Document ID: EPA-HQ-RCRA-2010-0742-0001
Agency: epa
Document Type: Proposed Rule
Title: Definition of Solid Waste
Posted Date: 2011-07-22T04:00Z

[Federal Register Volume 76, Number 141 (Friday, July 22, 2011)]
[Proposed Rules]
[Pages 44094-44154]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-17031]

[[Page 44093]]

Vol. 76

Friday,

No. 141

July 22, 2011

Part II

Environmental Protection Agency

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40 CFR Part 260, 261 and 266

Definition of Solid Waste; Proposed Rule

  Federal Register / Vol. 76 , No. 141 / Friday, July 22, 2011 / 
Proposed Rules  

[[Page 44094]]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 260, 261 and 266

[EPA-HQ-RCRA-2010-0742; FRL-9431-4]
RIN 2050-AG62

Definition of Solid Waste

AGENCY: Environmental Protection Agency.

ACTION: Proposed rule.

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SUMMARY: The Environmental Protection Agency (EPA or the Agency) is 
proposing to revise certain exclusions from the definition of solid 
waste for hazardous secondary materials intended for reclamation that 
would otherwise be regulated under Subtitle C of the Resource 
Conservation and Recovery Act (RCRA). The purpose of these proposed 
revisions is to ensure that the 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: Comments must be received on or before September 20, 2011.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ-
RCRA-2010-0742 by one of the following methods:
     http://www.regulations.gov: Follow the on-line 
instructions for submitting comments.
     E-mail: Comments may be sent by electronic mail (e-mail) 
to RCRA-docket@epa.gov, Attention Docket ID No. EPA-HQ-RCRA-2010-0742.
     Fax: Fax comments to: 202-566-9744, Attention Docket ID 
No. EPA-HQ-RCRA-2010-0742.
     Mail: Send comments to: OSWER Docket, EPA Docket Center, 
Mail Code 28221T, Environmental Protection Agency, 1200 Pennsylvania 
Avenue, NW., Washington DC 20460, Attention Docket ID No. EPA-HQ-RCRA-
2010-0742. Please include two copies of your comments. In addition, 
please mail a copy of your comments on the information collection 
provisions to the Office of Information and Regulatory Affairs, Office 
of Management and Budget (OMB), Attn: Desk Officer for EPA, 725 17th 
St., Washington DC 20503.
     Hand delivery: Deliver two copies of your comments to: 
Environmental Protection Agency, EPA Docket Center, Room 3334, 1301 
Constitution Avenue, NW., Washington DC, Attention Docket ID No. EPA-
HQ-RCRA-2010-0742. Such deliveries are only accepted during the 
docket's normal hours of operation and special arrangements should be 
made for deliveries of boxed information.
    Instructions: Direct your comments to Docket ID Number EPA-HQ-RCRA-
2010-0742. EPA's policy is that all comments received will be included 
in the public docket without change and may be made available online at 
http://www.regulations.gov, including any personal information 
provided, unless the comment includes information claimed to be 
Confidential Business Information (CBI) or other information whose 
disclosure is restricted by statute. Do not submit information that you 
consider to be CBI or otherwise protected through http://www.regulations.gov or e-mail. The http://www.regulations.gov Web site 
is an ``anonymous access'' system, which means EPA will not know your 
identity or contact information unless you provide it in the body of 
your comment. If you send an e-mail comment directly to EPA without 
going through http://www.regulations.gov, your e-mail address will be 
automatically captured and included as part of the comment that is 
placed in the public docket and made available on the Internet. If you 
submit an electronic comment, EPA recommends that you include your name 
and other contact information in the body of your comment and with any 
disk or CD-ROM you submit. If EPA cannot read your comment due to 
technical difficulties and cannot contact you for clarification, EPA 
may not be able to consider your comment. Electronic files should avoid 
the use of special characters, any form of encryption, and be free of 
any defects or viruses.
    Docket: All documents in the docket are listed in the http://www.regulations.gov index. Although listed in the index, some 
information is not publicly available, such as CBI or other information 
whose disclosure is restricted by statute. Certain other material, such 
as copyrighted material, will be publicly available only in hard copy. 
Publicly available docket materials are available either electronically 
at http://www.regulations.gov or in hard copy at the OSWER Docket, EPA/
DC, EPA 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 and the OSWER Docket is (202) 566-1744.

FOR FURTHER INFORMATION CONTACT: For more detailed information on 
specific aspects of this rulemaking, contact Marilyn Goode, Office of 
Resource Conservation and Recovery, Materials Recovery and Waste 
Management Division, MC 5304P, Environmental Protection Agency, 1200 
Pennsylvania Ave., NW., Washington, DC 20460, (703) 308-8800, 
(goode.marilyn@epa.gov) or Tracy Atagi, Office of 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 (atagi.tracy@epa.gov). For 
information on future public meetings on this proposal, contact Amanda 
Geldard, 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 (geldard.amanda@epa.gov.) Information regarding these 
public meetings will also be posted at EPA's Web site at: http://www.epa.gov/epawaste/hazard/dsw/rulemaking.htm.

SUPPLEMENTARY INFORMATION: 

A. Does this action apply to me?

    Entities potentially affected by today's action include between 
6,500 to 9,100 industrial facilities (depending on the regulatory 
option(s) selected) in upwards of 622 industries that generate or 
recycle hazardous secondary materials that are (1) Currently regulated 
as RCRA Subtitle C hazardous wastes, (2) hazardous secondary materials 
currently excluded under the 2008 DSW final rule (three exclusions), or 
(3) hazardous secondary materials currently excluded from RCRA Subtitle 
C under other recycling exclusions (32 exclusions). Most of the 622 
industries have relatively few counts of potentially affected entities 
and are not listed here. There are 27 industries with the largest 
counts of potentially affected entities which EPA evaluated in detail 
in its ``Regulatory Impact Analysis'' (RIA) for today's action. These 
industries in ascending code order by 6-digit NAICS codes are: (1) 
323110 Commercial Lithographic Printing; (2) 324110 Petroleum 
Refineries; (3) 325188 All Other Basic Inorganic Chemical 
Manufacturing; (4) 325199 All Other Basic Organic Chemical 
Manufacturing; (5) 325211 Plastics Material and Resin Manufacturing; 
(6) 325412 Pharmaceutical Preparation Manufacturing; (7) 325510 Paint 
and Coating Manufacturing; (8) 325998 All Other Miscellaneous Chemical 
Product and Preparation Manufacturing; (9)

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326199 All Other Plastics Product Manufacturing; (10) 331111 Iron and 
Steel Mills; (11) 331492 Secondary Smelting, Refining & Alloying of 
Nonferrous Metal (except Copper, Aluminum); (12) 332312 Fabricated 
Structural Metal Manufacturing; (13) 332812 Metal Coating, Engraving 
(except Jewelry and Silverware) and Allied Services to Manufacturers; 
(14) 332813 Electroplating, Plating, Polishing, Anodizing and Coloring; 
(15) 332999 All Other Miscellaneous Fabricated Metal Product 
Manufacturing; (16) 333415 Air Conditioning, Warm Air Heating 
Equipment, and Commercial and Industrial Refrigeration Equipment 
Manufacturing, (17) 334412 Bare Printed Circuit Board Manufacturing; 
(18) 334413 Semiconductor and Related Device Manufacturing; (19) 334418 
Printed Circuit Assembly, (20) 336399 All Other Motor Vehicle Parts 
Manufacturing; (21) 336412 Bare Printed Circuit Board Manufacturing; 
(22) 336413 Other Aircraft Part and Auxiliary Equipment Manufacturing; 
(23) 541710 Research & Development in the Physical, Engineering, and 
Life Sciences; (24) 562211 Hazardous Waste Treatment and Disposal; (25) 
611310 Colleges, Universities and Professional Schools; (26) 622110 
General Medical and Surgical Hospitals; and (27) 928110 National 
Security.
    In aggregate, the RIA estimates the future average annualized costs 
to industry to comply with the seven proposed revisions at between $7.2 
million to $13.1 million per year under a lower-bound state adoption 
scenario, which results in 13% of recycling facilities implementing the 
revisions, and between $7.4 million to $47.5 million per year under an 
upper-bound state adoption scenario, which results in 74% of recycling 
facilities implementing the revisions. This range reflects uncertainty 
about the ultimate number of states which may voluntarily adopt the 
proposed revisions. More information on the potentially affected 
entities, industries, and industrial materials, as well as the economic 
impacts of this proposed rule, is presented in Section XVII.A of this 
preamble and in the Regulatory Impact Analysis available in the docket 
for this final rule.

B. What To Consider When Preparing Comments for EPA

    1. Submitting CBI. Do not submit this information to EPA through 
http://www.regulations.gov or e-mail. Clearly mark all information that 
you claim to be CBI. For CBI information in a disk or CD-ROM that you 
mail to EPA, mark the outside of the disk or CD-ROM as CBI and then 
identify electronically within the disk or CD-ROM the specific 
information that is claimed as CBI. In addition to one complete version 
of the comment that includes information claimed as CBI, a copy of the 
comment that does not contain the information claimed as CBI must be 
submitted for inclusion in the public docket. Information so marked 
will not be disclosed, except in accordance with procedures set forth 
in 40 CFR part 2.
    2. Tips for Preparing Your Comments. When submitting comments, 
remember to:
     Identify the rulemaking by docket number and other 
identifying information (subject heading, Federal Register date and 
page number).
     Follow directions. The Agency may ask for commenters to 
respond to specific questions or organize comments by referencing a 
Code of Federal Regulations (CFR) part or section number.
     Explain why you agree or disagree; suggest alternatives 
and substitute language for your requested changes.
     Describe any assumptions and provide any technical 
information and/or data that you used.
     If estimating burden or costs, explain methods used to 
arrive at the estimate in sufficient detail to allow for it to be 
reproduced.
     Provide specific examples to illustrate any concerns and 
suggest alternatives.
     Make sure to submit comments by the comment period 
deadline identified above.

Preamble Outline

I. Statutory Authority
II. List of abbreviations and acronyms
III. What is the intent of this proposal?
IV. What is the scope of this proposal?
V. History of the Definition of Solid Waste
VI. Definition of Solid Waste Environmental Justice Analysis
VII. Exclusion for Hazardous Secondary Materials That Are 
Transferred for the Purpose of Legitimate Reclamation
VIII. Alternative Subtitle C Regulation for Hazardous Recyclable 
Materials
IX. Revisions to the Exclusion for Hazardous Secondary Materials 
That Are Legitimately Reclaimed Under the Control of the Generator
X. Revisions to the Definition of Legitimacy
XI. Revisions to Solid Waste Variances and Non-Waste Determinations
XII. Request for Comment on Re-Manufacturing Exclusion
XIII. Request for Comment on Revisions to Other Recycling Exclusions 
and Exemptions
XIV. Effect of This Proposal on Other Programs
XV. Implementation Issues With 2008 DSW Final Rule
XVI. State Authorization
XVII. Administrative Requirements for This Rulemaking

I. Statutory Authority

    These regulations are proposed under the authority of sections 
2002, 3001, 3002, 3003, 3004, 3007, 3010, and 3017 of the Solid Waste 
Disposal Act of 1970, as amended 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. List of Abbreviations and Acronyms

    CERCLA--Comprehensive Environmental Response, Compensation, and 
Liability Act.
    CFR--Code of Federal Regulations.
    DOT--Department of Transportation.
    DSW--Definition of Solid Waste.
    EPA--Environmental Protection Agency.
    HSWA--Hazardous and Solid Waste Amendments of 1984.
    LDR--Land Disposal Restrictions.
    NAICS--North American Industry Classification System.
    NPL--National Priority List.
    RCRA--Resource Conservation and Recovery Act of 1976.
    RIA--Regulatory Impact Analysis.

III. What is the intent of this proposal?

    Today's proposal would revise and clarify the RCRA definition of 
solid waste (DSW) for certain types of hazardous secondary materials 
that are currently conditionally excluded from the definition of solid 
waste. These exclusions were promulgated in October 2008 (73 FR 64688, 
October 30, 2008) and were intended to encourage the recovery and reuse 
of valuable resources as an alternative to land disposal or 
incineration, while at the same time maintaining protection of human 
health and the environment.
    In response to concerns raised by stakeholders about potential 
increases in risks to human health and the environment from hazardous 
secondary materials, EPA is proposing to revise the 2008 DSW 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 mismanagement of hazardous secondary materials.

IV. What is the scope of this proposal?

    In today's notice, EPA is proposing to revise the definition of 
solid waste regulations that were promulgated in October 2008 and that 
deal with the regulatory status of certain types of

[[Page 44096]]

hazardous secondary materials sent for reclamation. The 2008 DSW final 
rule does not apply to recycling of ``inherently waste-like'' materials 
(40 CFR 261.2(d)); recycling of hazardous secondary materials that are 
``used in a manner constituting disposal,'' or ``used to produce 
products that are applied to or placed on the land''(40 CFR 
261.2(c)(1)); or for ``burning of hazardous secondary materials for 
energy recovery'' or ``used to produce a fuel or otherwise contained in 
fuels'' (40 CFR 261.2(c)(2)).
    The regulatory changes being proposed today are summarized below. 
The intent of this summary is to give a brief overview of the proposed 
changes. More detailed discussions, including the Agency's rationale 
for the changes, are discussed in later sections. In addition, to aid 
commenters in their review, EPA has also included in the docket for 
today's proposal an informational redline/strikeout version of the 
proposed revised regulations as compared to the current Code of Federal 
Regulations.

A. Exclusion for Hazardous Secondary Materials That Are Transferred for 
the Purpose of Reclamation

    EPA is proposing to replace the exclusion 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 
alternative Subtitle C regulation for hazardous recyclable 
materials.\1\ (See Section VIII for a detailed discussion of the 
alternative regulatory approach.) EPA's new analyses of potential 
hazards posed by the 2008 DSW final rule indicate that, when 
implemented, the transfer-based exclusion may pose significant risk to 
human health and the environment from hazardous secondary material that 
may become discarded. While the transfer of materials is inherent in 
ordinary commerce and does not automatically indicate discard has 
occurred, in the case of hazardous secondary materials transferred for 
reclamation, EPA has determined that only a specific set of hazardous 
secondary materials and reclamation practices clearly do not involve 
discard. Based on new EPA analyses, EPA believes that in most cases, 
hazardous secondary materials transferred to another party for 
reclamation are discarded and are best regulated under RCRA Subtitle C. 
Further discussion of this proposed withdrawal can be found in Section 
VII of this preamble.
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    \1\ A hazardous secondary material is a secondary material 
(e.g., spent material, by-product, or sludge) that, when discarded, 
would be identified as hazardous waste under 40 CFR part 261. A 
hazardous recyclable material is a hazardous wastes that is 
recycled. Unlike hazardous secondary materials, hazardous recyclable 
materials have clearly been discarded and therefore are always solid 
wastes.
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B. Alternative Subtitle C Regulation for Hazardous Recyclable Materials

    EPA is proposing to replace the transfer-based exclusion with an 
alternative Subtitle C regulation in 40 CFR 266.30 for hazardous 
recyclable materials, with the intention of promoting the safe and 
sustainable reclamation of these materials. Under these alternative 
requirements, the hazardous recyclable materials must be managed 
according to the current RCRA Subtitle C requirements, including 
manifesting and hazardous waste permits for storage, except that 
generators may accumulate hazardous recyclable materials for up to a 
year without a RCRA permit if the generator makes advance arrangements 
for legitimate reclamation and documents those arrangements in a 
reclamation plan. EPA also requests comment on setting an upper limit 
on the amount of hazardous recyclable material accumulated at the 
generator at any one time. Further discussion of these proposed 
alternative standards can be found in Section VIII of this preamble.

C. Revisions to the Exclusion for Hazardous Secondary Materials 
Reclaimed Under the Control of the Generator

    EPA is proposing to retain the exclusion for hazardous secondary 
materials reclaimed under the control of the generator with certain 
revisions, including (1) adding a regulatory definition of 
``contained'' to 40 CFR 260.10; (2) making notification a condition of 
the exclusion; (3) adding a recordkeeping requirement for speculative 
accumulation in 40 CFR 261.1(c)(8); and (4) adding a recordkeeping 
requirement for reclamation under toll manufacturing agreements in 40 
CFR 261.4(a)(23)(i)(C). EPA is also requesting comment on whether to 
withdraw the toll manufacturing provision of the exclusion. Further 
discussion of these proposed revisions can be found in Section IX of 
this preamble.

D. Legitimacy

    EPA is also proposing revisions to the definition of legitimacy in 
40 CFR 260.43, including (1) applying the codified definition to all 
recycling activities regulated under 40 CFR 260-266; (2) making all 
legitimacy factors mandatory, with a petition process for instances 
where a factor is not met, but the recycling is still legitimate; and 
(3) requiring documentation of legitimacy. Further discussion of these 
proposed revisions can be found in Section X of this preamble.

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

    EPA is also proposing revisions to the solid waste variances and 
non-waste determinations found in 40 CFR 260.30-260.34 in order to 
foster greater consistency on the part of implementing agencies and 
help ensure the protectiveness of the implementation of the solid waste 
variances and non-waste determinations. Proposed revisions include (1) 
requiring facilities to re-apply for a variance in the event of a 
change in circumstances that affects how a material meets the criteria 
upon which a solid waste variance has been based; (2) requiring 
facilities to re-notify every two years with updated information; (3) 
revising the criteria for the partial reclamation variance to more 
clearly explain when the variance applies and to require, among other 
things, that the criteria for this variance must be reviewed and 
evaluated collectively; (4) revising the criteria for the non-waste 
determination in 40 CFR 260.34 and requiring that petitioners 
demonstrate why the existing solid waste exclusions would not apply to 
their hazardous secondary materials; and (5) designating the Regional 
Administrator as the EPA recipient of petitions for variances and non-
waste determinations. Further discussion of these proposed revisions 
can be found in Section XI of this preamble.

F. Request for Comment on Re-Manufacturing Exclusion

    EPA is also requesting comment on an exclusion from the definition 
of solid waste for specific types of higher-value hazardous secondary 
materials sent for re-manufacturing into similar products and on a 
petition process for higher-value hazardous secondary materials that 
are not included within this exclusion, but that are destined to be re-
manufactured into similar products. This exclusion would help promote 
sustainable materials management by extending the productive use of 
these materials and thus minimizing the amount of raw materials used 
overall and all the associated environmental impacts of production. 
Further discussion of this possible exclusion can be found in Section 
XII of this preamble.

[[Page 44097]]

G. Request for Comment on Revisions to Other Recycling Exclusions and 
Exemptions

    EPA is also requesting comment on revisions that would affect other 
definition of solid waste exclusions and hazardous waste exemptions for 
recyclable materials. These possible revisions include (1) 
recordkeeping for speculative accumulation in all cases; (2) requiring 
facilities to re-notify every two years with updated information on 
their operating status under the various exclusions and exemptions; and 
(3) containment standards for excluded hazardous secondary material. 
Further discussion of these possible revisions can be found in Section 
XIII of this preamble.

V. History of the Definition of Solid Waste

A. Background

    RCRA gives EPA the authority to regulate hazardous wastes (see, 
e.g., RCRA sections 3001-3004). The original statutory designation of 
the subtitle for the hazardous waste program was Subtitle C and the 
national hazardous waste program is referred to as the RCRA Subtitle C 
program. Subtitle C is codified at 42 USC 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, or physical, chemical, or infectious 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:
     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 (DC Cir. 1979); 48 FR 14502-04, April 3, 1983; and 50 FR 
616-618, January 4, 1985).
     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 sites 
listed 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). More recent data (i.e., 
information on damage incidents occurring after 1982) included in the 
rulemaking docket for today's proposed rule corroborate the fact that 
recycling operations can and have resulted in significant damage 
incidents.
     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 (DC 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 DC Circuit has agreed that materials undergoing sham recycling 
are discarded and, consequently, are solid wastes under RCRA (see 
American Petroleum Institute v. EPA, 216 F.3d 50, 58-59 (DC Cir. 
2000)).

B. A Series of DC Circuit Court Decisions 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 DC Circuit held that EPA 
exceeded its authority ``in seeking to bring materials that are not 
discarded or otherwise disposed of within the compass of `waste' '' 
(American Mining Congress v. EPA (``AMC I''), 824 F.2d 1177, 1178 (DC 
Cir. 1987)). The Court held that certain of the materials EPA was 
seeking to regulate were not ``discarded materials'' under RCRA section 
1004(27). The Court also held that Congress used the term ``discarded'' 
in its ordinary sense, to 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

[[Page 44098]]

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 DC 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 
(DC 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 (DC Cir. 1990)).
    It also is worth noting that two other Circuits also have held that 
EPA may regulate at least some materials destined for reclamation 
rather than final discard. The U.S. Court of Appeals for the Eleventh 
Circuit found that ``[i]t is unnecessary to read into the term 
`discarded' 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 under 
Subtitle C hazardous secondary materials recycled by reclamation within 
the mineral processing industry, the ``LDR Phase IV rule'' (63 FR 
28556, May 26, 1998). In that rule, EPA promulgated a conditional 
exclusion for all 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 DC 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 (DC Cir. 2000)). The Court 
held that it had already resolved the issue presented in ABR in its 
opinion in AMC I, where it found that ``* * * Congress unambiguously 
expressed its intent that `solid waste' (and therefore EPA's regulatory 
authority) be limited to materials that are `discarded' by virtue of 
being disposed of, abandoned, or thrown away'' (208 F.2d at 1051). It 
repeated that materials reused within an ongoing industrial process are 
neither disposed of nor abandoned (208 F.3d at 1051-52). It explained 
that the intervening API I and AMC II decisions had not narrowed the 
holding in AMC I (208 F.3d at 1054-1056).
    Notably, the Court did not hold that storage before reclamation 
automatically makes materials ``discarded.'' Rather, it held that ``* * 
* at least some of the secondary material EPA seeks to regulate as 
solid waste (in the mineral processing rule) is destined for reuse as 
part of a continuous industrial process and thus is not abandoned or 
thrown away'' (208 F.3d at 1056).
    In its most recent opinion dealing with the definition of solid 
waste, Safe Food and Fertilizer v. EPA (``Safe Food''), 350 F.3d 1263 
(DC Cir. 2003), the DC 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 
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 the 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 exempted 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 upheld the rule based on EPA's 
explanation that market participants manage materials in ways 
inconsistent with discard, and the fact that the levels of contaminants 
in the recycled fertilizers were ``identical'' to the fertilizers made 
with virgin raw materials (also called ``the identity principle''). The 
Court 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.
    The Court also 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 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

[[Page 44099]]

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:
     How do responsible generators and recyclers of hazardous 
secondary materials ensure that recycling is done in an environmentally 
safe manner?
     To what extent have hazardous secondary material recycling 
practices resulted in environmental problems since enactment of major 
waste management statutes, and why?
     Are there certain economic forces or incentives specific 
to hazardous secondary material recycling that can explain why 
environmental problems can sometimes originate from such recycling 
activities?
    Reports documenting these studies are available in the docket for 
the 2008 DSW final rule under the following titles:
     An Assessment of Good Current Practices for Recycling of 
Hazardous Secondary Materials (EPA-HQ-RCRA-2002-0031-0354) (``study of 
successful recycling'').
     An Assessment of Environmental Problems Associated With 
Recycling of Hazardous Secondary Materials (EPA-HQ-RCRA-2002-0031-0355) 
(``environmental problems study'').
     A Study of Potential Effects of Market Forces on the 
Management of Hazardous Secondary Materials Intended for Recycling 
(EPA-HQ-RCRA-2002-0031-0358) (``market forces study'').
    In the 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 that have been attributed to 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.\2\ The Agency believes 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 overseen by 
a government agency and the expenditure of public funds clearly 
demonstrate that the hazardous secondary material was discarded. Of the 
208 damage cases, 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.
---------------------------------------------------------------------------

    \2\ 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, EPA identified one new damage case and 
updated two existing damage case profiles with more information 
about environmental problems, as detailed in Addendum: An Assessment 
of Environmental Problems Associated with Recycling of Hazardous 
Secondary Materials (EPA-HQ-RCRA-2002-0031-0601). EPA determined 
that the new damage case and supplemental information were 
consistent with the damage cases previously cited in the study.
---------------------------------------------------------------------------

    In addition, the pattern of environmental damages that resulted 
from the mismanagement of recyclable 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, 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,

[[Page 44100]]

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 the 
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 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. These 
predicted outcomes appear to be supported by the results of the 
environmental problems study, which showed the majority of 
environmental damages occur at off-site commercial recyclers.
    However, as shown by the study of successful recycling, generators 
who might otherwise bear a large liability from poorly-managed 
recycling at other companies have addressed this issue by carefully 
examining the recyclers to which they send their hazardous secondary 
materials to ensure 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 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 finds 
value in the hazardous secondary materials, has retained control over 
them, and intends to use them, EPA proposed to exclude these materials 
from the definition of solid waste and, thus, from regulation under 
Subtitle C of RCRA, provided the reclamation is legitimate and the 
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. 
For example, one of the conditions would require the generator to make 
reasonable efforts, a form of due diligence, to determine that its 
hazardous secondary 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

[[Page 44101]]

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.
    EPA also 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 is 
not waste treatment.

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) 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 (4) 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 (DC Circuit). These cases, designated as 
Docket Nos. 09-1038 and 1041, respectively, are currently before the DC 
Circuit.
    The 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 coalitions letter to the Administrator, EPA issued a May 27, 
2009, Federal Register notice (74 FR 25200) describing possible actions 
and optional paths forward, as well as announcing a public meeting on 
June 30, 2009, to allow the public and interested stakeholders the 
opportunity to provide input to the decision-making process.
    In the May 27, 2009, Federal Register notice announcing the public 
meeting, EPA described the scope of possible action, which is governed 
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 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 ``discard,'' EPA does not expect to completely repeal the rule or 
stay its implementation, because such an action could result in 
hazardous secondary materials that are not discarded being regulated as 
hazardous waste. In particular, EPA said that it does not expect to 
repeal either the exclusion for hazardous secondary materials reclaimed 
under the control of the generator or the non-waste determination 
petition process. However, the Agency stated that it could revise other 
parts of the definition of solid waste rule, such as the definition of 
legitimacy and the transfer-based exclusion, in ways that could 
increase environmental protection, while still appropriately defining 
when a hazardous secondary material being reclaimed is a solid waste'' 
(74 FR 25203).
    Thirty-three people spoke at the public meeting, and approximately 
4,000 written comments were received, of which the majority were from 
private citizens who wrote in via a mass e-mail campaign to repeal the 
rule. The remaining comments came from state and local governments 
(17), the generating industry (28), the waste management/recycling 
industry (15), environmental, public health and community organizations 
(12), and academics (2). Industry comments 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

[[Page 44102]]

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. EPA 
appreciates all the comments that were provided and has carefully 
considered them in deciding to revisit the definition of solid waste in 
today's proposal. 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 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.

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 prepare a notice of proposed 
rulemaking to be signed no later than June 30, 2011, which would 
address, at a minimum, the issues raised in the Sierra Club's 
administrative petition, including the four issues discussed in the May 
27, 2009, public meeting Federal Register notice (74 FR 25200). The 
settlement agreement did not specify the outcome of the final rule or 
specifically what regulatory changes EPA would propose. A notice taking 
final administrative action concerning the notice of proposed 
rulemaking is to be signed no later than December 31, 2012.
    The settlement agreement was approved by the court on January 11, 
2011. Today's proposal represents EPA's fulfillment of the portion of 
the settlement agreement concerning the proposed rule.
    The four issues in the settlement agreement are (1) the definition 
of ``contained'' (which includes the issue of defining ``significant 
releases'') (addressed in Section IX.B.1 of this preamble), (2) 
notification before operating under the exclusion (addressed in Section 
IX.B.2 of this preamble), (3) the definition of ``legitimacy'' 
(addressed in Section X of this preamble) and (4) the transfer-based 
exclusion (addressed in Section VII of this preamble). Other issues 
presented in the administrative petition are discussed below.
2. Request to Immediately Stay the Implementation of and Revoke the 
2008 DSW Rule
    The Sierra Club's administrative petition included a request to 
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. Additionally, the petition claimed that there would be job 
losses in the hazardous waste treatment industry and increased worker 
health problems as a result of the rule.
    EPA addressed Sierra Club's request to revoke the 2008 DSW final 
rule in whole and stay its implementation in the May 27, 2009, public 
meeting notice, which continues to reflect EPA's current thinking. In 
that notice, 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 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.
    However, EPA believes that there may be 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 increasing environmental protection, while 
still appropriately defining when a hazardous secondary material 
being reclaimed is a solid waste and subject to hazardous waste 
regulation.

    Today's proposal includes a discussion of several potential changes 
to the generator-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 proposing to withdraw either 
provision.
3. Adequacy of EPA's Analyses
    Finally, the Sierra Club petition asserted that EPA's conclusion 
that the 2008 DSW final rule would have no adverse environmental 
impacts, and therefore would have no disproportional adverse impacts to 
minority and low-income communities, is unsupported by the 
administrative record. In response to these comments and similar 
comments by other stakeholders at the 2009 public meeting, EPA 
committed to producing an expanded analysis of the potential 
disproportionate impacts of the 2008

[[Page 44103]]

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.\3\ EPA considered the 
comments raised in those discussions and conducted an analysis. The 
analysis has undergone peer review, the results of which are included 
in the docket for today's proposed rule. The environmental justice 
analysis is discussed in detail in the next section (Section VI) below.
---------------------------------------------------------------------------

    \3\ 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. Commitment to Sustainable Materials Management

    In addition to addressing the environmental and public health 
concerns raised by the Sierra Club and other commenters, EPA also 
envisions today's proposal as an opportunity to discuss focused 
approaches to revising the hazardous waste recycling regulations to 
promote sustainable materials management, while ensuring protection of 
human health and the environment. Sustainable materials management is 
an approach to serving human needs by using/reusing resources most 
productively and sustainably throughout their life cycles, generally 
minimizing the amount of materials involved and all the associated 
environmental impacts. Sustainable materials management is a core 
element of RCRA's resource conservation objectives.
    The shift to sustainable materials management by taking a life-
cycle approach to managing materials is articulated in EPA's 2020 
Vision Report: Sustainable Materials Management: The Road Ahead,\4\ 
which was endorsed by both the Environmental Council of the States 
(ECOS) and the Association of State and Territorial Solid Waste 
Management Officials (ASTSWMO).\5\ Sustainable materials management, as 
articulated in the ``2020 Vision Report,'' is aligned also with the 
vision and efforts of the World Business Council for Sustainable 
Development.\6\
---------------------------------------------------------------------------

    \4\ http://www.epa.gov/waste/inforesources/pubs/vision.htm.
    \5\ Environmental Council of the States Resolution 10-1 on 
National Sustainable Materials Management, approved March 23, 2010, 
and Letter from Gary Baughman, president, ASTSWMO, to Matt Hale, 
Director, Office of Solid Waste, U.S. EPA, February 3, 2010.
    \6\ http://www.wbcsd.org/web/projects/BZrole/Vision2050-FullReport_Final.pdf.
---------------------------------------------------------------------------

    Sustainable materials management helps identify opportunities to 
reduce environmental impacts, including greenhouse gas reductions, and 
societal impacts across the life cycle of materials from how they are 
extracted, manufactured, distributed, used, reused, recycled, and 
disposed. It works to ensure unintended consequences are avoided. 
Efficiencies gained in a sustainable materials management approach, 
especially with respect to non-renewable materials, can result in less 
energy used, more efficient use of materials, more efficient movement 
of goods and services, conservation of water, and reduced volume and 
toxicity of waste.
    By considering system-wide impacts, sustainable materials 
management casts a far broader net than traditional waste and chemicals 
management approaches and represents a change in how we think about 
environmental protection. Hazardous waste regulations can only 
influence a small part of the picture, but to the extent that the 
Agency can use today's proposal to help advance these goals, while 
ensuring protection of human health and the environment, EPA believes 
that it makes sense to do so.

VI. Definition of Solid Waste Environmental Justice Analysis

    To achieve the goals of Executive Order 12898, Federal Actions to 
Address Environmental Justice in Minority Populations and Low-Income 
Populations, EPA must consider environmental justice when developing a 
regulation. Because decisions involving a regulation must be informed 
by a consideration of a number of different issues, an environmental 
justice analysis is one of several analyses the Agency uses when 
developing regulations. The environmental justice analysis may be 
qualitative and/or quantitative and is designed to provide the 
appropriate information on disproportionately high and adverse impacts 
to minority and/or low-income populations to decision-makers. To the 
extent an environmental justice analysis reveals potential 
disproportionately high adverse impacts on minority and/or low-income 
populations, this result can affect how EPA uses its policy discretion 
under applicable authorities to pursue specific regulatory options or 
provide opportunities to involve the public in the implementation of 
regulations.
    The purpose of the DSW environmental justice analysis is 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 analysis 
characterizing the extent any potential adverse impacts are likely to 
affect minority and/or low-income communities. The results of this 
analysis have informed EPA's decision-making on which regulatory 
options to pursue, within scope of the Agency's authority to regulate 
hazardous waste.
    The methodology for the DSW environmental justice analysis consists 
of six steps:

------------------------------------------------------------------------
 
------------------------------------------------------------------------
Step 1: Hazard                 Includes two phases: (1) Identifying
 characterization.              potential hazards that could pose risks
                                to human health and the environment from
                                recycling of hazardous secondary
                                materials, including accidental releases
                                of hazardous constituents and (2)
                                analyzing the likelihood of such hazards
                                occurring under the requirements of the
                                2008 DSW exclusions as compared to the
                                pre-2008 DSW hazardous waste
                                regulations.
Step 2: Identification of      Modeling the locations of facilities
 potentially affected           (including potential new facilities)
 communities.                   that are likely to choose to take
                                advantage of the 2008 DSW final rule.
Step 3: Demographics of        Mapping the location of the facilities
 potentially affected           modeled in Step 2 and identifying the
 communities.                   demographics (e.g., minority population
                                and income level) of the surrounding
                                communities.
Step 4: Identifying other      Identifying important vulnerability
 factors that affect            factors. These include factors that may
 vulnerability in potentially   increase the likelihood of ``damages,''
 affected communities.          the likelihood that a facility is sited
                                within a community, or the likelihood of
                                health risks in the event of releases.
                                Examples include the presence of other
                                pollution sources and any information
                                about the public health of the
                                surrounding population.
Step 5: Information            Synthesizing all the information to
 synthesis: assessment of       characterize whether the 2008 DSW rule
 disproportional impact.        will facilitate the occurrence of any
                                adverse impacts and whether some
                                population groups (e.g., minority or low
                                income populations) would be
                                overrepresented in the impacted
                                communities.

[[Page 44104]]

 
Step 6: Identification of      Identifying potential strategies to
 potential preventive and       prevent non-compliance and releases to
 mitigation strategies.         the environment and also strategies to
                                mitigate any impacts identified under
                                step 5.
------------------------------------------------------------------------

    A brief description of the six steps is presented below.

A. Step 1--Hazard Characterization

    The first step of the methodology is hazard characterization, which 
includes both identifying the potential hazards that hazardous 
secondary materials recycling could pose to human health and the 
environment, and evaluating the likelihood of such hazards resulting in 
increased risk under the 2008 DSW final rule. In conducting this 
analysis, EPA, assessed a number of different scenarios, which reflect 
how such hazardous secondary materials may be managed.
    With respect to the first part of the analysis, because hazardous 
secondary materials sent to recycling are physically and chemically 
similar, if not identical to many of the hazardous wastes sent for 
treatment and disposal, the potential risks from their management are 
similar, if not the same, as from hazardous wastes sent for treatment 
and disposal. The most commonly recycled hazardous secondary materials 
are spent solvents and electric arc furnace dust (which is recycled to 
reclaim metals). Spent solvents present particular management 
challenges in that recycling them involves the storage of liquids 
containing volatile organic chemicals and includes both halogenated and 
non-halogenated organic chemicals, which represent a broad range of 
chemicals and associated hazards. Electric arc furnace dust, which is 
usually in a solid state, presents different management challenges, 
including that the dust contains high concentrations of toxic metals, 
the storage of the dust is typically in waste piles, and the potential 
for the dust to become wind-blown, or otherwise released, and the 
potential for toxic metals contained in this waste to leach into the 
ground water.
    These two classes of hazardous secondary materials (as well as 
other hazardous secondary materials that are recycled) can pose risks 
via a wide variety of exposure routes and include a range of potential 
adverse health effects, both carcinogenic and non-carcinogenic, as well 
as a potential for acute impacts, such as fires and explosions.
    The second part of the hazard characterization step--determining 
whether these hazards could result in increased risk to human health 
and the environment--is a complex issue because of the interactions 
between how the regulations are written and how they are actually 
implemented. Under the 2008 DSW final rule, EPA believed that the 
conditions of the rule, which were designed to determine when a 
hazardous secondary material is not discarded, would also prevent any 
increase in risk. For example, the condition that the hazardous 
secondary materials be ``contained'' was intended to address this 
issue. If the material is not released to the environment, there would 
be no increased exposure or associated risk.
    However, what the 2008 analysis failed to take into account was 
whether the conditions of the rule--such as the ``contained'' 
standard--would operate as effectively in the real world as the more 
prescriptive requirements of the RCRA hazardous waste regulations. One 
of the most common criticisms of the January 2010 draft environmental 
justice methodology was that it did not include consideration of the 
potential for adverse impact from removing some of the important 
protections of the hazardous waste regulations, particularly the public 
participation requirements, which were also not considered by the 
Agency when developing the 2008 DSW final rule.
    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, particularly the incentives to accumulate 
larger volumes of hazardous secondary materials, the reduction in 
oversight resulting from eliminating the permit requirement for 
storage, and the reduction in the public's access to information and 
the opportunity for public participation. The specific gaps vary 
depending on the baseline scenario and the post-DSW scenario being 
considered,\7\ and in some cases, there is also a potential for 
increased benefits, primarily from resource conservation and from 
reduced transportation distances.\8\
---------------------------------------------------------------------------

    \7\ The specific scenarios evaluated were (1) generator 
continues current recycling practices; (2) generator switches from 
off-site disposal to on-site reclamation; (3) generator switches 
from off-site disposal to off-site recycling under the control of 
the generator; (4) generator switches from off-site disposal to off-
site recycling at a RCRA-permitted facility; (5) generator switches 
from off-site disposal to off-site recycling at a U.S. facility 
without a RCRA permit; (6) generator switches from off-site disposal 
to exporting for recycling; (7) generator switches from off-site 
recycling at a facility without a permit to another type of 
recycling under the 2008 DSW final rule; and (8) generator switches 
from off-site recycling at a RCRA-permitted facility or exporting 
waste for recycling to another type of recycling under the 2008 DSW 
final rule.
    \8\ By reporting the potential for increased benefits under 
certain scenarios, EPA does not intend to imply that such benefits 
could justify increased risk to human health and the environment 
from discarded hazardous secondary material. Promoting resource 
conservation and recovery is a major goal of RCRA, but this goal 
does not supersede the mandate to assure that hazardous waste 
management practices are protective of human health and the 
environment.
---------------------------------------------------------------------------

B. Step 2--Identification of Potentially Affected Communities

    The second step of the methodology identified those potential 
facilities that can represent the facilities that are likely to take 
advantage of the 2008 DSW final rule. These facilities are grouped into 
four different categories: (1) Facilities that have already notified 
under the 2008 DSW final rule (``Notification Facilities''), (2) 
facilities from the environmental problems study (many of which 
operated under various exclusions or reduced regulations) which have 
documented environmental damages from recycling activities (``Damage 
Case Facilities''), (3) hazardous waste facilities that are likely to 
recycle under the rule (including hazardous waste generators producing 
more than a truckload (25 tons) of recyclable hazardous secondary 
materials annually, and hazardous waste recyclers) (``Hazardous Waste 
Facilities''), and (4) facilities currently recycling non-hazardous 
industrial waste (e.g., antifreeze) that could most easily switch or 
expand to recycling under the 2008 DSW final rule (``Non-Hazardous 
Industrial Waste Facilities'').

C. Step 3--Demographics of Potentially Affected Communities

    The third step characterized the demographics of the communities 
within a three-kilometer radius around these facilities and determined 
whether they had a larger proportion of minority and/or low-income 
individuals as compared to the nation as a whole, and as compared to 
the population in the state.\9\ The comparison was done at both at the 
community and at the population level.
---------------------------------------------------------------------------

    \9\ EPA chose a three-kilometer radius as an approximation of 
the potential area that could be affected by an acute release 
scenario (such as a fire or explosion) at a reclamation facility. 
EPA focused on the acute scenario because such a scenario posed the 
most immediate harm to public health.
---------------------------------------------------------------------------

    For the community-level analysis, the question is whether the 
communities

[[Page 44105]]

around a facility had a higher or lower percentage of minority and/or 
low-income population as compared to the comparison population (i.e., 
national or state population). In general, some communities will have a 
higher percentage than the comparison population, while some 
communities will have a lower percentage. As long at these differences 
have a regular, or uniform, distribution, they generally would not 
indicate potential for disproportionate adverse impact. However, if the 
number of communities with a higher percentage of minority and/or low-
income population is greater than that of the comparison populations, 
then there is a potential for disproportionate adverse impact. The 
higher the average differences between the potentially affected 
communities and the comparison group, the greater the potential for a 
disproportionate adverse impact.
    In the chart below, the category that consistently demonstrates the 
potential for disproportionate adverse impact are the damage case 
facilities, which is the third category of facilities identified in 
Step 2, although a few other categories indicates the potential for 
disproportionate adverse impact in a few instances.\10\ For both the 
national and the state comparison populations, more than 50 percent of 
the damage case facilities are located in communities with minority and 
low-income populations that have a higher representation than the 
comparison populations. In addition, the average difference in these 
cases (i.e., the average amount that these facilities have a higher-
than-average percentage of minorities or low-income populations) ranges 
from 6-8 percent.
---------------------------------------------------------------------------

    \10\ For the damage cases, EPA notes that demographic data is 
not necessarily matched to the temporal period associated with the 
beginning of the damage case. For example, if the damage case began 
in 1990, EPA did not examine demographics from 1990, but rather the 
demographics were from 2000.

  Community-Level Analysis of Potential Disproportionate Adverse Impacts of 2008 DSW Final Rule to Minority and
                                             Low-Income Communities
                      [Values greater than 50% indicate potential disproportionate impact]
----------------------------------------------------------------------------------------------------------------
                                                     National        National          State           State
                                                   comparison %    comparison %    comparison %    comparison %
                                                    communities     communities     communities     communities
                                                    with higher     with higher     with higher     with higher
                                                     minority       low-income       minority       low- income
                                                  representation  representation  representation  representation
                                                     (average        (average        (average        (average
                                                    difference)     difference)     difference)     difference)
----------------------------------------------------------------------------------------------------------------
Facilities that Have Notified (40 total)........            7.5%           32.5%      50.0% (IA)      64.0% (IA)
                                                        (-20.7%)         (-2.0%)          (3.1%)          (1.7%)
                                                                                      20.0% (NJ)         0% (NJ)
                                                                                        (-11.0%)         (-3.7%)
                                                                                      31.3% (PA)        50% (PA)
                                                                                         (-2.3%)          (2.6%)
Damage Case Facilities (217 total)..............             53%             65%           55.8%             69%
                                                          (8.2%)          (5.9%)          (8.2%)          (6.7%)
Hazardous Waste Facilities (2,677 total)........             42%             48%           47.9%           50.6%
                                                          (0.9%)          (1.5%)          (4.0%)          (1.8%)
Non-Hazardous Industrial Waste Facilities (25                36%             40%             36%             44%
 total).........................................         (-5.0%)         (-0.5%)        (-2.55%)         (-0.3%)
----------------------------------------------------------------------------------------------------------------

    The population-level analysis examines the demographics of the 
total potentially affected population \11\ as compared to the total 
comparison population to determine (1) whether there is a substantially 
greater probability of members in a population group of concern 
(minority or low-income) being present as compared to members of the 
comparison population, and (2) whether members of the population group 
of concern comprised a substantially greater proportion of the 
potentially affected population than the comparison populations. These 
two comparisons are referred to as (1) the Affected Population Ratio, 
and (2) the Demographic Ratio. In both cases, if the ratio is greater 
than 1.0, then there is a potential for disproportionate adverse impact 
to the population of concern, and the larger the ratio, the greater the 
disproportionality.
---------------------------------------------------------------------------

    \11\ The total affected population is the sum of each of the 
populations around all the facilities in a category.

[[Page 44106]]

   Population-Level Analysis of Potential Disproportionate Impacts of 2008 DSW Rule to Minority and Low-Income
                                                   Communities
    [Ratios greater than 1.0 indicate potential disproportionate impact to population of concern all results
                                   statistically significant (p-value <0.05)]
----------------------------------------------------------------------------------------------------------------
                                                     National        National          State           State
                                                    comparison    comparison low-   comparison    comparison low-
                                                     minority         income         minority         income
                                                    population      population      population      population
                                                     affected        affected        affected        affected
                                                    population      population      population      population
                                                       ratio           ratio           ratio           ratio
                                                    demographic     demographic     demographic     demographic
                                                       ratio           ratio           ratio           ratio
----------------------------------------------------------------------------------------------------------------
Notification Facilities (40 total)..............            0.70            1.05       1.80 (IA)       1.34 (IA)
                                                            0.76            1.04       1.76 (IA)       1.32 (IA)
                                                                                       1.02 (NJ)  0.64 (NJ) 0.65
                                                                                       1.01 (NJ)            (NJ)
                                                                                       1.46 (PA)       1.74 (PA)
                                                                                       1.47 (PA)       1.63 (PA)
Damage Case Facilities (217 total)..............            2.87            1.98            2.59            2.04
                                                            1.86            1.80            1.64            1.90
Hazardous Waste Facilities (2,677 total)........            1.90            1.39            1.94            1.47
                                                            1.80            1.50            2.04            1.83
Non-Hazardous Industrial Waste Facilities (25               1.19            1.16            1.34            1.17
 total).........................................            1.12            1.14            1.20            1.15
----------------------------------------------------------------------------------------------------------------

    The chart above shows that the population level analysis has a 
greater incidence of potential disproportionate adverse impact to 
minority and low-income populations than the community-level analysis. 
For the population-level analysis, the potential for disproportionate 
impact (i.e., ratios greater than one) occurs under all categories, 
while the community-level analysis exhibits the potential for 
disproportionate impact primarily in the damage case facility category. 
This difference can occur when the populations of those communities 
that do have a greater percentage of minority or low-income individuals 
also have a significantly higher total population than those 
communities that do not. In other words, for the categories of 
facilities, except the damage case facilities, the facilities of 
concern generally do not appear to be disproportionately located in 
minority or low-income communities. The facilities that are located in 
minority and low-income communities have the potential to adverse 
impact much larger populations than those which are not, resulting in 
an overall potential disproportionate adverse impact to minority and 
low-income populations as a whole.

D. Step 4--Other Factors That Affect Vulnerability in Potentially 
Affected Communities

    In addition to considering the potential for the 2008 DSW final 
rule to result in adverse impacts that disproportionately affect 
minority and low-income communities, the DSW environmental justice 
analysis also considers other factors that could affect the impacts of 
the rule, based on categories from EPA's interim guidance on 
incorporating environmental justice into rulemaking.\12\ Two of these 
factors are of particular concern to the 2008 DSW final rule: Ability 
to participate in the decision-making process, and multiple and 
cumulative effects.\13\
---------------------------------------------------------------------------

    \12\ U.S. EPA Interim Guidance on Considering Environmental 
Justice During the Development of an Action July 2010. http://www.epa.gov/environmentaljustice/resources/policy/considering-ej-in-rulemaking-guide-07-2010.pdf.
    \13\ The other factors are (1) susceptible populations, (2) 
unique exposure pathways, and (3) physical infrastructure. Because 
of the wide variety of locations of the facilities and the many 
different hazardous secondary materials involved, any one of these 
factors could be present at a site, but EPA does not have specific 
information on these factors being particularly associated with the 
2008 DSW final rule.
---------------------------------------------------------------------------

1. Ability To Participate in the Decision-Making Process
    A key element of environmental justice is ensuring that all people 
have an opportunity for meaningful involvement in decision-making which 
may impact them. Certain groups may not have historically participated 
in decision-making because of economic (e.g., income), social (e.g., 
language barriers, education levels, distrust of government), and 
infrastructural reasons (e.g., access to public transportation). A 
critical concern is whether, and the extent to which, communities have 
the ability to influence the types and number of regulated activities 
taking place in their community, as well as the requirements, 
conditions, and parameters under which such activities must operate 
(e.g., permit conditions). Under the 2008 DSW final rule, facilities 
claiming an exclusion must submit an initial and biennial notification 
to EPA or the state, providing general facility information and 
describing hazardous secondary material types and activities under the 
exclusion.
    However, under the 2008 DSW final rule, this information is not 
made directly available to potentially affected communities, and 
facilities and regulators are not required to solicit or consider 
community input into the decision-making process as is the case with 
RCRA-permitted facilities.\14\ Thus, by removing the RCRA permitting 
requirement for facilities that manage excluded hazardous secondary 
materials, the 2008 DSW final rule also removed one of the key 
provisions for allowing communities to participate in the regulatory 
process (at least as it concerns the management of the hazardous 
secondary materials excluded under the rule). Communities with lower 
participation levels may experience greater adverse impacts from 
environmental decision-making because their input has not been 
considered fully, particularly if competing interests are set forth 
more effectively. This effect is most likely to occur in communities 
that have traditionally been excluded from the decision-making process.
---------------------------------------------------------------------------

    \14\ Although not required, EPA has posted on the Internet a 
list of facilities that have notified under the DSW exemption. The 
most recent list can be found at http://www.epa.gov/epawaste/hazard/dsw/notify-sum.pdf.

---------------------------------------------------------------------------

[[Page 44107]]

2. Multiple and Cumulative Effects
    Minority, low-income, and indigenous communities that have been 
affected by multiple pollution sources may be at risk for increased 
health consequences. Potential sources of pollution can include, for 
example, industrial facilities, landfills, transportation-related air 
emissions, poor housing conditions (e.g., lead-based paint), leaking 
underground storage tanks, pesticides, and incompatible land uses. An 
analysis of the cumulative effects from multiple stressors can provide 
a more complete evaluation of a population's health risks from 
pollutants. For example, an analysis of discrete stressors and effects 
on a population might conclude that nearby pollution sources are within 
regulatory limits; however, an analysis of cumulative effects might 
determine that a person's collective exposure to a contaminant from 
multiple sources exceeds a health-based limit.
    An examination of the facilities that have already notified under 
the 2008 DSW final rule shows that multiple environmental hazards are a 
potential concern for communities around these facilities.\15\ All have 
multiple facilities reporting to EPA, either under RCRA, the Clean Air 
Act (CAA), or the Comprehensive Environmental Response, Compensation 
and Liability Act (CERCLA--also known as Superfund), within a three-
kilometer radius of the facility.
---------------------------------------------------------------------------

    \15\ See U.S. EPA Environmental Justice Analysis of the 
Definition of Solid Waste Rule, Section 5.2, Table 5.1.
---------------------------------------------------------------------------

E. Step 5--Assessment of Disproportionate Impact

    As discussed under Step 1 in Section VI.A. of this preamble, the 
environmental justice analysis demonstrates 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 has increased 
under the 2008 DSW final rule. Of particular concern are (1) the 
absence of required measures (e.g., weekly inspections, training, 
contingency plans, etc.) at hazardous secondary materials reclaimers to 
prevent problems (e.g., spills, fires, explosions, etc.), (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, as discussed under Step 3 in Section VI.C. of this 
preamble, some of the communities potentially impacted by this increase 
in risk of adverse impacts are minority and low-income communities, and 
in most cases the populations potentially impacted are 
disproportionately minority and/or low income. In particular, the 
population-level analysis shows a potential disproportionate impact to 
minority and low-income populations, with the damage case facilities, 
the hazardous waste facilities and the non-hazardous waste facilities 
all consistently showing potential statistically significant 
disproportionate representation in potentially affected communities. In 
addition, as discussed under Step 4 in Section VI.D. of this preamble, 
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 potential for 
multiple and cumulative effects are of particular concern.

F. Step 6--Identification of Potential Strategies To Mitigate Adverse 
Impacts

    Potential strategies to mitigate adverse impacts of the 2008 DSW 
final rule, including the disproportionate impacts to minority and low-
income communities, include both possible regulatory changes and 
implementation strategies.
1. Regulatory Changes
    Regulatory changes to the 2008 DSW final rule were made according 
to EPA's authority under RCRA to regulate discarded material. As 
discussed in the preamble to the 2008 DSW final rule, EPA used the 
concept of discard as the central organizing idea behind the October 
2008 revisions to the definition of solid waste.
    As stated in 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.'' In exercising its discretion in the 2008 
DSW final rule to define what constitutes ``discard'' for hazardous 
secondary materials reclamation in the 2008 DSW final rule, EPA 
included an explanation of how each provision of the final rule relates 
to discard (73 FR 64676-64679).
    While the concept of discard also is the central organizing 
principle in this proposed rule since EPA only has authority under RCRA 
to regulate materials that have been discarded, the Federal Register 
notice announcing the June 2009 public meeting identified areas or 
opportunities to revise the 2008 DSW final rule in ways that could 
increase environmental protection, including in environmental justice 
communities, while still appropriately defining when a hazardous 
secondary material being reclaimed is a solid waste and subject to 
hazardous waste regulation (74 FR 25202). The purpose of today's 
proposal is to provide notice and the opportunity to comment on 
potential regulatory revisions to address the potential for adverse 
impacts to human health and the environment from discarded material, 
including disproportionate impacts to minority and low income 
communities.
    In particular, the proposed withdrawal of the transfer-based 
exclusion and its replacement with an alternative Subtitle C standard 
could be one way of addressing the concerns regarding third-party 
recyclers, including the impact of longer accumulation times, the lack 
of preventative measures under the containment standard, the lack of 
public participation requirements, the lack of RCRA air standards, and 
concerns regarding certain transportation issues. In addition, the 
proposed codification of the ``contained'' standard could be one way of 
addressing the lack of preventative measures and the lack of RCRA air 
standards under the generator-controlled exclusion. The proposed 
additional recordkeeping requirements for speculative accumulation and 
legitimacy could be one way of helping ensure that hazardous secondary 
material is being legitimately recycled and not simply discarded 
through over-accumulation and abandonment, and recordkeeping under the 
tolling and same-company provisions will help ensure that the hazardous 
secondary materials meet their intended destinations. Each of these 
proposed changes are discussed in more detail in Sections VII-X of this 
preamble. EPA requests comment on whether there are additional or 
alternate regulatory approaches for addressing the potential adverse 
impacts of the 2008 DSW final rule.
2. Implementation Measures
    In addition to considering regulatory changes to address potential 
adverse impacts of the 2008 DSW final rule, EPA can take steps in 
implementing the 2008 DSW final rule that would help mitigate any 
potential adverse impacts. These steps include closely monitoring the

[[Page 44108]]

facilities notifying under the 2008 DSW final rule, making information 
about the DSW facilities available to the public, and working with the 
states and EPA Regions to ensure they have the information they need to 
ensure compliance with the provisions of the rule, and making available 
to the public information about the facilities that have notified. EPA 
has begun this process for the states and territories currently 
operating under the 2008 DSW final rule and plans to continue these 
efforts in order to help prevent potential adverse impacts at the same 
time that revisions to the rule are under consideration.

VII. Exclusion for Hazardous Secondary Materials That Are Transferred 
for the Purpose of Legitimate Reclamation

    EPA is proposing to replace the exclusion for hazardous secondary 
materials that are transferred for the purpose of legitimate 
reclamation with an alternative Subtitle C standard. EPA believes that 
such a standard would be more appropriate for hazardous secondary 
material because (1) the Agency reasonably believes (as explained in 
detail in the 2008 DSW final rule) that, absent specific conditions, 
transfers of hazardous secondary materials to third-party reclaimers 
generally involve discard, and (2) the conditions of the 2008 DSW final 
rule have serious gaps, particularly the incentives to accumulate 
larger volumes of hazardous secondary materials, the reduction in 
oversight resulting from eliminating the permit requirement for 
storage, and the reduction in the public's access to information and 
the opportunity for public participation, that could create a 
potentially unacceptable likelihood of adverse effects to human health 
and the environment from such discarded material.

A. Summary of Transfer-Based Exclusion

    The exclusion for hazardous secondary materials that are 
transferred for the purpose of legitimate reclamation, 40 CFR 
261.4(a)(24) and (25),\16\ applies to hazardous secondary materials 
(i.e., spent materials, listed sludges, and listed by-products) that 
are generated and subsequently transferred to a different person or 
company for the purpose of reclamation. As long as the conditions and 
restrictions to the exclusion are satisfied, the hazardous secondary 
materials would not be subject to the Subtitle C hazardous waste 
regulations.
---------------------------------------------------------------------------

    \16\ 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 requirements under this exclusion include that:
     Hazardous secondary material generators, reclaimers, and 
intermediate facilities (i.e., facilities that would not reclaim the 
hazardous secondary material, but would store them for more than 10 
days) must submit a notification prior to operating under the exclusion 
and by March 1 of each even-numbered year thereafter to the EPA 
Regional Administrator or, in an authorized state, to the State 
Director (see 40 CFR 260.42), reporting volumes and types of hazardous 
secondary materials being reclaimed and
     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 are found at 40 CFR 261.4(a)(24)(v) and include:
     Containment of such hazardous secondary materials,
     Reasonable efforts, a form of due diligence, to ensure 
that the intermediate facility or reclaimer intends to manage or 
recycle the hazardous secondary material properly and legitimately, and
     Retention of records of off-site shipments for three 
years.
    Conditions applicable to intermediate facilities and reclaimers of 
hazardous secondary materials are found at 40 CFR 261.4(a)(24)(vi) and 
include:
     Containment of such materials,
     Transmittal of confirmations of receipt to generators,
     Retention of records for hazardous secondary materials 
received and sent off-site,
     Financial assurance equivalent to that required of 
hazardous waste facilities, and
     (For reclaimers) proper management of any residuals 
generated from the reclamation activities.

In addition, if any of the hazardous secondary materials excluded under 
40 CFR 261.4(a)(24) are generated and then exported to another country 
for reclamation, the exporter must notify and obtain consent from the 
receiving country and file an annual report. This export requirement is 
codified in 40 CFR 261.4(a)(25).

B. EPA's Rationale for Replacing the Transfer-Based Exclusion

    The first part of the Agency's rationale for replacing the 
transfer-based exclusion is based on the fact that EPA has already 
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 
promulgated a case-specific exclusion that a hazardous secondary 
material is not a solid waste. This determination is unchanged from the 
2008 DSW final rule. As noted in the preamble to the 2008 DSW final 
rule, generators of hazardous secondary materials who do not reclaim 
these materials themselves often ship these materials to a commercial 
facility or another manufacturer for reclamation in 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 (73 FR 64675).
    This behavior of hazardous secondary materials not being managed as 
a useful product is evidenced by the results of the environmental 
problems study, found in the docket of the 2008 DSW final rule. Of the 
208 damage cases discussed in the 2008 DSW final rule, 195 (or 
approximately 94%) were from reclamation activities of off-site third-
party 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

[[Page 44109]]

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 
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).
    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 assumed that DSW conditions would operate with the same 
level of oversight as the Subtitle C hazardous waste regulations.
    Which leads to the second part of EPA's rationale for replacing the 
transfer-based exclusion. Before excluding materials that have already 
been determined to be hazardous wastes, 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, a conditional exclusion must be 
reasonably expected not to result in the excluded hazardous secondary 
material being discarded.
    As discussed in more detail in Section XIII of this preamble, 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 they are not 
solid waste. However, unlike these types of specific transfer-based 
exclusions from the definition of solid waste (found in 40 CFR 
261.4(a)), 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,\17\ but 
without specific evidence that they would work as intended (i.e., would 
not result in significant risk to human health and the environment from 
discarded materials).
---------------------------------------------------------------------------

    \17\ 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 of the Subtitle C requirements, thereby increasing the 
likelihood of compliance and decreasing the potential for risk to human 
health and the environment from discarded hazardous secondary material. 
Most important of these is the permit requirement under RCRA section 
3005, which ensures that EPA or the state has reviewed a facility's 
planned operations before waste management begins and which allows 
public participation in the environmental decision-making process under 
RCRA section 7004. Subtitle C requirements for treatment, storage, and 
disposal facilities also include a statutory provision that such 
facilities be inspected every two years under RCRA section 3008(e). 
Finally, the detailed regulatory standards for hazardous waste 
management help ensure that both the regulatory authority and the 
regulated community have the specific information they need to comply 
in such a way that meets EPA's expectations when the rule was 
promulgated. EPA has performed a detailed regulatory comparison of the 
2008 DSW final rule with the 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.\18\
---------------------------------------------------------------------------

    \18\ See Chapter 2 and Attachment A of EPA's Environmental 
Justice Analysis of the Definition of Solid Waste Rule, available in 
the docket for today's proposal.
---------------------------------------------------------------------------

    EPA has also carefully monitored the implementation of the 2008 DSW 
final rule since it came into effect in December 2008. A total of 27 
facilities are operating under the transfer-based exclusion, 23 of 
which are generators transferring off-site and 4 which are reclamation 
facilities.\19\ All four reclamation facilities are RCRA permitted. 
(There are no unpermitted reclaimers currently operating under the 
transfer-based exclusion.) Of the 23 generators operating under the 
transfer-based exclusion, 6 generators appear to have either started or 
substantially increased their recycling as a result of the 2008 DSW 
exclusions. These six generators had previously reported in their 2007 
or 2009 biennial report that they sent their solvents offsite for fuel 
blending, and then in 2009 or 2010 notified that they are sending their 
spent solvents for reclamation under the 2008 DSW final rule.\20\ To 
date, no environmental problems have been reported at facilities 
claiming the DSW exclusions. However, because all reclaimers operating 
under the transfer-based exclusion also have RCRA hazardous waste 
permits, most of the novel conditions of the transfer-based exclusion 
(e.g., reasonable efforts audits and financial assurance for 
reclamation facilities without a RCRA permit) have not been tested.
---------------------------------------------------------------------------

    \19\ Some of these facilities are also managing hazardous 
secondary materials under the generator-controlled exclusion.
    \20\ U.S. EPA, EPA's Evaluation of Data Collected from 
Notifications Submitted under the 2008 Definition of Solid Waste 
Exclusions, June 30, 2011.
---------------------------------------------------------------------------

    Based on this reconsideration of the DSW transfer-based exclusion 
conditions, EPA is now proposing that hazardous secondary materials 
transferred for the purpose of legitimate reclamation are most 
appropriately regulated under Subtitle C of RCRA. 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

[[Page 44110]]

perverse incentives of the recycling market to over-accumulate such 
hazardous secondary materials intended for recycling, resulting in 
discard of the material, indicate the need to regulate these hazardous 
secondary materials as hazardous waste, unless there is specific 
information about a hazardous secondary material or reclamation 
practice that indicates discard is not occurring. EPA is therefore 
proposing to withdraw the transfer-based exclusion found in 40 CFR 
261.4(a)(24) and (25). EPA requests comment on this withdrawal, and is 
particularly interested in any information commenters can provide about 
alternative approaches that would address the concerns regarding 
ensuring that a transfer-based exclusion does not result in significant 
risk to human health and the environmental from discarded hazardous 
secondary material (e.g., by adding more conditions, such as requiring 
the reclamation facility be inspected every five years, or by requiring 
the reclamation facility certify annually that there have been no 
releases).
    At the same time, EPA acknowledges that some specific types of 
hazardous secondary materials are more like valuable commodities than 
solid wastes, and the act of transferring them to a third-party does 
not automatically involve discard. Many of the other exclusions in 40 
CFR 261.4(a) are for these types of materials, and the non-waste 
determination process under 40 CFR 260.34(c) provides an administrative 
process for determining that additional hazardous secondary materials 
are indistinguishable from products and therefore are not waste. In 
addition, in Section XII of this preamble, EPA is requesting comment on 
a possible re-manufacturing exclusion from the definition of solid 
waste for certain higher-value hazardous secondary materials whose 
management is more like manufacturing than waste management. EPA also 
requests comment if there are other specific hazardous waste streams or 
recycling practices, that, similarly to those found in 40 CFR 
261.4(a)(6)-(21), would be most appropriately addressed through a 
conditional exclusion due to their physical or chemical properties and/
or current management practices.

VIII. Alternative Subtitle C Regulation for Hazardous Recyclable 
Materials

A. Purpose of the Alternative Subtitle C Regulatory Standards for 
Hazardous Recyclable Materials

    As discussed above, after examining the potential adverse impacts 
to human health and the environment from discarded hazardous secondary 
materials transferred to another party for reclamation, EPA is 
proposing to replace the transfer-based exclusion with an alternative 
regulatory scheme for hazardous recyclable materials transferred from 
the generator to other persons for the purpose of reclamation. EPA 
recognizes the environmental benefits of safe recycling and how 
recycling can contribute to the goal of sustainable materials 
management, and acknowledges that in some cases the additional costs of 
Subtitle C regulation can be an economic disincentive to such 
recycling. However, as discussed in Section VII above, because (1) the 
Agency reasonably believes that, absent specific conditions, transfers 
of hazardous secondary materials to third-party reclaimers generally 
involve discard, and (2) the conditions of the 2008 DSW final rule have 
serious gaps that could create a potentially unacceptable likelihood of 
adverse effects to human health and the environment from such discarded 
material, the Agency has decided to replace the transferred based 
exclusion with an alternative hazardous waste standard.
    Specifically, EPA is proposing alternative hazardous waste 
standards under 40 CFR part 266 subpart D for generators of hazardous 
recyclable materials sent for reclamation. ``Hazardous recyclable 
materials'' would be defined as hazardous waste being reclaimed. EPA is 
proposing to use this term to be consistent with other standards for 
the management of specific hazardous wastes in 40 CFR part 266, and to 
distinguish them from the ``hazardous secondary materials'' reclaimed 
under the control of the generator and excluded under 40 CFR 
261.4(a)(23). These proposed alternative standards are designed to be 
as protective as the current hazardous waste standards, but tailored to 
the specific circumstances faced by generators of hazardous waste who 
would want to send their materials to a reclaimer, but are not able to 
do so because they cannot accumulate enough hazardous waste during the 
generator accumulation time limits to make such recycling economically 
viable.
    Under these alternative standards, the hazardous recyclable 
material would, for the most part, be subject to all hazardous waste 
regulations (i.e., accumulated in Subtitle C storage units, transported 
under a hazardous waste manifest, sent to a RCRA-permitted facility or 
a facility operating under 40 CFR 261.6(c)(2)). However, in order to 
allow generators time to accumulate enough hazardous recyclable 
material to make reclamation more economical, EPA is proposing 
alternative regulatory standards that would allow hazardous recyclable 
materials to be accumulated up to one year without a permit or interim 
status (although the hazardous waste generator standards would continue 
to apply).
    To guard against the risks of over-accumulation and possible 
abandonment of hazardous recyclable materials, EPA is proposing that 
before operating under the alternative standard and by March 1 of each 
even-numbered year thereafter, a generator must notify the EPA Regional 
Administrator (or the State Director, if the state is authorized). In 
addition, before operating under the alternative standard, the 
generator must develop a reclamation plan that provides details of 
where the hazardous recyclable material will be sent for reclamation, a 
short description of the recycling process, and the estimated volume of 
materials in each shipment. Also, the generator must contact the 
reclaimer in advance and make arrangements for the recycling. In 
addition, EPA is requesting comment on setting an upper limit on the 
amount of hazardous recyclable material a generator may accumulate at 
any one time, limiting it to no more than two shipments worth of 
hazardous secondary materials (as documented in the reclamation plan) 
at any point in time. Finally, as discussed below, EPA is requesting 
comment on allowing an alternative manifest system for hazardous 
recyclable materials regulated under this provision by replacing the 
hazardous waste manifest with a ``hazardous recyclable materials 
manifest.''

B. Proposed Part 266 Standards for the Management of Hazardous 
Recyclable Material

    Under the proposed part 266 subpart D Hazardous Recyclable 
Materials standards, large quantity generators and small quantity 
generators of hazardous recyclable materials would need to meet the 
alternative requirements described below.
1. Notification
    Under the proposed alternative standards, generators would be 
required to submit a notification prior to operating under this 
standard and by March 1 of each even-numbered year thereafter to the 
EPA Regional Administrator using EPA Form 8700-12.\21\ In states 
authorized by EPA to

[[Page 44111]]

administer the RCRA Subtitle C hazardous waste program, notifications 
may be sent to the state director. The notice must include:
---------------------------------------------------------------------------

    \21\ These notification requirements are the same as those 
currently found in 40 CFR 260.42.
---------------------------------------------------------------------------

     The name, address and EPA ID number of the facility;
     The name and telephone number of a contact person;
     The NAICS (North American Industry Classification System) 
code of the facility;
     The regulatory citation under which the hazardous 
recyclable materials will be managed (i.e., 40 CFR part 266 subpart D).
     When the facility expects to begin managing the hazardous 
recyclable materials in accordance with the alternative standard;
     A list of hazardous recyclable materials that will be 
managed according to the new standard (reported as the EPA hazardous 
waste numbers that would apply if the hazardous recyclable materials 
were managed as hazardous waste);
     The quantity of each hazardous recyclable material to be 
managed annually; and
     The certification (included in EPA Form 8700-12) signed 
and dated by an authorized representative of the facility.

    EPA believes that the information requested in the notification is 
the minimum information necessary to ensure that such hazardous 
recyclable materials are managed in a manner that is protective of 
human health and the environment.
    Generators would be required to notify on a per facility basis. In 
other words, each generator facility managing hazardous recyclable 
materials would need to submit a notification form in accordance with 
the alternative standard. One notification cannot cover two or more 
generators or facilities. Furthermore, each generator need only use one 
notification form to list all of the hazardous recyclable materials to 
be managed under the exclusion at any particular facility (i.e., 
generators need not file separate notifications for each hazardous 
recyclable material). We also would require facilities that stop 
managing hazardous recyclable materials in accordance with the 
exclusion to notify the Regional Administrator (or State Director) 
using the same EPA Form 8700-12 within 30 days after ceasing to claim 
the exemption.
2. Reclamation Plan
    Prior to operating under the alternative standard, generators would 
be required to make and document advance arrangements for reclamation. 
These advance arrangements would be documented in a reclamation plan 
that (1) describes the hazardous recyclable material(s) and identifies 
the reclamation facility where the material will be sent, (2) includes 
written confirmation from the facility that they are able to reclaim 
the hazardous recyclable material (3) documents the amount of hazardous 
recyclable material expected in each shipment and the anticipated 
frequency of shipments, and (4) documents that the reclamation is 
legitimate per 40 CFR 260.43. The purpose of the reclamation plan is to 
ensure that the hazardous secondary material will be recycled 
legitimately and not over-accumulated and abandoned. The reclamation 
plan must be kept on-site for at least three years from the date the 
generator ceases to operate under the alternative standards
3. Management Standards
    Generators operating under the proposed alternative standards would 
be able to accumulate hazardous recyclable materials on site for one 
year or less without a permit or without having interim status, 
provided that they follow the usual requirements for on-site management 
of hazardous wastes by large quantity or small quantity generators, 
with the following exceptions:
    (a) While accumulated on-site, each container and tank is labeled 
or marked clearly with the words ``hazardous recyclable material,'' 
rather than being marked as ``hazardous waste.''
    (b) As noted, the allowed accumulation period will be up to one 
year, rather than 90 or 180 days, respectively.\22\
---------------------------------------------------------------------------

    \22\ Small quantity generators may accumulate hazardous waste 
on-site for up to 270 days if they transport, or offer the waste for 
transport, over a distance of 200 miles or more for off-site 
treatment, storage, and disposal.
---------------------------------------------------------------------------

    EPA believes that the combination of the requirements of the 
notification and the reclamation plan (including the provision 
mandating advance arrangements for reclamation) would be as fully 
protective as the current generator times limits of 90 days for large 
quantity generator and 180/270 days for small quantity generators, 
since the reclamation plan will help demonstrate that the hazardous 
recyclable materials are going to be recycled and not be stored 
indefinitely, and the notification provision will allow proper 
oversight of this provision.
    However, EPA also requests comment on limiting the maximum volume 
of a hazardous recyclable materials accumulated on-site at any one time 
to no more than two standard shipments to the designated facility, as 
identified in the generator's reclamation plan. Under such a 
requirement, the maximum volume would differ depending on the hazardous 
recyclable materials and where they are being transferred to, but it 
would ensure that the generator is not accumulating more than what it 
would need to make an off-site shipment economically feasible. (Setting 
the upper limit at two shipments worth would allow the generator to 
continue to accumulate hazardous recyclable materials while the first 
shipment is being prepared).
4. Transportation
    Before transporting hazardous recyclable materials or offering 
hazardous recyclable materials for transportation off-site, a hazardous 
recyclable material generator would need to meet all the applicable 
pre-transportation requirements for hazardous waste generators under 40 
CFR part 262 subparts B and C, including the need to package, label and 
placard the materials in accordance with Department of Transportation 
standards, as applicable to large or small quantity generators and 
preparing a hazardous waste manifest.
    In addition, EPA requests comment on allowing an alternative 
hazardous recyclable materials manifest. Under the alternative manifest 
system, the same requirements (e.g., filling out the manifest, 
recordkeeping and procedures for rejected shipments) and information 
would apply to hazardous recyclable materials shipped on a hazardous 
recyclable materials manifest as those that apply to the hazardous 
waste manifest, but the manifests would be labeled ``hazardous 
recyclable materials manifest.'' Such an alternative system would 
require conforming changes to 40 CFR 262.20, 262.21, 262.40(a), 262.42, 
the appendix to part 262, 263.20, 263.22, 264.71, 264.72, 265.71 and 
265.72, plus 49 CFR 171.8 (DOT regulations) and EPA would integrate 
such a system into any future e-manifest systems. EPA requests comment 
on whether an alternative manifest would benefit the regulated 
community in such a way that would be worth the additional 
administrative effort in setting up such a system.

C. Request for Comment

    EPA requests comment on the alternative standards for hazardous 
recyclable materials sent to reclamation, particularly on whether the 
longer accumulation times without requiring a hazardous waste permit or 
complying with the interim status standards and alternative designation 
of the materials as ``hazardous recyclable materials'' will

[[Page 44112]]

help encourage legitimate reclamation. EPA notes that although the 
materials would be labeled as ``hazardous recyclable materials,'' they 
would be, by definition, still hazardous wastes and, per 40 CFR 261.5, 
would count towards a facility's generator status (e.g., Large Quantity 
Generator, Small Quantity Generator). EPA requests comment on this 
issue.
    In developing this proposed alternative standard, EPA also 
considered whether there were other areas, besides longer accumulation 
times, alternative labeling, and hazardous recyclable material 
manifests, where alternative standards for generators would help 
encourage safe and legitimate recycling of hazardous recyclable 
materials. Below is a discussion of the other major areas of the 
generator standards. EPA requests comment on whether there are other 
aspects of the hazardous waste generator standards where an alternative 
standard for hazardous recyclable material generators would pose no 
significant risk to human health and the environment from discarded 
materials and would also promote increased recycling.
1. Storage Standards
    Under the proposed alternative standards, generators must meet the 
same design, operating, inspection, and closure standards (including 
air emission standards) for containers, tanks, containment buildings, 
and drip pads as they would under the hazardous waste regulations. One 
alternative would be to replace these standards with the containment 
standards proposed for generators operating under the generator-
controlled exclusion at Sec.  261.4(a)(23). Under that proposed 
provision, a hazardous secondary material is contained if it is managed 
in a unit, including a land-based unit as defined in Sec.  260.10, that 
meets the following criteria: (1) The unit is in good condition, with 
no leaks or other continuing or intermittent releases of hazardous 
secondary materials to the environment, and is designed, as 
appropriate, 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 
groundwater, wind-blown dust, fugitive air emissions, and catastrophic 
unit failures; (2) a unit that is properly labeled or otherwise has a 
system (such as a log) to immediately identify the hazardous secondary 
materials in the unit; and (3) a unit that does not hold incompatible 
materials and addresses any potential risks of fires or explosions.
    EPA solicits comment on whether such a containment standard would 
help encourage generators to recycle, while posing no significant risk 
to human health and the environment from discarded materials.
2. Manifest
    As discussed earlier, EPA is requesting comment on allowing a 
hazardous recyclable materials manifest as an alternative to the 
hazardous waste manifest. Another option may be to use basic shipping 
records to document off-site shipments of the hazardous recyclable 
materials. This approach would be similar to how universal wastes are 
managed under streamlined hazardous waste regulations. However, EPA 
notes that two of the factors used to determine if a waste is 
appropriate to be considered a universal waste is if the risk posed by 
the waste during accumulation and transport is relatively low compared 
to other hazardous wastes, and whether the quantities generated by each 
generator are relatively small (see 40 CFR 273.81).
3. Personnel Training, Contingency Plan, and Emergency Procedures
    Under the proposed alternative standards, large quantity generators 
must meet the same personnel training, contingency plan and emergency 
procedures as they would under the hazardous waste requirements. One 
alternative could be to apply standards similar to the small quantity 
generator requirements for management of hazardous recyclable materials 
by hazardous recyclable material generators. Small quantity generator 
requirements for personnel training, contingency planning and emergency 
procedures may be particularly appropriate if EPA also, as discussed 
above, applies a limit to the maximum amount of hazardous recyclable 
materials accumulated on-site at any one time. These reduced 
requirements may be appropriate if the maximum quantity of hazardous 
recyclable materials is limited because of the decreased risks 
associated with smaller quantities of materials present at any point in 
time.
4. Biennial Report
    Under RCRA Subtitle C, large quantity generators of hazardous waste 
must submit biennial reports to their regulatory authority that 
describe the type and quantity of hazardous waste generated, as well as 
how the waste was managed (among other information). However, a 
biennial reporting requirement may be duplicative of the requirement 
for generators of hazardous recyclable materials to renotify in 
compliance with 40 CFR 260.42, which also requires generators to report 
the type and quantity of hazardous secondary materials generated and 
reclaimed. Eliminating the biennial reporting requirement may avoid 
duplication in reporting and reduce paperwork burden on generators of 
hazardous recyclable materials. EPA requests comment on using the 
renotification in lieu of requiring biennial reports.

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

A. Summary of Current Exclusion

    In the 2008 DSW final rule, EPA excluded from the definition of 
solid waste those hazardous secondary materials that are legitimately 
reclaimed under the control of the generator, provided the materials 
are contained in the units in which they are stored, are not 
speculatively accumulated, and are reclaimed within the United States 
or its territories. Under the 2008 DSW final rule, the generator must 
also periodically notify EPA or the authorized state (as discussed 
previously) that it is operating under the exclusion. The regulatory 
provision excluding hazardous secondary materials under the control of 
the generator that are managed in land-based units is currently found 
at 40 CFR 261.4(a)(23), while the provision excluding such materials 
that are managed in non-land-based units is currently found at 40 CFR 
261.2(a)(2)(ii). A land-based unit is defined in 40 CFR 260.10 as an 
area where hazardous secondary materials are placed in or on the land 
before 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.
    The definition of ``hazardous secondary material generated and 
reclaimed under the control of the generator'' is currently found at 40 
CFR 260.10. Hazardous secondary materials are considered ``under the 
control of the generator'' under the following circumstances:
     They are generated and then reclaimed at the generating 
facility; or
     They are generated and reclaimed at different facilities, 
if the generator certifies that the hazardous secondary

[[Page 44113]]

materials are sent either to a facility controlled by the generator or 
to a facility under common control with the generator, and that either 
the generator or the reclaimer has acknowledged responsibility for the 
safe management of the hazardous secondary materials; or
     They are generated and reclaimed pursuant to a written 
agreement between a tolling contractor and toll manufacturer, if the 
tolling contractor certifies that it has entered into a tolling 
contract with a toll manufacturer and that the tolling contractor 
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.
    Under this provision, the hazardous secondary materials must be 
contained, whether they are stored in land-based or non-land-based 
units. The materials are also subject to the speculative accumulation 
requirements of 40 CFR 261.1(c)(8), as well as the provisions for 
legitimate recycling at 40 CFR 260.43. Finally, under 40 CFR 260.42, 
the generator (and the reclaimer, if the generator and reclaimer are 
located at different facilities) must send a notification prior to 
operating under the exclusion and by March 1 of each even-numbered year 
thereafter to the EPA Regional Administrator or, in an authorized 
state, to the State Director.
    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. When 
reclaimed under the control of the generator, the hazardous secondary 
materials are being handled as a valuable commodity rather than a 
waste. However, if such hazardous secondary materials are released into 
the environment and are not recovered for legitimate recycling 
immediately, they have been discarded (i.e., are solid and hazardous 
wastes) and the generator is subject to all applicable Federal and 
state regulations, as well as applicable cleanup authorities. (See 73 
FR 64680, October 30, 2008 for a more detailed discussion of the 
generator-controlled exclusion.)

B. Proposed Changes to Generator-Controlled Exclusion

    As discussed in Section V.I.2 of today's proposal, EPA is not 
proposing to withdraw the generator controlled exclusion. In the 2008 
DSW final rule, EPA determined that if the generator maintains control 
over the recycled hazardous secondary materials and if the materials 
are legitimately recycled under the standards established in the final 
rule and not speculatively accumulated within the meaning of EPA's 
regulations, then the hazardous secondary materials are not discarded. 
This is because the hazardous secondary materials are being treated as 
a valuable commodity rather than as a waste. By maintaining control 
over, and potential liability for, the reclamation process, the 
generator ensures that the hazardous secondary materials are not 
discarded (see 73 FR 64676). EPA has not received any information that 
would cause the Agency to reverse this determination, and this 
continues to be the underlying rationale for the generator-controlled 
exclusion.
    However, EPA does believe that revisions to the generator-
controlled exclusion are needed in order to ensure that it operates as 
intended and does not result in discarded hazardous secondary material 
posing a significant risk to human health and the environment. The 
proposed changes are in five areas: (1) The contained standard, (2) 
notification as a condition, (3) recordkeeping for speculative 
accumulation, (4) recordkeeping for the tolling provision, and (5) 
clarifying edits to the regulatory text. In each of the five areas, the 
proposed changes are intended to improve the implementation of the 
generator-controlled exclusion to ensure that it is correctly 
functioning to only exclude hazardous secondary material that is not 
discarded.
1. Contained Standard
    Under the generator-controlled exclusion, hazardous secondary 
materials must be contained, regardless of whether they are stored in 
land-based units or non-land-based units. The contained standard is a 
key provision for determining that a hazardous secondary material is 
not discarded. Hazardous secondary materials that are not contained and 
are instead released to the environment are not destined for recycling 
and are clearly discarded. In today's proposed rule, EPA is retaining 
the ``contained'' condition based on the same rationale used in the 
2008 DSW final rule, but is adding a regulatory definition of contained 
to make it easier for implementing agencies and 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 such 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 
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.
    In the same preamble, EPA also discussed the issue of releases to 
the environment from stored hazardous secondary materials and when such 
materials could be considered ``contained.'' We stated that in the 
event of a release to the environment, the hazardous secondary 
materials remaining in the unit may or may not meet the terms of the 
exclusion, and specifically stated that such hazardous secondary 
materials would be considered wastes if a ``significant'' release 
occurred as a result of its not being managed as a valuable raw 
material, intermediate, or product, including storing acidic materials 
in a tank not suitable for such materials or failure to monitor the 
structural integrity of a tank, resulting in releases. If these 
releases were not immediately recovered, they would be considered 
discarded and, if hazardous, subject to the appropriate Federal or 
state regulations and applicable authorities. The Agency also noted 
that a ``significant'' release is not necessarily large in volume. For 
example, unaddressed small releases to the environment could cause 
significant damage over time and, if the hazardous secondary materials 
are managed in such a way that such unaddressed releases are likely to 
continue, the hazardous secondary materials still remaining in the unit 
could be considered discarded because they were not being managed as a 
valuable raw material, intermediate, or product.
    Conversely, the Agency also said that a unit in good condition 
could experience small releases resulting from normal operations of the 
facility, or a released material could be captured by secondary 
containment before being released to the environment. In those cases, 
the unit would retain its exclusion from the RCRA hazardous waste 
regulations and the hazardous secondary material in the unit would 
still be excluded from the definition of solid waste, even though any 
such materials that had been released would be considered discarded if 
not immediately recovered and would be subject to appropriate 
regulation.
    EPA did not finalize a regulatory definition of ``contained,'' nor 
did the 2008 DSW final rule impose specific performance or storage 
standards. In response to comments on the 2007 DSW supplemental 
proposal suggesting such specific standards, EPA stated its belief that 
such detailed measures were unnecessary for hazardous secondary

[[Page 44114]]

materials that are handled as valuable products and are destined for 
recycling. Rather, in the Agency's view at that time, regulatory 
authorities could determine whether such hazardous secondary materials 
were contained by considering site-specific circumstances (such as 
local conditions) and measures employed by the facility (such as 
liners, leak detection measures, and monitoring) to determine whether 
the hazardous secondary materials were contained in a storage unit.
    Since implementation of the 2008 DSW final rule, the Agency has 
reconsidered its position about whether a regulatory definition of 
``contained'' might be necessary for hazardous secondary materials 
managed under the control of the generator. EPA has received a 
considerable number of inquiries from state authorities and the 
regulated community about how to determine if a hazardous secondary 
material is contained. In particular, there have been many questions 
about when a release is ``significant'' and when hazardous secondary 
materials remaining in a unit that has suffered a release should be 
considered discarded.
    Of particular concern is the lack of preventative measures in the 
contained standard in the 2008 DSW final rule, which is noted as a 
major regulatory gap in the environmental justice analysis discussed in 
Section VI of this preamble. As noted above, EPA did not provide 
specific guidance on which types of units would be considered as 
adequately containing a hazardous secondary material. In the 2008 DSW 
final rule preamble, only the absence of containment, i.e., a release 
to the environment, is discussed, and even then the confusion over 
whether a release is ``significant'' makes proper implementation of the 
contained standard problematic.
    Given that the contained standard is one of the major requirements 
for determining that hazardous secondary materials reclaimed under the 
generator-controlled exclusion are not discarded, this lack of 
specificity has the potential to 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 has considered 
whether adding a regulatory definition of ``contained'' could resolve 
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.
    For these reasons, EPA is today proposing to amend 40 CFR 260.10 to 
include a regulatory definition of ``contained.'' Under today's 
proposal, a hazardous secondary material is contained if it is managed 
in a unit, including a land-based unit as defined in Sec.  260.10, 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. Such 
releases may include, but are not limited to, releases through surface 
transport by precipitation runoff, releases to 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 does not hold incompatible materials 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 are considered to be contained.
    This 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 being discarded. We note that the criteria in proposed 40 CFR 
261.4(a)(23)(i) are all measures 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 that 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 appropriateness of specific 
measures undertaken to ensure a hazardous secondary material is 
contained would depend on the material in the unit. For example, in the 
case of land-based piles of hazardous secondary materials in the form 
of fine particulate matter, a covering to prevent wind-blown dust could 
demonstrate that the unit was designed to prevent releases of such 
materials. On the other hand, land-based piles of hazardous secondary 
materials in the form of scrap metal that is unlikely be carried off by 
the wind would not need a covering to be considered contained.
    If these criteria were not met and a release of the hazardous 
secondary materials subsequently occurred that was not immediately 
recovered, the materials remaining in the unit would be considered 
solid and hazardous wastes and the unit would be subject to the 
appropriate hazardous waste regulations.
    Also, to clarify the regulatory status of units from which releases 
have occurred, the Agency is also proposing to add to 40 CFR 
261.4(a)(23) the following: (1) A hazardous secondary material released 
to the environment is discarded and a solid waste unless it is 
immediately recovered for the 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.
    In the preamble to the 2008 DSW final rule, EPA referred to 
``significant'' releases as the criterion to determine whether 
hazardous secondary materials remaining in the unit should be 
considered wastes. We believe that today's proposed codification better 
expresses our intent that all releases are of potential concern. 
However, under today's proposal, in the event of a release from a unit 
to the environment, the hazardous secondary materials that remain in 
the unit could still meet the terms of the exclusion, as long as the 
other provisions of the containment definition are met. A single 
release that is quickly addressed would not generally affect the 
regulatory status of the hazardous secondary materials still contained 
in the unit. Sometimes a material may escape from primary containment 
and may be captured by secondary containment or some other mechanism 
that would prevent the hazardous secondary 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 would be 
considered discarded if not immediately recovered for reclamation and 
would be subject to appropriate regulation.
    EPA also notes that certain units may be subject to occasional 
precipitation runoff that consists essentially of water, with trace 
amounts of hazardous constituents. For example, precipitation runoff 
containing trace amounts of metals may occur from units storing

[[Page 44115]]

furnace bricks collected from production units and stored on the ground 
in walled bins before being used as feedstocks in the metals production 
process. Similarly, metal components from fired ammunition or other 
scrap metal are sometimes stored on the ground before being sent for 
recycling, and precipitation may run off from this unit. As long as 
such runoff does not contain hazardous secondary material (e.g., it is 
essentially rainwater with trace amounts of metals), it would not be 
considered a ``release of hazardous secondary material.'' Therefore, 
the runoff would not cause the land-based units to be subject to 
Subtitle C controls. 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.
    A unit that has had a release of hazardous secondary materials and 
is likely to have one in the future (as demonstrated by not meeting the 
three factors in the standard) \23\ is not ``contained'' and is 
therefore a solid waste and the unit would be subject to Subtitle C 
regulation. In order to determine whether a unit that has had a release 
is likely to suffer future releases, the regulatory authorities should 
consider all the factors in proposed 40 CFR 261.4(a)(23)(i). The Agency 
believes that this procedure is more likely to provide effective 
guidance to regulatory authorities and the regulated community than the 
current criterion of ``significant.''
---------------------------------------------------------------------------

    \23\ The unit (which can include a land-based unit such as a 
pile) must meet the following three criteria: (1) The unit is in 
good condition with no leaks or other continuing or intermittent 
releases of 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. Such releases may include, but are not limited to, 
releases through surface transport by precipitation runoff, releases 
to 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 material in the unit; and (3) the unit does not 
hold incompatible materials and addresses any potential risks of 
fires or explosions.
---------------------------------------------------------------------------

    EPA notes that under today's proposal, this definition of 
``contained'' would apply to both land-based units and non-land-based 
units under the generator-controlled exclusion. For the reasons 
explained in section IX.B.5 of this preamble, EPA is proposing to place 
all requirements for both types of units in 40 CFR 261.4(a)(23).
    The Agency solicits comment on whether the proposed changes to 40 
CFR 261.4(a)(23)(i) will be effective in improving the implementability 
and enforceability of the ``contained'' requirement, and on whether 
additional requirements might be needed to achieve this end, or to 
ensure the hazardous secondary material is not discarded. We also 
request comment on whether the proposed regulatory definition of 
``contained'' allows sufficient flexibility to regulatory authorities 
to evaluate site-specific circumstances that might be relevant to 
whether a hazardous secondary material could be considered discarded.
2. Notification
    a. Summary. Under 40 CFR 260.42, hazardous secondary material 
generators, tolling contractors, toll manufacturers, intermediate 
facilities, and reclaimers managing hazardous secondary materials under 
40 CFR 261.2(a)(2)(ii), 261.4(a)(23), (24), or (25), are required to 
submit a notification prior to operating under these exclusions and by 
March 1 of each even-numbered 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 intent of the notification requirement is to provide basic 
information to the regulatory agencies about who will be managing 
hazardous secondary materials under the exclusion. The specific 
information included in the notification requirement enables regulatory 
agencies to monitor compliance and to ensure that the hazardous 
secondary materials are managed according to the exclusion and not 
discarded. Notification information is collected in EPA's RCRAInfo 
database, which is the national repository of all RCRA Subtitle C site 
identification information, whether collected by a state authority or 
EPA. As explained in the 2008 DSW final rule, EPA believes our 
authority to request such information is inherent in our authority to 
determine whether a material is discarded. We consider this to be the 
minimum information needed to enable credible evaluation of the status 
of hazardous secondary materials under section 3007 of RCRA and to 
ensure that the terms of the exclusions are being met by generators and 
reclaimers. EPA continues to support the underlying rationale outlined 
in the 2008 DSW final rule for the need to collect this information. 
(See 73 FR 64682, October 30, 2008, for a more detailed discussion of 
our authority to collect this information.)
    As codified, the requirement to provide this notification is not a 
condition of the exclusions. Thus, although failure to comply with the 
requirement constitutes a violation of RCRA, it does not affect the 
excluded status of the hazardous secondary material.
    b. Proposed changes. We are proposing today to make the 
notification provision in 40 CFR 260.42 a condition of the generator-
controlled exclusion in 40 CFR 261.4(a)(23).
    In the 2009 Federal Register notice announcing the June 2009 DSW 
public meeting, EPA listed as an issue for discussion whether 
notification should be a condition, rather than a requirement, of the 
exclusions. A number of commenters weighed in on both sides of this 
issue. On one hand, commenters stated that keeping notification as a 
requirement would create an unintended incentive for hazardous 
secondary material generators, intermediate facilities and reclaimers 
not to notify, because those who chose not to notify would likely evade 
oversight for many years and, if caught, could simply regard the 
violation as a ``paperwork violation,'' and regard the possible penalty 
for that violation as a cost of doing business. These commenters also 
argued that the failure of a hazardous secondary material generator, 
intermediate facility or reclaimer to provide notification is a strong 
indication that these entities are either unaware of or trying to 
circumvent the regulatory requirements. In both cases, these actions 
potentially increase the likelihood for environmental damage. 
Therefore, failure to notify should be regarded as more serious than a 
reporting violation and should remove the excluded status of the 
hazardous secondary materials.
    Conversely, some commenters supported maintaining notification as a 
requirement, arguing that if an entity fails to notify, it does not 
necessarily indicate that the hazardous secondary materials were 
discarded and, therefore, should not automatically affect the excluded 
status of such materials.
    At issue here are not the specifics of the notification in 40 CFR 
260.42, but rather the consequences an entity would face for failing to 
notify. Thus, if notification is a requirement under the authority of 
RCRA section 3007 of the exclusion, it means that failure to notify 
would constitute a violation of the notification regulations. On the 
other hand, if notification is a condition of the exclusion, it means 
failure to notify

[[Page 44116]]

would potentially result in the loss of the exclusion for the hazardous 
secondary materials (i.e., the hazardous secondary materials would 
become solid and hazardous wastes and subject to full Subtitle C 
regulation).
    In the 2008 DSW final rule, EPA considered the notification 
requirement as providing basic information to regulatory authorities, 
but determined that notification, in and of itself, did not allow 
regulatory authorities to directly determine that hazardous secondary 
materials were discarded. In other words, a generator or intermediate 
facility/reclaimer could fail to notify yet still be legitimately 
reclaiming (or storing the material prior to reclamation) their 
hazardous secondary materials according to the conditions of the 
exclusion (73 FR 64739, October 30, 2008).
    However, the notification provision is also the only formal 
indication of a facility's intent to reclaim a hazardous secondary 
material under the conditional exemption and not 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 could indicate that the hazardous secondary material may 
be mismanaged.
    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. Notification is important for 
informing regulators and the public about hazardous secondary materials 
activity and, without such notification, regulators are unable to 
effectively monitor compliance. Additionally, state commenters have 
argued that enforcement discretion is commonly used to distinguish 
between the unintentional administrative oversight of ``not notifying'' 
and a blatant attempt at evading enforcement. Making notification a 
condition of the exclusion provides states the ability to properly 
enforce against this latter group, while leaving the flexibility to 
tailor enforcement in appropriate cases. EPA is therefore proposing 
today to make the notification provision in Sec.  260.42 a condition of 
the generator-controlled exclusion in Sec.  261.4(a)(23). Additionally, 
we are also requesting comment on making notification a condition of 
the re-manufacturing exclusion and of the other recycling exclusions 
and exemptions (see Section XII ``Request for Comment on Re-
manufacturing Exclusion'' and Section XIII ``Request for Comment on 
Revisions to Other Recycling Exclusions and Exemptions'').
3. Recordkeeping for Speculative Accumulation
    In addition to the containment provision, hazardous secondary 
materials that are generated and legitimately reclaimed under the 
control of the generator are subject to the speculative accumulation 
provisions of 40 CFR 261.1(c)(8). If these hazardous secondary 
materials are speculatively accumulated, they are considered discarded. 
EPA did not propose changes to the speculative accumulation provisions 
in the March 26, 2007, DSW proposal and has not reopened any 
substantive provision of the speculative accumulation requirement.
    However, since implementation of the 2008 DSW final rule, EPA has 
received questions from regulatory authorities about enforcement of the 
speculative accumulation requirement. In particular, enforcement 
personnel have suggested that ease of enforcement would be 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 storage time limits of 40 CFR 261.4(a)(23)(iii) and 
40 CFR 261.1(c)(8).
    EPA agrees with this suggestion and is therefore proposing to amend 
40 CFR 261.4(a)(23)(iii) to require persons operating under the 
generator-controlled exclusion to place a label on the storage unit 
indicating the first date that the excluded hazardous secondary 
material began to be accumulated. In cases where placing a label on the 
storage unit is not practicable (e.g., if materials are stored in a 
surface impoundment), we are proposing as an alternative to amend 40 
CFR 261.4(a)(23)(iii) to require persons operating under the generator-
controlled exclusion to document in an inventory log the first date 
that the excluded hazardous secondary material began to be accumulated. 
EPA also notes that we are not proposing any changes or otherwise 
reopening the substantive requirements of the speculative accumulation 
condition.
    The Agency notes that placing labels on storage units or entering 
accumulation start dates in inventory logs is likely to already be part 
of normal business operations at many facilities. For this reason, we 
believe that this proposed requirement is not unduly burdensome and 
will provide a greater degree of clarity and certainty both to the 
regulated community and to regulatory authorities who are trying to 
determine when excluded hazardous secondary materials began to be 
accumulated. EPA solicits comment on whether this proposed requirement 
will be effective in meeting this goal and on whether other methods of 
measuring storage durations and/or identifying start dates would be 
equally effective (such as a requirement to post accumulation start 
dates in storage areas, within a specified number of feet of the 
storage unit).
    As proposed, this recordkeeping provision would only apply to the 
exclusion under 40 CFR 261.4(a)(23). However, the same arguments for 
tracking accumulation start dates could be made more broadly for all 
recycling subject to the speculative accumulation limits. Thus, EPA is 
also requesting comment on whether to add this recordkeeping 
requirement to the speculative accumulation provision in 40 CFR 
261.1(c)(8) itself.
4. Tolling Provision
    Under the 2008 DSW final rule, hazardous secondary materials are 
eligible for the generator-controlled exclusion if they are generated 
and reclaimed pursuant to a written agreement between a tolling 
contractor and toll manufacturer, if the tolling contractor certifies 
that it has entered into a contract with a toll manufacturer and that 
the tolling contractor retains ownership of, and responsibility for, 
the hazardous secondary materials generated during the course of the 
manufacture, including any releases of hazardous secondary materials 
that occur during the manufacturing process.
    For purposes of this exclusion, a tolling contractor is a person 
who arranges for the production of a product or intermediate made from 
specified unused materials through a written

[[Page 44117]]

contract with a toll manufacturer. The toll manufacturer is the person 
who produces a product or intermediate made from specified unused 
materials pursuant to a written contract with a tolling contractor. 
Under the 2008 DSW final rule, the tolling contractor must certify that 
it has a written contract with the toll manufacturer to manufacture a 
product or intermediate made from specified unused materials, and that 
the tolling contractor will reclaim the hazardous secondary materials 
generated during the manufacture of the product or intermediate. The 
tolling contractor must also certify that it retains ownership of, and 
liability for, the hazardous secondary materials that are generated 
during the course of the manufacture, including any releases of 
hazardous secondary materials that occur during the manufacturing 
process at the toll manufacturer's facility. This certification should 
be made by an official familiar with the terms of the written contract 
and should be retained at the site of the tolling contractor.
    However, there were no requirements to keep records of shipments of 
hazardous secondary materials sent or received pursuant to the written 
contract between the tolling contractor and the tolling manufacturer. 
Since implementation of the final rule, the Agency has received 
inquiries from regulatory authorities regarding the enforceability of 
the tolling provision. These authorities believe that it would be 
easier to determine if tolling contractors and manufacturers were in 
compliance with the requirements for the tolling exclusion if records 
were kept of these shipments. The Agency agrees with these suggestions 
and is therefore proposing to amend 40 CFR 261.4(a)(23)(ii) to add a 
recordkeeping requirement for tolling contractors and manufacturers.
    The proposed language would require the tolling contractor to 
maintain at its facility for no less than three years records of all 
hazardous secondary materials received pursuant to the 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 all hazardous secondary materials shipped pursuant to its 
written contract with the tolling contractor. In both cases, the 
records must contain the name of the transporter, the date of the 
shipment, and the 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 solicits comment on whether this 
proposed requirement would make the exclusion for hazardous secondary 
materials generated pursuant to a tolling contract easier to enforce. 
We also solicit comment on other information which would be appropriate 
for the recordkeeping requirements.
    While not specifically raised by regulatory authorities, the same 
question of enforceability could be raised if a hazardous secondary 
material is generated and reclaimed at different facilities where both 
facilities are under the control of the generator. Therefore, EPA also 
solicits comments on whether the recordkeeping requirement should also 
apply to hazardous secondary materials reclaimed off-site at the same 
company under 40 CFR 261.4(a)(23).
    Furthermore, the Agency is also soliciting comment on whether the 
specific tolling exclusion for hazardous secondary materials generated 
and reclaimed under the control of the generator should be retained or 
eliminated. We note that since implementation of the 2008 DSW final 
rule, no facilities have notified that they are operating under the 
tolling exclusion, which, in any event, applies only to a small subset 
of generators and reclaimers. The definitions under this exclusion 
(with its attendant certifications) are complicated and involve 
applying the exemption to companies other than the original generators 
and relying on contractual commitments to ensure generator control. If 
the exclusion is going to be only infrequently utilized, while possibly 
adding some additional risks of discard, it might be better for both 
the regulated community and regulatory authorities if it were not part 
of the exclusions granted to hazardous secondary materials generated 
and reclaimed under the control of the generator. Instead, persons 
operating under tolling arrangements would be eligible for the proposed 
alternative hazardous waste regulations for hazardous recyclable 
materials transferred to a third-party for reclamation. These proposed 
alternative regulations are discussed in Section VIII of this preamble. 
If this approach were finalized, there would be no need for definitions 
and certifications that are specific to tolling arrangements. On the 
other hand, the tolling contractor conducting the reclamation might 
need to obtain a RCRA storage permit. Toll manufacturing can be an 
efficient method for material production and the Agency does not wish 
to unnecessarily discourage sustainable reclamation practices under 
these arrangements. EPA requests comment on the likelihood and extent 
to which generators expect to rely on toll manufacturing arrangements 
and on the risks and benefits of including tolling arrangements in our 
proposed alternative regulatory scheme, or on maintaining their 
eligibility under the generator-controlled exclusion.
5. Other Changes
    The Agency is also proposing a number of structural changes to the 
regulations in the 2008 DSW final rule in order to make the generator 
controlled exclusion simpler and easier to understand. In the 2008 DSW 
final rule, the requirements for non-land-based units operating under 
the generator-controlled exclusion were found at 40 CFR 
261.2(a)(2)(ii), while the requirements for land-based units operating 
under the same exclusion were found at 40 CFR 261.4(a)(23). Since the 
requirements for the two types of units are identical, we believe that 
all the requirements for units operating under the control of the 
generator should be placed in one regulatory provision. We are 
therefore proposing to move the requirements listed in 40 CFR 
261.2(a)(2)(ii) to 40 CFR 261.4(a)(23). We believe this will provide 
more clarity and transparency to all users of the regulations.\24\
---------------------------------------------------------------------------

    \24\ In making this change, we are still keeping the definition 
for land-based operating units since the notification requirement at 
40 CFR 260.42 still will request whether or not the unit managing 
the hazardous secondary material is a land-based operating unit or a 
non-land-based operating unit.
---------------------------------------------------------------------------

    Another proposed change concerns the definitions of terms 
applicable to the generator-controlled exclusion. In the 2008 DSW final 
rule, these definitions (including certification requirements) were 
found in 40 CFR 260.10. We are proposing today to move these 
definitions to 40 CFR 261.4(a)(23). We believe that placing all 
definitions applicable to the generator-controlled exclusion together 
with the requirements for that exclusion in the same regulatory section 
will make it easier to locate and understand this exclusion in a single 
reading.

X. Revisions to the Definition of Legitimacy

A. Summary of Current Definition of Legitimacy

    Under the RCRA Subtitle C definition of solid waste, certain 
hazardous secondary materials, if recycled, are not solid wastes and, 
therefore, are not subject to RCRA's ``cradle to grave'' management 
system. The basic idea

[[Page 44118]]

behind this principle is that recycling of these hazardous secondary 
materials often closely resembles industrial manufacturing rather than 
waste management. However, due to the economic incentives for managing 
hazardous secondary materials outside the RCRA Subtitle C regulatory 
system, there is a potential for some handlers to claim that they are 
recycling the hazardous secondary materials when, in fact, they are 
conducting waste treatment and/or disposal.
    To guard against this, EPA has long articulated the need to 
distinguish between legitimate (i.e., true) recycling and sham 
recycling, beginning with the preamble to the 1985 regulations that 
discussed the definition of solid waste (50 FR 638, January 4, 1985) 
and continuing through the 2008 DSW final rule. The legitimacy 
provision that is required for the definition of solid waste final 
exclusions and non-waste determinations promulgated in the 2008 DSW 
final rule (40 CFR 260.43) is designed to distinguish between real 
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. This provision is 
substantively the same as the Agency's long-standing policy that has 
been expressed in our earlier preamble discussions and policy 
statements. The legitimacy provision applicable to these exclusions and 
non-waste determinations is based on the 2003 DSW proposal, the 2007 
DSW supplemental proposal, the 2008 DSW final rule, and all relevant 
information available to EPA as contained in the rulemaking record for 
the 2008 DSW final rule. The preamble to the 2008 DSW final rule 
contains the operative discussion on the four legitimacy factors that 
should be used when making legitimate recycling determinations.
    In the 2008 DSW final rule, hazardous secondary materials that are 
not legitimately recycled are discarded materials and, therefore, are 
solid wastes (40 CFR 260.43). This provision also states that any 
facility claiming an exclusion at Sec.  261.2(a)(2)(ii), Sec.  
261.4(a)(23), Sec.  261.4(a)(24), or Sec.  261.4(a)(25) or using a non-
waste determination at Sec.  260.30(d) or (e) must be able to 
demonstrate that its recycling activity is legitimate.
    The structure of the legitimacy standard in the 2008 DSW final rule 
has two parts. The first part includes a 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 is valuable. 
These two factors make up the core of legitimacy and, therefore, a 
process that does not conform to them cannot be a legitimate recycling 
process, but would be considered sham recycling.
    The second part of legitimacy in the 2008 DSW final rule includes 
two factors that must be considered, but not necessarily met, when a 
recycler is making a legitimacy determination. That is, EPA believed 
that these two factors that must be considered when making a legitimacy 
determination did not always need to be met. This was because the 
Agency is aware of a few situations in which a legitimate recycling 
process does not conform to one or both of these two factors, yet the 
reclamation activity would still be considered legitimate.
    EPA did not believe that this will be a common occurrence, but in 
recognition that legitimate recycling may still occur in these 
situations, EPA promulgated the factors that address the management of 
the hazardous secondary materials and the presence of hazardous 
constituents in the product of the recycling process as factors that 
must be considered in the overall legitimacy determination, but not 
factors that must always be met.
    Following is a summary of the four legitimacy factors that were 
codified in the 2008 DSW final rule. The preamble to the 2008 DSW final 
rule includes a lengthy discussion of the four legitimacy factors that 
is the operative discussion for making legitimate recycling 
determinations (73 FR 64700, October 30, 2008).

Summary of the Four Factors in the 2008 DSW Final Rule

    Factor 1--Useful Contribution: ``Legitimate recycling must involve 
a hazardous secondary material that provides a useful contribution to 
the recycling process or to a product of the recycling process * * * 
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'' 
(40 CFR 260.43(b)(1)).
    This factor expresses the principle that hazardous secondary 
materials should contribute value to the recycling process. This factor 
is an essential element to legitimate recycling because real recycling 
is not occurring if the hazardous secondary materials being added or 
recovered do not add anything to the process or recycled product. This 
factor is intended to prevent the practice of adding hazardous 
secondary materials to a manufacturing operation simply as a means of 
disposing of them, or of recovering only small amounts of a 
constituent, both of which EPA would consider sham recycling. For 
hazardous secondary materials to meet this factor, not every 
constituent or component of the hazardous secondary material has to 
make a contribution to the recycling activity. 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.
    Factor 2--Valuable Product or Intermediate: ``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'' (40 CFR 260.43(b)(2)).
    This factor expresses the principle that the product or 
intermediate 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. This factor is an essential element of the concept 
of legitimate recycling because recycling cannot be occurring if the 
product or intermediate of the recycling process is not of use to 
anyone and, therefore, is not a real product. This factor is intended 
to prevent the practice of running hazardous secondary materials 
through an industrial process for the purpose of avoiding the costs of 
hazardous waste management, rather than for the purpose of using the 
product or intermediate of the recycling activity. Such a practice 
would be sham recycling.
    Factor 3--Managed as a Valuable Commodity: ``The generator and the 
recycler should manage the hazardous secondary material as a valuable 
commodity. Where there is an analogous raw material, the hazardous 
secondary material should be managed,

[[Page 44119]]

at a minimum, in a manner consistent with the management of the raw 
material. Where there is no analogous raw material, the hazardous 
secondary material should be contained. Hazardous secondary materials 
that are released to the environment and are not recovered immediately 
are discarded'' (40 CFR 260.43(c)(1)).
    This factor expresses the principle that hazardous secondary 
materials being 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 materials are 
managed before they enter 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, that behavior may indicate that the hazardous 
secondary materials may not be recycled, but rather will be released 
into the environment and discarded.
    Factor 4--Comparison of Toxics in the Product: ``The product of the 
recycling process does not (i) contain significant concentrations of 
any hazardous constituents found in Appendix VIII of part 261 that are 
not found in analogous products; or (ii) contain concentrations of any 
hazardous constituents found in Appendix VIII of part 261 at levels 
that are significantly elevated from those found in analogous products; 
or (iii) exhibit a hazardous characteristic (as defined in part 261 
subpart C) that analogous products do not exhibit'' (40 CFR 
260.43(c)(2)).
    This factor expresses the principle that when making a legitimacy 
determination, one needs to look at the concentrations of the hazardous 
constituents found in the product made from the hazardous secondary 
materials and compare them to the concentrations of hazardous 
constituents in analogous products that were not made from hazardous 
secondary materials. Any of the following three situations could be an 
indicator of sham recycling: A product that contains significant levels 
of hazardous constituents that are not found in the analogous products; 
a product with significantly higher levels of hazardous constituents 
than were in the analogous products; or a product that exhibits a 
hazardous characteristic that analogous products do not exhibit.
    Any of these situations could indicate that sham recycling is 
occurring because in lieu of proper hazardous waste disposal, the 
recycler could have incorporated hazardous constituents into the final 
product when they are not needed to make the product effective for its 
purpose. This factor, therefore, is designed to determine when toxics 
that are ``along for the ride'' are discarded in a final product and, 
therefore, the hazardous secondary materials are not being legitimately 
recycled. Evaluating the significance of levels of hazardous 
constituents in products of the recycling process may involve taking 
into consideration several variables, such as the type of product, how 
it is used and by whom, whether or not the elevated levels of hazardous 
constituents compromise the efficacy of the product, the availability 
of the hazardous constituents to the environment, and others.
    In addition to promulgating the legitimate recycling provision in 
the 2008 DSW final rule, EPA included a discussion of how the current 
legitimacy policy continues to apply to existing recycling exclusions 
and how the four factors included in the legitimacy provision at 40 CFR 
260.43 are substantively the same as the current legitimacy policy. The 
Agency included a lengthy discussion of how it developed the legitimacy 
factors in 40 CFR 260.43 by closely examining the questions and sub-
questions in its long-standing policy memo on the subject, OSWER 
Directive 9441.1989(19) (April 26, 1989), also known as the Lowrance 
Memo, and in the relevant Federal Register preambles, and converting 
this policy guidance into four direct factors. The detailed 
explanations of how each of the four factors is derived from the 
Lowrance Memo and other existing policy statements can be found at 73 
FR 64708-64710, October 30, 2008.

B. Proposed Changes to the Definition of Legitimacy

1. Legitimacy Codified for all Recycling
    In today's action, EPA is proposing to codify the legitimate 
recycling requirement for all hazardous secondary materials 
recycling.\25\ In the October 28, 2003, proposal at 68 FR 61581-61588, 
EPA discussed its position on the relevance of legitimacy to hazardous 
secondary materials recycling in general and to the redefinition of 
solid waste specifically. At that time, we proposed to codify in the 
RCRA hazardous waste regulations four general criteria to be used in 
determining whether recycling of hazardous secondary materials is 
legitimate. In the supplemental proposal of March 26, 2007, at 72 FR 
14197-14201, we proposed two changes to the 2003 proposed legitimacy 
criteria and asked for public comment on those changes. The changes 
were (1) a restructuring of the proposed criteria, called ``factors'' 
in that proposal, to make two of them mandatory, while leaving the 
other two as factors to be considered, and (2) additional guidance on 
how the economics of the recycling activity should be considered in a 
legitimate recycling determination.
---------------------------------------------------------------------------

    \25\ This legitimate recycling requirement does not apply to 
non-hazardous secondary materials. For information on the legitimacy 
requirement for those materials, see the Identification of Non-
Hazardous Secondary Materials that Are Solid Waste Final Rule (76 FR 
15456, March 21, 2011).
---------------------------------------------------------------------------

    EPA's 2008 DSW final rule codified legitimacy for the recycling 
covered by the exclusions and non-waste determinations in that 
rulemaking. However, at that time, EPA did not codify the legitimacy 
factors for other recycling exclusions/activities, but explained that 
the concept of legitimacy finalized in that rule as a restriction or a 
condition for the final exclusions and the non-waste determinations is 
not substantively different from the Agency's longstanding policy that 
has been expressed in our earlier preamble discussions and policy 
statements.
    Upon further consideration of legitimacy, EPA believes that 
codifying the legitimacy factors for all recycling would provide a 
number of benefits. These benefits include ensuring that this important 
requirement is more readily accessible to the public, including the 
regulated community, by being published in the Federal Register and in 
the Code of Federal Regulations. EPA also expects that this action will 
prevent or minimize fraudulent or sham recycling, which will make the 
legitimacy provision a more enforceable standard for states and other 
entities implementing RCRA. In the Regulatory Impact Analysis for this 
proposed rule, we estimate that 5,321 facilities are currently 
recycling hazardous secondary materials in the U.S. For these 
facilities, this requirement that is currently implicit in the 
regulations and described in guidance would become an explicit 
regulatory requirement.
    a. What is the proposed scope of the legitimacy provision? If 
codified for all recycling, the definition of legitimacy would apply to 
these types of hazardous secondary materials, in addition to the final 
exclusions and non-waste determinations promulgated in the 2008 DSW 
final rule:
     Hazardous recyclable materials that are managed under 
today's proposed alternative Subtitle C regulations for hazardous 
recyclable materials.

[[Page 44120]]

     Hazardous secondary materials that, because they are 
recycled, are excluded or exempted from Subtitle C regulation under 
other regulatory provisions (e.g., see the exclusions from the 
definition of solid waste in 40 CFR 261.4(a)).
     Materials formally determined to be non-wastes under the 
procedures in 40 CFR 260.34.
     Recyclable hazardous wastes that are regulated under 
Subtitle C prior to recycling or subject to reduced regulation.
    The concept of legitimate recycling is also used to determine if a 
unit is a recycling unit exempt from RCRA Subtitle C permitting or is a 
regulated waste treatment or storage unit subject to full RCRA Subtitle 
C permitting.\26\ If finalized for all recycling, the legitimacy 
factors would apply to these situations as well.
---------------------------------------------------------------------------

    \26\ Certain exempt legitimate recycling facilities are still 
subject to RCRA air emission standards.
---------------------------------------------------------------------------

    One important note is that EPA has previously 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 factors being promulgated today. Thus, there would be 
situations where today's proposed broadly applicable factors would 
overlap with these more specific legitimacy provisions.
    One example is the regulation for zinc fertilizers made from 
recycled hazardous secondary materials. In the zinc fertilizer 
regulation, among the requirements established by EPA are specific 
numerical limits on five heavy metal contaminants and dioxins in the 
zinc fertilizer product exclusion at 40 CFR 261.4(a)(21). These limits 
would be the ``comparable'' standard for those contaminants when 
determining if the recycling meets legitimacy factor 4 (Comparison of 
Toxics in the Product). However, if fertilizer made from hazardous 
secondary materials contains other hazardous constituents that do not 
have specific numerical limits in 40 CFR 261.4(a)(21), then the 
generator or recycler would need to compare the levels of those 
hazardous constituents with those in an analogous fertilizer product 
not made from hazardous secondary materials. Other examples of more 
specific legitimacy provisions are found in the regulations for 
comparable fuels at Sec.  261.38, the use constituting disposal 
provisions in part 266 subpart C, and the burning for energy recovery 
and material recovery provisions in part 266 subpart H.
    In doing a legitimacy determination on a fuel made from hazardous 
secondary material under the comparable fuels exclusion, the 
regulations contain concentration limits for a comprehensive list of 
chemicals. If the fuel meets those limits, it would generally meet 
legitimacy factor 4 (unless it contains a hazardous constituent that is 
not on the list of chemicals in Sec.  261.38 Table 1). However, the 
regulated entity would need to consider the other legitimacy factors as 
well in making an overall legitimacy determination on the hazardous 
secondary material being burned as a comparable fuel.
    For hazardous secondary materials being used in a manner 
constituting disposal under 40 CFR part 266 subpart C, a person would 
need to determine if the hazardous secondary material being recycled in 
this way meets all four legitimacy factors in 40 CFR 260.43, in 
addition to meeting the conditions of 40 CFR part 266 subpart C. 
Meeting the applicable treatment standards as required by Sec.  266.20 
would not substitute for meeting legitimacy factor 4 because those 
standards are technologically-based standards and are not based on a 
comparison to an analogous product. Those standards in some cases would 
be more stringent while in other cases, they may be less stringent.
    The legitimacy provisions would also apply to hazardous secondary 
materials being burned either for energy recovery or material recovery 
under 40 CFR part 266 subpart H. For those materials being burned for 
metals recovery, meeting the concentration limits in 40 CFR 
266.100(d)(2) would be considered comparable for the sake of legitimacy 
factor 4. The regulated entity would have to ensure that the recycling 
meets the other legitimacy factors as well to be in compliance with the 
overall legitimate recycling provision.
    EPA is proposing that these more specific provisions remain 
applicable and that the legitimacy factors would not replace them. That 
is, regulated entities would need to comply with both the specific 
regulatory conditions of their recycling exclusions, as well as any of 
the legitimate recycling factors not explicitly covered by the specific 
recycling exclusion. The Agency seeks public comment on the overlap 
between the general legitimacy provision and the specific recycling 
exclusions.
    b. Why is EPA proposing to codify legitimacy for all recycling? In 
the 2008 DSW final rule, EPA explained that it was finalizing codified 
legitimacy factors only for the exclusions and non-waste determinations 
in that rule to avoid confusion among the regulated community and state 
and other implementing regulatory agencies about the status of 
recycling under existing exclusions. At the time, EPA did not expect 
members of the regulated community to revisit their previously-made 
legitimacy determinations.
    After evaluating the comments in response to the May 27, 2009, 
public meeting notice (74 FR 25200) and concerns brought up in the 
subsequent public meetings, EPA has determined that the benefits from 
having identical codified legitimacy requirements outweigh concerns 
about making administrative changes to the requirement. One codified 
legitimacy standard will be less confusing and more clear to the 
regulated community, implementing agencies and the public.
    EPA's environmental problems study documents a number of recycling 
damage cases that have resulted from sham recycling. For example, 
several cases of sham recycling detail cases of lead- and other metal-
contaminated materials from secondary lead smelters and battery 
recyclers being used as fill in residential neighborhoods and as play 
sand for children.\27\ These are clear cases of sham recycling, but can 
be difficult for states and other implementing agencies to enforce 
against because the requirement is not in the regulations. EPA believes 
that including legitimacy in the regulations for all recycling will 
make it easier to enforce these sham recycling cases and will help 
implementing agencies fulfill their mandate to protect human health and 
the environment.
---------------------------------------------------------------------------

    \27\ U.S. EPA, An Assessment of Environmental Problems 
Associated with Recycling of Hazardous Secondary Materials, Appendix 
2, EPA-HQ-RCRA-2002-0031-0358, Appendix 2, pp. 3-4, 238, 294-295, 
298-299.
---------------------------------------------------------------------------

    EPA also believes that there will be benefits to the environment 
from requiring those who are recycling under existing exclusions and 
other provisions to do this kind of evaluation of their recycling 
process with legitimacy considerations in mind. EPA believes that 
codifying the legitimacy factors for all recycling and the requirement 
to document legitimacy determinations, as discussed below, will result 
in more thorough, accurate and consistent legitimacy determinations. 
However, as we discuss below, documentation of the legitimacy 
determination (i.e., how the hazardous secondary material meets the 
legitimacy factors) needs only to be available from the effective date 
of this rule.
    EPA continues to believe that the four legitimacy factors we are 
proposing to codify for all recycling are substantively

[[Page 44121]]

the same as the existing policy found in previous Federal Register 
preamble statements and its long-standing policy memo on the subject 
(i.e., the Lowrance Memo). An analysis that shows how the four factors 
are derived from and equivalent to the Lowrance Memo and other policy 
statements is in the 2008 DSW final rule preamble (73 FR 64708-64710). 
In addition, EPA continues to believe that the vast majority of 
recycling of hazardous secondary materials in the regulated community 
is currently legitimate and would already meet all four legitimacy 
factors.
    It is the Agency's belief that it is an advantage for the 
regulatory agencies to have the regulatory requirements for legitimacy 
be identical for all recycling processes and to have the legitimacy 
provision promulgated in the regulations. Because legitimacy is an 
inherent concept underlying all of the current recycling exclusions, 
the legitimate recycling standard already applies to all hazardous 
secondary materials recycling and hazardous waste recycling, whether 
such recycling remains under the hazardous waste regulations or is 
excluded from the definition of solid waste. Therefore, the change 
being proposed today would result in the details of an existing 
standard being added to the regulations and thereby being more publicly 
available.
    It has been our long-standing policy and it is well understood 
throughout the regulated community and the implementing state 
regulatory agencies that recycling must be legitimate. EPA firmly 
believes that the legitimacy factors are a simplification and 
clarification of this existing policy and, as such, the large majority 
of existing determinations should not change or need to be revisited. 
We are reiterating today that simply codifying the legitimacy standard 
is not changing the underlying principles of legitimate recycling that 
have existed since the basic RCRA DSW structure was put in place in 
1985.
    We recognize that under some of the existing exclusions, certain 
conditions may fulfill certain legitimacy factors or considerations, 
but this is not universally the case for all of the recycling 
exclusions. Even under the existing exclusions, there remains the 
possibility of someone claiming an existing recycling exclusion as a 
means of discarding their hazardous waste. Thus, simply meeting the 
conditions of an exclusion does not automatically ensure that the 
recycling is legitimate and codifying the legitimacy factors for all 
recycling emphasizes this fact. The codified legitimacy factors would 
apply to all future recycling of hazardous secondary materials as well, 
unless we establish specific legitimacy conditions for a specific 
recycling practice that stand in for the more general factors.
    EPA is asking for comments on this proposed approach to the 
legitimate recycling requirement. EPA is particularly interested in 
examples of cases where it would not be appropriate for the legitimacy 
factors to be codified.
2. All Legitimacy Factors Being Mandatory
    a. What structure is EPA proposing for the legitimacy factors? In 
this proposed rule, EPA is reconsidering the current legitimacy 
structure and proposing that all the legitimacy factors be mandatory. 
EPA is proposing also that a petition process be available if a 
legitimate recycling process can be shown to be legitimate even though 
it does not meet one or both of the factors that currently have to be 
considered.
    As stated above, in the 2008 DSW final rule, EPA finalized a 
structure for legitimacy that included two factors that had to be met 
and two factors that had to be considered, but not necessarily met. We 
stated that we thought this approach would be clearer than the guidance 
for legitimacy being followed at that time, but would still provide 
some flexibility in those cases where recycling did not meet all the 
legitimacy factors, but the recycling activity was still legitimate.
    In this proposal, EPA is reconsidering its position on this issue 
and now believes that it would be most appropriate for all legitimacy 
factors to be mandatory, with a petition process for those cases where 
the recycling process is legitimate, even though factor 3 or factor 4 
or both are not met. EPA is proposing this administrative change in the 
structure of the legitimacy factors for several reasons. Comments in 
response to EPA's May 27, 2009, notice of a public meeting and comments 
provided at that public meeting on June 30, 2009, reiterated that most 
of the state agencies that would be responsible for implementing the 
DSW regulations when the state has adopted the program support an 
approach in which all legitimacy factors are mandatory. EPA also 
expects that making all of the legitimacy factors mandatory would be 
less complicated across the overall RCRA Subtitle C program and would 
improve both the effectiveness and the protectiveness of the legitimacy 
provision.
    Commenters also argued that the legitimacy provision does not 
effectively address EPA's expectation that most recycling should meet 
all four legitimacy factors and leaves too much leeway for potential 
sham operations. A structure with four mandatory factors and a petition 
process for an entity that believes that its recycling is legitimate 
despite not meeting factor 3 or factor 4 or both does convey EPA's 
belief that these exceptions to the legitimacy factors are rare.
    In addition, EPA had believed that the two mandatory factors and 
two factors to be considered would be protective of human health and 
the environment because, under the regulations in 40 CFR 260.43, 
exceptions to all four factors being met would only happen in cases of 
recycling that was legitimate anyway--that is, cases where either 
factor 3 or factor 4 were not met would have to have valid reasons for 
still being legitimate. However, it is not clear that this result will 
always occur in practice. Continued confusion about how the regulations 
work and concerns from state agencies that are and will be responsible 
for the enforcement and implementation of this provision are making EPA 
revisit its previous decision that this structure would be protective.
    Specifically, in the design of the legitimacy provision in the 2008 
DSW final rule, EPA did not intend to make it possible for materials 
going for reclamation to be mismanaged or to allow recycled products 
that could pose a risk into the market. EPA heard in further comments, 
however, that states and implementing agencies remained concerned that 
the structure of the factors would lead to these outcomes. These 
comments about the protectiveness of the legitimacy structure received 
from those regulators during actual implementation of the 2008 DSW 
final rule are one of the main reasons that EPA is rethinking its 
approach.
    EPA continues to believe that the majority of recycling currently 
taking place would meet all legitimacy factors, but recognizes that 
there may be instances where recycling may be legitimate, but not meet 
one or both of the two factors that were labeled ``to be considered'' 
in the 2008 DSW final rule. It is critical that the legitimacy 
regulations be flexible enough to allow for these situations, 
particularly if the regulations are going to apply to all recycling. 
Therefore, EPA is proposing a petition process for facilities that 
believe that their recycling processes are legitimate despite not 
meeting one or both of these two final factors. EPA's proposal for how 
this petition process would work is described later in this section.
    Comments in response to the May 27, 2009, Federal Register notice 
also

[[Page 44122]]

demonstrated that despite EPA's efforts to clarify what it meant by 
``factors to be considered'' and how the Agency thought that structure 
would work in implementation of legitimacy, many commenters still found 
the requirement confusing and believed the regulated community as a 
whole would be confused as well. EPA believes that a structure where 
all factors must be met with a petition process for any exceptions 
would be more straightforward than the current two mandatory factors 
with two factors that have to be considered.
    EPA notes that the ultimate determination of legitimacy would be 
the same under either approach (i.e., whether factors 3 and 4 ``must be 
considered'' or ``must be met''). Under the current structure requiring 
the factors be considered, a person making a legitimacy determination 
regarding a recycling process that does not meet one or both of these 
factors (i.e., is not being managed as a valuable commodity or has 
elevated levels of hazardous constituents in the product) would need a 
strong reason for why the recycling is still legitimate and, in the 
case of an enforcement action, would be required to demonstrate that 
reason. Under the proposed restructuring of the factors, under the same 
scenario, the recycler would be required to demonstrate legitimacy up 
front as part of a petition process and receive EPA approval before 
claiming an exemption. In other words, there would be no substantive 
distinction between the final legitimacy determination under the two 
approaches, but the administrative process for making that 
determination would be different.
    One potential concern with the proposed new structure is that it 
will require all entities making a legitimacy determination to reassess 
whether they meet all four factors and, if a facility's recycling does 
not meet factor 3 or factor 4 or both, it would either have to 
reengineer the process or submit a petition for a legitimacy variance. 
However, under the revisions being proposed today, all recyclers of 
hazardous secondary materials would be required to consider the 
legitimacy of their recycling in order to document that their recycling 
is legitimate for their files. Therefore, under EPA's proposal, the 
only burden on top of that requirement would be in the instance where a 
facility would need to submit a petition of a legitimacy variance.
    Finally, in designing the legitimacy factors that apply throughout 
the RCRA program, particularly in the various parts of the definition 
of solid waste, EPA is striving for consistency and cohesiveness. EPA's 
recent Identification of Non-Hazardous Secondary Materials that are 
Solid Wastes final rule (76 FR 15456, March 21, 2011) includes 
legitimacy factors for non-hazardous secondary materials that are 
burned in combustion units as fuels or used as ingredients. Despite the 
differences in the circumstances covered by that rule and this proposed 
rule, the legitimacy concepts are similar. EPA's non-hazardous 
secondary material rule mandates that all legitimacy factors must be 
met and in proposing to alter the legitimacy factors for hazardous 
secondary materials, EPA is proposing to line up these concepts in a 
consistent manner.
    b. Petition process for legitimacy. As stated above, EPA believes 
it is critical that the legitimacy requirement have flexibility for 
those situations where a facility is recycling legitimately, but is not 
meeting factor 3 and/or factor 4. The petition process being proposed 
would be a mechanism for that flexibility, while also allowing the 
implementing agency to review the site-specific nature of the recycling 
practice and ensure that it is legitimate. EPA is seeking comment on 
the various aspects of this proposed process. EPA believes that the 
situations that would warrant legitimacy variances are rare, but seeks 
comment again on specific recycling scenarios that are legitimate yet 
do not meet either legitimacy factor 3 and/or legitimacy factor 4.
    Commenters to the 2007 DSW supplemental proposal suggested the idea 
of a petition process with four mandatory factors. EPA considered this 
option for the 2008 DSW final rule, but did not finalize it. However, 
after determining that an approach to legitimacy with all four factors 
being mandatory may be most appropriate, EPA is returning to the idea 
of a petition process to provide the needed flexibility and oversight 
to legitimacy determinations.
Information To Be Included in the Petition
    Of primary interest, the petition would need to include information 
on the hazardous secondary material being recycled and the recycling 
process itself in the context of the four legitimacy factors. EPA 
continues to believe that legitimacy factors 1 and 2--which state that 
the material being recycled has to provide a useful contribution to the 
recycling product or process and that the process must produce a 
valuable product or intermediate--have to be met for recycling to be 
considered legitimate. A facility would be eligible to submit a 
petition for a legitimacy variance to its implementing agency under 
Sec.  260.43(c) if it has met legitimacy factors 1 and 2, but for some 
reason does not meet either factor 3, the requirement that the 
hazardous secondary material is managed as a valuable commodity, or 
factor 4, the requirement that the levels of any contaminants in the 
product of the recycling process be comparable to or lower than an 
analogous product or both.\28\
---------------------------------------------------------------------------

    \28\ EPA is proposing to amend legitimacy factors 3 and 4 in 
this proposal. These are discussed below in X.B.3. and X.B.4.
---------------------------------------------------------------------------

    Thus, the legitimacy variance petition would include a narrative 
description of how the facility's recycling process addresses each of 
the four legitimacy factors. For the factor or factors that the process 
does not meet, the petition would have to explain how the recycling 
process does not meet the factor(s), but why the recycling should 
nevertheless be determined to be legitimate.If, for example, the 
recycling process does not meet factor 3, the petition would include an 
in-depth description of how the hazardous secondary materials are 
managed and stored on-site and how analogous raw materials, if there 
are any, are stored on-site, as well as an explanation for why the 
storage of the hazardous secondary materials is different yet still 
indicative of management as a valuable product or intermediate. It may 
be appropriate to include photos or engineering specifications to 
illustrate the nature of the material storage. As described below, the 
Agency is also proposing to modify the language of this factor slightly 
to allow for situations where the hazardous secondary material is 
stored in a way that is different from the analogous raw material, but 
is stored in a manner equally protective. We are proposing that in 
those situations, a person would not have to petition for a legitimacy 
variance simply because the storage method was different than how the 
analogous raw material was stored.
    For a recycling process that does not meet factor 4 because the 
levels of contaminants in the product of the recycling process are not 
comparable to or lower than the levels in an analogous product, the 
petition should include a description of the product and its uses and 
an explanation of why the recycling is legitimate despite the elevated 
contaminant levels from the hazardous secondary material. This 
explanation could include considerations such as the lack of plausible 
exposure pathways to humans and the environment from the product, the 
bioavailability of the toxics in the product, or other factors, as

[[Page 44123]]

appropriate. It may also be appropriate in this section to include 
relevant product specifications, either from the specific facility or 
industry-wide, as well as results from any toxicity testing of the 
product of the recycling process.
    In the 2008 DSW final rule, EPA gave the following example of where 
recycling could still be considered legitimate, even though the 
contaminant levels could be considered significantly higher than an 
analogous product. The example of 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. However, in the case of lead contaminated 
foundry sand used as children's play sand, the same high levels of lead 
would disqualify this use from being considered legitimate recycling. 
In fact, the Agency is considering codifying the determination that the 
reuse of foundry sands for mold making in a foundry's sand loop using a 
non-thermal reclamation process is legitimate recycling and thus, these 
facilities would not need to submit a legitimacy variance petition 
since the Agency has already examined the practice and determined it is 
legitimate recycling. The Agency requests comment on this and on 
whether there are other similar cases where existing legitimacy 
determinations should be codified.
    In addition, the facility submitting a petition would also be 
required to include in its petition a detailed description of its 
process and its hazardous secondary materials, including, where 
applicable, material flow charts or diagrams, or other information the 
implementing agency may request. Because of the case-by-case nature of 
legitimacy determinations, the implementing agency reviewing the 
petition will need this detailed information to make an accurate 
assessment of the legitimacy of the process.
Process for Evaluating the Petition
    EPA is proposing that this petition process be managed by the state 
agencies where a state implements the RCRA Subtitle C program. In 
states where EPA implements Subtitle C, the petition process would be 
run by the appropriate EPA Regional office.
    EPA is proposing that in responding to a legitimacy variance 
petition, the implementing agency would follow the same procedures 
already in place for variances from solid waste, variances to be 
classified as a boiler, and for non-waste determinations in Sec.  
260.33. After evaluating the petition for a legitimacy variance and, if 
necessary, visiting the requesting facility, the implementing agency 
would issue a draft notice tentatively granting or denying the 
application. Notification of the tentative decision would be provided 
by newspaper advertisement or radio broadcast in the locality where the 
recycler is located and be made available on EPA's Web site. The 
implementing agency would then accept comment on the tentative decision 
for at least 30 days and may also hold a public hearing. The 
implementing agency would issue its final decision after receipt of 
comments and after any public meetings.
    Upon receiving a legitimacy variance, EPA is proposing that the 
facility include this information in the appropriate place of the RCRA 
Site ID Form (EPA Form 8700-12). EPA is proposing to revise this form 
to provide a place to check that a legitimacy variance has been 
received. The variance would not expire as long as the conditions 
relevant to the legitimacy variance described in the original petition 
do not change. The facility would be required to confirm that its 
process has not changed by re-notifying every two years, also through 
the RCRA Site ID Form. The facility should keep records of its 
legitimacy variance as part of its legitimacy documentation.
    EPA is seeking comment on the legitimacy petition process as 
proposed here and how the design of this process would work for both 
implementing agencies and facilities that may have to submit such a 
petition. In addition, EPA is seeking information on how many 
facilities may have to submit legitimacy petitions under this proposed 
requirement.
3. Proposed New Language for Legitimacy Factor 3 (Managed as a Valuable 
Commodity)
    The 2008 DSW final rule codified four factors as part of the Sec.  
260.43 definition of legitimacy, as summarized above. Factor 3 
addressed the management of the hazardous secondary materials before it 
is recycled. Specifically, the regulatory language for this factor 
reads as follows:

    ``The generator and the recycler should manage the hazardous 
secondary material as a valuable commodity. Where there is an 
analogous raw material, the hazardous secondary material should be 
managed, at a minimum, in a manner consistent with the management of 
the raw material. Where there is no analogous raw material, the 
hazardous secondary material should be contained. Hazardous 
secondary materials that are released to the environment and are not 
recovered immediately are discarded.''

    In making all legitimacy factors mandatory, the first sentence of 
the regulatory language would be revised to read as follows: ``The 
generator and the recycler must manage the hazardous secondary material 
as a valuable commodity.'' In addition, the Agency is proposing that 
the language following that sentence be changed to the following 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 not have to submit a petition for a 
legitimacy variance if their 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.
    The entire new proposed paragraph at 40 CFR 260.43(a)(3) would read 
as follows: ``The generator and the recycler must manage the hazardous 
secondary material as a valuable commodity. Where there is an analogous 
raw material, the hazardous secondary material must be managed, at a 
minimum, in a manner consistent with the management of the raw material 
or in an 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.''
    In addition, EPA would like to clarify that 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.

[[Page 44124]]

    EPA requests comment on these changes to the language in factor 3.
4. Proposed New Language for Legitimacy Factor 4 (Comparison of Toxics 
in the Product)
    The 2008 DSW final rule codified four factors as part of the Sec.  
260.43 definition of legitimacy, as summarized above. Factor 4 
addressed the issue of toxics along for the ride in the products made 
from hazardous secondary materials. Specifically, the factor found at 
40 CFR 260.43(c)(2) specifies that the product of the recycling process 
does not (1) contain significant concentrations of any hazardous 
constituents found in Appendix VIII of part 261 that are not found in 
analogous products; or (2) contain concentrations of any hazardous 
constituents found in Appendix VIII of part 261 at levels that are 
significantly elevated from those found in analogous products; or (3) 
exhibit a hazardous characteristic (as defined in part 261 subpart C) 
that analogous products do not exhibit.
    The agency is proposing to change the wording within the regulatory 
language of this legitimacy factor from ``significant'' and 
``significantly elevated'' to ``comparable to or lower than'' because 
it more clearly reflects the intent of this factor. The agency believes 
``comparable to or lower than'' means that any contaminants present in 
the product made from hazardous secondary materials are within a small 
acceptable range. In making this change, we also are simplifying the 
regulatory text by combining subparagraphs (i) and (ii) since it is no 
longer necessary to separate those instances where the hazardous 
constituents are or are not present in the analogous product. This 
language is also 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.
    For example, if paint made from reclaimed solvent contains 
significant amounts of cadmium, but the same type of paint made from 
virgin raw materials does not contain cadmium, it could indicate that 
the cadmium serves no useful purpose and is being passed though the 
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.
    In a second example, if a lead-bearing hazardous secondary material 
was reclaimed and then that material was used as an ingredient in 
making ceramic tiles and the amount of lead in the tiles was 
significantly higher than the amount of lead found in similar tiles 
made from virgin raw materials, the recycler should look more closely 
at the factors to determine the overall legitimacy of the process. The 
significantly higher levels of lead would indicate that the recycled 
product is not comparable to an analogous product and, thus, the 
recycling process is really a sham.
    Another example is if zinc galvanizing metal made from hazardous 
secondary materials that were reclaimed contains 500 parts per million 
(ppm) of lead, while the same zinc product made from raw materials 
typically contains 475 ppm. These 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 
submits a petition and receives a determination from the implementing 
agency that other factors demonstrate otherwise and the recycling 
activity is determined to be legitimate.
    In another example, 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 new proposed language for 40 CFR 260.43(a)(4) would specify 
that the product of the recycling process (1) must contain 
concentrations of any hazardous constituents found in Appendix VIII of 
part 261 at levels that are comparable to or lower than those found in 
analogous products and (2) must not exhibit a hazardous characteristic 
(as defined in part 261 subpart C) that analogous products do not 
exhibit.
    EPA requests comment on these changes to the language in factor 4 
and specifically, whether any commenters have examples of where this 
change in language would change the outcome of the legitimacy 
determination. If EPA were to receive specific information on numerous 
cases where the product of hazardous secondary material recycling had 
levels of hazardous constituents that were not comparable to those 
found in products made from raw materials, but the Agency still 
considered the recycling to be legitimate, such information would be 
important in EPA's final decision about whether factor 4 should be 
mandatory or should remain a factor ``to be considered.''
    In addition, EPA requests comment on whether it would be helpful 
for the Agency to develop additional guidance on what constitutes 
``comparable'' levels of hazardous constituents for certain products of 
hazardous secondary materials reclamation. For most types of hazardous 
secondary materials reclamation, EPA does not believe that additional 
guidance would be needed. For example, the three most common types of 
hazardous secondary materials reclamation--solvents recovery, metals 
recovery, and acid regeneration-- are expected to result in recycled 
products that are easily compared to their non-recycled counterparts. 
This is because it is EPA's understanding that the products of solvents 
recovery, metals recovery, and acid regeneration are generally 
indistinguishable from products made from raw materials. Users and 
recyclers of these common industrial materials are very familiar with 
the formulations of these commercial products and can easily identify 
whether there are hazardous constituents at elevated levels beyond what 
is typically found in these products. This could be informed by product 
specifications, where such specifications are available for the 
hazardous constituents. However, there may be some types of products 
from recycled hazardous secondary materials which are less common or 
more unusual for which guidance might be useful. EPA requests comment 
on whether such guidance would be useful and, if so, for which specific 
products made from hazardous secondary materials, and encourages 
commenters to submit data or identify which sources of data could be 
used to develop such guidance.
    Commenters should also provide views, and related data, on what 
parameters may be used to characterize ``comparable levels'' for 
classes of hazardous secondary materials. EPA requests the data for 
specific hazardous secondary materials, including identification of the 
industrial process, industrial sector, and the specific use for the 
hazardous secondary material.

[[Page 44125]]

5. Documentation of Legitimacy
    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. Specifically, 40 CFR 260.43 states that any 
facility claiming an exclusion at Sec.  261.2(a)(2)(ii), Sec.  
261.4(a)(23), Sec.  261.4(a)(24), or Sec.  261.4(a)(25) or using a non-
waste determination at Sec.  260.30(d) or (e) must be able to 
demonstrate that its recycling activity is legitimate.
    Although there was no specific recordkeeping requirement that went 
along with the ability to demonstrate legitimacy in the 2008 DSW final 
rule, EPA stated that we expected that in the event of an inspection or 
an enforcement action by an implementing agency, the recycler would be 
able to show how it made the overall legitimacy determination per Sec.  
261.2(f). 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. Under 
the 2008 DSW final rule, when a recycling process does not conform to 
one or both of the two non-mandatory factors under Sec.  260.43(c), the 
Agency would expect the facility to show that it considered the 
factor(s) and why the recycling activity overall remains legitimate. 
Although Sec.  261.2(f) will still apply in enforcement actions, we 
have since decided that it would be most useful to implementing 
agencies if the information documenting a recycling activity as 
legitimate was assembled in advance and available at all times.
    After implementing the DSW exclusions in several states since its 
promulgation in 2008, we have determined that documentation of 
legitimacy is an important step in ensuring compliance with this 
provision and will make oversight and enforcement more effective. We 
are therefore proposing today to require that persons who perform the 
recycling include documentation in their paperwork to explain how their 
hazardous secondary materials are legitimately recycled. We generally 
expect that this documentation would be a narrative description, which 
could include photographs or other illustrations of how the recycling 
of their hazardous secondary materials meets all four factors of 
legitimate recycling. All recyclers of hazardous secondary materials 
would need to maintain this documentation on site where the recycling 
occurs for the duration of the recycling operations and for three years 
after the recycling operations cease. If the recycling occurs on-site 
at a generator's facility rather than at the recycler's facility, then 
the documentation would be maintained at the generator's facility.
    Written documentation would 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. In addition, generators sending materials to 
third-party recyclers could also ask for a copy of the recycler's 
legitimacy documentation to ensure that their materials are going to 
legitimate recycling.
    This provision would require that persons claiming that their 
recycling activity is legitimate have the burden to provide written 
documentation showing how the hazardous secondary materials provide a 
useful contribution to the recycling process, how the product of the 
recycling activity--whether it is a product or process intermediate--is 
valuable, how the generator or the recycler manages the hazardous 
secondary materials as a valuable commodity, and how the levels of any 
hazardous constituents in the product made from hazardous secondary 
materials are comparable to or lower than those in analogous products 
made from virgin materials. If the hazardous secondary material 
recycler determines that one or both of the latter two factors were not 
met, it would need to produce documentation that it has petitioned the 
implementing agency for a legitimacy variance, as described above, and 
received a determination that the recycling was indeed legitimate, even 
though one or both of those factors were not met.
    The Agency is not proposing any specific 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:
     Useful contribution legitimacy factor--the recycler would 
document how the hazardous secondary materials provide 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 specific ways in which useful contribution can be achieved. The 
recycler would need to document how the hazardous secondary materials 
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 metals recovered and their 
value to the process.
     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 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.
     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 proposed in 40 CFR 
260.10.
     Comparison of toxics in the product legitimacy factor--the 
recycler would include any data or information that shows that the 
levels of hazardous constituents in the product are comparable to or 
lower than those found

[[Page 44126]]

in analogous products. For example, if a recycling process produced 
paint, the levels of hazardous constituents in the paint would be 
compared to the levels of the same constituents found in a similar 
paint made from virgin raw materials. This comparison would be included 
in the documentation of this legitimacy determination. A 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. This may be easier in cases 
where the recycler knows that the hazardous secondary material is very 
similar in profile to the raw material. It may also be preferable in 
cases where the recycler creates an intermediate which is later 
processed again and may end up in two or more products, where there is 
no analogous product or when production of the product of the recycling 
process has not yet begun.
    As discussed above, the Agency is also proposing that the 
legitimacy standard be codified for all hazardous secondary material 
recycling, not only for the specific DSW exclusions promulgated in the 
2008 DSW final rule. As part of ensuring that all hazardous secondary 
material recycling is legitimate, we are proposing that recyclers under 
these other exclusions and those recycling under the Subtitle C 
hazardous waste regulations (which often are subject to reduced 
regulatory requirements) also maintain documentation in their files of 
why their recycling is legitimate. This proposed administrative 
requirement would apply to all recycling that is ongoing after the 
effective date of the final rule adopting this requirement. We are 
interested in receiving public comment on this issue.
    As far as how documentation would work for existing exclusions, as 
we noted in the 2003 DSW proposal, EPA has already 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 factors that were finalized as part of the 2008 DSW 
exclusions and non-waste determination process. One example is the 
regulation for zinc fertilizers made from recycled hazardous secondary 
materials. In the zinc fertilizer regulation, among the requirements 
established by EPA are specific numerical limits on five heavy metal 
contaminants and dioxins in the zinc fertilizer product exclusion at 40 
CFR 261.4(a)(21). We believe that data showing the zinc fertilizer 
product meets those numerical limits would be sufficient for 
documenting that the product meets legitimacy factor 4 (comparison of 
toxics in the product) for these contaminants. As noted earlier, if 
fertilizer made from hazardous secondary materials contains other 
hazardous constituents that do not have specific numerical limits in 40 
CFR 261.4(a)(21), then the generator or recycler would need to compare 
the levels of those hazardous constituents with those in an analogous 
fertilizer product not made from hazardous secondary materials. Other 
examples of existing exclusions where EPA has established specific 
conditions that are related to their legitimacy determinations are 
shredded circuit boards excluded under 40 CFR 261.4(a)(14), which must 
be free of mercury switches, mercury relays, and nickel-cadmium and 
lithium batteries, and comparable fuels excluded under 40 CFR 
261.4(a)(16), which must meet specific levels for hazardous 
constituents (thus, meeting legitimacy factor 4).
    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 materials in 
question are not solid wastes. When EPA originally made the decision 
that these hazardous secondary materials are not solid waste, the 
Agency took into account the relevant factors about the hazardous 
secondary materials, including how the materials were managed and what 
toxic chemicals were present.
    Thus, for those specific exclusions in Sec.  261.4(a) that have 
conditions that relate directly to legitimacy, documentation that shows 
that the recycling facility meets those conditions would be what is 
necessary to show that the recycling of such material is meeting those 
specific legitimacy factors. However, a recycling facility would also 
have to include a description of how it meets the other legitimacy 
factors that may not be reflected in the waste-specific conditions of 
the exclusion, in its legitimacy documentation.
    EPA is requesting comment on the requirement for documentation of 
legitimacy from facilities performing the recycling, for both the 2008 
DSW exclusions and for the existing recycling exclusions. In 
particular, EPA is requesting comment on whether the proposed 
documentation requirement is necessary for implementation and 
enforcement of the legitimacy provision.

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

    The Agency is also proposing today to modify the existing 
regulation of solid waste variances at 40 CFR 260.31(c), 40 CFR 260.33 
and 40 CFR 260.34 to foster greater consistency on the part of 
implementing agencies and help ensure the protectiveness of the 
implementation of the solid waste variances and non-waste 
determinations. Specifically, EPA is proposing to do the following:
    1. Revise 40 CFR 260.33(c) to require facilities to re-apply for a 
variance in the event of a change in circumstances that affects how a 
material meets the criteria upon which a solid waste variance has been 
based;
    2. Add a provision at 40 CFR 260.33(d) stating that facilities 
receiving a variance or non-waste determination must provide 
notification as required by Sec.  260.42 of this chapter;
    3. Revise the criteria for the partial reclamation variance in 40 
CFR 260.31(c) to more clearly explain when the variance applies and to 
require, among other things, that the criteria for this variance must 
be reviewed and evaluated collectively, since each criterion reinforces 
and supports other criterion;
    4. Revise the criteria for the non-waste determination in 40 CFR 
260.34 to require that petitioners explain or demonstrate why their 
hazardous secondary materials cannot meet, or should not have to meet, 
the existing DSW exclusions under Sec. Sec.  261.2 or 261.4; and
    5. Designate the Regional Administrator as the EPA recipient of 
petitions for variance and non-waste determinations.
    Finally, EPA is requesting comment on other possible steps to help 
ensure national consistency and protectiveness in the implementation of 
variances and non-waste determinations.
    In response to the May 27, 2009, Federal Register notice announcing 
the DSW public meeting, commenters identified issues with the 
implementation of the non-waste determination process, arguing that (1) 
determinations can lead to inconsistency among states and may 
negatively impact economies for states that are more stringent in their 
determinations; (2) determinations may require a large amount of state 
resources to review and process; and, (3) determinations that are 
indefinitely approved may not receive the proper level of oversight 
required to ensure that

[[Page 44127]]

legitimate and safe reclamation is occurring.\29\
---------------------------------------------------------------------------

    \29\ EPA stated in the public meeting notice that we did not 
expect to repeal the non-waste determination process and thus we did 
not explicitly ask for comment on the provision in the notice. 
However, in some cases, commenters did address this provision.
---------------------------------------------------------------------------

    While these comments were focused on the non-waste determination 
petition process in the 2008 DSW final rule (which was the focus of the 
public meeting), they can apply equally to the solid waste variances as 
well, since the procedures in 40 CFR 260.33 are intended to apply to 
both. Thus, EPA is proposing to make changes that affect both the solid 
waste variances and the non-waste determinations.

A. Proposed Revisions to Procedures for Variances and Non-Waste 
Determinations Found 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 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 proposed rule, EPA is proposing two changes to 40 CFR 
260.33. First, EPA is proposing to make all variances subject to the 
provision in 40 CFR 260.33(c) that would require an applicant to re-
apply for a variance in the event that the material no longer meets the 
relevant criteria. Second, EPA is proposing to make all variances and 
non-waste determinations subject to the biennial notification 
requirements in 40 CFR 260.42.
1. Requirement That an Applicant Re-Apply in the Event the Material No 
Longer Meets the Relevant Criteria
    The 2008 DSW final rule noted that once a non-waste determination 
has been granted, the applicant is obligated to ensure the hazardous 
secondary material continues to meet the criteria of the non-waste 
determination, including any conditions specified therein by the 
regulatory authority. If a change occurs that affects how the hazardous 
secondary materials meet the relevant criteria and (if applicable) any 
conditions as specified by the regulatory authority and the applicant 
fails to re-apply to the Administrator for a formal determination, the 
hazardous secondary materials may be determined to be solid and 
hazardous waste and subject to the RCRA Subtitle C hazardous waste 
requirements (73 FR 64712-13, October 30, 2008). This requirement was 
codified at 40 CFR 260.33(c).
    The requirement that the hazardous secondary materials determined 
to not be a solid waste must continue to meet the relevant criteria of 
a solid waste variance or non-waste determination is inherent in the 
regulations. Failure to meet the criteria could indicate that the 
hazardous secondary materials are discarded and a solid waste and would 
trigger the need to re-examine the circumstances of the recycling. The 
2008 DSW final rule codified this requirement in order to enhance 
clarity and assist in its implementation, but only focused on the non-
waste determination provisions because that was the scope of that rule.
    EPA is now proposing to explicitly apply 40 CFR 260.33(c) to all 
the solid waste variances, as well as the non-waste determination 
provisions listed in 40 CFR 260.30 to ensure that if there are changes 
that may impact how hazardous secondary materials meet the relevant 
criteria, that such changes be considered by the regulatory authority 
to ensure that those criteria continue to be met. Codifying this 
requirement would help ensure clarity and consistency by providing an 
administrative procedure for reconsidering a variance in the event that 
the hazardous secondary material no longer meets the relative criteria 
for the variance.
2. Proposed Re-Notification Requirement
    The second proposed change to 40 CFR 260.33 is to require 
facilities receiving variances or non-waste determinations to re-notify 
EPA or the State Director, if the state is authorized for this aspect 
of the rule, every two years by March 1 of each even-numbered year and 
to notify within 30 days of stopping management of hazardous secondary 
materials under the variance or non-waste determination using EPA Form 
8700-12 in compliance with 40 CFR 260.42. The current process cannot 
track variances or non-waste determinations at a national level and 
over time. This lack of tracking can lead to state-to-state 
inconsistency in determinations because one state cannot easily access 
information regarding similar determinations made by another state. Two 
commenters expressed specific concern over this inconsistency, arguing 
that variations in stringency can drive jobs out of more-stringent 
states and into less-stringent states. These commenters argued that 
more detailed or restrictive criteria and EPA oversight are necessary 
to ensure that non-waste determinations are issued consistently across 
states. One of the commenters also recommended increasing transparency 
by making the non-waste determinations available online. Additionally, 
lack of tracking inhibits effective oversight of facilities receiving 
variances and non-waste determinations because it does not provide 
regulatory authorities with a mechanism for receiving updated 
information.
    Amending the procedures for variances and non-waste determinations 
to require re-notification ensures that regulatory authorities are 
provided regularly updated information (such as information regarding 
quantities of hazardous secondary materials managed under the 
determination). Such updating enables better compliance with the 
criteria and with any stipulations of the variance or non-waste 
determination. Additionally, this information can be used to identify 
facilities which may have undergone changes to their reclamation 
process significant enough to trigger a review of the determination 
under 40 CFR 260.33(c).
    This proposed change is also based on EPA's experience with the 
Sec.  260.42 notification requirement. Since the 2008 DSW final rule 
became effective on December 29, 2008, EPA has received a number of 
notifications from facilities managing hazardous secondary materials 
under the generator-controlled and transfer-based exclusion and has 
judged the notification provision to have worked well in enabling 
regulatory authorities to monitor compliance of the facilities with the 
conditions of the exclusions. 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 
follow up with facilities that appear to have misunderstood the 
regulations. For example, notification allows regulatory authorities to 
contact facilities that notified that they were operating under the 
exclusions but were, in fact, residing in a state that had not adopted 
the 2008 DSW final rule. Notification in these instances allowed 
regulatory authorities to identify problems and to intervene

[[Page 44128]]

early to prevent potential mismanagement. Based on experience with 
receiving notifications under the 2008 DSW final rule, EPA is convinced 
of the value of the notification provision in ensuring proper 
implementation of its rules and believes that such notification for 
variances and non-waste determinations would increase the transparency 
and oversight of facilities receiving a variance or non-waste 
determination.
    In addition to re-notification, EPA also plans to increase the 
transparency of the variance and non-waste determination petition 
processes by providing online access to a list of facilities receiving 
variances and non-waste determinations, including any supporting 
documentation upon which a determination has been made. Ideally, this 
Web site would function as a clearinghouse of information so that the 
states could use each other's determinations to inform determinations 
within their own state borders. EPA believes this sharing of 
information would increase consistency in determinations across states. 
EPA plans to work with states to develop a process for collecting 
information regarding non-waste determinations so that EPA can include 
these facilities in its online database.

B. Proposed Revisions to Partial Reclamation Variance

    The ``partial reclamation'' variance at 40 CFR 260.30(c) applies to 
materials that have been reclaimed, but must be reclaimed further 
before the materials are completely recovered (i.e., ``partial 
reclamation''). In turn, 40 CFR 260.31(c) provides the specific 
standards that a material must meet in order to be eligible for a 
variance from classification as a solid waste.
    Today, the Agency is proposing to revise the partial reclamation 
variance provision of 40 CFR 260.31(c) to clarify when partially-
reclaimed materials are not solid waste because they are commodity-
like. The objectives of these proposed revisions are to clarify the 
regulatory language, foster consistent application of the variance 
criteria, and make clear that the variance should be granted only when 
partial reclamation has produced a commodity-like material. EPA's 
proposed modifications of 40 CFR 260.31(c) include (1) revising the 
introductory text to clarify when the variance applies; (2) revising 
the introductory text to require that all of the decision criteria must 
be met; (3) revising the language of all of the decision criteria; and 
(4) eliminating the sixth criterion ``other relevant factors.''
1. The Current Partial Reclamation Variance Provision
    Under the current regulations, 40 CFR 260.30, 260.31, and 260.33 
together provide variance mechanisms for three types of recycled 
materials which the Regional Administrator (or State Director, in an 
authorized state) may determine, on a case-by-case basis, are not solid 
waste if they meet specified criteria. One of the variances, found in 
40 CFR 260.30(c), with associated criteria at 40 CFR 260.31(c), 
addresses materials that have been partially reclaimed but must be 
reclaimed further before the materials are completely recovered. Under 
current 40 CFR 260.31(c), the Regional Administrator may grant a 
request for a variance for such materials if, after initial 
reclamation, the resulting material is commodity-like. The 
determination that a partially reclaimed material is commodity-like is 
made using the following six factors:
    (1) The degree of processing the material has undergone and the 
degree of further processing that is required;
    (2) The value of the material after it has been reclaimed;
    (3) The degree to which the reclaimed material is like an analogous 
raw material;
    (4) The extent to which an end market for the reclaimed material is 
guaranteed;
    (5) The extent to which the reclaimed material is handled to 
minimize loss; and
    (6) Other relevant factors.
    In the preamble to the 1985 Definition of Solid Waste final rule 
(January 4, 1985; 50 FR 655) where this provision was promulgated, EPA 
stated that ``the Regional Administrator may weigh these factors as she 
sees fit, and may rely on any or all of them to reach a decision.''
2. The Intent of the Partial Reclamation Variance
    When the partial reclamation variance provision was promulgated in 
1985, EPA's intent was to provide a mechanism for determining that a 
hazardous waste had undergone sufficient reclamation (a 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.
    The following discussion illustrates how the Agency intended the 
variance to work for a typical treatment system involving three 
parties: (1) A generator of hazardous waste; (2) a partial reclamation 
facility that receives, stores, and partially reclaims the hazardous 
waste to produce a commodity-like material; and (3) a final reclaimer, 
or end market, that receives the commodity-like material and uses it as 
a substitute for products or intermediates in production processes that 
involve further reclamation.
    First, the generator would manage and ship the hazardous waste 
following all of the applicable hazardous waste regulations, including 
waste quantity determinations, accumulation time limits, generator 
accumulation technical requirements, and hazardous waste manifest 
procedures for shipping. Second, the partial reclamation facility would 
receive the hazardous waste under a hazardous waste manifest. The 
facility would also have a RCRA permit for management of the hazardous 
waste until the point that the partial reclamation process had produced 
a commodity-like material.
    Once the partial reclamation process had produced a commodity-like 
material, a partial reclamation variance from classification as solid 
waste could be granted. Accordingly, management of the commodity-like 
material after that point would not be covered by the partial 
reclamation facility's RCRA permit. In addition, the partial 
reclamation facility would not be required to use a manifest to ship 
the commodity-like material to the final reclaimer.
    Finally, the final reclaimer would receive the commodity-like 
material from the partial reclaimer without a manifest. The final 
reclaimer would not require a RCRA permit for management of the 
commodity-like material because the material is not a solid and 
hazardous waste.
    The preceding discussion illustrates how the variance would apply 
to a typical three-facility, three-step process. However, the critical 
point is not how many steps or facilities are involved, but at what 
point the partial reclamation process has produced a commodity-like 
material as defined by the criteria in 40 CFR 260.31(c). Depending on 
the materials and processes in question, this point could occur at 
varying steps in the management of a hazardous waste, at varying 
facilities where it is managed.

[[Page 44129]]

3. Experience With the Current Partial Reclamation Variance Provision
    EPA has become aware that authorized states across the country have 
interpreted and applied the variance provision inconsistently, even in 
similar circumstances. This inconsistency may be due to (1) the wide 
discretion allowed 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.''
    This inconsistency has resulted in variances being granted under 40 
CFR 260.31(c) for some materials that are not yet commodity-like and 
that are still clearly hazardous waste. Therefore, EPA is proposing 
revisions to the variance criteria to address the inconsistency among 
authorized states, remove ambiguities, and clearly convey the original 
intent that only hazardous wastes that have been partially reclaimed to 
produce 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 ``F006 Reclamation.'' This document includes a 
detailed description of how the proposed revised variance provision 
would be used to make determinations about whether a variance would be 
appropriate for listed hazardous waste F006 (wastewater treatment 
sludges from electroplating operations) at various steps in the 
reclamation process.
4. Proposed Revisions To Clarify and Improve the Partial Reclamation 
Variance Provision
    As stated above, EPA is proposing several revisions to 40 CFR 
260.31(c). Each of the proposed revisions is discussed below.
    a. Revision to clarify the introductory text of 40 CFR 260.31(c). 
EPA is proposing to revise the introductory text of 40 CFR 260.31(c) to 
clarify when a partial reclamation variance is applicable. The proposed 
revised text would make it clear that the Regional Administrator may 
grant requests for a variance from classifying as a solid waste those 
materials that have been partially reclaimed but must be reclaimed 
further before recovery is completed, only if the partial reclamation 
has produced a commodity-like material. To qualify for a variance the 
material must be legitimately recycled as specified in 40 CFR 260.43, 
must be partially-reclaimed as determined by meeting criterion 1, and 
must be commodity-like as determined by meeting criteria 2-5.
    The revised text is intended to clarify that the variance is 
applicable at the point that partial reclamation has produced a 
commodity-like material. The revised text includes the phrase ``has 
produced a commodity-like material'' and ``must be commodity-like.'' 
These changes clarify and reflect EPA's intent that the variance 
applies only after partial reclamation has produced a commodity-like 
material. The variance does not apply earlier in a process when a 
hazardous waste is still present. While not a new regulatory 
requirement, the proposed change also highlights that the commodity-
like material must be legitimately recycled. The revised introductory 
text also replaces the term ``reclaimed'' with ``partially reclaimed'' 
to be more specific about when a variance would be applicable (i.e., 
after partial reclamation has produced a commodity-like material, 
rather than after full reclamation). Finally, the revised text 
clarifies that the first criterion is to be used to determine whether 
partial reclamation has occurred and the remaining criteria are to be 
used to determine whether a partially-reclaimed material is commodity-
like.
    EPA requests comment on whether the proposed revisions to the 
introductory text clarify the variance provision effectively and 
whether they will result in appropriate and consistent decisions about 
whether and when to grant a variance.
    b. Revision to the introductory text of 40 CFR 260.31(c) to require 
that all criteria are met. When the partial reclamation variance 
provision was originally promulgated in 1985, EPA stated that the 
Regional Administrator or authorized State Director could weigh the 
decision criteria ``as she sees fit, and may rely on any or all of them 
to reach a decision.'' Based on experience with the variance provision, 
EPA is proposing to change the introductory text of 40 CFR 260.31(c) to 
require that all criteria must be satisfied before a variance is 
granted. EPA is proposing this change for several reasons. First, 
criterion 1 emphasizes that the material must have been substantially 
partially reclaimed to be eligible for a variance. (This is discussed 
further in the next section below.) Second, we believe that each of the 
proposed revised criteria numbers 2, 3, 4, and 5 appropriately reflects 
a fundamental and essential characteristic of a commodity-like 
material. Therefore, all criteria must be met for the material to be 
determined to be commodity-like. In addition, clarifying that all of 
the criteria must be met will result in more consistent application of 
the variance by different decision makers.
    EPA requests comment on whether (1) the revised introductory text 
is more clear, (2) the revised criteria appropriately reflect the 
fundamental characteristics of a commodity-like material; and (3) 
requiring that all criteria must be met to grant a variance will foster 
appropriate and consistent variance decisions.
    c. Revisions to all criteria of 40 CFR 260.31(c). EPA is proposing 
revisions to all of the criteria in 40 CFR 260.31(c). First, all of the 
criteria have been revised to begin with the word ``whether'' to make 
it clear that the regulatory authority must make a yes or no 
determination as to whether the material meets each criterion. In 
addition, all of the criteria have been revised to be clearer and to 
better reflect the fundamental characteristics of a commodity-like 
material. The proposed changes to each criterion are discussed below.
    1. The degree of processing the material has undergone and the 
degree of further processing that is required.
    EPA is proposing to revise the criterion in 40 CFR 260.31(c)(1) to 
require consideration of whether the degree of partial reclamation the 
material has undergone is substantial.
    This criterion examines the degree of reclamation the material has 
undergone to become commodity-like. The more substantial the partial 
reclamation step is, the more likely it is that the material generated 
by the partial reclamation step is commodity-like.
    First, EPA is proposing to replace the general term ``processing'' 
with the more specific and accurate term ``partial reclamation.'' 
Second, EPA is proposing to remove from the criterion the concept that 
the initial partial reclamation step that makes a material commodity-
like should be compared to the further reclamation that occurs after 
the material has become commodity-like. Experience with the variance 
has clarified that the relevant question is whether the partial 
reclamation that has been completed is substantial and that the 
material produced is not the original hazardous waste. If the material 
has been substantially partially reclaimed, it then can be evaluated to 
determine whether it is commodity-like using the

[[Page 44130]]

remaining criteria. The degree of reclamation that occurs in the final 
reclamation step is not indicative of whether the partially-reclaimed 
material is commodity-like. This criterion would be satisfied when the 
partial reclamation is substantial and has produced a material that is 
no longer the original hazardous waste.
    EPA requests comment on whether the proposed revisions to this 
criterion clarify when a variance is applicable. EPA also requests 
comment on the appropriateness of removing the requirement to compare 
the degree of partial reclamation to the degree of final reclamation.
    2. The value of the material after it has been reclaimed.
    EPA is proposing to revise the criterion in 40 CFR 260.31(c)(2) to 
require consideration of whether the partially-reclaimed material has 
sufficient economic value that it will be purchased for final 
reclamation.
    This criterion examines the first of four fundamental 
characteristics that indicates that a partially-reclaimed material is 
commodity-like, the value of the material produced by the partial 
reclamation step.
    EPA is proposing to add 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. EPA is also proposing to revise this criterion to reflect 
the fundamental characteristic that a commodity-like material has 
positive economic value. A partially-reclaimed material that is 
commodity-like will be purchased by those who use it in manufacturing 
and production operations. EPA notes that the value of a material 
produced at a later stage of reclamation cannot be used to justify a 
variance for the partially-reclaimed material produced earlier in the 
process. In other words, the criterion must be applied to the material 
as it is at the specific point in the reclamation process where 
application of the variance is requested.
    Evidence to support this criterion may include sales information; 
demand for the material; and business contracts (e.g., contracts 
specifying quantities of material sold, details of the transaction, and 
the 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 requests comment on whether the proposed revisions clarify the 
criterion and appropriately describe the fundamental economic value 
characteristic of a commodity-like material.
    3. The degree to which the reclaimed material is like an analogous 
raw material.
    EPA is proposing to revise the criterion in 40 CFR 260.31(c)(3) to 
require consideration of whether the partially-reclaimed material is a 
viable substitute for a product or intermediate, produced from virgin 
or raw materials, which feeds subsequent production steps.
    This criterion reflects the second of four fundamental 
characteristics of a commodity-like material that must go through 
further reclamation before it becomes a final commercial product. In 
short, the material must be sufficiently analogous to a product or 
intermediate used in a manufacturing process to substitute for that 
product or intermediate.
    First, as with other criteria, EPA is proposing to add the word 
``partially-'' before the word ``reclaimed'' to clarify that the 
criterion applies to the partially-reclaimed material, not the fully-
reclaimed material produced later in the process. Second, EPA is 
proposing to replace the phrase ``is like an analogous raw material'' 
with the phrase ``is a viable substitute for a product or intermediate, 
produced from virgin or raw materials, which feeds subsequent 
production steps.'' This revision is intended to more accurately 
describe the fundamental characteristic of a commodity-like material 
used in production, which is that it will be used as a viable 
substitute for a product or intermediate. A partially-reclaimed 
material would meet this criterion if it is analogous to, or, in other 
words, would replace, valuable products or intermediates in the 
manufacturing process that have been produced (i.e., partially 
reclaimed) from raw materials but require further processing 
(reclamation) steps before the manufacturing process is complete. 
Evidence to support this criterion would include a comparison of the 
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.
    EPA requests comment on whether the proposed revisions clarify the 
criterion and appropriately describe the fundamental characteristic of 
a commodity-like material related to substituting for a product or raw 
material in a production process.
    4. The extent to which an end market for the reclaimed material is 
guaranteed.
    EPA is proposing to revise this criterion in 40 CFR 260.31(c)(4) to 
require consideration of whether there is a guaranteed end market for 
the partially-reclaimed material.
    This criterion addresses the third of four fundamental 
characteristics of a commodity-like material, whether there is an end 
market for the partially-reclaimed material. As with other criteria, 
EPA is proposing to add the word ``partially-'' before the word 
``reclaimed'' to clarify that the criterion applies to the partially-
reclaimed material for which the variance is sought. An end market for 
further reclaimed material produced at a later stage of reclamation 
cannot be used to justify a variance for a partially-reclaimed 
material. EPA requests comment on whether this proposed revision 
clarifies the criterion effectively.
    In addition, although EPA is not proposing any other substantive 
changes to the criterion, based on experience with the variance 
provision, EPA believes that further explanation of this criterion is 
necessary. The criterion requires an evaluation of whether an end 
market is guaranteed for the material for which a variance is 
requested. For example, if a facility requests a variance for an 
incoming hazardous waste, the end market that would have to be 
evaluated is the market for the incoming hazardous waste itself. A 
demonstrated end market for materials the facility produces later from 
the incoming hazardous waste would not be relevant to the analysis for 
the incoming waste.
    For an end market for a partially-reclaimed material to be 
guaranteed, there must be secure demand and long-term markets for the 
material. This would make it unlikely that large quantities of the 
material will be stockpiled for long periods of time, lost, or 
mismanaged due to insufficient demand. Assessing whether an end market 
is guaranteed for the partially-reclaimed material requires that the 
applicant for the variance provide end market information for the 
material generated by the partial reclamation step. Evidence to support 
this criterion may include the material's value as an input to a 
production process, traditional usage of quantities of the material, 
contractual arrangements for use of the material, and the likely 
stability of markets for the material. Furthermore, the end market must 
be demonstrated by a record of multiple actual purchases of the 
partially-reclaimed material by other parties. Further reclamation that 
can only be

[[Page 44131]]

conducted by the facility seeking the variance is not proof of an end 
market.
    5. The extent to which the reclaimed material is handled to 
minimize loss.
    EPA is proposing to revise the criterion in 40 CFR 260.31(c)(5) to 
require consideration of whether the partially-reclaimed material is 
handled to minimize loss.
    This criterion addresses the fourth of four fundamental 
characteristics of a commodity-like material, whether the partially-
reclaimed material is handled to minimize loss, or in other words, is 
handled similarly to a commodity. As with other criteria, EPA is 
proposing to add the word ``partially-'' before the word ``reclaimed'' 
to clarify that the criterion applies to the partially-reclaimed 
material for which the variance is sought. Management of materials 
produced at later stages of reclamation is not relevant to how the 
partially-reclaimed material itself is handled. EPA requests comment on 
whether this proposed revision clarifies the criterion effectively.
    In addition, EPA's experience with the variance provision indicates 
that further explanation of this criterion is necessary. Specifically, 
this criterion requires evaluation of how the partially-reclaimed 
material is handled before it is further reclaimed. Handling a 
partially-reclaimed material to minimize loss indicates that the 
material is commodity-like. Generally, persons handling hazardous waste 
with little or no economic value do not have the same incentives to 
minimize loss as persons handling commodities. Evidence to support this 
criterion may include documentation of facility procedures used to 
minimize loss (e.g., inspections, training), and storage and management 
equipment designed to minimize loss.
    6. Revision to eliminate criterion six.
    Finally, EPA is proposing to eliminate the sixth and final 
criterion concerning other relevant factors. 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 now 
believes that criteria numbers 2, 3, 4, and 5 (as proposed to be 
revised) together accurately and fully reflect the fundamental 
substantive characteristics of a commodity-like material for the 
situation where a material has been partially reclaimed but must go on 
for further reclamation before it is a final commercial product. We 
have not seen other essential characteristics of this type of 
commodity-like material identified in variances or applications. Thus, 
we are proposing to eliminate this criterion. We also believe that 
removing this general criterion will result in more consistent and 
appropriate decision-making for partial reclamation variances.
    EPA requests comment on removing the sixth criterion and whether 
there are any additional characteristics that should be evaluated to 
assess whether a material is commodity-like. EPA also requests comment 
on whether one or more of the five remaining criteria should be 
consolidated.

C. Proposed Change to Non-Waste Determinations

    EPA is also proposing to add a criterion to both non-waste 
determinations 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 Sec. Sec.  261.2 or 
261.4.\30\ Because commenters to the 2009 DSW public meeting notice 
have argued that the non-waste determinations may be burdensome to 
states, EPA believes requiring applicants to formally consider and 
explain why they are not eligible for an existing DSW exclusion will 
reduce the burden on states. This criterion reduces 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 state why a facility believes it cannot meet an existing exclusion, 
which is likely to be the state's first question before evaluating a 
non-waste determination petition. Petitioners also would be allowed to 
seek non-waste determinations if they could show that they should not 
have to meet the conditions of another 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 Sec. Sec.  261.2 or 261.4, this may be grounds for 
denying a non-waste determination on the basis that regulatory relief 
has already been granted.
---------------------------------------------------------------------------

    \30\ 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.
---------------------------------------------------------------------------

D. Designating the Regional Administrator To Receive Petitions

    Lastly, we are proposing to change the word ``Administrator'' to 
``Regional Administrator'' in 40 CFR 260.30, 260.31, 260.32, 260.33, 
and 260.34. Due to the case-specific nature of the variances and non-
waste determinations, we believe these decisions should be made by the 
Regional Administrator because of his or her regional authority. We 
also note that although we propose to assign the decision-making 
authority to the Regional Administrator, it is common practice within 
EPA to work with other EPA offices, EPA Regions, EPA Headquarters on 
decisions that may affect national policy.

E. Request for Comment on Other Possible Steps To Help Ensure National 
Consistency and Protectiveness in the Implementation of Variances and 
Non-Waste Determinations

    EPA is also requesting comment on other possible steps to help 
ensure national consistency and protectiveness in the implementation of 
variances and non-waste determinations.
    First, EPA is requesting comment on whether to require variances 
and non-waste determinations to be renewed periodically, and, if so, 
what time period would be appropriate (e.g., two or five years). A 
renewal period would help ensures the hazardous secondary materials 
continue to meet the criteria and remain valid over time. To a certain 
extent, this concern would be addressed by the proposed revision to 40 
CFR 260.33(c), which would require applicants to re-apply for a 
variance or non-waste determination in the event of a change in 
circumstances that affect how hazardous secondary materials meet the 
relevant criteria, and by the proposed biennial re-notification, which 
would require the applicant to review the management of their hazardous 
secondary materials. However, the proposed revision to 40 CFR 260.33(c) 
still relies on the applicant to recognize when there is a need to 
reconsider a variance and take action, while a specific renewal period 
would mandate a reconsideration. On the other hand, mandating a renewal 
period would be an additional burden to the states, and may not be 
necessary in all situations. Additionally, regulators could always 
stipulate time limits in specific determinations, if warranted. EPA 
requests comment on whether to require a renewal period and, if so, how 
to minimize the burden on the states.
    The second possible change EPA is requesting comment on is whether 
to

[[Page 44132]]

require states to share copies of the variance and non-waste 
determination petitions and the tentative decisions with EPA to allow 
the Agency to comment and to encourage collaboration and national 
consistency. EPA and the states share responsibility for environmental 
protection and work as partners to solve the nation's environmental 
challenges. Because solid waste variances and non-waste determinations 
are made on a case-by-case basis, state governments are best situated 
to understand and evaluate the specific factors involved with the 
company submitting a petition. At the same time, EPA may be familiar 
with similar cases in other states or EPA Regions and can often provide 
additional expertise and a national perspective on issues that affect 
more than one location. As a general matter, the state and EPA 
frequently consult on such cases, helping to achieve the best results 
possible, taking full advantage of the unique strengths of each 
partner.
    However, formalizing this type of collaboration would have the 
benefit of reinforcing this working relationship and would help ensure 
national consistency. Thus, EPA requests comment on whether to require 
authorized states to forward to EPA copies of solid waste variance and 
non-waste determinations petitions and tentative decisions on those 
petitions for review and comment.

XII. Request for Comment on Re-Manufacturing Exclusion

A. Background

    In addition to the proposed changes to the definition of solid 
waste discussed in Sections VII-XI of this preamble, EPA is requesting 
comment on a focused exclusion from the definition of solid waste for 
certain types of higher-value hazardous secondary materials \31\ which 
are being re-manufactured into commercial-grade products.
---------------------------------------------------------------------------

    \31\ ``Higher-value'' hazardous secondary materials are those 
who have a higher value than most types of hazardous secondary 
materials and can be used in manufacturing commercial-grade 
products.
---------------------------------------------------------------------------

    The goal of the re-manufacturing exclusion would be 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.
    Sustainable materials management, as discussed in more detail in 
Section V.J. of this preamble, considers system-wide impacts, and 
represents a shift away from end-of-life waste management and toward a 
more sustainable future that avoids unintended consequences. The 
benefits of sustainable materials management broadly include potential 
reductions in energy used, more efficient use of materials, more 
efficient movement of goods and services, conservation of water, 
reduced greenhouse gas and other air emissions, and reduced volume and 
toxicity of waste. In particular, when hazardous secondary materials 
can be kept in the manufacturing process, rather than disposed of, or 
used in a lower-value process such as cleaning or degreasing, 
substantial environmental benefits can be obtained.
    As discussed in Section VII of this preamble, EPA is proposing to 
replace the transfer-based exclusion found in 40 CFR 261.4(a)(24) and 
(a)(25) with an alternative Subtitle C regulatory scheme because of the 
potential for adverse impacts to human health and the environment from 
discarded hazardous secondary materials. EPA believes that such a 
standard would be more appropriate for hazardous secondary material 
because (1) the Agency reasonably believes (as explained in detail in 
the 2008 DSW final rule) that, absent specific conditions, transfers of 
hazardous secondary materials to third-party reclaimers generally 
involve discard, and (2) the conditions of the 2008 DSW final rule have 
serious gaps, particularly the incentives to accumulate larger volumes 
of hazardous secondary materials, the reduction in oversight resulting 
from eliminating the permit requirement for storage, and the reduction 
in the public's access to information and the opportunity for public 
participation, that could create a potentially unacceptable likelihood 
of adverse effects to human health and the environment from such 
discarded material.
    However, as also discussed in Section VII, EPA acknowledges that 
some specific types of hazardous secondary materials are more like 
valuable commodities than solid wastes, and thus the act of 
transferring them to a third party under appropriate conditions does 
not necessarily involve discard. From a sustainable materials 
management perspective, these materials are the ideal candidates for 
focused regulatory changes that would address their life-cycle impacts 
and help extend their useful life. Many of the other exclusions in 40 
CFR 261.4(a) were developed for these types of hazardous secondary 
materials, and the non-waste determination process under 40 CFR 
260.34(c) provides an administrative process for additional hazardous 
secondary materials that are indistinguishable from a product to be 
determined to be non-wastes.
    To further encourage sustainable materials management,, EPA is 
requesting comment on an exclusion for the transfer of higher-value 
hazardous secondary materials from one manufacturer to another, for the 
purpose of extending the useful life of the original material product 
by keeping such materials in commerce to reproduce a commercial grade 
of the original material product (a process that for the purpose of 
this preamble discussion EPA is defining as ``re-manufacturing''). Re-
manufacturing these higher-value hazardous secondary materials can have 
significantly lower environmental impact than creating these material 
products and using them one time in their virgin state and then 
transferring them for off-site treatment and disposal, especially with 
regards to non-renewable materials. Thus, re-manufacturing allows the 
material products to be used again, lowering their life-cycle 
environmental impacts significantly.
    Specifically, EPA has reached a preliminary conclusion that, under 
appropriate conditions, the potential for discard in inter-company re-
manufacturing transfers for certain higher-value spent solvents would 
be low because they will be incorporated into the manufacturing process 
rather than accumulated or disposed of. Once these solvents are re-
manufactured 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 re-manufactured solvent products to 
realize an economic value. The company sending these higher-value 
hazardous secondary materials for re-manufacturing is expected to have 
little economic incentive to pay the receiving company more than a 
nominal amount of money, since it would already be transferring 
something of intrinsic market value (materials that can be easily re-
manufactured 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 hazardous secondary materials for 
re-manufacturing is expected to realize most of its profit from the 
sale or use of re-manufactured solvents.
    Once re-manufacturing processes are in place, EPA expects that 
solvent re-manufacturers would be competitive with solvent 
manufacturers even in the event of a downturn in the sizable

[[Page 44133]]

chemical markets. Companies would also have the flexibility to redirect 
re-manufacturing capacity to manufacturing should it ever make economic 
sense to do so, leaving little economic reason to accumulate unsold or 
unused re-manufactured solvents.
    Although the following discussion focuses mainly on spent solvents, 
EPA would welcome information on other types of non-renewable hazardous 
secondary materials that could benefit from a focused regulatory change 
that would encourage sustainable materials management and be protective 
of human health and the environment.

B. Conditions for the Re-Manufacturing Exclusion

    Given the wide variety of hazardous secondary materials and 
industrial processes, EPA believes it is reasonable to set conditions 
for the exclusion which there is supporting evidence that discard will 
be avoided and risk will be controlled. The supporting evidence that 
EPA is relying on for defining the conditions of this exclusion has 
been gathered from some of the Agency's ongoing efforts to promote 
sustainability and resource conservation.
    In particular, the Green Engineering Program within the Office of 
Chemical Safety and Pollution Prevention (OCSPP) has for several years 
been studying re-manufacturing scenarios for ``once-used'' solvents in 
several industry sectors that use solvents as chemical manufacturing 
and processing aids. By focusing on the life-cycle (cradle-to-grave) 
impact of the manufacture, process, and use of chemicals, and reviewing 
Toxics Release Inventory (TRI) production-related waste reporting, EPA 
has found that a large, but often hidden lifecycle environmental impact 
of a final consumer product is from the solvents used to produce the 
consumer product. For example, pharmaceutical manufacturers use at 
least 100 kg of solvents to make 1 kg of active pharmaceutical 
ingredient. The lifecycle impact of these solvent streams, which often 
are disposed after a single use under current regulatory conditions, is 
very high.EPA has determined that the environmental impacts from 
solvents used as manufacturing and processing aids could be 
significantly reduced if the product life of solvents used for these 
purposes were extended to more than a single use.\32\
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    \32\ U.S. EPA Benefits of the Re-manufacturing Exclusion, June 
2011.
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    Based on this information, EPA proposes that all of the following 
conditions would need to be satisfied for eligibility under a re-
manufacturing exclusion. The purpose of these conditions is to ensure 
that the exclusion would focus on higher-value hazardous secondary 
materials that are being re-manufactured rather than discarded.
    (1) The hazardous secondary material consists of one or more of the 
following solvents: 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;
    (2) The hazardous secondary material originated from using one or 
more of the above-listed solvents in commercial grade for reacting, 
extracting, purifying, or blending chemicals in the pharmaceutical, 
organic chemical, or plastics and resins manufacturing sectors, or the 
paint and coatings sector;
    (3) After re-manufacturing, the continuing use of the solvent is 
limited to reacting, extracting, purifying, or blending chemicals in 
the pharmaceutical, organic chemical, or plastics and resins 
manufacturing sectors, or the paint and coatings sector, or using them 
as ingredients in a product. These allowed continuing uses correspond 
to chemical functional uses enumerated under the proposed modification 
to the Inventory Update Rule of the Toxic Substances Control Act (40 
CFR parts 704, 710-711), including Industrial Function Codes U015 
(solvents consumed in a reaction to produce other chemicals) \33\ and 
U030 (solvents become part of the mixture).\34\
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    \33\ U015 Intermediates: Chemical substances consumed in a 
reaction to produce other chemical substances for commercial 
advantage. A residual of the intermediate chemical substance which 
has no separate function may remain in the reaction product.
    \34\ U30 Solvents (which become part of product formulation or 
mixture): Chemical substance used to dissolve another substance 
(solute) to form a uniformly dispersed mixture (solution) at the 
molecular level. Examples include diluents used to reduce the 
concentration of an active material to achieve a specified effect 
and low gravity materials added to reduce cost.
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    (4) After re-manufacturing, the continuing use of the solvent does 
not involve cleaning or degreasing oil, grease, or similar material 
from textiles, glassware, metal surfaces, or other articles (These 
disallowed continuing uses correspond to chemical functional uses in 
Industrial Function Code U029 under the proposed modification of the 
Inventory Update Rule of the Toxics Substances Control Act);
    (5) Additionally, both the hazardous secondary material generator 
and the re-manufacturer would have to
    a. Notify EPA or the State Director, if the state is authorized for 
the program, and update the notification every two years per 40 CFR 
260.42;
    b. Develop and maintain a re-manufacturing plan which includes 
information on the types and expected annual volumes of solvents to be 
re-manufactured, the processes and industry sectors that generate the 
solvents, the specific uses and industry sectors for the re-
manufactured solvents and the legitimacy of the re-manufacturing 
process;
    c. Maintain records of shipments and confirmations of receipts for 
a period of three years from the dates of the shipments;
    d. Prior to re-manufacturing, store the hazardous spent solvents in 
tanks or containers that meet technical standards that would be the 
same as those found in 40 CFR part 264 subparts I and J, with the tanks 
and containers being labeled or otherwise having an immediately 
available record of the material being stored; \35\ During re-
manufacturing, and during storage of the hazardous secondary materials 
prior to re-manufacturing, ensure that there is effective control of 
hazardous air emissions by complying with all applicable NESHAP 
standards, and with the requirements of 40 CFR part 264 or 265 subparts 
AA, BB, CC; and
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    \35\ These standards would be specified in the regulatory 
language of this exclusion, but would be the same technical 
standards as those required in 40 CFR part 264 subparts I and J.
---------------------------------------------------------------------------

    e. Meet the requirements prohibiting speculative accumulation per 
40 CFR 261.1(c)(8).
    The rationale for the data elements under each condition is 
provided below. EPA requests comment on each of the conditions, the 
specific data elements under each condition, and/or any other types of 
scenarios that might also meet EPA's proposed definition of re-
manufacturing (i.e., the transfer of a higher-value secondary material 
from one manufacturer to another, for the purpose of keeping the 
hazardous secondary material in commerce to produce a commercial grade 
product). In addition, EPA requests comment on whether, as part of the 
re-manufacturing plan, the hazardous secondary materials generator and 
the re-manufacturer should be required to estimate the energy and 
environmental benefits of re-manufacturing versus the use of virgin 
feedstock.

[[Page 44134]]

1. Designated Solvents
    EPA has identified 18 chemicals that could be included in the re-
manufacturing exclusion. They are 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.\36\
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    \36\ U.S. EPA, Selection of Industry Sectors, Chemicals and 
Functions in the Re-manufacturing Exclusion, June 2011.
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    EPA believes that including these 18 chemicals in a re-
manufacturing exclusion is a good opportunity for reducing the risks 
associated with these chemicals at the present time. 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.\37\ 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 achieved.\38,\ \39\ 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 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 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 re-manufacturing 
exclusion can help achieve.
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    \37\ 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.
    \38\ For information on U.S. EPA's Green Chemistry Program, see 
http://www.epa.gov/gcc/.
    \39\ 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.
---------------------------------------------------------------------------

    The exclusion can help 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. Re-manufacturing 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. All solvents are volatile, and virtually 
all spent solvents must go through the fuel-blending process prior to 
disposal.\40\ Third and finally, the exclusion can reduce the potential 
exposure from any transportation incidents, since it is likely spent 
solvents can be transported shorter distances for re-manufacturing 
purposes than they can for disposal purposes.\41\
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    \40\ U.S. EPA, Selection of Industry Sectors, Chemicals and 
Functions in the Re-manufacturing Exclusion, June 2011.
    \41\ Id.
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    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 aids'' solvents assist in the reaction, 
extraction, purification, and blending of ingredients and reactive 
products, but are not themselves reacted. These processing aid 
solvents, once used, can then be re-manufactured to commercial grade 
again. These higher-value solvents were selected because there are 
existing markets for all these solvents to be re-manufactured to serve 
similar purposes to those of the original commercial-grade materials.
    Note that, as explained below, these hazardous spent solvents would 
only be eligible if their originating use was of a specific type, and 
if they are re-manufactured to serve certain types of commercial 
functions. This restriction would help limit the exclusion to higher-
value materials and processes that resemble manufacturing more than 
waste management.
    EPA believes that spent solvents are particularly appropriate for 
the re-manufacturing exclusion because they are derived from a non-
renewable resource (petroleum), and they are manufactured in the 
industrial chemicals sector, which, according to EPA's report on 
sustainable materials management, ranks third overall as far as direct 
adverse overall impact to the environment.\42\ EPA requests comment on 
whether these solvents are appropriate for inclusion in the re-
manufacturing exclusion, and whether there are other solvents, 
chemicals or other types of hazardous secondary materials that should 
be included in the re-manufacturing exclusion. In particular, EPA 
requests comment on opportunities for re-manufacturing other types of 
non-renewable hazardous secondary materials, such as metal catalysts or 
other types of metal-bearing hazardous secondary materials.
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    \42\ U.S. EPA. 2020 Vision Report: Sustainable Materials 
Management: The Road Ahead, Table 1, page 25. http://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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2. Chemical Functions
    EPA believes that the re-manufactured 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. EPA has identified the following chemical functions for 
possible inclusion in the re-manufacturing exclusion: chemical 
manufacturing aid (reacting, extracting, blending and/or purifying 
chemicals), and chemical processing aid (extracting, blending and 
purifying chemicals).\43\ The solvents used for these functions can be 
separated readily from the other reaction components and therefore do 
not get contaminated as do solvents used for cleaning or degreasing 
operations, which are more likely to become discarded.
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    \43\ U.S. EPA, Selection of Industry Sectors, Chemicals and 
Functions in the Re-manufacturing Exclusion, June 2011.
---------------------------------------------------------------------------

    More environmental benefits will be obtained by maximizing the 
number of times a chemical product can be used at high-purity grade as 
an aid to chemical manufacturing and processing, before it is used for 
at lower-purity as a cleaner or degreaser. While it is possible to 
extend the product life of a used chemical as a cleaner/degreaser, it 
takes significantly less energy to bring solvents used as chemical 
manufacturing aids back to commercial grade than to bring solvents used 
as cleaners and degreasers back to lower grade functionality, making 
re-manufacturing of the higher-value solvents more economically 
feasible.
    Accordingly, the functions that the re-manufactured chemical 
products should serve would be the same as those enumerated above, plus 
the use in the formulation of the final product (a function which 
causes the solvent to remain in the product), or use as a chemical 
intermediate (a function which causes the solvent to be consumed in a 
chemical reaction).
    With respect to the hazardous secondary material generator, this

[[Page 44135]]

exclusion would focus 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 do not get contaminated by substances from which they are 
difficult to separate, such as inks and greases, 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.
    EPA requests comment on whether these chemical functions are 
appropriate for inclusion in the exclusion and whether there are other 
chemical functions that should also be included in the re-manufacturing 
exclusion.
3. Manufacturing Sectors
    EPA intends that any exclusion would be limited to companies whose 
primary business is manufacturing, rather than waste management, as 
indicated by particular NAICS codes. EPA has identified the operations 
of four manufacturing sectors as candidates for the re-manufacturing 
exclusion: Pharmaceutical manufacturing (NAICS 325412), basic organic 
chemical manufacturing (NAICS 325199), plastics and resins 
manufacturing (NAICS 325211), and the paints and coatings manufacturing 
sectors (NAICS 325510). Manufacturers within these four sectors all use 
one or more of the eighteen 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. Therefore, these four 
sectors seem to be good candidates for inclusion in the exclusion.\44\
---------------------------------------------------------------------------

    \44\ U.S. EPA, Selection of Industry Sectors, Chemicals and 
Functions in the Re-manufacturing Exclusion, June 2011
---------------------------------------------------------------------------

    As discussed earlier, companies whose primary business is the sale 
of a commercial product do not operate under the same market forces as 
commercial recyclers, whose profit depends on maximizing the amount of 
hazardous secondary material accepted, creating a perverse market 
incentive to over-accumulate hazardous secondary material, resulting in 
discard. It is not intended that the exclusion could be utilized by a 
commercial recycler even if it undertook reclamation operations 
involving the chemicals and chemical functions described above. 
Commercial recyclers are best regulated by the RCRA hazardous waste 
standards since waste handling is their primary business and RCRA 
standards are the primary governing standards for this line of 
business.
    EPA requests comment on whether these sectors are appropriate for 
inclusion in the exclusion, and whether there are other industry 
sectors that should be included in the re-manufacturing exclusion. In 
particular, while the re-manufacturing exclusion on which EPA is 
requesting comment focuses on those industry sectors that generate 
large volumes of spent solvents, we also are interested in other 
industry sectors that would generate other materials, especially other 
types of non-renewable materials, such as metal-bearing hazardous 
secondary materials. For example, the ``2020 Vision Report'' identifies 
industry sectors that could be evaluated and for which significant 
environmental gains could be realized through sustainable materials 
management. Thus, EPA requests comment on which sectors provide the 
most opportunity for reducing overall environmental impact by 
encouraging sustainable materials management through re-
manufacturing.\45\
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    \45\ For an analysis of materials, products and services ranked 
by overall environmental impact, see U.S. EPA. 2020 Vision Report: 
Sustainable Materials Management: The Road Ahead, Table 1, page 25. 
http://www.epa.gov/waste/inforesources/pubs/vision.htm.
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4. Additional Exclusion Conditions
    EPA has identified the following additional conditions as necessary 
for the proper implementation of a re-manufacturing exclusion and to 
ensure that the hazardous secondary materials are managed in a way that 
does not involve discard.
    a. Notification. Notification under a re-manufacturing exclusion 
would serve the same purpose and operate similarly to the notification 
provision found at 40 CFR 260.42. In other words, hazardous secondary 
material generators and re-manufacturers would have to submit a 
notification prior 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 notification would include:
     The name, address and EPA ID number (if applicable) of the 
facility;
     The name and telephone number of a contact person;
     The NAICS and TRI code of the facility;
     When the facility expects to begin managing the hazardous 
secondary material in accordance with the re-manufacturing exclusion;
     A list of the hazardous secondary materials that would be 
managed according to the new standard (reported as the EPA hazardous 
waste numbers that would apply if the materials were managed as 
hazardous waste);
     The quantity of each hazardous secondary material solvents 
to be managed annually; and
     The certification signed and dated by an authorized 
representative of the facility.
    The intent of the notification requirement is to provide basic 
information to the regulatory agencies about who will be managing 
hazardous secondary materials under the re-manufacturing exclusion. The 
specific information included in the notification requirement enables 
regulatory agencies to monitor compliance and to ensure hazardous 
secondary materials are managed in accordance with the exclusion and 
not discarded.
    b. Re-manufacturing plan. A key issue for a re-manufacturing 
exclusion would be how the facilities operating under the exclusion 
would demonstrate that they meet the requirements (e.g., that the 
hazardous secondary materials, functions, and manufacturing sectors are 
those identified in the exclusion). A straightforward method would be 
to require a re-manufacturing plan to be prepared and maintained by 
both the hazardous secondary material generator and re-manufacturer 
that includes information on the types and expected annual volumes of 
solvents to be excluded, the processes and industry sectors that 
generate the chemicals, the specific uses and industry sectors--for the 
re-manufactured solvents, and the legitimacy of the re-manufacturing 
process (see Section X for further discussion on legitimacy). The 
hazardous secondary material generator would also be required to make 
arrangements with the re-manufacturer to jointly develop this plan and 
to verify the appropriateness of the hazardous secondary materials for 
the re-

[[Page 44136]]

manufacturing process before claiming the exclusion, thus helping 
ensure that the hazardous secondary material will be re-manufactured 
and not discarded.
    c. Record of shipments and confirmations of receipts. Under a re-
manufacturing exclusion, generators and re-manufacturers would need to 
maintain at the facility records of shipments of hazardous secondary 
materials for a period of three years. Specifically, for each shipment 
of hazardous secondary material, the generator and re-manufacturer 
would need to maintain documentation of when the shipment occurred, who 
the transporter was, and the 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. 
However, EPA requests comment on whether for ease of implementation and 
enforcement, it should require more standardized record-keeping, such 
as the use of a standardized bill of lading.
    In addition, generators would need to maintain confirmations of 
receipt for all off-site shipments of hazardous secondary materials in 
order to verify that the hazardous secondary materials reached their 
intended 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 re-manufacturer, and the type, quantity, 
and date of hazardous secondary materials received. The Agency might 
not require a specific template or format for confirmation of receipt 
since routine business records (e.g., financial records, bills of 
lading, copies of Department of Transportation (DOT) shipping papers, 
and electronic confirmation of receipt) would contain the appropriate 
information sufficient for meeting this requirement. However, 
documented information must be verifiable. Therefore, EPA requests 
comment on whether for ease of implementation and enforcement, it 
should require more standardized record-keeping, such as requiring a 
standard method of confirmation of receipt and/or keeping this 
information in a readily accessible file.
    This provision is being proposed in order that all parties 
responsible for the excluded hazardous secondary materials would be 
able to demonstrate that the materials were in fact sent for re-
manufacturing and arrived at the intended facility and were not 
discarded in transit.
    d. Management in tanks and containers. Solvents, whether virgin or 
spent, are best stored in tanks or containers that possess inherent 
controls to address issues such a volatile air emissions, leaks, and 
fires or explosions. As discussed in Section VI of this preamble, spent 
solvents present particular management challenges associated with the 
storage of liquids containing volatile organic chemicals and include 
both halogenated and non-halogenated organic chemicals, which represent 
a broad range of chemicals and associated hazards.
    EPA believes that by focusing on higher-value spent solvents going 
to re-manufacturing, a re-manufacturing exclusion reduces the chance of 
mismanagement of the spent solvents. However, given the history of 
solvent mismanagement, as demonstrated in the damage cases found in 
environmental problems study,\46\ EPA also believes it would be 
appropriate to make an explicit condition that spent solvents excluded 
under a re-manufacturing exclusion be labeled or otherwise have an 
immediately available record of the material being stored and be stored 
prior to re-manufacturing in tanks or containers that meet technical 
standards that will ensure that the solvents will go to re-
manufacturing and will not be discarded via leaks, spills or 
explosions.
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    \46\ U.S. EPA An Assessment of Environmental Problems Associated 
With Recycling of Hazardous Secondary Materials (EPA-HQ-RCRA-2002-
0031-0355).
---------------------------------------------------------------------------

    For ease of implementation, EPA requests comment on establishing 
explicit tank and container standards which meet the technical 
standards that would be the same as those found in 40 CFR part 264 
subparts I and J. The tank and container standards of 40 CFR part 264 
were developed for hazardous wastes, but an analysis of the full set of 
technical requirements under subparts I and J shows that they are 
comparable to product storage standards from a number of sources, 
including regulations promulgated under the Occupational Safety and 
Health Act (OSHA), DOT, and industry standards, and may also be 
appropriate standards for storage prior to re-manufacturing.\47\ 
Establishing technical standards equivalent to subparts I and J has the 
benefit of using standards that the regulated community are already 
familiar with, and which are designed to prevent the spent solvents 
from being discarded through leaks or explosions. EPA also believes 
that during re-manufacturing and storage prior to re-manufacturing, 
there should be effective controls of hazardous air emissions. This can 
be ensured by requiring that equipment, vents, and tanks meet the 
technical standards of the National Emission Standards for Hazardous 
Air Pollutants (NESHAP) applicable to the sector, or absent such 
standards for the particular operation or piece of equipment covered by 
the exemption, then the standards equivalent to those found in 40 CFR 
part 264 or 265 subparts AA (vents), BB (equipment) and CC (tank 
storage).
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    \47\ U.S. EPA Equivalent Containment Standards for the Re-
manufacturing Exclusion, June 2011.
---------------------------------------------------------------------------

    EPA requests comment on using these standards or other alternative 
standards that would be appropriate for helping to demonstrate that the 
excluded spent solvents under the re-manufacturing exclusion are being 
managed as a commodity rather than being discarded.
    e. No speculative accumulation. In addition to the other 
conditions, hazardous secondary materials under a re-manufacturing 
exclusion would still be subject to the speculative accumulation 
restrictions in 40 CFR 261.1(c)(8), which includes both a time 
limitation and a requirement that the facility be able to show that 
there is a feasible means of recycling/recovering the hazardous 
secondary material. This helps ensure that the materials are re-
manufactured and not discarded.
    EPA requests comment on whether these conditions are appropriate 
and whether there are additional conditions that should be also 
included in any re-manufacturing exclusion.

C. Benefits of Re-Manufacturing Exclusion

    The solvents identified as possible candidates for a re-
manufacturing exclusion are highly energy-intensive and carbon-
intensive at their creation and destruction. Therefore, any step 
towards extending the useful life of these solvents (e.g., re-
manufacturing via distillation) significantly reduces the energy use 
and carbon release associated with these solvents, as well as other 
pollutants associated with their manufacturing and disposal.\48\ Using 
solvents multiple times instead of once means fewer solvents need to be 
produced and destroyed, which reduces the energy consumed for solvent 
production and destruction. That is, less fuel is needed to re-
manufacture solvents than to produce solvents from virgin materials. 
The reduction in fuel for manufacturing is significant because solvent 
manufacture is energy intensive due to a combination of the high and 
low temperature manufacturing steps involved. Also, less fuel is needed 
to destroy solvents (at very high temperatures) if fewer solvents are 
being

[[Page 44137]]

destroyed. Lastly, less pollution, including carbon, is released from 
the solvents themselves when incinerated or burned as fuel at the end 
of their useful life if fewer solvents are being incinerated or 
burned.\49\
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    \48\ U.S. EPA Benefits of the Re-manufacturing Exclusion, June 
2011.
    \49\ U.S. EPA Benefits of the Re-manufacturing Exclusion, June 
2011.
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    There is also a benefit of reduced transportation impacts 
associated with extending the useful life of solvents. EPA research 
indicates that in numerous instances the transport involved in 
transferring a quantity of spent solvents for purposes of re-
manufacturing (including any delivery to secondary users) is measurably 
less than the transport required for an equal quantity of solvents 
disposed of and replaced with new solvents.\50\ In addition, 
transportation impacts of virgin feedstocks would also be reduced. 
Thus, allowing hazardous secondary material generators to re-
manufacture solvents is also likely to reduce the risks to communities 
by reducing the likelihood of transportation accidents involving 
hazardous materials, as well as reducing other adverse environmental 
impacts from fuel consumed in transportation.
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    \50\ U.S. EPA Benefits of the Re-manufacturing Exclusion, June 
2011.
    .
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    Further, reduced manufacturing of virgin solvents would reduce the 
quantity of ingredients needed and the toxic and hazardous pollutant 
releases associated with solvent manufacture. Moreover, a re-
manufacturing exclusion would create a business-case incentive for 
hazardous secondary material generators to re-manufacture solvents. 
Reducing the economic barriers to solvent re-manufacturing (in 
particular, avoiding the costs associated with RCRA permitting) would 
make it commercially feasible for more chemical manufacturers to re-
manufacture solvents, and would thus serve to encourage chemical 
manufacturers to reduce the overall environmental impacts of solvent 
manufacturing and use.
    Finally, the benefit of limiting the functions of re-manufactured 
material to those performed by chemical manufacturers, processors, and 
formulators is that there are existing commercial purposes for re-
manufactured solvents, which would limit or prevent the over-
accumulation of the spent solvents, which also reduces the likelihood 
for discard.

D. Potential Rulemaking Variance Process To Add Candidates for Re-
Manufacturing Exclusion

    EPA is requesting comment in today's proposal on a re-manufacturing 
exclusion that is narrowly defined to apply to 18 solvents used for 
specific functions within four industry sectors. However, it is 
possible that other hazardous secondary materials, industry sectors, 
and/or functional uses may also be suitable candidates for the re-
manufacturing exclusion if they involve the transfer of a higher-value 
hazardous secondary material from one manufacturer to another, for the 
purpose of re-manufacturing a material with significant commercial 
value. If the Agency were to promulgate a re-manufacturing exclusion, 
EPA is requesting comment on whether to also include a specific 
petition process where petitioners may apply to EPA to request a 
hazardous secondary material, industry sector, and/or functional use be 
added to the exclusion.
    The petition process would be similar to 40 CFR 260.20, where any 
person may petition the Administrator to modify or revoke any 
provisions of the hazardous waste rules. Thus, in the context of a re-
manufacturing exclusion, any person would be able to petition the 
Administrator to add or remove hazardous secondary materials, industry 
sectors, and/or specific use functions to the list of hazardous 
secondary materials qualifying for this exclusion. To be successful, 
the petitioner would need to demonstrate to the satisfaction of the 
Administrator that the proposed regulatory amendment (1) meets the goal 
of the re-manufacturing exclusion, which is to encourage sustainable 
materials management by extending the productive life of a hazardous 
secondary material; (2) involves the transfer of a higher-value 
hazardous secondary material from one manufacturer to another for the 
purpose of re-manufacturing the hazardous secondary material to produce 
a product of significant commercial value; and, (3) results in neither 
the hazardous secondary materials nor the products recovered being 
discarded when the conditions of the exemption are followed. The 
application could be required to include (1) the petitioner's name and 
address; (2) a statement of the petitioner's interest in the proposed 
action; (3) a description of the proposed action, including the 
specific hazardous secondary material, industry (i.e., NAICS code) and 
functional use (i.e., industrial functional code listed in 40 CFR 
710.52(c)(4)(i)(C)); and (4) a statement of the need and justification 
for the proposed action, including any supporting tests, studies, or 
other information.
    Under this possible petition process, the Administrator would make 
a tentative decision to grant or deny a petition and then publish 
notice of such tentative decision, either in the form of an advanced 
notice of proposed rulemaking, a proposed rule, or a tentative 
determination to deny the petition, in the Federal Register for written 
public comment. The Administrator could, at his discretion, hold an 
informal public hearing to consider oral comments on the tentative 
decision.
    After evaluating all public comments, the Administrator would make 
a final decision by publishing in the Federal Register a regulatory 
amendment or a denial of the petition.

E. Other Issues Related to a Possible Re-Manufacturing Exclusion

    A re-manufacturing exclusion, as described above, would be based on 
a direct business arrangement between the hazardous secondary material 
generator of spent solvents and the re-manufacturer, such that the 
spent solvents would be shipped directly from the generator to the re-
manufacturer. Therefore, EPA does not believe that it would be 
necessary or appropriate to include intermediate storage facilities in 
the exclusion. We also believe that including such intermediate storage 
facilities would make it harder to keep track of the hazardous 
secondary materials and would increase storage time frames, potentially 
increasing the likelihood that the hazardous secondary materials will 
not be safely recycled. However, the Agency also recognizes that not 
allowing intermediate storage facilities to be part of the transaction 
may have an adverse impact on small businesses since such intermediate 
storage facilities would allow small businesses to ship their spent 
solvent, that are likely generated in limited quantities, to the 
intermediate facility for consolidation before they go to the re-
manufacturer. Thus, EPA requests comment on this issue.
    Similarly, EPA anticipates that re-manufacturing arrangements would 
be made within the United States, so that the companies involved would 
be governed by the same set of laws and regulations as far at their re-
manufacturing agreements are concerned. EPA requests comment on 
limiting the re-manufacturing exclusion to the United States, or 
requiring the generator to notify the receiving country through EPA and 
obtain consent from that country before shipment of the

[[Page 44138]]

hazardous secondary materials takes place. These notice and consent 
requirements, which would be the same as those currently required under 
the transfer-based exclusion (see 40 CFR 261.4(a)(25)), would provide 
notification to the receiving country so that it can ensure that the 
hazardous secondary materials are reclaimed rather than disposed of or 
abandoned. As an additional benefit, these requirements would allow the 
receiving country the opportunity to consent or refuse consent based on 
its analysis of whether the re-manufacturing facility can properly 
manage the hazardous secondary materials in an environmentally sound 
manner within its borders.
    EPA also requests comment on other possible conditions that could 
be added to any re-manufacturing exclusion. In particular, EPA requests 
comment on whether it should require the re-manufacturer to have 
financial assurance. EPA required financial assurance for recyclers 
under the transfer-based exclusion. Since the re-manufacturing 
exclusion will be limited to higher-value solvents going to 
manufacturers with a greater flexibility than commercial recyclers to 
adjust to unstable markets, there may be less of a need for financial 
assurance under this proposed exclusion. However, EPA requests comment 
on whether financial assurance should nevertheless be included as a 
condition to best ensure against discard. EPA also requests comment on 
whether it should add public participation requirements and/or a 
regulatory agency approval (short of a RCRA permit) before a re-
manufacturer may start handling hazardous secondary materials sent from 
another company. EPA received input during its environmental justice 
review of the 2008 DSW final rule that the absence of an opportunity 
for public input was a deficiency of the transfer-based exclusion. 
However, since the re-manufacturing exclusion will be limited to 
manufacturing facilities, typically at their already existing 
locations, and actually may reduce the environmental impacts at such 
facilities, the need for public participation may be less. However, EPA 
requests comment on whether it should nevertheless require a public 
participation process to ensure that neighbors of a facility are aware 
that it will be handling hazardous secondary materials sent from other 
companies, and have input about how the protective conditions required 
by the proposed exclusion will be met. Finally, EPA requests comment on 
whether companies should be required to keep records and/or report to 
EPA about the environmental benefits (e.g., reduced air emissions, 
energy savings, reduced transportation impacts) that are realized 
through their use of the re-manufacturing exclusion. EPA could then use 
this information to measure performance of the exclusion, enable public 
reporting of results, and facilitate information transfer in which 
other companies can learn how to achieve similar benefits. 
Additionally, we note that many companies already take advantage of 
reporting tools in order to track progress towards corporate 
sustainability goals and thus we believe that reporting would not pose 
an undue burden on facilities.

XIII. Request for Comment on Revisions to Other Recycling Exclusions 
and Exemptions

A. Background Information on Other Recycling Exclusions and Exemptions

    As part of the 2008 DSW rulemaking, EPA developed a report, ``An 
Assessment of Environmental Problems Associated with Recycling of 
Hazardous Secondary Materials'' (environmental problems study), which 
analyzed 218 recycling damage cases.\51\ The goal of the environmental 
problems study was to identify and characterize environmental problems 
that have been attributed to hazardous secondary materials 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. In 
developing today's proposal, we are interested in whether these 
conditions should be codified for the pre-2008 recycling exclusions and 
exemptions.
---------------------------------------------------------------------------

    \51\ The original environmental problems study, published 
January 11, 2007, reviewed 208 damage cases. Based on information 
submitted by commenters, EPA reviewed an additional 10 recycling 
damage cases in an addendum to the environmental problems study, 
published July 14, 2008.An Assessment of Environmental Problems 
Associated with Recycling of Hazardous Secondary Materials, U.S. 
EPA, January 11, 2007 and addendum. Report: http://www.regulations.gov/search/Regs/home.html#documentDetail?R=09000064801f3efb. Addendum (July 2008): 
http://www.regulations.gov/search/Regs/home.html#documentDetail?R=09000064806b5741, Addendum (June 2011) 
found in today's docket.
---------------------------------------------------------------------------

    As part of the ``Environmental Justice Analysis of the Definition 
of Solid Waste Rule'' (EJ analysis), EPA reviewed and analyzed each 
damage case in the environmental problems study, including five 
additional damage cases that were identified after the 2008 DSW final 
rule was promulgated, and determined the regulatory provision that 
likely, or potentially, governed the management of the hazardous 
secondary materials. 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), the results which can be 
found in the docket for this rulemaking.\52\
---------------------------------------------------------------------------

    \52\ U.S. EPA Correlation of Recycling Damage Cases with 
Regulatory Exclusions, Exemptions or Alternative Standards.
---------------------------------------------------------------------------

    From this analysis, we conclude that over half of the damage cases 
in this study were associated with hazardous secondary materials that 
were likely excluded or exempted from Subtitle C under an existing 
(pre-2008) regulatory provision. For example, 52 damage cases (23%) are 
associated with scrap metal that is likely excluded under 261.4(a)(13) 
and/or 261.6(a)(3)(ii). Drum reconditioning accounted for 23 damage 
cases (10%), in which the residuals are likely excluded under 40 CFR 
261.7. Additionally, 35 damage cases (16%) were associated with 
recycling of batteries that are likely managed under 40 CFR 273.2 and/
or 40 CFR part 266 subpart G. Based on these results, and given that 
many of the pre-2008 recycling exclusions specify limited or no 
conditions, we believe that these provisions may not be adequately 
enforceable in order to protect human health and the environment. Thus, 
we are requesting comment today on codifying specific conditions for 
these recycling exclusions.
    EPA emphasizes that we are not reopening comment on any substantive 
provisions of the regulatory exclusions or exemptions. The inclusion of 
requirements for legitimacy, containment, and notification are strictly 
meant as means to better enforce the regulations. Moreover, EPA 
believes that the containment condition--as with the legitimacy 
criteria--is implicit in all of the regulations to which it would 
apply. If secondary material is not contained when it is being 
recycled, it is simply being discarded.
    As part of the 2008 DSW final rulemaking, we reviewed the recycling 
studies and public comments in order to develop conditions that defined 
discard of hazardous secondary materials. Four conditions required for 
the generator-controlled exclusion in 40 CFR 261.4(a)(23)--legitimate 
recycling, no speculative accumulation, containment, and notification--
constitute what we believe to be the minimum requirements necessary to 
define when recycled

[[Page 44139]]

hazardous secondary materials are not discarded. Therefore, it seems 
prudent to review past exclusions and exemptions to ensure these 
regulatory provisions clearly require these newly codified standards.
    Specifically, we are requesting comment on codifying the legitimate 
recycling standard in 40 CFR 260.43, additional recordkeeping 
requirements in the speculative accumulation standard in 40 CFR 
261.1(c)(8), the contained standard in 40 CFR 260.10, and the 
notification provision in 40 CFR 260.42 for 32 regulatory provisions 
that exclude or exempt certain types of recycling from full Subtitle C 
regulation. A list of these 32 regulatory provisions can be found 
below. The new legitimacy standard would apply to all regulatory 
provisions except for 40 CFR 261.7, because it involves determining 
whether residues in containers are regulated, and no hazardous 
secondary material is being reclaimed. The contained standard and 
notification condition would apply to all provisions, although 
facilities operating under provisions that already contain specific 
regulatory requirements would have to continue meeting those 
requirements. The additional recordkeeping requirements for speculative 
accumulation would only apply to those regulatory provisions already 
subject to speculative accumulation (i.e., hazardous secondary material 
being used or reused per 261.2(e), characteristic by-products and 
sludges being reclaimed as noted in 40 CFR 261.2 Table 1, and the 
recycling-related exclusions in 40 CFR 261.4(a)), but would not apply 
to commercial chemical products being reclaimed (see 40 CFR 261.2 Table 
1) or to recycling provisions that apply to recycling of solid or 
hazardous wastes (as noted in the chart below).

------------------------------------------------------------------------
          --Citation                      Description
------------------------------------------------------------------------
                   260 & 261 Definition of Solid Waste
------------------------------------------------------------------------
1--260.30..............................  Procedures for variances and
                                          non-waste determinations.
2--261.2 (e)...........................  Use/Reuse.
3--261.2 Table 1.......................  Characteristic sludges being
                                          reclaimed.
4--261.2 Table 1.......................  Characteristic by-products
                                          being reclaimed.
5--261.2 Table 1.......................  Commercial chemical products
                                          being reclaimed.
------------------------------------------------------------------------
         261.4(a) Exclusions from the Definition of Solid Waste
------------------------------------------------------------------------
6--261.4(a)(6).........................  Pulping Liquors.
7--261.4(a)(7).........................  Spent Sulfuric Acid.
8--261.4(a)(8).........................  Closed-Loop Recycling.
9--261.4(a)(9).........................  Spent Wood Preservatives.
10--261.4(a)(10).......................  Coke By-Product Wastes.
11--261.4(a)(11).......................  Splash Condenser Dross Residue.
12--261.4(a)(12).......................  Hazardous Oil-Bearing Secondary
                                          Materials and Recovered Oil
                                          from Petroleum Refining
                                          Operations.
13--261.4(a)(13).......................  Processed Scrap Metal.
14--261.4(a)(14).......................  Shredded Circuit Boards.
15--261.4(a)(16).......................  Comparable Fuels.
16--261.4(a)(17).......................  Mineral Processing Spent
                                          Materials.
17--261.4(a)(18).......................  Petrochemical Recovered Oil.
18--261.4(a)(19).......................  Spent Caustic Solutions from
                                          Petroleum Refining.
19--261.4(a)(20).......................  Hazardous Secondary Materials
                                          Used to Make Zinc Fertilizers.
20--261.4(a)(21).......................  Zinc Fertilizers Made from
                                          Recycled Hazardous Secondary
                                          Materials.
21--261.4(a)(22).......................  Used Cathode Ray Tubes (CRTs).
------------------------------------------------------------------------
          261.4(b) Solid wastes which are not hazardous wastes
------------------------------------------------------------------------
22--261.4(b)(12).......................  Spent Chlorofluorocarbon
                                          Refrigerants.
23--261.4(b)(14).......................  Used Oil Distillation Bottoms
                                          used to manufacture asphalt
                                          products.
------------------------------------------------------------------------
     261.6 Requirements for recyclable materials (hazardous wastes)
------------------------------------------------------------------------
24--261.6(a)(3)(ii)....................  Scrap metal.
25--261.6(a)(3)(iii)...................  Waste-derived fuels from
                                          refining processes.
26--261.6(a)(3)(iv)....................  Unrefined waste-derived fuels
                                          and oils from petroleum
                                          refineries.
27--261.6(c)(2)........................  Reclaimers that do not store.
------------------------------------------------------------------------
          261.7 Residues of hazardous waste in empty containers
------------------------------------------------------------------------
28--261.7..............................  Residues of hazardous waste in
                                          empty containers.
------------------------------------------------------------------------
   Part 266 Standards for the Management of Specific Hazardous Wastes
------------------------------------------------------------------------
29--266 Subpart C......................  Recyclable Materials Used in a
                                          Manner Constituting Disposal.
------------------------------------------------------------------------
30--266 Subpart F......................  Materials Utilized for Precious
                                          Metal Recovery.
31--266 Subpart G......................  Spent Lead-Acid Batteries Being
                                          Reclaimed.
32--266 Subpart H......................  Hazardous Waste Burned in
                                          Boilers and Industrial
                                          Furnaces.
------------------------------------------------------------------------

    Note that the possible changes discussed below would be in addition 
to the proposed application of the definition of legitimacy to all 
recycling, discussed in Section X of this preamble, and the request for 
comment on

[[Page 44140]]

additional recordkeeping for speculative accumulation, discussed in 
Section IX.B.2 of this preamble.

B. Possible Changes to Other Exclusions and Exemptions

1. Contained Standard
    Under the 2008 DSW final rule, hazardous secondary materials must 
be contained, whether they are stored in land-based units or non-land-
based units. Generally, such material is considered ``contained'' if it 
is placed in a unit that controls the movement of the hazardous 
secondary material out of the unit and into the environment. Hazardous 
secondary materials that are released to the environment are not 
destined for recycling and are clearly discarded. Additionally, 
hazardous secondary materials that are not contained, and have not been 
immediately recovered, are not being managed as valuable commodities, 
which is relevant to determining whether the recycling process is 
legitimate. Lastly, requiring that hazardous secondary materials be 
contained ensures that the materials are managed in a manner protective 
of human health and the environment.
    In the environmental problems study, mismanagement of hazardous 
secondary materials was determined to be the cause, or one of the 
causes, in 11 percent of the damage cases. Since many of these damage 
cases have been associated with a pre-2008 recycling provision, we 
believe it appropriate to close this gap by specifically requiring 
compliance with the contained standard in 40 CFR 260.10. Of course, 
facilities operating under provisions that already contain management 
requirements would have to continue meeting those requirements.
2. Notification
    Under the 2008 DSW final rule, facilities managing hazardous 
secondary materials are required to submit a notification prior to 
operating under the exclusions and by March 1 of each even-numbered 
year thereafter to the EPA Regional Administrator or State Director, if 
a state is authorized for the program, using the Site ID form, EPA Form 
8700-12. The intent of this notification requirement is to provide 
basic information to regulatory authorities in order to enable adequate 
compliance monitoring and to ensure hazardous secondary materials are 
managed according to the exclusion and are not discarded. For example, 
in the notification, EPA requires facilities to include the quantity of 
hazardous secondary materials that will be managed under each exclusion 
and disclose whether certain types of hazardous secondary materials 
will be managed in land-based units. This information can be used to 
assist RCRA inspectors in determining which facilities may warrant 
greater oversight and provides a basis for setting enforcement 
priorities. Furthermore, requiring facilities to notify when they have 
stopped managing hazardous secondary materials allows states to follow 
up at those facilities and ensure that the hazardous secondary 
materials have not been discarded.
    Notification information is collected in EPA's RCRAInfo database, 
which is the national repository of all RCRA Subtitle C site 
identification information, whether collected by a state or EPA. EPA 
provides public access to this information through EPA's public Web 
site.\53\
---------------------------------------------------------------------------

    \53\ http://www.epa.gov/epawaste/hazard/dsw/impresource.htm.
---------------------------------------------------------------------------

    The 2008 DSW final rule differed from other prior exclusions 
because it required facilities claiming the exclusion to notify EPA, or 
the authorized state, using an established EPA form (i.e., the Site ID 
form) and required facilities to re-notify every two years. Together, 
these requirements provide regulatory authorities with regularly 
updated data in a consistent format that enables them to collect, 
store, access, use, and publicly share information about these 
facilities. In contrast, many of the pre-2008 DSW recycling exclusions 
and exemptions do not contain any notification requirement and the few 
provisions that do require notification do not require a specific 
format for submitting the information or periodic updates. This results 
in facilities providing information in various forms, such as letters, 
which makes it difficult for regulatory authorities to share and use 
the information.
    Additionally, a one-time notification requirement has limited 
value. With a one-time notification approach, there is no assurance 
that the information collected in EPA's databases over time will 
accurately reflect facilities that are managing hazardous secondary 
materials according to the exclusions. Therefore, the Agency can 
imagine instances where extensive resources are required to be spent on 
`cleaning up' the data before regulatory authorities can use it to 
identify facilities who are currently managing hazardous secondary 
materials under the exclusions. With a one-time notification, we can 
also foresee problems where regulatory agencies spend time and 
resources monitoring compliance at facilities that have since stopped 
managing hazardous secondary materials at some point in the past. This 
inefficient use of resources would lower the overall effectiveness of 
regulators' ability to monitor compliance and could potentially 
increase the risk of environmental damage from abuse.
    In the time since the 2008 DSW final rule became effective, we have 
received more than 40 notifications from facilities managing hazardous 
secondary materials under the generator-controlled and/or transfer-
based exclusions. This information has directly enabled regulatory 
authorities to monitor compliance and assist implementation via 
guidance materials and training. Additionally, notification has had the 
added benefit of identifying facilities that planned to manage 
hazardous secondary materials under the rule, but were, in fact, 
ineligible for the exclusions. (For example, we have received 
notifications from facilities located in a state that had not adopted 
the 2008 DSW final rule.) Notification in these instances allowed 
regulatory authorities to identify problems and to intervene early to 
prevent potential mismanagement.
    In the case of the many of the pre-2008 recycling exclusions and 
exemptions, we do not require notification (and even in those instances 
where we require notification, it is a one-time notification) and thus 
have no reliable or efficient way to receive information that enables 
regulatory authorities to adequately monitor these exclusions and 
exemptions. We believe this gap increases the risk of environmental 
damage stemming from improper management of hazardous secondary 
materials being recycled. We, therefore, are requesting comment on 
whether to require notification for those facilities operating under 
pre-2008 recycling exclusions and exemptions.
    Specifically, we are requesting comment on codifying notification 
under Sec.  260.42 for facilities managing hazardous secondary 
materials under the pre-2008 recycling provisions. For those exclusions 
and exemptions that already require a one-time notification, 
notification under Sec.  260.42 would replace, and not duplicate, the 
one-time notification requirement.

XIV. Effect of This Proposal on Other Programs

A. Effect on Permitted and Interim Status Facilities

    In the 2008 DSW final rule, EPA discussed how that rule would 
affect permitted and interim status facilities.

[[Page 44141]]

Specifically, the Agency explained that permitted and interim status 
disposal facilities that manage hazardous wastes excluded under the 
2008 DSW final rule are affected by the final rule in a number of ways, 
depending on the situation at the facility. (74 FR 64715-7) If a 
permitted facility seeks to either terminate its operating permit or to 
remove units from its permit as a result of the 2008 DSW final rule, a 
facility must submit a Class I permit modification request with prior 
Agency approval; however, the obligation to address facility-wide 
corrective action remains in effect. Similarly, for facilities 
operating under interim status, the owner or operator retains 
responsibility for unaddressed corrective action obligations at the 
facility.
    However, if EPA finalizes today's proposal to replace the transfer-
based exclusion with an alternative Subtitle C regulatory approach, EPA 
anticipates that the number of permitted and interim status facilities 
that are able to take advantage of the exclusion would be significantly 
reduced, because most of the permitted and interim status facilities 
affected by the 2008 final rule are excluded under the transfer-based 
exclusion. Furthermore, if EPA finalizes the re-manufacturing exclusion 
discussed in Section XII of this preamble, the Agency would not expect 
TSDFs to be affected, since that exclusion would be limited to 
manufacturers. Regardless of the ultimate scope of the exclusion, 
however, facilities with units covered by the exclusion should continue 
to refer to the preamble in the 2008 final rule (at FR 64715-17) for a 
discussion of the effect of the exclusion on permitted and interim 
status facilities.

B. Effect on CERCLA

    In 1999, Congress enacted the Superfund Recycling Equity Act 
(SREA), explicitly defining those hazardous substance recycling 
activities that may be exempted from liability under CERCLA (CERCLA 
section 127). Today's proposal, if finalized, would not change the 
universe of recycling activities that could be exempted from CERCLA 
liability pursuant to CERCLA section 127. The proposal would only 
change the definition of solid waste for purposes of the RCRA Subtitle 
C requirements. The proposal also would not limit or otherwise affect 
EPA's ability to pursue potentially responsible persons under section 
107 of CERCLA for releases or threatened releases of hazardous 
substances.

C. Effect on the Derived-From Rule

    In the 2008 DSW final rule (October 30, 2008, 73 FR 64692), EPA 
notes that the ``derived from'' rule articulated in 40 CFR 261.3(c)(2) 
does not apply to residuals from the reclamation of hazardous secondary 
materials excluded under the generator-controlled and transfer-based 
exclusions. These residuals are a new point of generation for the 
purposes of applying the hazardous waste determination requirements of 
40 CFR 262.11. If the residuals exhibit a hazardous characteristic, or 
they themselves are a listed hazardous waste, they would be considered 
hazardous wastes (unless otherwise exempted) and would have to be 
managed accordingly. If they did not exhibit a hazardous 
characteristic, or were not themselves a listed hazardous waste, they 
would have to be managed in accordance with applicable state or Federal 
requirements for non-hazardous wastes. EPA believes that in most cases, 
this would not be an issue because residuals from hazardous secondary 
material reclamation that may be of concern would either themselves be 
listed hazardous waste (i.e., still bottoms from the reclamation of 
solvents listed in 40 CFR 261.31) or would exhibit a characteristic 
(i.e., residuals from metals reclamation with hazardous metals 
concentrations above the toxicity characteristic in 40 CFR 261.24). EPA 
requests comment, including for any available data, on the 
hazardousness of reclamation residuals and whether the derived-from 
rule would need to be modified to regulate these residuals as hazardous 
waste.

D. Effect on Spent Petroleum Catalysts

    In the 2008 DSW final rule, EPA deferred the question of whether 
spent petroleum 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 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 
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 are therefore may be most 
appropriately managed as hazardous waste when recycled.
    Under today's proposal, EPA is proposing to replace the transfer-
based exclusion with an alternative Subtitle C regulatory approach, and 
if finalized, would make the question of the eligibility of most types 
of spent catalyst recycling for the 2008 DSW final rule exclusions 
moot.\54\ However, EPA is also proposing to add a regulatory definition 
of the ``contained'' standard which includes a requirement to address 
the risk of fires and explosions. This provision, if properly 
implemented, could address the pyrophoric properties of the spent 
petroleum catalysts (as well as other types of ignitibility or 
reactivity). EPA requests comment on whether this provision would 
adequately address the potential for discard of spent petroleum 
catalysts due to fire and explosions, thereby allowing EPA to remove 
the ineligibility of K171 and K172 from the DSW exclusion, and on other 
regulatory options, including adding more conditions (such as specific 
container

[[Page 44142]]

standards) specific to pyrophoric materials to the exclusion.
---------------------------------------------------------------------------

    \54\ The spent catalysts would be eligible for the alternative 
Subtitle C regulations discussed in Section VIII of this preamble.
---------------------------------------------------------------------------

XV. Implementation Issues With 2008 DSW Final Rule

    The 2008 DSW final rule became Federally effective on December 29, 
2008. The rule was effective immediately in states and territories for 
which EPA manages the RCRA program, specifically Alaska, Iowa, the U.S. 
Virgin Islands, the Northern Mariana Islands, American Samoa, and 
Tribal lands. The rule does not go into effect in states that are 
authorized to manage their own RCRA programs unless and until the state 
adopts the rule. Currently, four states--Idaho, Illinois, New Jersey, 
and Pennsylvania--have adopted the rule. Within the states and 
territories where the 2008 DSW final rule is effective, more than 40 
facilities have notified that they are managing hazardous secondary 
materials under the generator-controlled and/or the transfer-based 
exclusion.
    EPA believes that it is important to support effective 
implementation of the 2008 DSW final rule in order to ensure that 
hazardous secondary materials are properly managed and not discarded. 
Our goal is to reduce the risk of mismanagement of hazardous secondary 
materials that may occur from misunderstanding the regulations and 
incorrect implementation of the requirements and conditions. To this 
end, we have worked with the EPA Regions and states to provide training 
and guidance materials for regulators and the regulated community. 
Since the 2008 DSW final rule was codified, there have been number of 
questions from states and the regulated community regarding how the 
rule should be implemented and how it operates in special 
circumstances.
    Today, we are taking the opportunity to clarify these issues in the 
context of the 2008 DSW final rule. It should be noted that some of 
these implementation issues are specific to the transfer-based 
exclusion found at 40 CFR 261.4(a)(24), which EPA is proposing to 
replace with alternative management standards under Subtitle C of RCRA. 
If EPA finalizes this change, some of these issues would become moot.

A. Mixing of Hazardous Secondary Materials Excluded Under 40 CFR 
261.4(a)(24) With Similar Hazardous Wastes \55\
---------------------------------------------------------------------------

    \55\ This section restates our policy on this issue, which is 
published in the ``Guidance for Mixing Hazardous Secondary Materials 
Received Under the 40 CFR 261.4(a)(24) Exclusion from the Definition 
of Solid Waste with Regulated Hazardous Wastes.'' This guidance can 
be found in RCRAOnline and on our DSW Implementation Web site at 
http://www.epa.gov/epawaste/hazard/dsw/impresource.htm.
---------------------------------------------------------------------------

    One issue regards whether hazardous secondary materials excluded 
under 40 CFR 261.4(a)(24) can be mixed with other similar hazardous 
wastes within permitted units or exempt recycling units and how such 
mixing would affect the requirements of the generator and the 
reclaimer. Under Sec.  261.4(a)(24), which covers hazardous secondary 
materials transferred off-site for reclamation, hazardous secondary 
material generators may send their materials to a facility that 
operates under a RCRA Part B permit or interim status standards. In 
this case, generators are not required to conduct reasonable efforts on 
the reclaimer as long as the RCRA Part B permit extends to the 
management of the hazardous secondary materials in question. We believe 
Part B permits or the interim status standards provide adequate 
assurance that the hazardous secondary materials will be well managed, 
specifically because the hazardous secondary materials are managed in 
units that are subject to stringent design and operating standards, the 
reclaimer must demonstrate financial assurance, and the materials are 
subject to the corrective action requirements in the event of 
environmental problems.
    EPA understands that some reclaimers are receiving the same type of 
hazardous secondary materials for reclamation from multiple generators, 
with some amount excluded under Sec.  261.4(a)(24) and some amount 
regulated as hazardous waste. The regulatory status of the material 
depends on how the generator who sent the materials chose to manage and 
transfer the materials off site. We also understand that reclaimers are 
interpreting Sec.  261.4(a)(24) to mean that hazardous wastes and 
hazardous secondary materials must be stored in separate units and 
reclaimed independently of each other in order to preserve the 
regulatory status of the excluded material and the exclusion for the 
generators that transferred the hazardous secondary materials to the 
reclaimer.
    It is clear in the 2008 DSW final rule that EPA allows hazardous 
secondary materials that are excluded from full Subtitle C regulation 
to be managed under a RCRA Part B permit or interim status standards. 
Managing hazardous secondary materials under a RCRA Part B permit 
affords further assurance that the hazardous secondary materials will 
be properly managed and reclaimed. Additionally, we believe that taking 
advantage of the existing recycling infrastructure both improves 
efficiency under the rule and increases opportunities for recycling.
    Section 261.4(a)(24) states that the exclusion applies if the 
hazardous secondary materials are generated and transferred ``for the 
purpose of reclamation.'' Thus, a reclaimer mixing excluded hazardous 
secondary materials with regulated hazardous wastes of the same type 
may only mix the materials for the purpose of reclamation (and not for 
the purpose of, for example, burning for energy recovery or disposal).
    Prior to mixing, the reclaimer must manage the excluded hazardous 
secondary materials under Sec.  261.4(a)(24) up to the point that they 
mix the excluded materials with similar materials that are regulated 
hazardous waste. The reclaimer must comply with all applicable 
conditions of Sec.  261.4(a)(24) because it is receiving hazardous 
secondary materials transferred for the purpose of reclamation and 
excluded from the definition of solid waste. The reclaimer must 
therefore meet the applicable conditions of the Sec.  261.4(a)(24) 
exclusion, including legitimate reclamation, recordkeeping, financial 
assurance, containment of hazardous secondary materials, notification, 
and the prohibition on speculative accumulation.
    A reclaimer may only mix hazardous secondary materials excluded 
under Sec.  261.4(a)(24) with regulated hazardous waste for the purpose 
of reclamation. This can be satisfied by mixing in units that are 
dedicated for reclamation, such as storage units that are connected to 
reclamation units by hard pipes or other conveyance; storage units that 
are solely used to store materials prior to the reclamation process; 
and recycling units. Additionally, a reclaimer is not mixing for the 
purpose of reclamation if the reclaimer first mixes the materials and 
then makes a determination whether the mixture should be reclaimed or 
sent for burning or disposal. This determination must be made prior to 
mixing the excluded hazardous secondary materials with regulated 
hazardous wastes.
    After mixing the excluded hazardous secondary materials with 
regulated hazardous waste, the reclaimer must manage the entire mixture 
as hazardous waste for the purpose of reclamation. Excluded hazardous 
secondary materials cannot be mixed with regulated hazardous waste and 
still maintain the exclusion from the definition of solid waste. If 
excluded hazardous secondary materials are

[[Page 44143]]

mixed with hazardous waste, the resulting mixture is a hazardous waste. 
This follows the general principle that RCRA applicability cannot be 
avoided by mixing a hazardous waste with another material.\56\ 
Therefore, the reclaimer must comply with the standard hazardous waste 
regulations applicable to hazardous waste managed by an off-site 
reclaimer (i.e., 40 CFR 261.6(c) and (d) or 40 CFR part 264 or 265). 
The mixture must be stored and managed in compliance with the hazardous 
waste regulations applicable to hazardous waste managed by an off-site 
reclaimer (i.e., 40 CFR 261.6(c) and (d) or 40 CFR part 264 or 265). If 
a reclaimer mixes hazardous secondary materials and other similar 
hazardous wastes in a recycling unit, the mixture would be considered 
hazardous waste, but the unit would be generally exempt from regulation 
under 40 CFR 261.6(c)(2).
---------------------------------------------------------------------------

    \56\ Horsehead Resource Development Co., Inc. v. EPA, 16 F3d 
1246 (February 1994).
---------------------------------------------------------------------------

    Mixing by the reclaimer of excluded hazardous secondary materials 
received under 40 CFR 261.4(a)(24) with regulated hazardous wastes does 
not affect the requirements applicable to generators who shipped the 
hazardous secondary materials, provided that the hazardous secondary 
materials are transferred for the purpose of reclamation and the 
reclaimer complies with all applicable conditions of Sec.  261.4(a)(24) 
prior to mixing. Excluded hazardous secondary materials mixed with 
regulated hazardous wastes of the same type become hazardous waste at 
the point of mixing and must be managed as such after that point. 
Therefore, generators transferring hazardous secondary materials under 
Sec.  261.4(a)(24) to a reclaimer who mixes may manage the hazardous 
secondary materials under the Sec.  261.4(a)(24) exclusion (e.g., 
longer storage times, shipping without a manifest) because the 
hazardous secondary materials have not yet been mixed with regulated 
hazardous wastes. (Of course, the generator and the reclaimer must meet 
all applicable conditions of Sec.  261.4(a)(24) prior to mixing.)

B. Rejected Loads

    A second issue regards shipments of hazardous secondary material 
transferred off-site by the generator for reclamation, but that are 
subsequently rejected by the reclaimer (otherwise known as ``rejected 
loads''). Because 40 CFR 261.4(a)(24) states that the exclusion applies 
if the hazardous secondary material is generated and transferred ``for 
the purpose of reclamation,'' EPA has received questions regarding how 
generators and reclaimers should handle rejected loads.
    Although EPA did not explicitly address rejected loads in the 
preamble to the 2008 DSW final rule, we offered some guidance in our 
Response to Comments document for that action. Specifically, we state 
that if hazardous secondary materials transferred off-site for 
reclamation are subsequently rejected by the reclaimer, the generator 
can choose to send the hazardous secondary materials to another 
reclamation facility, provided the generator continues to comply with 
the conditions of the exclusion, including the speculative accumulation 
limits.
    Prior to arranging for transport to an alternate reclamation 
facility, hazardous secondary material generators must make reasonable 
efforts to ensure the alternate reclamation facility intends to 
properly and legitimately reclaim the hazardous secondary material and 
must keep records of the off-site shipment and confirmation of its 
receipt as required under the 2008 DSW final rule. If a hazardous 
secondary material generator is unable to reclaim the hazardous 
secondary material in compliance with the speculative accumulation 
provision and the other terms of the exclusion, it must manage the 
materials as solid and hazardous waste according to the RCRA Subtitle C 
hazardous waste regulations. Furthermore, we believe the recordkeeping 
conditions (records of all off-site shipments and confirmations of 
receipt) are sufficient to ensure the hazardous secondary materials are 
properly managed if a rejected shipment must be returned to the 
hazardous secondary material generator or sent to an alternate 
reclamation facility.
    In the event of a rejected load, generators and reclamation 
facilities should contact their regulatory authority in order to 
receive instructions on a case-by-case basis. Reclamation facilities 
should document their rejected loads, including information such as the 
EPA ID number, name, and address of the generator, the date the 
facility received the hazardous secondary material, a description and 
quantity of the material, the ultimate destination and disposition of 
the material, and an explanation of why the load was rejected. 
Additionally, we note that efforts to prevent rejected loads may help 
to avoid this issue altogether, for example, by sending test samples of 
the hazardous secondary material to a reclaimer to ensure that 
legitimate reclamation can be performed prior to sending the first 
shipment.

C. Interstate Transport

    A third implementation issue regards the transport of excluded 
hazardous secondary materials from or to a state that has adopted the 
2008 DSW final rule to or from a state that has not adopted the rule 
and what conditions would apply in each state. Specifically, if the 
originating state has adopted the 2008 DSW final rule, but the 
receiving (or transfer) state has not adopted the rule, the hazardous 
secondary materials (1) are subject to the hazardous waste requirements 
of the receiving state that has not adopted the rule upon reaching the 
border of that state (e.g., manifesting requirements); (2) must go to a 
RCRA-permitted facility (or other authorized designated facility), and, 
if stored, materials must be managed in permitted storage units (or 
when applicable under interim status requirements); and (3) cannot go 
to an unpermitted recycling facility which is not a designated facility 
in a state that has not adopted the rule because such a facility would 
not meet the conditions of the exclusion (e.g., financial assurance) 
and since the receiving state would not have adopted the exclusion.
    If the originating state has not adopted the rule, but the 
receiving state has adopted the rule, the hazardous secondary materials 
(1) must be managed as regulated hazardous waste not only in the 
originating state, but also in the receiving state that has adopted the 
rule (e.g., may be sent to a permitted recycling facility, in the 
receiving state, which has notified that it is operating under the 
exclusion, but must then be stored only in permitted units at that 
facility) and (2) would not be eligible for the exclusion because the 
generator in the originating state that has not adopted the rule would 
not meet the conditions and requirements of the exclusion. In 
particular, the fact that the generator would not have notified EPA 
that it is sending the hazardous secondary material to an excluded 
reclamation facility, and would not have performed a ``reasonable 
efforts'' audit under 40 CFR 261.4(a)(24)(v)(B) to ensure that the 
hazardous secondary material will be safely and legitimately reclaimed 
could undermine the proper implementation of the 2008 DSW exclusion.
    As noted in written comments submitted in response to the May 2009 
public meeting Federal Register Notice, some states that do not plan on 
adopting the 2008 DSW final rule in full would like the generators in 
their states to be able to send their hazardous secondary materials to 
facilities without RCRA permits that are operating under the 40

[[Page 44144]]

CFR 261.4(a)(24) transfer-based exclusion in states that have adopted 
the rule\57\ One possible solution for such a state might be to adopt 
the requirements applicable to generators in the 2008 DSW final rule 
(found in 40 CFR 261.4(a)(24)(i-v and vii)), in addition to the state's 
hazardous waste requirements, for those generators that wish to ship to 
reclaimers without RCRA permits whose operations are covered by the 
exclusion. In most cases, a generator following the generating state's 
hazardous waste requirements would also meet the 2008 DSW final rule 
requirements (i.e., no speculative accumulation, meeting DOT transport 
requirements, containment, records of shipments), since the state's 
RCRA program requirements (e.g., 90 and 180 day storage limits, 
manifesting requirements) would be equally or more stringent than the 
2008 DSW final rule requirements), but the generator would also need to 
ensure that the hazardous secondary material meets the codified 
definition of legitimacy under 40 CFR 260.43, perform a ``reasonable 
efforts'' audit of the reclaimer and keep a copy of the audit for three 
years per 40 CFR 261.4(a)(24)(v)(B) and (C), and provide notification 
per 40 CFR 260.42. Thus, the hazardous secondary material would be 
covered both by the state hazardous waste program in the generating 
state that has not adopted the 2008 DSW final rule, and by the DSW 
transfer-based exclusion in the reclaiming state that has adopted the 
2008 DSW final rule.
---------------------------------------------------------------------------

    \57\ Generators in states that have not adopted the 2008 DSW 
final rule are able to send their materials to RCRA-permitted 
reclaimers under hazardous waste regulations.
---------------------------------------------------------------------------

    As discussed earlier, EPA has proposed to replace the transfer-
based exclusion with an alternative Subtitle C regulation, which would 
possibly render this issue moot. However, EPA is interested in and 
requests comments on these issues of how interstate transportation 
should be handled, particularly whether states are interested in such a 
solution, if the transfer-based exclusion is retained or not, and 
whether it is an issue for any of the other exclusions EPA is proposing 
to retain or is asking for comment on today. For example, should EPA 
allow for the shipment of hazardous secondary materials from a state 
which does not adopt the `under the control of the generator' exclusion 
to a state that has adopted that exclusion. If so, what additional 
requirements would the generating state have to adopt in order to allow 
for such shipments. Similarly, if a re-manufacturing exclusion is 
adopted, should EPA allow for the shipment of hazardous secondary 
materials from a state that does not adopt that exclusion to a state 
that adopts that exclusion. Again, what additional requirements would 
the generating state have to adopt in order to allow for such 
shipments.

D. Regulatory Status of Solvent Still Bottoms

    A fourth implementation issue is whether still bottoms from the 
reclamation of solvents can be burned for energy recovery without 
invalidating the 2008 DSW final rule exclusions, which specifically 
does not include burning for energy recovery. Still bottoms from the 
reclamation of the solvents listed in 40 CFR 261.31(a) as F001-F005 are 
themselves listed hazardous waste and are not products of solvent 
reclamation. These still bottoms are a new point of generation, and 
they may be burned for energy recovery under the hazardous waste 
regulations without invalidating the exclusion.

XVI. 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 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.\58\ 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.
---------------------------------------------------------------------------

    \58\ EPA notes that decisions regarding whether a state rule is 
more stringent or broader in scope than the federal program are made 
when the Agency authorizes state programs.
---------------------------------------------------------------------------

B. Effect on State Authorization of Proposed Rule

    Today's notice proposes regulations that, if finalized, would not 
be promulgated under the authority of HSWA. Thus, the standards, if 
finalized, would be applicable on the effective 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 proposed 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 if these standards are finalized. 
However, when compared to the Federal program that was in place when 
the 2008 DSW final rule was finalized, many of today's proposed 
revisions would be considered less stringent (e.g., the revised 
generator-controlled exclusion and the potential re-manufacturing 
exclusion) or are neither more nor less stringent (i.e., the 
alternative Subtitle C regulations for reclaimed hazardous recyclable 
materials). Therefore, authorized states that have not adopted the 2008 
DSW final rule would not be required to modify their programs to adopt 
these standards, if finalized.
    However, the potential revisions to the other recycling exclusions 
and exemptions discussed in Section XIII of this preamble that EPA is 
currently

[[Page 44145]]

requesting comment on, including codifying the legitimacy criteria for 
other exclusions as discussed in Section X of the preamble, would be 
more stringent than the current Federal hazardous waste program, and 
all authorized states would be required to modify their programs to 
adopt equivalent, consistent and no less stringent requirements. Also, 
the proposed changes to the standards and criteria for variances from 
classification as a solid waste discussed in Section XI would be more 
stringent than the current Federal hazardous waste program, and all 
authorized states which have adopted the underlying Sec.  260.31 
variance procedures would be required to modify their programs to adopt 
equivalent, consistent and no less stringent requirements.

XVII. Administrative Requirements for This Rulemaking

A. Executive Orders 12866 and 13563: Regulatory Planning and Review

    Under Executive Order 12866 (58 FR 51735, October 4, 1993), this 
action is a ``significant regulatory action'' because it is likely to 
``raise novel legal or policy issues'' under section 3(f)(4) of 
Executive Order 12866. 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 Regulatory Impact Analysis (RIA) document titled ``EPA's 2011 
Proposed Revisions to Industrial Recycling Exclusions of the RCRA 
Definition of Solid Waste'' which is available for public download from 
the docket for this action. The RIA is briefly summarized here.
    The RIA evaluates the potential future impacts of the seven 
proposed revisions (i.e., Options 1 to 7 in the RIA) to the DSW 
regulatory exclusions for industrial hazardous secondary materials 
recycling. Six of the seven proposed revisions (i.e., RIA Options 1 
thru 6) could affect EPA's 2008 DSW recycling exclusions (three 
exclusions) involving between 662 and 3,671 facilities currently 
recycling or disposing industrial hazardous wastes regulated under RCRA 
Subtitle C without exclusions, while three of today's proposed 
revisions (i.e., RIA Options 4, 5, and 7) in part or in whole could 
affect EPA's pre-2008 recycling exclusions involving an estimated 5,321 
industrial facilities engaged in current RCRA-excluded recycling 
activities (32 exclusions).
    The RIA presents a qualitative description of three categories of 
expected future environmental and economic benefits for the proposed 
revisions: (1) Reduction in future environmental damage cases 
associated with industrial hazardous secondary materials recycling; (2) 
increased environmental compliance; and (3) reduced liability, less 
regulatory uncertainty, and lower legal and credit costs for recycling 
facilities.
    In aggregate, the RIA estimates the future average annualized costs 
to industry to comply with the seven proposed revisions at between $7.2 
million to $13.1 million per year under a lower-bound state adoption 
scenario, which results in 13% of recycling facilities implementing the 
revisions, and between $7.4 million to $47.5 million per year under an 
upper-bound state adoption scenario, which results in 74% of recycling 
facilities implementing the revisions (2011$ @7% discount rate). Based 
on the 13% implementation scenario, netting out the $7.2 million to 
$13.1 million average annual future costs for the seven proposed 
revisions, from the 2011-updated DSW regulatory cost savings baseline 
of $86.7 million per year (consisting of $79.3 million per year cost 
savings to industry associated with the pre-2008 DSW exclusions, plus 
$7.4 million cost savings per year for the 13% adoption rate of the 
2008 DSW recycling exclusions), yields a future average annual net cost 
savings for all DSW exclusions of $73.6 million to $79.5 million per 
year (@7% ``base case'' discount rate over 50-years 2015 to 2064).
    These two alternative future implementation scenarios represent 
EPA's uncertainty about the future total count of state government 
RCRA-authorized programs which may ultimately adopt today's proposal 
when finalized. The lower-bound cost estimate represents an average 
annual future implementation rate by facilities based on the actual 
state government adoption rate associated with the 2008 DSW final rule. 
As of April 2011, four states (ID, IL, NJ, PA) have adopted the 2008 
DSW final rule, five other states and territories (AK, AS, IA, NMI, VI) 
have adopted by EPA Regional Office administration of the RCRA 
regulatory program in those areas, and a total of 49 facilities have 
notified EPA they are managing hazardous secondary materials under the 
2008 DSW final rule exclusions (divided over the 2.3 years between the 
date of today's action and the December 2008 effective date of the 
October 2008 DSW final rule, this 49 total facility count represents an 
average annual implementation rate of about 21 facilities per year). 
The upper-bound cost estimate represents hypothetical future non-
adoption by all 12 authorized states that commented unfavorably on the 
transfer-based exclusion in the 2007 DSW proposed rule.\59\ The rule 
was assumed to go into effect in all other states and territories. 
Updated information about the identity of state governments which have 
adopted the 2008 DSW final rule, and the total count and identity of 
industrial facilities which have notified EPA they are managing 
hazardous secondary materials under the 2008 DSW final rule exclusions, 
is available at EPA's ``DSW Final Rule: Resources for Implementation'' 
Web page at http://www.epa.gov/waste/hazard/dsw/impresource.htm.
---------------------------------------------------------------------------

    \59\ The identity of the 12 states which commented unfavorably 
as potential adopters of the 2008 DSW final rule are listed in 
Exhibit 12A (pages 136 to 138) of EPA's ``Regulatory Impact 
Analysis'' for the 2008 DSW final rule, which is available from 
EPA's ``DSW Rulemakings'' Web page at http://www.epa.gov/epawaste/hazard/dsw/rulemaking.htm#2008, or from the Federal regulatory 
docket as Document ID nr. EPA-HQ-RCRA-2002-0031-0602 at http://www.regulations.gov.
---------------------------------------------------------------------------

B. Paperwork Reduction Act (Information Collection Request)

    The information collection requirements in this proposed rule have 
been submitted for approval to the Office of Management and Budget 
(OMB) under the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. The 
Information Collection Request (ICR) document prepared by EPA has been 
assigned EPA ICR number 2310.02. 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.
    The information requirements proposed for this action help ensure 
that (1) entities operating under the regulatory exclusions included in 
today's proposal are held accountable to the applicable requirements 
and (2) state and EPA inspectors can verify compliance when needed.
    EPA estimates the total annual burden to respondents under the new 
paperwork requirements to be 84,590 hours and $4,456,294 in O&M costs 
($10,277,107, including labor costs).

[[Page 44146]]

Burden and costs continuing from the 2008 ICR include 1,046 hours and 
$187 O&M ($72,614, including labor costs), respectively. The total 
annual burden and O&M costs comparable to the 2008 ICR inventory would 
be 85,635 hours and $4,456,481, or 256,905 hours and $13,369,443 over 
three years. EPA estimates that the proposed 2011 revisions to the DSW 
final rule will also affect other related ICRs, increasing their annual 
burden and costs by 1,240 hours and $8,648 O&M ($79,392, including 
labor costs), respectively. The total annual respondent burden and cost 
as a result of the proposed rule, including impacts continuing from the 
2008 ICR and impacts to associated ICRs, would be 86,876 hours and 
$4,465,129 O&M ($10,429,113, including labor costs), respectively.
    In addition, EPA estimates the total annual burden to the 
government under the new paperwork requirements to be 43,863 hours and 
$1,707 in O&M costs ($2,385,917, including labor costs). Burden and 
costs continuing from the 2008 ICR include 1,107 hours and $27 in O&M 
($60,225, including labor costs), respectively. The total annual burden 
and O&M costs comparable to the 2008 ICR inventory would be 44,971 
hours and $1,734 in O&M costs, or 134,913 hours and $5,202 in O&M costs 
over three years. EPA estimates that the proposed 2011 revisions to the 
DSW rule will also affect other related ICRs, increasing their annual 
burden to the government by 12 hours ($481 labor costs), but no new O&M 
costs. The total annual burden and cost to the government as a result 
of the proposed rule, including impacts continuing from the 2008 ICR 
and impacts to associated ICRs, would be 44,982 hours and $1,734 O&M 
($2,444,889, including labor costs), respectively.
    To comment on the Agency's need for this information, the accuracy 
of the provided burden estimates, and any suggested methods for 
minimizing respondent burden, EPA has established a public docket for 
this rule, which includes this ICR, under Docket ID number EPA-HQ-RCRA-
2010-0742. Submit any comments related to the ICR to EPA and OMB. See 
ADDRESSES section at the beginning of this notice for where to submit 
comments to EPA. Send comments to OMB at the Office of Information and 
Regulatory Affairs, Office of Management and Budget, 725 17th Street, 
NW., Washington, DC 20503, Attention: Desk Office for EPA. Since OMB is 
required to make a decision concerning the ICR between 30 and 60 days 
after July 22, 2011, a comment to OMB is best assured of having its 
full effect if OMB receives it by August 22, 2011. The final rule will 
respond to any OMB or public comments on the information collection 
requirements contained in this proposal.

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 the purpose of assessing the impacts of today's proposed rule 
on small entities, small entity is defined as (1) a small business as 
defined by the Small Business Administration's (SBA) regulations at 13 
CFR 121.201; (2) a small governmental jurisdiction that is a government 
of a 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 proposed rule on 
small entities, I certify that this action will not have a significant 
economic impact on a substantial number of small entities.
    As presented in EPA's RIA for today's proposal, the types of small 
entities which could potentially be directly regulated are in a wide 
range of up to 620 industries. For purposes of analysis, the RIA 
evaluated potential small business impacts in 27 NAICS code industries 
with the largest number of facilities potentially affected. This RIA 
identified the 27 industries by first looking at the count of 
facilities by 6-digit NAICS codes for the current population of 
facilities recovering hazardous secondary materials, including (1) 
323110 Commercial Lithographic Printing; (2) 324110 Petroleum 
Refineries; (3) 325188 All Other Basic Inorganic Chemical 
Manufacturing; (4) 325199 All Other Basic Organic Chemical 
Manufacturing; (5) 325211 Plastics Material and Resin Manufacturing; 
(6) 325412 Pharmaceutical Preparation Manufacturing; (7) 325510 Paint 
and Coating Manufacturing; (8) 325998 All Other Miscellaneous Chemical 
Product and Preparation Mfg; (9) 326199 All Other Plastics Product 
Manufacturing; (10) 331111 Iron and Steel Mills; (11) 331492 Secondary 
Smelting, Refining & Alloying of Nonferrous Metal (except Copper, 
Aluminum); (12) 332312 Fabricated Structural Metal Manufacturing; (13) 
332812 Metal Coating, Engraving (except Jewelry and Silverware), and 
Allied Services to Manufacturers; (14) 332813 Electroplating, Plating, 
Polishing, Anodizing and Coloring; (15) 332999 All Other Miscellaneous 
Fabricated Metal Product Manufacturing; (16) 333415 Air Conditioning, 
Warm Air Heating Equipment, and Commercial and Industrial Refrigerator 
Equipment Manufacturing; (17) 334412 Bare Printed Circuit Board 
Manufacturing; (18) 334413 Semiconductor and Related Device 
Manufacturing; (19) Printed Circuit Assembly, (20) 336399 All Other 
Motor Vehicle Parts Manufacturing; (21) 336412 Bare Printed Circuit 
Board Manufacturing; (22) 336413 Other Aircraft Part and Auxiliary 
Equipment Manufacturing; (23) 541710 Research & Development in the 
Physical, Engineering, and Life Sciences; (24) 562211 Hazardous Waste 
Treatment and Disposal; (25) 611310 Colleges, Universities and 
Professional Schools; (26) 622110 General Medical and Surgical 
Hospitals; (27) 928110 National Security.
    The estimated potential average annual impact (i.e., added 
regulatory cost) on small entities is estimated to be significantly 
less than 1% of annual sales for all affected small entities. The RIA 
estimates that under the 13% base-case adoption scenario 910 small 
entities could be affected by today's proposal (if promulgated) out of 
a total 6,497 affected small plus non-small entities (i.e., 14%), and 
1,274 small entities could be affected out of a total 9,102 potentially 
affected small plus non-small entities (i.e., 14%) under the 74% upper-
bound adoption scenario. These counts include facilities currently 
operating under the pre-2008 DSW recycling exclusions (32 exclusions), 
plus additional current RCRA hazardous waste recyclers which in the 
future could potentially operate under the 2008 DSW recycling 
exclusions (3 exclusions). However, these facility count estimates are 
based on analyses presented in EPA's RIA involving EPA's Toxic Release 
Inventory (TRI) database for the pre-2008 exclusions, and EPA's RCRA 
Hazardous Waste Biennial Report database for potential adoption of the 
2008 DSW exclusions, and both databases have limitations which may make 
these facility count estimates inaccurate. Specifically, some of the 
facilities identified using the TRI database may be RCRA conditionally 
exempt small quantity generators

[[Page 44147]]

(CESQGs) which will not be affected by today's proposal (and thus may 
contribute to over-estimating in the RIA both small and total small 
plus non-small entities affected under the pre-2008 exclusions), and 
the BR database does not include comprehensive data on RCRA small 
quantity generators (SQGs) which may contribute to under-estimating in 
the RIA both small and total small plus non-small entities.
    Based on the RIA's small entity ``sales test'' impact evaluation 
method, the highest estimated potential impact on any single small 
entity as a percentage of annual business revenues (i.e., the ``sales 
test'' method) is estimated at 0.41%. The total number of small 
businesses impacted at this level is estimated at 21 small entities 
under the 13% base-case adoption scenario, and 30 small entities under 
the 74% adoption scenario, which represents 2.3% to 2.4%, respectively, 
of the 910 (13% scenario) to 1,274 (74% scenario) small entities which 
could be impacted by today's proposal.
    Although this proposed rule will not have a significant economic 
impact on a substantial number of small entities, we continue to be 
interested in the potential impacts of the proposed rule on small 
entities and welcome comments on issues related to such impacts and 
suggestions on how to reduce such impacts.

D. Unfunded Mandates Reform Act

    This rule does not contain a 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. 
Potential future annual added direct costs to state, local, and Tribal 
governments could include 11 administrative activities associated with 
a number of the options, including (1) receive, review and file 
biennial notifications (RIA Options 2, 4, 6, & 7); (2) receive, review 
and file reclamation plan (RIA Option 2); (3) receive, review and 
approve emergency plans (RIA Option 2); (4) receive, review and file 
notification of compliance regarding affected release area (RIA Option 
2); (5) review RCRA permit applications and enter into database (RIA 
Option 2); (6) evaluate legitimacy petitions (RIA Option 4); (7) 
evaluate legitimacy documentation (RIA Options 4); (8) receive, review, 
and file re-application for variance or non-waste determination (RIA 
Option 5); (9) EPA provides online public access to a list (including 
documentation) of facilities receiving non-waste determinations (RIA 
Option 5); (10) petition process for re-manufacturing exclusion (RIA 
Option 6); and (11) other state paperwork requirements under existing 
paperwork requirements covering 2008 revisions to the RCRA definition 
of solid waste, RCRA hazardous waste manifest system requirements, 
hazardous waste generator standards, hazardous waste specific unit 
requirements and special waste processes and types, and air emission 
standards for tanks, surface impoundments and containers.
    See the RIA for a complete description of the options and the 
various administrative activities. The RIA estimates that the state 
government share of future average annualized direct costs for the 
above seven implementation requirements ranges between $8.5 million and 
$9.1 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 proposed rule is not subject to the 
requirements of sections 202 or 205 of UMRA. This rule is also not 
subject to the requirements of section 203 of UMRA because it contains 
no regulatory requirements that might significantly or 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 for today's action presents 
an evaluation of whether the proposed regulatory revisions could 
``impose substantial direct compliance costs'' on state or local 
governments. For purpose of quantitative analysis, the RIA applied a 
numerical method known as the ``$25 million test.'' The analysis 
evaluated whether annualized direct compliance costs to state or local 
governments potentially exceed $25 million per year. Potential future 
annual added direct costs to state or local governments could include 
11 administrative activities associated with a number of the options, 
including (1) receive, review and file biennial notifications (RIA 
Options 2, 4, 6, & 7); (2) receive, review and file reclamation plan 
(RIA Option 2); (3) receive, Review and approve emergency plans (RIA 
Option 2); (4) receive, review and file notification of compliance 
regarded affected release area (RIA Option 2); (5) review RCRA permit 
applications and enter into database (RIA Option 2); (6) evaluate 
legitimacy petitions (RIA Option 4); (7) evaluate legitimacy 
documentation (RIA Options 4); (8) receive, review, and file re-
application for variance or non-waste determination (RIA Option 5); (9) 
EPA provides online public access to a list (including documentation) 
of facilities receiving non-waste determinations (RIA Option 5); (10) 
petition process for re-manufacturing exclusion (RIA Option 6); and 
(11) other state paperwork requirements under existing paperwork 
requirements covering 2008 revisions to the RCRA definition of solid 
waste, RCRA hazardous waste manifest system requirements, hazardous 
waste generator standards, hazardous waste specific unit requirements 
and special waste processes and types, and air emission standards for 
tanks, surface impoundment and containers. See the RIA for a complete 
description of the Options and the various administrative activities. 
The RIA estimates that the maximum state government share of future 
average annualized direct costs for these implementation tasks ranges 
between $8.5 million and $9.1 million per year. No impacts are expected 
for local governments. Because these direct costs are well below the 
$25 million test threshold, we conclude that Executive Order 13132 does 
not apply to this action. However, in the spirit of Executive Order 
13132, and consistent with EPA policy to promote communications between 
EPA and state and local governments, EPA specifically solicits comment 
on this proposed action from state and local officials.

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

    Subject to the Executive Order 13175 (65 FR 67249, November 9, 
2000), EPA may not issue a regulation that has Tribal implications, 
that imposes substantial direct compliance costs, and that is not 
required by statute, unless the Federal government provides the funds 
necessary to pay the direct compliance costs incurred by Tribal 
governments, or EPA consults with Tribal officials early in the process 
of developing the proposed 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 
proposed today would not impose any direct costs on Tribal governments. 
In addition,

[[Page 44148]]

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 
proposed 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. Tribal 
representatives participated in the public meetings EPA held on the 
draft environmental justice methodology and noted that the census data 
used as the basis for the demographic analysis can undercount 
indigenous populations. EPA has noted this limitation in the analysis 
and has committed to working independently with the Tribal governments 
as the rulemaking moves forward to ensure their concerns have been met. 
EPA specifically solicits additional comment from Tribal officials on 
this proposed action and any Tribal implications.

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

    This action is not subject to Executive Order 13045 (62 FR 19885, 
April 23, 1997) because it is not economically significant as defined 
in Executive Order 12866. EPA has determined that this proposed rule 
will not have an adverse impact to children's health because it 
increases the level of environmental protection for all affected 
populations, including children. This action's health assessment are 
contained in Section VI of this preamble (as the hazard 
characterization portion of the environmental justice analysis). The 
public is invited to submit comments or identify peer-reviewed studies 
and data that assess effects of early life exposure to hazardous 
secondary materials being reclaimed.

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. As defined in Executive Order 13211, a 
``significant energy action'' is any action by an agency (normally 
published in the Federal Register) that promulgates or is expected to 
lead to the promulgation of a final rule or regulation, including 
notices of inquiry, advance notices of proposed rulemaking, and notices 
of proposed rulemaking that: (1) Is a significant regulatory action 
under Executive Order 12866 or any successor order and is likely to 
have a significant adverse effect on the supply, distribution, or use 
of energy; or (2) is designated by OMB as a significant energy action. 
This rule does not involve the supply, distribution, or use of energy 
and is not a significant regulatory action under Executive Order 12866. 
Thus, Executive Order 13211 does not apply to this rule.

I. National Technology Transfer and Advancement Act of 1995

    Section 12(d) of the National Technology Transfer and Advancement 
Act of 1995 (``NTTAA''), Public Law 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 proposed rulemaking does not involve technical standards. 
Therefore, EPA is not considering the use of any voluntary consensus 
standards.

J. Executive Order 12898: Environmental Justice

    Executive Order 12898 (59 FR 7629 (Feb. 16, 1994)) 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 proposed 
rule will not have disproportionately high and adverse human health or 
environmental effects on minority or low-income populations because it 
increases the level of environmental protection for all affected 
populations without having any disproportionately high and adverse 
human health or environmental effects on any population, including any 
minority or low-income population. The purpose of this proposal is to 
revise the 2008 DSW final rule in such a way that reduces potential 
adverse impacts, including potential disproportionate impacts to 
minority and low-impact communities. See Section VI. for further 
discussion of the environmental justice analysis that was conducted for 
this proposed rule, a copy of which is included in the docket to 
today's proposed rule. In addition, the environmental justice analysis 
was subject to peer review. Copies of the peer review comments that EPA 
received, as well as how EPA responded to those comments are also in 
the docket to this proposal. EPA requests comments on EPA's 
environmental justice analysis, and whether there remains any potential 
adverse impacts of the proposed rule, including disproportionate 
impacts to minority and low-income communities, that is within the 
Agency's discretion to address.

List of Subjects

40 CFR Part 260

    Environmental protection, Administrative practice and procedure, 
Hazardous waste, Reporting and recordkeeping requirements.

40 CFR Part 261

    Environmental protection, Hazardous waste, Solid Waste, Recycling.

40 CFR Part 266

    Environmental protection, Hazardous Waste, Recycling.

    Dated: June 30, 2011.
Lisa P. Jackson,
Administrator.
    For the reasons set out in the preamble, title 40, chapter I of the 
Code of Federal Regulations is proposed to be amended as follows:

PART 260--HAZARDOUS WASTE MANAGEMENT SYSTEM: GENERAL

    1. The authority citation for part 260 continues to read as 
follows:

    Authority:  42 U.S.C. 6905, 6912(a), 6921-6927, 6930, 6935, 
6937, 6938, 6939 and 6974.

Subpart B--Definitions

    2. Amend Sec.  260.10 as follows:
    a. Remove the definition of ``hazardous secondary material 
generated and reclaimed under the control of the generator,''
    b. Add in alphabetical order the definition of ``contained'' to 
read as follows:

Sec.  260.10  Definitions.

* * * * *
    Contained means a unit (including a land-based unit as defined in 
this

[[Page 44149]]

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. Such releases may include, but 
are not limited to, releases through surface transport by precipitation 
runoff, releases to 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 does not hold incompatible materials 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 considered to be contained.
* * * * *

Subpart C--Rulemaking Petitions

    3. Section 260.30 is amended by revising the introductory text to 
read as follows:

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

    In accordance with the standards and criteria in Sec.  260.31 and 
Sec.  260.34 and the procedures in Sec.  260.33, the Regional 
Administrator may determine on a case-by-case basis that the following 
recycled materials are not solid wastes:
* * * * *
    4. Amend Sec.  260.31 as follows:
    a. Revise the introductory text of paragraphs (a) and (b);
    b. Revise paragraph (c).

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

    (a) The Regional Administrator may grant requests for a variance 
from classifying as a solid waste those materials that are accumulated 
speculatively without sufficient amounts being recycled if the 
applicant demonstrates that sufficient amounts of the material will be 
recycled or transferred for recycling in the following year. If a 
variance is granted, it is valid only for the following year, but can 
be renewed, on an annual basis, by filing a new application. The 
Regional Administrator's decision will be based on whether the 
hazardous secondary material is legitimately recycled as specified in 
Sec.  260.43 and the following criteria:
* * * * *
    (b) The Regional Administrator may grant requests for a variance 
from classifying as a solid waste those materials that are reclaimed 
and then reused as feedstock within the original production process in 
which the materials were generated if the reclamation operation is an 
essential part of the production process. This determination will be 
based on whether the hazardous secondary material is legitimately 
reclaimed as specified in Sec.  260.43 and the following criteria:
* * * * *
    (c) The Regional Administrator may grant requests for a variance 
from classifying as a solid waste those materials that have been 
partially reclaimed but must be reclaimed further before recovery is 
completed, if the partial reclamation has produced a commodity-like 
material. A determination that a partially reclaimed material for which 
the variance is sought is commodity-like will be based whether the 
hazardous secondary material is legitimately recycled as specified in 
Sec.  260.43 and on whether all of the following decision criteria are 
satisfied:
    (1) Whether the degree of partial reclamation the material has 
undergone is substantial;
    (2) Whether the partially-reclaimed material has sufficient 
economic value that it will be purchased for final reclamation;
    (3) Whether the partially-reclaimed material is a viable substitute 
for a product or intermediate produced from virgin or raw materials 
which feeds subsequent production steps;
    (4) Whether there is a guaranteed end market for the partially-
reclaimed material;
    (5) Whether the partially-reclaimed material is handled to minimize 
loss.
    5. Section 260.32 is amended by revising the introductory text to 
read as follows:

Sec.  260.32  Variances to be classified as a boiler.

    In accordance with the standards and criteria in Sec.  260.10 
(definition of ``boiler''), and the procedures in Sec.  260.33, the 
Regional Administrator may determine on a case-by-case basis that 
certain enclosed devices using controlled flame combustion are boilers, 
even though they do not otherwise meet the definition of boiler 
contained in Sec.  260.10, after considering the following criteria:
* * * * *
    6. Section 260.33 is revised to read as follows:

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

    The Regional Administrator will use the following procedures in 
evaluating applications for variances from classification as a solid 
waste, applications to classify particular enclosed controlled flame 
combustion devices as boilers, applications for legitimacy variances, 
or applications for non-waste determinations.
    (a) The applicant must apply to the Regional Administrator for the 
variance or non-waste determination. The application must address the 
relevant criteria contained in Sec.  260.31, Sec.  260.32, Sec.  
260.34, or Sec.  260.43 as applicable.
    (b) The Regional Administrator will evaluate the application 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 recycler is 
located, and be made available on EPA's Web site. The Regional 
Administrator will accept comment on the tentative decision for 30 
days, and may also hold a public hearing upon request or at his 
discretion. The Regional Administrator will issue a final decision 
after receipt of comments and after the hearing (if any).
    (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, Sec.  260.34 or Sec.  260.43 upon which a 
variance or non-waste determination has been based, the applicant must 
re-apply to the Regional Administrator for a formal determination that 
the hazardous secondary material continues to meet the relevant 
criteria and therefore is not a solid waste.
    (d) Facilities receiving a variance or non-waste determination must 
provide notification as required by Sec.  260.42 of this chapter.
    7. Amend Sec.  260.34 as follows:
    a. Revise the introductory text of paragraph (a);
    b. Revise the introductory text of paragraph (b), and paragraph 
(b)(4);
    c. Revise the introductory text to paragraph (c), and paragraph 
(c)(5).

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

    (a) An applicant may apply to the Regional Administrator for a 
formal determination that a hazardous

[[Page 44150]]

secondary material is not discarded and therefore not a solid waste. 
The determinations will be based on the criteria contained in 
paragraphs (b) or (c) of this section, as applicable. If an application 
is denied, the hazardous secondary material might still be eligible for 
a solid waste variance or exclusion (for example, one of the solid 
waste variances under Sec.  260.31). Determinations may also be granted 
by the State if the State is either authorized for this provision or if 
the following conditions are met:
* * * * *
    (b) The Regional Administrator may grant a non-waste determination 
for hazardous secondary material which is reclaimed in a continuous 
industrial process if the applicant demonstrates that the hazardous 
secondary material is a part of the production process and is not 
discarded. The determination will be based on whether the hazardous 
secondary material is legitimately recycled as specified in Sec.  
260.43 and on the following criteria:
* * * * *
    (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) The Regional Administrator may grant a non-waste determination 
for hazardous secondary material which is indistinguishable in all 
relevant aspects from a product or intermediate if the applicant 
demonstrates that the hazardous secondary material is comparable to a 
product or intermediate and is reclaimed and is not discarded. The 
determination will be based on whether the hazardous secondary material 
is legitimately recycled as specified in Sec.  260.43 and on the 
following criteria:
* * * * *
    (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.
    8. Amend Sec.  260.42 as follows:
    a. Revise the introductory text to paragraph (a), and paragraphs 
(a)(1), (a)(4), (a)(5), (a)(6), (a)(7), (a)(8) and (a)(9);
    b. Remove paragraph (a)(10);
    c. Revise paragraph (b).

Sec.  260.42  Notification requirement for hazardous secondary 
materials.

    (a) Facilities managing hazardous secondary materials or hazardous 
recyclable materials under Sec. Sec.  260.30, 261.4(a)(23) or part 266 
subpart D must send a notification prior to operating under the 
regulatory provision and by March 1 of each even-numbered year 
thereafter to the Regional Administrator using EPA Form 8700-12 that 
includes the following information:
    (1) The name, address, and EPA ID number of the facility;
* * * * *
    (4) The regulation under which the hazardous secondary materials 
will be managed;
    (5) When the facility began or expects to begin managing the 
hazardous secondary materials in accordance with the regulation;
    (6) A list of hazardous secondary materials that will be managed 
according to the exclusion (reported as the EPA hazardous waste numbers 
that would apply if the hazardous secondary materials were managed as 
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 one 
year.
    9. Section 260.43 is amended by revising the section heading and 
paragraphs (a), (b) and (c) to read 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 or 
alternate regulatory standards 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. 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:
    (i) Must contain concentrations of any hazardous constituents found 
in Appendix VIII of part 261 of this chapter at levels that are 
comparable to or lower than those found in analogous products; or
    (ii) Must not exhibit a hazardous characteristic (as defined in 
part 261 subpart C) that analogous products do not exhibit.
    (b) Persons performing the recycling of hazardous secondary 
materials for the purpose of obtaining exclusions or exemptions from 
the hazardous waste regulations or alternative regulatory standards 
must maintain documentation of their legitimacy determination on-site.
    (1) Documentation must be either a written description of how the 
recycling meets all four factors in Sec.  260.43(a) or a copy of a 
legitimacy variance received from the person's implementing agency.

[[Page 44151]]

    (2) Documentation must be maintained for three years after the 
recycling operation has ceased.
    (c) An applicant may petition the Regional Administrator for a 
formal determination that a recycling process is legitimate without 
meeting the requirements under Sec.  260.43(a)(3) or Sec.  
260.43(a)(4). The Regional Administrator will use the procedures in 
Sec.  260.33 in evaluating petitions for legitimacy variances. In 
making a determination on a petition for a legitimacy variance, the 
Regional Administrator will evaluate all factors and consider 
legitimacy as a whole. In determining whether a process that does not 
meet one or both of the requirements under Sec.  260.43(a)(3) or Sec.  
260.43(a)(4) is still legitimate, the Regional Administrator can 
consider the protectiveness of the storage methods, exposure from 
toxics in the product, the bioavailability of the toxics in the 
product, and any other relevant considerations.
* * * * *

PART 261--IDENTIFICATION AND LISTING OF HAZARDOUS WASTE

    10. 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

    11. Section 261.2 is amended by removing paragraph (a)(2)(ii) and 
by revising the introductory text to paragraph (e)(1) to read as 
follows:

Sec.  261.2  Definition of solid waste.

* * * * *
    (e) * * * (1) Materials are not solid wastes when they can be shown 
to be legitimately recycled as specified in Sec.  260.43 by being:
* * * * *
    12. Amend Sec.  261.4, as follows:
    a. Republish the introductory text of paragraph (a);
    b. Revise paragraphs (a)(6) and (a)(7);
    c. Revise the introductory text to paragraph (a)(8);
    d. Revise paragraphs (a)(9)(i) and (a)(9)(ii);
    e. Revise paragraphs (a)(10) and (a)(11);
    f. Revise the first sentence of paragraph (a)(12)(i);
    g. Revise the first sentence of paragraph (a)(12)(ii);
    h. Revise paragraph (a)(13);
    i. Revise the introductory text of paragraph (a)(14);
    j. Revise paragraph (a)(17)(i);
    k. Revise the introductory text to paragraph (a)(18);
    l. Revise paragraph (a)(19);
    m. Revise the introductory text to paragraph (a)(20) and the 
introductory text to paragraph (a)(21);
    n. Revise paragraph (a)(22)(ii);
    o. Revise paragraph (a)(23);
    p. Remove paragraphs (a)(24) and (a)(25);
    q. Republish the introductory text of paragraph (b);
    r. Revise paragraphs (b)(12) and (b)(14).

Sec.  261.4  Exclusions.

    (a) Materials which are not solid wastes. The following materials 
are not solid wastes for the purpose of this part:
* * * * *
    (6) Pulping liquors (i.e., black liquor) that are legitimately 
reclaimed as specified in Sec.  260.43 of this chapter in a pulping 
liquor recovery furnace and then reused in the pulping process, unless 
it is accumulated speculatively as defined in Sec.  261.1(c) of this 
chapter.
    (7) Spent sulfuric acid legitimately used to produce virgin 
sulfuric acid as specified in Sec.  260.43 of this chapter, unless it 
is accumulated speculatively as defined in Sec.  261.1(c) of this 
chapter.
    (8) Secondary materials that are legitimately reclaimed as 
specified in Sec.  260.43 of this chapter and returned to the original 
process or processes in which they were generated where they are reused 
in the production process provided:
* * * * *
    (9)(i) Spent wood preserving solutions that have been legitimately 
reclaimed as specified in Sec.  260.43 of this chapter and are reused 
for their original intended purpose; and
    (ii) Wastewaters from the wood preserving process that have been 
legitimately reclaimed as specified in Sec.  260.43 of this chapter and 
are reused to treat wood.
* * * * *
    (10) EPA Hazardous Waste Nos. K060, K087, K141, K142, K143, K144, 
K145, K147, and K148, and any wastes from the coke by-products 
processes that are hazardous only because they exhibit the Toxicity 
Characteristic (TC) specified in Sec.  261.24 of this part when, 
subsequent to generation, these materials are legitimately recycled as 
specified in Sec.  260.43 of this chapter to coke ovens, to the tar 
recovery process as a feedstock to produce coal tar, or mixed with coal 
tar prior to the tar's sale or refining. This exclusion is conditioned 
on there being no land disposal of the wastes from the point they are 
generated to the point they are recycled to coke ovens or tar recovery 
or refining processes, or mixed with coal tar.
    (11) Nonwastewater splash condenser dross residue from the 
treatment of K061 in high temperature metals recovery units, provided 
it is shipped in drums (if shipped) and not land disposed before 
legitimate recovery as specified in Sec.  260.43 of this chapter.
    (12)(i) Oil-bearing hazardous secondary materials (i.e., sludges, 
byproducts, or spent materials) that are generated at a petroleum 
refinery (SIC code 2911) and are legitimately recycled as specified in 
Sec.  260.43 of this chapter by being inserted into the petroleum 
refining process (SIC code 2911--including, but not limited to, 
distillation, catalytic cracking, fractionation, gasification (as 
defined in 40 CFR 260.10) or thermal cracking units (i.e., cokers)) 
unless the material is placed on the land, or speculatively accumulated 
before being so recycled. * * *
    (ii) Recovered oil that is legitimately recycled as specified in 
Sec.  260.43 of this chapter in the same manner and with the same 
conditions as described in paragraph (a)(12)(i) of this section. * * *
    (13) Excluded scrap metal (processed scrap metal, unprocessed home 
scrap metal, and unprocessed prompt scrap metal) being legitimately 
recycled as specified in Sec.  260.43 of this chapter.
    (14) Shredded circuit boards being legitimately recycled as 
specified in Sec.  260.43 of this chapter provided that they are:
* * * * *
    (17) * * *
    (i) The spent material is legitimately recycled as specified in 
Sec.  260.43 of this chapter to recover minerals, acids, cyanide, water 
or other values;
* * * * *
    (18) Petrochemical recovered oil from an associated organic 
chemical manufacturing facility, where the oil is legitimately recycled 
as specified in Sec.  260.43 of this chapter by being inserted into the 
petroleum refining process (SIC code 2911) along with normal petroleum 
refinery process streams, provided:
* * * * *
    (19) Spent caustic solutions from petroleum refining liquid 
treating processes legitimately used as a feedstock as specified in 
Sec.  260.43 of this chapter to produce cresylic or naphthenic acid 
unless the material is placed on the land, or accumulated speculatively 
as defined in Sec.  261.1(c).
    (20) Hazardous secondary materials legitimately used as specified 
in Sec.  260.43 to make zinc fertilizers,

[[Page 44152]]

provided that the following conditions specified are satisfied:
* * * * *
    (21) Zinc fertilizers legitimately made from hazardous wastes, or 
hazardous secondary materials that are excluded under paragraph (a)(20) 
of this section as specified in Sec.  260.43 of this chapter, provided 
that:
* * * * *
    (22) * * *
* * * * *
    (ii) Used, intact CRTs as defined in Sec.  260.10 of this chapter 
are not solid wastes when exported for legitimate recycling as 
specified in Sec.  260.43 of this chapter provided that they meet the 
requirements of Sec.  261.40.
* * * * *
    (23) Hazardous secondary material generated and legitimately 
reclaimed under the control of the generator provided that it 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 the 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 of this chapter shall not be deemed to 
``control'' such facilities, or
    (C) The hazardous secondary material is generated pursuant to a 
written contract between a tolling contractor and a toll manufacturer 
and is reclaimed 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 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 generated and reclaimed 
within the United States or its territories.
    (B) 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 recycling. Hazardous secondary 
material managed in a unit with leaks or other continuing releases of 
the hazardous secondary material is discarded and a solid waste.
    (C) The hazardous secondary material is not speculatively 
accumulated, as defined in Sec.  261.1(c)(8), and the material is 
placed in a storage unit with a label indicating the first date that 
the excluded hazardous secondary material began to be accumulated. If 
placing a label on the storage unit is not practicable, the first date 
that the excluded hazardous secondary material began to be accumulated 
must be entered in an inventory log.
    (D) Notice is provided as required by Sec.  260.42 of this chapter.
    (b) Solid wastes which are not hazardous wastes. The following 
solid wastes are not hazardous wastes:
* * * * *
    (12) Used chlorofluorocarbon refrigerants from totally enclosed 
heat transfer equipment, including mobile air conditioning systems, 
mobile refrigeration, and commercial and industrial air conditioning 
and refrigeration systems that use chlorofluorocarbons as the heat 
transfer fluid in a refrigeration cycle, provided the refrigerant is 
reclaimed for further use in a manner that is legitimate as specified 
in Sec.  260.43 of this chapter.
* * * * *
    (14) Used oil re-refining distillation bottoms that are used as 
feedstock to manufacture asphalt products in a manner that is 
legitimate as specified in Sec.  260.43 of this chapter.
    13. Amend Sec.  261.6 as follows:
    a. Revise paragraph (a)(1);
    b. Revise the introductory text to paragraph (a)(2) and add 
paragraph (a)(2)(v);
    c. Revise the introductory text to paragraph (a)(3);
    d. Revise paragraph (c)(1) and the introductory text to paragraph 
(c)(2).

Sec.  261.6  Requirements for recyclable materials.

    (a)(1) Hazardous wastes that are legitimately recycled as specified 
in Sec.  260.43 of this chapter are subject to the requirements for 
generators, transporters, and storage facilities of paragraphs (b) and 
(c) of this section, except for the materials listed in paragraphs 
(a)(2) and (a)(3) of this section. Hazardous wastes that are 
legitimately recycled will be known as ``recyclable materials.''
    (2) The following recyclable materials are not subject to the 
requirements of this section when legitimately recycled as specified in 
Sec.  260.43 of this chapter but are regulated under subparts C through 
N of part 266 of this chapter and all applicable provisions in parts 
268, 270, and 124 of this chapter.
* * * * *
    (v) Hazardous recyclable materials transferred for reclamation (40 
CFR part 266, subpart D).
    (3) The following recyclable materials are not subject to 
regulation under parts

[[Page 44153]]

262 through parts 268, 270, or 124 of this chapter and are not subject 
to the notification requirements of section 3010 of RCRA when 
legitimately recycled as specified in Sec.  260.43 of this chapter:
* * * * *
    (c)(1) Owners and operators of facilities that store recyclable 
materials before they are recycled are regulated under all applicable 
provisions of subparts A though L, AA, BB, and CC of parts 264 and 265, 
and under parts 124, 266, 267, 268, and 270 of this chapter and the 
notification requirements under section 3010 of RCRA, except as 
provided in paragraph (a) of this section. (The recycling process 
itself is exempt from regulation as long as the recycling is legitimate 
as specified in Sec.  260.43 of this chapter, except as provided in 
Sec.  261.6(d).)
    (2) Owners or operators of facilities that recycle recyclable 
materials without storing them before they are legitimately recycled 
are subject to the following requirements, except as provided in 
paragraph (a) of this section:
* * * * *

Subpart E--Exclusions/Exemptions

    14. Section 261.38 is amended by adding paragraph (b)(17) to read 
as follows:

Sec.  261.38  Exclusion of comparable fuel and syngas fuel.

* * * * *
    (b) * * *
* * * * *
    (17) Legitimate recycling. Excluded fuel must be legitimately 
recycled as specified in Sec.  260.43 of this chapter.
* * * * *
    15. Section 261.39 is amended by revising the introductory text to 
read as follows:

Sec.  261.39  Conditional Exclusion for Used, Broken Cathode Ray Tubes 
(CRTs) and Processed CRT Glass Undergoing Recycling.

    Used, broken CRTs are not solid wastes if they are legitimately 
recycled as specified in Sec.  260.43 of this chapter and meet the 
following conditions:
* * * * *
    16. Section 261.40 is revised to read as follows:

Sec.  261.40  Conditional Exclusion for Used, Intact Cathode Ray Tubes 
(CRTs) Exported for Recycling.

    Used, intact CRTs exported for legitimate recycling as specified in 
Sec.  260.43 of this chapter are not solid wastes if they meet the 
notice and consent conditions of Sec.  261.39(a)(5), and if they are 
not speculatively accumulated as defined in Sec.  261.1(c)(8).
    17. Section 261.41 is revised to read as follows:

Sec.  261.41  Notification and Recordkeeping for Used, Intact Cathode 
Ray Tubes (CRTs) Exported for Reuse.

    (a) Persons who export used, intact CRTs for legitimate reuse as 
specified in Sec.  260.43 of this chapter must send a one-time 
notification to the Regional Administrator. The notification must 
include a statement that the notifier plans to export used, intact CRTs 
for reuse, the notifier's name, address, and EPA ID number (if 
applicable) and the name and phone number of a contact person.
    (b) Persons who export used, intact CRTs for legitimate reuse as 
specified in Sec.  260.43 of this chapter must keep copies of normal 
business records, such as contracts, demonstrating that each shipment 
of exported CRTs will be reused. This documentation must be retained 
for a period of at least three years from the date the CRTs were 
exported.

Subpart H (Sec. Sec.  261.140 through 261.151)--[Removed]

    18. Subpart H, consisting of Sec. Sec.  261.140 through 261.151, is 
removed.

PART 266--STANDARDS FOR THE MANAGEMENT OF SPECIFIC HAZARDOUS WASTES 
AND SPECIFIC TYPES OF HAZARDOUS WASTE MANAGEMENT FACILITIES

    19. The authority citation for part 266 continues to read as 
follows:

    Authority:  42 U.S.C. 1006, 2002(a), 3001-3009, 3014, 3017, 
6905, 6906, 6912, 6921, 6922, 6924-6927, 6934, and 6937.

Subpart C--Recyclable Materials Used in a Manner Constituting 
Disposal

    20. Section 266.20 is amended by revising the introductory text to 
paragraph (a), and paragraphs (b) and (d)(2), to read as follows:

Sec.  266.20  Applicability.

    (a) The regulations of this subpart apply to recyclable materials 
that are applied to or placed on the land, provided they are 
legitimately recycled as specified in Sec.  260.43 of this chapter:
* * * * *
    (b) Products produced for the general public's use that are used in 
a manner that constitutes disposal and that contain recyclable 
materials are not presently subject to regulation if the recyclable 
materials have undergone a chemical reaction in the course of producing 
the products so as to become inseparable by physical means and if such 
products meet the applicable treatment standards in subpart D of part 
268 (or applicable prohibition levels in Sec.  268.32 or RCRA section 
3004(d), where no treatment standards have been established) for each 
recyclable material (i.e., hazardous waste) that they contain, provided 
they are legitimately recycled as specified in Sec.  260.43 of this 
chapter.
* * * * *
    (d) * * *
    (2) They meet the applicable treatment standards in subpart D of 
part 268 of this chapter for each hazardous waste that they contain and 
provided they are legitimately recycled as specified in Sec.  260.43 of 
this chapter.
    21. Subpart D is added to part 266 to read as follows:

Subpart D--Hazardous Recyclable Materials

Sec.  266.30  Applicability.

    (a) The regulations of this subpart apply to hazardous recyclable 
materials that are reclaimed as defined in Sec.  261.1(a)(4) of this 
chapter. For the purposes of this subpart, a hazardous recyclable 
material is a hazardous waste this is being recycled.
    (b) A hazardous recyclable material generator may accumulate 
hazardous recyclable material onsite for one year or less without a 
permit or without having interim status, provided that:
    (1) The hazardous recyclable material generator provides 
notification as required by Sec.  260.42 of this chapter;
    (2) The hazardous recyclable material generator makes and documents 
advance arrangements for reclamation prior to operating under this 
subpart in a reclamation plan that:
    (i) Describes the hazardous recyclable material and identifies the 
reclamation facility where the material will be sent,
    (ii) Includes written confirmation from the facility that they are 
able to reclaim the hazardous recyclable material,
    (iii) Documents the amount of hazardous recyclable material 
expected in each shipment and the anticipated frequency of shipments, 
and:
    (iv) Documents that the reclamation is legitimate per 40 CFR 
260.43;
    (3) While hazardous recyclable materials are being accumulated on-
site, each container and tank is labeled or marked clearly with the 
words, ``Hazardous recyclable material'';
    (4) The hazardous recyclable material generator complies as 
applicable either with all requirements applicable to large quantity 
generators or all requirements applicable to small quantity generators, 
except for the 90-day storage time limit

[[Page 44154]]

for large quantity generators and the 180-day (or 270-day) storage time 
limit for small quantity generators, and except that tanks and 
containers need not be labeled as containing ``hazardous waste'' if 
they instead are labeled as containing ``hazardous recyclable 
materials.''
    (c) Persons who transport or who store hazardous recyclable 
materials other than at the site of generation, prior to reclamation 
are subject to all applicable requirements of parts 263 through 265 and 
part 268 of this chapter.

Subpart F--Recyclable Materials Utilized for Precious Metal 
Recovery

    22. Section 266.70 is amended by revising paragraph (a) to read as 
follows:

Sec.  266.70  Applicability and requirements.

    (a) The regulations of this subpart apply to recyclable materials 
that are legitimately reclaimed as specified in Sec.  260.43 of this 
chapter to recover economically significant amounts of gold, silver, 
platinum, palladium, iridium, osmium, rhodium, ruthenium, or any 
combination of these.
* * * * *

Subpart G--Spent Lead-Acid Batteries Being Reclaimed

    23. Section 266.80 is amended by revising the introductory text of 
paragraph (a) to read as follows:

Sec.  266.80  Applicability and requirements.

    (a) Are spent lead-acid batteries exempt from hazardous waste 
management requirements? If you generate, collect, transport, store, or 
regenerate lead-acid batteries for legitimate reclamation purposes as 
specified in Sec.  260.43 of this chapter, you may be exempt from 
certain hazardous waste management requirements. Use the following 
table to determine which requirements apply to you. Alternatively, you 
may choose to manage your spent lead-acid batteries under the 
``Universal Waste'' rule in 40 CFR part 273.
* * * * *

Subpart H--Hazardous Waste Burned in Boilers and Industrial 
Furnaces

    24. Section 266.100 is amended by revising paragraph (a) to read as 
follows:

Sec.  266.100  Applicability.

    (a) The regulations of this subpart apply to hazardous waste burned 
or processed in a boiler or industrial furnace (as defined in Sec.  
260.10 of this chapter) irrespective of the purpose of burning or 
processing, except as provided by paragraphs (b), (c), (d), (g), and 
(h) of this section. In this subpart, the term ``burn'' means burning 
for energy recovery or destruction, or processing for materials 
recovery or as an ingredient. The emissions standards of Sec. Sec.  
266.104, 266.105, 266.106, and 266.107 apply to facilities operating 
under interim status or under a RCRA permit as specified in Sec. Sec.  
266.102 and 266.103. Burning for energy recovery and processing for 
materials recovery or as an ingredient must be legitimate recycling as 
specified in Sec.  260.43 of this chapter.
* * * * *
[FR Doc. 2011-17031 Filed 7-21-11; 8:45 am]
BILLING CODE 6560-50-P