 10 ppmw, unless the 
process vents are equipped with operating air emission controls in 
accordance with the requirements of an applicable Clean Air Act 
regulation codified under 40 CFR part 60, part 61, or part 63.


Sec.  261.1031  Definitions.

    As used in this subpart, all terms not defined herein shall have 
the meaning given them in the Resource Conservation and Recovery Act 
and parts 260-266.
    Air stripping operation is a desorption operation employed to 
transfer one or more volatile components from a liquid mixture into a 
gas (air) either with or without the application of heat to the liquid. 
Packed towers, spray towers, and bubble-cap, sieve, or valve-type plate 
towers are among the process configurations used for contacting the air 
and a liquid.
    Bottoms receiver means a container or tank used to receive and 
collect the heavier bottoms fractions of the distillation feed stream 
that remain in the liquid phase.
    Closed-vent system means a system that is not open to the 
atmosphere and that is composed of piping, connections, and, if 
necessary, flow-inducing devices that transport gas or vapor from a 
piece or pieces of equipment to a control device.
    Condenser means a heat-transfer device that reduces a thermodynamic 
fluid from its vapor phase to its liquid phase.
    Connector means flanged, screwed, welded, or other joined fittings 
used to connect two pipelines or a pipeline and a piece of equipment. 
For the purposes of reporting and recordkeeping, connector means 
flanged fittings that are not covered by insulation or other materials 
that prevent location of the fittings.
    Continuous recorder means a data-recording device recording an 
instantaneous data value at least once every 15 minutes.
    Control device means an enclosed combustion device, vapor recovery 
system, or flare. Any device the primary function of which is the 
recovery or capture of solvents or other organics for use, reuse, or 
sale (e.g., a primary condenser on a solvent recovery unit) is not a 
control device.
    Control device shutdown means the cessation of operation of a 
control device for any purpose.
    Distillate receiver means a container or tank used to receive and 
collect liquid material (condensed) from the overhead condenser of a 
distillation unit and from which the condensed liquid is pumped to 
larger storage tanks or other process units.
    Distillation operation means an operation, either batch or 
continuous, separating one or more feed stream(s)

[[Page 1784]]

into two or more exit streams, each exit stream having component 
concentrations different from those in the feed stream(s). The 
separation is achieved by the redistribution of the components between 
the liquid and vapor phase as they approach equilibrium within the 
distillation unit.
    Double block and bleed system means two block valves connected in 
series with a bleed valve or line that can vent the line between the 
two block valves.
    Equipment means each valve, pump, compressor, pressure relief 
device, sampling connection system, open-ended valve or line, or flange 
or other connector, and any control devices or systems required by this 
subpart.
    Flame zone means the portion of the combustion chamber in a boiler 
occupied by the flame envelope.
    Flow indicator means a device that indicates whether gas flow is 
present in a vent stream.
    First attempt at repair means to take rapid action for the purpose 
of stopping or reducing leakage of organic material to the atmosphere 
using best practices.
    Fractionation operation means a distillation operation or method 
used to separate a mixture of several volatile components of different 
boiling points in successive stages, each stage removing from the 
mixture some proportion of one of the components.
    Hazardous secondary material management unit shutdown means a work 
practice or operational procedure that stops operation of a hazardous 
secondary material management unit or part of a hazardous secondary 
material management unit. An unscheduled work practice or operational 
procedure that stops operation of a hazardous secondary material 
management unit or part of a hazardous secondary material management 
unit for less than 24 hours is not a hazardous secondary material 
management unit shutdown. The use of spare equipment and technically 
feasible bypassing of equipment without stopping operation are not 
hazardous secondary material management unit shutdowns.
    Hot well means a container for collecting condensate as in a steam 
condenser serving a vacuum-jet or steam-jet ejector.
    In gas/vapor service means that the piece of equipment contains or 
contacts a hazardous secondary material stream that is in the gaseous 
state at operating conditions.
    In heavy liquid service means that the piece of equipment is not in 
gas/vapor service or in light liquid service.
    In light liquid service means that the piece of equipment contains 
or contacts a material stream where the vapor pressure of one or more 
of the organic components in the stream is greater than 0.3 kilopascals 
(kPa) at 20 [deg]C, the total concentration of the pure organic 
components having a vapor pressure greater than 0.3 kilopascals (kPa) 
at 20 [deg]C is equal to or greater than 20 percent by weight, and the 
fluid is a liquid at operating conditions.
    In situ sampling systems means nonextractive samplers or in-line 
samplers.
    In vacuum service means that equipment is operating at an internal 
pressure that is at least 5 kPa below ambient pressure.
    Malfunction means any sudden failure of a control device or a 
hazardous secondary material management unit or failure of a hazardous 
secondary material management unit to operate in a normal or usual 
manner, so that organic emissions are increased.
    Open-ended valve or line means any valve, except pressure relief 
valves, having one side of the valve seat in contact with hazardous 
secondary material and one side open to the atmosphere, either directly 
or through open piping.
    Pressure release means the emission of materials resulting from the 
system pressure being greater than the set pressure of the pressure 
relief device.
    Process heater means a device that transfers heat liberated by 
burning fuel to fluids contained in tubes, including all fluids except 
water that are heated to produce steam.
    Process vent means any open-ended pipe or stack that is vented to 
the atmosphere either directly, through a vacuum-producing system, or 
through a tank (e.g., distillate receiver, condenser, bottoms receiver, 
surge control tank, separator tank, or hot well) associated with 
hazardous secondary material distillation, fractionation, thin-film 
evaporation, solvent extraction, or air or steam stripping operations.
    Repaired means that equipment is adjusted, or otherwise altered, to 
eliminate a leak.
    Sampling connection system means an assembly of equipment within a 
process or material management unit used during periods of 
representative operation to take samples of the process or material 
fluid. Equipment used to take non-routine grab samples is not 
considered a sampling connection system.
    Sensor means a device that measures a physical quantity or the 
change in a physical quantity, such as temperature, pressure, flow 
rate, pH, or liquid level.
    Separator tank means a device used for separation of two immiscible 
liquids.
    Solvent extraction operation means an operation or method of 
separation in which a solid or solution is contacted with a liquid 
solvent (the two being mutually insoluble) to preferentially dissolve 
and transfer one or more components into the solvent.
    Startup means the setting in operation of a hazardous secondary 
material management unit or control device for any purpose.
    Steam stripping operation means a distillation operation in which 
vaporization of the volatile constituents of a liquid mixture takes 
place by the introduction of steam directly into the charge.
    Surge control tank means a large-sized pipe or storage reservoir 
sufficient to contain the surging liquid discharge of the process tank 
to which it is connected.
    Thin-film evaporation operation means a distillation operation that 
employs a heating surface consisting of a large diameter tube that may 
be either straight or tapered, horizontal or vertical. Liquid is spread 
on the tube wall by a rotating assembly of blades that maintain a close 
clearance from the wall or actually ride on the film of liquid on the 
wall.
    Vapor incinerator means any enclosed combustion device that is used 
for destroying organic compounds and does not extract energy in the 
form of steam or process heat.
    Vented means discharged through an opening, typically an open-ended 
pipe or stack, allowing the passage of a stream of liquids, gases, or 
fumes into the atmosphere. The passage of liquids, gases, or fumes is 
caused by mechanical means such as compressors or vacuum-producing 
systems or by process-related means such as evaporation produced by 
heating and not caused by tank loading and unloading (working losses) 
or by natural means such as diurnal temperature changes.


Sec.  261.1032  Standards: Process vents.

    (a) The remanufacturer or other person that stores or treats 
hazardous secondary materials in hazardous secondary material 
management units with process vents associated with distillation, 
fractionation, thin-film evaporation, solvent extraction, or air or 
steam stripping operations managing hazardous secondary material with 
organic concentrations of at least 10 ppmw shall either:
    (1) Reduce total organic emissions from all affected process vents 
at the facility below 1.4 kg/h (3 lb/h) and 2.8 Mg/yr (3.1 tons/yr), or
    (2) Reduce, by use of a control device, total organic emissions 
from all affected

[[Page 1785]]

process vents at the facility by 95 weight percent.
    (b) If the remanufacturer or other person that stores or treats the 
hazardous secondary material installs a closed-vent system and control 
device to comply with the provisions of paragraph (a) of this section 
the closed-vent system and control device must meet the requirements of 
Sec.  261.1033.
    (c) Determinations of vent emissions and emission reductions or 
total organic compound concentrations achieved by add-on control 
devices may be based on engineering calculations or performance tests. 
If performance tests are used to determine vent emissions, emission 
reductions, or total organic compound concentrations achieved by add-on 
control devices, the performance tests must conform with the 
requirements of Sec.  261.1034(c).
    (d) When a remanufacturer or other person that stores or treats the 
hazardous secondary material and the Regional Administrator do not 
agree on determinations of vent emissions and/or emission reductions or 
total organic compound concentrations achieved by add-on control 
devices based on engineering calculations, the procedures in Sec.  
261.1034(c) shall be used to resolve the disagreement.


Sec.  261.1033  Standards: Closed-vent systems and control devices.

    (a)(1) The remanufacturer or other person that stores or treats the 
hazardous secondary materials in hazardous secondary material 
management units using closed-vent systems and control devices used to 
comply with provisions of this part shall comply with the provisions of 
this section.
    (2) [Reserved]
    (b) A control device involving vapor recovery (e.g., a condenser or 
adsorber) shall be designed and operated to recover the organic vapors 
vented to it with an efficiency of 95 weight percent or greater unless 
the total organic emission limits of Sec.  261.1032(a)(1) for all 
affected process vents can be attained at an efficiency less than 95 
weight percent.
    (c) An enclosed combustion device (e.g., a vapor incinerator, 
boiler, or process heater) shall be designed and operated to reduce the 
organic emissions vented to it by 95 weight percent or greater; to 
achieve a total organic compound concentration of 20 ppmv, expressed as 
the sum of the actual compounds, not carbon equivalents, on a dry basis 
corrected to 3 percent oxygen; or to provide a minimum residence time 
of 0.50 seconds at a minimum temperature of 760 [deg]C. If a boiler or 
process heater is used as the control device, then the vent stream 
shall be introduced into the flame zone of the boiler or process 
heater.
    (d)(1) A flare shall be designed for and operated with no visible 
emissions as determined by the methods specified in paragraph (e)(1) of 
this section, except for periods not to exceed a total of 5 minutes 
during any 2 consecutive hours.
    (2) A flare shall be operated with a flame present at all times, as 
determined by the methods specified in paragraph (f)(2)(iii) of this 
section.
    (3) A flare shall be used only if the net heating value of the gas 
being combusted is 11.2 MJ/scm (300 Btu/scf) or greater if the flare is 
steam-assisted or air-assisted; or if the net heating value of the gas 
being combusted is 7.45 MJ/scm (200 Btu/scf) or greater if the flare is 
nonassisted. The net heating value of the gas being combusted shall be 
determined by the methods specified in paragraph (e)(2) of this 
section.
    (4)(i) A steam-assisted or nonassisted flare shall be designed for 
and operated with an exit velocity, as determined by the methods 
specified in paragraph (e)(3) of this section, less than 18.3 m/s (60 
ft/s), except as provided in paragraphs (d)(4)(ii) and (iii) of this 
section.
    (ii) A steam-assisted or nonassisted flare designed for and 
operated with an exit velocity, as determined by the methods specified 
in paragraph (e)(3) of this section, equal to or greater than 18.3 m/s 
(60 ft/s) but less than 122 m/s (400 ft/s) is allowed if the net 
heating value of the gas being combusted is greater than 37.3 MJ/scm 
(1,000 Btu/scf).
    (iii) A steam-assisted or nonassisted flare designed for and 
operated with an exit velocity, as determined by the methods specified 
in paragraph (e)(3) of this section, less than the velocity, 
V<INF>max</INF>, as determined by the method specified in paragraph 
(e)(4) of this section and less than 122 m/s (400 ft/s) is allowed.
    (5) An air-assisted flare shall be designed and operated with an 
exit velocity less than the velocity, V<INF>max</INF>, as determined by 
the method specified in paragraph (e)(5) of this section.
    (6) A flare used to comply with this section shall be steam-
assisted, air-assisted, or nonassisted.
    (e)(1) Reference Method 22 in 40 CFR part 60 shall be used to 
determine the compliance of a flare with the visible emission 
provisions of this subpart. The observation period is 2 hours and shall 
be used according to Method 22.
    (2) The net heating value of the gas being combusted in a flare 
shall be calculated using the following equation:
[GRAPHIC] [TIFF OMITTED] TR13JA15.000

Where:

H<INF>T</INF> = Net heating value of the sample, MJ/scm; where the 
net enthalpy per mole of offgas is based on combustion at 25 [deg]C 
and 760 mm Hg, but the standard temperature for determining the 
volume corresponding to 1 mol is 20 [deg]C;
K = Constant, 1.74 x 10<SUP>-7</SUP> (1/ppm) (g mol/scm) (MJ/kcal) 
where standard temperature for (g mol/scm) is 20 [deg]C;
C<INF>i</INF> = Concentration of sample component i in ppm on a wet 
basis, as measured for organics by Reference Method 18 in 40 CFR 
part 60 and measured for hydrogen and carbon monoxide by ASTM D 
1946-82 (incorporated by reference as specified in Sec.  260.11); 
and
H<INF>i</INF> = Net heat of combustion of sample component i, kcal/9 
mol at 25 [deg]C and 760 mm Hg. The heats of combustion may be 
determined using ASTM D 2382-83 (incorporated by reference as 
specified in Sec.  260.11) if published values are not available or 
cannot be calculated.

    (3) The actual exit velocity of a flare shall be determined by 
dividing the volumetric flow rate (in units of standard temperature and 
pressure), as determined by Reference Methods 2, 2A, 2C, or 2D in 40 
CFR part 60 as appropriate, by the unobstructed (free) cross-sectional 
area of the flare tip.
    (4) The maximum allowed velocity in m/s, V<INF>max</INF>, for a 
flare complying with paragraph (d)(4)(iii) of this section shall be 
determined by the following equation:

Log<INF>10</INF>(V<INF>max</INF>) = (H<INF>T</INF> + 28.8)/31.7

Where:

28.8 = Constant,
31.7 = Constant,
H<INF>T</INF> = The net heating value as determined in paragraph 
(e)(2) of this section.

    (5) The maximum allowed velocity in m/s, V<INF>max</INF>, for an 
air-assisted flare shall be determined by the following equation:

V<INF>max</INF> = 8.706 + 0.7084 (H<INF>T</INF>)

Where:

8.706 = Constant,
0.7084 = Constant,
H<INF>T</INF> = The net heating value as determined in paragraph 
(e)(2) of this section.

    (f) The remanufacturer or other person that stores or treats the 
hazardous secondary material shall monitor and inspect each control 
device required to comply with this section to ensure proper operation 
and maintenance of the control device by implementing the following 
requirements:
    (1) Install, calibrate, maintain, and operate according to the 
manufacturer's specifications a flow indicator that provides a record 
of vent stream flow

[[Page 1786]]

from each affected process vent to the control device at least once 
every hour. The flow indicator sensor shall be installed in the vent 
stream at the nearest feasible point to the control device inlet but 
before the point at which the vent streams are combined.
    (2) Install, calibrate, maintain, and operate according to the 
manufacturer's specifications a device to continuously monitor control 
device operation as specified below:
    (i) For a thermal vapor incinerator, a temperature monitoring 
device equipped with a continuous recorder. The device shall have an 
accuracy of <plus-minus>1 percent of the temperature being monitored in 
[deg]C or <plus-minus>0.5 [deg]C, whichever is greater. The temperature 
sensor shall be installed at a location in the combustion chamber 
downstream of the combustion zone.
    (ii) For a catalytic vapor incinerator, a temperature monitoring 
device equipped with a continuous recorder. The device shall be capable 
of monitoring temperature at two locations and have an accuracy of 
<plus-minus>1 percent of the temperature being monitored in [deg]C or 
<plus-minus>0.5 [deg]C, whichever is greater. One temperature sensor 
shall be installed in the vent stream at the nearest feasible point to 
the catalyst bed inlet and a second temperature sensor shall be 
installed in the vent stream at the nearest feasible point to the 
catalyst bed outlet.
    (iii) For a flare, a heat sensing monitoring device equipped with a 
continuous recorder that indicates the continuous ignition of the pilot 
flame.
    (iv) For a boiler or process heater having a design heat input 
capacity less than 44 MW, a temperature monitoring device equipped with 
a continuous recorder. The device shall have an accuracy of <plus-
minus>1 percent of the temperature being monitored in [deg]C or <plus-
minus>0.5 [deg]C, whichever is greater. The temperature sensor shall be 
installed at a location in the furnace downstream of the combustion 
zone.
    (v) For a boiler or process heater having a design heat input 
capacity greater than or equal to 44 MW, a monitoring device equipped 
with a continuous recorder to measure a parameter(s) that indicates 
good combustion operating practices are being used.
    (vi) For a condenser, either:
    (A) A monitoring device equipped with a continuous recorder to 
measure the concentration level of the organic compounds in the exhaust 
vent stream from the condenser, or
    (B) A temperature monitoring device equipped with a continuous 
recorder. The device shall be capable of monitoring temperature with an 
accuracy of <plus-minus>1 percent of the temperature being monitored in 
degrees Celsius ([deg]C) or <plus-minus>0.5 [deg]C, whichever is 
greater. The temperature sensor shall be installed at a location in the 
exhaust vent stream from the condenser exit (i.e., product side).
    (vii) For a carbon adsorption system that regenerates the carbon 
bed directly in the control device such as a fixed-bed carbon adsorber, 
either:
    (A) A monitoring device equipped with a continuous recorder to 
measure the concentration level of the organic compounds in the exhaust 
vent stream from the carbon bed, or
    (B) A monitoring device equipped with a continuous recorder to 
measure a parameter that indicates the carbon bed is regenerated on a 
regular, predetermined time cycle.
    (3) Inspect the readings from each monitoring device required by 
paragraphs (f)(1) and (2) of this section at least once each operating 
day to check control device operation and, if necessary, immediately 
implement the corrective measures necessary to ensure the control 
device operates in compliance with the requirements of this section.
    (g) A remanufacturer or other person that stores or treats 
hazardous secondary material in a hazardous secondary material 
management unit using a carbon adsorption system such as a fixed-bed 
carbon adsorber that regenerates the carbon bed directly onsite in the 
control device shall replace the existing carbon in the control device 
with fresh carbon at a regular, predetermined time interval that is no 
longer than the carbon service life established as a requirement of 
Sec.  261.1035(b)(4)(iii)(F).
    (h) A remanufacturer or other person that stores or treats 
hazardous secondary material in a hazardous secondary material 
management unit using a carbon adsorption system such as a carbon 
canister that does not regenerate the carbon bed directly onsite in the 
control device shall replace the existing carbon in the control device 
with fresh carbon on a regular basis by using one of the following 
procedures:
    (1) Monitor the concentration level of the organic compounds in the 
exhaust vent stream from the carbon adsorption system on a regular 
schedule, and replace the existing carbon with fresh carbon immediately 
when carbon breakthrough is indicated. The monitoring frequency shall 
be daily or at an interval no greater than 20 percent of the time 
required to consume the total carbon working capacity established as a 
requirement of Sec.  261.1035(b)(4)(iii)(G), whichever is longer.
    (2) Replace the existing carbon with fresh carbon at a regular, 
predetermined time interval that is less than the design carbon 
replacement interval established as a requirement of Sec.  
261.1035(b)(4)(iii)(G).
    (i) An alternative operational or process parameter may be 
monitored if it can be demonstrated that another parameter will ensure 
that the control device is operated in conformance with these standards 
and the control device's design specifications.
    (j) A remanufacturer or other person that stores or treats 
hazardous secondary material at an affected facility seeking to comply 
with the provisions of this part by using a control device other than a 
thermal vapor incinerator, catalytic vapor incinerator, flare, boiler, 
process heater, condenser, or carbon adsorption system is required to 
develop documentation including sufficient information to describe the 
control device operation and identify the process parameter or 
parameters that indicate proper operation and maintenance of the 
control device.
    (k) A closed-vent system shall meet either of the following design 
requirements:
    (1) A closed-vent system shall be designed to operate with no 
detectable emissions, as indicated by an instrument reading of less 
than 500 ppmv above background as determined by the procedure in Sec.  
261.1034(b) of this subpart, and by visual inspections; or
    (2) A closed-vent system shall be designed to operate at a pressure 
below atmospheric pressure. The system shall be equipped with at least 
one pressure gauge or other pressure measurement device that can be 
read from a readily accessible location to verify that negative 
pressure is being maintained in the closed-vent system when the control 
device is operating.
    (l) The remanufacturer or other person that stores or treats the 
hazardous secondary material shall monitor and inspect each closed-vent 
system required to comply with this section to ensure proper operation 
and maintenance of the closed-vent system by implementing the following 
requirements:
    (1) Each closed-vent system that is used to comply with paragraph 
(k)(1) of this section shall be inspected and monitored in accordance 
with the following requirements:
    (i) An initial leak detection monitoring of the closed-vent system 
shall be conducted by the remanufacturer or other person that stores or 
treats the hazardous secondary

[[Page 1787]]

material on or before the date that the system becomes subject to this 
section. The remanufacturer or other person that stores or treats the 
hazardous secondary material shall monitor the closed-vent system 
components and connections using the procedures specified in Sec.  
261.1034(b) of this subpart to demonstrate that the closed-vent system 
operates with no detectable emissions, as indicated by an instrument 
reading of less than 500 ppmv above background.
    (ii) After initial leak detection monitoring required in paragraph 
(l)(1)(i) of this section, the remanufacturer or other person that 
stores or treats the hazardous secondary material shall inspect and 
monitor the closed-vent system as follows:
    (A) Closed-vent system joints, seams, or other connections that are 
permanently or semi-permanently sealed (e.g., a welded joint between 
two sections of hard piping or a bolted and gasketed ducting flange) 
shall be visually inspected at least once per year to check for defects 
that could result in air pollutant emissions. The remanufacturer or 
other person that stores or treats the hazardous secondary material 
shall monitor a component or connection using the procedures specified 
in Sec.  261.1034(b) of this subpart to demonstrate that it operates 
with no detectable emissions following any time the component is 
repaired or replaced (e.g., a section of damaged hard piping is 
replaced with new hard piping) or the connection is unsealed (e.g., a 
flange is unbolted).
    (B) Closed-vent system components or connections other than those 
specified in paragraph (l)(1)(ii)(A) of this section shall be monitored 
annually and at other times as requested by the Regional Administrator, 
except as provided for in paragraph (o) of this section, using the 
procedures specified in Sec.  261.1034(b) of this subpart to 
demonstrate that the components or connections operate with no 
detectable emissions.
    (iii) In the event that a defect or leak is detected, the 
remanufacturer or other person that stores or treats the hazardous 
secondary material shall repair the defect or leak in accordance with 
the requirements of paragraph (l)(3) of this section.
    (iv) The remanufacturer or other person that stores or treats the 
hazardous secondary material shall maintain a record of the inspection 
and monitoring in accordance with the requirements specified in Sec.  
261.1035 of this subpart.
    (2) Each closed-vent system that is used to comply with paragraph 
(k)(2) of this section shall be inspected and monitored in accordance 
with the following requirements:
    (i) The closed-vent system shall be visually inspected by the 
remanufacturer or other person that stores or treats the hazardous 
secondary material to check for defects that could result in air 
pollutant emissions. Defects include, but are not limited to, visible 
cracks, holes, or gaps in ductwork or piping or loose connections.
    (ii) The remanufacturer or other person that stores or treats the 
hazardous secondary material shall perform an initial inspection of the 
closed-vent system on or before the date that the system becomes 
subject to this section. Thereafter, the remanufacturer or other person 
that stores or treats the hazardous secondary material shall perform 
the inspections at least once every year.
    (iii) In the event that a defect or leak is detected, the 
remanufacturer or other person that stores or treats the hazardous 
secondary material shall repair the defect in accordance with the 
requirements of paragraph (l)(3) of this section.
    (iv) The remanufacturer or other person that stores or treats the 
hazardous secondary material shall maintain a record of the inspection 
and monitoring in accordance with the requirements specified in Sec.  
261.1035 of this subpart.
    (3) The remanufacturer or other person that stores or treats the 
hazardous secondary material shall repair all detected defects as 
follows:
    (i) Detectable emissions, as indicated by visual inspection, or by 
an instrument reading greater than 500 ppmv above background, shall be 
controlled as soon as practicable, but not later than 15 calendar days 
after the emission is detected, except as provided for in paragraph 
(l)(3)(iii) of this section.
    (ii) A first attempt at repair shall be made no later than 5 
calendar days after the emission is detected.
    (iii) Delay of repair of a closed-vent system for which leaks have 
been detected is allowed if the repair is technically infeasible 
without a process unit shutdown, or if the remanufacturer or other 
person that stores or treats the hazardous secondary material 
determines that emissions resulting from immediate repair would be 
greater than the fugitive emissions likely to result from delay of 
repair. Repair of such equipment shall be completed by the end of the 
next process unit shutdown.
    (iv) The remanufacturer or other person that stores or treats the 
hazardous secondary material shall maintain a record of the defect 
repair in accordance with the requirements specified in Sec.  261.1035 
of this subpart.
    (m) Closed-vent systems and control devices used to comply with 
provisions of this subpart shall be operated at all times when 
emissions may be vented to them.
    (n) The owner or operator using a carbon adsorption system to 
control air pollutant emissions shall document that all carbon that is 
a hazardous waste and that is removed from the control device is 
managed in one of the following manners, regardless of the average 
volatile organic concentration of the carbon:
    (1) Regenerated or reactivated in a thermal treatment unit that 
meets one of the following:
    (i) The owner or operator of the unit has been issued a final 
permit under 40 CFR part 270 which implements the requirements of 
subpart X of this part; or
    (ii) The unit is equipped with and operating air emission controls 
in accordance with the applicable requirements of subparts AA and CC of 
either this part or of 40 CFR part 265; or
    (iii) The unit is equipped with and operating air emission controls 
in accordance with a national emission standard for hazardous air 
pollutants under 40 CFR part 61 or 40 CFR part 63.
    (2) Incinerated in a hazardous waste incinerator for which the 
owner or operator either:
    (i) Has been issued a final permit under 40 CFR part 270 which 
implements the requirements of subpart O of this part; or
    (ii) Has designed and operates the incinerator in accordance with 
the interim status requirements of 40 CFR part 265, subpart O.
    (3) Burned in a boiler or industrial furnace for which the owner or 
operator either:
    (i) Has been issued a final permit under 40 CFR part 270 which 
implements the requirements of 40 CFR part 266, subpart H; or
    (ii) Has designed and operates the boiler or industrial furnace in 
accordance with the interim status requirements of 40 CFR part 266, 
subpart H.
    (o) Any components of a closed-vent system that are designated, as 
described in Sec.  261.1035(c)(9) of this subpart, as unsafe to monitor 
are exempt from the requirements of paragraph (l)(1)(ii)(B) of this 
section if:
    (1) The remanufacturer or other person that stores or treats the 
hazardous secondary material in a hazardous secondary material 
management unit using a closed-vent

[[Page 1788]]

system determines that the components of the closed-vent system are 
unsafe to monitor because monitoring personnel would be exposed to an 
immediate danger as a consequence of complying with paragraph 
(l)(1)(ii)(B) of this section; and
    (2) The remanufacturer or other person that stores or treats the 
hazardous secondary material in a hazardous secondary material 
management unit using a closed-vent system adheres to a written plan 
that requires monitoring the closed-vent system components using the 
procedure specified in paragraph (l)(1)(ii)(B) of this section as 
frequently as practicable during safe-to-monitor times.


Sec.  261.1034  Test methods and procedures.

    (a) Each remanufacturer or other person that stores or treats the 
hazardous secondary material subject to the provisions of this subpart 
shall comply with the test methods and procedural requirements provided 
in this section.
    (b) When a closed-vent system is tested for compliance with no 
detectable emissions, as required in Sec.  261.1033(l) of this subpart, 
the test shall comply with the following requirements:
    (1) Monitoring shall comply with Reference Method 21 in 40 CFR part 
60.
    (2) The detection instrument shall meet the performance criteria of 
Reference Method 21.
    (3) The instrument shall be calibrated before use on each day of 
its use by the procedures specified in Reference Method 21.
    (4) Calibration gases shall be:
    (i) Zero air (less than 10 ppm of hydrocarbon in air).
    (ii) A mixture of methane or n-hexane and air at a concentration of 
approximately, but less than, 10,000 ppm methane or n-hexane.
    (5) The background level shall be determined as set forth in 
Reference Method 21.
    (6) The instrument probe shall be traversed around all potential 
leak interfaces as close to the interface as possible as described in 
Reference Method 21.
    (7) The arithmetic difference between the maximum concentration 
indicated by the instrument and the background level is compared with 
500 ppm for determining compliance.
    (c) Performance tests to determine compliance with Sec.  
261.1032(a) and with the total organic compound concentration limit of 
Sec.  261.1033(c) shall comply with the following:
    (1) Performance tests to determine total organic compound 
concentrations and mass flow rates entering and exiting control devices 
shall be conducted and data reduced in accordance with the following 
reference methods and calculation procedures:
    (i) Method 2 in 40 CFR part 60 for velocity and volumetric flow 
rate.
    (ii) Method 18 or Method 25A in 40 CFR part 60, appendix A, for 
organic content. If Method 25A is used, the organic HAP used as the 
calibration gas must be the single organic HAP representing the largest 
percent by volume of the emissions. The use of Method 25A is acceptable 
if the response from the high-level calibration gas is at least 20 
times the standard deviation of the response from the zero calibration 
gas when the instrument is zeroed on the most sensitive scale.
    (iii) Each performance test shall consist of three separate runs; 
each run conducted for at least 1 hour under the conditions that exist 
when the hazardous secondary material management unit is operating at 
the highest load or capacity level reasonably expected to occur. For 
the purpose of determining total organic compound concentrations and 
mass flow rates, the average of results of all runs shall apply. The 
average shall be computed on a time-weighted basis.
    (iv) Total organic mass flow rates shall be determined by the 
following equation:
    (A) For sources utilizing Method 18.
    [GRAPHIC] [TIFF OMITTED] TR13JA15.001
    

Where:

E<INF>h</INF>= Total organic mass flow rate, kg/h;
Q<INF>2sd</INF>= Volumetric flow rate of gases entering or exiting 
control device, as determined by Method 2, dscm/h;
n = Number of organic compounds in the vent gas;
C<INF>i</INF>= Organic concentration in ppm, dry basis, of compound 
i in the vent gas, as determined by Method 18;
MW<INF>i</INF>= Molecular weight of organic compound i in the vent 
gas, kg/kg-mol;
0.0416 = Conversion factor for molar volume, kg-mol/m3 (@293 K and 
760 mm Hg);
10<SUP>-</SUP>\6\ = Conversion from ppm

    (B) For sources utilizing Method 25A.

E<INF>h</INF>= (Q)(C)(MW)(0.0416)(10<SUP>-</SUP>\6\)

Where:

E<INF>h</INF>= Total organic mass flow rate, kg/h;
Q = Volumetric flow rate of gases entering or exiting control 
device, as determined by Method 2, dscm/h;
C = Organic concentration in ppm, dry basis, as determined by Method 
25A;
MW = Molecular weight of propane, 44;
0.0416 = Conversion factor for molar volume, kg-mol/m3 (@293 K and 
760 mm Hg);
10<SUP>-</SUP>\6\ = Conversion from ppm.

    (v) The annual total organic emission rate shall be determined by 
the following equation:

E<INF>A</INF>=(E<INF>h</INF>)(H)

Where:

E<INF>A</INF>=Total organic mass emission rate, kg/y;
E<INF>h</INF>=Total organic mass flow rate for the process vent, kg/
h;
H=Total annual hours of operations for the affected unit, h.

    (vi) Total organic emissions from all affected process vents at the 
facility shall be determined by summing the hourly total organic mass 
emission rates (E<INF>h</INF>, as determined in paragraph (c)(1)(iv) of 
this section) and by summing the annual total organic mass emission 
rates (E<INF>A</INF>, as determined in paragraph (c)(1)(v) of this 
section) for all affected process vents at the facility.
    (2) The remanufacturer or other person that stores or treats the 
hazardous secondary material shall record such process information as 
may be necessary to determine the conditions of the performance tests. 
Operations during periods of startup, shutdown, and malfunction shall 
not constitute representative conditions for the purpose of a 
performance test.
    (3) The remanufacturer or other person that stores or treats the 
hazardous secondary material at an affected facility shall provide, or 
cause to be provided, performance testing facilities as follows:
    (i) Sampling ports adequate for the test methods specified in 
paragraph (c)(1) of this section.
    (ii) Safe sampling platform(s).
    (iii) Safe access to sampling platform(s).
    (iv) Utilities for sampling and testing equipment.
    (4) For the purpose of making compliance determinations, the time-
weighted average of the results of the three runs shall apply. In the 
event that a sample is accidentally lost or conditions occur in which 
one of the

[[Page 1789]]

three runs must be discontinued because of forced shutdown, failure of 
an irreplaceable portion of the sample train, extreme meteorological 
conditions, or other circumstances beyond the remanufacturer's or other 
person's that stores or treats the hazardous secondary material 
control, compliance may, upon the Regional Administrator's approval, be 
determined using the average of the results of the two other runs.
    (d) To show that a process vent associated with a hazardous 
secondary material distillation, fractionation, thin-film evaporation, 
solvent extraction, or air or steam stripping operation is not subject 
to the requirements of this subpart, the remanufacturer or other person 
that stores or treats the hazardous secondary material must make an 
initial determination that the time-weighted, annual average total 
organic concentration of the material managed by the hazardous 
secondary material management unit is less than 10 ppmw using one of 
the following two methods:
    (1) Direct measurement of the organic concentration of the material 
using the following procedures:
    (i) The remanufacturer or other person that stores or treats the 
hazardous secondary material must take a minimum of four grab samples 
of material for each material stream managed in the affected unit under 
process conditions expected to cause the maximum material organic 
concentration.
    (ii) For material generated onsite, the grab samples must be 
collected at a point before the material is exposed to the atmosphere 
such as in an enclosed pipe or other closed system that is used to 
transfer the material after generation to the first affected 
distillation, fractionation, thin-film evaporation, solvent extraction, 
or air or steam stripping operation. For material generated offsite, 
the grab samples must be collected at the inlet to the first material 
management unit that receives the material provided the material has 
been transferred to the facility in a closed system such as a tank 
truck and the material is not diluted or mixed with other material.
    (iii) Each sample shall be analyzed and the total organic 
concentration of the sample shall be computed using Method 9060A 
(incorporated by reference under 40 CFR 260.11) of ``Test Methods for 
Evaluating Solid Waste, Physical/Chemical Methods,'' EPA Publication 
SW-846, or analyzed for its individual organic constituents.
    (iv) The arithmetic mean of the results of the analyses of the four 
samples shall apply for each material stream managed in the unit in 
determining the time-weighted, annual average total organic 
concentration of the material. The time-weighted average is to be 
calculated using the annual quantity of each material stream processed 
and the mean organic concentration of each material stream managed in 
the unit.
    (2) Using knowledge of the material to determine that its total 
organic concentration is less than 10 ppmw. Documentation of the 
material determination is required. Examples of documentation that 
shall be used to support a determination under this provision include 
production process information documenting that no organic compounds 
are used, information that the material is generated by a process that 
is identical to a process at the same or another facility that has 
previously been demonstrated by direct measurement to generate a 
material stream having a total organic content less than 10 ppmw, or 
prior speciation analysis results on the same material stream where it 
can also be documented that no process changes have occurred since that 
analysis that could affect the material total organic concentration.
    (e) The determination that distillation, fractionation, thin-film 
evaporation, solvent extraction, or air or steam stripping operations 
manage hazardous secondary materials with time-weighted, annual average 
total organic concentrations less than 10 ppmw shall be made as 
follows:
    (1) By the effective date that the facility becomes subject to the 
provisions of this subpart or by the date when the material is first 
managed in a hazardous secondary material management unit, whichever is 
later, and
    (2) For continuously generated material, annually, or
    (3) Whenever there is a change in the material being managed or a 
change in the process that generates or treats the material.
    (f) When a remanufacturer or other person that stores or treats the 
hazardous secondary material and the Regional Administrator do not 
agree on whether a distillation, fractionation, thin-film evaporation, 
solvent extraction, or air or steam stripping operation manages a 
hazardous secondary material with organic concentrations of at least 10 
ppmw based on knowledge of the material, the dispute may be resolved by 
using direct measurement as specified at paragraph (d)(1) of this 
section.


Sec.  261.1035  Recordkeeping requirements.

    (a)(1) Each remanufacturer or other person that stores or treats 
the hazardous secondary material subject to the provisions of this 
subpart shall comply with the recordkeeping requirements of this 
section.
    (2) A remanufacturer or other person that stores or treats the 
hazardous secondary material of more than one hazardous secondary 
material management unit subject to the provisions of this subpart may 
comply with the recordkeeping requirements for these hazardous 
secondary material management units in one recordkeeping system if the 
system identifies each record by each hazardous secondary material 
management unit.
    (b) The remanufacturer or other person that stores or treats the 
hazardous secondary material must keep the following records on-site:
    (1) For facilities that comply with the provisions of Sec.  
261.1033(a)(2), an implementation schedule that includes dates by which 
the closed-vent system and control device will be installed and in 
operation. The schedule must also include a rationale of why the 
installation cannot be completed at an earlier date. The implementation 
schedule must be kept on-site at the facility by the effective date 
that the facility becomes subject to the provisions of this subpart.
    (2) Up-to-date documentation of compliance with the process vent 
standards in Sec.  261.1032, including:
    (i) Information and data identifying all affected process vents, 
annual throughput and operating hours of each affected unit, estimated 
emission rates for each affected vent and for the overall facility 
(i.e., the total emissions for all affected vents at the facility), and 
the approximate location within the facility of each affected unit 
(e.g., identify the hazardous secondary material management units on a 
facility plot plan).
    (ii) Information and data supporting determinations of vent 
emissions and emission reductions achieved by add-on control devices 
based on engineering calculations or source tests. For the purpose of 
determining compliance, determinations of vent emissions and emission 
reductions must be made using operating parameter values (e.g., 
temperatures, flow rates, or vent stream organic compounds and 
concentrations) that represent the conditions that result in maximum 
organic emissions, such as when the hazardous secondary material 
management unit is operating at the highest load or capacity level 
reasonably expected to occur. If the remanufacturer or other person 
that stores or treats the

[[Page 1790]]

hazardous secondary material takes any action (e.g., managing a 
material of different composition or increasing operating hours of 
affected hazardous secondary material management units) that would 
result in an increase in total organic emissions from affected process 
vents at the facility, then a new determination is required.
    (3) Where a remanufacturer or other person that stores or treats 
the hazardous secondary material chooses to use test data to determine 
the organic removal efficiency or total organic compound concentration 
achieved by the control device, a performance test plan must be 
developed and include:
    (i) A description of how it is determined that the planned test is 
going to be conducted when the hazardous secondary material management 
unit is operating at the highest load or capacity level reasonably 
expected to occur. This shall include the estimated or design flow rate 
and organic content of each vent stream and define the acceptable 
operating ranges of key process and control device parameters during 
the test program.
    (ii) A detailed engineering description of the closed-vent system 
and control device including:
    (A) Manufacturer's name and model number of control device.
    (B) Type of control device.
    (C) Dimensions of the control device.
    (D) Capacity.
    (E) Construction materials.
    (iii) A detailed description of sampling and monitoring procedures, 
including sampling and monitoring locations in the system, the 
equipment to be used, sampling and monitoring frequency, and planned 
analytical procedures for sample analysis.
    (4) Documentation of compliance with Sec.  261.1033 shall include 
the following information:
    (i) A list of all information references and sources used in 
preparing the documentation.
    (ii) Records, including the dates, of each compliance test required 
by Sec.  261.1033(k).
    (iii) If engineering calculations are used, a design analysis, 
specifications, drawings, schematics, and piping and instrumentation 
diagrams based on the appropriate sections of ``APTI Course 415: 
Control of Gaseous Emissions'' (incorporated by reference as specified 
in Sec.  260.11) or other engineering texts acceptable to the Regional 
Administrator that present basic control device design information. 
Documentation provided by the control device manufacturer or vendor 
that describes the control device design in accordance with paragraphs 
(b)(4)(iii)(A) through (G) of this section may be used to comply with 
this requirement. The design analysis shall address the vent stream 
characteristics and control device operation parameters as specified 
below.
    (A) For a thermal vapor incinerator, the design analysis shall 
consider the vent stream composition, constituent concentrations, and 
flow rate. The design analysis shall also establish the design minimum 
and average temperature in the combustion zone and the combustion zone 
residence time.
    (B) For a catalytic vapor incinerator, the design analysis shall 
consider the vent stream composition, constituent concentrations, and 
flow rate. The design analysis shall also establish the design minimum 
and average temperatures across the catalyst bed inlet and outlet.
    (C) For a boiler or process heater, the design analysis shall 
consider the vent stream composition, constituent concentrations, and 
flow rate. The design analysis shall also establish the design minimum 
and average flame zone temperatures, combustion zone residence time, 
and description of method and location where the vent stream is 
introduced into the combustion zone.
    (D) For a flare, the design analysis shall consider the vent stream 
composition, constituent concentrations, and flow rate. The design 
analysis shall also consider the requirements specified in Sec.  
261.1033(d).
    (E) For a condenser, the design analysis shall consider the vent 
stream composition, constituent concentrations, flow rate, relative 
humidity, and temperature. The design analysis shall also establish the 
design outlet organic compound concentration level, design average 
temperature of the condenser exhaust vent stream, and design average 
temperatures of the coolant fluid at the condenser inlet and outlet.
    (F) For a carbon adsorption system such as a fixed-bed adsorber 
that regenerates the carbon bed directly onsite in the control device, 
the design analysis shall consider the vent stream composition, 
constituent concentrations, flow rate, relative humidity, and 
temperature. The design analysis shall also establish the design 
exhaust vent stream organic compound concentration level, number and 
capacity of carbon beds, type and working capacity of activated carbon 
used for carbon beds, design total steam flow over the period of each 
complete carbon bed regeneration cycle, duration of the carbon bed 
steaming and cooling/drying cycles, design carbon bed temperature after 
regeneration, design carbon bed regeneration time, and design service 
life of carbon.
    (G) For a carbon adsorption system such as a carbon canister that 
does not regenerate the carbon bed directly onsite in the control 
device, the design analysis shall consider the vent stream composition, 
constituent concentrations, flow rate, relative humidity, and 
temperature. The design analysis shall also establish the design outlet 
organic concentration level, capacity of carbon bed, type and working 
capacity of activated carbon used for carbon bed, and design carbon 
replacement interval based on the total carbon working capacity of the 
control device and source operating schedule.
    (iv) A statement signed and dated by the remanufacturer or other 
person that stores or treats the hazardous secondary material 
certifying that the operating parameters used in the design analysis 
reasonably represent the conditions that exist when the hazardous 
secondary material management unit is or would be operating at the 
highest load or capacity level reasonably expected to occur.
    (v) A statement signed and dated by the remanufacturer or other 
person that stores or treats the hazardous secondary material 
certifying that the control device is designed to operate at an 
efficiency of 95 percent or greater unless the total organic 
concentration limit of Sec.  261.1032(a) is achieved at an efficiency 
less than 95 weight percent or the total organic emission limits of 
Sec.  261.1032(a) for affected process vents at the facility can be 
attained by a control device involving vapor recovery at an efficiency 
less than 95 weight percent. A statement provided by the control device 
manufacturer or vendor certifying that the control equipment meets the 
design specifications may be used to comply with this requirement.
    (vi) If performance tests are used to demonstrate compliance, all 
test results.
    (c) Design documentation and monitoring, operating, and inspection 
information for each closed-vent system and control device required to 
comply with the provisions of this part shall be recorded and kept up-
to-date at the facility. The information shall include:
    (1) Description and date of each modification that is made to the 
closed-vent system or control device design.
    (2) Identification of operating parameter, description of 
monitoring device, and diagram of monitoring sensor location or 
locations used to comply with Sec.  261.1033 (f)(1) and (2).
    (3) Monitoring, operating, and inspection information required by 
Sec.  261.1033(f) through (k).

[[Page 1791]]

    (4) Date, time, and duration of each period that occurs while the 
control device is operating when any monitored parameter exceeds the 
value established in the control device design analysis as specified 
below:
    (i) For a thermal vapor incinerator designed to operate with a 
minimum residence time of 0.50 second at a minimum temperature of 760 
[deg]C, period when the combustion temperature is below 760 [deg]C.
    (ii) For a thermal vapor incinerator designed to operate with an 
organic emission reduction efficiency of 95 weight percent or greater, 
period when the combustion zone temperature is more than 28 [deg]C 
below the design average combustion zone temperature established as a 
requirement of paragraph (b)(4)(iii)(A) of this section.
    (iii) For a catalytic vapor incinerator, period when:
    (A) Temperature of the vent stream at the catalyst bed inlet is 
more than 28 [deg]C below the average temperature of the inlet vent 
stream established as a requirement of paragraph (b)(4)(iii)(B) of this 
section, or
    (B) Temperature difference across the catalyst bed is less than 80 
percent of the design average temperature difference established as a 
requirement of paragraph (b)(4)(iii)(B) of this section.
    (iv) For a boiler or process heater, period when:
    (A) Flame zone temperature is more than 28 [deg]C below the design 
average flame zone temperature established as a requirement of 
paragraph (b)(4)(iii)(C) of this section, or
    (B) Position changes where the vent stream is introduced to the 
combustion zone from the location established as a requirement of 
paragraph (b)(4)(iii)(C) of this section.
    (v) For a flare, period when the pilot flame is not ignited.
    (vi) For a condenser that complies with Sec.  
261.1033(f)(2)(vi)(A), period when the organic compound concentration 
level or readings of organic compounds in the exhaust vent stream from 
the condenser are more than 20 percent greater than the design outlet 
organic compound concentration level established as a requirement of 
paragraph (b)(4)(iii)(E) of this section.
    (vii) For a condenser that complies with Sec.  
261.1033(f)(2)(vi)(B), period when:
    (A) Temperature of the exhaust vent stream from the condenser is 
more than 6 [deg]C above the design average exhaust vent stream 
temperature established as a requirement of paragraph (b)(4)(iii)(E) of 
this section; or
    (B) Temperature of the coolant fluid exiting the condenser is more 
than 6 [deg]C above the design average coolant fluid temperature at the 
condenser outlet established as a requirement of paragraph 
(b)(4)(iii)(E) of this section.
    (viii) For a carbon adsorption system such as a fixed-bed carbon 
adsorber that regenerates the carbon bed directly on-site in the 
control device and complies with Sec.  261.1033(f)(2)(vii)(A), period 
when the organic compound concentration level or readings of organic 
compounds in the exhaust vent stream from the carbon bed are more than 
20 percent greater than the design exhaust vent stream organic compound 
concentration level established as a requirement of paragraph 
(b)(4)(iii)(F) of this section.
    (ix) For a carbon adsorption system such as a fixed-bed carbon 
adsorber that regenerates the carbon bed directly on-site in the 
control device and complies with Sec.  261.1033(f)(2)(vii)(B), period 
when the vent stream continues to flow through the control device 
beyond the predetermined carbon bed regeneration time established as a 
requirement of paragraph (b)(4)(iii)(F) of this section.
    (5) Explanation for each period recorded under paragraph (c)(4) of 
the cause for control device operating parameter exceeding the design 
value and the measures implemented to correct the control device 
operation.
    (6) For a carbon adsorption system operated subject to requirements 
specified in Sec.  261.1033(g) or (h)(2), date when existing carbon in 
the control device is replaced with fresh carbon.
    (7) For a carbon adsorption system operated subject to requirements 
specified in Sec.  261.1033(h)(1), a log that records:
    (i) Date and time when control device is monitored for carbon 
breakthrough and the monitoring device reading.
    (ii) Date when existing carbon in the control device is replaced 
with fresh carbon.
    (8) Date of each control device startup and shutdown.
    (9) A remanufacturer or other person that stores or treats the 
hazardous secondary material designating any components of a closed-
vent system as unsafe to monitor pursuant to Sec.  261.1033(o) of this 
subpart shall record in a log that is kept at the facility the 
identification of closed-vent system components that are designated as 
unsafe to monitor in accordance with the requirements of Sec.  
261.1033(o) of this subpart, an explanation for each closed-vent system 
component stating why the closed-vent system component is unsafe to 
monitor, and the plan for monitoring each closed-vent system component.
    (10) When each leak is detected as specified in Sec.  261.1033(l) 
of this subpart, the following information shall be recorded:
    (i) The instrument identification number, the closed-vent system 
component identification number, and the operator name, initials, or 
identification number.
    (ii) The date the leak was detected and the date of first attempt 
to repair the leak.
    (iii) The date of successful repair of the leak.
    (iv) Maximum instrument reading measured by Method 21 of 40 CFR 
part 60, appendix A after it is successfully repaired or determined to 
be nonrepairable.
    (v) ``Repair delayed'' and the reason for the delay if a leak is 
not repaired within 15 calendar days after discovery of the leak.
    (A) The remanufacturer or other person that stores or treats the 
hazardous secondary material may develop a written procedure that 
identifies the conditions that justify a delay of repair. In such 
cases, reasons for delay of repair may be documented by citing the 
relevant sections of the written procedure.
    (B) If delay of repair was caused by depletion of stocked parts, 
there must be documentation that the spare parts were sufficiently 
stocked on-site before depletion and the reason for depletion.
    (d) Records of the monitoring, operating, and inspection 
information required by paragraphs (c)(3) through (10) of this section 
shall be maintained by the owner or operator for at least 3 years 
following the date of each occurrence, measurement, maintenance, 
corrective action, or record.
    (e) For a control device other than a thermal vapor incinerator, 
catalytic vapor incinerator, flare, boiler, process heater, condenser, 
or carbon adsorption system, the Regional Administrator will specify 
the appropriate recordkeeping requirements.
    (f) Up-to-date information and data used to determine whether or 
not a process vent is subject to the requirements in Sec.  261.1032 
including supporting documentation as required by Sec.  261.1034(d)(2) 
when application of the knowledge of the nature of the hazardous 
secondary material stream or the process by which it was produced is 
used, shall be recorded in a log that is kept at the facility.


Sec. Sec.  261.1036-261.1049  [Reserved]

Subpart BB--Air Emission Standards for Equipment Leaks


Sec.  261.1050  Applicability.

    (a) The regulations in this subpart apply to equipment that 
contains

[[Page 1792]]

hazardous secondary materials excluded under the remanufacturing 
exclusion at Sec.  261.4(a)(27), unless the equipment operations are 
subject to the requirements of an applicable Clean Air Act regulation 
codified under 40 CFR part 60, part 61, or part 63.


Sec.  261.1051  Definitions.

    As used in this subpart, all terms shall have the meaning given 
them in Sec.  261.1031, the Resource Conservation and Recovery Act, and 
40 CFR parts 260-266.


Sec.  261.1052  Standards: Pumps in light liquid service.

    (a)(1) Each pump in light liquid service shall be monitored monthly 
to detect leaks by the methods specified in Sec.  261.1063(b), except 
as provided in paragraphs (d), (e), and (f) of this section.
    (2) Each pump in light liquid service shall be checked by visual 
inspection each calendar week for indications of liquids dripping from 
the pump seal.
    (b)(1) If an instrument reading of 10,000 ppm or greater is 
measured, a leak is detected.
    (2) If there are indications of liquids dripping from the pump 
seal, a leak is detected.
    (c)(1) When a leak is detected, it shall be repaired as soon as 
practicable, but not later than 15 calendar days after it is detected, 
except as provided in Sec.  261.1059.
    (2) A first attempt at repair (e.g., tightening the packing gland) 
shall be made no later than five calendar days after each leak is 
detected.
    (d) Each pump equipped with a dual mechanical seal system that 
includes a barrier fluid system is exempt from the requirements of 
paragraph (a) of this section, provided the following requirements are 
met:
    (1) Each dual mechanical seal system must be:
    (i) Operated with the barrier fluid at a pressure that is at all 
times greater than the pump stuffing box pressure, or
    (ii) Equipped with a barrier fluid degassing reservoir that is 
connected by a closed-vent system to a control device that complies 
with the requirements of Sec.  261.1060, or
    (iii) Equipped with a system that purges the barrier fluid into a 
hazardous secondary material stream with no detectable emissions to the 
atmosphere.
    (2) The barrier fluid system must not be a hazardous secondary 
material with organic concentrations 10 percent or greater by weight.
    (3) Each barrier fluid system must be equipped with a sensor that 
will detect failure of the seal system, the barrier fluid system, or 
both.
    (4) Each pump must be checked by visual inspection, each calendar 
week, for indications of liquids dripping from the pump seals.
    (5)(i) Each sensor as described in paragraph (d)(3) of this section 
must be checked daily or be equipped with an audible alarm that must be 
checked monthly to ensure that it is functioning properly.
    (ii) The remanufacturer or other person that stores or treats the 
hazardous secondary material must determine, based on design 
considerations and operating experience, a criterion that indicates 
failure of the seal system, the barrier fluid system, or both.
    (6)(i) If there are indications of liquids dripping from the pump 
seal or the sensor indicates failure of the seal system, the barrier 
fluid system, or both based on the criterion determined in paragraph 
(d)(5)(ii) of this section, a leak is detected.
    (ii) When a leak is detected, it shall be repaired as soon as 
practicable, but not later than 15 calendar days after it is detected, 
except as provided in Sec.  261.1059.
    (iii) A first attempt at repair (e.g., relapping the seal) shall be 
made no later than five calendar days after each leak is detected.
    (e) Any pump that is designated, as described in Sec.  
261.1064(g)(2), for no detectable emissions, as indicated by an 
instrument reading of less than 500 ppm above background, is exempt 
from the requirements of paragraphs (a), (c), and (d) of this section 
if the pump meets the following requirements:
    (1) Must have no externally actuated shaft penetrating the pump 
housing.
    (2) Must operate with no detectable emissions as indicated by an 
instrument reading of less than 500 ppm above background as measured by 
the methods specified in Sec.  261.1063(c).
    (3) Must be tested for compliance with paragraph (e)(2) of this 
section initially upon designation, annually, and at other times as 
requested by the Regional Administrator.
    (f) If any pump is equipped with a closed-vent system capable of 
capturing and transporting any leakage from the seal or seals to a 
control device that complies with the requirements of Sec.  261.1060, 
it is exempt from the requirements of paragraphs (a) through (e) of 
this section.


Sec.  261.1053  Standards: Compressors.

    (a) Each compressor shall be equipped with a seal system that 
includes a barrier fluid system and that prevents leakage of total 
organic emissions to the atmosphere, except as provided in paragraphs 
(h) and (i) of this section.
    (b) Each compressor seal system as required in paragraph (a) of 
this section shall be:
    (1) Operated with the barrier fluid at a pressure that is at all 
times greater than the compressor stuffing box pressure, or
    (2) Equipped with a barrier fluid system that is connected by a 
closed-vent system to a control device that complies with the 
requirements of Sec.  261.1060, or
    (3) Equipped with a system that purges the barrier fluid into a 
hazardous secondary material stream with no detectable emissions to 
atmosphere.
    (c) The barrier fluid must not be a hazardous secondary material 
with organic concentrations 10 percent or greater by weight.
    (d) Each barrier fluid system as described in paragraphs (a) 
through (c) of this section shall be equipped with a sensor that will 
detect failure of the seal system, barrier fluid system, or both.
    (e)(1) Each sensor as required in paragraph (d) of this section 
shall be checked daily or shall be equipped with an audible alarm that 
must be checked monthly to ensure that it is functioning properly 
unless the compressor is located within the boundary of an unmanned 
plant site, in which case the sensor must be checked daily.
    (2) The remanufacturer or other person that stores or treats the 
hazardous secondary material shall determine, based on design 
considerations and operating experience, a criterion that indicates 
failure of the seal system, the barrier fluid system, or both.
    (f) If the sensor indicates failure of the seal system, the barrier 
fluid system, or both based on the criterion determined under paragraph 
(e)(2) of this section, a leak is detected.
    (g)(1) When a leak is detected, it shall be repaired as soon as 
practicable, but not later than 15 calendar days after it is detected, 
except as provided in Sec.  261.1059.
    (2) A first attempt at repair (e.g., tightening the packing gland) 
shall be made no later than 5 calendar days after each leak is 
detected.
    (h) A compressor is exempt from the requirements of paragraphs (a) 
and (b) of this section if it is equipped with a closed-vent system 
capable of capturing and transporting any leakage from the seal to a 
control device that complies with the requirements of Sec.  261.1060, 
except as provided in paragraph (i) of this section.
    (i) Any compressor that is designated, as described in Sec.  
261.1064(g)(2), for no

[[Page 1793]]

detectable emissions as indicated by an instrument reading of less than 
500 ppm above background is exempt from the requirements of paragraphs 
(a) through (h) of this section if the compressor:
    (1) Is determined to be operating with no detectable emissions, as 
indicated by an instrument reading of less than 500 ppm above 
background, as measured by the method specified in Sec.  261.1063(c).
    (2) Is tested for compliance with paragraph (i)(1) of this section 
initially upon designation, annually, and at other times as requested 
by the Regional Administrator.


Sec.  261.1054  Standards: Pressure relief devices in gas/vapor 
service.

    (a) Except during pressure releases, each pressure relief device in 
gas/vapor service shall be operated with no detectable emissions, as 
indicated by an instrument reading of less than 500 ppm above 
background, as measured by the method specified in Sec.  261.1063(c).
    (b)(1) After each pressure release, the pressure relief device 
shall be returned to a condition of no detectable emissions, as 
indicated by an instrument reading of less than 500 ppm above 
background, as soon as practicable, but no later than 5 calendar days 
after each pressure release, except as provided in Sec.  261.1059.
    (2) No later than 5 calendar days after the pressure release, the 
pressure relief device shall be monitored to confirm the condition of 
no detectable emissions, as indicated by an instrument reading of less 
than 500 ppm above background, as measured by the method specified in 
Sec.  261.1063(c).
    (c) Any pressure relief device that is equipped with a closed-vent 
system capable of capturing and transporting leakage from the pressure 
relief device to a control device as described in Sec.  261.1060 is 
exempt from the requirements of paragraphs (a) and (b) of this section.


Sec.  261.1055  Standards: Sampling connection systems.

    (a) Each sampling connection system shall be equipped with a 
closed-purge, closed-loop, or closed-vent system. This system shall 
collect the sample purge for return to the process or for routing to 
the appropriate treatment system. Gases displaced during filling of the 
sample container are not required to be collected or captured.
    (b) Each closed-purge, closed-loop, or closed-vent system as 
required in paragraph (a) of this section shall meet one of the 
following requirements:
    (1) Return the purged process fluid directly to the process line;
    (2) Collect and recycle the purged process fluid; or
    (3) Be designed and operated to capture and transport all the 
purged process fluid to a material management unit that complies with 
the applicable requirements of Sec. Sec.  261.1084 through 264.1086 of 
this subpart or a control device that complies with the requirements of 
Sec.  261.1060 of this subpart.
    (c) In-situ sampling systems and sampling systems without purges 
are exempt from the requirements of paragraphs (a) and (b) of this 
section.


Sec.  261.1056  Standards: Open-ended valves or lines.

    (a)(1) Each open-ended valve or line shall be equipped with a cap, 
blind flange, plug, or a second valve.
    (2) The cap, blind flange, plug, or second valve shall seal the 
open end at all times except during operations requiring hazardous 
secondary material stream flow through the open-ended valve or line.
    (b) Each open-ended valve or line equipped with a second valve 
shall be operated in a manner such that the valve on the hazardous 
secondary material stream end is closed before the second valve is 
closed.
    (c) When a double block and bleed system is being used, the bleed 
valve or line may remain open during operations that require venting 
the line between the block valves but shall comply with paragraph (a) 
of this section at all other times.


Sec.  261.1057  Standards: Valves in gas/vapor service or in light 
liquid service.

    (a) Each valve in gas/vapor or light liquid service shall be 
monitored monthly to detect leaks by the methods specified in Sec.  
261.1063(b) and shall comply with paragraphs (b) through (e) of this 
section, except as provided in paragraphs (f), (g), and (h) of this 
section and Sec. Sec.  261.1061 and 261.1062.
    (b) If an instrument reading of 10,000 ppm or greater is measured, 
a leak is detected.
    (c)(1) Any valve for which a leak is not detected for two 
successive months may be monitored the first month of every succeeding 
quarter, beginning with the next quarter, until a leak is detected.
    (2) If a leak is detected, the valve shall be monitored monthly 
until a leak is not detected for two successive months,
    (d)(1) When a leak is detected, it shall be repaired as soon as 
practicable, but no later than 15 calendar days after the leak is 
detected, except as provided in Sec.  261.1059.
    (2) A first attempt at repair shall be made no later than 5 
calendar days after each leak is detected.
    (e) First attempts at repair include, but are not limited to, the 
following best practices where practicable:
    (1) Tightening of bonnet bolts.
    (2) Replacement of bonnet bolts.
    (3) Tightening of packing gland nuts.
    (4) Injection of lubricant into lubricated packing.
    (f) Any valve that is designated, as described in Sec.  
261.1064(g)(2), for no detectable emissions, as indicated by an 
instrument reading of less than 500 ppm above background, is exempt 
from the requirements of paragraph (a) of this section if the valve:
    (1) Has no external actuating mechanism in contact with the 
hazardous secondary material stream.
    (2) Is operated with emissions less than 500 ppm above background 
as determined by the method specified in Sec.  261.1063(c).
    (3) Is tested for compliance with paragraph (f)(2) of this section 
initially upon designation, annually, and at other times as requested 
by the Regional Administrator.
    (g) Any valve that is designated, as described in Sec.  
261.1064(h)(1), as an unsafe-to-monitor valve is exempt from the 
requirements of paragraph (a) of this section if:
    (1) The remanufacturer or other person that stores or treats the 
hazardous secondary material determines that the valve is unsafe to 
monitor because monitoring personnel would be exposed to an immediate 
danger as a consequence of complying with paragraph (a) of this 
section.
    (2) The remanufacturer or other person that stores or treats the 
hazardous secondary material adheres to a written plan that requires 
monitoring of the valve as frequently as practicable during safe-to-
monitor times.
    (h) Any valve that is designated, as described in Sec.  
261.1064(h)(2), as a difficult-to-monitor valve is exempt from the 
requirements of paragraph (a) of this section if:
    (1) The remanufacturer or other person that stores or treats the 
hazardous secondary material determines that the valve cannot be 
monitored without elevating the monitoring personnel more than 2 meters 
above a support surface.
    (2) The hazardous secondary material management unit within which 
the valve is located was in operation before January 13, 2015.
    (3) The owner or operator of the valve follows a written plan that 
requires monitoring of the valve at least once per calendar year.

[[Page 1794]]

Sec.  261.1058  Standards: Pumps and valves in heavy liquid service, 
pressure relief devices in light liquid or heavy liquid service, and 
flanges and other connectors.

    (a) Pumps and valves in heavy liquid service, pressure relief 
devices in light liquid or heavy liquid service, and flanges and other 
connectors shall be monitored within five days by the method specified 
in Sec.  261.1063(b) if evidence of a potential leak is found by 
visual, audible, olfactory, or any other detection method.
    (b) If an instrument reading of 10,000 ppm or greater is measured, 
a leak is detected.
    (c)(1) When a leak is detected, it shall be repaired as soon as 
practicable, but not later than 15 calendar days after it is detected, 
except as provided in Sec.  261.1059.
    (2) The first attempt at repair shall be made no later than 5 
calendar days after each leak is detected.
    (d) First attempts at repair include, but are not limited to, the 
best practices described under Sec.  261.1057(e).
    (e) Any connector that is inaccessible or is ceramic or ceramic-
lined (e.g., porcelain, glass, or glass-lined) is exempt from the 
monitoring requirements of paragraph (a) of this section and from the 
recordkeeping requirements of Sec.  261.1064 of this subpart.


Sec.  261.1059  Standards: Delay of repair.

    (a) Delay of repair of equipment for which leaks have been detected 
will be allowed if the repair is technically infeasible without a 
hazardous secondary material management unit shutdown. In such a case, 
repair of this equipment shall occur before the end of the next 
hazardous secondary material management unit shutdown.
    (b) Delay of repair of equipment for which leaks have been detected 
will be allowed for equipment that is isolated from the hazardous 
secondary material management unit and that does not continue to 
contain or contact hazardous secondary material with organic 
concentrations at least 10 percent by weight.
    (c) Delay of repair for valves will be allowed if:
    (1) The remanufacturer or other person that stores or treats the 
hazardous secondary material determines that emissions of purged 
material resulting from immediate repair are greater than the emissions 
likely to result from delay of repair.
    (2) When repair procedures are effected, the purged material is 
collected and destroyed or recovered in a control device complying with 
Sec.  261.1060.
    (d) Delay of repair for pumps will be allowed if:
    (1) Repair requires the use of a dual mechanical seal system that 
includes a barrier fluid system.
    (2) Repair is completed as soon as practicable, but not later than 
6 months after the leak was detected.
    (e) Delay of repair beyond a hazardous secondary material 
management unit shutdown will be allowed for a valve if valve assembly 
replacement is necessary during the hazardous secondary material 
management unit shutdown, valve assembly supplies have been depleted, 
and valve assembly supplies had been sufficiently stocked before the 
supplies were depleted. Delay of repair beyond the next hazardous 
secondary material management unit shutdown will not be allowed unless 
the next hazardous secondary material management unit shutdown occurs 
sooner than 6 months after the first hazardous secondary material 
management unit shutdown.


Sec.  261.1060  Standards: Closed-vent systems and control devices.

    (a) The remanufacturer or other person that stores or treats the 
hazardous secondary material in a hazardous secondary material 
management units using closed-vent systems and control devices subject 
to this subpart shall comply with the provisions of Sec.  261.1033 of 
this part.
    (b)(1) The remanufacturer or other person that stores or treats the 
hazardous secondary material at an existing facility who cannot install 
a closed-vent system and control device to comply with the provisions 
of this subpart on the effective date that the facility becomes subject 
to the provisions of this subpart must prepare an implementation 
schedule that includes dates by which the closed-vent system and 
control device will be installed and in operation. The controls must be 
installed as soon as possible, but the implementation schedule may 
allow up to 30 months after the effective date that the facility 
becomes subject to this subpart for installation and startup.
    (2) Any unit that begins operation after July 13, 2015 and is 
subject to the provisions of this subpart when operation begins, must 
comply with the rules immediately (i.e., must have control devices 
installed and operating on startup of the affected unit); the 30-month 
implementation schedule does not apply.
    (3) The remanufacturer or other person that stores or treats the 
hazardous secondary material at any facility in existence on the 
effective date of a statutory or regulatory amendment that renders the 
facility subject to this subpart shall comply with all requirements of 
this subpart as soon as practicable but no later than 30 months after 
the amendment's effective date. When control equipment required by this 
subpart cannot be installed and begin operation by the effective date 
of the amendment, the facility owner or operator shall prepare an 
implementation schedule that includes the following information: 
Specific calendar dates for award of contracts or issuance of purchase 
orders for the control equipment, initiation of on-site installation of 
the control equipment, completion of the control equipment 
installation, and performance of any testing to demonstrate that the 
installed equipment meets the applicable standards of this subpart. The 
remanufacturer or other person that stores or treats the hazardous 
secondary material shall keep a copy of the implementation schedule at 
the facility.
    (4) Remanufacturers or other persons that store or treat the 
hazardous secondary materials at facilities and units that become newly 
subject to the requirements of this subpart after January 13, 2015, due 
to an action other than those described in paragraph (b)(3) of this 
section must comply with all applicable requirements immediately (i.e., 
must have control devices installed and operating on the date the 
facility or unit becomes subject to this subpart; the 30-month 
implementation schedule does not apply).


Sec.  261.1061  Alternative standards for valves in gas/vapor service 
or in light liquid service: percentage of valves allowed to leak.

    (a) A remanufacturer or other person that stores or treats the 
hazardous secondary material subject to the requirements of Sec.  
261.1057 may elect to have all valves within a hazardous secondary 
material management unit comply with an alternative standard that 
allows no greater than 2 percent of the valves to leak.
    (b) The following requirements shall be met if a remanufacturer or 
other person that stores or treats the hazardous secondary material 
decides to comply with the alternative standard of allowing 2 percent 
of valves to leak:
    (1) A performance test as specified in paragraph (c) of this 
section shall be conducted initially upon designation, annually, and at 
other times requested by the Regional Administrator.
    (2) If a valve leak is detected, it shall be repaired in accordance 
with Sec.  261.1057(d) and (e).
    (c) Performance tests shall be conducted in the following manner:
    (1) All valves subject to the requirements in Sec.  261.1057 within 
the

[[Page 1795]]

hazardous secondary material management unit shall be monitored within 
1 week by the methods specified in Sec.  261.1063(b).
    (2) If an instrument reading of 10,000 ppm or greater is measured, 
a leak is detected.
    (3) The leak percentage shall be determined by dividing the number 
of valves subject to the requirements in Sec.  261.1057 for which leaks 
are detected by the total number of valves subject to the requirements 
in Sec.  261.1057 within the hazardous secondary material management 
unit.


Sec.  261.1062  Alternative standards for valves in gas/vapor service 
or in light liquid service: skip period leak detection and repair.

    (a) A remanufacturer or other person that stores or treats the 
hazardous secondary material subject to the requirements of Sec.  
261.1057 may elect for all valves within a hazardous secondary material 
management unit to comply with one of the alternative work practices 
specified in paragraphs (b)(2) and (3) of this section.
    (b)(1) A remanufacturer or other person that stores or treats the 
hazardous secondary material shall comply with the requirements for 
valves, as described in Sec.  261.1057, except as described in 
paragraphs (b)(2) and (3) of this section.
    (2) After two consecutive quarterly leak detection periods with the 
percentage of valves leaking equal to or less than two percent, a 
remanufacturer or other person that stores or treats the hazardous 
secondary material may begin to skip one of the quarterly leak 
detection periods (i.e., monitor for leaks once every six months) for 
the valves subject to the requirements in Sec.  261.1057 of this 
subpart.
    (3) After five consecutive quarterly leak detection periods with 
the percentage of valves leaking equal to or less than two percent, a 
remanufacturer or other person that stores or treats the hazardous 
secondary material may begin to skip three of the quarterly leak 
detection periods (i.e., monitor for leaks once every year) for the 
valves subject to the requirements in Sec.  261.1057 of this subpart.
    (4) If the percentage of valves leaking is greater than two 
percent, the remanufacturer or other person that stores or treats the 
hazardous secondary material shall monitor monthly in compliance with 
the requirements in Sec.  261.1057, but may again elect to use this 
section after meeting the requirements of Sec.  261.1057(c)(1).


Sec.  261.1063  Test methods and procedures.

    (a) Each remanufacturer or other person that stores or treats the 
hazardous secondary material subject to the provisions of this subpart 
shall comply with the test methods and procedures requirements provided 
in this section.
    (b) Leak detection monitoring, as required in Sec. Sec.  261.1052-
261.1062, shall comply with the following requirements:
    (1) Monitoring shall comply with Reference Method 21 in 40 CFR part 
60.
    (2) The detection instrument shall meet the performance criteria of 
Reference Method 21.
    (3) The instrument shall be calibrated before use on each day of 
its use by the procedures specified in Reference Method 21.
    (4) Calibration gases shall be:
    (i) Zero air (less than 10 ppm of hydrocarbon in air).
    (ii) A mixture of methane or n-hexane and air at a concentration of 
approximately, but less than, 10,000 ppm methane or n-hexane.
    (5) The instrument probe shall be traversed around all potential 
leak interfaces as close to the interface as possible as described in 
Reference Method 21.
    (c) When equipment is tested for compliance with no detectable 
emissions, as required in Sec. Sec.  261.1052(e), 261.1053(i), 
261.1054, and 261.1057(f), the test shall comply with the following 
requirements:
    (1) The requirements of paragraphs (b)(1) through (4) of this 
section shall apply.
    (2) The background level shall be determined as set forth in 
Reference Method 21.
    (3) The instrument probe shall be traversed around all potential 
leak interfaces as close to the interface as possible as described in 
Reference Method 21.
    (4) The arithmetic difference between the maximum concentration 
indicated by the instrument and the background level is compared with 
500 ppm for determining compliance.
    (d) A remanufacturer or other person that stores or treats the 
hazardous secondary material must determine, for each piece of 
equipment, whether the equipment contains or contacts a hazardous 
secondary material with organic concentration that equals or exceeds 10 
percent by weight using the following:
    (1) Methods described in ASTM Methods D 2267-88, E 169-87, E 168-
88, E 260-85 (incorporated by reference under Sec.  260.11);
    (2) Method 9060A (incorporated by reference under 40 CFR 260.11) of 
``Test Methods for Evaluating Solid Waste,'' EPA Publication SW-846, 
for computing total organic concentration of the sample, or analyzed 
for its individual organic constituents; or
    (3) Application of the knowledge of the nature of the hazardous 
secondary material stream or the process by which it was produced. 
Documentation of a material determination by knowledge is required. 
Examples of documentation that shall be used to support a determination 
under this provision include production process information documenting 
that no organic compounds are used, information that the material is 
generated by a process that is identical to a process at the same or 
another facility that has previously been demonstrated by direct 
measurement to have a total organic content less than 10 percent, or 
prior speciation analysis results on the same material stream where it 
can also be documented that no process changes have occurred since that 
analysis that could affect the material total organic concentration.
    (e) If a remanufacturer or other person that stores or treats the 
hazardous secondary material determines that a piece of equipment 
contains or contacts a hazardous secondary material with organic 
concentrations at least 10 percent by weight, the determination can be 
revised only after following the procedures in paragraph (d)(1) or (2) 
of this section.
    (f) When a remanufacturer or other person that stores or treats the 
hazardous secondary material and the Regional Administrator do not 
agree on whether a piece of equipment contains or contacts a hazardous 
secondary material with organic concentrations at least 10 percent by 
weight, the procedures in paragraph (d)(1) or (2) of this section can 
be used to resolve the dispute.
    (g) Samples used in determining the percent organic content shall 
be representative of the highest total organic content hazardous 
secondary material that is expected to be contained in or contact the 
equipment.
    (h) To determine if pumps or valves are in light liquid service, 
the vapor pressures of constituents may be obtained from standard 
reference texts or may be determined by ASTM D-2879-86 (incorporated by 
reference under Sec.  260.11).
    (i) Performance tests to determine if a control device achieves 95 
weight percent organic emission reduction shall comply with the 
procedures of Sec.  261.1034(c)(1) through (4).

[[Page 1796]]

Sec.  261.1064  Recordkeeping requirements.

    (a)(1) Each remanufacturer or other person that stores or treats 
the hazardous secondary material subject to the provisions of this 
subpart shall comply with the recordkeeping requirements of this 
section.
    (2) A remanufacturer or other person that stores or treats the 
hazardous secondary material in more than one hazardous secondary 
material management unit subject to the provisions of this subpart may 
comply with the recordkeeping requirements for these hazardous 
secondary material management units in one recordkeeping system if the 
system identifies each record by each hazardous secondary material 
management unit.
    (b) Remanufacturer's and other person's that store or treat the 
hazardous secondary material must record and keep the following 
information at the facility:
    (1) For each piece of equipment to which subpart BB of part 261 
applies:
    (i) Equipment identification number and hazardous secondary 
material management unit identification.
    (ii) Approximate locations within the facility (e.g., identify the 
hazardous secondary material management unit on a facility plot plan).
    (iii) Type of equipment (e.g., a pump or pipeline valve).
    (iv) Percent-by-weight total organics in the hazardous secondary 
material stream at the equipment.
    (v) Hazardous secondary material state at the equipment (e.g., gas/
vapor or liquid).
    (vi) Method of compliance with the standard (e.g., ``monthly leak 
detection and repair'' or ``equipped with dual mechanical seals'').
    (2) For facilities that comply with the provisions of Sec.  
261.1033(a)(2), an implementation schedule as specified in Sec.  
261.1033(a)(2).
    (3) Where a remanufacturer or other person that stores or treats 
the hazardous secondary material chooses to use test data to 
demonstrate the organic removal efficiency or total organic compound 
concentration achieved by the control device, a performance test plan 
as specified in Sec.  261.1035(b)(3).
    (4) Documentation of compliance with Sec.  261.1060, including the 
detailed design documentation or performance test results specified in 
Sec.  261.1035(b)(4).
    (c) When each leak is detected as specified in Sec. Sec.  261.1052, 
261.1053, 261.1057, and 261.1058, the following requirements apply:
    (1) A weatherproof and readily visible identification, marked with 
the equipment identification number, the date evidence of a potential 
leak was found in accordance with Sec.  261.1058(a), and the date the 
leak was detected, shall be attached to the leaking equipment.
    (2) The identification on equipment, except on a valve, may be 
removed after it has been repaired.
    (3) The identification on a valve may be removed after it has been 
monitored for two successive months as specified in Sec.  261.1057(c) 
and no leak has been detected during those two months.
    (d) When each leak is detected as specified in Sec. Sec.  261.1052, 
261.1053, 261.1057, and 261.1058, the following information shall be 
recorded in an inspection log and shall be kept at the facility:
    (1) The instrument and operator identification numbers and the 
equipment identification number.
    (2) The date evidence of a potential leak was found in accordance 
with Sec.  261.1058(a).
    (3) The date the leak was detected and the dates of each attempt to 
repair the leak.
    (4) Repair methods applied in each attempt to repair the leak.
    (5) ``Above 10,000'' if the maximum instrument reading measured by 
the methods specified in Sec.  261.1063(b) after each repair attempt is 
equal to or greater than 10,000 ppm.
    (6) ``Repair delayed'' and the reason for the delay if a leak is 
not repaired within 15 calendar days after discovery of the leak.
    (7) Documentation supporting the delay of repair of a valve in 
compliance with Sec.  261.1059(c).
    (8) The signature of the remanufacturer or other person that stores 
or treats the hazardous secondary material (or designate) whose 
decision it was that repair could not be effected without a hazardous 
secondary material management unit shutdown.
    (9) The expected date of successful repair of the leak if a leak is 
not repaired within 15 calendar days.
    (10) The date of successful repair of the leak.
    (e) Design documentation and monitoring, operating, and inspection 
information for each closed-vent system and control device required to 
comply with the provisions of Sec.  261.1060 shall be recorded and kept 
up-to-date at the facility as specified in Sec.  261.1035(c). Design 
documentation is specified in Sec.  261.1035(c)(1) and (2) and 
monitoring, operating, and inspection information in Sec.  
261.1035(c)(3) through (8).
    (f) For a control device other than a thermal vapor incinerator, 
catalytic vapor incinerator, flare, boiler, process heater, condenser, 
or carbon adsorption system, the Regional Administrator will specify 
the appropriate recordkeeping requirements.
    (g) The following information pertaining to all equipment subject 
to the requirements in Sec. Sec.  261.1052 through 261.1060 shall be 
recorded in a log that is kept at the facility:
    (1) A list of identification numbers for equipment (except welded 
fittings) subject to the requirements of this subpart.
    (2)(i) A list of identification numbers for equipment that the 
remanufacturer or other person that stores or treats the hazardous 
secondary material elects to designate for no detectable emissions, as 
indicated by an instrument reading of less than 500 ppm above 
background, under the provisions of Sec. Sec.  261.1052(e), 
261.1053(i), and 261.1057(f).
    (ii) The designation of this equipment as subject to the 
requirements of Sec. Sec.  261.1052(e), 261.1053(i), or 261.1057(f) 
shall be signed by the remanufacturer or other person that stores or 
treats the hazardous secondary material.
    (3) A list of equipment identification numbers for pressure relief 
devices required to comply with Sec.  261.1054(a).
    (4)(i) The dates of each compliance test required in Sec. Sec.  
261.1052(e), 261.1053(i), 261.1054, and 261.1057(f).
    (ii) The background level measured during each compliance test.
    (iii) The maximum instrument reading measured at the equipment 
during each compliance test.
    (5) A list of identification numbers for equipment in vacuum 
service.
    (6) Identification, either by list or location (area or group) of 
equipment that contains or contacts hazardous secondary material with 
an organic concentration of at least 10 percent by weight for less than 
300 hours per calendar year.
    (h) The following information pertaining to all valves subject to 
the requirements of Sec.  261.1057(g) and (h) shall be recorded in a 
log that is kept at the facility:
    (1) A list of identification numbers for valves that are designated 
as unsafe to monitor, an explanation for each valve stating why the 
valve is unsafe to monitor, and the plan for monitoring each valve.
    (2) A list of identification numbers for valves that are designated 
as difficult to monitor, an explanation for each valve stating why the 
valve is difficult to monitor, and the planned schedule for monitoring 
each valve.
    (i) The following information shall be recorded in a log that is 
kept at the facility for valves complying with Sec.  261.1062:
    (1) A schedule of monitoring.

[[Page 1797]]

    (2) The percent of valves found leaking during each monitoring 
period.
    (j) The following information shall be recorded in a log that is 
kept at in the facility:
    (1) Criteria required in Sec. Sec.  261.1052(d)(5)(ii) and 
261.1053(e)(2) and an explanation of the design criteria.
    (2) Any changes to these criteria and the reasons for the changes.
    (k) The following information shall be recorded in a log that is 
kept at the facility for use in determining exemptions as provided in 
the applicability section of this subpart and other specific subparts:
    (1) An analysis determining the design capacity of the hazardous 
secondary material management unit.
    (2) A statement listing the hazardous secondary material influent 
to and effluent from each hazardous secondary material management unit 
subject to the requirements in Sec. Sec.  261.1052 through 261.1060 and 
an analysis determining whether these hazardous secondary materials are 
heavy liquids.
    (3) An up-to-date analysis and the supporting information and data 
used to determine whether or not equipment is subject to the 
requirements in Sec. Sec.  261.1052 through 261.1060. The record shall 
include supporting documentation as required by Sec.  261.1063(d)(3) 
when application of the knowledge of the nature of the hazardous 
secondary material stream or the process by which it was produced is 
used. If the remanufacturer or other person that stores or treats the 
hazardous secondary material takes any action (e.g., changing the 
process that produced the material) that could result in an increase in 
the total organic content of the material contained in or contacted by 
equipment determined not to be subject to the requirements in 
Sec. Sec.  261.1052 through 261.1060, then a new determination is 
required.
    (l) Records of the equipment leak information required by paragraph 
(d) of this section and the operating information required by paragraph 
(e) of this section need be kept only three years.
    (m) The remanufacturer or other person that stores or treats the 
hazardous secondary material at a facility with equipment that is 
subject to this subpart and to regulations at 40 CFR part 60, part 61, 
or part 63 may elect to determine compliance with this subpart either 
by documentation pursuant to Sec.  261.1064 of this subpart, or by 
documentation of compliance with the regulations at 40 CFR part 60, 
part 61, or part 63 pursuant to the relevant provisions of the 
regulations at 40 part 60, part 61, or part 63. The documentation of 
compliance under regulations at 40 CFR part 60, part 61, or part 63 
shall be kept with or made readily available at the facility.


Sec. Sec.  261.1065-261.1079  [Reserved]

Subpart CC--Air Emission Standards for Tanks and Containers


Sec.  261.1080  Applicability.

    (a) The regulations in this subpart apply to tanks and containers 
that contain hazardous secondary materials excluded under the 
remanufacturing exclusion at Sec.  261.4(a)(27), unless the tanks and 
containers are equipped with and operating air emission controls in 
accordance with the requirements of an applicable Clean Air Act 
regulations codified under 40 CFR part 60, part 61, or part 63.
    (b) [Reserved]


Sec.  261.1081  Definitions.

    As used in this subpart, all terms not defined herein shall have 
the meaning given to them in the Resource Conservation and Recovery Act 
and parts 260 through 266 of this chapter.
    Average volatile organic concentration or average VO concentration 
means the mass-weighted average volatile organic concentration of a 
hazardous secondary material as determined in accordance with the 
requirements of Sec.  261.1084 of this subpart.
    Closure device means a cap, hatch, lid, plug, seal, valve, or other 
type of fitting that blocks an opening in a cover such that when the 
device is secured in the closed position it prevents or reduces air 
pollutant emissions to the atmosphere. Closure devices include devices 
that are detachable from the cover (e.g., a sampling port cap), 
manually operated (e.g., a hinged access lid or hatch), or 
automatically operated (e.g., a spring-loaded pressure relief valve).
    Continuous seal means a seal that forms a continuous closure that 
completely covers the space between the edge of the floating roof and 
the wall of a tank. A continuous seal may be a vapor-mounted seal, 
liquid-mounted seal, or metallic shoe seal. A continuous seal may be 
constructed of fastened segments so as to form a continuous seal.
    Cover means a device that provides a continuous barrier over the 
hazardous secondary material managed in a unit to prevent or reduce air 
pollutant emissions to the atmosphere. A cover may have openings (such 
as access hatches, sampling ports, gauge wells) that are necessary for 
operation, inspection, maintenance, and repair of the unit on which the 
cover is used. A cover may be a separate piece of equipment which can 
be detached and removed from the unit or a cover may be formed by 
structural features permanently integrated into the design of the unit.
    Empty hazardous secondary material container means:
    (1) A container from which all hazardous secondary materials have 
been removed that can be removed using the practices commonly employed 
to remove materials from that type of container, e.g., pouring, 
pumping, and aspirating, and no more than 2.5 centimeters (one inch) of 
residue remain on the bottom of the container or inner liner;
    (2) A container that is less than or equal to 119 gallons in size 
and no more than 3 percent by weight of the total capacity of the 
container remains in the container or inner liner; or
    (3) A container that is greater than 119 gallons in size and no 
more than 0.3 percent by weight of the total capacity of the container 
remains in the container or inner liner.
    Enclosure means a structure that surrounds a tank or container, 
captures organic vapors emitted from the tank or container, and vents 
the captured vapors through a closed-vent system to a control device.
    External floating roof means a pontoon-type or double-deck type 
cover that rests on the surface of the material managed in a tank with 
no fixed roof.
    Fixed roof means a cover that is mounted on a unit in a stationary 
position and does not move with fluctuations in the level of the 
material managed in the unit.
    Floating membrane cover means a cover consisting of a synthetic 
flexible membrane material that rests upon and is supported by the 
hazardous secondary material being managed in a surface impoundment.
    Floating roof means a cover consisting of a double deck, pontoon 
single deck, or internal floating cover which rests upon and is 
supported by the material being contained, and is equipped with a 
continuous seal.
    Hard-piping means pipe or tubing that is manufactured and properly 
installed in accordance with relevant standards and good engineering 
practices.
    In light material service means the container is used to manage a 
material for which both of the following conditions apply: The vapor 
pressure of one or more of the organic constituents in the material is 
greater than 0.3 kilopascals (kPa) at 20 [deg]C; and the total 
concentration of the pure organic

[[Page 1798]]

constituents having a vapor pressure greater than 0.3 kPa at 20 [deg]C 
is equal to or greater than 20 percent by weight.
    Internal floating roof means a cover that rests or floats on the 
material surface (but not necessarily in complete contact with it) 
inside a tank that has a fixed roof.
    Liquid-mounted seal means a foam or liquid-filled primary seal 
mounted in contact with the hazardous secondary material between the 
tank wall and the floating roof continuously around the circumference 
of the tank.
    Malfunction means any sudden, infrequent, and not reasonably 
preventable failure of air pollution control equipment, process 
equipment, or a process to operate in a normal or usual manner. 
Failures that are caused in part by poor maintenance or careless 
operation are not malfunctions.
    Material determination means performing all applicable procedures 
in accordance with the requirements of Sec.  261.1084 of this subpart 
to determine whether a hazardous secondary material meets standards 
specified in this subpart. Examples of a material determination include 
performing the procedures in accordance with the requirements of Sec.  
261.1084 of this subpart to determine the average VO concentration of a 
hazardous secondary material at the point of material origination; the 
average VO concentration of a hazardous secondary material at the point 
of material treatment and comparing the results to the exit 
concentration limit specified for the process used to treat the 
hazardous secondary material; the organic reduction efficiency and the 
organic biodegradation efficiency for a biological process used to 
treat a hazardous secondary material and comparing the results to the 
applicable standards; or the maximum volatile organic vapor pressure 
for a hazardous secondary material in a tank and comparing the results 
to the applicable standards.
    Maximum organic vapor pressure means the sum of the individual 
organic constituent partial pressures exerted by the material contained 
in a tank, at the maximum vapor pressure-causing conditions (i.e., 
temperature, agitation, pH effects of combining materials, etc.) 
reasonably expected to occur in the tank. For the purpose of this 
subpart, maximum organic vapor pressure is determined using the 
procedures specified in Sec.  261.1084(c) of this subpart.
    Metallic shoe seal means a continuous seal that is constructed of 
metal sheets which are held vertically against the wall of the tank by 
springs, weighted levers, or other mechanisms and is connected to the 
floating roof by braces or other means. A flexible coated fabric 
(envelope) spans the annular space between the metal sheet and the 
floating roof.
    No detectable organic emissions means no escape of organics to the 
atmosphere as determined using the procedure specified in Sec.  
261.1084(d) of this subpart.
    Point of material origination means as follows:
    (1) When the remanufacturer or other person that stores or treats 
the hazardous secondary material is the generator of the hazardous 
secondary material, the point of material origination means the point 
where a material produced by a system, process, or material management 
unit is determined to be a hazardous secondary material excluded under 
Sec.  261.4(a)(27).
    Note to paragraph (1) of the definition of Point of material 
origination: In this case, this term is being used in a manner similar 
to the use of the term ``point of generation'' in air standards 
established under authority of the Clean Air Act in 40 CFR parts 60, 
61, and 63.
    (2) When the remanufacturer or other person that stores or treats 
the hazardous secondary material is not the generator of the hazardous 
secondary material, point of material origination means the point where 
the remanufacturer or other person that stores or treats the hazardous 
secondary material accepts delivery or takes possession of the 
hazardous secondary material.
    Safety device means a closure device such as a pressure relief 
valve, frangible disc, fusible plug, or any other type of device which 
functions exclusively to prevent physical damage or permanent 
deformation to a unit or its air emission control equipment by venting 
gases or vapors directly to the atmosphere during unsafe conditions 
resulting from an unplanned, accidental, or emergency event. For the 
purpose of this subpart, a safety device is not used for routine 
venting of gases or vapors from the vapor headspace underneath a cover 
such as during filling of the unit or to adjust the pressure in this 
vapor headspace in response to normal daily diurnal ambient temperature 
fluctuations. A safety device is designed to remain in a closed 
position during normal operations and open only when the internal 
pressure, or another relevant parameter, exceeds the device threshold 
setting applicable to the air emission control equipment as determined 
by the remanufacturer or other person that stores or treats the 
hazardous secondary material based on manufacturer recommendations, 
applicable regulations, fire protection and prevention codes, standard 
engineering codes and practices, or other requirements for the safe 
handling of flammable, ignitable, explosive, reactive, or hazardous 
materials.
    Single-seal system means a floating roof having one continuous 
seal. This seal may be vapor-mounted, liquid-mounted, or a metallic 
shoe seal.
    Vapor-mounted seal means a continuous seal that is mounted such 
that there is a vapor space between the hazardous secondary material in 
the unit and the bottom of the seal.
    Volatile organic concentration or VO concentration means the 
fraction by weight of the volatile organic compounds contained in a 
hazardous secondary material expressed in terms of parts per million 
(ppmw) as determined by direct measurement or by knowledge of the 
material in accordance with the requirements of Sec.  261.1084 of this 
subpart. For the purpose of determining the VO concentration of a 
hazardous secondary material, organic compounds with a Henry's law 
constant value of at least 0.1 mole-fraction-in-the-gas-phase/mole-
fraction-in the liquid-phase (0.1 Y/X) (which can also be expressed as 
1.8 x 10<SUP>-</SUP>\6\atmospheres/gram-mole/m\3\) at 25 degrees 
Celsius must be included.


Sec.  261.1082  Standards: General.

    (a) This section applies to the management of hazardous secondary 
material in tanks and containers subject to this subpart.
    (b) The remanufacturer or other person that stores or treats the 
hazardous secondary material shall control air pollutant emissions from 
each hazardous secondary material management unit in accordance with 
standards specified in Sec. Sec.  261.1084 through 261.1087 of this 
subpart, as applicable to the hazardous secondary material management 
unit, except as provided for in paragraph (c) of this section.
    (c) A tank or container is exempt from standards specified in 
Sec. Sec.  261.1084 through 261.1087 of this subpart, as applicable, 
provided that the hazardous secondary material management unit is a 
tank or container for which all hazardous secondary material entering 
the unit has an average VO concentration at the point of material 
origination of less than 500 parts per million by weight (ppmw). The 
average VO concentration shall be determined using the procedures 
specified in Sec.  261.1083(a) of this subpart. The remanufacturer or 
other person that stores or treats the hazardous secondary

[[Page 1799]]

material shall review and update, as necessary, this determination at 
least once every 12 months following the date of the initial 
determination for the hazardous secondary material streams entering the 
unit.


Sec.  261.1083  Material determination procedures.

    (a) Material determination procedure to determine average volatile 
organic (VO) concentration of a hazardous secondary material at the 
point of material origination. (1) Determining average VO concentration 
at the point of material origination. A remanufacturer or other person 
that stores or treats the hazardous secondary material shall determine 
the average VO concentration at the point of material origination for 
each hazardous secondary material placed in a hazardous secondary 
material management unit exempted under the provisions of Sec.  
261.1082(c)(1) of this subpart from using air emission controls in 
accordance with standards specified in Sec. Sec.  261.1084 through 
261.1087 of this subpart, as applicable to the hazardous secondary 
material management unit.
    (i) An initial determination of the average VO concentration of the 
material stream shall be made before the first time any portion of the 
material in the hazardous secondary material stream is placed in a 
hazardous secondary material management unit exempted under the 
provisions of Sec.  261.1082(c)(1) of this subpart from using air 
emission controls, and thereafter an initial determination of the 
average VO concentration of the material stream shall be made for each 
averaging period that a hazardous secondary material is managed in the 
unit; and
    (ii) Perform a new material determination whenever changes to the 
source generating the material stream are reasonably likely to cause 
the average VO concentration of the hazardous secondary material to 
increase to a level that is equal to or greater than the applicable VO 
concentration limits specified in Sec.  261.1082 of this subpart.
    (2) Determination of average VO concentration using direct 
measurement or knowledge. For a material determination that is required 
by paragraph (a)(1) of this section, the average VO concentration of a 
hazardous secondary material at the point of material origination shall 
be determined using either direct measurement as specified in paragraph 
(a)(3) of this section or by knowledge as specified in paragraph (a)(4) 
of this section.
    (3) Direct measurement to determine average VO concentration of a 
hazardous secondary material at the point of material origination--(i) 
Identification. The remanufacturer or other person that stores or 
treats the hazardous secondary material shall identify and record in a 
log that is kept at the facility the point of material origination for 
the hazardous secondary material.
    (ii) Sampling. Samples of the hazardous secondary material stream 
shall be collected at the point of material origination in a manner 
such that volatilization of organics contained in the material and in 
the subsequent sample is minimized and an adequately representative 
sample is collected and maintained for analysis by the selected method.
    (A) The averaging period to be used for determining the average VO 
concentration for the hazardous secondary material stream on a mass-
weighted average basis shall be designated and recorded. The averaging 
period can represent any time interval that the remanufacturer or other 
person that stores or treats the hazardous secondary material 
determines is appropriate for the hazardous secondary material stream 
but shall not exceed 1 year.
    (B) A sufficient number of samples, but no less than four samples, 
shall be collected and analyzed for a hazardous secondary material 
determination. All of the samples for a given material determination 
shall be collected within a one-hour period. The average of the four or 
more sample results constitutes a material determination for the 
material stream. One or more material determinations may be required to 
represent the complete range of material compositions and quantities 
that occur during the entire averaging period due to normal variations 
in the operating conditions for the source or process generating the 
hazardous secondary material stream. Examples of such normal variations 
are seasonal variations in material quantity or fluctuations in ambient 
temperature.
    (C) All samples shall be collected and handled in accordance with 
written procedures prepared by the remanufacturer or other person that 
stores or treats the hazardous secondary material and documented in a 
site sampling plan. This plan shall describe the procedure by which 
representative samples of the hazardous secondary material stream are 
collected such that a minimum loss of organics occurs throughout the 
sample collection and handling process, and by which sample integrity 
is maintained. A copy of the written sampling plan shall be maintained 
at the facility. An example of acceptable sample collection and 
handling procedures for a total volatile organic constituent 
concentration may be found in Method 25D in 40 CFR part 60, appendix A.
    (D) Sufficient information, as specified in the ``site sampling 
plan'' required under paragraph (a)(3)(ii)(C) of this section, shall be 
prepared and recorded to document the material quantity represented by 
the samples and, as applicable, the operating conditions for the source 
or process generating the hazardous secondary material represented by 
the samples.
    (iii) Analysis. Each collected sample shall be prepared and 
analyzed in accordance with Method 25D in 40 CFR part 60, appendix A 
for the total concentration of volatile organic constituents, or using 
one or more methods when the individual organic compound concentrations 
are identified and summed and the summed material concentration 
accounts for and reflects all organic compounds in the material with 
Henry's law constant values at least 0.1 mole-fraction-in-the-gas-
phase/mole-fraction-in-the-liquid-phase (0.1 Y/X) [which can also be 
expressed as 1.8 x 10<SUP>-6</SUP>atmospheres/gram-mole/m\3\] at 25 
degrees Celsius. At the discretion of the remanufacturer or other 
person that stores or treats the hazardous secondary material, the test 
data obtained may be adjusted by any appropriate method to discount any 
contribution to the total volatile organic concentration that is a 
result of including a compound with a Henry's law constant value of 
less than 0.1 Y/X at 25 degrees Celsius. To adjust these data, the 
measured concentration of each individual chemical constituent 
contained in the material is multiplied by the appropriate constituent-
specific adjustment factor (f<INF>m25D</INF>). If the remanufacturer or 
other person that stores or treats the hazardous secondary material 
elects to adjust the test data, the adjustment must be made to all 
individual chemical constituents with a Henry's law constant value 
greater than or equal to 0.1 Y/X at 25 degrees Celsius contained in the 
material. Constituent-specific adjustment factors (f<INF>m25D</INF>) 
can be obtained by contacting the Waste and Chemical Processes Group, 
Office of Air Quality Planning and Standards, Research Triangle Park, 
NC 27711. Other test methods may be used if they meet the requirements 
in paragraph (a)(3)(iii)(A) or (B) of this section and provided the 
requirement to reflect all organic compounds in the material with 
Henry's law constant values greater than or equal to 0.1 Y/X [which can 
also be

[[Page 1800]]

expressed as 1.8 x 10<SUP>-6</SUP>atmospheres/gram-mole/m\3\] at 25 
degrees Celsius, is met.
    (A) Any EPA standard method that has been validated in accordance 
with ``Alternative Validation Procedure for EPA Waste and Wastewater 
Methods,'' 40 CFR part 63, appendix D.
    (B) Any other analysis method that has been validated in accordance 
with the procedures specified in Section 5.1 or Section 5.3, and the 
corresponding calculations in Section 6.1 or Section 6.3, of Method 301 
in 40 CFR part 63, appendix A. The data are acceptable if they meet the 
criteria specified in Section 6.1.5 or Section 6.3.3 of Method 301. If 
correction is required under section 6.3.3 of Method 301, the data are 
acceptable if the correction factor is within the range 0.7 to 1.30. 
Other sections of Method 301 are not required.
    (iv) Calculations. (A) The average VO concentration (C) on a mass-
weighted basis shall be calculated by using the results for all 
material determinations conducted in accordance with paragraphs 
(a)(3)(ii) and (iii) of this section and the following equation:
[GRAPHIC] [TIFF OMITTED] TR13JA15.002

Where:

C = Average VO concentration of the hazardous secondary material at 
the point of material origination on a mass-weighted basis, ppmw.
i = Individual material determination ``i'' of the hazardous 
secondary material.
n = Total number of material determinations of the hazardous 
secondary material conducted for the averaging period (not to exceed 
1 year).
Q<INF>i</INF> = Mass quantity of hazardous secondary material stream 
represented by C<INF>i</INF>, kg/hr.
Q<INF>T</INF> = Total mass quantity of hazardous secondary material 
during the averaging period, kg/hr.
C<INF>i</INF> = Measured VO concentration of material determination 
``i'' as determined in accordance with the requirements of paragraph 
(a)(3)(iii) of this section (i.e. the average of the four or more 
samples specified in paragraph (a)(3)(ii)(B) of this section), ppmw.

    (B) For the purpose of determining C<INF>i</INF>, for individual 
material samples analyzed in accordance with paragraph (a)(3)(iii) of 
this section, the remanufacturer or other person that stores or treats 
the hazardous secondary material shall account for VO concentrations 
determined to be below the limit of detection of the analytical method 
by using the following VO concentration:
    (1) If Method 25D in 40 CFR part 60, appendix A is used for the 
analysis, one-half the blank value determined in the method at section 
4.4 of Method 25D in 40 CFR part 60, appendix A.
    (2) If any other analytical method is used, one-half the sum of the 
limits of detection established for each organic constituent in the 
material that has a Henry's law constant values at least 0.1 mole-
fraction-in-the-gas-phase/mole-fraction-in-the-liquid-phase (0.1 Y/X) 
[which can also be expressed as 1.8 x 10<SUP>-6</SUP>atmospheres/gram-
mole/m\3\] at 25 degrees Celsius.
    (4) Use of knowledge by the remanufacturer or other person that 
stores or treats the hazardous secondary material to determine average 
VO concentration of a hazardous secondary material at the point of 
material origination. (i) Documentation shall be prepared that presents 
the information used as the basis for the knowledge by the 
remanufacturer or other person that stores or treats the hazardous 
secondary material of the hazardous secondary material stream's average 
VO concentration. Examples of information that may be used as the basis 
for knowledge include: Material balances for the source or process 
generating the hazardous secondary material stream; constituent-
specific chemical test data for the hazardous secondary material stream 
from previous testing that are still applicable to the current material 
stream; previous test data for other locations managing the same type 
of material stream; or other knowledge based on information included in 
shipping papers or material certification notices.
    (ii) If test data are used as the basis for knowledge, then the 
remanufacturer or other person that stores or treats the hazardous 
secondary material shall document the test method, sampling protocol, 
and the means by which sampling variability and analytical variability 
are accounted for in the determination of the average VO concentration. 
For example, a remanufacturer or other person that stores or treats the 
hazardous secondary material may use organic concentration test data 
for the hazardous secondary material stream that are validated in 
accordance with Method 301 in 40 CFR part 63, appendix A as the basis 
for knowledge of the material.
    (iii) A remanufacturer or other person that stores or treats the 
hazardous secondary material using chemical constituent-specific 
concentration test data as the basis for knowledge of the hazardous 
secondary material may adjust the test data to the corresponding 
average VO concentration value which would have been obtained had the 
material samples been analyzed using Method 25D in 40 CFR part 60, 
appendix A. To adjust these data, the measured concentration for each 
individual chemical constituent contained in the material is multiplied 
by the appropriate constituent-specific adjustment factor 
(f<INF>m25D</INF>).
    (iv) In the event that the Regional Administrator and the 
remanufacture or other person that stores or treats the hazardous 
secondary material disagree on a determination of the average VO 
concentration for a hazardous secondary material stream using 
knowledge, then the results from a determination of average VO 
concentration using direct measurement as specified in paragraph (a)(3) 
of this section shall be used to establish compliance with the 
applicable requirements of this subpart. The Regional Administrator may 
perform or request that the remanufacturer or other person that stores 
or treats the hazardous secondary material perform this determination 
using direct measurement. The remanufacturer or other person that 
stores or treats the hazardous secondary material may choose one or 
more appropriate methods to analyze each collected sample in accordance 
with the requirements of paragraph (a)(3)(iii) of this section.
    (b) [Reserved]
    (c) Procedure to determine the maximum organic vapor pressure of a 
hazardous secondary material in a tank. (1) A remanufacturer or other 
person that stores or treats the hazardous secondary material shall 
determine the maximum organic vapor pressure for each hazardous 
secondary material placed in a tank using Tank Level 1 controls in 
accordance with standards specified in Sec.  261.1084(c) of this 
subpart.
    (2) A remanufacturer or other person that stores or treats the 
hazardous secondary material shall use either direct measurement as 
specified in paragraph (c)(3) of this section or knowledge of the waste 
as specified by paragraph (c)(4) of this section to determine the 
maximum organic vapor pressure which is representative of the hazardous 
secondary material composition stored or treated in the tank.
    (3) Direct measurement to determine the maximum organic vapor 
pressure of a hazardous secondary material.
    (i) Sampling. A sufficient number of samples shall be collected to 
be representative of the hazardous secondary material contained in the 
tank. All samples shall be collected and handled in accordance with 
written procedures prepared by the remanufacturer or other person that 
stores or treats the hazardous secondary

[[Page 1801]]

material and documented in a site sampling plan. This plan shall 
describe the procedure by which representative samples of the hazardous 
secondary material are collected such that a minimum loss of organics 
occurs throughout the sample collection and handling process and by 
which sample integrity is maintained. A copy of the written sampling 
plan shall be maintained at the facility. An example of acceptable 
sample collection and handling procedures may be found in Method 25D in 
40 CFR part 60, appendix A.
    (ii) Analysis. Any appropriate one of the following methods may be 
used to analyze the samples and compute the maximum organic vapor 
pressure of the hazardous secondary material:
    (A) Method 25E in 40 CFR part 60 appendix A;
    (B) Methods described in American Petroleum Institute Publication 
2517, Third Edition, February 1989, ``Evaporative Loss from External 
Floating-Roof Tanks,'' (incorporated by reference--refer to Sec.  
260.11 of this chapter);
    (C) Methods obtained from standard reference texts;
    (D) ASTM Method 2879-92 (incorporated by reference--refer to Sec.  
260.11 of this chapter); and
    (E) Any other method approved by the Regional Administrator.
    (4) Use of knowledge to determine the maximum organic vapor 
pressure of the hazardous secondary material. Documentation shall be 
prepared and recorded that presents the information used as the basis 
for the knowledge by the remanufacturer or other person that stores or 
treats the hazardous secondary material that the maximum organic vapor 
pressure of the hazardous secondary material is less than the maximum 
vapor pressure limit listed in Sec.  261.1085(b)(1)(i) of this subpart 
for the applicable tank design capacity category. An example of 
information that may be used is documentation that the hazardous 
secondary material is generated by a process for which at other 
locations it previously has been determined by direct measurement that 
the hazardous secondary material's waste maximum organic vapor pressure 
is less than the maximum vapor pressure limit for the appropriate tank 
design capacity category.
    (d) Procedure for determining no detectable organic emissions for 
the purpose of complying with this subpart:
    (1) The test shall be conducted in accordance with the procedures 
specified in Method 21 of 40 CFR part 60, appendix A. Each potential 
leak interface (i.e., a location where organic vapor leakage could 
occur) on the cover and associated closure devices shall be checked. 
Potential leak interfaces that are associated with covers and closure 
devices include, but are not limited to: The interface of the cover and 
its foundation mounting; the periphery of any opening on the cover and 
its associated closure device; and the sealing seat interface on a 
spring-loaded pressure relief valve.
    (2) The test shall be performed when the unit contains a hazardous 
secondary material having an organic concentration representative of 
the range of concentrations for the hazardous secondary material 
expected to be managed in the unit. During the test, the cover and 
closure devices shall be secured in the closed position.
    (3) The detection instrument shall meet the performance criteria of 
Method 21 of 40 CFR part 60, appendix A, except the instrument response 
factor criteria in section 3.1.2(a) of Method 21 shall be for the 
average composition of the organic constituents in the hazardous 
secondary material placed in the hazardous secondary management unit, 
not for each individual organic constituent.
    (4) The detection instrument shall be calibrated before use on each 
day of its use by the procedures specified in Method 21 of 40 CFR part 
60, appendix A.
    (5) Calibration gases shall be as follows:
    (i) Zero air (less than 10 ppmv hydrocarbon in air), and
    (ii) A mixture of methane or n-hexane and air at a concentration of 
approximately, but less than, 10,000 ppmv methane or n-hexane.
    (6) The background level shall be determined according to the 
procedures in Method 21 of 40 CFR part 60, appendix A.
    (7) Each potential leak interface shall be checked by traversing 
the instrument probe around the potential leak interface as close to 
the interface as possible, as described in Method 21 of 40 CFR part 60, 
appendix A. In the case when the configuration of the cover or closure 
device prevents a complete traverse of the interface, all accessible 
portions of the interface shall be sampled. In the case when the 
configuration of the closure device prevents any sampling at the 
interface and the device is equipped with an enclosed extension or horn 
(e.g., some pressure relief devices), the instrument probe inlet shall 
be placed at approximately the center of the exhaust area to the 
atmosphere.
    (8) The arithmetic difference between the maximum organic 
concentration indicated by the instrument and the background level 
shall be compared with the value of 500 ppmv except when monitoring a 
seal around a rotating shaft that passes through a cover opening, in 
which case the comparison shall be as specified in paragraph (d)(9) of 
this section. If the difference is less than 500 ppmv, then the 
potential leak interface is determined to operate with no detectable 
organic emissions.
    (9) For the seals around a rotating shaft that passes through a 
cover opening, the arithmetic difference between the maximum organic 
concentration indicated by the instrument and the background level 
shall be compared with the value of 10,000 ppmw. If the difference is 
less than 10,000 ppmw, then the potential leak interface is determined 
to operate with no detectable organic emissions.


Sec.  261.1084  Standards: tanks.

    (a) The provisions of this section apply to the control of air 
pollutant emissions from tanks for which Sec.  261.1082(b) of this 
subpart references the use of this section for such air emission 
control.
    (b) The remanufacturer or other person that stores or treats the 
hazardous secondary material shall control air pollutant emissions from 
each tank subject to this section in accordance with the following 
requirements as applicable:
    (1) For a tank that manages hazardous secondary material that meets 
all of the conditions specified in paragraphs (b)(1)(i) through (iii) 
of this section, the remanufacturer or other person that stores or 
treats the hazardous secondary material shall control air pollutant 
emissions from the tank in accordance with the Tank Level 1 controls 
specified in paragraph (c) of this section or the Tank Level 2 controls 
specified in paragraph (d) of this section.
    (i) The hazardous secondary material in the tank has a maximum 
organic vapor pressure which is less than the maximum organic vapor 
pressure limit for the tank's design capacity category as follows:
    (A) For a tank design capacity equal to or greater than 151 m\3\, 
the maximum organic vapor pressure limit for the tank is 5.2 kPa.
    (B) For a tank design capacity equal to or greater than 75 m\3\ but 
less than 151 m\3\, the maximum organic vapor pressure limit for the 
tank is 27.6 kPa.
    (C) For a tank design capacity less than 75 m\3\, the maximum 
organic vapor pressure limit for the tank is 76.6 kPa.
    (ii) The hazardous secondary material in the tank is not heated by 
the

[[Page 1802]]

remanufacturer or other person that stores or treats the hazardous 
secondary material to a temperature that is greater than the 
temperature at which the maximum organic vapor pressure of the 
hazardous secondary material is determined for the purpose of complying 
with paragraph (b)(1)(i) of this section.
    (2) For a tank that manages hazardous secondary material that does 
not meet all of the conditions specified in paragraphs (b)(1)(i) 
through (iii) of this section, the remanufacturer or other person that 
stores or treats the hazardous secondary material shall control air 
pollutant emissions from the tank by using Tank Level 2 controls in 
accordance with the requirements of paragraph (d) of this section. An 
example of tanks required to use Tank Level 2 controls is a tank for 
which the hazardous secondary material in the tank has a maximum 
organic vapor pressure that is equal to or greater than the maximum 
organic vapor pressure limit for the tank's design capacity category as 
specified in paragraph (b)(1)(i) of this section.
    (c) Remanufacturers or other persons that store or treats the 
hazardous secondary material controlling air pollutant emissions from a 
tank using Tank Level 1 controls shall meet the requirements specified 
in paragraphs (c)(1) through (4) of this section:
    (1) The remanufacturer or other person that stores or treats that 
hazardous secondary material shall determine the maximum organic vapor 
pressure for a hazardous secondary material to be managed in the tank 
using Tank Level 1 controls before the first time the hazardous 
secondary material is placed in the tank. The maximum organic vapor 
pressure shall be determined using the procedures specified in Sec.  
261.1083(c) of this subpart. Thereafter, the remanufacturer or other 
person that stores or treats the hazardous secondary material shall 
perform a new determination whenever changes to the hazardous secondary 
material managed in the tank could potentially cause the maximum 
organic vapor pressure to increase to a level that is equal to or 
greater than the maximum organic vapor pressure limit for the tank 
design capacity category specified in paragraph (b)(1)(i) of this 
section, as applicable to the tank.
    (2) The tank shall be equipped with a fixed roof designed to meet 
the following specifications:
    (i) The fixed roof and its closure devices shall be designed to 
form a continuous barrier over the entire surface area of the hazardous 
secondary material in the tank. The fixed roof may be a separate cover 
installed on the tank (e.g., a removable cover mounted on an open-top 
tank) or may be an integral part of the tank structural design (e.g., a 
horizontal cylindrical tank equipped with a hatch).
    (ii) The fixed roof shall be installed in a manner such that there 
are no visible cracks, holes, gaps, or other open spaces between roof 
section joints or between the interface of the roof edge and the tank 
wall.
    (iii) Each opening in the fixed roof, and any manifold system 
associated with the fixed roof, shall be either:
    (A) Equipped with a closure device designed to operate such that 
when the closure device is secured in the closed position there are no 
visible cracks, holes, gaps, or other open spaces in the closure device 
or between the perimeter of the opening and the closure device; or
    (B) Connected by a closed-vent system that is vented to a control 
device. The control device shall remove or destroy organics in the vent 
stream, and shall be operating whenever hazardous secondary material is 
managed in the tank, except as provided for in paragraphs 
(c)(2)(iii)(B)(1) and (2) of this section.
    (1) During periods when it is necessary to provide access to the 
tank for performing the activities of paragraph (c)(2)(iii)(B)(2) of 
this section, venting of the vapor headspace underneath the fixed roof 
to the control device is not required, opening of closure devices is 
allowed, and removal of the fixed roof is allowed. Following completion 
of the activity, the remanufacturer or other person that stores or 
treats the hazardous secondary material shall promptly secure the 
closure device in the closed position or reinstall the cover, as 
applicable, and resume operation of the control device.
    (2) During periods of routine inspection, maintenance, or other 
activities needed for normal operations, and for removal of accumulated 
sludge or other residues from the bottom of the tank.
    (iv) The fixed roof and its closure devices shall be made of 
suitable materials that will minimize exposure of the hazardous 
secondary material to the atmosphere, to the extent practical, and will 
maintain the integrity of the fixed roof and closure devices throughout 
their intended service life. Factors to be considered when selecting 
the materials for and designing the fixed roof and closure devices 
shall include: organic vapor permeability, the effects of any contact 
with the hazardous secondary material or its vapors managed in the 
tank; the effects of outdoor exposure to wind, moisture, and sunlight; 
and the operating practices used for the tank on which the fixed roof 
is installed.
    (3) Whenever a hazardous secondary material is in the tank, the 
fixed roof shall be installed with each closure device secured in the 
closed position except as follows:
    (i) Opening of closure devices or removal of the fixed roof is 
allowed at the following times:
    (A) To provide access to the tank for performing routine 
inspection, maintenance, or other activities needed for normal 
operations. Examples of such activities include those times when a 
worker needs to open a port to sample the liquid in the tank, or when a 
worker needs to open a hatch to maintain or repair equipment. Following 
completion of the activity, the remanufacturer or other person that 
stores or treats the hazardous secondary material shall promptly secure 
the closure device in the closed position or reinstall the cover, as 
applicable, to the tank.
    (B) To remove accumulated sludge or other residues from the bottom 
of tank.
    (ii) Opening of a spring-loaded pressure-vacuum relief valve, 
conservation vent, or similar type of pressure relief device which 
vents to the atmosphere is allowed during normal operations for the 
purpose of maintaining the tank internal pressure in accordance with 
the tank design specifications. The device shall be designed to operate 
with no detectable organic emissions when the device is secured in the 
closed position. The settings at which the device opens shall be 
established such that the device remains in the closed position 
whenever the tank internal pressure is within the internal pressure 
operating range determined by the remanufacturer or other person that 
stores or treats the hazardous secondary material based on the tank 
manufacturer recommendations, applicable regulations, fire protection 
and prevention codes, standard engineering codes and practices, or 
other requirements for the safe handling of flammable, ignitable, 
explosive, reactive, or hazardous materials. Examples of normal 
operating conditions that may require these devices to open are during 
those times when the tank internal pressure exceeds the internal 
pressure operating range for the tank as a result of loading operations 
or diurnal ambient temperature fluctuations.
    (iii) Opening of a safety device, as defined in Sec.  261.1081, is 
allowed at any time conditions require doing so to avoid an unsafe 
condition.

[[Page 1803]]

    (4) The remanufacturer or other person that stores or treats the 
hazardous secondary material shall inspect the air emission control 
equipment in accordance with the following requirements.
    (i) The fixed roof and its closure devices shall be visually 
inspected by the remanufacturer or other person that stores or treats 
the hazardous secondary material to check for defects that could result 
in air pollutant emissions. Defects include, but are not limited to, 
visible cracks, holes, or gaps in the roof sections or between the roof 
and the tank wall; broken, cracked, or otherwise damaged seals or 
gaskets on closure devices; and broken or missing hatches, access 
covers, caps, or other closure devices.
    (ii) The remanufacturer or other person that stores or treats the 
hazardous secondary material shall perform an initial inspection of the 
fixed roof and its closure devices on or before the date that the tank 
becomes subject to this section. Thereafter, the remanufacturer or 
other person that stores or treats the hazardous secondary material 
shall perform the inspections at least once every year except under the 
special conditions provided for in paragraph (l) of this section.
    (iii) In the event that a defect is detected, the remanufacturer or 
other person that stores or treats the hazardous secondary material 
shall repair the defect in accordance with the requirements of 
paragraph (k) of this section.
    (iv) The remanufacturer or other person that stores or treats the 
hazardous secondary material shall maintain a record of the inspection 
in accordance with the requirements specified in Sec.  261.1089(b) of 
this subpart.
    (d) Remanufacturers or other persons that store or treat the 
hazardous secondary material controlling air pollutant emissions from a 
tank using Tank Level 2 controls shall use one of the following tanks:
    (1) A fixed-roof tank equipped with an internal floating roof in 
accordance with the requirements specified in paragraph (e) of this 
section;
    (2) A tank equipped with an external floating roof in accordance 
with the requirements specified in paragraph (f) of this section;
    (3) A tank vented through a closed-vent system to a control device 
in accordance with the requirements specified in paragraph (g) of this 
section;
    (4) A pressure tank designed and operated in accordance with the 
requirements specified in paragraph (h) of this section; or
    (5) A tank located inside an enclosure that is vented through a 
closed-vent system to an enclosed combustion control device in 
accordance with the requirements specified in paragraph (i) of this 
section.
    (e) The remanufacturer or other person that stores or treats the 
hazardous secondary material who controls air pollutant emissions from 
a tank using a fixed roof with an internal floating roof shall meet the 
requirements specified in paragraphs (e)(1) through (3) of this 
section.
    (1) The tank shall be equipped with a fixed roof and an internal 
floating roof in accordance with the following requirements:
    (i) The internal floating roof shall be designed to float on the 
liquid surface except when the floating roof must be supported by the 
leg supports.
    (ii) The internal floating roof shall be equipped with a continuous 
seal between the wall of the tank and the floating roof edge that meets 
either of the following requirements:
    (A) A single continuous seal that is either a liquid-mounted seal 
or a metallic shoe seal, as defined in Sec.  261.1081; or
    (B) Two continuous seals mounted one above the other. The lower 
seal may be a vapor-mounted seal.
    (iii) The internal floating roof shall meet the following 
specifications:
    (A) Each opening in a noncontact internal floating roof except for 
automatic bleeder vents (vacuum breaker vents) and the rim space vents 
is to provide a projection below the liquid surface.
    (B) Each opening in the internal floating roof shall be equipped 
with a gasketed cover or a gasketed lid except for leg sleeves, 
automatic bleeder vents, rim space vents, column wells, ladder wells, 
sample wells, and stub drains.
    (C) Each penetration of the internal floating roof for the purpose 
of sampling shall have a slit fabric cover that covers at least 90 
percent of the opening.
    (D) Each automatic bleeder vent and rim space vent shall be 
gasketed.
    (E) Each penetration of the internal floating roof that allows for 
passage of a ladder shall have a gasketed sliding cover.
    (F) Each penetration of the internal floating roof that allows for 
passage of a column supporting the fixed roof shall have a flexible 
fabric sleeve seal or a gasketed sliding cover.
    (2) The remanufacturer or other person that stores or treats the 
hazardous secondary material shall operate the tank in accordance with 
the following requirements:
    (i) When the floating roof is resting on the leg supports, the 
process of filling, emptying, or refilling shall be continuous and 
shall be completed as soon as practical.
    (ii) Automatic bleeder vents are to be set closed at all times when 
the roof is floating, except when the roof is being floated off or is 
being landed on the leg supports.
    (iii) Prior to filling the tank, each cover, access hatch, gauge 
float well or lid on any opening in the internal floating roof shall be 
bolted or fastened closed (i.e., no visible gaps). Rim space vents are 
to be set to open only when the internal floating roof is not floating 
or when the pressure beneath the rim exceeds the manufacturer's 
recommended setting.
    (3) The remanufacturer or other person that stores or treats the 
hazardous secondary material shall inspect the internal floating roof 
in accordance with the procedures specified as follows:
    (i) The floating roof and its closure devices shall be visually 
inspected by the remanufacture or other person that stores or treats 
the hazardous secondary material to check for defects that could result 
in air pollutant emissions. Defects include, but are not limited to: 
The internal floating roof is not floating on the surface of the liquid 
inside the tank; liquid has accumulated on top of the internal floating 
roof; any portion of the roof seals have detached from the roof rim; 
holes, tears, or other openings are visible in the seal fabric; the 
gaskets no longer close off the hazardous secondary material surface 
from the atmosphere; or the slotted membrane has more than 10 percent 
open area.
    (ii) The remanufacturer or other person that stores or treats the 
hazardous secondary material shall inspect the internal floating roof 
components as follows except as provided in paragraph (e)(3)(iii) of 
this section:
    (A) Visually inspect the internal floating roof components through 
openings on the fixed-roof (e.g., manholes and roof hatches) at least 
once every 12 months after initial fill, and
    (B) Visually inspect the internal floating roof, primary seal, 
secondary seal (if one is in service), gaskets, slotted membranes, and 
sleeve seals (if any) each time the tank is emptied and degassed and at 
least every 10 years.
    (iii) As an alternative to performing the inspections specified in 
paragraph (e)(3)(ii) of this section for an internal floating roof 
equipped with two continuous seals mounted one above the

[[Page 1804]]

other, the remanufacturer or other person that stores or treats the 
hazardous secondary material may visually inspect the internal floating 
roof, primary and secondary seals, gaskets, slotted membranes, and 
sleeve seals (if any) each time the tank is emptied and degassed and at 
least every five years.
    (iv) Prior to each inspection required by paragraph (e)(3)(ii) or 
(iii) of this section, the remanufacturer or other person that stores 
or treats the hazardous secondary material shall notify the Regional 
Administrator in advance of each inspection to provide the Regional 
Administrator with the opportunity to have an observer present during 
the inspection. The remanufacturer or other person that stores or 
treats the hazardous secondary material shall notify the Regional 
Administrator of the date and location of the inspection as follows:
    (A) Prior to each visual inspection of an internal floating roof in 
a tank that has been emptied and degassed, written notification shall 
be prepared and sent by the remanufacturer or other person that stores 
or treats the hazardous secondary material so that it is received by 
the Regional Administrator at least 30 calendar days before refilling 
the tank except when an inspection is not planned as provided for in 
paragraph (e)(3)(iv)(B) of this section.
    (B) When a visual inspection is not planned and the remanufacturer 
or other person that stores or treats the hazardous secondary material 
could not have known about the inspection 30 calendar days before 
refilling the tank, the remanufacturer or other person that stores or 
treats the hazardous secondary material shall notify the Regional 
Administrator as soon as possible, but no later than seven calendar 
days before refilling of the tank. This notification may be made by 
telephone and immediately followed by a written explanation for why the 
inspection is unplanned. Alternatively, written notification, including 
the explanation for the unplanned inspection, may be sent so that it is 
received by the Regional Administrator at least seven calendar days 
before refilling the tank.
    (v) In the event that a defect is detected, the remanufacturer or 
other person that stores or treats the hazardous secondary material 
shall repair the defect in accordance with the requirements of 
paragraph (k) of this section.
    (vi) The remanufacturer or other person that stores or treats the 
hazardous secondary material shall maintain a record of the inspection 
in accordance with the requirements specified in Sec.  261.1089(b) of 
this subpart.
    (4) Safety devices, as defined in Sec.  261.1081, may be installed 
and operated as necessary on any tank complying with the requirements 
of paragraph (e) of this section.
    (f) The remanufacturer or other person that stores or treats the 
hazardous secondary material who controls air pollutant emissions from 
a tank using an external floating roof shall meet the requirements 
specified in paragraphs (f)(1) through (3) of this section.
    (1) The remanufacturer or other person that stores or treats the 
hazardous secondary material shall design the external floating roof in 
accordance with the following requirements:
    (i) The external floating roof shall be designed to float on the 
liquid surface except when the floating roof must be supported by the 
leg supports.
    (ii) The floating roof shall be equipped with two continuous seals, 
one above the other, between the wall of the tank and the roof edge. 
The lower seal is referred to as the primary seal, and the upper seal 
is referred to as the secondary seal.
    (A) The primary seal shall be a liquid-mounted seal or a metallic 
shoe seal, as defined in 40 CFR 261.1081. The total area of the gaps 
between the tank wall and the primary seal shall not exceed 212 square 
centimeters (cm\2\) per meter of tank diameter, and the width of any 
portion of these gaps shall not exceed 3.8 centimeters (cm). If a 
metallic shoe seal is used for the primary seal, the metallic shoe seal 
shall be designed so that one end extends into the liquid in the tank 
and the other end extends a vertical distance of at least 61 
centimeters above the liquid surface.
    (B) The secondary seal shall be mounted above the primary seal and 
cover the annular space between the floating roof and the wall of the 
tank. The total area of the gaps between the tank wall and the 
secondary seal shall not exceed 21.2 square centimeters (cm\2\) per 
meter of tank diameter, and the width of any portion of these gaps 
shall not exceed 1.3 centimeters (cm).
    (iii) The external floating roof shall meet the following 
specifications:
    (A) Except for automatic bleeder vents (vacuum breaker vents) and 
rim space vents, each opening in a noncontact external floating roof 
shall provide a projection below the liquid surface.
    (B) Except for automatic bleeder vents, rim space vents, roof 
drains, and leg sleeves, each opening in the roof shall be equipped 
with a gasketed cover, seal, or lid.
    (C) Each access hatch and each gauge float well shall be equipped 
with a cover designed to be bolted or fastened when the cover is 
secured in the closed position.
    (D) Each automatic bleeder vent and each rim space vent shall be 
equipped with a gasket.
    (E) Each roof drain that empties into the liquid managed in the 
tank shall be equipped with a slotted membrane fabric cover that covers 
at least 90 percent of the area of the opening.
    (F) Each unslotted and slotted guide pole well shall be equipped 
with a gasketed sliding cover or a flexible fabric sleeve seal.
    (G) Each unslotted guide pole shall be equipped with a gasketed cap 
on the end of the pole.
    (H) Each slotted guide pole shall be equipped with a gasketed float 
or other device which closes off the liquid surface from the 
atmosphere.
    (I) Each gauge hatch and each sample well shall be equipped with a 
gasketed cover.
    (2) The remanufacturer or other person that stores or treats the 
hazardous secondary material shall operate the tank in accordance with 
the following requirements:
    (i) When the floating roof is resting on the leg supports, the 
process of filling, emptying, or refilling shall be continuous and 
shall be completed as soon as practical.
    (ii) Except for automatic bleeder vents, rim space vents, roof 
drains, and leg sleeves, each opening in the roof shall be secured and 
maintained in a closed position at all times except when the closure 
device must be open for access.
    (iii) Covers on each access hatch and each gauge float well shall 
be bolted or fastened when secured in the closed position.
    (iv) Automatic bleeder vents shall be set closed at all times when 
the roof is floating, except when the roof is being floated off or is 
being landed on the leg supports.
    (v) Rim space vents shall be set to open only at those times that 
the roof is being floated off the roof leg supports or when the 
pressure beneath the rim seal exceeds the manufacturer's recommended 
setting.
    (vi) The cap on the end of each unslotted guide pole shall be 
secured in the closed position at all times except when measuring the 
level or collecting samples of the liquid in the tank.
    (vii) The cover on each gauge hatch or sample well shall be secured 
in the closed position at all times except when the hatch or well must 
be opened for access.

[[Page 1805]]

    (viii) Both the primary seal and the secondary seal shall 
completely cover the annular space between the external floating roof 
and the wall of the tank in a continuous fashion except during 
inspections.
    (3) The remanufacturer or other person that stores or treats the 
hazardous secondary material shall inspect the external floating roof 
in accordance with the procedures specified as follows:
    (i) The remanufacturer or other person that stores or treats the 
hazardous secondary material shall measure the external floating roof 
seal gaps in accordance with the following requirements:
    (A) The remanufacturer or other person that stores or treats the 
hazardous secondary material shall perform measurements of gaps between 
the tank wall and the primary seal within 60 calendar days after 
initial operation of the tank following installation of the floating 
roof and, thereafter, at least once every 5 years.
    (B) The remanufacturer or other person that stores or treats the 
hazardous secondary material shall perform measurements of gaps between 
the tank wall and the secondary seal within 60 calendar days after 
initial operation of the tank following installation of the floating 
roof and, thereafter, at least once every year.
    (C) If a tank ceases to hold hazardous secondary material for a 
period of 1 year or more, subsequent introduction of hazardous 
secondary material into the tank shall be considered an initial 
operation for the purposes of paragraphs (f)(3)(i)(A) and (B) of this 
section.
    (D) The remanufacturer or other person that stores or treats the 
hazardous secondary material shall determine the total surface area of 
gaps in the primary seal and in the secondary seal individually using 
the following procedure:
    (1) The seal gap measurements shall be performed at one or more 
floating roof levels when the roof is floating off the roof supports.
    (2) Seal gaps, if any, shall be measured around the entire 
perimeter of the floating roof in each place where a 0.32-centimeter 
(cm) diameter uniform probe passes freely (without forcing or binding 
against the seal) between the seal and the wall of the tank and measure 
the circumferential distance of each such location.
    (3) For a seal gap measured under paragraph (f)(3) of this section, 
the gap surface area shall be determined by using probes of various 
widths to measure accurately the actual distance from the tank wall to 
the seal and multiplying each such width by its respective 
circumferential distance.
    (4) The total gap area shall be calculated by adding the gap 
surface areas determined for each identified gap location for the 
primary seal and the secondary seal individually, and then dividing the 
sum for each seal type by the nominal diameter of the tank. These total 
gap areas for the primary seal and secondary seal are then compared to 
the respective standards for the seal type as specified in paragraph 
(f)(1)(ii) of this section.
    (E) In the event that the seal gap measurements do not conform to 
the specifications in paragraph (f)(1)(ii) of this section, the 
remanufacturer or other person that stores or treats the hazardous 
secondary material shall repair the defect in accordance with the 
requirements of paragraph (k) of this section.
    (F) The remanufacturer or other person that stores or treats the 
hazardous secondary material shall maintain a record of the inspection 
in accordance with the requirements specified in Sec.  261.1089(b) of 
this subpart.
    (ii) The remanufacturer or other person that stores or treats the 
hazardous secondary material shall visually inspect the external 
floating roof in accordance with the following requirements:
    (A) The floating roof and its closure devices shall be visually 
inspected by the remanufacturer or other person that stores or treats 
the hazardous secondary material to check for defects that could result 
in air pollutant emissions. Defects include, but are not limited to: 
Holes, tears, or other openings in the rim seal or seal fabric of the 
floating roof; a rim seal detached from the floating roof; all or a 
portion of the floating roof deck being submerged below the surface of 
the liquid in the tank; broken, cracked, or otherwise damaged seals or 
gaskets on closure devices; and broken or missing hatches, access 
covers, caps, or other closure devices.
    (B) The remanufacturer or other person that stores or treats the 
hazardous secondary material shall perform an initial inspection of the 
external floating roof and its closure devices on or before the date 
that the tank becomes subject to this section. Thereafter, the 
remanufacturer or other person that stores or treats the hazardous 
secondary material shall perform the inspections at least once every 
year except for the special conditions provided for in paragraph (l) of 
this section.
    (C) In the event that a defect is detected, the remanufacturer or 
other person that stores or treats the hazardous secondary material 
shall repair the defect in accordance with the requirements of 
paragraph (k) of this section.
    (D) The remanufacturer or other person that stores or treats the 
hazardous secondary material shall maintain a record of the inspection 
in accordance with the requirements specified in Sec.  261.1089(b) of 
this subpart.
    (iii) Prior to each inspection required by paragraph (f)(3)(i) or 
(ii) of this section, the remanufacturer or other person that stores or 
treats the hazardous secondary material shall notify the Regional 
Administrator in advance of each inspection to provide the Regional 
Administrator with the opportunity to have an observer present during 
the inspection. The remanufacturer or other person that stores or 
treats the hazardous secondary material shall notify the Regional 
Administrator of the date and location of the inspection as follows:
    (A) Prior to each inspection to measure external floating roof seal 
gaps as required under paragraph (f)(3)(i) of this section, written 
notification shall be prepared and sent by the remanufacturer or other 
person that stores or treats the hazardous secondary material so that 
it is received by the Regional Administrator at least 30 calendar days 
before the date the measurements are scheduled to be performed.
    (B) Prior to each visual inspection of an external floating roof in 
a tank that has been emptied and degassed, written notification shall 
be prepared and sent by the remanufacturer or other person that stores 
or treats the hazardous secondary material so that it is received by 
the Regional Administrator at least 30 calendar days before refilling 
the tank except when an inspection is not planned as provided for in 
paragraph (f)(3)(iii)(C) of this section.
    (C) When a visual inspection is not planned and the remanufacturer 
or other person that stores or treats the hazardous secondary material 
could not have known about the inspection 30 calendar days before 
refilling the tank, the owner or operator shall notify the Regional 
Administrator as soon as possible, but no later than seven calendar 
days before refilling of the tank. This notification may be made by 
telephone and immediately followed by a written explanation for why the 
inspection is unplanned. Alternatively, written notification, including 
the explanation for the unplanned inspection, may be sent so that it is 
received by the Regional Administrator

[[Page 1806]]

at least seven calendar days before refilling the tank.
    (4) Safety devices, as defined in Sec.  261.1081, may be installed 
and operated as necessary on any tank complying with the requirements 
of paragraph (f) of this section.
    (g) The remanufacturer or other person that stores or treats the 
hazardous secondary material who controls air pollutant emissions from 
a tank by venting the tank to a control device shall meet the 
requirements specified in paragraphs (g)(1) through (3) of this 
section.
    (1) The tank shall be covered by a fixed roof and vented directly 
through a closed-vent system to a control device in accordance with the 
following requirements:
    (i) The fixed roof and its closure devices shall be designed to 
form a continuous barrier over the entire surface area of the liquid in 
the tank.
    (ii) Each opening in the fixed roof not vented to the control 
device shall be equipped with a closure device. If the pressure in the 
vapor headspace underneath the fixed roof is less than atmospheric 
pressure when the control device is operating, the closure devices 
shall be designed to operate such that when the closure device is 
secured in the closed position there are no visible cracks, holes, 
gaps, or other open spaces in the closure device or between the 
perimeter of the cover opening and the closure device. If the pressure 
in the vapor headspace underneath the fixed roof is equal to or greater 
than atmospheric pressure when the control device is operating, the 
closure device shall be designed to operate with no detectable organic 
emissions.
    (iii) The fixed roof and its closure devices shall be made of 
suitable materials that will minimize exposure of the hazardous 
secondary material to the atmosphere, to the extent practical, and will 
maintain the integrity of the fixed roof and closure devices throughout 
their intended service life. Factors to be considered when selecting 
the materials for and designing the fixed roof and closure devices 
shall include: Organic vapor permeability, the effects of any contact 
with the liquid and its vapor managed in the tank; the effects of 
outdoor exposure to wind, moisture, and sunlight; and the operating 
practices used for the tank on which the fixed roof is installed.
    (iv) The closed-vent system and control device shall be designed 
and operated in accordance with the requirements of Sec.  261.1087 of 
this subpart.
    (2) Whenever a hazardous secondary material is in the tank, the 
fixed roof shall be installed with each closure device secured in the 
closed position and the vapor headspace underneath the fixed roof 
vented to the control device except as follows:
    (i) Venting to the control device is not required, and opening of 
closure devices or removal of the fixed roof is allowed at the 
following times:
    (A) To provide access to the tank for performing routine 
inspection, maintenance, or other activities needed for normal 
operations. Examples of such activities include those times when a 
worker needs to open a port to sample liquid in the tank, or when a 
worker needs to open a hatch to maintain or repair equipment. Following 
completion of the activity, the remanufacturer or other person that 
stores or treats the hazardous secondary material shall promptly secure 
the closure device in the closed position or reinstall the cover, as 
applicable, to the tank.
    (B) To remove accumulated sludge or other residues from the bottom 
of a tank.
    (ii) Opening of a safety device, as defined in Sec.  261.1081, is 
allowed at any time conditions require doing so to avoid an unsafe 
condition.
    (3) The remanufacturer or other person that stores or treats the 
hazardous secondary material shall inspect and monitor the air emission 
control equipment in accordance with the following procedures:
    (i) The fixed roof and its closure devices shall be visually 
inspected by the remanufacturer or other person that stores or treats 
the hazardous secondary material to check for defects that could result 
in air pollutant emissions. Defects include, but are not limited to, 
visible cracks, holes, or gaps in the roof sections or between the roof 
and the tank wall; broken, cracked, or otherwise damaged seals or 
gaskets on closure devices; and broken or missing hatches, access 
covers, caps, or other closure devices.
    (ii) The closed-vent system and control device shall be inspected 
and monitored by the remanufacturer or other person that stores or 
treats the hazardous secondary material in accordance with the 
procedures specified in Sec.  261.1087 of this subpart.
    (iii) The remanufacturer or other person that stores or treats the 
hazardous secondary material shall perform an initial inspection of the 
air emission control equipment on or before the date that the tank 
becomes subject to this section. Thereafter, the remanufacturer or 
other person that stores or treats the hazardous secondary material 
shall perform the inspections at least once every year except for the 
special conditions provided for in paragraph (l) of this section.
    (iv) In the event that a defect is detected, the remanufacture or 
other person that stores or treats the hazardous secondary material 
shall repair the defect in accordance with the requirements of 
paragraph (k) of this section.
    (v) The remanufacturer or other person that stores or treats the 
hazardous secondary material shall maintain a record of the inspection 
in accordance with the requirements specified in Sec.  261.1089(b) of 
this subpart.
    (h) The remanufacturer or other person that stores or treats the 
hazardous secondary material who controls air pollutant emissions by 
using a pressure tank shall meet the following requirements.
    (1) The tank shall be designed not to vent to the atmosphere as a 
result of compression of the vapor headspace in the tank during filling 
of the tank to its design capacity.
    (2) All tank openings shall be equipped with closure devices 
designed to operate with no detectable organic emissions as determined 
using the procedure specified in Sec.  261.1083(d) of this subpart.
    (3) Whenever a hazardous secondary material is in the tank, the 
tank shall be operated as a closed system that does not vent to the 
atmosphere except under either or the following conditions as specified 
in paragraph (h)(3)(i) or (h)(3)(ii) of this section.
    (i) At those times when opening of a safety device, as defined in 
Sec.  261.1081 of this subpart, is required to avoid an unsafe 
condition.
    (ii) At those times when purging of inerts from the tank is 
required and the purge stream is routed to a closed-vent system and 
control device designed and operated in accordance with the 
requirements of Sec.  261.1087 of this subpart.
    (i) The remanufacturer or other person that stores or treats the 
hazardous secondary material who controls air pollutant emissions by 
using an enclosure vented through a closed-vent system to an enclosed 
combustion control device shall meet the requirements specified in 
paragraphs (i)(1) through (4) of this section.
    (1) The tank shall be located inside an enclosure. The enclosure 
shall be designed and operated in accordance with the criteria for a 
permanent total enclosure as specified in ``Procedure T--Criteria for 
and Verification of a Permanent or Temporary Total Enclosure'' under 40 
CFR 52.741, appendix B. The enclosure may have

[[Page 1807]]

permanent or temporary openings to allow worker access; passage of 
material into or out of the enclosure by conveyor, vehicles, or other 
mechanical means; entry of permanent mechanical or electrical 
equipment; or direct airflow into the enclosure. The remanufacturer or 
other person that stores or treats the hazardous secondary material 
shall perform the verification procedure for the enclosure as specified 
in Section 5.0 to ``Procedure T--Criteria for and Verification of a 
Permanent or Temporary Total Enclosure'' initially when the enclosure 
is first installed and, thereafter, annually.
    (2) The enclosure shall be vented through a closed-vent system to 
an enclosed combustion control device that is designed and operated in 
accordance with the standards for either a vapor incinerator, boiler, 
or process heater specified in Sec.  261.1087 of this subpart.
    (3) Safety devices, as defined in Sec.  261.1081, may be installed 
and operated as necessary on any enclosure, closed-vent system, or 
control device used to comply with the requirements of paragraphs 
(i)(1) and (2) of this section.
    (4) The remanufacturer or other person that stores or treats the 
hazardous secondary material shall inspect and monitor the closed-vent 
system and control device as specified in Sec.  261.1087 of this 
subpart.
    (j) The remanufacturer or other person that stores or treats the 
hazardous secondary material shall transfer hazardous secondary 
material to a tank subject to this section in accordance with the 
following requirements:
    (1) Transfer of hazardous secondary material, except as provided in 
paragraph (j)(2) of this section, to the tank from another tank subject 
to this section shall be conducted using continuous hard-piping or 
another closed system that does not allow exposure of the hazardous 
secondary material to the atmosphere. For the purpose of complying with 
this provision, an individual drain system is considered to be a closed 
system when it meets the requirements of 40 CFR part 63, subpart RR--
National Emission Standards for Individual Drain Systems.
    (2) The requirements of paragraph (j)(1) of this section do not 
apply when transferring a hazardous secondary material to the tank 
under any of the following conditions:
    (i) The hazardous secondary material meets the average VO 
concentration conditions specified in Sec.  261.1082(c)(1) of this 
subpart at the point of material origination.
    (ii) The hazardous secondary material has been treated by an 
organic destruction or removal process to meet the requirements in 
Sec.  261.1082(c)(2) of this subpart.
    (iii) The hazardous secondary material meets the requirements of 
Sec.  261.1082(c)(4) of this subpart.
    (k) The remanufacturer or other person that stores or treats the 
hazardous secondary material shall repair each defect detected during 
an inspection performed in accordance with the requirements of 
paragraph (c)(4), (e)(3), (f)(3), or (g)(3) of this section as follows:
    (1) The remanufacturer or other person that stores or treats the 
hazardous secondary material shall make first efforts at repair of the 
defect no later than 5 calendar days after detection, and repair shall 
be completed as soon as possible but no later than 45 calendar days 
after detection except as provided in paragraph (k)(2) of this section.
    (2) Repair of a defect may be delayed beyond 45 calendar days if 
the remanufacturer or other person that stores or treats the hazardous 
secondary material determines that repair of the defect requires 
emptying or temporary removal from service of the tank and no 
alternative tank capacity is available at the site to accept the 
hazardous secondary material normally managed in the tank. In this 
case, the remanufacturer or other person that stores or treats the 
hazardous secondary material shall repair the defect the next time the 
process or unit that is generating the hazardous secondary material 
managed in the tank stops operation. Repair of the defect shall be 
completed before the process or unit resumes operation.
    (l) Following the initial inspection and monitoring of the cover as 
required by the applicable provisions of this subpart, subsequent 
inspection and monitoring may be performed at intervals longer than 1 
year under the following special conditions:
    (1) In the case when inspecting or monitoring the cover would 
expose a worker to dangerous, hazardous, or other unsafe conditions, 
then the remanufacturer or other person that stores or treats the 
hazardous secondary material may designate a cover as an ``unsafe to 
inspect and monitor cover'' and comply with all of the following 
requirements:
    (i) Prepare a written explanation for the cover stating the reasons 
why the cover is unsafe to visually inspect or to monitor, if required.
    (ii) Develop and implement a written plan and schedule to inspect 
and monitor the cover, using the procedures specified in the applicable 
section of this subpart, as frequently as practicable during those 
times when a worker can safely access the cover.
    (2) In the case when a tank is buried partially or entirely 
underground, a remanufacturer or other person that stores or treats the 
hazardous secondary material is required to inspect and monitor, as 
required by the applicable provisions of this section, only those 
portions of the tank cover and those connections to the tank (e.g., 
fill ports, access hatches, gauge wells, etc.) that are located on or 
above the ground surface.


Sec.  261.1085  [Reserved]


Sec.  261.1086  Standards: containers.

    (a) Applicability. The provisions of this section apply to the 
control of air pollutant emissions from containers for which Sec.  
261.1082(b) of this subpart references the use of this section for such 
air emission control.
    (b) General requirements. (1) The remanufacturer or other person 
that stores or treats the hazardous secondary material shall control 
air pollutant emissions from each container subject to this section in 
accordance with the following requirements, as applicable to the 
container.
    (i) For a container having a design capacity greater than 0.1 m\3\ 
and less than or equal to 0.46 m\3\, the remanufacturer or other person 
that stores or treats the hazardous secondary material shall control 
air pollutant emissions from the container in accordance with the 
Container Level 1 standards specified in paragraph (c) of this section.
    (ii) For a container having a design capacity greater than 0.46 
m\3\ that is not in light material service, the remanufacturer or other 
person that stores or treats the hazardous secondary material shall 
control air pollutant emissions from the container in accordance with 
the Container Level 1 standards specified in paragraph (c) of this 
section.
    (iii) For a container having a design capacity greater than 0.46 
m\3\ that is in light material service, the remanufacturer or other 
person that stores or treats the hazardous secondary material shall 
control air pollutant emissions from the container in accordance with 
the Container Level 2 standards specified in paragraph (d) of this 
section.
    (2) [Reserved]
    (c) Container Level 1 standards. (1) A container using Container 
Level 1 controls is one of the following:
    (i) A container that meets the applicable U.S. Department of 
Transportation (DOT) regulations on

[[Page 1808]]

packaging hazardous materials for transportation as specified in 
paragraph (f) of this section.
    (ii) A container equipped with a cover and closure devices that 
form a continuous barrier over the container openings such that when 
the cover and closure devices are secured in the closed position there 
are no visible holes, gaps, or other open spaces into the interior of 
the container. The cover may be a separate cover installed on the 
container (e.g., a lid on a drum or a suitably secured tarp on a roll-
off box) or may be an integral part of the container structural design 
(e.g., a ``portable tank'' or bulk cargo container equipped with a 
screw-type cap).
    (iii) An open-top container in which an organic-vapor suppressing 
barrier is placed on or over the hazardous secondary material in the 
container such that no hazardous secondary material is exposed to the 
atmosphere. One example of such a barrier is application of a suitable 
organic-vapor suppressing foam.
    (2) A container used to meet the requirements of paragraph 
(c)(1)(ii) or (iii) of this section shall be equipped with covers and 
closure devices, as applicable to the container, that are composed of 
suitable materials to minimize exposure of the hazardous secondary 
material to the atmosphere and to maintain the equipment integrity, for 
as long as the container is in service. Factors to be considered in 
selecting the materials of construction and designing the cover and 
closure devices shall include: Organic vapor permeability; the effects 
of contact with the hazardous secondary material or its vapor managed 
in the container; the effects of outdoor exposure of the closure device 
or cover material to wind, moisture, and sunlight; and the operating 
practices for which the container is intended to be used.
    (3) Whenever a hazardous secondary material is in a container using 
Container Level 1 controls, the remanufacturer or other person that 
stores or treats the hazardous secondary material shall install all 
covers and closure devices for the container, as applicable to the 
container, and secure and maintain each closure device in the closed 
position except as follows:
    (i) Opening of a closure device or cover is allowed for the purpose 
of adding hazardous secondary material or other material to the 
container as follows:
    (A) In the case when the container is filled to the intended final 
level in one continuous operation, the remanufacturer or other person 
that stores or treats the hazardous secondary material shall promptly 
secure the closure devices in the closed position and install the 
covers, as applicable to the container, upon conclusion of the filling 
operation.
    (B) In the case when discrete quantities or batches of material 
intermittently are added to the container over a period of time, the 
remanufacturer or other person that stores or treats the hazardous 
secondary material shall promptly secure the closure devices in the 
closed position and install covers, as applicable to the container, 
upon either the container being filled to the intended final level; the 
completion of a batch loading after which no additional material will 
be added to the container within 15 minutes; the person performing the 
loading operation leaving the immediate vicinity of the container; or 
the shutdown of the process generating the hazardous secondary material 
being added to the container, whichever condition occurs first.
    (ii) Opening of a closure device or cover is allowed for the 
purpose of removing hazardous secondary material from the container as 
follows:
    (A) For the purpose of meeting the requirements of this section, an 
empty hazardous secondary material container may be open to the 
atmosphere at any time (i.e., covers and closure devices on such a 
container are not required to be secured in the closed position).
    (B) In the case when discrete quantities or batches of material are 
removed from the container, but the container is not an empty hazardous 
secondary material container, the remanufacturer or other person that 
stores or treats the hazardous secondary material shall promptly secure 
the closure devices in the closed position and install covers, as 
applicable to the container, upon the completion of a batch removal 
after which no additional material will be removed from the container 
within 15 minutes or the person performing the unloading operation 
leaves the immediate vicinity of the container, whichever condition 
occurs first.
    (iii) Opening of a closure device or cover is allowed when access 
inside the container is needed to perform routine activities other than 
transfer of hazardous secondary material. Examples of such activities 
include those times when a worker needs to open a port to measure the 
depth of or sample the material in the container, or when a worker 
needs to open a manhole hatch to access equipment inside the container. 
Following completion of the activity, the remanufacturer or other 
person that stores or treats the hazardous secondary material shall 
promptly secure the closure device in the closed position or reinstall 
the cover, as applicable to the container.
    (iv) Opening of a spring-loaded pressure-vacuum relief valve, 
conservation vent, or similar type of pressure relief device which 
vents to the atmosphere is allowed during normal operations for the 
purpose of maintaining the internal pressure of the container in 
accordance with the container design specifications. The device shall 
be designed to operate with no detectable organic emissions when the 
device is secured in the closed position. The settings at which the 
device opens shall be established such that the device remains in the 
closed position whenever the internal pressure of the container is 
within the internal pressure operating range determined by the 
remanufacturer or other persons that stores or treats the hazardous 
secondary material based on container manufacturer recommendations, 
applicable regulations, fire protection and prevention codes, standard 
engineering codes and practices, or other requirements for the safe 
handling of flammable, ignitable, explosive, reactive, or hazardous 
materials. Examples of normal operating conditions that may require 
these devices to open are during those times when the internal pressure 
of the container exceeds the internal pressure operating range for the 
container as a result of loading operations or diurnal ambient 
temperature fluctuations.
    (v) Opening of a safety device, as defined in 40 CFR 261.1081, is 
allowed at any time conditions require doing so to avoid an unsafe 
condition.
    (4) The remanufacturer or other person that stores or treats the 
hazardous secondary material using containers with Container Level 1 
controls shall inspect the containers and their covers and closure 
devices as follows:
    (i) In the case when a hazardous secondary material already is in 
the container at the time the remanufacturer or other person that 
stores or treats the hazardous secondary material first accepts 
possession of the container at the facility and the container is not 
emptied within 24 hours after the container is accepted at the facility 
(i.e., is not an empty hazardous secondary material container) the 
remanufacturer or other person that stores or treats the hazardous 
secondary material shall visually inspect the container and its cover 
and closure devices to check for visible cracks, holes, gaps, or other 
open spaces into the interior of the container when the cover and 
closure devices are

[[Page 1809]]

secured in the closed position. The container visual inspection shall 
be conducted on or before the date that the container is accepted at 
the facility (i.e., the date the container becomes subject to the 
subpart CC container standards).
    (ii) In the case when a container used for managing hazardous 
secondary material remains at the facility for a period of 1 year or 
more, the remanufacturer or other person that stores or treats the 
hazardous secondary material shall visually inspect the container and 
its cover and closure devices initially and thereafter, at least once 
every 12 months, to check for visible cracks, holes, gaps, or other 
open spaces into the interior of the container when the cover and 
closure devices are secured in the closed position. If a defect is 
detected, the remanufacturer or other person that stores or treats the 
hazardous secondary material shall repair the defect in accordance with 
the requirements of paragraph (c)(4)(iii) of this section.
    (iii) When a defect is detected for the container, cover, or 
closure devices, the remanufacturer or other person that stores or 
treats the hazardous secondary material shall make first efforts at 
repair of the defect no later than 24 hours after detection and repair 
shall be completed as soon as possible but no later than 5 calendar 
days after detection. If repair of a defect cannot be completed within 
5 calendar days, then the hazardous secondary material shall be removed 
from the container and the container shall not be used to manage 
hazardous secondary material until the defect is repaired.
    (5) The remanufacturer or other person that stores or treats the 
hazardous secondary material shall maintain at the facility a copy of 
the procedure used to determine that containers with capacity of 0.46 
m\3\ or greater, which do not meet applicable DOT regulations as 
specified in paragraph (f) of this section, are not managing hazardous 
secondary material in light material service.
    (d) Container Level 2 standards. (1) A container using Container 
Level 2 controls is one of the following:
    (i) A container that meets the applicable U.S. Department of 
Transportation (DOT) regulations on packaging hazardous materials for 
transportation as specified in paragraph (f) of this section.
    (ii) A container that operates with no detectable organic emissions 
as defined in Sec.  261.1081 and determined in accordance with the 
procedure specified in paragraph (g) of this section.
    (iii) A container that has been demonstrated within the preceding 
12 months to be vapor-tight by using 40 CFR part 60, appendix A, Method 
27 in accordance with the procedure specified in paragraph (h) of this 
section.
    (2) Transfer of hazardous secondary material in or out of a 
container using Container Level 2 controls shall be conducted in such a 
manner as to minimize exposure of the hazardous secondary material to 
the atmosphere, to the extent practical, considering the physical 
properties of the hazardous secondary material and good engineering and 
safety practices for handling flammable, ignitable, explosive, 
reactive, or other hazardous materials. Examples of container loading 
procedures that the EPA considers to meet the requirements of this 
paragraph include using any one of the following: a submerged-fill pipe 
or other submerged-fill method to load liquids into the container; a 
vapor-balancing system or a vapor-recovery system to collect and 
control the vapors displaced from the container during filling 
operations; or a fitted opening in the top of a container through which 
the hazardous secondary material is filled and subsequently purging the 
transfer line before removing it from the container opening.
    (3) Whenever a hazardous secondary material is in a container using 
Container Level 2 controls, the remanufacturer or other person that 
stores or treats the hazardous secondary material shall install all 
covers and closure devices for the container, and secure and maintain 
each closure device in the closed position except as follows:
    (i) Opening of a closure device or cover is allowed for the purpose 
of adding hazardous secondary material or other material to the 
container as follows:
    (A) In the case when the container is filled to the intended final 
level in one continuous operation, the remanufacture or other person 
that stores or treats the hazardous secondary material shall promptly 
secure the closure devices in the closed position and install the 
covers, as applicable to the container, upon conclusion of the filling 
operation.
    (B) In the case when discrete quantities or batches of material 
intermittently are added to the container over a period of time, the 
remanufacturer or other person that stores or treats the hazardous 
secondary material shall promptly secure the closure devices in the 
closed position and install covers, as applicable to the container, 
upon either the container being filled to the intended final level; the 
completion of a batch loading after which no additional material will 
be added to the container within 15 minutes; the person performing the 
loading operation leaving the immediate vicinity of the container; or 
the shutdown of the process generating the material being added to the 
container, whichever condition occurs first.
    (ii) Opening of a closure device or cover is allowed for the 
purpose of removing hazardous secondary material from the container as 
follows:
    (A) For the purpose of meeting the requirements of this section, an 
empty hazardous secondary material container may be open to the 
atmosphere at any time (i.e., covers and closure devices are not 
required to be secured in the closed position on an empty container).
    (B) In the case when discrete quantities or batches of material are 
removed from the container, but the container is not an empty hazardous 
secondary materials container, the remanufacturer or other person that 
stores or treats the hazardous secondary material shall promptly secure 
the closure devices in the closed position and install covers, as 
applicable to the container, upon the completion of a batch removal 
after which no additional material will be removed from the container 
within 15 minutes or the person performing the unloading operation 
leaves the immediate vicinity of the container, whichever condition 
occurs first.
    (iii) Opening of a closure device or cover is allowed when access 
inside the container is needed to perform routine activities other than 
transfer of hazardous secondary material. Examples of such activities 
include those times when a worker needs to open a port to measure the 
depth of or sample the material in the container, or when a worker 
needs to open a manhole hatch to access equipment inside the container. 
Following completion of the activity, the remanufacturer or other 
person that stores or treats the hazardous secondary material shall 
promptly secure the closure device in the closed position or reinstall 
the cover, as applicable to the container.
    (iv) Opening of a spring-loaded, pressure-vacuum relief valve, 
conservation vent, or similar type of pressure relief device which 
vents to the atmosphere is allowed during normal operations for the 
purpose of maintaining the internal pressure of the container in 
accordance with the container design specifications. The device shall 
be designed to operate with no detectable organic emission when the 
device is secured in the closed position. The settings at which the 
device opens shall be established such that the device remains in the 
closed

[[Page 1810]]

position whenever the internal pressure of the container is within the 
internal pressure operating range determined by the remanufacturer or 
other person that stores or treats the hazardous secondary material 
based on container manufacturer recommendations, applicable 
regulations, fire protection and prevention codes, standard engineering 
codes and practices, or other requirements for the safe handling of 
flammable, ignitable, explosive, reactive, or hazardous materials. 
Examples of normal operating conditions that may require these devices 
to open are during those times when the internal pressure of the 
container exceeds the internal pressure operating range for the 
container as a result of loading operations or diurnal ambient 
temperature fluctuations.
    (v) Opening of a safety device, as defined in Sec.  261.1081, is 
allowed at any time conditions require doing so to avoid an unsafe 
condition.
    (4) The remanufacture or other person that stores or treats the 
hazardous secondary material using containers with Container Level 2 
controls shall inspect the containers and their covers and closure 
devices as follows:
    (i) In the case when a hazardous secondary material already is in 
the container at the time the remanufacturer or other person that 
stores or treats the hazardous secondary material first accepts 
possession of the container at the facility and the container is not 
emptied within 24 hours after the container is accepted at the facility 
(i.e., is not an empty hazardous secondary material container), the 
remanufacturer or other person that stores or treats the hazardous 
secondary material shall visually inspect the container and its cover 
and closure devices to check for visible cracks, holes, gaps, or other 
open spaces into the interior of the container when the cover and 
closure devices are secured in the closed position. The container 
visual inspection shall be conducted on or before the date that the 
container is accepted at the facility (i.e., the date the container 
becomes subject to the subpart CC container standards).
    (ii) In the case when a container used for managing hazardous 
secondary material remains at the facility for a period of 1 year or 
more, the remanufacturer or other person that stores or treats the 
hazardous secondary material shall visually inspect the container and 
its cover and closure devices initially and thereafter, at least once 
every 12 months, to check for visible cracks, holes, gaps, or other 
open spaces into the interior of the container when the cover and 
closure devices are secured in the closed position. If a defect is 
detected, the remanufacturer or other person that stores or treats the 
hazardous secondary material shall repair the defect in accordance with 
the requirements of paragraph (d)(4)(iii) of this section.
    (iii) When a defect is detected for the container, cover, or 
closure devices, the remanufacturer or other person that stores or 
treats the hazardous secondary material shall make first efforts at 
repair of the defect no later than 24 hours after detection, and repair 
shall be completed as soon as possible but no later than 5 calendar 
days after detection. If repair of a defect cannot be completed within 
5 calendar days, then the hazardous secondary material shall be removed 
from the container and the container shall not be used to manage 
hazardous secondary material until the defect is repaired.
    (e) Container Level 3 standards. (1) A container using Container 
Level 3 controls is one of the following:
    (i) A container that is vented directly through a closed-vent 
system to a control device in accordance with the requirements of 
paragraph (e)(2)(ii) of this section.
    (ii) A container that is vented inside an enclosure which is 
exhausted through a closed-vent system to a control device in 
accordance with the requirements of paragraphs (e)(2)(i) and (ii) of 
this section.
    (2) The remanufacturer or other person that stores or treats the 
hazardous secondary material shall meet the following requirements, as 
applicable to the type of air emission control equipment selected by 
the remanufacturer or other person that stores or treats the hazardous 
secondary material:
    (i) The container enclosure shall be designed and operated in 
accordance with the criteria for a permanent total enclosure as 
specified in ``Procedure T--Criteria for and Verification of a 
Permanent or Temporary Total Enclosure'' under 40 CFR 52.741, appendix 
B. The enclosure may have permanent or temporary openings to allow 
worker access; passage of containers through the enclosure by conveyor 
or other mechanical means; entry of permanent mechanical or electrical 
equipment; or direct airflow into the enclosure. The remanufacturer or 
other person that stores or treats the hazardous secondary material 
shall perform the verification procedure for the enclosure as specified 
in Section 5.0 to ``Procedure T--Criteria for and Verification of a 
Permanent or Temporary Total Enclosure'' initially when the enclosure 
is first installed and, thereafter, annually.
    (ii) The closed-vent system and control device shall be designed 
and operated in accordance with the requirements of Sec.  261.1087 of 
this subpart.
    (3) Safety devices, as defined in Sec.  261.1081, may be installed 
and operated as necessary on any container, enclosure, closed-vent 
system, or control device used to comply with the requirements of 
paragraph (e)(1) of this section.
    (4) Remanufacturers or other persons that store or treat the 
hazardous secondary material using Container Level 3 controls in 
accordance with the provisions of this subpart shall inspect and 
monitor the closed-vent systems and control devices as specified in 
Sec.  261.1087 of this subpart.
    (5) Remanufacturers or other persons that store or treat the 
hazardous secondary material that use Container Level 3 controls in 
accordance with the provisions of this subpart shall prepare and 
maintain the records specified in Sec.  261.1089(d) of this subpart.
    (6) Transfer of hazardous secondary material in or out of a 
container using Container Level 3 controls shall be conducted in such a 
manner as to minimize exposure of the hazardous secondary material to 
the atmosphere, to the extent practical, considering the physical 
properties of the hazardous secondary material and good engineering and 
safety practices for handling flammable, ignitable, explosive, 
reactive, or other hazardous materials. Examples of container loading 
procedures that the EPA considers to meet the requirements of this 
paragraph include using any one of the following: a submerged-fill pipe 
or other submerged-fill method to load liquids into the container; a 
vapor-balancing system or a vapor-recovery system to collect and 
control the vapors displaced from the container during filling 
operations; or a fitted opening in the top of a container through which 
the hazardous secondary material is filled and subsequently purging the 
transfer line before removing it from the container opening.
    (f) For the purpose of compliance with paragraph (c)(1)(i) or 
(d)(1)(i) of this section, containers shall be used that meet the 
applicable U.S. Department of Transportation (DOT) regulations on 
packaging hazardous materials for transportation as follows:
    (1) The container meets the applicable requirements specified in 49 
CFR part 178 or part 179.
    (2) Hazardous secondary material is managed in the container in 
accordance with the applicable requirements

[[Page 1811]]

specified in 49 CFR part 107, subpart B and 49 CFR parts 172, 173, and 
180.
    (3) For the purpose of complying with this subpart, no exceptions 
to the 49 CFR part 178 or part 179 regulations are allowed.
    (g) To determine compliance with the no detectable organic 
emissions requirement of paragraph (d)(1)(ii) of this section, the 
procedure specified in Sec.  261.1083(d) of this subpart shall be used.
    (1) Each potential leak interface (i.e., a location where organic 
vapor leakage could occur) on the container, its cover, and associated 
closure devices, as applicable to the container, shall be checked. 
Potential leak interfaces that are associated with containers include, 
but are not limited to: the interface of the cover rim and the 
container wall; the periphery of any opening on the container or 
container cover and its associated closure device; and the sealing seat 
interface on a spring-loaded pressure-relief valve.
    (2) The test shall be performed when the container is filled with a 
material having a volatile organic concentration representative of the 
range of volatile organic concentrations for the hazardous secondary 
materials expected to be managed in this type of container. During the 
test, the container cover and closure devices shall be secured in the 
closed position.
    (h) Procedure for determining a container to be vapor-tight using 
Method 27 of 40 CFR part 60, appendix A for the purpose of complying 
with paragraph (d)(1)(iii) of this section.
    (1) The test shall be performed in accordance with Method 27 of 40 
CFR part 60, appendix A of this chapter.
    (2) A pressure measurement device shall be used that has a 
precision of <plus-minus>2.5 mm water and that is capable of measuring 
above the pressure at which the container is to be tested for vapor 
tightness.
    (3) If the test results determined by Method 27 indicate that the 
container sustains a pressure change less than or equal to 750 Pascals 
within 5 minutes after it is pressurized to a minimum of 4,500 Pascals, 
then the container is determined to be vapor-tight.


Sec.  261.1087  Standards: Closed-vent systems and control devices.

    (a) This section applies to each closed-vent system and control 
device installed and operated by the remanufacturer or other person who 
stores or treats the hazardous secondary material to control air 
emissions in accordance with standards of this subpart.
    (b) The closed-vent system shall meet the following requirements:
    (1) The closed-vent system shall route the gases, vapors, and fumes 
emitted from the hazardous secondary material in the hazardous 
secondary material management unit to a control device that meets the 
requirements specified in paragraph (c) of this section.
    (2) The closed-vent system shall be designed and operated in 
accordance with the requirements specified in Sec.  261.1033(k) of this 
part.
    (3) In the case when the closed-vent system includes bypass devices 
that could be used to divert the gas or vapor stream to the atmosphere 
before entering the control device, each bypass device shall be 
equipped with either a flow indicator as specified in paragraph 
(b)(3)(i) of this section or a seal or locking device as specified in 
paragraph (b)(3)(ii) of this section. For the purpose of complying with 
this paragraph, low leg drains, high point bleeds, analyzer vents, 
open-ended valves or lines, spring loaded pressure relief valves, and 
other fittings used for safety purposes are not considered to be bypass 
devices.
    (i) If a flow indicator is used to comply with paragraph (b)(3) of 
this section, the indicator shall be installed at the inlet to the 
bypass line used to divert gases and vapors from the closed-vent system 
to the atmosphere at a point upstream of the control device inlet. For 
this paragraph, a flow indicator means a device which indicates the 
presence of either gas or vapor flow in the bypass line.
    (ii) If a seal or locking device is used to comply with paragraph 
(b)(3) of this section, the device shall be placed on the mechanism by 
which the bypass device position is controlled (e.g., valve handle, 
damper lever) when the bypass device is in the closed position such 
that the bypass device cannot be opened without breaking the seal or 
removing the lock. Examples of such devices include, but are not 
limited to, a car-seal or a lock-and-key configuration valve. The 
remanufacturer or other person that stores or treats the hazardous 
secondary material shall visually inspect the seal or closure mechanism 
at least once every month to verify that the bypass mechanism is 
maintained in the closed position.
    (4) The closed-vent system shall be inspected and monitored by the 
remanufacturer or other person that stores or treats the hazardous 
secondary material in accordance with the procedure specified in Sec.  
261.1033(l).
    (c) The control device shall meet the following requirements:
    (1) The control device shall be one of the following devices:
    (i) A control device designed and operated to reduce the total 
organic content of the inlet vapor stream vented to the control device 
by at least 95 percent by weight;
    (ii) An enclosed combustion device designed and operated in 
accordance with the requirements of Sec.  261.1033(c) of this part; or
    (iii) A flare designed and operated in accordance with the 
requirements of Sec.  261.1033(d) of this part.
    (2) The remanufacturer or other person that stores or treats the 
hazardous secondary material who elects to use a closed-vent system and 
control device to comply with the requirements of this section shall 
comply with the requirements specified in paragraphs (c)(2)(i) through 
(vi) of this section.
    (i) Periods of planned routine maintenance of the control device, 
during which the control device does not meet the specifications of 
paragraph (c)(1)(i), (ii), or (iii) of this section, as applicable, 
shall not exceed 240 hours per year.
    (ii) The specifications and requirements in paragraphs (c)(1)(i) 
through (iii) of this section for control devices do not apply during 
periods of planned routine maintenance.
    (iii) The specifications and requirements in paragraphs (c)(1)(i) 
through (iii) of this section for control devices do not apply during a 
control device system malfunction.
    (iv) The remanufacturer or other person that stores or treats the 
hazardous secondary material shall demonstrate compliance with the 
requirements of paragraph (c)(2)(i) of this section (i.e., planned 
routine maintenance of a control device, during which the control 
device does not meet the specifications of paragraph (c)(1)(i), (ii), 
or (iii) of this section, as applicable, shall not exceed 240 hours per 
year) by recording the information specified in Sec.  261.1089(e)(1)(v) 
of this subpart.
    (v) The remanufacturer or other person that stores or treats the 
hazardous secondary material shall correct control device system 
malfunctions as soon as practicable after their occurrence in order to 
minimize excess emissions of air pollutants.
    (vi) The remanufacturer or other person that stores or treats the 
hazardous secondary material shall operate the closed-vent system such 
that gases, vapors, or fumes are not actively vented to the control 
device during periods of planned maintenance or control device system 
malfunction (i.e., periods when the control device is not operating or 
not operating normally) except in cases when it is necessary to

[[Page 1812]]

vent the gases, vapors, and/or fumes to avoid an unsafe condition or to 
implement malfunction corrective actions or planned maintenance 
actions.
    (3) The remanufacturer or other person that stores or treats the 
hazardous secondary material using a carbon adsorption system to comply 
with paragraph (c)(1) of this section shall operate and maintain the 
control device in accordance with the following requirements:
    (i) Following the initial startup of the control device, all 
activated carbon in the control device shall be replaced with fresh 
carbon on a regular basis in accordance with the requirements of Sec.  
261.1033(g) or (h) of this part.
    (ii) All carbon that is hazardous waste and that is removed from 
the control device shall be managed in accordance with the requirements 
of Sec.  261.1033(n), regardless of the average volatile organic 
concentration of the carbon.
    (4) A remanufacturer or other person that stores or treats the 
hazardous secondary material using a control device other than a 
thermal vapor incinerator, flare, boiler, process heater, condenser, or 
carbon adsorption system to comply with paragraph (c)(1) of this 
section shall operate and maintain the control device in accordance 
with the requirements of Sec.  261.1033(j) of this part.
    (5) The remanufacturer or other person that stores or treats the 
hazardous secondary material shall demonstrate that a control device 
achieves the performance requirements of paragraph (c)(1) of this 
section as follows:
    (i) A remanufacturer or other person that stores or treats the 
hazardous secondary material shall demonstrate using either a 
performance test as specified in paragraph (c)(5)(iii) of this section 
or a design analysis as specified in paragraph (c)(5)(iv) of this 
section the performance of each control device except for the 
following:
    (A) A flare;
    (B) A boiler or process heater with a design heat input capacity of 
44 megawatts or greater;
    (C) A boiler or process heater into which the vent stream is 
introduced with the primary fuel;
    (ii) A remanufacturer or other person that stores or treats the 
hazardous secondary material shall demonstrate the performance of each 
flare in accordance with the requirements specified in Sec.  
261.1033(e).
    (iii) For a performance test conducted to meet the requirements of 
paragraph (c)(5)(i) of this section, the remanufacturer or other person 
that stores or treats the hazardous secondary material shall use the 
test methods and procedures specified in Sec.  261.1034(c)(1) through 
(4).
    (iv) For a design analysis conducted to meet the requirements of 
paragraph (c)(5)(i) of this section, the design analysis shall meet the 
requirements specified in Sec.  261.1035(b)(4)(iii).
    (v) The remanufacturer or other person that stores or treats the 
hazardous secondary material shall demonstrate that a carbon adsorption 
system achieves the performance requirements of paragraph (c)(1) of 
this section based on the total quantity of organics vented to the 
atmosphere from all carbon adsorption system equipment that is used for 
organic adsorption, organic desorption or carbon regeneration, organic 
recovery, and carbon disposal.
    (6) If the remanufacturer or other person that stores or treats the 
hazardous secondary material and the Regional Administrator do not 
agree on a demonstration of control device performance using a design 
analysis then the disagreement shall be resolved using the results of a 
performance test performed by the remanufacturer or other person that 
stores or treats the hazardous secondary material in accordance with 
the requirements of paragraph (c)(5)(iii) of this section. The Regional 
Administrator may choose to have an authorized representative observe 
the performance test.
    (7) The closed-vent system and control device shall be inspected 
and monitored by the remanufacture or other person that stores or 
treats the hazardous secondary material in accordance with the 
procedures specified in Sec.  261.1033(f)(2) and (l). The readings from 
each monitoring device required by Sec.  261.1033(f)(2) shall be 
inspected at least once each operating day to check control device 
operation. Any necessary corrective measures shall be immediately 
implemented to ensure the control device is operated in compliance with 
the requirements of this section.


Sec.  261.1088  Inspection and monitoring requirements.

    (a) The remanufacturer or other person that stores or treats the 
hazardous secondary material shall inspect and monitor air emission 
control equipment used to comply with this subpart in accordance with 
the applicable requirements specified in Sec. Sec.  261.1084 through 
261.1087 of this subpart.
    (b) The remanufacture or other person that stores or treats the 
hazardous secondary material shall develop and implement a written plan 
and schedule to perform the inspections and monitoring required by 
paragraph (a) of this section. The remanufacturer or other person that 
stores or treats the hazardous secondary material shall keep the plan 
and schedule at the facility.


Sec.  261.1089  Recordkeeping requirements.

    (a) Each remanufacturer or other person that stores or treats the 
hazardous secondary material subject to requirements of this subpart 
shall record and maintain the information specified in paragraphs (b) 
through (j) of this section, as applicable to the facility. Except for 
air emission control equipment design documentation and information 
required by paragraphs (i) and (j) of this section, records required by 
this section shall be maintained at the facility for a minimum of 3 
years. Air emission control equipment design documentation shall be 
maintained at the facility until the air emission control equipment is 
replaced or otherwise no longer in service. Information required by 
paragraphs (i) and (j) of this section shall be maintained at the 
facility for as long as the hazardous secondary material management 
unit is not using air emission controls specified in Sec. Sec.  
261.1084 through 261.1087 of this subpart in accordance with the 
conditions specified in Sec.  261.1080(b)(7) or (d) of this subpart, 
respectively.
    (b) The remanufacturer or other person that stores or treats the 
hazardous secondary material using a tank with air emission controls in 
accordance with the requirements of Sec.  261.1084 of this subpart 
shall prepare and maintain records for the tank that include the 
following information:
    (1) For each tank using air emission controls in accordance with 
the requirements of Sec.  261.1084 of this subpart, the remanufacturer 
or other person that stores or treats the hazardous secondary material 
shall record:
    (i) A tank identification number (or other unique identification 
description as selected by the remanufacturer or other person that 
stores or treats the hazardous secondary material).
    (ii) A record for each inspection required by Sec.  261.1084 of 
this subpart that includes the following information:
    (A) Date inspection was conducted.
    (B) For each defect detected during the inspection: The location of 
the defect, a description of the defect, the date of detection, and 
corrective action taken to repair the defect. In the event that repair 
of the defect is delayed in accordance with the requirements of Sec.  
261.1084 of this subpart, the remanufacturer or other person that 
stores or treats the hazardous secondary

[[Page 1813]]

material shall also record the reason for the delay and the date that 
completion of repair of the defect is expected.
    (2) In addition to the information required by paragraph (b)(1) of 
this section, the remanufacturer or other person that stores or treats 
the hazardous secondary material shall record the following 
information, as applicable to the tank:
    (i) The remanufacturer or other person that stores or treats the 
hazardous secondary material using a fixed roof to comply with the Tank 
Level 1 control requirements specified in Sec.  261.1084(c) of this 
subpart shall prepare and maintain records for each determination for 
the maximum organic vapor pressure of the hazardous secondary material 
in the tank performed in accordance with the requirements of Sec.  
261.1084(c) of this subpart. The records shall include the date and 
time the samples were collected, the analysis method used, and the 
analysis results.
    (ii) The remanufacturer or other person that stores or treats the 
hazardous secondary material using an internal floating roof to comply 
with the Tank Level 2 control requirements specified in Sec.  
261.1084(e) of this subpart shall prepare and maintain documentation 
describing the floating roof design.
    (iii) Remanufacturer or other persons that store or treat the 
hazardous secondary material using an external floating roof to comply 
with the Tank Level 2 control requirements specified in Sec.  
261.1084(f) of this subpart shall prepare and maintain the following 
records:
    (A) Documentation describing the floating roof design and the 
dimensions of the tank.
    (B) Records for each seal gap inspection required by Sec.  
261.1084(f)(3) of this subpart describing the results of the seal gap 
measurements. The records shall include the date that the measurements 
were performed, the raw data obtained for the measurements, and the 
calculations of the total gap surface area. In the event that the seal 
gap measurements do not conform to the specifications in Sec.  
261.1084(f)(1) of this subpart, the records shall include a description 
of the repairs that were made, the date the repairs were made, and the 
date the tank was emptied, if necessary.
    (iv) Each remanufacturer or other person that stores or treats the 
hazardous secondary material using an enclosure to comply with the Tank 
Level 2 control requirements specified in Sec.  261.1084(i) of this 
subpart shall prepare and maintain the following records:
    (A) Records for the most recent set of calculations and 
measurements performed by the remanufacturer or other person that 
stores or treats the hazardous secondary material to verify that the 
enclosure meets the criteria of a permanent total enclosure as 
specified in ``Procedure T--Criteria for and Verification of a 
Permanent or Temporary Total Enclosure'' under 40 CFR 52.741, appendix 
B.
    (B) Records required for the closed-vent system and control device 
in accordance with the requirements of paragraph (e) of this section.
    (c) [Reserved]
    (d) The remanufacturer or other person that stores or treats the 
hazardous secondary material using containers with Container Level 3 
air emission controls in accordance with the requirements of Sec.  
261.1086 of this subpart shall prepare and maintain records that 
include the following information:
    (1) Records for the most recent set of calculations and 
measurements performed by the remanufacturer or other person that 
stores or treats the hazardous secondary material to verify that the 
enclosure meets the criteria of a permanent total enclosure as 
specified in ``Procedure T--Criteria for and Verification of a 
Permanent or Temporary Total Enclosure'' under 40 CFR 52.741, appendix 
B.
    (2) Records required for the closed-vent system and control device 
in accordance with the requirements of paragraph (e) of this section.
    (e) The remanufacturer or other person that stores or treats the 
hazardous secondary material using a closed-vent system and control 
device in accordance with the requirements of Sec.  261.1087 of this 
subpart shall prepare and maintain records that include the following 
information:
    (1) Documentation for the closed-vent system and control device 
that includes:
    (i) Certification that is signed and dated by the remanufacturer or 
other person that stores or treats the hazardous secondary material 
stating that the control device is designed to operate at the 
performance level documented by a design analysis as specified in 
paragraph (e)(1)(ii) of this section or by performance tests as 
specified in paragraph (e)(1)(iii) of this section when the tank or 
container is or would be operating at capacity or the highest level 
reasonably expected to occur.
    (ii) If a design analysis is used, then design documentation as 
specified in Sec.  261.1035(b)(4). The documentation shall include 
information prepared by the remanufacturer or other person that stores 
or treats the hazardous secondary material or provided by the control 
device manufacturer or vendor that describes the control device design 
in accordance with Sec.  261.1035(b)(4)(iii) and certification by the 
remanufacturer or other person that stores or treats the hazardous 
secondary material that the control equipment meets the applicable 
specifications.
    (iii) If performance tests are used, then a performance test plan 
as specified in Sec.  261.1035(b)(3) and all test results.
    (iv) Information as required by Sec. Sec.  261.1035(c)(1) and 
261.1035(c)(2), as applicable.
    (v) A remanufacturer or other person that stores or treats the 
hazardous secondary material shall record, on a semiannual basis, the 
information specified in paragraphs (e)(1)(v)(A) and (B) of this 
section for those planned routine maintenance operations that would 
require the control device not to meet the requirements of Sec.  
261.1087(c)(1)(i), (ii), or (iii) of this subpart, as applicable.
    (A) A description of the planned routine maintenance that is 
anticipated to be performed for the control device during the next 6-
month period. This description shall include the type of maintenance 
necessary, planned frequency of maintenance, and lengths of maintenance 
periods.
    (B) A description of the planned routine maintenance that was 
performed for the control device during the previous 6-month period. 
This description shall include the type of maintenance performed and 
the total number of hours during those 6 months that the control device 
did not meet the requirements of Sec.  261.1087(c)(1)(i), (ii), or 
(iii) of this subpart, as applicable, due to planned routine 
maintenance.
    (vi) A remanufacturer or other person that stores or treats the 
hazardous secondary material shall record the information specified in 
paragraphs (e)(1)(vi)(A) through (C) of this section for those 
unexpected control device system malfunctions that would require the 
control device not to meet the requirements of Sec.  261.1087(c)(1)(i), 
(ii), or (iii) of this subpart, as applicable.
    (A) The occurrence and duration of each malfunction of the control 
device system.
    (B) The duration of each period during a malfunction when gases, 
vapors, or fumes are vented from the hazardous secondary material 
management unit through the closed-vent system to the control device 
while the control device is not properly functioning.

[[Page 1814]]

    (C) Actions taken during periods of malfunction to restore a 
malfunctioning control device to its normal or usual manner of 
operation.
    (vii) Records of the management of carbon removed from a carbon 
adsorption system conducted in accordance with Sec.  261.1087(c)(3)(ii) 
of this subpart.
    (f) The remanufacturer or other person that stores or treats the 
hazardous secondary material using a tank or container exempted under 
the hazardous secondary material organic concentration conditions 
specified in Sec.  261.1082(c)(1) or (c)(2)(i) through (vi) of this 
subpart, shall prepare and maintain at the facility records documenting 
the information used for each material determination (e.g., test 
results, measurements, calculations, and other documentation). If 
analysis results for material samples are used for the material 
determination, then the remanufacturer or other person that stores or 
treats the hazardous secondary material shall record the date, time, 
and location that each material sample is collected in accordance with 
applicable requirements of Sec.  261.1083 of this subpart.
    (2) [Reserved]
    (g) A remanufacturer or other person that stores or treats the 
hazardous secondary material designating a cover as ``unsafe to inspect 
and monitor'' pursuant to Sec.  261.1084(l) or Sec.  261.1085(g) of 
this subpart shall record and keep at facility the following 
information: The identification numbers for hazardous secondary 
material management units with covers that are designated as ``unsafe 
to inspect and monitor,'' the explanation for each cover stating why 
the cover is unsafe to inspect and monitor, and the plan and schedule 
for inspecting and monitoring each cover.
    (h) The remanufacturer or other person that stores or treats the 
hazardous secondary material that is subject to this subpart and to the 
control device standards in 40 CFR part 60, subpart VV, or 40 CFR part 
61, subpart V, may elect to demonstrate compliance with the applicable 
sections of this subpart by documentation either pursuant to this 
subpart, or pursuant to the provisions of 40 CFR part 60, subpart VV or 
40 CFR part 61, subpart V, to the extent that the documentation 
required by 40 CFR parts 60 or 61 duplicates the documentation required 
by this section.


Sec.  261.1090  [Reserved]

[FR Doc. 2014-30382 Filed 1-12-15; 8:45 am]
BILLING CODE 6560-50-P


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