exempted from liability under the Comprehensive Environmental Response,
Compensation and Liability Act (CERCLA) (CERCLA section 127). Today's
final rule does not change the universe of recycling activities that
could be exempted from CERCLA liability pursuant to CERCLA section 127.
Today's final rule only changes the definition of solid waste for
purposes of the RCRA Subtitle C requirements. The final rule also does
not limit or otherwise affect EPA's ability to pursue potentially
responsible persons under section 107 of CERCLA for releases or
threatened releases of hazardous substances.

XIV. Effect on Imports and Exports

    The exclusion for hazardous secondary materials generated and
reclaimed under the control of the generator is limited to recycling
performed in the United States or its territories. However, the
exclusion for hazardous secondary materials exported for reclamation
and the non-waste determinations included in today's final rule do not
place any geographic restrictions on movements of such hazardous
secondary materials, provided they meet the conditions of the exclusion
or, if stipulated, conditions of the non-waste determination. It is
therefore possible that in some cases excluded hazardous secondary
materials could be generated in the United States or its territories
and subsequently exported for reclamation to a facility in a foreign
country. It is also possible that hazardous secondary materials could
be generated in a foreign country and imported for reclamation in the
United States. Under today's exclusion for hazardous secondary
materials exported for reclamation, hazardous secondary materials are
only excluded from the definition of solid waste in the U.S. and, thus,
may be considered solid and hazardous wastes in the foreign country
under that country's laws and regulations. If this is the case, the
U.S. facility that exports or imports hazardous secondary materials
will also need to comply with any applicable laws and regulatory
requirements of the foreign country. For further discussion, see
section VIII.C.5. of today's preamble regarding specific export and
import conditions for hazardous secondary materials excluded under
today's rule.

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

    EPA received hundreds of comments on the October 2003 proposal and
the March 2007 supplemental proposal, most of which were quite detailed
and raised multiple issues. Below is an overview of some of the major
comments on general aspects of the proposals and a summary of EPA's
responses to those comments. For a complete discussion of all the
comments and EPA's responses to those comments, please see Revisions to
the Definition of Solid Waste Final Rule Response to Comment Document
found in the docket for today's rulemaking.

A. EPA's Legal Authority To Determine Whether a Material Is a Solid
Waste

Comments: Legal Authority
    EPA received many comments from environmental groups and the waste
treatment and recycling industry regarding EPA's authority to define
when recyclable hazardous secondary materials are solid wastes and how
EPA used this authority in the proposed rulemaking. Some commenters
argued that EPA has no authority under the RCRA statute to broadly
exclude hazardous secondary materials from the definition of solid
waste. These commenters asserted that Congress intended for hazardous
secondary materials to be classified as solid wastes even when they are
recycled. The commenters argued that the proposed exclusions are
contrary to the plain statutory language of RCRA and that EPA may not
lawfully exclude pollution control sludges and materials resulting from
industrial, commercial, mining, and agricultural operations, according
to accepted principles of statutory interpretation. Although the
commenters acknowledged that EPA has promulgated such exclusions in the
past, and that one such exclusion was recently upheld in court in Safe
Food and Fertilizer v. EPA, they stated that they believed that the DC
Circuit erred in Safe Food. The commenters argue that, in the
fertilizer rule upheld in Safe Food, EPA considered impermissible
factors (e.g., market participation, management practices, and chemical
identity) in defining which materials are not discarded under RCRA, and
that the Agency has done so again in the current rulemaking effort.
EPA's Response: Legal Authority
    EPA disagrees with comments that state that we have exceeded our
authority by the exclusions being finalized today. While EPA clearly
has the authority to regulate hazardous secondary materials that are
reclaimed under Subtitle C of RCRA when discard is involved, the Agency
also believes (and the courts have generally confirmed) that when
hazardous secondary materials are reclaimed and such recycling
operations do not involve discard, the hazardous secondary materials
involved are not solid wastes under RCRA. EPA also has the authority to
determine which types of recycling do not involve discard and,
therefore, which types of hazardous secondary materials are not solid
wastes. As EPA noted in the March 2007 supplemental proposal, ``[u]nder
the RCRA Subtitle C definition of solid waste, many existing hazardous
secondary materials are not solid wastes and, thus, not subject to
RCRA's `cradle-to-grave' management system if they are recycled. The
basic idea behind this construct is that recycling of such materials
often closely resembles normal industrial manufacturing, rather than
waste management'' (72 FR 14197). Existing exclusions, found in 40 CFR
261.4(a), provide a long historical precedent for EPA's authority to
exclude reclaimed materials from the definition of solid waste. EPA
refers these commenters to the discussion of case law, above, and
asserts that this rule follows valid precedent in the DC Circuit,
including the court's opinion in Safe Food.

B. Adequacy of Conditions and Restrictions Used To Determine Whether a
Material Is a Solid Waste

Comments: Adequacy of Conditions
    Other commenters did not dispute EPA's authority to exclude
hazardous secondary materials from the definition of solid waste, but
instead argued that before EPA can lawfully claim that excluded
materials are not discarded, the Agency would need to strengthen the
conditions to protect human health and the environment. For example,
one commenter believed that all legitimacy criteria should be
mandatory, that performance standards, such as secondary containment
are needed for materials stored in tanks and containers, and that EPA
should require engineered liner systems and monitoring for materials
stored in land-based units.

EPA's Response: Adequacy of Conditions
    EPA disagrees that the restrictions we are requiring for the under
the control of the generator exclusions or the conditions and
restrictions we are requiring for the transfer-based exclusion are
inadequate. Each of the restrictions and/or conditions is specifically
linked to defining when the hazardous secondary materials are not
discarded and to ensuring that the regulatory authority has the
information needed to oversee the exclusion. Specifically, for
hazardous secondary materials reclaimed under the control of the
generator, the fact that the generator maintains control and liability
for the hazardous secondary materials, either by managing them on-site,
within the same company, or under a specific tolling contract, is
itself an indication that the materials are not discarded. The
prohibition on speculative accumulation (as defined in 261.1(c)(8)),
addresses both the situation in which a large percentage of the
hazardous secondary material is accumulated over the year without being
recycled and the situation where there is no feasible means of
recycling the hazardous secondary material, regardless of volume.
Finally, the requirement that the hazardous secondary materials must be
contained in the unit recognizes the reality that hazardous secondary
materials that are released to the environment are discarded.
    For hazardous secondary materials transferred to another party for
reclamation, the fact that the generator is required to make reasonable
efforts to ensure that its hazardous secondary materials are properly
and legitimately reclaimed demonstrates that the generator is not
simply disposing of the material, but instead is taking responsibility
that the hazardous secondary materials will be recycled. In addition,
by maintaining a record of each shipment and a confirmation of receipt,
the generator demonstrates that it continues to take responsibility for
knowing the ultimate disposition of its hazardous secondary materials.
Furthermore, by obtaining financial assurance, the reclamation facility
demonstrates that it has also taken on the responsibility to ensure
that the hazardous secondary materials will not be abandoned in the
event that circumstances make it impossible for the facility to reclaim
the hazardous secondary materials. For further discussion of how these
and other restrictions and/or conditions of the exclusions are linked
to defining when hazardous secondary materials are not discarded, see
section V of this preamble, as well as sections VII-IX and sections
XVI-XVIII. Support for the Agency's determination regarding which
materials are not discarded is also found throughout the rulemaking
record in this proceeding.
    EPA also disagrees that specifying further engineering conditions,
such as secondary containment, liners, and leak detection systems, is
needed to determine which hazardous secondary materials are not being
discarded. The restrictions EPA has established and the 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.
    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 DOT'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 health and the environment developed
under other statutory authorities alongside of RCRA. For more
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.

C. EPA's Authority To Regulate Recycling

Comments: EPA's Authority
    EPA also received comments from the hazardous waste generating
industry disputing EPA's authority to promulgate today's rule. Unlike
the environmental groups' and waste treatment and recycling industry's
comments, which argued that EPA has no authority to deregulate
hazardous secondary materials recycling, many of the generator industry
comments asserted that EPA has no authority to regulate such recycling,
even to prohibit speculative accumulation or require that the hazardous
secondary materials be contained.
    While most such commenters applauded EPA's decision in the March
2007 supplemental proposal to explicitly link the proposed exclusions
to the concept of defining when hazardous secondary materials are not
discarded, many of these comments argued that EPA has over-reached its
statutory authority by imposing restrictions or conditions that the
commenters argued have no relationship to discard.
    Some commenters asserted that limiting the exclusions for hazardous
secondary materials reclaimed under the control of the generator and
imposing conditions on the exclusion for hazardous secondary materials
transferred to a third party for reclamation, EPA has misread the
intent of Congress. These comments cite previous court cases, noting
the ``analysis of the statute reveals clear Congressional intent to
extend EPA's authority only to materials that are truly discarded,
disposed of, thrown away, or abandoned'' (AMC I, 824 F2d. at 1190).
They go on to argue that materials being recycled do not fall into one
of these enumerated activities.
    Specifically, many of the comments cite the ABR decision (which in
turn cites earlier court decisions), where the

court noted that EPA's authority is ``limited to materials that are
`discarded' by virtue of being disposed of, abandoned, or thrown away''
and that ``[s]econdary materials destined for recycling are obviously
not of that sort. Rather than throwing them away, the producer saves
them, rather than abandoning them, the producer reuses them'' (ABR 208
F.3d at 1051). ``To say that when something is saved it is thrown away
is an extraordinary distortion of the English language'' (Id. at 1053).
The commenters assert that, by limiting the exclusion to hazardous
secondary materials intended for recycling that are ``contained'' in
the unit, EPA is illegally imposing conditions on a material that has
not been discarded.
    Other comments take issue with EPA's decision to impose conditions
for the transfer-based exclusion. These comments criticize EPA's
rationale that, in part, bases the conditions on the fact that
``subsequent activities are more likely to involve discard, given that
the generator has relinquished control of the hazardous secondary
material'' (72 FR 14178). One commenter specifically challenged the
proposed financial assurance requirement, claiming that the condition
does not define the absence of discard and would effectively impose a
waste management requirement upon a non-waste.
EPA's Response: EPA's Authority
    EPA disagrees with the comments that Congress did not intend to
give EPA the authority to regulate hazardous waste recycling. As EPA
noted in both the October 2003 proposal and the March 2007 supplemental
proposal, the RCRA statute and the legislative history suggest that
Congress expected EPA to regulate as solid and hazardous wastes certain
materials that are destined for recycling (see 45 FR 33091, citing
numerous sections of the statute and U.S. Brewers' Association v. EPA,
600 F. 2d 974 (DC Cir. 1979); 48 FR 14502-04, April 3, 1983; and 50 FR
616-618). Moreover, the case law discussed above clearly shows
instances where EPA properly regulated the recycling of solid and
hazardous wastes.
    EPA also disagrees that requiring the hazardous secondary materials
to be ``contained'' contradicts the court's finding in ABR that EPA
does not have the authority to define when hazardous secondary
materials are not discarded. By limiting the exclusion to hazardous
secondary materials that are contained, EPA is defining ``discard'' for
this material. While it is true that the court has said that materials
recycled in a continuous process by the generating industry are not
solid wastes, commenters have failed to demonstrate how hazardous
secondary materials that are not contained meet that description. By
``contained,'' EPA means not released to the environment. It is a self-
evident fact that hazardous secondary materials released to the
environment (e.g., causing soil and groundwater contamination) are not
``destined for recycling'' or ``recycled in a continuous process'';
thus, they are part of the waste management problem. Moreover, as
discussed above in section VII.C, to the extent that significant
releases to the environment from a storage unit have occurred and
remain unaddressed, it is reasonable to conclude that the material
remaining in the unit is also actively being discarded. It is important
to note that the hazardous secondary materials that remain in the unit
are not solid wastes, unless the releases from the storage unit
indicate that these materials are not being managed as valuable
commodities and are, in fact, discarded. For examples of releases from
a hazardous secondary materials storage unit that indicate that the
hazardous secondary material in the unit is discarded and examples of
releases that do not indicate discard, see section VII.C. of this
preamble.
    EPA also disagrees with comments that, under the transfer-based
exclusion, EPA cannot consider the fact that the generator has
relinquished control of the hazardous secondary material (along with
other factors that indicate discard) in determining what conditions are
needed for this exclusion. EPA's authority to regulate such transfers
is clear: as the Court noted in Safe Food, ``materials destined for
future recycling by another industry may be considered `discarded'; the
statutory definition does not preclude application of RCRA to such
materials if they can reasonably be considered part of the waste
disposal problem'' (350 F.3d at 1268).
    EPA's record for today's rulemaking demonstrates that third-party
recycling of hazardous secondary materials has been and continues to be
part of the waste disposal problem, and, without the conditions being
finalized today, these hazardous secondary materials would be solid
wastes. Of the 208 damage cases in EPA's study of environmental
problems associated with post-RCRA, post CERCLA hazardous secondary
materials recycling, 94% appeared to take place at commercial off-site
facilities. Moreover, EPA's study of how market forces impact recycling
demonstrates that these damages are consistent with our understanding
of how the business model for commercial recycling can lead to sub-
optimal results. As opposed to manufacturing, where the cost of inputs,
either raw materials or intermediates, is greater than zero and revenue
is from the sale of the output, recycling conducted by commercial
hazardous secondary materials recyclers involves generating revenue
from receipt of the hazardous secondary materials, as well as from the
sale of the output. Recyclers of hazardous secondary materials in this
situation can have a short-term incentive to accept more hazardous
secondary materials than they can economically or safely recycle,
resulting in the hazardous secondary materials eventually being
discarded.
    The financial assurance condition for the transfer-based exclusion
being finalized today is directly linked to this situation. By
obtaining financial assurance, the owner or operator of the reclamation
facility is making a direct demonstration that it will not abandon the
hazardous secondary material. Of the 208 damage cases, 69 (or 33%) were
primarily caused by abandonment of the hazardous secondary material by
the recycler. None of 69 facilities whose damages were primarily caused
by abandonment had financial assurance.
    Under the transfer-based exclusion, financial assurance is the
means by which the recycler demonstrates an investment in the future of
the recycled materials; even if the market changes in such a way that
the recycler can no longer process the hazardous secondary materials,
by obtaining financial assurance, it has made certain that the
hazardous secondary materials will not be abandoned and therefore not
discarded. EPA therefore disagrees with the comment that the financial
assurance condition is not related to discard of the material.
    Moreover, financial assurance also addresses the correlation of the
financial health of a reclamation facility with the absence of discard
of hazardous secondary materials. According to the successful recycling
study, an examination of a company's finances is an important part of
many of the environmental audits generators currently use to determine
that their hazardous secondary materials will not be discarded. In
addition, the environmental problems study showed that bankruptcies or
other types of business failures were associated with 138 (66%) of the
damage cases, and the market forces study identified a low net worth of
a firm as a strong indication of a sub-optimal outcome of recycling
(i.e., over-accumulation of hazardous secondary materials, resulting in
releases to the environment and

abandonment of hazardous secondary materials).
    In the March 2007 supplemental proposal, EPA proposed to require
that reclamation facilities obtain financial assurance to ensure that
the reclamation facility owner/operators who would operate under the
terms of this exclusion are financially sound (72 FR 14191), and many
commenters supported this condition and EPA's rationale. EPA continues
to believe that the findings in the recycling studies indicate a
correlation between financial health of a reclaimer and the likelihood
he will not discard the hazardous secondary materials.

D. Comments on Recycling Studies

1. Environmental Problems Study
    EPA completed An Assessment of Environmental Problems Associated
with Recycling of Hazardous Secondary Materials in order to identify
and characterize environmental problems attributed to hazardous
secondary materials recycling activities and to provide the
stakeholders with a clearer picture of the recycling industry in the
United States.
    The environmental problems study (or study) was conducted in
response to public comments received on the October 2003 proposal and
to guide EPA's deliberations on how to proceed with the March 2007
supplemental proposal. In the public comments to the October 2003
proposal, a number of commenters expressed concern that deregulating
hazardous secondary materials that are reclaimed in the manner
described in that proposal could result in mismanagement of the
hazardous secondary materials, and thus could create new cases of
environmental damage requiring remedial action under federal or state
authorities. Some of these commenters illustrated their concern by
citing specific examples of environmental damage related to hazardous
secondary materials recycling. A number of other commenters expressed
the view that the great majority of the damage cases cited by
commenters had occurred before RCRA, CERCLA, or other environmental
regulatory programs were established in the early 1980s and, therefore,
that the cases represent ``historical'' recycling-related environmental
damage and are not particularly relevant or instructive for revising
the RCRA Subtitle C definition of solid waste. These commenters further
argued that the environmental programs--most notably RCRA's hazardous
waste regulations and the liability provisions of CERCLA--have created
strong incentives for the proper management of recyclable hazardous
secondary materials and recycling residuals.
    In response to the March 2007 supplemental proposal and to the
study, made public in the rulemaking docket in conjunction with that
proposal, EPA received comments on the study from a variety of
commenters. In general, the comments pertain to the scope and
methodology of the study and how the study reflects on today's
exclusions and restrictions and/or conditions of the exclusions.
Comments: Scope and Methodology
    With respect to the scope and methodology of the study, a few
commenters agreed with excluding historical damage cases from the study
and stated that recycling operations have in fact improved since RCRA
was enacted. A few commenters provided several types of recycling-
related environmental problems familiar to state agencies and a few
commenters suggested the review of several additional damage cases. A
few commenters argued that inclusion of their facility in the study, or
the inclusion of their industry representatives' facilities, was
unfounded due to one or more of the following reasons: Hazardous
secondary materials were exempt from RCRA when environmental problems
occurred; environmental problems stem from historical or pre-RCRA
activities; numerous facilities in the study shut down during the 1980s
in response to the creation of regulatory disincentives; environmental
problems were addressed pursuant to CERCLA; and problematic activities
were clearly a result of non-compliance. Also, a commenter suggested
that one damage case profiled in the study ``is not a good example of a
contaminated site caused by recycling.'' In support of their comment,
the commenter cited a Record of Decision (ROD) which stated that the
site's former foundry operations, which existed pre-RCRA, caused soil
and groundwater contamination.
    One commenter suggested EPA overlooked potential sources of
information for the study, including television commentary, media
reports, books, and other reports (specifically one state report), and
one commenter suggested that EPA ``may have missed reviewing relevant
files'' by not analyzing state and regional paper files. Another
commenter expressed concern that the study was not peer reviewed.
EPA's Response: Scope and Methodology
    EPA acknowledged in the preamble to the March 2007 supplemental
proposal that we did not search every possible information source for
damage cases for the environmental problems study. For example, we did
not systematically survey all state environmental agencies for relevant
cases, nor did we search paper files in EPA Regional offices. We did
solicit damage cases from regional representatives and we solicited
additional cases through the public comment process. We recognize that
there are likely to be additional cases that we did not identify.
However, we have no reason to believe that additional cases would
substantially change the overall picture. In fact, information
submitted to EPA does not indicate that EPA has failed to find a
representative sample of environmental damage caused by recycling
activities.
    EPA maintains that historical recycling-related damage cases are
much less relevant and instructive than cases which have occurred
within the current regulatory and liability landscape, and several
commenters shared our belief. We value state commenters' general
discussion of environmental problems encountered at recycling
operations and note that any facility taking advantage of today's
exclusion will need to comply with all applicable protective
restrictions and conditions.
    We also appreciate the suggestion of additional damage cases to
review for the study. Based on our analysis of these cases, we have
added one new damage case site to the study and updated two existing
damage case profiles with more information about environmental problems
(see Addendum: An Assessment of Environmental Problems Associated With
Recycling of Hazardous Secondary Materials). We also determined that
three damage cases identified in the public comments already are
included in the 2007 study and additional information was not revealed
to supplement the profiles; determined that one damage case identified
in the public comments was previously reviewed and the damage was
deemed unrelated to recycling and that no additional information was
provided to change this conclusion; and determined that two sites
identified in the public comments had damage unrelated to recycling. We
concluded that the new damage cases and the supplemental information
added to existing cases are consistent with the damage cases previously
cited in the study; therefore, the additional facts do

not substantially change our understanding of the hazardous secondary
materials recycling damage cases.
    EPA maintains that the damage cases captured in the environmental
problems study fall within the study's scope and, as such, are relevant
for guiding the development of today's rulemaking. As we discussed in
the study, we are interested in whether damage may be more or less
prevalent for hazardous secondary materials that are explicitly
exempted or excluded from RCRA regulatory controls and we are less
interested in historical or pre-RCRA cases (defined in the study as
before 1982). We also indicated in the study that we are interested in
``whether or not the recycler * * * went out of business'' and which
``government program is responsible for overseeing the cleanup of the
site,'' and clearly we are interested in acts of non-compliance that
resulted in environmental damage. These points of interest, among
others cited on pages 4-5 of the study, are informative for the purpose
of this rulemaking and are within the scope of the study. Consequently,
we disagree with industry and association commenters who argued that
certain damage cases did not warrant inclusion in the Environmental
Problems Study.
    We acknowledge that the particular damage case referenced by a
commenter as ``not a good example'' for the study does in fact exhibit
environmental damage which can be partially attributed to foundry
operations pre-1982. However, as indicated in the damage case profile
in Appendix II of the study, the damage case was included in the study
due to the following factors, which do not include damage associated
with pre-1982 operations: Abandonment of drums of spent catalyst,
bankruptcy, and business closure. As a result, we maintain that this
damage case is within the scope of the study.
    While we acknowledge that we did not review all possible sources of
information for our study and generally relied on readily available
material, we did in fact rely on media reports for information and we
collaborated with regional representatives who are very knowledgeable
about the damage cases and who assisted us in fact checking and
suggesting damage cases. With respect to a commenter's suggestion that
we review the ``Final Report of the Waste and Hazardous Materials
Division, Fire & Explosions Task Force,'' produced by Michigan DEQ, we
regret that the state has not yet made the report publicly available.
However, we note that the scope of the draft Michigan study was not
limited to hazardous secondary materials recycling operations, and
shows that accidents can and do occur in all types of manufacturing
facilities.
    Despite the fact that we did not conduct an exhaustive review of
all possible sources of damage case information, we believe that the
restrictions and conditions of today's exclusions are sufficient to
ensure safe recycling activities. For facilities operating under the
transfer-based exclusion, sudden accidental liability coverage for
bodily injury and property damage to third parties is required for all
units, and non-sudden accidental liability coverage is required for
land-based units (see section VIII.C.4. for a more detailed discussion
of liability coverage). We also note that facilities may be subject to
other regulations that ensure facility safety, such as the OSHA
requirements and state and local requirements (see ``Memorandum:
Requirements that other Regulatory Programs Would Place on Generators,
Reclaimers and Transporters of Hazardous Secondary Materials'' made
available in the docket for today's final rulemaking). While EPA has
not done a definitive study of other regulatory requirements, we are
reasonably comfortable with the fact that the available information
indicates oversight by other regulatory agencies would significantly
mitigate potential damage from the non-discarded materials.
    With respect to the comment regarding peer review, we believe that
while the study was not peer reviewed, the scope and methodology are
sound, as evidenced by the small number of comments received on this
issue. Additionally, peer review was not warranted by EPA peer-review
standards because the study is not a scientific and/or technical work
product. Rather, the study is an analysis of existing and publicly
available information compiled to provide a representative view of
hazardous secondary materials recycling.
Comments: Study's Relation to Today's Actions
    EPA received a number of comments alleging that the study does not
support today's exclusions. Several commenters strongly believe that
the study reflected that recycling hazardous secondary materials is a
high risk activity and thus should remain fully regulated. A few
commenters wrote that the study does not support the transfer-based
exclusion and these commenters collectively predicted that the
exclusion will create future damage cases. To bolster their feedback,
one commenter stressed that the majority of all damage cases cited in
the study are located off-site from the facilities that generated the
hazardous secondary materials. Commenters also used the study's
findings (namely damage type, damage cause, cost of cleanup) to support
their opposition to the transfer-based exclusion. In particular,
commenters stressed the financial impact to states and communities if
additional environmental clean-ups were to result from facilities
taking advantage of the exclusions.
    On the other hand, EPA also received responses from several
commenters stating that the environmental problems study supports the
proposed conditions of the transfer-based exclusion for reclaimers and
generators. While several of these commenters opposed codification of
the transfer-based exclusion, other commenters supported it as long as
there were requirements to ensure protection of public health and the
environment. For example, commenters responded that mismanagement of
hazardous secondary materials, residuals, and recycled products or
intermediates in the damage cases clearly represented a need to have
requirements for protective management and storage, as well as a
requirement for safe residuals management. Additionally, commenters
believed in the importance of a financial assurance requirement to
protect against the damage noted in the study related to bankruptcy and
the abandonment of hazardous secondary materials and residuals. A
commenter also responded that generators should assess whether the
above protections exist at reclamation facilities in order to minimize
their future liability. Additionally, in response to the study, EPA
received one comment suggesting that each of the following safeguards
be added to the exclusions: Tracking materials, restriction on land-
based storage, and 90-day storage provisions in 40 CFR part 262 for all
generators, including those who recycle on-site.
EPA's Response: Study's Relation to Today's Actions
    While EPA agrees that the study reflects the risk and problems
involved with recycling hazardous secondary materials, we disagree with
those commenters who stated that the study does not support today's
exclusions because of the perceived risk posed by the exclusions.
Instead, we agree that the environmental problems highlighted in the
study demonstrate the need to promulgate restrictions and conditions
for the exclusions (e.g., requirements for

financial assurance, reasonable efforts, shipping documentation,
hazardous secondary materials management, legitimate recycling, and
speculative accumulation). EPA maintains that the restrictions and
conditions finalized with today's exclusions, and discussed more in
depth in sections VII.C. and VIII.C., will address the problems
identified in the study and will limit the exclusions to materials that
EPA has determined are not discarded. We also agree with those
commenters who suggest that generators should assess whether
reclamation facilities adequately manage hazardous secondary materials
in order to mitigate the risk of future environmental problems.
Consequently, we are finalizing the reasonable efforts condition for
the transfer-based exclusion.
Comments: Restrictions on Mining and Mineral Processing
    A few commenters responded that the study does not support controls
on land-based storage of hazardous secondary materials at mining and
mineral processing facilities. They cited that only 1 of the 208 damage
cases is associated with a primary mineral processing facility. Thus,
the commenters argued that the small number of environmental problems
stemming from recycling at mining and mineral processing facilities
does not warrant the proposed regulatory oversight of the industry.
EPA's Response: Restrictions on Mining and Mineral Processing
    EPA acknowledges that the environmental problems study included one
damage case from primary mineral processing and two damage cases from
secondary mineral processing. We note that whether an industry has a
single damage case represented in the study or numerous damage cases,
all industries are treated equally within the final rulemaking for
hazardous secondary materials generated, reclaimed, and managed in
land-based units (40 CFR 261.4(a)(23)).
    Moreover, further review of publicly available data revealed four
additional damage case profiles from primary and secondary mineral
processing facilities, which corroborates EPA's view that the findings
from the environmental problems study apply across industries,
including the mining and mineral processing industries (see Addendum:
An Assessment of Environmental Problems Associated with Recycling of
Hazardous Secondary Materials to review new damage case profiles). Of
the four additional damage cases, three are primary mineral processing
facilities and one is a secondary mineral processing facility. Improper
disposal of residuals and improper management of recyclables are the
most frequently observed primary damage cause at such facilities. The
primary environmental damage type resulting from the above activities
are soil contamination, wildlife exposure, and groundwater and surface
water contamination.
    We have concluded that the additional damage cases do not
substantially change the overall picture of environmental problems
caused by hazardous secondary materials recycling activities at
facilities, including mining and mineral processing facilities. We also
disagree with the commenters' assertion that restrictions on land-based
storage units are not supported by the environmental problems study.
Cumulative damage causes from the study support the restrictions
imposed by 40 CFR 261.4(a)(23) and the identification of additional
mining and mineral processing damage cases corroborates EPA's finding
that no industry should be exempt from the restrictions and/or
conditions due to the limited number of damage case profiles exhibited
in the environmental problems study.
2. Good Recycling Practices Study
    EPA completed An Assessment of Good Current Practices for Recycling
of Hazardous Secondary Materials to provide a more complete picture of
the hazardous secondary materials recycling industry in the United
States. The study examines what practices responsible generators and
recyclers currently use to ensure that their hazardous secondary
materials are recycled responsibly.
    One purpose of the study was to provide the Agency with another
angle from which to view the hazardous secondary materials recycling
industry. EPA has long heard from representatives of that industry that
management of hazardous secondary materials has changed and improved
since RCRA was implemented in the early 1980s. In addition, by
indicating what controls responsible recyclers are using, the study was
intended to help EPA determine which kinds of regulatory requirements
would be most appropriate and effective as conditions of the
exclusions.
    Some of the comments on the successful recycling study supported
the conclusions in the study. Particularly, these commenters stated
that audits are typical, that they usually cover the subjects described
in the study, and that RCRA and CERCLA liability are drivers of
responsible recycling behavior. Several other commenters suggested that
other incentives affecting the behavior of recyclers include economic
concerns, the RCRA hazardous waste regulations, and environmental and
safety regulations under other statutes.
Comments: Scope of the Successful Recycling Study
    EPA received several critical comments in response to the study on
responsible recycling behaviors. One comment that appeared more than
once was that EPA's study focused too much on large companies and that
many of the practices a large company undertakes with a full
environmental staff would not be possible for a smaller company and,
therefore, that the practices are not widespread among smaller
companies.
EPA's Response: Scope of the Successful Recycling Study
    EPA agrees with the focus on larger companies in the study and
discusses it in the methodology section of the report's introduction.
Because many of the contacts for interviews for the report came out of
the public comments on the October 2003 proposed rule, much of the
information in the report came from companies large enough to have
staff responsible for submitting public comments to federal proposed
rulemakings. However, where possible and appropriate, the study does
examine the options for small businesses, as well as what small
businesses are doing that approximates the audit programs and other
practices of larger companies. The Agency did find that many small
companies are concerned with questions of liability in their hazardous
secondary materials recycling and often either belong to auditing
consortiums or already do smaller audits by mail and telephone if they
cannot afford to set up visits to the recycling facilities to examine
them in person.
Comments: Purpose of the Successful Recycling Study
    Another comment made by several commenters expressed a concern that
circular logic was in place in the March 2007 supplemental proposal.
The commenters stated that it was regulation under RCRA that led to the
growth of the good practices being described and stated that EPA was
using these practices as justification for taking away the very
regulations that led to them.
EPA's Response: Purpose of the Successful Recycling Study
    The Agency believes that those making this comment misunderstood

the relationship between the successful recycling study and the March
2007 supplemental proposal. The proposal did not state that this
background material was a justification for why the Agency proposed the
conditional exclusion for hazardous secondary materials not under the
control of the generator. Rather, the Agency looked to the study to
determine what the current responsible practices are and to use that
information to inform decisions on what restrictions and/or conditions
would be appropriate for the transfer-based exclusion. By promulgating
restrictions and/or conditions that will lead to responsible management
of hazardous secondary materials, the Agency intends to encourage
hazardous secondary materials recycling, while protecting human health
and the environment.
3. Market Forces Study
    EPA received very few comments on Potential Effects of Market
Forces on the Management of Hazardous Secondary Materials Intended for
Recycling. The purpose of this study is to use economic theory to
describe how various market incentives can influence a firm's decision
making process when the recycling of hazardous secondary materials is
involved. Different economic incentives between the recycling of
hazardous secondary materials and manufacturing can arise due to
differences in these two business models. As opposed to manufacturing,
where the cost of inputs of either raw materials or intermediates is
greater than zero and revenue is generated primarily from the sale of
the output, some models of hazardous secondary materials recycling
involve generating revenue primarily from the receipt of the hazardous
secondary materials. Recyclers of hazardous secondary materials in this
situation may thus respond differently to economic forces and
incentives from traditional manufacturers.
Comments and EPA's Response: Market Forces Study
    Most of the commenters agreed with the underlying premise of the
study that market forces affect commercial recycling differently from
how they affect manufacturing from virgin materials, thus creating a
potential incentive for the over-accumulation of hazardous secondary
materials in some circumstances. Thus, the study supports both the
proposed conditions for the transfer-based exclusion and the ``useful
contribution'' factor for the legitimacy criteria. EPA agrees with
these comments.
    One commenter stated that as a result of the market forces study,
EPA should also include a requirement that the generator evaluate the
financial health of the recycler before shipping a hazardous secondary
material to the recycler. While EPA agrees that evaluating the
financial health of a company can be useful and informative, and
encourages companies to do so, it is not an activity that lends itself
to an objective standard that would be appropriate for regulation.
Instead, EPA is requiring recyclers under the transfer-based exclusion
to have financial assurance in order to determine that negative
economic factors will not result in the hazardous secondary materials
being abandoned.
    One commenter disagreed with the study's conclusion that intra- and
inter-company recyclers have more flexibility in their waste management
decisions than commercial recyclers do. The commenter noted that
company politics and internal goals can make it difficult to switch
from recycling to disposal, even if the market forces make it more
economical, and that it may take two or more months to find a disposal
contractor.
    While EPA generally agrees that there are more factors at work than
those described in the study, we continue to believe that intra- and
inter-company recycling have more flexibility in waste management
decisions than a commercial recycler does. When a commercial recycler's
entire income is from accepting hazardous secondary materials for
recycling and selling recycled products, there is no economic
alternative for it to stop recycling and continue to stay in business
unless it can afford the cost of a hazardous waste management permit
and the cost of becoming a hazardous waste disposal facility. This
finding is supported by the results of the damage cases, the
overwhelming majority of which were at commercial recycling facilities.

E. Use Constituting Disposal (UCD) and Burning for Energy (BFE)

Comments: UCD and BFE
    EPA received extensive comments on both the October 2003 proposal
and the March 2007 supplemental proposal requesting that the scope of
the proposed rules be expanded to include hazardous secondary materials
used in a manner constituting disposal and hazardous secondary
materials burned for energy recovery. Commenters argued that these
operations do not involve discard, and that they can have many
environmental benefits, including resource conservation and reduction
in greenhouse gas emissions. In particular, commenters argued that
hazardous waste that is indistinguishable from a commercial fuel should
be not a solid waste. Other commenters supported keeping the exclusion
focused on reclamation and not including use constituting disposal and
burning for energy recovery. Commenters noted that these types of
activities, in some cases, are akin to discard, that precedents exist
for regulation of these hazardous secondary materials, and that
recycling and reclamation are higher on the waste management hierarchy
and more likely to conserve resources than burning for energy recovery.
EPA's Response: BFE and UCD
    EPA continues to maintain that comments on UCD and BFE are outside
the scope of the solid waste exclusions in today's final rule, which
are focused on reclamation. EPA agrees that hazardous secondary
materials that are comparable to commercial fuels should not be solid
wastes, and the Agency has already promulgated an exclusion for certain
of these materials (40 CFR 261.4(a)(16)). However, as stated earlier,
such materials are outside the scope of today's final exclusions and
are best addressed under separate rulemaking efforts.

XVI. Major Comments on the Exclusion for Hazardous Secondary Materials
Legitimately Reclaimed Under the Control of the Generator

A. Scope of the Exclusion

1. Exclusion for Materials Recycled On-Site
Comments: On-Site Exclusion
    In our March 2007 supplemental proposal, EPA proposed to exclude
from the definition of solid waste hazardous secondary materials that
are generated and legitimately reclaimed at the generating facility.
EPA proposed to define ``generating facility'' in 40 CFR 260.10 as
``all contiguous property owned by the generator'' (72 FR 14214). We
noted that our proposed definition would include situations where a
generator contracted with another company to reclaim hazardous
secondary materials at the generator's facility, either temporarily or
permanently. The Agency solicited comment on whether facilities under
separate ownership, but located at the same site (e.g., industrial
parks), should be included within this proposed exclusion. We also
solicited comment on other definitions which might be compatible with
the concept of generator control.

    Commenters who addressed this issue generally supported the
proposed on-site exclusion. They agreed with EPA that hazardous
secondary materials reclaimed by a generator at its facility are
unlikely to be discarded because the materials will be managed and
monitored by a single entity who is familiar with both the generation
and recycling of the hazardous secondary materials. Several commenters
also agreed with EPA that environmental risks were lessened if the
hazardous secondary materials were not transported off-site, and that
fewer liability questions would arise in the case of accidents or
mismanagement.
    With respect to companies under separate ownership, but located at
the same site, commenter reaction was more mixed. Some commenters said
that this situation is not compatible with generator control. They
argued that unrelated companies would not be as likely to have
knowledge of each other's operations and hazardous secondary materials,
and that additional controls were necessary, such as financial
assurance for the reclaimer and reasonable efforts on the part of the
generator (conditions that EPA had proposed for the transfer-based
exclusion).
    Other commenters supported an exclusion for facilities under
separate ownership, but located at the same site, (i.e., co-located
facilities). These commenters said that such an exclusion would
encourage recycling. These commenters mentioned a variety of scenarios
which they argued should be eligible for the exclusion. Some commenters
described integrated chemical manufacturing operations with co-located
facilities that are owned by different entities because of corporate
mergers and acquisitions. Another commenter noted that at some steel
plants, spent pickle liquor is reclaimed on-site by a company that is
different from the company operating the steel plant. Other commenters
noted that coke and tar plants at iron and steel facilities are
sometimes owned by electric utilities. A few commenters argued that
facilities at airports should be eligible for the exclusion, and other
commenters mentioned various cooperative recycling ventures within the
automotive industry. Some operations mentioned by commenters appeared
to be prospective rather than actual.
EPA's Response: On-Site Exclusion
    After evaluating these comments, EPA has decided to finalize this
provision as proposed and to limit the exclusion to hazardous secondary
materials that are generated and legitimately reclaimed by the
hazardous secondary material generator at that generator's facility. We
agree with the commenters that at least some of the situations they
described are not necessarily incompatible with generator control. One
of the situations--spent pickle liquor recycled on-site at a steel
mill--is eligible for the generator-controlled exclusion if the
generator has contracted with the company to reclaim the material at
the generator's facility. However, the Agency does not have sufficient
legal or factual information about other situations mentioned by the
commenters to determine if there is a single entity who remains in
control of the hazardous secondary material throughout the reclamation
process.
    For this reason, EPA believes that such situations may be more
appropriately addressed under the exclusion for hazardous secondary
materials transferred for reclamation (40 CFR 261.4(a)(24)) or under
the case-by-case non-waste determination procedures finalized today in
Sec.  260.30.
    For the sake of clarity and in response to comments, we are also
adding a definition of ``hazardous secondary material'' and ``hazardous
secondary material generator'' to Sec.  260.10. ``Hazardous secondary
material'' means a secondary material that, when discarded, would be
identified as hazardous waste under part 261 of 40 CFR. ``Hazardous
secondary material generator'' means any person whose act or process
produces hazardous secondary material at the generating facility. A
facility that collects hazardous secondary materials from other persons
is not the hazardous secondary material generator. These definitions
would apply to all of the exclusions promulgated today. We note that
generators sometimes contract with a second company to collect
hazardous secondary materials at the generating facility, after which
the hazardous secondary materials are subsequently reclaimed at the
facility of the second company. In that situation, the hazardous
secondary materials would no longer be considered ``under the control
of the generator'' because the materials are not reclaimed at the
generating facility. The materials should instead be managed under the
exclusion for materials transferred for reclamation.
    EPA agrees with certain comments that a facility that generates
hazardous secondary materials may lease the property where it conducts
operations, rather than own the property and that our proposed
definition of ``generating facility'' would not cover such
arrangements. EPA has therefore changed the definition of ``generating
facility'' in 40 CFR 260.10 to read ``all contiguous property owned,
leased, or otherwise controlled by the hazardous secondary material
generator.'' We have also amended the existing definition of
``facility'' in Sec.  260.10 to include a reference to management of
hazardous secondary materials. Therefore, any references to
``facilities'' or ``units'' of a facility in today's rule also refers
to facilities or units managing hazardous secondary materials excluded
under this rule.
2. Exclusion for Materials Recycled by the ``Same Company''
    In its March 2007 supplemental proposal, EPA proposed to exclude
from the definition of solid waste hazardous secondary materials that
were generated and reclaimed by the same ``person'' as defined in 40
CFR 260.10, if the generator certified the following: ``on behalf of
[insert company name], I certify that the indicated hazardous
recyclable material will be sent to [insert company name], that the two
companies are under the same ownership, and that the owner corporation
[insert company name] has acknowledged full responsibility for the safe
management of the hazardous secondary material'' (72 FR 14214).
``Person,'' as defined in Sec.  260.10, means an individual, trust,
firm, joint stock company, Federal Agency, corporation (including a
government corporation), partnership, association, State, municipality,
commission, political subdivision of a State, or any interstate body.
EPA proposed the certification requirement because of existing
complexities in corporate ownership and liability. The certification
would clarify the responsibilities of the generator and reclaimer and
would help regulatory authorities determine whether a facility was
eligible for this exclusion. The Agency solicited comment on any other
certification language that might accomplish the same end, and on other
definitions of ``same-company'' (72 FR 14186).
Comments: Same-Company Exclusion
    Many commenters supported this exclusion and stated that hazardous
secondary materials sent from one company's facility to another
remained essentially under the control of the generating company.
According to these commenters, if a generator sends materials to a
reclaimer that is part of the same corporate structure, the generator
is likely to be familiar with the recycling and materials management
processes employed by the reclaimer. In addition, questions regarding
liability

and responsibility for such hazardous secondary materials are likely to
be clearer than is the case with facilities from unrelated companies.
    Other commenters stated that when hazardous secondary materials are
generated and transported off-site for reclamation, additional controls
were needed to avoid discard and protect human health and the
environment even in the case of intra-company recycling. Some of these
commenters preferred such reclamation to be regulated under the
proposed conditional exclusion for hazardous secondary materials
transferred for the purpose of reclamation. This measure would ensure
that generators would have to perform reasonable efforts and that
reclaimers would have to obtain financial assurance. Other commenters
suggested additional notification and recordkeeping requirements for
any hazardous secondary materials transported off-site.
EPA's Response: Same-Company Exclusion
    After evaluating these comments, the Agency has decided to retain
``same-company'' recycling under the exclusion for hazardous secondary
materials legitimately reclaimed under the control of the generator. We
do not believe that facilities exchanging hazardous secondary materials
within the same corporate structure should be subject to the
requirements for our exclusion at Sec.  261.4(a)(24), as long as
appropriate control of the recycling process is maintained. In
particular, it is unnecessary for the generator to perform reasonable
efforts on the reclaimer, because the generator is likely to be
knowledgeable about the reclaimer's ability to recycle the hazardous
secondary materials properly and legitimately. Similarly, if the
generator and reclaimer are part of the same corporate structure and if
common control is maintained over the policies of both facilities,
there are strong incentives to ensure that the hazardous secondary
materials are properly and legitimately reclaimed, thus making a
financial assurance requirement for the reclaimer unnecessary.
    In response to commenters who suggested additional notification and
recordkeeping requirements, we note that the Agency is revising our
proposed requirements for notification and recordkeeping for all
exclusions promulgated today. These revisions are discussed in sections
VII.C. and VIII.C. of this preamble.
Comments: Certification of Same Company
    Some commenters argued that no certification should be necessary
when hazardous secondary materials are sent between the same or related
companies because generator knowledge of the materials and the
potential CERCLA liability should suffice to ensure safe and legitimate
recycling. Other commenters supported a certification provision, but
suggested alternative language that they stated would be more
compatible with generator control. Still other commenters disagreed
with our proposed requirement for certifying that the generator and
reclaimer of hazardous secondary materials were under the same
ownership and that the owner corporation must acknowledge
responsibility for the safe management of the hazardous secondary
materials.
    According to these commenters, under existing corporate law, parent
companies do not (and sometimes cannot) assume legal liability for
their subsidiaries. EPA's proposed certification requirement regarding
the owner company would therefore have little legal effect and could
actually discourage same-company recycling. Some of these commenters
suggested that either the generator or the reclaimer should acknowledge
responsibility for properly managing the hazardous secondary material,
not a third-party owner corporation.
    Other commenters said that the proposed requirement that the
hazardous secondary materials be generated and reclaimed by the same
``person'' under 40 CFR 260.10 was not appropriate because a
corporation and its affiliates or subsidiaries are legally distinct and
not the same ``person.'' Therefore, one commenter suggested that we
refer to related ``facilities'' rather than ``companies.'' Some other
commenters suggested that we focus on the concept of ``control'' rather
than ``ownership.''
EPA's Response: Certification of Same Company
    After evaluating these comments, EPA does not agree with the
commenters who argued that a certification requirement is not needed.
We note that the purpose of the certification is not to directly ensure
proper and legitimate recycling, but to clarify responsibility for the
hazardous secondary materials and to demonstrate to regulatory
officials that the hazardous secondary materials are not discarded and
are within the terms of the generator-controlled exclusion. We are
therefore retaining a certification requirement for this exclusion.
    However, the Agency has also decided that its proposed
certification language should be revised to avoid confusion and to
ensure more effective generator control. We have therefore revised our
proposed regulatory definition for this exclusion to refer to
``facilities'' rather than companies. Under the definition finalized
today at 40 CFR 260.10, the reclaiming facility must be ``controlled''
by the generating facility or by a person (under Sec.  260.10) who
controls both the generating facility and the reclaiming facility.
``Control,'' for purposes of this exclusion, means ``the power to
direct the policies of the facility, whether by the ownership of stock,
voting rights, or otherwise, except that contractors who operate
facilities on behalf of a different person shall not be deemed to
``control'' such facilities'' (see Sec.  260.10). Our final
certification language requires the generating facility to certify that
it controls the reclaiming facility, or that the generating facility
and the reclaiming facility are under common control. In addition, the
generator must certify that either the generating facility or the
reclaiming facility acknowledges full responsibility for the proper
management of the hazardous secondary materials. To avoid confusion, we
have also amended the definition of ``facility'' at 40 CFR 260.10 to
include facilities which manage hazardous secondary materials.
Therefore, any reference to ``facilities'' in this rule also includes
facilities which manage materials excluded under the regulations
promulgated today.
    EPA believes that this revised language more appropriately reflects
the concept of ``generator control'' that underlies the exclusions at
40 CFR 261.2(a)(2)(ii) and 261.4(a)(23). Requiring that a generating
facility control the reclaiming facility, or that both be under common
control, ensures that there is an ongoing relationship between the
generator and reclaimer and that the two facilities are more likely to
be familiar with each others' waste management practices, thereby
minimizing the possibility of discard. If there is no such
relationship, the two facilities should not be eligible for this
exclusion and the use of the transfer-based exclusion would be more
appropriate. In addition, requiring the hazardous secondary material
generator to certify that either the generating facility or the
reclaiming facility acknowledges responsibility for the safe management
of hazardous secondary materials ensures that the responsibility rests
with the party most capable of assuming such responsibility. This

certification should be made by an official familiar with the corporate
structure of both the generating and the reclaiming facilities and
should be retained at the site of the generating facility.
Comments and EPA's Response: Application to Government Agencies and
Universities
    Some commenters requested that EPA clarify whether two government
agencies (such as the Department of Defense and the Department of
Energy) would be considered the same ``person'' under 40 CFR 260.10 if
hazardous secondary materials are generated by one agency and reclaimed
by another. In response, we note that for purposes of RCRA, the federal
government is not a single ``person''; rather, each agency or
department would be considered a separate ``person.'' We also note that
under today's final rule, a federal agency that is a generating
facility does not normally have the power to direct the policies of a
different federal agency that is a reclaiming facility, nor is there a
``person'' under Sec.  260.10 who directs the routine policies of both
facilities. In certain situations, the two different federal agencies
involved may wish to apply for a case-by-case non-waste determination
under 40 CFR 260.30, as appropriate, or use the transfer-based
exclusion.
    Other commenters requested that EPA clarify whether the same-
company exclusion extends to hazardous secondary materials that are
generated and reclaimed at different facilities, when both facilities
are owned by the same government agency or university, but operated by
a contractor. In some of these situations, the same contractor operates
both the generating facility and the recycling facility, but, in other
situations, the generating facility and the reclaiming facility are
operated by different contractors. In those situations where the
generating facility and the reclaiming facility are both owned by the
same government agency or university, the two facilities would be under
common control because the agency or university in question has the
power to direct the policies of both the generating facility and the
reclaiming facility. Under this scenario, both facilities would
therefore be eligible for the same-company exclusion, even if operated
by different contractors. However, if the generating facility and the
reclaiming facility were each owned by a separate government agency or
university, they would not be eligible for this exclusion even if both
facilities were operated by the same contractor, because the element of
common control would be lacking. We have revised the certification
language of 40 CFR 260.10 to reflect this approach. The parties
involved may apply for a case-by-case non-waste determination under 40
CFR 260.30, as appropriate, or use the transfer-based exclusion.
3. Types of Tolling Arrangements Eligible
    In its March 2007 supplemental proposal, the Agency proposed to
exclude from the definition of solid waste certain hazardous secondary
materials that are generated pursuant to a written contract between a
tolling contractor and a toll manufacturer. Through the contract, the
tolling contractor would arrange for the manufacture by the toll
manufacturer of a product made from unused materials specified by the
tolling contractor. To be eligible for the exclusion, the tolling
contractor would have to retain ownership of and responsibility for the
hazardous secondary materials that were generated during the course of
the production of the product. EPA solicited comment on other types of
contractual arrangements under which discard is unlikely to happen and
which could appropriately be covered by the exclusion for generator-
controlled hazardous secondary materials. For example, one company
could enter into a contractual arrangement for a second company to
reclaim and reuse (or return for reuse) the first company's hazardous
secondary materials. The first company could create a contractual
instrument that exhibits the same degree of control over how the second
company manages the hazardous secondary materials as is found in a
tolling arrangement (72 FR 14186).
Comments: Tolling Arrangements
    Some commenters stated that tolling arrangements are incompatible
with ``generator control'' and are best regulated under the proposed
exclusion for materials that were transferred for legitimate
reclamation. They argued that requirements such as reasonable efforts
(by generators) and financial assurance (for reclaimers) were necessary
to avoid discard in the case of off-site reclamation. Some of the
commenters argued that the physical generator of the hazardous
secondary material (in this case, the toll manufacturer) retains legal
liability for the material. They stated that contracts which
reallocated resources to address financial responsibility for
mismanagement or mishap could contain loopholes that would allow
tolling contractors to dispose of hazardous secondary materials or send
them to a third party for reclamation.
    Other commenters, on the other hand, urged EPA to expand the
tolling exclusion to other types of contractual arrangements. A few
commenters said that the exclusion should be allowed for any contract
between a generator and a reclaimer where the generator was willing to
retain ownership of and/or responsibility for the hazardous secondary
materials. Other commenters mentioned specific contractual situations
in which they argued the hazardous secondary materials in question were
clearly handled as a commodity and discard was therefore highly
unlikely. One example given was a facility that reclaims metals from
electric arc furnace dust and then sends the metals back to steel mills
to be reused. Another example was a facility that takes spent copper
etchant from manufacturers of printed wiring boards and uses the
material to make new copper compounds. Still another example was a
facility that collects used paint purge solvent from auto body paint
operations, reclaims it, and sells regenerated solvent back to the auto
body facility.
EPA's Response: Tolling Arrangements
    After considering these comments, the Agency has decided to retain
the tolling exclusion, but not to broaden its scope. The exclusion will
therefore be limited to situations where a tolling contractor contracts
with a toll manufacturer to make a product from specified unused
materials. We do not agree with those commenters who said that tolling
contracts are not compatible with ``generator control.'' The typical
tolling contract contains detailed specifications about the product to
be manufactured, including the management of any hazardous secondary
materials that are generated and returned to the tolling contractor for
reclamation. In addition, the tolling contractor will enter into a
tolling contract with such requirements only if it has decided that the
economic benefit from such recycling is justified. For these reasons,
we do not believe that tolling arrangements should be subject to the
conditions applicable to the transfer-based exclusion.
    On the other hand, the Agency also does not agree with those
commenters who urged that we should allow the generator-controlled
exclusion for any hazardous secondary materials generated under a
contract between a generator and a reclaimer. We believe that the
exclusion should be limited to the types of tolling arrangements
specified in 40 CFR 260.10. When hazardous secondary materials are

transferred off-site for reclamation, there is, in general, less
likelihood of generator control, and, hence, more likelihood of
discard, in the absence of conditions that ensure the hazardous
secondary materials will be handled as valuable products. In these
situations, additional requirements are needed for the Agency to
determine that no discard has occurred. Conversely, in the specific
situations included in the generator-controlled exclusion (on-site,
same-company, and tolling reclamation), we believe that the generator
is much more likely to be familiar with the reclaimer and to have
powerful incentives to see that the hazardous secondary materials are
reclaimed properly and legitimately. In these cases, the requirements
that we have finalized today (notification, legitimate recycling,
compliance with speculative accumulation limits, and containment) are
sufficient for the Agency to determine that such hazardous secondary
materials are not discarded. These requirements may not be sufficient
in the case of unrelated generators and reclaimers who have a non-
tolling type of contract.
    To clarify the requirements for tolling contracts under today's
rule, and to assist regulatory authorities in determining whether a
facility is eligible for an exclusion under a tolling contract, EPA has
also added a certification requirement to the definition of hazardous
secondary material generated and reclaimed under the control of the
generator in Sec.  260.10 of the final rule. This provision would
require the tolling contractor to certify that it has a written
contract with the toll manufacturer to manufacture a product or
intermediate which is made from unused materials specified by the
tolling contractor, and that the tolling contractor will reclaim the
hazardous secondary materials generated during the course of this
manufacture. The tolling contractor must also certify that it retains
ownership of, and responsibility for, the hazardous secondary materials
that are generated during the course of the manufacture, including any
releases of hazardous secondary materials that occur during the
manufacturing process. This certification should be made by an official
familiar with the terms of the written contract and should be retained
at the site of the tolling contractor.
    In response to those commenters who described specific types of
contractual arrangements that should be eligible for the generator-
controlled exclusion, we note that facilities operating under such
arrangements may apply for a non-waste determination under Sec.
260.30, as appropriate. In some cases, commenters did not include
enough detail about the contracts to enable the Agency to draft
appropriate regulatory language. In other cases, the arrangement
suggested was industry-specific and the conditions or requirements
suggested by the commenters were not appropriate for an exclusion
covering many different types of facilities. We believe that such
arrangements are best evaluated on a case-by-case basis by the
regulatory authority, possibly under 40 CFR 260.30, to determine their
eligibility for exclusion.
Comments: Terms Used in Tolling Exclusion
    One commenter suggested that we replace the term ``batch
manufacturer'' with ``toll manufacturer.'' This commenter stated that
``batch manufacturer'' was too broad and generally referred to a
facility which engages in a distinct, short production campaign, not
necessarily tied to a two-party contractual agreement. ``Toll
manufacturer,'' this commenter stated, is a subset of batch
manufacturers and generally refers to a party which undertakes
manufacturing pursuant to a contract with a tolling contractor, such as
the arrangement we proposed. This commenter also requested that EPA
clarify that the ``product'' required to be produced under a tolling
contract can include intermediates, as well as final products, and that
materials used in toll manufacturing were sometimes specialty chemicals
or intermediates that could not be described as ``raw materials,'' as
would be required under our proposal. They suggested that we use the
term ``specified materials'' instead.
EPA's Response: Terms Used in Tolling Exclusion
    The Agency agrees that the suggested term ``toll manufacturer'' is
more accurate and has revised the definition in Sec.  260.10
accordingly. EPA also agrees that a product produced under a tolling
contract can be an intermediate or a final product and has revised the
definition in Sec.  260.10 to refer to ``production of a product or
intermediate.'' Finally, the Agency agrees that the term ``raw
materials'' may not be accurate, but prefers to use the term ``unused
materials'' instead of ``specified materials,'' because we believe that
term encompasses specialty chemicals and intermediates without also
including spent or secondary materials, which are not included in our
definition of toll manufacturing.

B. Restrictions on Exclusions for Hazardous Secondary Materials Managed
Under the Control of the Generator in Land-Based Units and Non-Land-
Based Units

    In its March 2007 supplemental proposal, the Agency proposed in 40
CFR 261.4(a)(23)(i) that hazardous secondary materials generated and
legitimately reclaimed under the control of the generator must be
contained if they were stored in land-based units (72 FR 14216). EPA
proposed to use the existing definition of land-based units and defined
a land-based unit in 40 CFR 260.10 as a landfill, surface impoundment,
waste pile, injection well, land treatment facility, salt dome
formation, salt bed formation, or underground mine or cave. EPA did not
propose a containment limitation for such materials if they were stored
in non-land-based units.
    EPA did not propose a regulatory definition of ``contained,'' nor
did we propose specific performance or storage standards. We stated
that whether hazardous secondary materials are contained would be
decided on a case-by-case basis, and that such materials are generally
contained if they are placed in a unit that controls the movement of
the hazardous secondary materials out of the unit. We solicited comment
on whether additional requirements might be necessary to demonstrate
absence of discard when hazardous secondary materials were recycled
under the control of the generator. In particular, we asked whether
additional requirements for storage would be appropriate, such as
performance-based standards designed to address releases to the
environment. We also indicated that if commenters believed such
requirements were appropriate, they should specify the technical
rationale for each requirement suggested and why the requirement is
necessary if the hazardous secondary material remains under the control
of the generator.
Comments and EPA's Response: Definition of ``Land-Based Unit''
    EPA received several comments expressing confusion over our
proposed definition of ``land-based unit.'' We proposed land-based unit
to mean ``a landfill, surface impoundment, waste pile, injection well,
land treatment facility, salt dome formation, salt bed formation, or
underground mine or cave.'' Commenters noted that including
``landfills'' and ``injection wells'' was not necessary for the
proposed exclusion, since these management units are clearly
inappropriate for

hazardous secondary materials intended for recycling. Furthermore,
commenters also noted that Subtitle C defines these terms waste-
centrically (i.e., as a unit that handles ``waste'' in one way or
another). This could create confusion because a hazardous secondary
material would not, by definition, be ``managed'' (or ``stored'') in
one of these ``waste'' units. EPA agrees with these comments, and in
the final rule has defined ``land-based unit'' as an area where
hazardous secondary materials are placed in or on the land before
recycling. However, as discussed below, the Agency has clarified that
land-based units that are production units are not included in the
definition.
Comments and EPA's Response: Mineral Processing Industry
    Some commenters asserted that the Agency has no jurisdiction over
land-based production units in the mineral processing industry. As
previously stated, EPA agrees that the Agency does not regulate the
production process. (See 63 FR 28580). Accordingly, EPA has clarified
the definition of ``land-based unit'' to clarify that production units
are not included in that definition. However, these commenters also
asserted that EPA cannot legally require containment for these units.
To the extent that these comments are intended to mean that EPA cannot
regulate material that has been released into the environment, these
comments are addressed in section XV.C. of this preamble, and also in
the response to comments document in the record for this rulemaking.
Comments: Standards for Units (Both Land-Based and Non-Land-Based)
    Other commenters, however, were opposed to allowing any land-based
storage, at least without a RCRA Part B permit or strict requirements,
such as secondary containment, leak detection measures, regular
inspections, monitoring, or financial assurance. Most of these
commenters did not appear to distinguish between land-based units under
the generator-controlled exclusion and those under the exclusion for
hazardous secondary materials transferred for reclamation; presumably,
they wanted the same conditions for both.
    Regarding non-land-based units such as tanks, containers, or
containment buildings, some commenters agreed with EPA's approach, but
other commenters preferred minimum storage standards for these units.
Some commenters wanted Subtitle C standards to apply. Other commenters
believed that the RCRA hazardous waste requirements were not necessary,
but suggested other standards, such as requiring tanks to be in good
condition, to be compatible with the stored material, to have secondary
containment, or to be subject to routine inspections.
EPA's Response: Standards for Units (Land-Based and Non-Land-Based)
    After evaluating these comments, the Agency has decided not to add
performance standards or other requirements for managing hazardous
secondary materials excluded under any of the exclusions promulgated
today (Sec. Sec.  261.2(a)(2)(ii), 261.4(a)(23), or 261.4(a)(24)). Such
detailed measures are unnecessary for hazardous secondary materials
that are handled as valuable products that are destined for recycling.
Under today's 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.
    EPA also believes that detailed standards are not necessary to
determine that valuable materials destined for recycling are not
discarded when managed in non-land-based units. As with land-based
units, the regulatory authorities can identify hazardous secondary
materials that have been released from the unit and determine that the
released material is discarded. To clarify this approach and to
facilitate its implementation, however, EPA has revised its regulatory
language to require that hazardous secondary materials that are
generated and reclaimed under the control of the generator and managed
in non-land-based units must also be contained (Sec.  261.4(a)(23)(i)).
Comments and EPA's Response: State Regulatory Program-Compliant Units
    A few commenters indicated that hazardous secondary materials
managed in units complying with state regulatory programs to address
releases should be considered contained. Because of the variety of such
programs, and because the Agency has not conducted an in-depth
evaluation of such state requirements, we are not adding a definition
of ``contained'' that would incorporate this suggested element.
However, regulatory authorities may consider compliance with such
requirements as one of the factors in determining whether the hazardous
secondary materials are contained in the units.
Comments: Releases
    In the March 2007 supplemental proposal, the Agency stated that
hazardous secondary materials that remain contained in these units
would still meet the terms of the exclusion even if a release occurred,
unless the hazardous secondary materials are not managed as a valuable
product, and, as a result, a significant release from the unit takes
place. If such a significant release occurred, the hazardous secondary
material remaining in the unit may be considered a solid and hazardous
waste. Some commenters noted that a series of small releases from a
unit could occur over time, causing cumulative environmental harm even
though no single release was significant in terms of volume. These
commenters said that such a series of releases should generally lead to
the conclusion that the hazardous secondary material remaining in the
unit was a waste.
EPA's Response: Releases
    EPA agrees with the comment concerning small releases from a unit
over time. Thus, a ``significant'' release is not necessarily large in
volume, but would include an unaddressed small release from a unit
that, if allowed to continue over time, could cause significant damage.
Any one release may not be significant in terms of volume. However, if
the cause of such a release remains unaddressed over time and hazardous
secondary materials are managed in such a way that the release is
likely to continue, the hazardous secondary materials in the unit would
not be contained. For example, a rusting tank or containers that are
deteriorating may have a slow leak that, if unaddressed, could, over
time, cause a significant environmental impact. Similarly, a surface
impoundment with a slow, unaddressed leak to groundwater could, over
time, result in significant damage. Another example would be a large
pile of lead-contaminated finely ground material without any provisions
to prevent wind dispersal of the particles. Such releases, if
unaddressed over time and likely to continue, would mean that the
hazardous secondary materials remaining in the unit were not being

managed as a valuable raw material, intermediate, or product and that
the materials had been discarded. As a result, the hazardous secondary
materials in the unit would be hazardous wastes and these units would
be subject to the RCRA hazardous waste regulations.

XVII. Major Comments on the Exclusion for Hazardous Secondary Materials
Transferred for the Purpose of Legitimate Reclamation

A. Status of Facilities Other Than the Generator or Reclaimer
(``Intermediate Facilities'')

Comments: Intermediate Facilities
    In its March 2007 supplemental proposal, EPA requested comment on
its proposal that under the proposed exclusion for hazardous secondary
materials transferred for reclamation, such materials would have to be
transferred directly from the generator to the reclaimer and not be
handled by anyone other than a transporter.
    EPA received many comments on this provision. Some commenters
supported the provision as proposed because they were concerned that if
hazardous secondary materials were transferred to a ``middleman,'' the
generator would not have a reasonable understanding of who would
reclaim the hazardous secondary materials and how they would be managed
and reclaimed. If the generator was unable to ascertain whether the
hazardous secondary materials in question could be properly and
legitimately recycled, the materials should be considered discarded.
    Other commenters objected to this proposed limitation. They argued
that many persons who generate smaller quantities of hazardous
secondary materials need help in consolidating shipments to make
reclamation economically feasible. Some of these commenters also argued
that intermediate facilities provided valuable assistance to generators
by helping them properly transport, package, and store material, and by
helping them find responsible reclaimers. These commenters believed
that EPA's proposed limitation could discourage reclamation by persons
who generate smaller quantities of such hazardous secondary materials.
    Most of the commenters who suggested that intermediate facilities
be eligible for the exclusion also suggested conditions for these
facilities. These conditions included requiring the generator to select
the reclaimer, requiring the generator to perform reasonable efforts on
the intermediate facility, as well as the reclaimer, and requirements
for notification and recordkeeping. A few commenters argued that
intermediate facilities should be required to have a RCRA Part B permit
or interim status.
EPA's Response: Intermediate Facilities
    After evaluating these comments, the Agency has decided that
intermediate facilities storing hazardous secondary materials should be
eligible for the exclusion at 40 CFR 261.4(a)(24) under certain
conditions. We believe that such facilities make it easier for
generators that generate smaller quantities of hazardous secondary
materials to send these materials for reclamation and that storage at
such facilities under the conditions designed to address discard is
completely consistent with handling the hazardous secondary materials
as valuable commodities. To this end, we have added a new definition of
``intermediate facility'' to 40 CFR 260.10. We note that this rule does
not address ``brokers'' because that term is commonly understood to
mean a person who helps arrange for the transfer of hazardous waste or
hazardous secondary material, but does not take possession of the
material or manage it in any way. Brokers that never take possession of
hazardous secondary materials would not have been affected under the
supplemental proposal, nor are they affected by today's rule.
    Under today's rule, an intermediate facility is a facility that
stores hazardous secondary materials for more than 10 days, other than
a generator or reclaimer of such materials. If an intermediate facility
treats the hazardous secondary materials or commingles it with other
hazardous secondary materials or with hazardous waste, it would not be
eligible as an ``intermediate facility'' as defined in Sec.  260.10
under today's regulation. Under 40 CFR 260.42, intermediate facilities
must submit the same notification required of generators and reclaimers
of hazardous secondary materials transferred for reclamation. In
addition, under Sec.  261.4(a)(24)(v) of today's rule, generators must
also perform appropriate reasonable efforts on the intermediate
facility, as well as the reclamation facility, and generators are
responsible for the ultimate selection of the reclamation facility.
These requirements will ensure that the intermediate facility is
handling the hazardous secondary materials as a commodity.
    Today's rule also requires intermediate facilities to comply with
the applicable requirements for reclaimers of hazardous secondary
materials under 40 CFR 261.4(a)(24)(vi), including recordkeeping,
storage of excluded materials, financial assurance, and speculative
accumulation. The Agency believes that these conditions are fully
sufficient to ensure that hazardous secondary materials stored at
intermediate facilities are handled as valuable products and not
discarded. Therefore, we do not agree with those commenters who
suggested that intermediate facilities should be required to operate
under Part B permits or interim status.
    The Agency notes that in some cases, the intermediate facility
performs the physical measures associated with generator reasonable
efforts to ensure that the reclaimer will properly and legitimately
recycle the hazardous secondary materials. These measures may include
facility inspections and preparation of audits. In those cases, the
generator must carefully review such measures to ensure that any
information provided is credible.
    Under today's rule (see 40 CFR 261.4(a)(24)(ii)), if hazardous
secondary materials are stored for 10 days or less at a transfer
facility, the transit is not subject to the requirements applicable to
intermediate facilities under the transfer-based exclusion. Instead, it
must only be packaged in accordance with applicable DOT requirements.
The Agency considers hazardous secondary materials stored by transfer
facilities for short periods of time to be in transit, similar to
hazardous waste stored by similar facilities for the same time period.
They are therefore not discarded. We have revised the existing
definition of ``transfer facility'' at 40 CFR 260.10 to clarify that
such facilities may store hazardous secondary materials, as well as
hazardous waste. The generator need not perform reasonable efforts on
such facilities, nor must such facilities comply with the requirements
applicable to reclaimers of hazardous secondary materials under 40 CFR
261.4(a)(24)(vi). In addition, hazardous secondary materials at
transfer facilities may be repackaged from one container to another
(e.g., the materials may be consolidated from smaller to larger
containers) or transferred to different vehicles for shipment (see 45
FR 86966, December 31, 1980). However, different hazardous secondary
materials may not be mixed together. In addition, if there is a release
of the hazardous secondary materials at the transfer facility that is
not cleaned up immediately, such materials become solid waste, and, if
they exhibit a hazardous characteristic or are specifically listed by
EPA, a hazardous waste as well. Depending on the nature of the release,
the hazardous secondary materials remaining in the unit could

also become a solid and hazardous waste subject to Subtitle C
regulation (for a discussion of when such units are considered
``contained,'' see section XVI of this preamble).

B. Reasonable Efforts Condition

    EPA received many comments on the condition proposed in the March
2007 supplemental proposal that generators ``make reasonable efforts to
ensure that the reclaimer intends to legitimately recycle the material
and not discard it * * * and that the reclaimer will manage the
material in a manner that is protective of human health and the
environment.'' This condition was proposed to be fulfilled by hazardous
secondary material generators sending hazardous secondary materials to
any reclamation facility not operating under a RCRA Part B permit or
interim status standards, and the condition would have to be satisfied
prior to transferring the hazardous secondary materials to the
reclamation facility (72 FR 14190-14194). Below is a summary of six
major issues raised in the comments and EPA's responses. For more
detailed comment responses, please see Revisions to the Definition of
Solid Waste Response to Comments Document.
Comments: An Objective Standard for Reasonable Efforts
    As proposed, the codified reasonable efforts provision for
generators was a general standard, rather than a more specific standard
with clearly stated requirements. EPA requested comment on establishing
a more objective standard for making reasonable efforts, such as
requiring generators to answer the questions discussed in the preamble.
EPA acknowledged that creating an objective standard could provide
generators and overseeing agencies with more regulatory certainty and
requested comment on codifying the six questions outlined in the
preamble.
    EPA received many comments in support of an objective standard for
satisfying the reasonable efforts condition. Commenters suggested that
a minimum standard was needed to determine whether a generator
fulfilled the condition and as a way of determining what is
``reasonable.'' Many of these commenters also believed that a standard
that generators must meet was necessary to delineate liability for
hazardous secondary materials that are transferred from a generator to
a reclamation facility. In contrast, several commenters suggested that
formalizing a minimum standard which all generators must meet is
inappropriate since recycling is inherently case-specific.
    On the issue of whether to codify a reasonable efforts standard,
which several commenters addressed separately from the development of a
standard, EPA received many comments both in support of and against
codification. A large number of commenters addressed this issue by
commenting on the six questions EPA discussed in the preamble. Those in
favor of codification believed that establishing a minimum, objective
standard was important in order to provide regulatory certainty for
generators regarding what is ``reasonable'' and for overseeing agencies
needing to make consistent determinations that the condition is
satisfied. Industry commenters responding in support of codification
believed the six questions resemble existing audit questions, and would
therefore be straightforward to answer and satisfy. Recyclers and waste
management commenters believed that small quantity generators would
benefit from having a clear standard and also that the standard would
make additional clarifying guidance unnecessary in the future. Some
commenters conditionally supported codification contingent upon
severance of RCRA liability for generators that meet the minimum
condition. These commenters supported EPA's proposal to create what
they termed as a ``safe harbor'' for generators that, having met the
reasonable efforts condition, would be shielded from any future RCRA
liability caused by environmental damage at a reclamation facility.
    On the other hand, several commenters (mostly from the generating
industry) opposed codifying a standard. They believed a standard would
be unnecessary since generators that already audit recyclers have
existing criteria for making reasonable efforts. Some of these
commenters also stressed a need to maintain flexibility in their
activities and to avoid additional burdensome requirements. One state
commenter requested that EPA allow generators to establish their own
standard for reasonable efforts so that generators will weigh their own
level of risk and ultimately be responsible for their decisions. This
commenter also believed that one standard is impractical for both ``a
large industrial generator of a highly toxic hazardous secondary
material'' and ``a small generator of a barely ignitable hazardous
secondary material.''
    Of the commenters that responded to the March 2007 supplemental
proposal to codify a standard for reasonable efforts, many also
provided comments on the six questions in the preamble. In general,
commenters were divided between supporting and opposing codification of
all six questions, but responses were generally favorable when
commenters discussed the value of individual questions within a
reasonable efforts inquiry. One exception to this is with respect to
proposed question (B) (``Does the reclamation facility have the
equipment and trained personnel to properly recycle the hazardous
secondary material?''), which several commenters believed to be
difficult for a hazardous secondary material generator to answer with
existing knowledge. A few commenters also noted that questions (D) and
(E), the two proposed questions pertaining to legitimacy within the
preamble discussion of reasonable efforts, did not represent the
legitimacy ``factors to be considered'' that were proposed in the March
2007 supplemental proposal at 40 CFR 261.2(g). These commenters
suggested that a reasonable efforts inquiry should include all criteria
and factors in the proposed legitimate recycling requirement. A few
commenters also suggested including an additional question about the
financial health of a reclaimer.
EPA's Response: An Objective Standard for Reasonable Efforts
    After evaluating these comments, EPA agrees that an objective
minimum standard is appropriate and necessary for hazardous secondary
material generators to determine that they have fulfilled the
reasonable efforts condition. We believe that without such a standard,
both generators and the regulatory agencies would experience difficulty
in determining whether the condition is met. However, in defining the
standard, it would in no way limit a generator's ability to tailor and
enhance its reasonable efforts inquiry to evaluate a particular
industry or recycler.
    We also agree with the commenters who stated that the six questions
from the preamble to the March 2007 supplemental proposal, with two
modifications noted below, serve as a minimum objective standard.
Therefore, we are codifying them, with certain modifications. We
strongly believe that any generator who takes advantage of today's
transfer-based exclusion must be able to answer all reasonable efforts
questions affirmatively for each reclamation facility (and intermediate
facility, if such hazardous secondary materials are sent to such a
facility) in order to demonstrate that its hazardous

secondary materials will be properly and legitimately recycled and not
discarded. In EPA's view, a generator who is unable to satisfy the
reasonable efforts condition has not demonstrated that its hazardous
secondary materials are not discarded when recycled. The hazardous
secondary materials would thus be ineligible for today's transfer-based
exclusion.
    With respect to question (4) (``Does the available information
indicate that the reclamation facility and any intermediate facility
that is used by the hazardous secondary material generator have the
equipment and trained personnel to safely recycle the hazardous
secondary material?''), we believe that its inclusion within reasonable
efforts is appropriate and necessary since the question informs a
generator's inquiry as to whether its hazardous secondary materials
will be properly and legitimately recycled. If a reclamation facility
were found to have inadequate equipment or untrained personnel, it
would raise serious questions as to whether the facility would be
engaged in proper recycling or discard. Without exploring this
question, we believe that a generator cannot ascertain that a
reclamation facility will properly and legitimately recycle its
hazardous secondary materials. However, we also agree that, as drafted
in the proposed rule, answering this question may require specialized
knowledge and expertise. Accordingly, EPA is changing this question to
allow the generator to rely on the reclamation facility to explain why
its equipment and personnel are appropriate. Of course, the generator
must have an objectively reasonable belief that the reclamation
facility's equipment and trained personnel are adequate for safe
recycling. Accordingly, if the equipment and personnel described by the
reclamation facility would be, to an objective reasonable person,
clearly inadequate for safe recycling of the generator's hazardous
secondary material, then the generator would not have met this
condition. However, EPA does not require nor expect the generator to
have specialized knowledge or expertise of the recycling process. We
also discuss in more detail how a generator can answer this question in
section VIII.C.2. of this preamble.
    As noted previously, we are codifying the questions with two
modifications. The first modification to the questions is language that
accommodates the inclusion of intermediate facilities within the
transfer-based exclusion. As discussed in section VIII.C. of this
preamble, if a generator sends hazardous secondary materials to an
intermediate facility where they are stored for longer than 10 days
prior to being transferred to a reclamation facility, the generator
will need to perform reasonable efforts for both the intermediate
facility and reclamation facility.
    The second modification is to the questions pertaining to
legitimate recycling activities. EPA acknowledges that one source of
confusion for commenters regarding the relationship between the
reasonable efforts condition and the legitimate recycling requirement
may have been the two questions pertaining to legitimacy (proposed
questions (D) and (E)) within the reasonable efforts preamble
discussion and the proposed legitimacy requirement at 40 CFR 261.2(g).
Questions (D) and (E) and the proposed regulatory language for
legitimacy did not share the exact same wording, although both concepts
were intended to be consistent. Furthermore, we understand the concern
commenters raised that questions (D) and (E) did not represent the
legitimacy ``factors to be considered'' that were proposed within 40
CFR 261.2(g). As a result, we have restructured the reasonable efforts
questions pertaining to legitimacy to read as a single question that
ensures that a reclamation facility receiving hazardous secondary
materials intends to legitimately recycle the hazardous secondary
materials. Because of changes to the legitimacy provision in this final
rule as compared to the March 2007 supplemental proposal, this question
now refers to the legitimacy requirement in Sec.  260.43 of today's
final rule.
Comments: Liability Related to Reasonable Efforts
    EPA proposed the reasonable efforts condition as a way for
hazardous secondary material generators to demonstrate that they met
their regulatory obligation to ensure that their hazardous secondary
materials, when transferred to a reclamation facility, would not be
discarded. Based on our assessment of good recycling practices and the
comments received, we believe that the reasonable efforts condition
reflects current industry best practices of auditing or assessing
reclamation facilities prior to entering into business relations; this
is done to minimize potential regulatory and liability exposures and to
demonstrate a commitment to environmental stewardship.
    We received many comments related to liability and the reasonable
efforts condition. Many commenters stated that making reasonable
efforts to evaluate a reclaimer is a good method for limiting future
liability and that many generators already employ some form of the
practice. These commenters largely supported the provision. Other
commenters expressed concern that the reasonable efforts condition is
an unnecessary requirement since existing incentives, such as economic
motivations and CERCLA liability, would cause a generator to perform
evaluations of reclaimers without being mandated as a condition of the
exclusion.
    Additionally, EPA received comments about whether satisfying the
reasonable efforts condition would sever a generator's regulatory
liability if, after being sent to a reclamation facility, its hazardous
secondary materials were discarded or involved in environmental damage.
Several commenters (namely from industry) asked that EPA clarify that
upon conducting a reasonable efforts evaluation of a reclamation
facility, a generator would not be liable for a reclaimer's subsequent
environmental violations or if a reclaimer's actions caused or
contributed to some environmental harm or damage. Many of these
commenters supported the codification of a reasonable efforts standard,
provided that liability would be severed upon meeting the condition.
Conversely, several commenters stated that generator liability should
be maintained into the future regardless of satisfying the condition.
In general, these commenters were concerned that hazardous secondary
material generators could subvert RCRA liability by conducting
incomplete and superficial evaluations of reclaimers, and that future
environmental damage would result at reclamation facilities. A few of
these commenters suggested that EPA clarify that a hazardous secondary
material generator would be held liable for violating the condition of
the exclusion into the future if it was shown that the generator did
not conduct a thorough assessment of the reclaimer.
EPA's Response: Liability Related to Reasonable Efforts
    EPA disagrees that the reasonable efforts condition is unnecessary
in light of economic forces or CERCLA liability, which may motivate
some generators to evaluate recyclers. We proposed the reasonable
efforts condition as a way for hazardous secondary material generators
to demonstrate that they are not discarding the hazardous secondary
materials when sending them to a third party for reclamation. The
language of the condition is intended to capture within the regulatory
text how

responsible generators currently inquire and make decisions about
recycling of hazardous secondary materials and how generators manage
potential liability and regulatory non-compliance risks. Several
commenters suggested that not all generators currently audit or
evaluate reclamation facilities despite having economic interests and
existing liability concerns. Analysis of the environmental problems
study also suggests that CERCLA liability alone is not enough to
prevent damage and that increased generator inquiry of reclamation
facilities may help avoid future cases of abandonment or discard,
residuals mismanagement, sham recycling, and improper management of
hazardous secondary materials and recycled products.
    By proposing the reasonable efforts condition, EPA intended to
maintain RCRA liability for any hazardous secondary materials that are
discarded. The condition clearly holds a generator accountable for
determining that its hazardous secondary materials will not be
discarded at a reclamation facility or any intermediate facility prior
to transferring such materials to the facility. If a generator does not
meet the condition, then the generator's hazardous secondary materials
would not be eligible for the transfer-based exclusion and would be
considered by EPA to be hazardous waste subject to the RCRA Subtitle C
controls from the point of generation.
    EPA did intend, however, that if the hazardous secondary materials
generator had satisfied the reasonable efforts condition and discard
subsequently occurred while hazardous secondary materials were under
the control of the reclamation or intermediate facility, then the
reclamation or intermediate facility, not the generator, would be
liable under RCRA. EPA acknowledges that meeting this condition will
not affect CERCLA liability. (See section XIII for more information on
CERCLA liability.) We recognize commenters' concern that in order to
satisfy the reasonable efforts condition and be released from RCRA
liability, hazardous secondary material generators could be tempted
into making incomplete evaluations of reclamation and intermediate
facilities. EPA believes that codifying an objective reasonable efforts
standard that all generators must meet in order to satisfy the
condition will alleviate this concern (see section VIII.C. of today's
rulemaking for more discussion). We also believe that specifying a
standard that hazardous secondary material generators must satisfy will
assist both regulatory agencies and the regulated community in
determining whether the condition of the exclusion has been met or
violated.
Comments: Relationship Between the Reasonable Efforts Condition and the
Legitimate Recycling Requirement
    EPA received a variety of comments on the relationship between the
condition that hazardous secondary material generators must make a
reasonable efforts inquiry of reclamation facilities and the
requirement that hazardous secondary materials must be legitimately
recycled. Several commenters stated that evaluating whether a reclaimer
meets the legitimacy criteria should be part of a reasonable efforts
inquiry to ensure that a generator's hazardous secondary materials are
legitimately recycled. 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. Furthermore,
several commenters (mostly from industry) stated that a reasonable
efforts condition is redundant since the proposed legitimate recycling
requirement in 40 CFR 261.2(g) ensures that hazardous secondary
materials transferred off-site are safely recycled.
EPA's Response: Relationship Between the Reasonable Efforts Condition
and the Legitimate Recycling Requirement
    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, that many responsible generators already use
existing legitimacy guidance 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 (see section VIII.E. for more information).
Comments: Periodic Updates to Reasonable Efforts
    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 secondary 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 updating
reasonable efforts. The suggested schedules ranged from annually to
every five years.
    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. The stated criteria for judging the level of risk
included facilities with lower financial health and the addition of
``new processing capabilities and when ownership changes.'' Another
generator requested EPA to ``suggest, and not require, the frequency of
periodic updates.''
EPA's Response: Periodic Updates to Reasonable Efforts
    EPA agrees with the comments stating that requiring generators to
conduct specific periodic updates of the reasonable efforts provision
is critical for ensuring that reclamation facilities continue to
properly and legitimately recycle 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 to regulators 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.
For these reasons, we are requiring that hazardous secondary material
generators update their reasonable efforts evaluation at least every
three years, at a minimum. Based on public comments, this appears to
represent general industry practice and to be within the 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.
Comments: Requiring Generators to Certify Reasonable Efforts
    EPA solicited comment on requiring hazardous secondary material
generators to certify that they made reasonable efforts prior to
arranging for transport of hazardous secondary materials to be
recycled. As discussed in the preamble to the March 2007 supplemental
proposal, the certification statement would be a form of documentation
necessary for each reclamation facility and would be signed and dated
by an authorized representative of the generator company. We also
provided certification language as an example.
    Several commenters including recyclers, all responding states but
one, and a few industry generators and associations, commented in favor
of requiring hazardous secondary material generators to certify that
they had met the reasonable efforts condition. All commenters that
responded regarding the example certification statement supported the
language. A few commenters reiterated that generators must certify
reasonable efforts for each reclamation facility and that certification
should not be necessary for RCRA Part B permitted facilities. One
commenter requested that the certification must be made ``prior to
implementing exempt operations.'' Another commenter believed that a
certification statement would improve the enforceability of the
reasonable efforts condition. A generator that currently audits its
waste facilities stated that ``a letter signed and dated by the
department manager is mailed to the audited facility stating the
results of the audit,'' and that the letter should act as a
certification. Another commenter suggested that given the large number
of facilities for which reasonable efforts are required, having a
company representative, as opposed to an ``authorized representative,''
sign and date a certification should be sufficient and would be less
burdensome. One recycler requested that the generator certification and
signature be built into the one-time notification that EPA is requiring
for the exclusion.
    A smaller number of comments from generators opposed the
certification requirement. A few generators found the certification
statement to be overly burdensome and stated that it would stifle the
use of third-party reclaimers. One generator, who currently audits
reclamation facilities, stated it could not certify the accuracy of
information prepared by third parties, nor could it certify responses
by reclamation facilities to questions (B) through (E), which EPA
discussed in the preamble. Another generator responded that without
further clarification as to the minimum requirements for satisfying
reasonable efforts, the generator could not certify that the condition
was met. A commenter also suggested that requiring certification of
reasonable efforts for reclamation facilities that recycle hazardous
secondary materials was unnecessary if certification is not required
for the storage, treatment, and disposal of hazardous waste.
EPA's Response: Requiring Generators To Certify Reasonable Efforts
    After evaluating the comments, EPA has concluded that certifying
the reasonable efforts provision is a necessary and minimally
burdensome requirement for ensuring that the reasonable efforts
condition is met prior to transferring the hazardous secondary
materials to a reclamation facility. We also strongly believe that
requiring the signature of an authorized representative of the
generator company, who can be any appointed company representative, is
critical for ensuring accountability for satisfying the condition. In
the event of an enforcement action, we believe that the certification
will lend support to hazardous secondary material generators needing to
prove that the reasonable efforts condition was met. Therefore, in
today's final rulemaking, we are finalizing a requirement that
hazardous secondary material generators must certify that reasonable
efforts were made for each reclamation and intermediate facility prior
to transferring hazardous secondary materials to such facilities.
    With respect to those commenters who opposed certification and
specifically argued that requiring such certification would stifle the
use of third-party auditors, it is our understanding that third-party
auditors do not generally draw any conclusions based on their audits,
but simply report the results. In addition, the reasonable efforts
condition requires that the hazardous secondary material generator
decide whether a reclaimer is acceptable. Therefore, we disagree with

those commenters who stated that requiring a certification would
constitute a significant new burden. Rather, EPA believes that
requiring a hazardous secondary material generator to certify the
reasonable efforts condition would provide them the flexibility to use
audits or other information necessary in certifying that the condition
of the exclusion was met. We find that the commenter example of an
existing practice of sending a letter with audit results to an audited
facility would need to include the certification language in 40 CFR
261.4(a)(24)(v)(C)(2) in order to meet the reasonable efforts
condition.
Comments: Documenting of Reasonable Efforts
    While EPA proposed that generators conduct reasonable efforts
before sending hazardous secondary materials to the reclamation
facility, we did not propose that documentation records must be kept of
such demonstrations. However, EPA requested comment on whether to
require hazardous secondary material generators to maintain
documentation at the generating facility demonstrating that the
reasonable efforts condition was satisfied prior to transferring the
hazardous secondary materials to a reclamation facility. No form of
documentation or format was specified, although EPA did cite audits as
one type of documentation that could be relevant. Additionally, EPA
requested comment on whether hazardous secondary material generators
should be required to maintain certification statements that reasonable
efforts were conducted for each reclamation facility to which the
generator transferred the hazardous secondary materials to be
reclaimed.
    A majority of commenters supported a requirement that generators
maintain documentation of reasonable efforts. A few commenters asked
that documentation be kept on-site, while a few commenters asked that
the documentation could be kept at a headquarters or other off-site
location. Other commenters specifically requested that EPA not specify
a location for the documentation. Commenters in favor of this
requirement stated that documentation would be necessary for showing
the basis for the reasonable efforts determination, as well as for
improving the enforceability of the condition. A few commenters
suggested that documentation be maintained for three years and one
industry commenter asked that EPA set a time requirement specifying how
long such documentation must be kept.
    On the other hand, a few commenters were opposed to a documentation
requirement. These commenters cited the confidential and proprietary