records can be accessed by generators; and "additional recycling markets
for facilities without permits would also be encouraged for those
generators and reclamation facilities willing and able to satisfy the
regulatory conditions."

One commenter appeared confused by the proposed regulatory language and
commented in opposition to allowing a generator of "a recyclable
secondary material," who does not take advantage of the exclusion, to
send the material to a non-Part B permitted reclamation facility.

(0452, 0460, 0468, 0471.2, 0478, 0500, 0507, 0555, 0558)

<IP_ADDRESS> - Response

In the final rule, the reasonable efforts condition for generators
applies to hazardous secondary materials transferred to intermediate and
reclamation facilities operating without a RCRA Part B permit, or to
facilities not under interim status standards. If the permit or interim
status standards extend to the management the hazardous secondary
materials, we do not require generators to conduct reasonable efforts
because we believe the Part B permit or the interim status standards
provide adequate assurance that the hazardous secondary materials will
be well managed and the reclamation facility must comply with financial
assurance requirements. Of course, if a permitted facility later
modifies its permit terms in a way that the permit no longer extends to
the management of the hazardous secondary materials, then the generator
would need to perform reasonable efforts in accordance with this
exclusion.

EPA appreciates commenter support for the proposed reasonable efforts
language regarding facilities having RCRA Part B permits or operating
under interim status standards. After considering comments, EPA
continues to find that a reasonable efforts condition is a necessary
part of identifying what reclaimed materials are not discarded and thus
should be excluded from the definition of hazardous waste. As confirmed
by comments, and supported by the good recycling practices study, the
environmental problems study, and the recycling markets study, a
generator’s care in choosing an appropriate recycler is necessary and
critical to ensure that his material is not discarded, and does not
become part of the waste management problem. Therefore, we are
finalizing regulatory text similar to the 2007 supplemental proposal. We
are not requiring the reasonable efforts condition (e.g.,
261.4(a)(24)(v)(B) and 261.4(a)(24)(v)(C)) for generators sending their
hazardous secondary materials to reclamation or intermediate facilities
where the management of reclaimed hazardous materials is addressed under
a RCRA Part B permit or interim status standards. This means that for
these generators certification of reasonable efforts, and the
requirement to affirmatively answer Questions 1 through 5, would not be
a condition of the exclusion. As stated above, the Agency believes
permitted and interim status recycling and intermediate facilities will
provide generators with environmental assurances (such as storage
requirements, operating standards, regulatory oversight, and financial
assurance) which ensure their hazardous secondary materials will not be
discarded. Because of the way the reasonable efforts condition is
structured, it is necessary to state that the act of identifying whether
a facility is permitted is equivalent to satisfying the reasonable
efforts condition, as suggested by a commenter, in fact a generator will
have the choice of either making reasonable efforts or sending their
materials to a permitted or interim status facility.

Regarding suggested edits to regulatory language, we appreciate
commenter ideas for clarifying the text and as appropriate, we have
modified the final language to reflect them. As such, the final
regulatory language clearly states that the generator must make
reasonable efforts for any facility "where the management of the
hazardous secondary materials is not addressed under a RCRA Part B
permit or interim status standards."

Without more information, we cannot conclude that this will encourage
reclamation and intermediate facilities to extend existing RCRA permits
terms to the management of hazardous secondary materials in order to
attract generators' business; but such changes to existing permits would
in fact preclude generators from needing to satisfy the reasonable
efforts condition. We acknowledge that this condition may in fact
provide an incentive for reclamation and intermediate facilities to
retain a Part B permit on behalf of their generator customers who do not
want to or cannot make reasonable efforts, such as small quantity
generators. In general, one outcome of today's exclusions from the
definition of solid waste should be an increase in markets for safe
recycling of hazardous secondary materials, regardless of whether the
increase is observed among permitted or unpermitted facilities, as
suggested by a commenter.

We would like to further clarify two points raised by commenters. The is
that generators can access inspection records for permitted and interim
status reclamation and intermediate facilities because they are
routinely audited by regulatory agencies. Reasonable efforts is a
condition of the transfer-based exclusion in part because non-permitted
and non-interim status facilities may not have as much regulatory
oversight as permitted or interim status facilities; thus generators
would not automatically have the same assurance that the hazardous
secondary materials will be well managed and not discarded. However, we
anticipate that state regulatory authorities will continue to conduct
inspections of excluded facilities and that publicly available
inspection records for those facilities will be accessible to generators
to use for their reasonable efforts analyses.

Secondly, we would like to respond to a comment that a generator who
does not take advantage of the exclusion should not be able to send
hazardous secondary materials to a non-Part B permitted or non-interim
status reclamation or intermediate facility. We agree with this
assertion and reiterate that a generator has two choices with respect to
reasonable efforts under the transfer-based exclusion: to send materials
to a facility with a RCRA Part B permit, or that is operating under
interim status standards, and avoid the reasonable efforts condition; or
to send materials to a facility without a RCRA Part B permit, or that is
not operating under interim status standards, and to make reasonable
efforts for each facility to ensure that the materials are safely
recycled and not discarded.

<IP_ADDRESS> - Reasonable efforts to include only questions (A) and (F)

<IP_ADDRESS> - Summary

EPA requested comment on whether to require generators to answer only
questions (A) and (F), which are discussed in the 2007 supplemental
proposal preamble, in order to satisfy reasonable efforts. We suggested
this approach, which focuses only on the notification and financial
assurance requirements, as well as residuals management, because it was
potentially a "more bright-line" option for generators to satisfy
reasonable efforts.

We received only one comment addressing this option and the state
commenter believed that all questions (A) - (F) should be answered
instead.  (0489)

<IP_ADDRESS> - Response

We agree with this commenter and believe that including only questions
(A) and (F) in the reasonable efforts requirement, or questions (1) and
(5) as finalized in today's rulemaking, does not sufficiently determine
whether a generator's hazardous secondary materials are not discarded at
an intermediate or reclamation facility. We believe that all questions
(1) - (5) must define reasonable efforts and our decision is based on
public comments that support defining reasonable efforts with all of the
questions and supportive information from both EPA's An Assessment of
Good Current Practices for Recycling of Hazardous Secondary Materials
(EPA-HQ-RCRA-2002-0031-0354 ) ("successful recycling study") and An
Assessment of Environmental Problems Associated With Recycling of
Hazardous Secondary Materials (EPA-HQ-RCRA-2002-0031-0355)
("environmental problems study"). We believe that only answering
questions (A) and (F) is not sufficient for generators to determine
their hazardous secondary materials will be properly and legitimately
recycled because this approach does not include important questions
about the legitimacy of a recycling activity, a facility's environmental
compliance history, and the technical capacity of a facility to recycle
hazardous secondary materials. We are convinced that all of these
questions are necessary to adequately determine that a generator is, in
fact, not discarding their hazardous secondary material.

<IP_ADDRESS> - Relationship between reasonable efforts and legitimacy

<IP_ADDRESS> - Summary

In the March 2007 supplemental proposal, we proposed that in order to
take advantage of the transfer-based exclusion, a "generator must make
reasonable efforts to ensure that the reclaimer intends to legitimately
recycle the material and not discard it pursuant to the criteria in
proposed [40 CFR 261.2(g)]." We also proposed that by satisfying the
reasonable efforts condition, the generator would have also satisfied
the obligation to determine his hazardous secondary material was
legitimately recycled. Additionally, we requested comment on two more
issues: whether any or all of questions (A) - (F) are appropriate for
the generator to answer in making reasonable efforts to ensure that the
reclaimer intends to legitimately recycle the material; and whether to
keep the legitimacy determination an independent requirement for
generators. The latter request was due in part to the documentation and
certification requirements for reasonable efforts, which we pointed out
"could alter the implementation of the legitimacy determination for
materials excluded under the provision" if questions (D) and (E) about
legitimacy were incorporated in reasonable efforts.

EPA received a variety of comments on the relationship between the
reasonable efforts condition and the requirement that hazardous
secondary materials must be legitimately recycled. We heard from many
commenters that evaluating whether a reclaimer meets the legitimacy
requirements should be part of a reasonable efforts inquiry to ensure
that a generator's hazardous secondary materials are legitimately
recycled. One commenter stated that in order for the conditional
exclusion to effectively ensure legitimate recycling, it is important to
include questions that define legitimacy within reasonable efforts. The
commenter believed this is crucial because "[for] two decades, the
legitimacy criteria in the Sylvia Lowrance [memo] have been widely
misunderstood, ignored, and unenforced."

Supportive commenters also had numerous suggestions for improving the
reasonable efforts condition with respect to the legitimacy requirement:

Include language that states that a generator can satisfy reasonable
efforts by relying on "any credible evidence available" or by using a
facility that has a RCRA Part B permit or interim status standards that
must "apply to the management of the excluded material by the
reclamation facility."

Include "an evaluation of how well the reclaimer is meeting the
legitimacy criteria to either [Question] D or E."

Include questions that pertain to the "two factors that must be
considered," instead of just focusing on the two mandatory legitimacy
factors. One commenter asked that a question be added about "toxics
along for the ride" only. Other commenters wanted to include the
following two series of questions within reasonable efforts: (1) "Does
the reclaimer manage the hazardous secondary material as a valuable
commodity? Where there is an analogous raw material, does the reclaimer
manage the hazardous secondary material in a manner consistent with the
management of the raw material? Where there is no analogous raw
material, is the hazardous secondary material contained?" (2) “Does
the product of the recycling process contain significant concentrations
of any hazardous constituents in Appendix VIII of 40 CFR part 261 that
are not found in analogous products? Does the product contain
concentrations of any Appendix VIII hazardous constituent at levels that
are significantly elevated from those found in analogous products? Does
the product exhibit a hazardous characteristic that analogous products
do not exhibit?"

Some commenters argued there is a disconnect between requiring
generators to evaluate reclaimers under reasonable efforts, including
the requirements of proposed 40 CFR 261.2(g), but not requiring a
reclaimer to document legitimacy. These commenters wanted EPA to require
documentation of reasonable efforts to facilitate a generator's
reasonable efforts inquiry. One commenter believed that authorized
states would have a difficult time determining whether a generator
satisfied the reasonable efforts condition (pertaining to questions (D)
and (E)) without documentation.

Require "that the generator provide evidence that the recycler complies
with the two legitimacy criteria not mandated in this proposal," e.g.,
the "two factors to be considered."

The notification requirement should include a legitimacy determination,
which the generator should then maintain "as part of the waste
characterization records required as a condition of the exemption." We
presume that the commenter is suggesting that the generator should
maintain a copy of the reclaimer's notification, which would include a
legitimacy determination, in order to satisfy the reasonable efforts
condition.

The reclaimer must also sign and certify to the generator that they meet
the legitimacy requirements.

"[A] generator should re-evaluate the legitimacy of the recycling
operation whenever new information becomes available."

Several commenters also argued that a legitimacy requirement should not
be a part of the reasonable efforts condition:

One commenter stated that while a hazardous secondary material generator
would need to ensure that a recycling activity being considered is
legitimate in order to protect its own liability interests, a legitimacy
determination should be entirely separate from the reasonable efforts
condition.

Another commenter also stressed that, as a matter of good practice, many
responsible generators already ensure that they send hazardous secondary
materials to facilities engaged in legitimate recycling; therefore, a
legitimacy evaluation within reasonable efforts is unnecessary.

One commenter said it was inappropriate and unnecessary for generators
to evaluate the "two factors to be considered" from the proposed
legitimacy requirements. They believed that generators don't typically
have expertise to make the complex technical and engineering
evaluations, particularly related to evaluations of "toxics along for
the ride."

Some commenters argued that a legitimacy determination should be
separate from the reasonable efforts condition. One commenter stated
that codifying questions about legitimacy is unnecessary because "in
order to protect its own interests, a generator will need to ensure
internally that the recycling being contemplated is legitimate,
consistent with existing guidance as proposed in the rule." Therefore,
"a legitimacy determination should be kept as an independent requirement
for generators."

We also received several comments stating that the condition and/or the
"prescriptive approach" to reasonable efforts (e.g., questions (A) -
(F)) is redundant and unnecessary given current regulations. The
commenters generally said that "all generators are already compelled by
regulatory compliance and liability concerns to evaluate the legitimacy
of reclamation in the context of the 4 legitimacy criteria… and by
CERCLA liability concerns." One commenter also suggested that questions
(A) - (F) were "overly burdensome" since facilities already operate
under RCRA requirements, and because the commenter assumed facilities
will operate under the proposed legitimacy requirements in the future.

(468, 471.2, 472, 475, 476, 482, 486, 491, 495, 501, 507, 509, 516, 534,
538, 558, 559)

<IP_ADDRESS> - Response

EPA agrees with the commenters who stated that determining whether a
recycling activity is legitimate is a sound practice and, based on
comments we received, understands that many responsible generators
already use existing legitimacy policy as a way to manage their
potential liability. The reasonable efforts condition is intended to
assist generators in determining that their chosen reclamation
facilities will properly and legitimately recycle the generators'
hazardous secondary materials. Consequently, EPA strongly believes that
the reasonable efforts condition must contain a provision that
explicitly refers generators to their obligation to ensure that their
hazardous secondary materials are legitimately reclaimed. Including
legitimacy as part of the reasonable efforts condition means that if the
generator made reasonable efforts to ensure that its hazardous secondary
materials are legitimately recycled in a way that satisfies this
condition and, subsequently, the reclamation facility fails to recycle
the materials legitimately, the reclamation facility, not the generator,
becomes liable for violating RCRA.

In the final rulemaking for reasonable efforts, we are including
commenter suggested language clarifying that RCRA Part B permits and
interim status standards must extend to the management of hazardous
secondary materials if generators are to rely on such facilities for
legitimately recycling their materials. We are also codifying question
(1), which requires a generator to affirm that a reclamation facility
legitimately recycles pursuant to 40 CFR 260.43, in order to ensure that
the entire legitimacy determination is represented in reasonable efforts
(not just the mandatory factors) and to clarify any confusion about
variations in the proposed language between proposed 261.2(g) and
questions (D) and (E). We also agree with commenters who suggested that
incorporating the legitimacy determination in reasonable efforts
guarantees that generators clearly understand their responsibility to
ensure legitimate recycling as part of determining that their hazardous
secondary materials are not discarded, as described in previous preamble
and policy statements.

EPA has the following responses to other suggestions for improving the
reasonable efforts condition with respect to the legitimacy requirement:

We believe that the requirements in 260.43 adequately ensure legitimacy
without "an evaluation of how well the reclaimer is meeting the
legitimacy factors"; therefore, we do not think it is necessary to
include that specific language within reasonable efforts.

Since question (1) requires a generator to affirm that a reclamation
facility legitimately recycles pursuant to 40 CFR 260.43, we believe it
would be unnecessarily redundant to include separate questions that
pertain to each legitimacy factor.

We recognize that a reclaimer may document its legitimacy determination
in order to facilitate a generator's reasonable efforts inquiry of the
reclaimer. However, EPA has determined that for the purpose of
documenting the legitimacy factors in the final rule, 40 CFR 261.2(f)
applies. Section 261.2(f) states that, in the context of an enforcement
action to implement Subtitle C of RCRA, a person claiming that a
material is not a solid waste or is conditionally exempt from regulation
is responsible for showing that they meet the terms of the exclusion and
must provide appropriate documentation to show why they are eligible.
Therefore, we do not think it is also necessary to require a reclaimer
to document a legitimacy determination within the reasonable efforts
condition if it is not a requirement under 260.43.

With respect to a comment about notification, which EPA presumed to mean
a reclaimer's notification should include a legitimacy determination, we
do not believe that that information is necessary within the
notification form. Also, as stated above, EPA determined that 261.2(f)
is sufficient for documentation needs of legitimacy and meeting the
terms of this exclusion. However, we agree that if a reclaimer documents
its legitimacy determination, a generator could use that documentation
to support the generator's requirement to document it satisfied the
reasonable efforts condition.

We believe that the satisfying the final reasonable efforts condition
ensures that a generator's hazardous secondary material is legitimately
recycled and not discarded without requiring that the reclaimer certify
to the generator that they meet the legitimacy factors. However, we
agree that such a certification, if requested by a generator, could
support a generator's requirement to document that the reasonable
efforts condition has been met.

EPA believes that requiring generators to conduct updates of reasonable
efforts is critical for ensuring that reclamation facilities continue to
properly and legitimately recycle the hazardous secondary materials into
the future. As such, we are requiring that generators update their
reasonable efforts evaluation at least every three years, at a minimum.
By specifying a time frame for periodic updates, EPA in no way intends
to limit a generator to conducting evaluations only every three years.
In fact, we acknowledge that shorter time frames could be appropriate
for certain industries. Additionally, we would expect that any hazardous
secondary material generator who has concerns about a reclamation or
intermediate facility, or who gains new knowledge of significant changes
or extraordinary situations at such facilities, would conduct reasonable
efforts regardless of the minimum required update schedule.

EPA also has the following responses for comments in opposition to
referencing the legitimacy requirement in the reasonable efforts
condition:

We recognize that many responsible generators do already ensure that
they send hazardous secondary materials to facilities engaged in
legitimate recycling, as evidenced by the successful recycling study;
however, we know that not all generators do.  Consequently, we believe
there is a need to incorporate the legitimacy requirements in reasonable
efforts to guarantee that generators clearly understand their regulatory
requirements to ensure legitimate recycling.

In answering question (1) of reasonable efforts, we anticipate that a
generator, which already has knowledge of how to safely manage its
hazardous secondary material, will verify that the reclaimer has made a
sound legitimacy determination for recycling the generator's hazardous
secondary material. EPA thinks this requirement is crucial for ensuring
that the generator's materials will be legitimately recycled and not
discarded. We believe that generators may already have staff with enough
technical and engineering knowledge to be capable of verifying a
legitimacy determination, or may employ a third party for assistance as
needed, and we anticipate that reclaimers will assist generators in
providing the information necessary to satisfy question (1) of
reasonable efforts. If a reclaimer is not meeting one or both of the
factors to be considered, then EPA would expect the generator to ask for
a demonstration of how the recycling is still legitimate under 40 CFR
260.43.

While it is true that "in order to protect its own interests, a
generator will need to ensure internally that the recycling being
contemplated is legitimate, consistent with existing guidance as
proposed in the rule," we believe that the generator requirements must
be as clear as possible to guarantee that in fact all generators are
aware of what must be done to "protect their interests," e.g., make
certain they will not be liable for discard. Based on the environmental
problems study, we do not believe that all generators clearly understand
their responsibility to ensure their hazardous secondary materials are
legitimately recycled and not discarded. Therefore, we do not agree that
the legitimacy requirement should be completely separate from reasonable
efforts.

We disagree that the condition and/or the "prescriptive approach" to
reasonable efforts, including an affirmation of legitimate recycling, is
redundant, unnecessary, and burdensome given current and/or future
legitimacy requirements, CERCLA liability concerns, and/or RCRA
requirements. Since the exclusions of today's rulemaking will remove
existing RCRA requirements for certain recycling activities, we do not
agree that the reasonable efforts condition is redundant or unnecessary.
Additionally, we heard from commenters that not all generators currently
evaluate reclamation facilities despite having existing liability
concerns and legitimacy requirements. Analysis of the study of
environmental damage also suggests that CERCLA liability and/or
legitimacy requirements are not enough to prevent damage and that
increased generator inquiry of reclamation facilities will help avoid
future cases of abandonment or discard, residuals mismanagement, sham
recycling, and improper management of hazardous secondary materials and
recycled products. As a result, we believe that it is critical to
include question (1) in the reasonable efforts condition, which requires
a generator to affirm that a reclamation facility legitimately recycles
pursuant to 40 CFR 260.43.

<IP_ADDRESS> - Scope of typical audit

<IP_ADDRESS> - Summary

In the March 2007 supplemental proposal, EPA proposed the reasonable
efforts condition for generators under the transfer-based exclusion.
While describing how the condition would work in the preamble, we
described existing best practices for evaluating waste management and
reclamation facilities, and generally referred to how generators could
make reasonable efforts by auditing facilities and producing and using
audit reports. However, we did not propose auditing or producing reports
as a requirement of the condition.

Instead, in the proposal, we discussed generator audits and requested
comments on whether: (1) generators should be able to use any credible
evidence available in making reasonable efforts, including information
gathered by the generator, provided by the reclaimer, and/or provided by
a third party, in lieu of personally performing an environmental audit;
(2) generators should be required to maintain documentation at the
generating facility, which would presumably include copies of audit
reports and/or other relevant information, showing that reasonable
efforts were made before transferring the hazardous secondary materials
to the reclamation facility; (3) we should include a question that
pertains to a financial evaluation of a reclamation facility, which we
determined would be included in a typical audit, and how such a question
might affect the scope of a typical audit.

As noted above, we also described in the preamble our understanding of
current best audit practices, which we primarily obtained from
conducting the successful recycling study. As a result, we received many
comments in response to our discussion of generator audits. (To learn
more about commenters' input related to auditing and producing and using
audits for satisfying reasonable efforts, please refer to the following
sections within this document: "Questions that reasonable efforts must
address at a minimum," "Frequency of periodically updating reasonable
efforts," "Documentation of reasonable efforts," and "Certification of
reasonable efforts.")

Several commenters told EPA that generators currently acquire
information very similar to questions (A) - (F), if not more extensive
information, when they conduct audits, and that they have the ability to
evaluate the relevant aspects of a reclamation facility. A few
commenters also said that they audit all off-site TSDFs, including some
recycling facilities, and that audits are generally conducted by
generators, third-party auditors, or consortiums prior to sending
materials to a reclamation facility. Some commenters also stated that
audits are fairly commonplace and they support and perform audits as a
good business practice. One commenter made each of the following
statements:

"These [audit] practices and systems are an integral part of daily
operations and [ensure that materials] are recycled and not
'discarded'."

"All off-site [TSDFs], including some recycling facilities, are audited
by an independent third party auditing firm to guard against any future
liabilities resulting from the mismanagement of the materials."

 The scope of audits is "significantly diverse," as are the findings of
audits.

Many generators currently determine whether a reclamation facility is
acceptable if the facilities "are RCRA permitted and appear to have
reasonably sound and stable operations."

They "use environmental, health, safety and Responsible Care criteria in
vendor selection and conduct financial assessments."

Audits are recurring, but the frequency of how often a facility is
audited will vary.

We also received several comments regarding the purpose of audits and
what is currently included within facility audits:

"Information collected during these audits is used to establish the
legitimacy of the recycling operation(s), the ability and capacity of
the facility to properly manage the materials, and the compliance
history."

Facility audits include: "review of the facility's environmental
stewardship, regulatory compliance history, technology, and financial
stability." A financial audit is conducted annually regardless of a
facility's prior good history.

One commenter offered the following extensive list of elements that are
included within its facility audit: facility design and operations,
groundwater monitoring, training, waste analysis/manifest system,
laboratories, inspection records, secondary waste facilities in use,
contingency plan, closure assurance, liability insurance,
remediation/litigation, financial records, security, personnel safety,
housekeeping, container management, facility status changes, storage
tanks, permit status, operational changes, spills, compliance history.

The final step in an audit is to review and evaluate the audit to
determine whether waste should be sent to the facility.

One commenter described how a particular program makes both generators
and recyclers responsible for properly recycling materials: Prior to
shipping materials, a generator completes a profile describing the
material to be recycled, and sometimes a sample of the material is sent
to the recycler as well. The recycler then reviews the information and
may test the material to be sure it can be processed, and then the
generator is notified that it can ship the material.

Several commenters expressed concern that EPA would require audits under
the reasonable efforts condition for the following reasons:

Generators, particularly those that are small and medium size, "do not
have adequate resources to audit reclaimers to the level proposed."

It is not appropriate for EPA to shift the burden of performing audits
from inspectors to generators. Generators would be willing to provide
regulatory authorities with any information necessary and authorities
would maintain the latitude to request it.

Many generators do not even leave the office to conduct audits, and
those without expertise just compare paperwork, like permits, operating
records, etc. against RCRA standards. "These general 'all-purpose'
auditors typically rely on EPA and the [states'] expertise to ensure
proper storage, handling and processing is occurring."

Reclaimers are also generators, but because they are in the waste
management industry, they cannot belong to the non-profit trade
association, CHWMEG, which provides economical facility audits for
member companies. Consequently, reclaimers will need to individually
audit facilities and they do not have the resources for that. This
particular commenter predicted that as a result, many reclaimers will
not take advantage of the exclusion.

Audits contain proprietary and confidential business information;
therefore, generators do not want to and/or cannot easily share them
with regulatory authorities. EPA would need to treat confidential audits
as confidential business information (CBI).

It will be time consuming and resource intensive for reclaimers to
coordinate with multiple generators' audit inquiries.

A commenter disagreed that trade associations could facilitate the audit
process and reduce costs through sharing audits with member companies
because currently, one association "requires that [the generator]
maintain confidentiality of the audit reports, so that entities who have
not paid for them cannot access them." The association's audit process
also does not consider disclosure to EPA or regulatory agencies and does
not support information collection for enforcement activities.

Commenters provided the following suggestions for improving any audit
requirement if EPA finalized one for reasonable efforts:

Require that the generator performs the audit or hires qualified
staff/auditors with specific audit knowledge and experience.

Auditors should have scientific or engineering expertise so they can
assess the entire reclamation process.

The auditor should be required to certify in the audit report that the
reclaimer meets its requirements under the exclusion.

In addition to an audit ensuring that hazardous secondary materials are
actually recycled, require information on hazardous waste properties of
the hazardous secondary material and how the reclaimer protectively
manages and controls the material.

(447, 457, 458, 465, 466, 475, 479, 481, 485, 492, 500, 503, 512, 528,
549)

<IP_ADDRESS> - Response

We are not requiring that audits be conducted to satisfy reasonable
efforts based on the comments that EPA received regarding the scope of
typical audits, and also based on comments related to audits on the
proposed reasonable efforts condition and on the questions that define a
minimum standard for the condition. (For more information on the
referenced comments, please refer to earlier sections of this document
entitled, "Reasonable efforts condition" and "Questions that reasonable
efforts must address at a minimum.")

From the comments, we understand that audits are diverse and run the
gamut in terms of the type of information generators seek: from minimal,
potentially unverified information collected by staff without formal
training, to highly specific, technical information gathered by expert
auditors with significant training. We are also aware that while many
generators may conduct audits as a good business practice, not all do.
As a result, we are codifying questions (1) - (5) as a minimum standard
for reasonable efforts and allowing generators to use any "credible
information" to affirmatively answer the questions. We anticipate that
generators may use audits to satisfy the condition, particularly if they
already conduct audits, and also expect that some of the following
information sources may also be used: compliance data on EPA's website,
notification information provided to EPA and authorized states,
information provided by industry or waste management associations, audit
consortiums, documents provided by the reclaimer or intermediate
facility, an expert's technical knowledge, etc.

In response to the remaining comments:

We agree that it is important to establish the legitimacy of the
recycling operation(s), the ability and capacity of the facility to
properly manage the materials, and the compliance history. Reasonable
efforts questions (1), (3), and (4) capture that information.

We believe that the codified reasonable efforts questions include a
review of a facility's environmental stewardship, regulatory compliance
history, and technology, and require that facilities recycling hazardous
secondary materials comply with financial assurance requirements.
However, while evaluating the financial health of a company can be
valuable, and we encourage companies to do so, we do not believe that it
is an activity that lends itself to an objective standard that would be
workable in a solid waste identification regulation.

With respect to the extensive list of elements that were included within
a commenter's facility audit, we believe that we have designed the
reasonable efforts condition such that it includes the critical core
elements necessary to ensure that a generator's hazardous secondary
materials will be safely and legitimately recycled, and not discarded.

We agree that the final step in a reasonable efforts evaluation is to
review and evaluate the information obtained in order to determine
whether waste should be sent to the facility. That is why we are
requiring that generators document and certify their reasonable efforts
to show that they have completed this final step.

The commenter described a program that makes both generators and
recyclers responsible for properly recycling materials that is
innovative and surely supports a reasonable efforts inquiry. However, as
stated before, we believe that we have designed the reasonable efforts
condition to address only the critical core elements of a reasonable
efforts evaluation that will adequately ensure that a generator's
hazardous secondary materials will be safely and legitimately recycled,
and not discarded.

It is also our understanding that generators, particularly those that
are small and medium size, may not have resources for detailed and
elaborate facility audits, which is why we are not requiring a specific
audit format. Rather, we are requiring generators to document their
answers to the reasonable efforts questions, which we believe all
generators are capable of answering and must answer affirmatively in
order to take advantage of the exclusion.

We do not agree that by requiring the reasonable efforts condition we
are shifting the burden of performing audits from inspectors to
generators. The reasonable efforts condition allows generators to ensure
that hazardous secondary material will not be discarded when transferred
to a reclamation or intermediate facility. Consequently, a generator
must play a role in determining that a reclamation or intermediate
facility will safely and legitimately manage and reclaim materials. We
do not agree that generators will "inspect" facilities and we note that
inspectors from regulatory authorities will continue to inspect
facilities as necessary. Also, the proposed condition did not include a
provision requiring that documentation be provided to regulatory
agencies, although we agree that authorities would have likely retained
the ability to request documents. In the final rule, we are requiring
that documentation of reasonable efforts be made available upon request
to a regulatory authority within 72 hours, or within a longer period of
time as specified by the regulatory authority.

EPA does not anticipate that documentation of reasonable efforts will
require confidential or proprietary information. The questions are
sufficiently clear and cover basic information about a facility;
information should not be confidential. In any case, if the facility is
not willing to share that kind of information to respond critical core
questions about the operations, the generator will have no way of being
sure that the facility will safely and legitimately manage hazardous
secondary material and not discard it.

We recognize that reclaimers will possibly receive multiple reasonable
efforts inquiries from generators, but we do not believe that this will
pose an undue burden to reclaimers for the following reasons: according
to commenters, many generators already audit facilities, so responding
to a reasonable efforts inquiry should; be familiar and practiced
activity for reclaimers; we received several comments that suggested
reclaimers anticipate and prepare for audits, including by creating
audit guides or websites with necessary information; we believe that the
reasonable efforts questions (1) - (5) are objective and can be easily
answered by generators with input from reclaimers; and requiring all
generators to answer the same questions may in fact standardize the
requests that reclaimers receive, minimizing the effort it would take to
respond to each generator’s different questions.

EPA understands that trade associations would not be willing to share
information about audits with non-member companies and that currently an
association audit process may not consider the disclosure of information
to EPA. We expect that trade associations and others who provide
information to generators for their reasonable efforts will design their
information programs to ensure that generators are aware of their
policies for sharing that information.  We believe that the particular
information necessary to respond to the reasonable efforts questions is
general enough that these information programs can be designed such that
any information a generator needs for documentation will not compromise
the confidentiality of the reclaimer or the information provider if it
is provided to the regulating agency as part of its oversight
activities.  Nevertheless, if necessary, all regulating agencies have
procedures in place to manage and protect confidential business
information if claimed confidential by the regulated community.

In codifying an objective standard for reasonable efforts, we believe we
have designed questions (1) - (5) to be straightforward and answerable
by all generators, including ones that may not have expert auditors on
staff. We also think that the codified questions are complete, and that
they ensure that a when a generator affirmatively answers the questions,
the generator is ensuring facilities receiving recyclable materials
intend to safely and legitimately recycle and not discard the material.
Therefore, we disagree with commenters' recommendations to require the
following in reasonable efforts: the generator or a qualified
staff/auditors with specific audit knowledge and experience must conduct
audits; auditors should have scientific or engineering expertise; and
include an addition to an audit ensuring that hazardous secondary
materials are actually recycled, and require information on hazardous
waste properties of the hazardous secondary material.

Finally, we do not believe that it is necessary in the reasonable
efforts condition to require that an auditor certify that the reclaimer
meets its requirements under the exclusion. In terms of certifications,
EPA believes that it is only necessary that the generator certify that
reasonable efforts were made prior to arranging transportation of
hazardous secondary materials.

<IP_ADDRESS> - Frequency of periodically updating reasonable efforts

<IP_ADDRESS> - Summary

EPA requested comment on a requirement for making periodic updates to
reasonable efforts, but did not propose an explicit time period. Some
commenters favored requiring a specific time limit for updating the
reasonable efforts provision, while others (a slightly smaller number)
favored a flexible time frame for updating reasonable efforts, to be
determined by the hazardous secondary material generator. The commenters
who supported a specific time frame for updating the reasonable efforts
condition included states, several representatives of the recycling
industry, one industry generator, and one environmental organization.
Several of these commenters stated that the hazardous material generator
needed to evaluate changes over time to the recycling facility (e.g.,
compliance status, financial assurance, permit renewals, impact of
changes in recycling markets) to ensure that their hazardous secondary
materials continue to be recycled properly and legitimately. Commenters
also suggested that generators re-evaluate recyclers whenever the
generator becomes aware of new, "material" information about or changes
to a reclamation facility. These commenters asked EPA to set a minimum
schedule for generators to update reasonable efforts. The suggested
schedules ranged from annually to every five years and were based on
commenters' current experience with industry audit practices as well as
commenters' suggested time frames for ensuring that reasonable efforts
information is reassessed periodically. One commenter noted that it
conducts a financial audit of facilities annually regardless of past
good behavior.

Several industry generators and associations, as well as one waste
management association, submitted comments in opposition to requiring
specific periodic updates of the reasonable efforts provision.
Commenters expressed concern that an arbitrary time frame would
unnecessarily change generators' current schedules for auditing or
making inquiries of recycling facilities. Several commenters suggested
that schedules for evaluating reclaimers should vary from facility to
facility and by industry and that a generator should be allowed to
decide when to update reasonable efforts given a facility's history and
the generator's familiarity with the facility. One commenting
organization cited its use of an internal risk-based audit schedule to
determine when to review a reclamation facility, while another commenter
suggested there is no equivalent annual audit requirement under existing
RCRA regulations to warrant an update of reasonable efforts. The stated
criteria for judging the level of risk included facilities with lower
financial health and an addition of "new processing capabilities and
when ownership changes." Another generator requested EPA to "suggest,
and not require, the frequency of periodic updates."

(457, 462, 463, 466, 470, 472, 476, 479, 482, 486, 489, 492, 503, 507,
509, 512, 525, 534, 538, 543, 549, 559)

<IP_ADDRESS> - Response

EPA agrees with the comments stating that requiring generators to
conduct specific periodic updates of the reasonable efforts provision is
critical for ensuring that excluded reclamation and intermediate
facilities continue to properly and legitimately recycle, and not
discard, the hazardous secondary materials into the future. We believe
that if a hazardous secondary material generator evaluated a reclamation
facility (or an intermediate facility if hazardous secondary material is
sent to such a facility) only once before the initial transfer of
hazardous secondary materials for recycling, it would not provide
adequate assurance that hazardous secondary material generators have met
the reasonable efforts condition to ensure discard will not occur 5, 10,
or 20 years into the future.

We understand that generators often evaluate recyclers or intermediate
facilities on a recurring schedule determined by the generator's
particular interests, concerns, and experience. However, EPA believes
that hazardous secondary material generators are also interested in
having regulatory certainty regarding the time frame for which
reasonable efforts must be conducted, rather than a completely
discretionary "generator decides" approach, which will present many
disagreements and challenges as to what a "reasonable" schedule is. We
are also aware that many generators do not currently conduct reasonable
efforts, let alone re-evaluate such facilities over time, and note that
the reasonable efforts condition and its associated requirements will be
new to many generators without existing evaluation practices.

It is our understanding that generators auditing facilities, based on
public comments and on knowledge gained from EPA's An Assessment of Good
Current Practices for Recycling of Hazardous Secondary Materials
(EPA-HQ-RCRA-2002-0031-0354 ) ("successful recycling study"), continue
to re-audit facilities every one to five years. Commenters, including
states, also believed that it is critical for generators to periodically
update reasonable efforts to ensure information used by generators is
current. For all of these reasons, we are requiring that generators
update their reasonable efforts evaluation at least every three years,
at a minimum. Again, based on public comments and our successful
recycling study, this appears to represent general industry practice and
an average time frame for those generators who currently conduct
environmental audits of facilities to which they send their hazardous
secondary materials.

By specifying a time frame for periodic updates, EPA in no way intends
to limit a generator to conducting evaluations only every three years.
In fact, we acknowledge that shorter time frames could be appropriate
for certain industries. Additionally, we would expect that any hazardous
secondary material generator who has concerns about a reclamation or
intermediate facility, or who gains new knowledge of significant changes
or extraordinary situations at such facilities, would conduct reasonable
efforts regardless of the minimum required update schedule.

7.5 - Conditions specific for reclaimers

7.5.1 - Storage of recyclable materials

7.5.1 - Summary

Two commenters did not object to the recordkeeping, storage, and
management requirements for reclaimers as proposed in 2007. [0472-46,
0486-45]

7.5.1 - Response

EPA appreciates the commenters' support of the proposed recordkeeping,
storage and management requirements for reclaimers.

<IP_ADDRESS> - Requirement to manage materials in same manner as analogous
raw materials and to contain

<IP_ADDRESS> - Summary

Several commenters supported the condition that secondary materials be
managed in a manner that is at least protective as that used for
analogous raw materials.  Commenters asserted that this condition makes
sense because the secondary materials are as valuable as the analogous
raw materials.  Accordingly, reclaimers have a substantial incentive to
take appropriate measures to ensure that the valuable materials are not
spilled, released or otherwise lost.  Reclaimers would also
appropriately contain secondary materials without analogous raw
materials to prevent releases for the same reasons discussed above. This
standard accurately defines the absence of discard, and no more specific
storage requirements are necessary. More specificity would carry the
rule over into the category of "modified RCRA regulations."  Given the
variability of raw materials, hazardous secondary materials, and storage
units used to store these materials, the proposed regulation at 40
C.F.R. § 261.4(a)(24)(v)(B) provides sufficient clarity in generally
describing how storage units for non-discarded materials are designed
and operated.

[0463-13, 0472-47, 0478-13, 0486-46, 0492-41]

<IP_ADDRESS> - Response

EPA appreciates and agrees with the comments supporting the proposed
condition that secondary materials be managed in a manner that is at
least protective as that used for analogous raw materials.

<IP_ADDRESS> - Alternatives to proposed storage condition, including if more
specific terms for storage should be set

<IP_ADDRESS> - Summary

Many commenters requested that EPA include more specific storage
standards for facilities reclaiming hazardous secondary materials under
the transfer-based option.  Commenters asserted that specific storage
conditions for reclamation facilities that operate under the proposed
exclusion would allow the Agency to determine that the recyclable
materials are not discarded. The great majority of damages documented in
the study of recent recycling-related damage incidents occurred at
commercial reclamation facilities, and mismanagement of hazardous
secondary material was found to be a cause of environmental problems in
35% of the incidents. It might be expected that truly responsible
generators and reclamation companies will evaluate the characteristics
of the specific hazardous materials and, using "sound engineering
practices,” will construct storage facilities with containment that is
protective of the environment. However, the EPA assessment of
environmental problems associated with the recycling of hazardous
secondary materials shows that improper storage and containment is a
significant source of the recorded environmental impacts. As currently
written, the "performance based approach" with no guidance on the actual
requirements, provides no assurance that good engineering practice will
be used. The proposal makes no reference to any type of design or
operating standard for these "analogous" materials, such as API or ASTM
standards, leaving it up to the generator to determine what the
appropriate standard should be.  Using this approach, EPA and the public
will only know that the performance-based approach was inadequate after
the environmental impact has already occurred. Hazardous secondary
materials may contain contaminants that are not compatible with the
associated storage requirements for the main component's analogous raw
material and often will need more protective storage. Given the dramatic
fires that have occurred over the last few years at facilities
conducting recycling operations (all of which involved tank and
container storage areas and all of which are currently regulated), the
most recent of which occurred on June 22, 2007, does EPA really want to
take a dramatic step backwards and promulgate regulations that would
eliminate existing requirements?  EPA has issued basic storage standards
for universal wastes that are reclaimed, such as batteries, thermostats,
and lamps, and for used oil that is recycled.  Surely hazardous
secondary materials that include organic solvents and toxic
metal-bearing sludges warrant storage standards that are at least as
specific and clear.

Accordingly, commenters believe that regulatory requirements for proper
storage are necessary, appropriate, and should be codified for
reclamation facilities that take advantage of this exclusion, and will
establish an expectation for the owner/operators of such facilities
(i.e., that they must manage hazardous secondary materials in a
protective manner to minimize the potential for these materials to be
released into the environment). Because the hazardous secondary
materials exhibit the same chemical and physical properties whether in
storage as hazardous waste or material destined for recycling,
commenters believe they should be subject to equivalent storage
requirements as currently exist for hazardous waste.

Examples of specific storage requirements provided include:  designated
area(s), containment, inspections, labeling, contingency planning, RCRA
specifications for containers, containment buildings, and waste piles,
and a prohibition on land placement.

Other suggested alternatives to full RCRA requirements include:

Condition of containers and tanks. If the container or tank holding the
hazardous secondary material is not in good condition (for example, it
exhibits severe rusting or apparent structural defects) or it begins to
leak, the generator should transfer the material to a container or tank
that is in good condition, or manage the material in some other way that
is protective.

Compatibility of materials. The generator must use a container or tank
made of or lined with materials that are compatible and will not react
with the hazardous secondary materials to be stored.

Secondary containment. The generator must design and operate a
containment system for the storage area, with a base that is
sufficiently impervious to contain leaks, spills, and accumulated
precipitation until the collected material is detected and removed; and
with sufficient capacity to contain 10% of the volume of stored
materials, or the volume of the largest container or tank, whichever is
greater.

Inspections. At least weekly, the generator must inspect the storage
areas looking for leaks and accumulated materials.  The generator must
remove any spilled or leaked materials and accumulated liquid from the
containment system as promptly as is necessary to prevent overflow.

Air emission controls. The generator must manage the hazardous secondary
materials placed in a container or tank according to the requirements of
subparts AA, BB, and CC of 40 CFR part 264.  The following control
devices are permissible: thermal vapor incinerator, catalytic vapor
incinerator, flame, boiler, process heater, condenser, and carbon
absorption unit.

One commenter suggested that for land-based units, EPA should model the
storage unit requirements after those developed for PCB bulk product
wastes under the TSCA regulations at 40 CFR 761.65(c)(9). The commenter
believes that the risks posed by land-based storage of HSM storage are
similar to those posed by land-based PCB bulk product waste storage.
These storage requirements were developed specifically for land-based
storage, are well understood, and have been 'field-tested' for years.
When there is no analogous raw material for the HSM, the commenter
recommends modeling the storage unit requirements after those for
Universal Waste pesticides found at 40 CFR 273.13(b).

[0457-43, 0475-6, 0475-28, 0475-29,  0482-3, 0482-4, 0489-19, 0507-31,
0521-21, 0525-14, 0531-8, 0538-8, 0539-12, 0543-13, 0543-49, 0548-9,
0551-2, 0558-46, 0559-35]

One commenter provided a specific example of spent catalyst storage
outside on a thin concrete pad or on the ground, which is how analogous
molybdenum and vanadium ores are stored.  Such an arrangement would have
had no leak detection to discover a building leak; indeed it may not
have had a building at all. With rudimentary runoff collection it could
have argued for years that the stored catalyst was both "analogous" to
vanadium/molybdenum ore storage and that it was "contained.” While
there may have been notification and remediation obligations under
CERCLA or state law, this is a poor substitute for the preventative
nature of specific storage requirements.

[0475-19, 0475-29]

One commenter agreed that the minimum requirement for reclamation
facilities should be that for the storage of analogous raw materials.
However, in some cases that may be difficult to ascertain.  In those
circumstances, the commenter believes that secondary material should be
subject to storage standards equivalent to those for a RCRA regulated
hazardous waste of the same type and composition.  Because, as stated in
the preamble, past recycling facility environmental issues were due to
improper storage, not the recycling process, we believe that secure
storage is one of the most important considerations in protection of
human health and the environment.  Another comment noted that in some
cases there might not be an analogous raw material and that EPA should
require materials to be stored in a manner sufficient to minimize
releases.

[460-9, 0529-20]

Two commenters also said that EPA cannot rely on the generator's
"reasonable efforts" condition to make an assessment of storage at the
reclamation facility.  The generator needs a basic set of management
standards to assess the reclaimer's storage practices and equipment.
EPA's proposed standard would require generators to know whether there
are analogous raw materials, and if so how those raw materials are
typically stored, in order to assess compliance with this condition -
knowledge that generators are unlikely to possess, since they are not
engaged in the business of recycling the secondary materials, which is
why they are sending the materials to a commercial reclamation facility.
 Auditors are typically not experts in the construction of storage
facilities. The proper approach is to put the onus on the reclamation
facility to meet basic storage standards, as demonstrated through a
certification by a professional engineer.

[0475-31, 0558-46]

<IP_ADDRESS> - Response

EPA disagrees that more specific storage standards, such as secondary
containment, liners, and leak detection systems, are needed to determine
which hazardous secondary materials are not being discarded. The
restrictions and conditions that EPA is finalizing today address a
variety of hazardous secondary materials and reclamation operations that
are linked to defining the act of discard, rather than specifying a
particular technology that may not be appropriate in some cases.

Specifically, EPA has established in the final rule that all secondary
hazardous materials, whether stored in a land-based unit or a non-land
based unit, must be contained in that unit.  By limiting the exclusion
to hazardous secondary materials that are contained, EPA is defining
"discard" for this material. Under the final rule, regulatory
authorities can determine whether such materials in a unit are contained
by considering all such site-specific circumstances. For example, local
conditions can greatly affect whether hazardous secondary materials
managed in a surface impoundment are likely to leak and cause damage,
and, therefore, whether the unit could be considered contained.
Similarly, facilities may employ such measures as liners, leak detection
measures, inventory control and tracking, control of releases, or
monitoring and inspections. Any or all of these practices may be used to
determine whether the hazardous secondary materials are contained in the
unit.

In addition to the condition that the hazardous secondary materials must
be contained, reclamation facilities and intermediate facilities must
also manage the hazardous secondary materials in a manner that is at
least as protective as that employed for the analogous raw material,
where there is an analogous raw material. An "analogous raw material" is
a material for which a hazardous secondary material substitutes and
which serves the same function and has similar physical and chemical
properties as the hazardous secondary material. A raw material that has
significantly different physical or chemical properties would not be
considered analogous even if it serves the same function. For example, a
metal-bearing ore might serve the same function as a metal-bearing air
pollution control dust, but because the physical properties of the dust
would make it more susceptible to wind dispersal, the two would not be
considered analogous. Similarly, hazardous secondary materials with high
levels of toxic volatile chemicals would not be considered analogous to
a raw material that does not have these volatile chemicals or that has
only minimal levels of volatile chemicals.

These conditions work in conjunction with other conditions of the final
rule exclusion, including the reasonable efforts condition.  EPA
disagrees with comments that say generators are unlikely to possess the
knowledge of how hazardous secondary materials are typically stored and
therefore unable to perform reasonable efforts.  On the contrary, the
facility that generated the hazardous secondary material would be the
most knowledgeable about the physical and chemical properties of the
material and best be able to evaluate whether the recycling facility is
capable of handling it.  In fact, HSM generators are knowledgeable about
storage practices appropriate for their materials because they
themselves store the materials before shipping them off-site. The
storage conditions work in tandem with the other conditions to the
exclusion to show that the materials are not discarded, but instead are
treated as commodities which the handler considers valuable and would be
used and not be lost to the environment.

Furthermore, hazardous secondary materials excluded under today's rule
may remain subject (or become subject) to requirements under other
statutory programs. For example, hazardous secondary material
generators, transporters, intermediate facilities and reclaimers may be
subject to regulations developed under:

The Occupational Safety and Health Act of 1970, which requires hazard
communication programs, labeling, material safety data sheets (MSDS) and
employee information and training (29 CFR part 1910). The Occupational
Safety and Health Administration (OSHA) regulations also require
emergency response planning and training under their Emergency Response
Program to Hazardous Substance Releases (29 CFR 1910.120);

The Hazardous Materials Transportation Act of 1975 and the subsequent
Hazardous Materials Transportation Uniform Safety Act of 1990, which
requires hazardous secondary materials meeting the Department of
Transportation's defining criteria for hazard classes and divisions to
comply with hazard identification, shipping papers, labeling and
placarding, incident reporting and security plans (49 CFR part 107 and
parts 171-180);

The Comprehensive Environmental Response, Compensation and Liability Act
(CERCLA), Emergency Planning and Community Right-to-Know Act (EPCRA) and
the Superfund Amendments and Reauthorization Act (SARA) of 1986 which,
combined, require notification of hazardous substance releases above a
reportable quantity, emergency planning and, if applicable, MSDS and
inventory reporting (40 CFR 302.6, 40 CFR parts 355 and 370). Hazardous
secondary material generators and reclaimers meeting defined criteria
are also subject to toxic chemical release reporting (i.e., Toxics
Release Inventory (TRI) under EPCRA (40 CFR part 372).

While not exhaustive, this list provides examples of regulatory programs
designed to protect human heath and the environment developed under
other statutory authorities alongside of RCRA. For more useful
information on these regulatory programs, please see "Memorandum:
Requirements that other Regulatory Programs would place on Generators,
Reclaimers and Transporters of Hazardous Secondary Materials" located in
the docket for this rulemaking.

<IP_ADDRESS> - No storage condition needed

<IP_ADDRESS> - Summary

A few commenters objected to the condition that if the secondary
material serves as a substitute for an analogous raw material, the
reclaimer must "manage the hazardous secondary material in a manner that
is at least as protective as that employed for analogous raw material."
Commenters argue that such requirements are not necessary in light of
the existing legitimacy criterion that recycled materials be managed in
a manner similar to analogous virgin materials. One commenter argued
that storage should be appropriate to minimize losses and to avoid
releases. These concepts are consistent with good management, rather
than discard, but avoid overly prescriptive, and potentially
unnecessary, requirements and that therefore EPA should instead require
materials to be stored in a manner sufficient to minimize releases.

[0472-45, 0486-11]

<IP_ADDRESS> - Response

EPA disagrees with comments stating that the condition that the
reclaimer must "manage the hazardous secondary material in a manner that
is at least as protective as that employed for analogous raw material"
is unnecessary.  Although this concept is also found in the definition
of legitimacy in 40 CFR 260.43, it is a "factor to be considered" and is
not mandatory.  Of the 208 damage cases in EPA's study of environmental
problems associated with hazardous secondary material recycling, 81
cases (40%) primarily resulted from the mismanagement of recyclable
hazardous secondary materials.  Accordingly, EPA continues to find that
such a storage condition is needed for the Agency to determine that the
hazardous secondary materials are not discarded.

7.5.2 - Management of recycling residuals

7.5.2 - Summary

Two commenters request clarification on regulation of residuals.  In the
circumstance when a solvent sent to reclamation is excluded from the
definition of solid waste, would only the solvent sludge from the
reclamation process be considered to be a "generated waste" and
therefore, only the volume of sludge would be included in the
calculation of the volume of waste generated by the facility for
purposes of determining if the generator is a small or large quantity
generator?  In the case of untreated electroplating wastes, which
residuals would meet the F006 definition, and how will the recovery
facility be notified of its obligation to manage the residuals as
hazardous waste?

[0040-1, 0186-12]

7.5.2 - Response

Any hazardous secondary material excluded from the definition of solid
waste is not a solid waste, and therefore is not a hazardous waste, and
therefore would not be included in the quantity calculations in
determining if the generator is a small or large quantity generator.   A
residual from the reclamation process, if discarded, would be solid
wastes and would be included in the quantity calculation if it exhibits
a hazardous waste or is itself a listed hazardous waste.  A reclamation
facility has the obligation under 40 CFR 262.11 to determine if its
solid waste is hazardous.  In the case of electroplating wastes,
residues from recycling would be identified as F006 only if they
themselves meet the F006 listing description as generated in the
recycling process.

<IP_ADDRESS> - Manage any residuals that are generated from reclamation
processes in a manner protective of human health and the environment

<IP_ADDRESS> - Summary

Some commenters agreed with EPA's proposed condition that specifies that
"any residuals that are generated from reclamation processes will be
managed in a manner that is protective of human health and the
environment. If any residuals exhibit a hazardous characteristic
according to subpart C of 40 CFR part 261, or themselves are listed
hazardous wastes, they are hazardous wastes (if discarded) and must be
managed according to the applicable requirements of 40 CFR parts 260
through 272."  Commenters noted that the purpose of this condition is
primarily to clarify the regulatory status of these waste materials, and
to emphasize in explicit terms that recycling residuals must be managed
properly. The commenters stated that the study of recent (i.e., post-
CERCLA, post-RCRA) recycling-related environmental problems revealed
that mismanagement of residuals was the cause of such problems in one
third of the incidents that were documented. Some common examples of
these mismanaged residuals were acids and casings from processing of
lead-acid batteries, solvents and other liquids generated from cleaning
drums at drum reconditioning facilities, and PCBs and other oils
generated from disassembled transformers. In many of these damage
incidents, the residuals were simply disposed in on-site landfills or
piles, with little apparent regard for the environmental consequences of
such mismanagement, or possible CERCLA liabilities associated with
cleanup of these releases.

[0457-44, 0470-26, 0482-28, 0507-32, 0558-48]

One commenter requested clarification of the proposed condition.  The
commenter said that it is not clear that the first sentence of this
paragraph has (or is intended to have) any meaning other than what is
stated in the second sentence.  The first sentence states the general
proposition that "any residuals that are generated from reclamation
processes will be managed in a manner that is protective of human health
and the environment."  The second sentence states what apparently is
intended by the first- i.e., that if these residuals exhibit a hazard
characteristic or are themselves listed hazardous wastes, they must be
managed accordingly under the applicable RCRA requirements of 40 C.F.R.
Parts 260 through 272 [Footnote 54: (According to EPA, "the purpose of
[40 C.F.R. 261.4(a)(24)(v)(C)] . . . is primarily to clarify the
regulatory status of these waste materials, and to emphasize in explicit
terms that recycling residuals must be managed properly."  72 Fed. Reg.
at 14195.)].  If this reading of the paragraph is correct, the first
sentence should be deleted because it is superfluous and confusing. If,
on the other hand, the first sentence is intended to establish some
additional requirement beyond those set forth in the second sentence,
EPA should explain what that is.

[0452-18]

<IP_ADDRESS> - Response

EPA appreciates and agrees with comments supportive of the proposed
condition that specifies that "any residuals that are generated from
reclamation processes will be managed in a manner that is protective of
human health and the environment. If any residuals exhibit a hazardous
characteristic according to subpart C of 40 CFR part 261, or themselves
are listed hazardous wastes, they are hazardous wastes (if discarded)
and must be managed according to the applicable requirements of 40 CFR
parts 260 through 272." Mismanagement of recycling residuals was the
primary cause of damages in 71 cases (34%) in the study of environmental
problems from hazardous secondary materials reclamation. Often, in the
case of mismanagement of recycling residues, 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.

EPA believes that both sentences are needed for this condition because
in some cases, the residuals may not be listed or characteristic
hazardous wastes (e.g., PCBs from dissembled transformers) but would
still require proper management.

<IP_ADDRESS> - Whether "derived from" principle should be used to regulate
management of recycling residuals

<IP_ADDRESS> - Summary

2003 "Derived-From" Comments - Summary

Several commenters reacted to EPA's 2003 proposal statement in the
discussion of the regulatory impact analysis that stated that "residuals
from formerly listed hazardous waste would not be considered hazardous
wastes under the derived-from rule under this proposal.  In such cases,
these residuals could be land disposed in units other than hazardous
waste landfills." (68 FR 61592)  Commenters concurred with this
statement, noting that this approach is no different that than used for
recycled characteristic by-products and sludges, and that if EPA were
concerned about the residuals, the Agency could list the residuals in
their own right, as was done for refinery residuals (40 CFR
261.4(a)(12)(i)).

Commenters also stated that as a result of the non-application of the
derived from rule, hazardous waste landfill space would be saved, and
provided specific examples.  Commenters also believed that this would
encourage companies to eliminate or reduce the listed hazardous before
disposal.  Commenters encouraged EPA to extend this interpretation to
all legitimate reclamation, or at the very least, to reclamation under
the closed-loop exclusion at 261.4(a)(8).

Other comments ask for clarification on whether the derived-from rule
would apply to residuals from excluded recycling, saying that it should
apply, so as to ensure that such residuals are properly managed in a
manner consistent with other hazardous wastes generated from similar
processes.

[0051, 0083, 0091, 0098, 0104, 0182]

2007 "Derived-From" Comments - Summary

Several commenters responded to EPA's request for comment in the 2007
proposal on applying the "derived-from" principle to the residuals
generated from the reclamation of excluded hazardous secondary materials
(72 FR 14195).   Many commenters agreed that it is not necessary to
apply the "derived-from" principle to residuals generated from the
reclamation of excluded hazardous materials.  Commenters stated that the
residuals from recycling excluded hazardous secondary materials should
be subject to a hazardous waste determination as set forth in 40 CFR
Part 262.11 and should be managed accordingly.  Commenters agreed that
"residuals from reclamation processes often do not resemble the
hazardous secondary materials that were reclaimed" and provided specific
examples.  Commenters stated that if these materials are excluded, the
logical basis of the derived from principle cannot be applied.
Commenters also noted that the application of the "mixture and
derived-from rule" discourages the recycling of listed hazardous waste
such as F006 because the residues from recycling listed hazardous waste
are automatically considered a listed hazardous waste and provided
examples of how recycling would increase under the rule.

[0452, 0460, 0463, 0467, 0472, 0474, 0478, 0481, 0486, 0489, 0491, 0492,
0521, 0529, 0538]

One commenter agreed that the derived-from principle need not apply to
the residues, but not for the reasons cited by EPA  (i.e., because the
recycled hazardous secondary materials are not wastes, provided they
meet the conditions of the exclusion, and therefore the "derived from"
concept as articulated in §261.3(c)(2) should not be applied to these
wastes.  Further, such waste residuals from reclamation processes often
do not resemble the hazardous secondary materials that were reclaimed,
and thus, the argument goes, it should not be assumed that they would
always need to be managed as hazardous wastes.)  The commenter
understands the argument that recyclable secondary materials are not
wastes, provided they meet the conditions of the exclusion, but it does
not follow that "therefore the derived-from concept … should not be
applied."

The critical question is whether as a condition of the exclusion, the
residuals should be managed in accordance with the derived-from
principle. The derived-from rule is critical to the RCRA program for
hazardous wastes.  The fundamental rationale is that treatment of listed
hazardous wastes, even the "best demonstrated available treatment"
(BDAT) required by the LDR program, may not destroy or remove the
hazardous constituents in listed wastes as necessary to fully protect
human health and the environment.  EPA recently confirmed the important
role played by the derived-from rule in the hazardous waste program when
the Agency re-promulgated the rule after an extensive rulemaking
process.  The commenter believed that the argument suggested by EPA that
residuals often do not resemble the hazardous wastes that are treated is
not relevant.  The critical point is not whether the residues resemble
the listed hazardous waste, but the presence in the residues of the same
hazardous constituents that caused the waste to be listed in the first
place, often in more concentrated form.

Nonetheless, the commenter does not believe that this rationale applies
with the same force to residues from recycling of secondary materials.
Often the reclamation process is intended to recover the hazardous
constituent(s), such as solvents or metals, that are of concern in a
listed hazardous waste.  Rather than transferring the hazardous
constituents to the residue for disposal, the constituents are recovered
and concentrated into a useful product, such as an industrial solvent,
intermediate, or metal dust or concentrate.  Moreover, some reclamation
processes for inorganic materials will alter the oxidation state or
complex of the inorganic material and physically/chemically change the
residue.  The constituents are fixed or stabilized and are less
available for release.  Finally, the commenter believes that the RCRA
hazardous characteristics will identify those residuals that should be
managed as hazardous wastes.  For these reasons, we agree with EPA that
the derived-from principle need not be apply to the residues from
recycling of hazardous secondary materials under the proposed rule.

[0558]

Other commenters stated that residuals should be regulated as RCRA
hazardous waste if they were derived from materials that were physically
and chemically identical to listed hazardous wastes and contain
hazardous constituents that might pose significant threats to human
health and the environment if the residuals were mismanaged. Commenters
stated that a fundamental rationale for the derived-from concept is that
treatment of listed hazardous wastes, even the "best demonstrated
available treatment" required by the LDR program, typically does not
destroy or remove all the hazardous constituents in listed wastes as
necessary to fully protect human health and the environment.  Recently,
EPA reaffirmed the critical role of the derived-from concept in
re-promulgating the rule after a lengthy rulemaking process. Commenters
believe that what is true for best available treatment is even truer for
recycling - the hazardous constituents in the materials are not
destroyed or removed, but in fact end up in the residuals. Indeed, the
better the recycling process at reclaiming the secondary material, the
more likely that the most toxic and dangerous contaminants will be
captured in the residuals.

Therefore, commenters believe that these residuals should be managed as
listed hazardous wastes because they were derived from materials that
were physically and chemically identical to listed hazardous wastes.
Indeed, the materials would in fact be listed hazardous wastes when
reclaimed, but for the conditional exclusion.  Commenters stated that
the argument that residuals from reclamation processes often do not
resemble the materials that were reclaimed is equally true of residuals
from treatment of hazardous wastes.  The critical point is not whether
the residues resemble the listed hazardous waste, but the presence in
the residues of the same hazardous constituents that caused the waste to
be listed in the first place, often in more concentrated form.

Nor do the commenters believe that the RCRA characteristics are adequate
to capture waste residuals that are hazardous.  The toxicity
characteristic includes only 32 regulated constituents, omitting many of
the most hazardous organic constituents in Appendix VIII to 40 CFR Part
261. In fact, many listed hazardous wastes either were listed for
hazardous constituents, or typically contain other hazardous
constituents, not addressed by the toxicity characteristic.  Commenters
stated that while simply removing the listing or characteristic
hazardous designation offers large potential economic saving to waste
generators, it undermines the entire EPA listing and LDR program while
disadvantaging recyclers managing the same waste in a fully permitted
RCRA Part B facility.

Commenters were concerned that the lack of a "derived-from" rule or a
risk based evaluation of the residuals will leave a loophole for
recycling residuals to be managed as non-hazardous simply because
residuals from the recycling of the listed waste were not contemplated
when the listing was established. In some instances it may even be
possible that the economic incentive to conduct the recycling will
result mainly from disposal in a non-hazardous landfill of recycling
residue from a material that meets a hazardous waste listing.
Commenters were concerned that the non-hazardous waste landfill may not
even be subject to any design standards or permitting if the waste is
disposed of at the same site where the waste was recycled. In other
words, minimal recycling might be conducted as a means to place listed
waste into a non-hazardous waste landfill and may make sham recycling a
more attractive option under certain circumstances. Further
consideration needs to be given to the management of residuals and the
tools that will be available to prevent sham recycling and subsequent
disposal of the recycling residuals in a non-hazardous landfill.

Commenters stated that EPA's failure to consider these residuals
hazardous waste is arbitrary, capricious, and contrary to substantial
evidence. EPA's own Environmental Assessment reveals that numerous
damage cases resulted from the mismanagement of recycling residuals.  72
Fed. Reg. 14181. In fact, EPA notes that mismanagement of recycling
residuals was the primary cause of damage at a full 34% of the sites.
Id. EPA explains that "reclamation processes generated residuals in
which the toxic components of the recycled materials because
concentrated, and these wastes were then mismanaged." Id. Given the
clear evidence assembled by EPA that points to the problems caused by
residuals, it is untenable that EPA would not apply the strictest
standards to their management to prevent the rampant damage catalogued
in its own recent study.

Other comments stated that if the residuals meet the listing definition
(still bottoms from the reclamation of spent solvents, for example),
they should be managed as listed hazardous wastes.   Commenters
expressed concern that in some instances it may even be possible that
the economic incentive to conduct the recycling will result mainly from
disposal in a non-hazardous landfill of recycling residue from a
material that meets a hazardous waste listing.

[0457, 0462, 0482, 0484, 0490, 0509, 0559]

Clarification Requested - Summary

Some comments ask for clarification.  For example, if used acetone is
not solid waste before recycling due to one of the proposed exclusions,
and the still bottom is not ignitable or toxic, does the F003 treatment
standard still apply to the still bottom, or can it be disposed of
directly in a Subtitle D facility?

Another commenter asked that EPA be clear that EPA's language on
residuals exhibiting a characteristic or meeting a listing description
being hazardous waste would not be interpreted to apply to
"Bevill-covered" waste.

Another commenter expressed concern that the approach outlined in the
2007 proposal is inconsistent with EPA's determination in the 1994
"stripper skins" letter (RCRA OnLine number 11851) to Christopher Rhodes
and likely with the 1994 Weisjahn letter (RCRA OnLine number 11857.  In
this 1994 guidance, EPA did not consider as relevant the fact that the
sludge was generated within a 261.4(a)(8) closed-loop, where very
arguably there is no wastewater available to produce a F006 sludge,
given that there are no wastes within 261.4(a)(8) closed-loop.  (This
"no wastewater" argument was the thrust of NYSDEC's prior determination
that the stripper skins were not F006, a determination referred to in
the incoming letter to EPA of March 9, 1994 from Mr. Rhodes.)  The
commenter requested clarification of whether EPA intended to have two
different interpretations.  Would residues from the reclamation of that
wastewater (to, for example, produce a substitute for tap water) be
classified as F006? Would EPA even regard the regeneration of the
wastewater as potentially qualifying for the proposed exclusions in
those instances where the reclaimed water was merely used as a
substitute for tap water, given the typically modest cost of tap water?
The wastewater might even be contained in land-based units (e.g.,
surface impoundments).

[0470, 0481, 0516]

<IP_ADDRESS> - Response

2003 Comments - Response

The comments on the statement regarding the derived-from rule in 2003
proposal have been overtaken by events.  The 2003 proposal only excluded
from the definition of solid waste materials that were considered by EPA
to be "reclaimed in a continuous industrial process."  The 2007
Supplemental Proposal identifies restrictions and conditions to
materials that are not solid wastes if they comply with those conditions
and restrictions.  The condition that residuals must be managed to
protect public health and the environment is one of those conditions.
Thus, the 2007 proposal has taken a different approach to addressing the
issue of residuals from the excluded reclamation process from the 2003
proposal.  EPA also notes that if the Agency were to list discarded
residuals of the recycling process as hazardous wastes in their own
right, the Agency would have to do this through a rulemaking.

2007 Comments - Response

EPA notes that, strictly as a matter of plain meaning, the "derived
from" rule in 40 CFR 261.3(c)(2) does not apply to residuals from
reclamation of hazardous secondary materials excluded under today's
rule. These waste residuals are generated at the point they exit the
recycling process for the purposes of applying the hazardous waste
determination requirements of 40 CFR 262.11.  Because the hazardous
secondary materials being reclaimed are not solid (or hazardous) wastes,
the residuals are not derived from a hazardous waste.  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 need to be managed in accordance with
applicable state or federal requirements for non-hazardous wastes.    If
EPA were to apply the derived-from principle to the residuals from
recycling of excluded hazardous secondary materials, it would need to do
so through a regulatory change.

After reviewing the public comments on the 2007 proposal, EPA has
determined that it is not necessary to apply the "derived-from"
principle to residuals generated from the reclamation of excluded
hazardous materials.  In particular, EPA agrees with the commenter who
noted that often the reclamation process is intended to cover the
hazardous constituent(s), such as solvents or metals, that are of
concern in a listed waste, and that some reclamation processes for
inorganic materials will alter the oxidation state or complex of the
inorganic material and physically/chemically change the residue, making
the constituents less available for release.

Thus, while that the fact that residuals do not resemble the original
hazardous secondary material may not be by itself reason to decide not
to apply the derived-from principle, the fact that the residuals often
have the hazardous constituents removed or immobilized is an important
consideration.  Moreover, EPA also notes that still bottoms from the
recycling of hazardous solvents - which are the residues from one of the
major classes of hazardous secondary materials recycling excluded by
this rule - are themselves listed hazardous wastes.   In addition, the
toxicity characteristic captures the major toxic metals, which would be
the contaminants of concern in the residues of the other major class of
hazardous secondary materials recycling excluded by this rule - metals
recycling.

However, EPA also notes that recycling can involve the separation of the
toxic components from the non-toxic components, and that the toxic
components in some cases have been mismanaged and discarded.
Mismanagement of recycling residuals was the primary cause of damages in
71 cases (34%) in EPA's environmental problems study.  These cases, with
their uncontrolled massive piles of toxic residues and their acres of
abandoned contaminated drums (in some cases numbering in the tens of
thousands) represent gross violations of either Subtitle C regulations
(with materials failing the toxicity characteristic not being managed as
hazardous waste) or Subtitle D regulations (with violations of open
dumping laws and the prohibition of liquids in landfills).  Thus, EPA is
including two conditions in the final rule to facilitate proper
oversight of these types of residuals.  First, the generator must
conduct reasonable efforts to determine that the reclamation facility
will properly manage residuals from the recycling process.  Second, the
reclamation facility, as an explicit condition of the exclusion, must
manage any residuals that are generated from the reclamation process in
a manner that is protective of human health and the environment,
including managing such materials as hazardous waste if they exhibit a
characteristic or they themselves are a listed waste.

These conditions are necessary to ensure that the reclamation operation
is not just another way of discarding hazardous constituents and that
recycling is not merely an excuse to discard unwanted materials.   EPA
believes that this is the most appropriate way to address the issue of
residuals from recycling materials that are not solid wastes, which, due
to the nature of the excluded materials and the recycling processes,
generally pose different concerns from residuals from the treatment of
hazardous wastes.

Clarification Requested - Response

In response to the question on the status of still bottoms from
reclamation of acetone (F003), if a residual itself meets the
description of a waste listed in subpart D of 261, it is a listed waste.
 For example, still bottoms from the recovery of F001-F005 solvents are
specifically included in the listing description for listed hazardous
wastes.

In response to the question of EPA's language on residuals being
interpreted as applying to "Bevill-covered" waste, EPA agrees that the
final rule exclusions would not affect any material that is currently
excluded under existing provisions and has stated so explicitly in the
final rule preamble.

In regard to the questions raised by a commenter regarding EPA's
determination in the 1994 "stripper skins" Rhodes letter (RCRA Online
number 11851) regarding F006 produced from a closed-loop recycling
process and the 1994 Weisjahn letter (11857), these letters are not
based on the derived-from rule, but rather interpret the F006 listing
itself, and are consistent with the approach in the final rule (i.e., if
the residuals of an excluded recycling process themselves meet the
hazardous waste listing description, they are listed hazardous wastes).

7.5.3 - Financial assurance requirements

7.5.3 - Summary

In response to the 2003 proposal, commenters questioned why EPA did not
include financial assurance as a condition for facilities recycling
materials when received from off-site. (See 0076, 0084 and 0119 from
2003 proposal.)  One commenter was specifically concerned with mineral
processing wastes being excluded from financial assurance requirements,
particularly when such sites were mentioned as causing significant
environmental damages in the past (0095). Commenters were concerned that
the 2003 proposal and 2007 supplemental proposal would lead to the
abandonment of waste under the worst possible circumstances, and would
be exempt from CERCLA liability. (See 0191, 0192, 0231, 0484, 0558.)
One commenter was concerned that if EPA modifies its proposal to weaken
the financial assurance requirement, the Agency would be obligated under
Executive Order 12688 to estimate the amount of taxpayer paid clean up
this deregulatory proposal would generate as well as the likely
environmental harm. (0558)

One commenter recommended that a facility's financial assurance "must be
determined by a generator's or reclaimer's submittal to a permitting
review process no less stringent than RCRA Subtitle C Facility
permitting requirements." This commenter also recommended that a
facility should have the option of remaining a RCRA-permitted facility,
and receiving both excluded wastes and permitted waste.  The facility
may also elect to keep its permit for storage considerations of residual
wastes.  (0479)   One commenter recommended that financial assurance be
fully funded upfront. (0564)

One commenter believes that the financial assurance requirements
contained in the standardized permit rule should not be incorporated
into this proposed rule. Not all states adopted the standardized permit
rule. (0489)

One commenter was perplexed and troubled by the fact that EPA does not
require financial assurance under the generator-controlled tolling
exclusion, even though the tolling agent or batch manufacturer is not
the generator, and despite the fact that the background document "An
Assessment of Environmental Problems Associated with Recycling of
Hazardous Secondary Materials"  EPA notes that 69 of the 208 damage
cases found were from abandonment because the recycler abandoned the
secondary hazardous materials at the site. (0548)

7.5.3 - Response

EPA agrees with comments supporting financial assurance, which is a
condition in the final rule for those facilities receiving hazardous
secondary materials from off-site. Intermediate and reclamation
facilities receiving and recycling hazardous secondary materials under
the transfer-based option that take advantage of the exclusion from the
definition of solid waste must have financial assurance that meets the
provisions of 40 CFR Part 261 Subpart H which is referenced by
261.4(a)(24)(vi)(D), including certain mechanisms being fully funded
immediately.

As part of the final rule, a facility subject to the financial assurance
condition will be required to estimate the cost of removing all the
hazardous secondary material at the point the volume would be the
greatest, and managing it as hazardous waste. The facility also will
need to develop a detailed plan describing how this would be done, and
amend this plan if things change. The cost of removing all of hazardous
secondary material at the point the volume would be the greatest will be
the basis for estimating the facility’s financial assurance needs and
will be available for EPA and/or state inspectors to review. Similarly,
EPA and states who adopt this rule will be aware of facilities taking
advantage of this exclusion through the notification provisions of the
final rule.

The financial assurance requirements of 40 CFR 261 subpart H
substantively mirror the interim status standards in 40 CFR part 265 for
hazardous waste treatment, storage and disposal facilities (TSDFs), but
have been tailored for hazardous secondary material reclamation and
intermediate facilities. The provision in the new subpart H in 40 CFR
part 261 are parallel to equivalent provisions under 40 CFR part 265,
which, as we noted in the March 2007 supplemental proposal, "outline how
owners and operators should determine cost estimates, explain the
acceptable mechanisms for providing financial assurance, and set the
minimum amounts of liability coverage required" (see 72 FR 14196).  EPA
agrees with comments that the financial assurance requirements contained
in the standardized permit rule should not be incorporated into the
final rule.

In regards to the comment on the need for financial assurance for
materials recycled under tolling arrangements,  EPA notes that the
tolling contractor must certify that it has entered into a tolling
contract with a toll manufacturer and that the tolling contractor
retains ownership of, and responsibility for, the hazardous secondary
materials generated during the course of the manufacture, including any
releases of hazardous secondary materials that occur during the
manufacturing process.   The tolling contractor is essentially
outsourcing a step in the manufacturing process, while still maintaining
control of the hazardous secondary materials generated and recycled from
that process.  This arrangement is not the same as that characterized by
third-party recycling and found in the damage cases, where a generator
has essentially yielded control of his hazardous secondary material to
the reclaimer.  Thus EPA disagrees that financial assurance is warranted
under the generator-controlled tolling exclusion.

<IP_ADDRESS> - Support for financial assurance condition

<IP_ADDRESS> - Summary

Many commenters supported EPA's proposal that intermediate and
reclamation facilities receiving and recycling hazardous secondary
materials under the transfer-based option be required to demonstrate
financial assurance in accordance with the Subpart H of 40 CFR Part 265.
(See comments from 0104, 0171, 0452,  0457, 0458, 0460,0462,0470,
0475,0476, 0482, 0490, 0491, 0507,0521,0525, 0538, 0539, 0543, 0555,
0558, 0559, 0563)

Reasons supporting this recommendation included:

Without a codified financial assurance requirement, recyclers that
mismanage hazardous secondary materials could simply close their doors
and walk away, leaving an environmental problem for the public to
address with the burden of correcting mismanagement at recycling
facilities shifting to states and local authorities that may not have
the resources to address and clean up mismanaged sites;.

EPA's Damage Case Study shows that the primary cause of damage incidents
has been the business failure of recycling facilities.  Without
financial assurance for proper closure, states and taxpayers are stuck
with the bill for cleaning up these abandoned sites.

A recycling facility that cannot obtain an insurance policy or other
financial instrument, or that does not have the resources to establish a
trust fund or other mechanism, probably should not be handling hazardous
secondary materials under the conditional exclusion.

One of the primary reasons that generators audit recyclers is to
evaluate their financial health and resources to respond to accidents or
other problems that could cause adverse environmental or human health
consequences. This is primarily because of the joint-and-several
liability provisions of CERCLA, under which a generator can become a
"responsible party" obligated to help pay for remediation expenses if
(in this example) a recycler to whom he sent recyclable hazardous
secondary materials were to create contamination problems, but lacked
the resources to pay for their cleanup. This proposed condition for
financial assurance thus can be seen as a regulatory precaution against
the same concern, ensuring that the reclamation facility owner/operators
who would operate under the terms of this proposed exclusion are
financially sound.

<IP_ADDRESS> - Response

EPA finds those comments that support the financial assurance condition
persuasive and agrees with their conclusions.  Requiring financial
assurance for reclamation and intermediate facilities operating under
the transfer-based exclusion is necessary for the Agency to determine
that the materials managed at these facilities are not discarded, and is
supported by the findings of the recycling studies we conducted as part
of this rulemaking effort.  Financial assurance as a condition will
ensure that the recycler will not abandon the material, thus
demonstrating that the material is not being discarded.

<IP_ADDRESS> - Opposition to financial assurance condition

<IP_ADDRESS> - Summary

Several commenters disagreed with EPA's proposal that intermediate and
reclamation facilities receiving and recycling hazardous secondary
materials under the transfer-based option be required to demonstrate
financial assurance in accordance with Subpart H of 40 CFR Part 265.

Two commenters (0481 and 0492) believe EPA lacks the authority under
RCRA to impose financial assurance requirements on facilities using
secondary materials in production operations which are never discarded.
Several commenters questioned EPA's logic of applying the Subtitle C
financial assurance framework for hazardous wastes being discarded. to
the financial assurance framework for hazardous secondary materials
being recycled.  For example, two commenters (0481 and 0444) believe the
high cost of obtaining financial assurance (e.g., at a level equal to
Subtitle C financial assurance), will essentially keep new reclaimers
out of the recycling market.  Another commenter (0442) mentioned that
similar requirements were not established for facilities accepting
universal waste lamps or batteries, even though history has shown that
lead acid battery handling sites have required remediation under the
Comprehensive Environmental Response, Compensation, and Liability Act
(CERCLA).

Another commenter (0458) stated that any financial assurance
requirements imposed by EPA should be directly proportional to the
direct additional risks associated with the storage (and potential
release) of specific types and volumes of conditionally excluded
secondary materials handled by a reclaimer.

Still another commenter (0463) mentioned the large variability of
hazardous secondary materials and recycling operations, and argued that
imposing the existing Subtitle C financial requirements on reclamation
facilities that are not otherwise regulated under the 40 C.F.R. Part 264
permitting program is not appropriate.

Two commenters (0458 and 0471) believe that the majority of the sites
that may pursue 3rd party reclamation activities are already chemical
manufacturers or other manufacturers and will likely have some type of
spill and pollution prevention assurance in the range of 1-5 million
dollars. Therefore, full Subtitle C financial assurance requirements
would be impractical and inhibit many qualified sites from becoming
third party reclaimers.

One commenter (0518) opposed the provision requiring compliance with the
financial requirements in 40 CFR §264, Subpart H because those
financial requirements are intended for storage and disposal facilities
that are involved in the perpetual disposal of hazardous wastes into or
onto land.

Two commenters (0526, 0528) mentioned that both the reclaimer and the
generator already have the potential for CERCLA liability should a
reclaimer not properly reclaim a material.  Thus, they do not see a
benefit in requiring reclamation facilities to secure financial
assurance at the levels currently required for permitted "hazardous
waste" TSDFs.  This is especially true where, as here, the materials in
question are neither "solid" nor "hazardous wastes."

Finally, one commenter (0442) simply recommended that financial
requirements be deleted in their entirety.

<IP_ADDRESS> - Response

EPA disagrees with comments opposing the financial assurance condition.
Facilities that that receive hazardous secondary materials from off-site
and that are not under the control of the generator must have financial
assurance to ensure that the material is not abandoned, thus
demonstrating that the material is not being discarded.

The financial assurance condition will both facilitate increases in
recycling and protect against the potential for discard of hazardous
secondary materials. Market forces and facility expertise will dictate
whether new facilities enter the hazardous secondary recycling industry.
 Many commercial recycling facilities currently process hazardous
secondary materials that have financial assurance. Therefore, EPA
disagrees with the comment that small and mid-sized companies will be
discouraged from entering this market strictly because of financial
assurance. Other factors, such as market forces and facility expertise
will be the major factor impacting a decision to enter this market.

Despite the belief that a facility has a long term interest to prevent
"discard,” history suggests otherwise.  As noted by commenters, at
least 138 of the 208 damage cases were firms that had gone out of
business and abandoned their waste.    In addition, EPA's market forces
study indicates that recyclers of hazardous secondary materials may
behave differently from traditional manufacturers due to difference in
economic forces and incentives involved in recycling.  Similarly, we
disagree with the assumptions by one commenter that the majority of the
sites that may pursue 3rd party reclamation activities are already
chemical manufacturers. While some chemical manufacturers have unique
tolling agreements with other chemical manufacturers in the processing
and recycling of hazardous secondary materials, we believe the more
common occurrence will be recyclers who are not traditional
manufacturers.   In any case, a chemical manufacturer interested in
recycling would likely not find it difficult to meet the financial
assurance provisions using one or more of the available instruments.

EPA also believes there is no need for facilities taking advantage of
the exclusion to submit information associated with financial assurance
to the regulatory agency for review and approval. EPA and the states
will be able to identify reclamation and intermediate facilities because
they will be required to submit a notification identifying themselves.
EPA and/or the state may then choose to conduct further inspection, if
necessary.

Finally, EPA is also clarifying that facilities recycling hazardous
secondary materials under current exclusions would continue to manage
their hazardous secondary materials under other authorities that do not
involve obtaining financial assurance. Similarly, facilities that are
already TSDFs have the option of including their hazardous secondary
material management units under their existing financial assurance
mechanisms.

<IP_ADDRESS> - Suggested changes to financial assurance condition

<IP_ADDRESS>.1 - Adjust language of Subpart H for exempt facilities

<IP_ADDRESS>.1 - Summary

Three commenters recommended that EPA develop a financial assurance
program specifically for facilities that would take advantage of the
exclusion from the definition of solid waste. (See 0470, 0543, and 0489)

<IP_ADDRESS>.1 - Response

EPA agrees with the three commenters. EPA has developed closure and
financial assurance conditions specifically for recycling facilities
taking advantage of the exclusion from the definition of solid waste.
Substantively, the financial assurance provisions mirror those in 40 CFR
265 for hazardous waste treatment, storage and disposal facilities
(TSDFs), but have been tailored to be appropriate for hazardous
secondary material reclamation and intermediate facilities.

<IP_ADDRESS>.2 - Closure plan needed to document costs

<IP_ADDRESS>.2 - Summary

One commenter recommended that reclamation facilities taking advantage
of the exclusion maintain a closure plan that would be available for
review, upon request, that substantiates and verifies the amount of
financial assurance required. (0490)

<IP_ADDRESS>.2 - Response

EPA concurs with the substance of this recommendation. Under this rule,
facilities claiming an exclusion from the definition of solid waste will
be required to maintain a plan that would be available for review, upon
request, that substantiates and verifies the amount of financial
assurance required.   Because Subtitle C closure requirements would not
apply to units managing excluded hazardous secondary materials (as long
as the conditions of the exclusion are met), this plan is not called a
"closure plan."    However, because hazardous secondary materials that
lose the exclusion may have to be disposed of as a hazardous waste and
the facility may have to be closed as a hazardous waste facility in
accordance with the requirements of 40 CFR Part 265, the plan would
include a detailed written estimate in current dollars of performing
this work.

<IP_ADDRESS>.3 - Require copies of financial assurance documents to be sent
to regulatory authority

No comments

<IP_ADDRESS>.4 - Set minimum standards for financial assurance

<IP_ADDRESS>.4 - Summary

Two commenters recommended that EPA require that copies of financial
assurance instruments be submitted along with notifications. (See 0462
and 0538). One commenter also recommended that EPA should set minimum
standards for financial assurance instruments at independent reclamation
facilities. (0462)

<IP_ADDRESS>.4 - Response

EPA believes the process it has established for implementing financial
assurance components of this rule are sufficient to respond to the above
commenters. Specifically, as part of this rule, facilities seeking to
take advantage of this exclusion will be required to submit a
notification form to EPA or their authorized state that they are
operating under one of the exclusions in the final rule. In many
instances, facilities notifying will be already operating such that EPA
and the States are already aware of their operations. Therefore, EPA and
the States should be able to easily follow-up and review their cost
estimates and financial assurance mechanisms.

Similarly, EPA believes the process it has established for estimating
costs, and associated financial assurance, as well as closing the
facility once operations cease should satisfy the "minimum standards"
for recycling facilities seeking to take advantage of the exclusion from
the definition of solid waste.

<IP_ADDRESS>.5 - Less stringent financial assurance standards for reclaimers

<IP_ADDRESS>.5 - Summary

Two commenters proposed that financial assurance requirements be less
stringent than Subtitle C financial assurance requirements. Reasons
provided included: other conditions in the exclusion will already make
discard highly unlikely (0529), or because reclamation facilities
processing hazardous secondary materials are more analogous to
manufacturing facilities using hazardous raw materials (e.g.,
essentially processing raw materials for beneficial use) than to RCRA
hazardous waste permitted facilities (0478).

<IP_ADDRESS>.5 - Response

EPA disagrees with the comments stating that recycling hazardous
secondary materials is essentially the same as processing raw materials
for beneficial use.  Because of the nature of the materials covered by
the final exclusions (i.e., hazardous spent materials and listed
byproducts and sludges), they are more difficult to process than most
raw materials, and the nature of the economics of the transfer of these
materials creates an incentive for discard.   Requiring financial
assurance is essential for helping to define those situations where the
material is not being discarded.   (It should be noted that the
financial assurance instruments themselves are only utilized to provide
funds for management and disposal at the point that the hazardous
secondary materials are discarded; in other words, at the point the
regulatory authority determines that a reclamation facility is not
legitimately recycling or otherwise fails to meet the conditions of the
exclusion.  At that point, that facility is managing a solid and
hazardous waste and therefore is a TSDF for the purpose of activating
financial assurance instruments to provide funds.)

<IP_ADDRESS>.6 - Study the availability of financial assurance coverage

<IP_ADDRESS>.6 - Summary

Two commenters recommended that the Agency launch a study on the
availability of insurance or other financial assurance mechanisms. (See
0494 and 0517.)

<IP_ADDRESS>.6 - Response

The Agency disagrees with comments requesting a study of the
availability of financial assurance for recycling facilities.  Under the
hazardous waste regulations, financial assurance instruments are already
available for hazardous waste recycling facilities and it is reasonable
to presume that the market will make available financial assurance for
those excluded facilities that qualify.  Moreover, the financial
assurance condition includes a range of financial assurance instruments
for the facility to choose from.

<IP_ADDRESS>.7 - Provide cost estimate guidance

<IP_ADDRESS>.7 - Summary

One commenter recommended that EPA "should issue some guidance or
republish existing guidance on closure cost estimates, or take a generic
approach in terms of uniform unit costs for different categories of
HSM." (0527.)

<IP_ADDRESS>.7 - Response

As part of Agency's Standardized Permit rule, EPA developed guidance
that can be used by facilities to estimate closure costs for hazardous
wastes stored in tanks, containers and containment buildings. See
http://www.epa.gov/epaoswer/hazwaste/permit/std-perm.htm. This guidance
is also applicable to facilities storing hazardous secondary materials
prior to recycling. Guidance is also under development for materials
stored in waste piles and surface impoundments.

<IP_ADDRESS> - Alternative approaches to 40 CFR Part 265 subpart H

<IP_ADDRESS> - Summary

Several commenters responded to our request for comment concerning
whether or not the existing Subpart H requirements need to be modified
in some way specifically for reclamation facility owner/operators, or
whether we should adopt the financial assurance requirements that were
promulgated as part of the standardized permit rule (see 70 FR 53419,
September 8, 2005) We also asked for comment on whether the costing
requirements associated with Subpart H requirements for this proposed
rulemaking should be tailored, or minimum fixed estimates established.

No commenters supported modifying the substance of the financial
assurance regulations under subpart H or adoption of the financial
assurance requirements that were promulgated as part of the standardized
permit rule. (See 0489, 0531, 0479). All except one commenter was
opposed to setting a fixed amount for financial assurance primarily
because of the variability that exists from one facility to another.
(See 0479, 0538, 0525.) One commenter favored the idea of using a fixed
amount because of its simplicity (0516). One commenter took no position,
but "if EPA does set such a value, it should be a "safe harbor" that the
facility owner/operator, in its discretion, could utilize in lieu of
making a closure-cost determination under Subpart H (0452). Another
commenter (0559) stated that if EPA is to deviate from subpart H cost
calculations, a far better record of the cleanup, closure and
post-closure costs for reclamation facilities must be established.

<IP_ADDRESS> - Response

EPA agrees with comments arguing against adopting the financial
assurance requirements that were promulgated as part of the standardized
permit rule, or setting a fixed amount for financial assurance.

With respect to modifying the regulations associated with subpart H
financial assurance requirements, EPA has modified these regulations to
be appropriate for reclamation facilities utilizing the transfer-based
exclusion from the definition of solid waste.  The final rule requires
that reclamation and intermediate facilities meet the financial
assurance requirements of 40 CFR 261 subpart H.  This is a new subpart
which mirrors 40 CFR 265 subpart H, but has been tailored for facilities
excluded under the DSW rule.  EPA determined that this new subpart was
necessary because so many wording changes were needed to make financial
assurance workable for excluded facilities. The main differences between
40 CFR 265 subpart H and 40 CFR 261 subpart H are:  (1) the new subpart
uses terminology appropriate for excluded facilities (e.g., hazardous
secondary material vs. hazardous waste), (2)  the references to Subtitle
C closure requirements have been removed; those aspects of closure
needed to properly implement financial assurance (e.g., cost estimate)
have been retained, and (3) the requirement for financial assurance for
post-closure care (e.g., groundwater monitoring) has been removed as it
is not appropriate for reclamation facilities that are not discarding
hazardous waste.

7.5.4 - Provision allowing reclamation facilities to claim conditional
exclusion even if generator chooses to manage secondary materials as
hazardous waste

7.5.4 - Summary

Many commenters opposed EPA's proposal to allow a reclamation facility
at which hazardous secondary materials are managed in accordance with
the provisions of this exclusion to also accept and manage hazardous
wastes under the exclusion from generators who do not use this
exclusion.  Commenters stated that if this provision is allowed, it
completely undermines the basic premise of the proposal that generators
will be responsible and ensure reclaimers properly manage and recycle
the hazardous materials. This provision will allow generators to ignore
the requirement of making a "reasonable effort" (261.4(a)(24)(v)) to
ensure the reclaimer intends to legitimately recycle the materials and
that the reclaimer will manage the material in a manner that is
protective of health and the environment. This provision provides a
large loophole that lets generators off the hook for auditing the
reclaimer and making other reasonable efforts to ensure the excluded
material is legitimately recycled and managed properly. It would appear
to allow the reclaimer to make whatever decisions they wish regarding
the exclusion. This approach seems contradictory to the approach EPA has
taken for off site transfer, namely attempting to make the generator
responsible, in addition to the reclaimer, for ensuring that the
material is truly recycled and managed properly.  Commenters note that
it is also not clear how a generator could manifest a hazardous waste
and ship it to a facility that is not a RCRA permitted facility.
Somewhere between the time the generator puts the material on the road
and the time it is received, it would have to be declared non-hazardous
and the manifest closed. This approach appears to be completely
contradictory to the RCRA "cradle to grave" approach and would
circumvent the RCRA rules and agency intent. The provision also
conflicts with 40 CFR 262 Subpart B. Generators who are not claiming the
exclusion may only send fully regulated hazardous waste to a facility
permitted to handle the waste, and raises CERCLA concerns. RCRA
regulatory hazardous wastes are automatically CERCLA hazardous
substances. CERCLA liability in Section 107(a)(3) pertains to persons
arranging for hazardous substance disposal or treatment, not offering
materials for legitimate reclamation.  Proposed 40 CFR 261.4(a)(24)(vi)
appears to allow non-RCRA permitted reclamation facilities to accept and
perhaps commingle "fully regulated hazardous wastes" with hazardous
secondary materials. This approach would increase the CERCLA liability
for hazardous secondary materials because it would blur any distinction
between materials offered for reclamation and wastes sent for disposal
or treatment.

[0475-36, 0479-40, 0482-27, 0489-23, 0500-9, 0507-22, 0507-34, 0538-21,
0548-11, 0548-24, 0558-53]

Other commenters requested that if EPA were to include this provision in
the final rule, that it be clarified, particularly in respect to how the
manifest would operate and whether the reclamation facility would be a
designated facility.  One commenter also requested that the reclaimer be
required to inform the generator of his intent to claim the exclusion.
[0452-21, 0492-44, 0516-21, 0516-32]

Three commenters supported the provision because it adds flexibility for
generators to continue to manage their wastes as hazardous but still
send their waste for reclamation.

[0442-17, 0509-16, 0521-24]

7.5.4 - Response

EPA agrees with comments that oppose the proposed provision that would
have allowed a reclamation facility at which hazardous secondary
materials are managed under the proposed transfer-based exclusion to
also accept and manage regulated hazardous wastes under the exclusion
from generators who do not use this exclusion.   In particular, EPA
agrees that if a hazardous waste generator has shipped hazardous
secondary material as hazardous waste then generator has chosen to
discard it, and it would be inappropriate to apply the transfer-based
exclusion to such material.

7.5.5 - Other conditions for generators and reclaimers

7.5.5 - Summary

Several commenters commented on additional requirements for generators
and reclaimers. These comments include:

1) 	CONTRACTS: A few commenters recommended requiring contracts, or
recycling agreements, in the rulemaking. Commenters argued that
contracts are essential for assigning responsibility and establishing
liability amongst the generator and recycler and would facilitate
legitimate recycling. Contracts are a normal business practice and
minimize the potential for recyclers to receive shipments of hazardous
secondary materials that they are not equipped to recycle. [0457, 0460,
0470]

2) 	TRACKING/MANIFESTING: Some commenters believed tracking systems
(including, but not limited to, shipping papers) are essential to ensure
hazardous secondary materials are being transported and handled in a
responsible manner. One commenter believed tracking gives security to
the public in knowing that hazardous secondary materials are being
managed properly. This commenter further argued that the lack of
meaningful tracking systems places the public in harm's way of materials
that have been recognized as hazardous to human health and the
environment for decades. This would also render EPA unable to identify
potentially responsible parties, let alone recover cleanup costs.
Another commenter believed that manifests should be used and copies
maintained for at least three years. One commenter suggested modifying
the existing Uniform Hazardous Waste Manifest by creating an "E" waste
code for excluded waste.  Another commenter supported requiring
reclaimers to maintain receipt records in the form of shipping
documents. These documents should be coupled with records showing how
the material was recycled and what kind of product was rendered and
would be available for review by the regulating community to ensure
legitimacy of the recycling process. One commenter said the deletion of
the tracking/manifest system will have negative effects on tank
inspections, personnel training, contingency plans for spills or
accidental releases and air emission controls. The existing problems
that are presently uncovered in today's recycling industry will only be
magnified under a system with no tracking system because industries will
be influenced by monetary savings and not capable of conforming to the
intent of legitimate recycling. Furthermore, this commenter does not
believe that EPA has the resources to inspect and enforce against all
businesses that may engage in improper recycling. Another commenter
believed the designation "non regulated material" on shipping papers is
an invitation to abuse and is aware of many incidents where used oil has
been improperly characterized and shipped as non-regulated waste. [0192,
0457, 0460, 0462, 0470, 0479, 0484]

3) 	WASTE CHARACTERIZATION: Commenters encouraged EPA to require
reclaimers to conduct characterization of hazardous secondary materials
because even small concentrations of certain compounds can present
serious process, human health and safety issues as well as product
quality impacts. One commenter supported requiring confirmatory
"fingerprint" testing of incoming shipments for recyclers to verify that
they are receiving the material described to them by the generator.
Waste verification procedures are currently a vital component in the
Waste Analysis Plans for RCRA permitted waste management facilities and
such procedures should also be required for reclaimers to ensure that
they are not receiving inappropriate material for recovery, reuse or
reclamation. Another commenter believed that proper characterization is
essential for the protection of facility employees and property. One
commenter recommended adoption of a uniform national waste/secondary
material profile form that includes LDR restriction information for use
by TSDFs, WWTFs, solid waste facilities and recyclers. [0457, 0460,
0462, 0470, 0484, 0543, 0548]

4) 	CONTINGENCY PLANNING/ EMERGENCY RESPONSE/TRAINING: Some commenters
believed that contingency planning, spill cleanup procedures, emergency
response and personnel training standards must be required for
generators and reclaimers. Under the final rule, hazardous secondary
materials would not count towards generator status and thus, because
generator size is reduced, so too will the minimum training requirements
for the affected generators. These commenters argued that a change in
name does not change the volume or hazardous properties of the wastes
and thus they still pose the same threat to human health and the
environment and are more likely to be mismanaged, absent good training
and emergency planning. One commenter recommended that the Agency
require reclaimers to comply with general facility standards similar to
those required for Used Oil Processors and Re-refiners under 40 CFR
279.52. Additionally, one commenter said security issues should be
addressed through the Department of Homeland Security requirements.
[0457, 0462, 0458, 0482, 0543]

5) 	TANK/CONTAINER INSPECTION: Some commenters believed that tank and
container inspections should continue for hazardous secondary materials
because the wastes in question still pose the same threats to human