the tolling contractor for energy recovery.  In the first place, the
activity of burning for energy recovery is not eligible for the
exclusions in this rule.  In the second place, tolling exclusions must
meet the legitimacy criteria specified in 40 CFR 260.43; EPA has no
reason to believe that sham recycling is more likely under the tolling
exclusion than for other forms of recycling.  We also do not agree that
entering into such agreements to lower costs is a reason to bar tolling
arrangements from an exclusion; and we have no data that would indicate
that the existence of a tolling exclusion would discourage on-site
recycling. We see no reason to conclude that a generator of hazardous
secondary material would choose a tolling exclusion if an on-site
exclusion were feasible, or vice-versa, as some commenters suggested.
We would expect that generators would enter tolling arrangements in
situations where on-site recycling was not practicable because of
temporary capacity limitations or because the toll manufacturer had
specialized expertise needed for the manufacturing.  We also have no
information indicating that a tolling exclusion would discourage
attempts to reduce product or waste management costs.  We believe that
generators of hazardous secondary materials are the best judges of which
exclusion meets their economic and technical needs, assuming they are
eligible.

In response to the commenters who expressed concern about situations in
which the tolling contractor was unable or unwilling to recycle the
hazardous secondary material received from the toll manufacturer, we
note any such material is subject to the speculative accumulation
provisions of 40 CFR 261.1(c)(8).  If the tolling contractor fails to
comply with that provision, the excluded material becomes a solid and
hazardous waste, subject to full Subtitle C requirements. Similarly, if
either the toll manufacturer or the tolling contractor decides to
dispose of the hazardous secondary material rather than recycle it, the
exclusion would no longer apply and the material would have to be
managed under the RCRA hazardous waste requirements.  The notifications
and renotifications submitted by the tolling contractors and toll
manufacturers will allow the regulatory authorities to follow up in
cases where they have concern about whether a particular facility is
eligible for the exclusion.

We do not agree with the commenter who said that states would not be
able to determine whether the generator or recycler was managing the
excluded material as a valuable commodity when the other party to the
transaction was located in another state.  The Agency anticipates that
regulatory authorities will consult notifications and renotifications if
they have concerns about whether a facility is entitled to an exclusion.
 The regulatory authority would then examine the addresses contained in
the notification to ascertain the location of the tolling contractor or
toll manufacturer, after which it would request further information from
the facility about the other facility involved in the transaction.  If
this inquiry does not satisfy the concern, the state could request
additional information from the state in which the other facility is
located.  The state could also consult any certifications located in the
facility’s business records. These measures will enable states to keep
track of situations where generators and reclaimers are located in
different states.

In response to the suggestion for developing a standard tolling contract
to be approved by EPA, the Agency does not believe that a standard
contract would be sufficiently flexible to address all the
facility-specific circumstances and contingencies that must always be
considered when business contracts are prepared. Revising the standard
contract in the inevitable event of changing business practices would
also be impracticable.  Nor do we agree that allowing tolling agreements
only for a limited period, such as three years, is necessary.  We
believe that the information submitted in the notifications and
renotifications required under 40 CFR 260.42 and the certifications
required under 40 CFR 260.10 will allow regulatory authorities to
investigate whenever they have concerns about a particular tolling
arrangement. Such a case-by-case approach is preferable to standard
contract or a blanket time restriction.

We do not agree with the commenter who said that there would be no
legitimate interest in recycling hazardous secondary materials generated
through a tolling contract if the toll manufacturer bought ingredients
on the open market instead of obtaining them from the tolling
contractor. The tolling contractor could still have the desire and the
means to recycle the hazardous secondary material, even if it did not
supply the toll manufacturer with the ingredients.    Similarly, we do
not agree with the comment that the tolling contractor is unlikely to
have the capacity to recycle a hazardous secondary material generated
from a manufacturing process unless it had the capacity to conduct the
manufacturing process itself. Generally, manufacturing a product and
recycling residues from the manufacture of that product are different
operations conducted in different types of units.  It is quite possible
that either party may have capacity or a shortfall in capacity for
either operation.  At times the incapacity to conduct the manufacturing
is temporary, and the hazardous secondary material can still be
reclaimed at the tolling contractor's facility, if not immediately.  At
other times the hazardous secondary material in question may be one that
presents various opportunities for recycling, such as a solvent.

In response to the commenter with a series of questions about
hypothetical scenarios under a tolling arrangement, we note that
facilities desiring answers to such questions should consult the
appropriate regulatory authorities so that all appropriate site-specific
circumstances can be considered and any more stringent state
requirements can be taken into account.  Following is a general response
based on our best interpretation of this commenter's questions:

Proposal addresses the product, rather than the byproducts or residuals:
the commenter is incorrect. The tolling exclusion is designed to address
primarily the management of residuals from the manufacture of the
product, which is not made from secondary materials and is not
regulated.  Under the tolling exclusion, the residues from the
manufacturing process, if they are hazardous secondary materials, are
returned to the tolling contractor.

The toll manufacturer purchases the recycled material for resale, or
reclaims it himself - we assume that the commenter is referring to the
hazardous secondary material generated during the manufacturing process.
 Under this final rule, the tolling contractor must certify that it will
reclaim these hazardous secondary materials.  If the toll manufacturer
were to resell the materials, or reclaim them himself, they would no
longer be eligible for the tolling exclusion.

What if the toll manufacturer is operating under a variance from the
definition of solid waste that allows him to reclaim the hazardous
secondary material himself?  Can the tolling contractor then assign his
generator status to the toll manufacturer? If he does, would he need to
audit the toll manufacturer? Would not a variance procedure be a better
solution than our tolling exclusion?   We are not certain which variance
the commenter is referring to - it may be the proposed variance under 40
CFR 260.30(f) for material that is generated and reclaimed under the
control of the generator.  This proposed case-by-case determination was
not finalized in this rule. If the toll manufacturer is operating under
another variance under 40 CFR 260.30, the facility should contact the
appropriate regulatory authority to ascertain the interaction (if any)
between the variance and the tolling exclusion, or whether the facility
can choose between the variance and the exclusion.  For example, the
state is most likely to be the authority which issued the variance;
therefore, any questions concerning the variance should be directed to
the state. We do not believe that a variance process is preferable to a
self-implementing exclusion for a tolling arrangement, because the
requirements of the tolling exclusion are relatively simple and would
not require a case-by-case determination.

What if the tolling contractor recycles the hazardous secondary
materials and then accumulates waste residuals for disposal from this
recycling?  Would it need a RCRA storage permit after 90 days?
Materials destined for disposal are not eligible for the exclusions in
this rule.  Any residuals generated by the tolling contractor that are
destined for disposal would be subject to a hazardous waste
determination.  If they were classified as hazardous waste, the existing
generator requirements would apply, including the 90-day accumulation
period under 40 CFR 262.34.  After that period, waste would be subject
to requirements for the storage and disposal of hazardous waste.

What if the tolling contractor stores the excluded hazardous secondary
material for longer than the speculative accumulation period?  What
would be the date of generation? Would the tolling contractor have an
additional 90 days to dispose of the material? What if the tolling
contractor has a RCRA storage permit?   If a tolling contractor stores
the excluded hazardous secondary material received from the toll
manufacturer, the speculative accumulation requirements of 40 CFR
261.1(c)(8) would apply.  If the speculative accumulation period is
exceeded, the tolling contractor would generally not have another 90
days to accumulate the waste because it is not the physical generator of
the waste. We are unclear what the commenter means by "date of
generation.” If he is asking when the speculative accumulation period
starts, it begins when the tolling contractor receives the excluded
material from the toll manufacturer. If the tolling contractor has a
RCRA storage permit, it should contact the permitting authority to
ascertain the applicable requirements.

In response to the commenter who asked whether a tolling contractor
would lose a previous 40 CFR 261.4(a)(8) closed-loop exclusion (for
materials generated and reclaimed in the closed-loop) if  he received
recyclable spent solvent from an offsite toll manufacturer, we note that
facilities wishing to inquire about their eligibility for specific
exclusions should consult the appropriate regulatory authorities, so
that site-specific factors or more stringent state requirements can be
taken into account.  However, we also note that under this rule, the
contractor with a closed-loop exclusion will now be eligible for the
exclusion for hazardous secondary materials generated and reclaimed at
the generating facility. Materials received from another company would
not fit within these exclusions, but might fit within the tolling
exclusion if the restrictions of the exclusion are met.

TERMS USED IN THE EXCLUSION

The Agency does not agree that the term "toll contractor" is confusing,
or that it should be replaced with the term "generator.”  We believe
the certification language that we have added to 40 CFR 260.10 of this
rule makes it clear that the term refers to the entity contracting to
have manufacturing conducted and subsequently performing the recycling
of residuals pursuant to the tolling contract.  The term "generator" is
not appropriate because it is much less specific and could be
interpreted to refer to the toll manufacturer, since its operations
actually create the residue.

The Agency agrees that the suggested term "toll manufacturer" is more
accurate and has revised the definition in §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
§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 "virgin 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.

6.4 - Management requirements for hazardous secondary materials managed
under the control of the generator

6.4 - Summary

JURISDICTION OVER LAND-BASED STORAGE UNITS

Some commenters asserted that the Agency has no jurisdiction over
land-based production units in the mineral processing industry, or over
other generator-controlled storage involving recycling (0549-1, 0549-3,
0465-1, 0468-9, 0472-17, 0481-31,0481-34, 0481-30, 0481-39, 0481-40,
0481-42, 0481-44, 0537-6). Therefore, according to these commenters, EPA
cannot legally require containment for these units. Another commenter
said that the Agency has improperly excluded materials that should be
regulated and that the exclusions are inconsistent with decisions of the
D.C. Circuit. These cases show that EPA's exemption for materials that
will be recycled is statutorily impermissible or, at a minimum, entirely
unreasonable (0559-29).

STANDARDS FOR LAND-BASED STORAGE UNITS

Most commenters who addressed the storage issue 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.

Many commenters were opposed to allowing any land-based storage without
RCRA Part B permits or requirements similar to those found in such
permits, such as recordkeeping, siting requirements, technical,  design,
and operating  requirements, compatibility of materials, engineered
liner systems, secondary containment, leak detection measures, public
notice, inventory tracking and control, training, regular inspections,
soil or groundwater monitoring, corrective action, and/or financial
assurance (0092-16, 0098-36, 0457-15, 0457-46, 0470-5, 0470-7, 0479-14,
0479-16, 0479-21, 0479-37, 0482-3, 0482-13, 0482-14, 0488-19, 0489-4,
0489-5, 0489-17, 0490-2, 0495-14, 0501-3, 0507-3, 0507-5, 0507-11,
0531-7, 0532-7,  0538-14, 0539-4, 0539-8, 0543-1, 0543-5, 0543-6,
0543-56, 0562-1, 0562-4, 0563-6, 0558-0558-4, 0558-15, 0558-17, 0559-47,
0559-48, 0559-49, 0559-50, 0559-52, 0559-53, 0559-54, 0559-56, 0559-83).
Some commenters said that temporary land storage should be allowed for
recyclers (0208-3, 0536-10).

    One commenter said that generators should be required to maintain
the recyclability of their wastes (through storage methods). This
commenter also suggested requiring that generators store and recycle
material in equipment that is designed to prevent unauthorized releases
to the environment, inspected and maintained at necessary intervals, and
designed and operated to minimize the time the material is staged or
stored before recycling (0509-4).

Some commenters suggested technology-based standards for containment and
monitoring, and that generators be allowed to choose technology-based
standards for land-based units, with some generators choosing synthetic
liners and other choosing monitoring systems at the unit boundary, as
appropriate (0482-3, 0558-17).

One commenter said that no free liquids should be managed in land-based
units, and that surface impoundments and waste piles should only be
allowed in narrowly defined areas of the country (0538-14). Another
commenter said that the Agency should require at least a single liner
for land-based units or specify a maximum permeability for a clay liner
(0539-8).    One commenter said that land-based storage requirements for
hazardous secondary materials should be based on those developed for PCB
bulk product wastes under 40 CFR 761.65, since the risks posed by both
of these types of materials are similar (0521-6).

One commenter said that storage conditions for generators should be
limited to secondary containment and management to prevent contamination
of stormwater (0458-29).

One commenter suggested prohibiting recycling activities in land-based
units (0551-2). However, one commenter said that EPA should institute a
procedure for facilities to demonstrate that land-based storage is
appropriate and legitimate, based on the specific properties of the
hazardous secondary material (0544-2, 0544-3).

Some commenters suggested that EPA should provide a specific definition
of "contained" in the final rule (0476-6, 0488-12, 0489-8, 0516-1,
0536-4, 0538-14, 0521-6, 0562-1). Other commenters agreed with the
Agency's proposed approach of not requiring specific performance
standards for land-based storage units.  These commenters generally
believed that the "contained" requirement should be determined on a
case-by-case basis, taking into consideration local conditions and
specific measures employed by the facility (0461-7, 0463-5, 0463-6,
0466-5, 0481-48).

One commenter said that our proposed "contained" requirement was
unnecessary because units with unacceptable risks of releases could be
addressed through CERCLA and similar remedial authorities in most states
(0459-4).

A few commenters suggested that hazardous secondary materials managed in
units complying with state regulatory programs to address releases
should be considered contained (0465-1, 0481-5, 0481-49, 0526-11,
0528-8). Another commenter said that the Agency should recognize in its
regulations that the "contained" requirement does not apply when an
authorized state has adopted its own RCRA determination about "discard"
from a land-based production unit (0528-8).

One commenter said that EPA should substitute the term "stored" for
"managed" in both the generator-controlled and transfer-based
exclusions, to avoid the inference that land-based production operations
were regulated (0481-35, 0481-37, 0481-39).

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,” injection wells,” and "land treatment facilities" was
not necessary for the proposed exclusion, since these management units
are clearly inappropriate for hazardous secondary materials that are
reclaimed (0465-1, 0538-14). Furthermore, some commenters also noted
that Subtitle C defines these terms waste-centrically (i.e., as a unit
that handles "waste" in one way or another) (0465-1, 0490-1). This could
create confusion because a hazardous secondary material would not, by
definition, be "managed" (or "stored") in one of these "waste" units.

One commenter suggested adding drip pads and other units such as
concrete decks to EPA's proposed definition (0470-6).  Other commenters
objected to EPA's reference in the proposed preamble to "sumps" as
examples of surface impoundments, since both of these terms are
separately defined in 40 CFR 260.10 (0472-18, 0486-7, 0486-27, 0516-7,
0491-20).

STORAGE STANDARDS FOR NON-LAND-BASED UNITS

Some commenters said that storage standards for non-land-based units
should be similar to those required for RCRA permitted facilities.
Standards should include routine inspections, recordkeeping, employee
training, contingency planning, public notice, tank standards with
certification, siting, corrective action, and closure requirements
(0457-6, 0479-7, 0457-15, 0479-21, 0479-37, 0482-4, 0507-3, 0551-2.
Another commenter suggested requiring labeling, storage time limits with
documentation of accumulation start dates, closed, sturdy, leak-proof
containers, and tank standards (0462-15).  One commenter suggested
labeling and marking accumulation start dates to help with legitimacy
and speculative accumulation determinations (0563-5). Still another
commenter suggested requiring labeling and storage in sturdy, leak-proof
containers for all hazardous secondary materials, including
characteristic sludges, byproducts and feedstocks, even for SQG and
CESQG sites (0462-31).  Two commenters requested performance standards
for storage in containers and tanks for hazardous secondary materials
stored under the control of the generator (0495-22, 0507-5, 0507-11).
One commenter expressed concern that the generators eligible for our
exclusions would no longer need to comply with the emissions control
requirements of 40 CFR Subparts AA, BB, or CC. According to this
commenter, the requirements of 40 CFR Subpart DD would not be adequate
because these requirements only apply to sites considered major sources
under the Clean Air Act (0482-3). Another commenter suggested minimum
standards for tanks, containers, or buildings used as recycling units,
with certification that any recycling units meet the standards (0551-2).
Another commenter suggested requiring that tanks and containers be in
good condition, compatible with the hazardous secondary material to be
stored, secondary containment, weekly inspections, and air emissions
controls under 40 CFR Subparts AA, BB, and CC of Part 264 (0558-3,
0558-1414). Another commenter said that materials stored in
non-land-based should also have a containment requirement, partly
because of the danger of releases of volatile organic compounds
(0470-7). Another commenter suggested accumulation in DOT containers
suitable for shipment or tanks with secondary containment (0536-4).

Other commenters supported the Agency's proposed approach of not
requiring detailed performance standards for hazardous secondary
materials stored in non-land-based units (0461-7, 0468-9, 0471.2-14,
0471.2-53, 0476-7, 0481-46, 0485-8, 0486-28, 0492-22). These commenters
often indicated that hazardous secondary materials are usually stored in
the same manner and containers as other raw materials or products, so
that there is no element of discard associated with these materials.

RELEASES

In the March 2007 supplemental proposal, the Agency stated that
hazardous secondary materials that remain contained in a unit 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 said that the terms "significant" or "contained"  were
too subjective (0442-5, 0467-6, 0516-8, 0521-6). One commenter said the
failure to promulgate a definition of "contained" renders our exclusion
impermissibly vague and unenforceable, leaving it up to inspectors to
determine when a release is "immediately" cleaned up, or what "cleaned
up" actually means (0558-16).  Another commenter said that in addition
to the enforceability issue, the lack of a standard for containment is
inconsistent with past rulemakings for many wastes (0559-55).

One commenter suggested an explicit statement in the rule (not just the
preamble) that the exclusion is voided with respect to materials that
are actually released into the environment (0098-4, 0470-7). One
commenter said that the Agency should recognize that "de minimis" losses
of recyclable materials do not constitute discard (0526-12), and another
commenter was concerned that our failure to define "significant"
releases could lead to covering minor releases such as evaporation
(0442-5). However, another commenter said that the term "contained"
should be defined to prohibit any release to land, water, or air
(0543-51, 0543-55).

One commenter 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. This commenter 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
(0558-15).  One commenter said that the magnitude of a release should
have no bearing on the antecedent (sic) determination of whether
hazardous secondary material was discarded during the time such material
remained in the unit. This commenter said that a significant,
large-volume release could be a result of a catastrophic failure of the
unit. Such a failure could occur even though the reclaimer still
considered the hazardous secondary material to be a valuable product
(0476-5).  Another commenter said that a "significant" release could
occur but be completely controlled in a liner or as part of a different
recovery system; such a release would not mean that the material was not
"contained" (0481-50). Another commenter said that in cases of a single,
isolated release, the Agency should consider the totality of events and
circumstances that led to the release and what actions have been taken
to prevent further releases (0478-14). Still another commenter said that
a significant release does not mean that a secondary material is not
contained.  This commenter said that a "contained" determination should
include a consideration of all factors involved, including local
conditions and specific measures employed (0481-5).  Another commenter
asked EPA to clarify whether the loss of an exclusion because of a
release would apply to the material released to the environment, or to
the material still being stored (the commenter urged the first
interpretation) (0491-18).

One commenter asked EPA to clarify that hazardous secondary materials
that are released and then recovered are not solid wastes (0179-31).
Similarly, another commenter asked EPA to state that if spilled
hazardous secondary material can still be recovered from a spill cleanup
residue, the residue should be considered excluded from the definition
of solid waste. This commenter also asked whether the exclusion ceased
as soon as the facility discovers that a release has occurred, or was it
retroactive to when the release actually began (which might be difficult
for the facility to discover). The commenter also said that if a release
of hazardous secondary material contaminates environmental media, only
contaminated media that is determined to contain a hazardous waste
should be subject to regulation as a hazardous waste (0491-18).

One commenter said that the Agency had stated that releases from a
land-based unit of a material that is not a hazardous secondary material
will not affect the storage status of that material (p. 14186, 3rd
column, para. 1).  According to this commenter, this policy would make
it difficult to address the situation where hazardous secondary
materials are stored with other materials, and a release of the mixed
materials occurs (0532-7).

OTHER REQUIREMENTS

Some commenters said that no reporting or recordkeeping requirements
were necessary for hazardous secondary materials reclaimed under the
control of the generator (0471.2-3, 0471.2-8, 0471.2-39, 0471.2-47,
0472-20, 0473-4, 0486-28, 0491-19, 0529-3, 0549-4). These commenters
generally said that ordinary business records were sufficient to provide
any documentation needed in connection with the exclusion, and that
additional paper work could discourage recycling.

However, other commenters suggested recordkeeping requirements on the
nature and quantity of the hazardous secondary materials and legitimate
recycling (0507-11, 0558-8, 0559-42). One commenter believed that the
same recordkeeping requirements proposed under the transfer-based
exclusion should also apply under the generator-controlled exclusion
(0563-3).

One of these commenters suggested a paper trail of shipping papers
signed by all three parties to each shipment of hazardous secondary
materials off the site of a generator to help prevent discard (0495-21).

Another commenter said that weekly or monthly documentation of the
amount of hazardous secondary materials accumulated and recycled, the
method of recycling, and specifications for the recycling process would
be helpful in an enforcement action (0489-8). One commenter suggested
requiring generators and recyclers to demonstrate compliance with
speculative accumulation requirements (0563-3). Still another said that
facilities storing hazardous secondary materials in land-based units
should be required to maintain an inventory of the date and amount of
materials placed in the units, to assist with legitimacy and speculative
accumulation determinations (0563-6).

Some commenters said that no further performance-based requirements were
necessary to demonstrate absence of discard (0476-7, 0485-8, 0486-28,
0486-29, 0491-19, 0492-22, 0485-8).  However, another  commenter
suggested that EPA clarify how much hazardous secondary material must be
recycled before the materials are considered discarded, possibly by
examining the percent of material recycled in conjunction with the value
of the recyclable material. For example, a liquid waste may have several
phases, only one of which will be recycled.  Sometimes the phase
separation may be performed by an intermediate facility or a recycler
rather than a generator (0509-3). Another commenter suggested adopting
requirements of 40 CFR 262.34 for materials accumulated prior to on-site
recycling similar to the satellite accumulation provisions, with a
maximum quantity of waste and/or time and storage conditions. This
commenter also suggested changing 40 CFR 261.5 so that only treatment
residuals from on-site recycling are counted toward generator status.
According to this commenter, this could ultimately affect the amount of
waste that could be disposed of in Subtitle D landfills without meeting
40 Part 268 land disposal restriction universal treatment standards
(0470-9).

Another commenter objected to EPA's request (on p. 14187, 2nd column of
the March 26, 2007 proposal) that anyone suggesting performance
standards for managing hazardous secondary materials should "propose" a
technical rationale for such recommendations and provide suggestions for
regulations (0532-8).

6.4 - Response

JURISDICTION OVER LAND-BASED STORAGE UNITS

Comments concerning EPA's jurisdiction over certain kinds of land-based
storage are addressed in sections <IP_ADDRESS>, 2.1.2, and 13.1 of this
response to comments document.

STANDARDS FOR LAND-BASED STORAGE UNITS

This rule finalizes an exclusion for hazardous secondary materials
reclaimed under the control of the generator. If managed according to
the restrictions of the exclusion, these materials are not discarded.
For this reason, the Agency has decided not to add performance standards
or other detailed requirements for managing hazardous secondary
materials that are reclaimed under the control of the generator
(§§261.2(a)(ii)and 261.4(a)(23)).  Such standards would not be
appropriate for materials that are managed as valuable products destined
for recycling.

Specifying further storage standards or engineering conditions, such as
secondary containment, liners, or lead detection systems, is not needed
to determine whether hazardous secondary materials are being discarded.
The restrictions on the generator-controlled exclusion in this rule are
linked to defining the act of discard.  They do not specify a particular
technology that may not be appropriate for all generators or reclaimers.
Under today's rule, regulatory authorities can determine whether such
materials in a unit are contained by considering all site-specific
circumstances. For example, local conditions can greatly affect whether
hazardous secondary materials managed in a surface impoundment leak out
of the unit and cause damage, and, therefore, whether the materials in
the are 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.  The Agency believes that this
approach is preferable to promulgating a definition of "contained" that
may not be related in all cases to whether a hazardous secondary
material is being discarded.

However, we disagree with the commenter who said that a "contained"
requirement was unnecessary because releases could be addressed through
CERCLA and similar remedial state authorities.  A hazardous secondary
material, if it is not contained and is released, has been discarded and
is a solid and hazardous waste which could pose significant
environmental harm before it could be addressed through remedial action.
 We are therefore retaining our proposed restriction that all hazardous
secondary materials generated and reclaimed under the
generator-controlled exclusion must be contained.

We do not agree with the commenter who said that recycling in land-based
units should be prohibited.  We do not believe such recycling
constitutes discard, as long as the units are contained.  Nor do we
believe that the Agency should institute a case-by-case procedure for
the approval of land-based storage.  We believe that the notifications
submitted by generators and reclaimers are sufficient to allow
regulatory authorities to investigate facilities if they have concerns
about whether land-based storage is contained at a particular facility.

We also do not agree with those commenters who said that hazardous
secondary materials should always be considered "contained" if they are
managed in compliance with state regulatory programs to address
releases. 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. In response to the commenter who mentioned state
determinations about land-based production units, we note that any
facility wishing to ascertain the regulatory status of its units should
always contact the appropriate regulatory authority. In almost all
cases, that authority will be the state where the unit is located.

We do not agree with the commenter who suggested substituting the term
"stored" for "managed" in the generator-controlled exclusion and the
transfer-based exclusion (to avoid the inference that land-based
production operations were regulated). In addition to storage of
hazardous secondary materials in land-based units, such materials are
sometimes reclaimed in such units. However, we agree that land-based
production units are not regulated, and we have so stated in the
definition “land-based unit” at 40 CFR 260.10.  We have not changed
references to "management" of hazardous secondary materials in 40 CFR
261.4(a)((24) because some of the requirements in that section are
generally applicable to all of the activities conducted under the
exclusion, not to any particular activity such as storage.

DEFINITION OF "LAND-BASED UNIT"

EPA agrees with the commenters who said that our definition was
confusing in its inclusion of certain units that are separately defined
or not generally associated with hazardous secondary materials
recycling. We do not agree with the commenter who suggested inclusion of
additional industry-specific units, such as drip pads or concrete decks,
because it is not possible to include all such units in our definition.
For this reason, in the final rule we have defined "land-based unit" in
40 CFR 260.10 as an area where hazardous secondary materials are placed
in or on the land before recycling.  This definition does not include
land-based production units.

STORAGE STANDARDS FOR NON-LAND-BASED UNITS

EPA 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 on a case-by-case basis, by considering all site-specific
circumstances.

However, we also believe that to clarify this approach and facilitate
its implementation, it is appropriate to specify that hazardous
secondary materials that are generated and reclaimed under the control
of the generator and managed in non-land-based units must be contained,
similarly to such materials that are stored in land-based units. This
simply states clearly that in all cases hazardous secondary materials
must be contained to be not discarded.  We have revised the language of
40 CFR 261.4(a)(23)(i) accordingly.

In response to those commenters who mentioned air emissions controls, we
do not believe that such standards are appropriate for hazardous
secondary materials that are not solid wastes, but rather are handled as
valuable products, Of course, facilities which manage hazardous
secondary materials may be subject to standards under the Clean Air Act
which regulates air emissions from stationary and mobile sources.

In response to the commenters who suggested marking and labeling for
accumulation times, we note that under this exclusion facilities
managing hazardous secondary materials are subject to the speculative
accumulation provisions of 40 CFR 261.1(c)(8). We are not requiring
specific labeling or records to monitor compliance with speculative
accumulation because we believe any requirement would be duplicative of
the existing 40 CFR 261.1(c)(8), which already provides that "a material
is not accumulated speculatively, however, if the person accumulating it
can show that the material is potentially recyclable and has a feasible
means of being recycled; and that-during the calendar year (commencing
on January 1)-the amount of material that is recycled, or transferred to
a different site for recycling, equals at least 75 percent by weight or
volume of the amount of that material accumulated at the beginning of
the period." Furthermore, we did not propose any changes to the
speculative accumulation provision in our March 2007 supplemental
proposal.  We also did not propose the changes suggested by one
commenter to the existing regulatory requirements for SQG and CESQG
sites or for characteristic sludges and by-products being reclaimed.
Such changes would therefore be outside the scope of this rulemaking.

In response to the commenters who suggested requiring regular
inspections, we are not requiring such inspections because we believe
the restriction that hazardous secondary materials must be contained
achieves the same objective. For example, an acidic hazardous secondary
material undergoing reclamation could be stored in a tank that
experienced a failure. A facility might fail to monitor the structural
integrity of the tank, as most product tanks are monitored, or the tank
might not be constructed to contain acidic hazardous secondary
materials, causing a significant release of such materials into the
environment. The unit itself would consequently be considered a
hazardous waste management unit because the hazardous secondary
materials were not being managed as a valuable raw material,
intermediate, or product, as evidenced by the failure to monitor it for
structural integrity, resulting in the release. Thus, the unit and any
remaining waste would be subject to Subtitle C controls because the
hazardous secondary materials in the unit have been discarded and were
not contained. In addition, any of the released materials that were not
immediately recovered would also be considered discarded and, if
hazardous, subject to appropriate federal or state regulations and
applicable authorities. Thus, to be excluded from the definition of
solid waste, the facility has an obligation to manage the material as it
would any raw material, intermediate, or product because of its value.
This includes, for example, operating and maintaining storage units in
the same manner as product units. In the above example, whether by
mismanagement of the hazardous secondary materials or by storing acidic
materials in a tank not constructed to handle them or because of the
failure to monitor the structural integrity of the unit, the result is
that the unit would come under Subtitle C regulation.

In response to those commenters who suggested contingency planning,
emergency response requirements, or standards for employee training, we
are not requiring such measures because they do not directly determine
whether a material is discarded (e.g., a generator could have a
contingency plan but still be discarding its materials). Furthermore, we
note that hazardous secondary materials excluded under today's rule may
remain subject (or become subject) to requirements under other statutory
programs. For example, generators, transporters, intermediate facilities
and reclaimers may be subject to regulations developed under:

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

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

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

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

RELEASES

The Agency does not agree with those commenters who said that a more
specific definition of "contained" is necessary. Under today's rule,
members of the regulated community and regulatory authorities can
determine whether hazardous secondary materials 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 leak out of the unit and cause damage,
and, therefore, whether materials in the unit are 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. The
Agency believes that “contained” is actually a straightforward and
simple concept that can be applied successfully to the wide range of
materials and units covered by this exclusion.  The Agency believes that
this approach is preferable to promulgating a definition of "contained"
that may not be appropriate in all cases to determine whether a
hazardous secondary material is being discarded.

In response to the commenter who noted that this approach is
inconsistent with past rulemakings, we note that some of the waste
stream-specific storage standards mentioned by the commenter (e.g., for
spent materials generated within the mineral processing industry or for
hazardous secondary materials used to make zinc fertilizers) may not be
appropriate for some types of materials managed under an exclusion
covering a wide variety of materials.  As the commenter acknowledged,
some other exclusions promulgated by the Agency in 40 CFR 261.4(a) have
general storage standards (e.g., "must be managed to prevent releases").
 EPA does not agree that this general standard is very different from a
requirement that hazardous secondary materials must be "contained.”
Generally, such material is "contained" if it is placed in a unit that
controls the movement of the hazardous secondary material out of the
unit and prevents the material from being released into the environment.
 This restriction supports EPA's determination that materials managed in
this manner are not discarded.

As commenters noted, a tank or a surface impoundment in good condition
may infrequently  experience small ("de minimis") releases, a small,
isolated release, or minor evaporation resulting from normal operations
of the facility.  As another commenter noted, sometimes a material may
escape from primary containment and may be captured by secondary
containment or some other mechanism that would prevent the material from
being released to the environment. In that case, the unit would retain
its exclusion from RCRA hazardous waste regulation and the hazardous
secondary materials in the unit would still be excluded from the
definition of solid waste, even though any such materials that had been
released would be considered discarded if not immediately recovered and
would be subject to appropriate regulation. The Agency does not agree
with those commenters who said that any release whatsoever should always
invalidate the exclusion from the definition of solid waste, because
some types of releases may be consistent with managing a hazardous
secondary material as a valuable product.  One specific example of
"contained" hazardous secondary materials could be furnace bricks
collected from production units and stored on the ground in walled bins
before being used as feedstocks in the metals production process. If
there were very small releases from the walled bins due to precipitation
runoff, such releases would not cause the storage bins to be subject to
Subtitle C controls.  We agree with the commenter who said that a
"contained" determination should include a consideration of all factors
involved, including local conditions and specific measures employed.

Several commenters asked about the regulatory status of hazardous
secondary materials remaining in a storage unit after a release from
such a unit. In the event of a release from a unit, the hazardous
secondary materials that remain in the unit may or may not meet the
terms of the exclusion. They would be considered solid wastes if they
are not managed as a valuable raw material, intermediate, or product,
and as a result, a "significant" release from the unit were to take
place. If such a significant release were to occur, the hazardous
secondary materials remaining in the unit would be considered solid and
hazardous wastes and the unit would be subject to the appropriate
hazardous waste regulations. For example, an acidic hazardous secondary
material undergoing reclamation could be stored in a tank that
experienced a failure. A facility might fail to monitor the structural
integrity of the tank, as most product tanks are monitored, or the tank
might not be constructed to contain acidic hazardous secondary
materials, causing a significant release of such materials into the
environment. The unit itself would consequently be considered a
hazardous waste management unit because the hazardous secondary
materials were not being managed as a valuable raw material,
intermediate, or product, as evidenced by the failure to monitor it for
structural integrity, resulting in the release. Thus, the unit and any
remaining waste would be subject to Subtitle C controls because the
hazardous secondary materials in the unit have been discarded and were
not contained. In addition, any of the released materials that were not
immediately recovered would also be considered discarded and, if
hazardous, subject to appropriate federal or state regulations and
applicable authorities. Thus, to be excluded from the definition of
solid waste, the facility has an obligation to manage the material as it
would any raw material, intermediate or product because of its value.
This includes, for example, operating and maintaining storage units in
the same manner as product units. In the above example, whether by
mismanagement of the hazardous secondary materials or by storing acidic
materials in a tank not constructed to handle them or because of the
failure to monitor the structural integrity of the unit, the result is
that the unit would come under Subtitle C regulation because a
significant release occurred due to failure to manage the material as a
valuable product, raw material, or intermediate.

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, would cause significant damage. Any one
release may not be significant in terms of volume. However, if the cause
of such a release remains unaddressed 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, would cause a significant environmental
impact. Similarly, a surface impoundment with a slow, unaddressed leak
to groundwater could 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, 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.

EPA does not agree with the commenter who said that the magnitude of a
release should have no bearing on the regulatory status of hazardous
secondary materials remaining in the unit after the release. The
magnitude of the release is one of the factors that the regulatory
authority should take into account when making this determination,
although it may not be the sole determining factor.

In response to the commenter who asked whether the exclusion would cease
when the release was discovered or would be retroactive to when the
release actually began, the Agency believes that any loss of an
exclusion would generally date from when the release was discovered
(since it might not be possible to ascertain when the release began.) We
generally agree that hazardous secondary materials that are released,
then immediately recovered and subsequently  recycled in a timely
manner, are not solid wastes, and that only contaminated media that are
determined to contain a hazardous waste should be subject to regulation
as a hazardous waste. We do not agree with the commenter who suggested
changing our regulations to specify that any hazardous secondary
materials that are released and sent for disposal are discarded.  Such a
change is not necessary because the exclusions in this rule only apply
to hazardous secondary materials that are reclaimed.  We do not
understand the commenter who quoted the Agency as stating (on p. 14186,
3rd column, para 1) that releases from a unit of a material that is not
a hazardous secondary material will not affect the storage status of
that material.  The Agency agrees with the commenter that a release of
hazardous secondary materials mixed with other materials should be
considered a release of the hazardous secondary materials.

OTHER REQUIREMENTS

The Agency does not agree with the commenter who suggested that all
recordkeeping requirements under the transfer-based exclusion should
also apply to the generator-controlled exclusion.  We believe that these
requirements are not appropriate for situations where the generator
retains control over, and responsibility for, the hazardous secondary
materials that are reclaimed at its facility, by the same company, or
through a tolling contract.  In these cases, the recordkeeping is not
necessary to demonstrate lack of discard. For the same reason, we
disagree with the commenters who suggested a paper trail of shipping
papers or documentation about the nature and quantity of hazardous
secondary materials and legitimate recycling.  In response to commenters
arguing that no reporting or recordkeeping is necessary, we note that
the notifications and renotifications submitted by generators and
reclaimers under this exclusion are necessary to provide effective
oversight for the exclusion.

Regarding the comments concerning documentation of accumulation times,
inventories, and demonstration of compliance with speculative
accumulation requirements, we are not adopting these suggestions because
they would duplicate existing 40 CFR 261.1(c)(8), which already provides
that "a material is not accumulated speculatively, however, if the
person accumulating it can show that the material is potentially
recyclable and has a feasible means of being recycled; and that-during
the calendar year (commencing on January 1)-the amount of material that
is recycled, or transferred to a different site for recycling, equals at
least 75 percent by weight or volume of the amount of that material
accumulated at the beginning of the period."  Concerning the comment
requesting documentation of the recycling method and specifications for
the recycling process, we are not imposing these requirements because
they are not directly related to a determination of discard.  In
addition, regulatory authorities can use the notifications and
renotifications submitted by generators and reclaimers to contact
particular facilities if the authorities need such information.

In response to the commenter who suggested that the Agency clarify how
much hazardous secondary material must be recycled before the material
is considered discarded (e.g., when a liquid waste undergoes phase
separation), we note that such determinations must necessarily be made
on a case-by-case basis by using the legitimacy provisions of 40  CFR
260.43. If the recycling is not legitimate, the material is discarded.
In response to the commenter who suggested imposing the generator
requirements of 40 CFR 262.34 for materials accumulated before on-site
recycling, we do not believe that these requirements are appropriate for
hazardous secondary materials that are handled as valuable products that
are destined for recycling. We also did not propose to change the
requirements at 40 CFR 261.5 for conditionally exempt small quantity
generators, as suggested by this commenter. Such changes would therefore
be outside the scope of this rulemaking.

In response to the commenter who objected to EPA's request for
"proposals" of technical rationales, the commenter has misinterpreted
the Agency's suggestion.  EPA was requesting that commenters who
submitted suggestions for additional management requirements accompany
these suggestions with technical rationales for the suggestions. In this
way, the Agency can more effectively evaluate the suggestions, decide
whether to adopt them, and respond to comments.

6.5 - Enforcement of the exclusion for hazardous secondary materials
managed under the control of the generator

6.5 - Summary

Some commenters said that RCRA enforcement action should not be
retroactively applied to entities that manage hazardous secondary
materials in good faith, after which the materials are subsequently
mishandled, either because of a minor violation by the generator or
violations by subsequent handlers (0048-7, 0458-33, 0481-113, 0529-6).
Another commenter, however, said that violations of the conditions or
restrictions of the exclusions should lead to hazardous secondary
materials being considered solid and hazardous wastes from the time they
were generated or from the time the violation occurred (0457-14). Some
commenters asked EPA to clarify its enforcement policy for "downstream"
mismanagement of recycled materials (0069-1, 0457-14), or expressed
concern that such mismanagement would be difficult to enforce (0092-1).

Some commenters said that any enforcement action or loss of an exclusion
should be based on violations causing actual environmental harm or
threat, rather than paperwork violations (0458-33, 0467-15, 0491-11,
0491-12, 0491-14).

One commenter requested that the Agency clarify its application of
enforcement discretion to  speculative accumulation and the requirement
that land-based units be contained (0467-15).

One commenter asked the Agency to clarify its policy regarding the
burden of proof in an enforcement action (0069-1). Another commenter
objected to our statement in the October 2003 proposal that in the case
of an enforcement action, a respondent who claimed that a material was
excluded had the burden of proof to demonstrate that the material had
been managed in a manner that maintained the exclusion. According to
this commenter, if the Agency concludes that a material has been
discarded, EPA has the burden of proving this in the context of an
enforcement action. (0197-17).

One commenter stated that the standards applicable to the
generator-controlled exclusion, principally speculative accumulation,
would be "standards the facility imposed upon itself" (57 FR 14188).
According to this commenter, the potential for litigation concerning
speculative accumulation, releases, and other issues would be great
(0532-9).

Some commenters expressed concern about the ability of regulatory
authorities to determine eligibility for, or compliance with, the
exclusions in this final rule.  Some commenters expressed concern about
reduced oversight making prevention of releases more difficult (0462-11,
0462-13, 0530-4). One commenter objected because the rule places no
limits on the number of times the material can be moved, or geographical
limitations on how far the material can be transported (0130-8). Some
commenters said that it might not be possible to track the whereabouts
of hazardous secondary materials (0076-7, 0084-8, 0130-8, 0186-13,
0213-1, 0530-4, 0536-1). Other commenters expressed doubt that
regulatory authorities would be able to ascertain whether recyclers were
qualified (0171-12, 0186-13).

Still another commenter said that EPA should explicitly state that
agencies have authority to inspect and verify that facilities meet the
conditions of the exclusions (0470-5). Another commenter said that the
Agency should clearly specify that all releases of hazardous secondary
materials are subject to RCRA regulations (0538-10).

One commenter stated that states did not have sufficient numbers of
enforcement personnel to provide oversight of hazardous waste
facilities, let alone facilities that would be excluded under this rule.
 This commenter was also dubious about the value of self-implementation
of the exclusions (0564-3, 0564-9, 0564-16). Another commenter urged
environmental authorities to be as diligent in their compliance
inspections of recyclers as they are for commercial TSDFs (0457-36).

6.5 - Response

In response to those commenters who addressed our enforcement criteria,
especially for retrospective liability, we note that the criteria are
explained in sections VII, VIII, and IX of the preamble of this final
rule. Specifically, we note that hazardous secondary materials
transferred to a third party for the purpose of reclamation are excluded
from RCRA Subtitle C regulation under certain conditions and
restrictions. If a hazardous secondary material generator fails to meet
any of the above-described conditions and restrictions that are
applicable to the generator, then the hazardous secondary materials
would be considered discarded by the generator and would be subject to
the RCRA Subtitle C requirements from the point at which such material
was generated. This approach is long-standing EPA policy, which we did
not propose to amend in our March 26, 2007 supplemental proposal.  In
addition, if a reclaimer or an intermediate facility failed to meet the
conditions, then the hazardous secondary materials would be considered
discarded by the reclaimer or intermediate facility and would be subject
to RCRA Subtitle C requirements from the point at which the reclaimer or
intermediate facility failed to meet a condition or restriction, thereby
discarding the material.  However, we also note that the failure of the
reclaimer or intermediate facility to meet the conditions or
restrictions of the exclusion does not mean that the hazardous secondary
material was considered waste when handled by the generator, as long as
the generator can adequately demonstrate that it has met its
obligations, including the obligation under 40 CFR 261.4(a)(24)(v)(B) to
make reasonable efforts to ensure that the hazardous secondary material
will be recycled legitimately and properly managed. A hazardous
secondary material generator that met its reasonable efforts obligations
could, in good faith, ship its excluded materials to a reclamation
facility or intermediate facility where, due to circumstances beyond its
control, they were released and caused environmental problems at that
facility. In such situations, and where the generator's decision to ship
to that reclaimer or intermediate facility is based on an objectively
reasonable belief that the hazardous secondary materials would be
reclaimed legitimately and otherwise managed in a manner consistent with
this regulation, the generator would not have violated the terms of the
exclusion.

The Agency notes that such determinations would only be for the purposes
of determining compliance with the exclusions in this final rule and
would not affect liability under CERCLA. For further discussions of
liability under RCRA and CERCLA, see sections 7.8 and 10.3 of this
response to comments document.

EPA strongly disagrees with those commenters who suggested that any
enforcement action or loss of an exclusion should be based on violations
causing actual environmental harm or threat, rather than paperwork
violations.  We note that the requirement to provide notifications is
not a condition of the exclusions. Thus, failure to comply with this
requirement does not affect the excluded status of the hazardous
secondary materials. However, violations of other recordkeeping
requirements may endanger the status of the exclusion, and failure to
submit a required notification may subject the respondent to an
enforcement action as a violation of RCRA. In our view, these
requirements are necessary to demonstrate lack of discard, and failure
to comply with these provisions constitutes a potential threat to the
environment.  Without these requirements, regulatory authorities and the
regulated community would not be able to assure themselves of the status
and whereabouts of hazardous secondary materials and there would be a
greater possibility of releases.

In response to the commenter who asked that we clarify our enforcement
discretion policy with respect to releases and violations of the
speculative accumulation requirements, we note that under the Agency's
enforcement discretion policy, all enforcement actions are taken on a
case-by-case basis after taking into account all circumstances that are
relevant to the particular facility.  All generators, reclaimers and
intermediate facilities should make every attempt to comply with the
containment requirement and the speculative accumulation provisions.  If
a facility needs additional time to accumulate hazardous secondary
materials, the owner or operator may apply for a variance under 40 CFR
260.30(a).

	In response to the commenter who objected to our statement in the
October 2003 proposal regarding the burden of proof in an enforcement
action, we note that the applicable burdens of proof and evidentiary
standards in EPA's administrative cases are discussed in In Re: General
Motors Automotive - North America, 13 E.A.B, _________, slip opinion pp.
70-74 (EAB 6/20/08)(found at the EAB's website: epa.gov/eab). That
discussion also notes that "parties claiming the benefits of an
exception to a broad remedial statutory or regulatory scheme have the
burden of proof…. to show that they meet the terms of the
exception.” Further, EPA's regulations at 40 CFR 261.2(f) provide that
the person claiming an exclusion must provide appropriate documentation
to demonstrate that he meets the conditions of the exclusion or
exemption.  If EPA initiates an enforcement action, the burden is on the
Agency to prove by a preponderance of the evidence that the respondent
has committed a violation, or (in the case of a criminal action) that
the defendant is guilty beyond a reasonable doubt.

We disagree with the commenter who said that the requirements for the
generator-controlled exclusion were "self-imposed" and would lead to
litigation. The exclusions are self-implementing, but the standards
themselves have been developed by EPA, and, in the case of containment
and speculative accumulation (mentioned by the commenter) are concepts
that have been part of the RCRA regulatory program for many years.

In response to the commenters who expressed concern about the ability of
regulatory authorities to oversee compliance and eligibility, we believe
that the notification, renotification and recordkeeping requirements in
this rule are completely adequate for this purpose.  These requirements
are discussed in detail in Sections VII and VIII of the preamble to this
rule, and in the relevant sections of this response to comments
document.  We note that the agency has expanded recordkeeping
requirements from the March 26, 2007 supplemental proposal to include
periodic renotification, confirmations of receipt, documentation and
certification of reasonable efforts, and annual reports for hazardous
secondary material exported for reclamation.  We have also added a
certification requirement for "same company" under the
generator-controlled exclusion.  We consider these requirements to be
sufficient to allow regulatory authorities to determine that hazardous
secondary materials have not been discarded and managed in a manner
protective of human health and the environment.

With these requirements in place, it is not necessary to place limits on
the number of times a material can be moved, or place geographical
limitations on transport.  The requirements will enable regulatory
authorities to track the whereabouts of hazardous secondary materials
and to determine, if appropriate, whether recyclers are qualified.

Nor does the Agency agree that it is necessary to explicitly state in
the regulations that agencies have the authority to inspect and verify
that facilities meet the conditions of the exclusion.  We believe that
existing authorities such as RCRA section 3007 are adequate for this
purpose. In response to the commenter who suggested that we state that
releases are subject to full Subtitle C regulation, we note that the
subject of releases is covered in detail in sections VII and VIII of the
preamble to this final rule, as well as in the relevant portions of this
response to comments document.

In response to the commenter who expressed doubts about
self-implementation and said that states did not have sufficient
enforcement personnel to enforce this rule, the Agency has full
confidence in the willingness and ability of states to enforce the
requirements of the exclusions in this final rule.  In addition,
assistance from EPA is available under many circumstances.

7 - Conditional exclusion for hazardous secondary materials that are
transferred for the purpose of reclamation ("broader exclusion")

7.1 - Purpose and intent of proposed exclusion

7.1 - Summary

The commenter stated that some recycling practices may bear more
resemblance to waste management and the hazardous secondary materials
should therefore remain regulated as wastes.  A common example is the
distillation of solvents from off-site sources.  The Agency is proposing
to deregulate a specific subset of these materials that are recycled by
being reclaimed, but the proposal is biased against smaller businesses
that do not have specialized resources to support such activity or
coordination within similar industry. [0215]

7.1 - Response

EPA agrees that facilitating access for smaller companies to the
recycling exclusion when possible is an important objective.  As a
result, in the 2007 supplemental proposal and the final rule, EPA
included provisions such as not requiring reasonable efforts when
hazardous secondary material is sent to a RCRA-permitted facility and
allowing the use of intermediate facilities that would help facilitate
small companies' participation in the exclusions while still
appropriately defining when a material is not discarded and therefore
not a solid waste.

7.1.1 - Support for broader exclusion

7.1.1 - Summary

Many commenters on both the October 2003 proposal and the March 2007
supplemental proposal supported a broad option under which hazardous
secondary materials generated and subsequently transferred to another
company or person for the purpose of reclamation would be excluded from
the definition of solid waste upon certain conditions being met
("transfer-based exclusion"). Commenters on the 2007 proposal commended
EPA for its significant departure from the "same industry" scheme
proposed in 2003 by proposing this transfer-based exclusion. As the
Agency notes, this exclusion reflects "how successful third-party
recycling currently operates" and will promote legitimate recycling
across many industries. Commenters also provide examples of recycling
opportunities, including sending solvents to a paint manufacturer or
other facility for recycling, the recycling of gold-bearing secondary
materials at nearby facilities, the recycling of electric arc furnace
dust, recycling of electroplating dust, recycling foundry sand,
recovering vanadium from spent catalyst, reuse of acidic materials and
other hazardous secondary materials at phosphate fertilizer production
facilities, recycling spent pickle liquor, recycling electroplating
waste and spent echants, and metals recycling. In some cases commenters
provided draft regulatory text.  Such an exclusion would also (1)
promote the concept of industrial ecology, where waste products from one
process serve as feedstock to another process, (2) help accomplish EPA's
long term 2020 vision of the RCRA program, (3) promote the Resource
Conservation Challenge, (4) encourage by-product synergy, (5) benefit
small businesses, and (6) reduce manpower costs spent determining
whether a particular load is waste or not.  In some cases, commenters
supported EPA addressing the exclusions in a incremental fashion.
[0043-12, 0048-10, 0052-2, 0053-1, 0060-2, 0060-11, 0067-17, 0060-18,
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0524-10, 0527-3, 0529-10, 0529-11, 0534-9, 0534-14, 0536-3, 0536-11,
0536-12, 0545-4, 0551-4]

7.1.1 - Response

EPA appreciates the comments in support of a broad option under which
hazardous secondary materials generated and subsequently transferred to
another company or person for the purpose of reclamation are excluded
from the definition of solid waste upon certain conditions being met
("transfer-based exclusion"). EPA believes that this exclusion will
encourage the recycling of hazardous secondary materials and reduce
unnecessary regulatory compliance costs to industry, while still
maintaining protection of human health and the environment. After
considering the entire rulemaking record, including comments submitted
by the public, the Agency continues to believe that this exclusion is a
workable, common-sense approach to meeting these objectives; is well
supported by the record for this rulemaking, including the recycling
studies that EPA has conducted; and, in important ways, reflects current
good industry practices that are used by responsible generators for
recycling hazardous secondary materials.

<IP_ADDRESS> - Additional conditions needed to support the broad exclusion

<IP_ADDRESS> - Summary

Many commenters indicated that they would support a broad option to
exclude hazardous secondary materials generated and subsequently
transferred to another company or person for the purpose of reclamation,
but only if certain conditions were met.  Commenters believe that there
is a middle road that can be taken with a rule that incorporates some of
the limitations and concepts from the lead proposed rule, but does not
go so far as to deregulate all materials, especially for those practices
that are outside the scope of the lead proposed rule.  If EPA believes
that a spent material should be removed from the family of "solid
wastes" or "hazardous wastes" when sent to metals reclamation, then such
a change should occur on a case-by-case basis, and EPA should use as a
starting point those regulatory controls previously found to be needed
in light of the unique properties of the waste in question. In the
process of this review, EPA should consider all the potential
consequences of deregulation of the activity. By loosening those
safeguards to the level of protection most appropriate to material not
destined for disposal, we could encourage greater recycling while still
ensuring safety. EPA has to preserve at least some elements of the
current regulatory system which tracks these materials: (1) ensuring
they are legitimately recycled, (2) discouraging mismanagement of these
materials, (3) demonstrating attainment of purported recycling goals,
and (4) maintaining protection of human health and the environment.
Since the proposed rule will allow the treatment of hazardous wastes
with little or no community or regulatory oversight or review, some
quality assurance standard should be provided.  The Agency should review
its own requirements for such RCRA activity and place similar
requirements on these secondary recycling facilities, even if not
subject to prior review.

Examples of conditions suggested include:

- Legitimacy criteria;

- Prohibition against speculative accumulation;

- An initial notification of an entity's intent to claim the exclusion;

- Recordkeeping and documentation of all secondary materials processed
on- or off-site, maintained for 3 years;

- Recordkeeping and reporting requirements similar to those found in 40
CFR Part 262, Subpart D for generators of recyclable materials and 40
C.F.R. Part 264, Subpart E for facilities receiving recyclable
materials;

- Use of a 'recyclable material" manifest consistent with Department of
Transportation shipping and labeling requirements for off-site
shipments;

- Development and maintenance of an operationing plan describing and
documenting compliance with legitimacy criteria and incorporating a
contingency plan and emergency response procedures comparable to those
required under 40 C.F.R. Part 264, Subpart B;

- Labeling, and waste analysis plans;

- Minimum standards for management and storage of recyclable materials
and recycled products in a manner to minimize releases of hazardous
constituents into the environment; including containment standards for
tanks and containers;

- Financial assurance.

[0072-7, 0091-35, 0101-6, 0104-1, 0119-57, 0125-3, 0144-8,  0144-10,
0146-14, 0146-16, 0146-17, 0153-29, 0172-10, 0172-40,  0178-15, 0475-17,
0475-41, 0484-28, 0484-32, 0543-1, 0543-7, 0543-12, 0544-4, 0558-24]

One commenter noted that, as much as it makes sense that a material has
not been discarded if it is being put to beneficial re-use, there have
been situations that serve as examples of EPA's concern regarding
blanket deregulation of recyclable materials.  They cited the example of
a company that did recycle, but also polluted its site with a wide
variety of chemicals in the process. The commenter expressed a  need to
find the middle ground where "generators" are encouraged to recycle
on-site or off, within industry or without; while maintaining regulatory
authority over the real potential source of pollution ..... the
recycling operation/location itself. The commenter was in favor of
excluding materials destined for recycling from the definition of solid
waste as that will encourage legitimate recycling, but was not in favor
of that deregulation extending to any process that recycles hazardous
materials other than in a completely closed system. There is a caveat in
every environmental statute that basically says, "If no rule covers
something we feel is a substantial risk to the environment, we still
have authority to act." Somehow or another, there IS a way to deregulate
the "generators" and maintain regulatory authority over receiving
facilities. It's not the substance that pollutes, it's the people who
handle it improperly.

[0035-1]

Commenters also suggested that EPA redefine "solid waste" by defining
what is not a solid waste using the following definition:

Recyclable materials that are managed in an environmentally sound manner
and are legitimately and beneficially recycled in a process that (1)
produces a product for use or sale in commerce, or (2) produces a
valuable material for further use as a feedstock in a manufacturing
process, are not solid wastes.

The commenter believes it would be reasonable to base a conditional
exclusion on conformance with this definition plus environmentally sound
management conditions.

[0091-35, 0107-2]

<IP_ADDRESS> - Response

EPA agrees that conditions are needed for a broad provision to exclude
hazardous secondary materials generated and subsequently transferred to
another company or person for the purpose of reclamation
("transfer-based" exclusion).   As discussed in Section V of the
preamble to the final rule and elsewhere in this response to comments
document, the conditions and restrictions to the transfer-based
exclusion in the final rule ensure that it is appropriately focused on
hazardous secondary materials that are not discarded.

<IP_ADDRESS> - Additional conditions are not needed for broader exclusion

<IP_ADDRESS> - Summary

Some commenters supported a broad provision to exclude hazardous
secondary materials generated and subsequently transferred to another
company or person for the purpose of reclamation, but would not support
additional conditions.  More thorough characterization of secondary
materials, beyond those deemed necessary by the recycler to manage their
processes in conformance with the legitimacy criteria would add
unnecessary costs to recycling.  Additional requirements regarding
transportation records are redundant as there are DOT requirements for
transportation of hazardous materials.  Furthermore, residuals from the
reclamation of secondary materials should not be considered hazardous
waste unless they are listed or characteristic waste.  More detailed
record keeping or storage safeguards are unnecessary because the
legitimacy criteria already prohibit the handling of secondary material
in a sloppy manner.  Abuse of this prohibition would subject the handler
to RCRA enforcement.  In order to not undercut the effectiveness of this
proposal, EPA should seek to impose only those regulations necessary to
maintain environmental protections.

[0093-54, 0138-32, 0225-18, 0458-31, 0468-23, 0481-40]

<IP_ADDRESS> - Response

EPA believes that certain conditions are needed for transfer-based
exclusion for hazardous secondary materials generated and subsequently
transferred to another company or person for the purpose of reclamation
("transfer-based" exclusion).   As discussed in Section V of the
preamble to the final rule and elsewhere in this response to comment
document, the conditions and restrictions included in the transfer-based
exclusion in the final rule are designed to ensure that it is
appropriately focused on hazardous secondary materials that are not
discarded, and the appropriateness of the conditions and restrictions
for this purpose is supported by the record for this rulemaking.

7.1.2 - Opposition to broader exclusion

7.1.2 - Summary

Many commenters on both the October 2003 proposal and the March 2007
supplemental proposal opposed a broad option under which hazardous
secondary materials generated and subsequently transferred to another
company or person for the purpose of reclamation would be excluded from
the definition of solid waste upon certain conditions being met
("transfer-based exclusion").   Commenters believe that this type of
exemption would remove the safeguards required by RCRA for the proper
management of hazardous wastes, would result in an increase in "sham
recycling," and ultimately would result in an increase in the potential
for releases of hazardous wastes to the environment resulting from
improper storage practices and a lack of adequate tracking of shipments.
 Commenters argued that this would allow material to move in and out of
the hazardous waste management system depending on what any person
handling the material decided to do with it and would potentially result
in environmental mismanagement throughout the country.

Commenters also assert that eliminating the RCRA requirements through a
broader exemption for all legitimate reclamation may create incentives
for new companies to enter the market that are not subject to the same
regulatory standards, thus raising the potential for releases to the
environment and the creation of new Superfund sites. New reclamation
facilities may pop up and market their services before regulators are
able to check them out. Generators will assume they are acceptable,
based on their past experiences with heavily regulated facilities; but
the reality will have shifted and their assumptions will no longer be
valid. In fact, this scenario has played itself out multiple times in
the past, as new wastes fall under regulatory scrutiny. Good examples
are electronic scrap, fluorescent lamps and oil filters. As these wastes
came under regulatory scrutiny, recycling companies jumped in to fill
the demand for services. Some of those were shams.

Commenters believe that the storage of wastes prior to recycling
presents many if not all of the same risks and hazards as storage prior
to disposal does.  With the possible exception of its recycling value,
the fact that a given drum of hazardous waste is going to be recycled
does not in itself reduce the likelihood that the drum is going to
become damaged or leak, or be involved in a fire, explosion, or other
mishap.  Nor does it reduce the need for the personnel handling the
material to be properly trained so as to safely handle the material and
prevent releases.  Any change in RCRA that is aimed at encouraging
recycling and that does not address this reality is not adequately
protective, and is therefore unacceptable. Materials that pose risks to
health are regulated by the Environmental Protection Agency and by
states. Redefining hazardous materials does not change their
carcinogenic, mutagenic, neurotoxic or other poisonous properties.
Commenters ask that in an environment of increasing threats to public
safety from individuals or organizations that knowingly seek to do harm
to Americans, do we really want to lose track of 650 million tons of
poisons? At what disadvantage does this leave our first responders in an
emergency situation? How much time would be lost in the event of a
spill, explosion, or other incident trying to identify materials if this
measure were to be enacted? Transporting "excluded" wastes increases
risks to every community. Americans are safer when officials know what
dangerous substances are in the environment, and where they are, and
when.

Commenters noted that a generator's RCRA "cradle to grave"
responsibility needs to be maintained. Deregulating recycling in an
across-the-board way ignores the fundamental purpose of RCRA as a
preventative regulation. Under a broad exclusion, all of the up-front
protective standards of RCRA are lost, leaving only emergency response
and cleanup authorities should a spill or release occur. This changes
RCRA from a preventive, pro-active rule to a remedial, reactionary one.
It is a necessary assurance that the generator will make certain that
the waste is being legitimately recycled. Materials should not be
excluded from US EPA's jurisdiction simply because someone claims that
they will be recycled. The fact that materials are transferred by the
generator to another person or company for reclamation demonstrates that
subsequent activities are more likely to involve some level of discard,
given that the generator has relinquished control of the hazardous
secondary material, and additional conditions are needed for the Agency
to determine that these materials are not being discarded.  With no base
in primary manufacturing, commercial recyclers may have few employees
and shallow or no roots in the community. They are often small in size,
with little in fixed facilities and capital investment. Therefore, they
are easily abandoned in favor of new locations. If not subject to
permitting, with associated design and operating standards and financial
assurances, or at least periodic inspection, the probability is
relatively high that such facilities will become tomorrow's Superfund
sites. There are several examples of these nationwide.

Commenters also expressed concern that state agencies charged with
enforcing use of a broader exclusion would have to deal with monitoring
a much larger universe of excluded facilities for compliance and would
have less information about those facilities’ activities since, as
proposed, they would not have to submit records to the agencies about
their recycling activities (except for the initial or amended
notifications); e.g. no copies of shipping manifests.  State agencies
would have only the information in the notifications to assist their
inspection targeting strategies.  Such a broader exclusion would place a
much greater resource burden on state agencies.

Commenters also note that EPA's recycling studies speak directly to the
issue of whether off-site recycling is inherently more dangerous than
recycling conducted on-site. EPA states that one of the questions it
examined in the study was whether there were any significant differences
in the frequency, type or causes of environmental damage when recycling
was conducted on-site, as compared to off-site. The evidence is
unequivocal.  Of the 208 damage cases, 91% involved off-site recycling,
and only 6% of the damage cases involved wholly on-site recycling.

This significant difference in the record of commercial recycling
facilities versus on-site recyclers should have stopped EPA in its
tracks from lessening regulatory requirements applicable to off-site
hazardous waste recyclers.  In fact, the assessment is a clear signal
that current regulations are not stringent enough. 130 of the 208 sites
involve recycling activities currently exempted in 40 CFR Part 261. This
number is conservative, because detailed information was not available
for each damage case. At the very least, 60% of the damage cases
identified by EPA resulted from recycling activities that EPA has
already exempted from subtitle C requirements.  If more information were
available, the percentage would likely increase substantially.  In fact,
if one counts 24 additional cases where information indicates that
exempted recycling was likely taking place, the total would approach 80%
of the entire list of damage cases.  EPA should therefore question the
safety of the existing recycling exemptions.  If these exemptions are
not working as EPA intended, EPA must reexamine the present course of
this supplemental proposal, whose broad exclusions from the definition
solid waste promise only to make matters worse.

Commenters also noted that examples of "successful recycling practices"
in EPA's studies arose in direct response to the Agency's regulatory
programs under RCRA.  As EPA observes, "The Agency has long heard from
various representatives of industry and other stakeholders that
management of hazardous secondary materials has changed and improved
since the inception of RCRA hazardous waste regulations in the early
1980s and that these hazardous secondary materials are being managed
much more carefully than they were historically." (72 FR 14179) The
commenters state that the Agency ultimately uses the results of its
studies of successful recycling practices to justify their broad
deregulation, seemingly oblivious of (or unconcerned about) the circular
nature of the underlying 'logic' and the deep irony inherent in the
decisions it produces.   In a single sweep, EPA links the current
"careful" management of hazardous secondary materials to its RCRA
regulatory program while admitting that these materials were managed
less carefully prior to the inception of RCRA rules. EPA then relies
upon the success of its RCRA regulatory regime to justify its
dismantling, apparently content to believe that because some large
corporations now have "corporate responsibility" programs, all
generators will mange their hazardous secondary materials in exemplary
ways.  The Agency seems comfortable with this belief despite the fact
that it found "the real effects of these corporate policies are hard to
gauge."  (72 FR 14179)   The commenters state that EPA must explain and
fully justify in factual terms its basis for concluding that eliminating
RCRA controls over broad categories of secondary hazardous materials
will not result in a reversion to the conditions that existing prior to
the development of a comprehensive regulatory scheme that governed the
disposition of these materials.  The fact that some companies (EPA has
made no effort to quantify how many) have corporate responsibility
programs does not explain why the Agency should expect that 100 percent,
or even most of the secondary materials it proposes to exclude from RCRA
will continue to be carefully managed once the regulatory incentives
that are credited with causing that behavior no longer exist.  In fact,
the people or entities who might have been most inclined to be
irresponsible in the past will now be free to be even more
irresponsible, with no concern about penalties.

[0065-8, 0068-16, 0073-2, 0073-6, 0073-10, 0092-7, 0098-37, 0098-38,
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0210-7, 0457-16,  0462-8, 0470-14, 0470-15, 0479-3, 0479-11, 0479-15,
0480-3, 0482-2, 0484-20, 0495-3, 0495-11, 0521-5, 0541-1, 0541-2,
0548-21, 0559-11, 0559-13, 0562-2, 0563-7, 0564-13, 0564-27]

7.1.2 - Response

While EPA agrees that the information in the recycling studies indicate
that, absent regulatory controls, hazardous secondary materials sent to
a third party for recycling can become the cause of environmental
damages, EPA disagrees that the exclusion in the final rule for these
materials fails to address this concern.

The conditions and restrictions included in the transfer-based exclusion
are adequate to appropriately exclude only those materials that are not
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 and ensuring that they are properly recycled.
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 the final rule preamble, as well as sections VII-IX and
sections XVI-XVIII. Support for the Agency's determination regarding
which materials are not discarded is found throughout the rulemaking
record in this proceeding.

The restrictions and the conditions EPA is finalizing today are designed
to define which reclaimed hazardous secondary materials are not
discarded and hence are not solid waste.

EPA disagrees with comments that characterize the final rule as relying
on "corporate responsibility" to ensure properly recycling of hazardous
secondary material.   While the successful recycling study was useful in
providing information on  actions that some generators currently take -
such as auditing the reclamation facility - to ensure their material is
safely recycled, EPA does not assume that these actions will always be
taken absent regulation.  That is why provisions such as the reasonable
efforts requirement are explicit conditions of the rule.

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

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

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

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

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

EPA acknowledges that some of the damages in the study may have resulted
from some activities that may have been covered by various types of
regulatory exclusions or exemptions.  EPA recognizes the commenters’
point that past damages that may have occurred under current recycling
exclusions could raise concerns about additional exclusions. However,
the Agency believes that careful evaluation of damage cases conducted in
the study provides conclusive evidence of the kinds and causes of
environmental damages that must be addressed in the exclusions in this
rulemaking to ensure that they cover only non-discard activities. EPA
thus believes that the study provides us with the information necessary
to craft appropriate conditions and restrictions for the exclusions to
ensure that only non-discard reclamation activities are excluded from
the definition of solid waste.

<IP_ADDRESS> - Additional information needed to evaluate broader exclusion

<IP_ADDRESS> - Summary

Some commenters on the 2003 proposal urged EPA to provide additional
information on the potential broad option that hazardous secondary
materials generated and subsequently transferred to another company or
person for the purpose of reclamation be excluded from the definition of
solid waste upon certain conditions being met ("transfer-based
exclusion").  Commenters recommended that EPA conduct a more thorough
analysis of the various options proposed, particularly with respect to
potential adverse impacts on health, safety, and the environment as well
as the additional costs that will be incurred by state RCRA programs.
Commenters noted that without a more detailed analysis, they are unable
to adequately judge the rationality of the distinction between intra and
inter industry recycling, and whether a broader exclusion may be
warranted to encourage more recycling. Commenters requested that EPA
conduct stakeholder discussions and develop a supplemental proposal for
public comment based on an adequate administrative record.  Commenters
stated that EPA has a responsibility to provide enough information in
the rulemaking to support their claim of safety, and so that a
reasonable person can fully participate during the comment period.

Finally, one commenter noted that they were (at the time of their
comment) awaiting a response from the EPA on a Freedom of Information
Act request dated January 23, 2004. Under this request they specifically
asked for all information relevant to this rulemaking on environmental
damage caused from the use of recovered materials between industries, as
well as from the use of raw materials; all information on the known
harms from contaminants in recovered materials; and information on all
consumer products that would be made from recovered materials under this
rule.

[0067-2, 0080-3, 0119-56, 0141-4, 0193-5, 0227-1]

<IP_ADDRESS> - Response

EPA acknowledges the public comments to the October 2003 proposal that
requested addition information on a potential broad option under which
hazardous secondary materials generated and subsequently transferred to
another company or person for the purpose of reclamation would be
excluded from the definition of solid waste upon certain conditions
being met ("transfer-based exclusion"). In light of these comments on
the October 2003 proposal, and in deliberating on how to proceed with
this rulemaking effort, the Agency decided that additional information
on hazardous secondary material recycling would benefit the regulatory
decision-making process, and would provide the Agency and stakeholders
with a clearer picture of the hazardous secondary material recycling
industry in this country.

Accordingly, in support of the 2007 supplemental proposal , the Agency
examined three basic issues that we believed and that commenters
suggested were of particular importance to informing this rulemaking
effort:

(1) How do responsible generators and recyclers of hazardous secondary
materials ensure that recycling is done in an environmentally safe
manner?

(2) To what extent have hazardous secondary material recycling practices
resulted in environmental problems in recent years, and why?

(3) Are there certain economic forces or incentives specific to
hazardous secondary material recycling that can explain why
environmental problems can sometimes originate from such recycling
activities?

Reports documenting studies addressing these questions are available in
the docket for this rulemaking, under the following titles:

- An Assessment of Good Current Practices for Recycling of Hazardous
Secondary Materials (EPA-HQ-RCRA-2002-0031-0354 ) ("successful recycling
study")

- An Assessment of Environmental Problems Associated With Recycling of
Hazardous Secondary Materials (EPA-HQ-RCRA-2002-0031-0355)
("environmental problems study")

- A Study of Potential Effects of Market Forces on the Management of
Hazardous Secondary Materials Intended for Recycling
(EPA-HQ-RCRA-2002-0031-0358) ("market forces study")

The results of these three studies have informed and supported EPA's
decision making in today's final rule.

The successful recycling study has provided information to the Agency
that has helped us determine what types of restrictions and conditions
would be appropriate for hazardous secondary materials sent for
reclamation to determine that they are handled as commodities rather
than wastes. EPA found that responsible recycling practices used by
generators and recyclers to manage hazardous secondary materials fall
into two general categories. The first category includes the audit
activities and inquiries performed by a generator of a hazardous
secondary material to determine whether the entity to which it is
sending such material is equipped to responsibly manage it without the
risk of releases or other environmental damage. These recycling and
waste audits of other companies' facilities are a key component of many
of the transactions in the hazardous secondary materials market. The
second category of responsible recycling practices consists of the
control practices that ensure responsible management of any given
shipment of hazardous secondary material, such as the contracts under
which the transaction takes place and the recordkeeping systems in place
that can inform a generator that its hazardous secondary material has
been properly managed.  These findings helped inform EPA's decision to
include a condition regarding hazardous secondary material generator
conduct of reasonable efforts to ensure its materials are properly and
legitimately recycled, and to identify certain recordkeeping practices
that indicate that discard is not taking place.

The goal of the environmental problems study was to identify and
characterize environmental problems that have been attributed to some
types of hazardous secondary material recycling activity that are
relevant for the purpose of this rulemaking effort. To address
commenters concerns that historic damages are irrelevant to current
practices, EPA only included cases where damages occurred after 1982
(post-RCRA and -CERCLA implementation). The study identifies 208 cases
in which environmental damages of some kind occurred from some type of
recycling activity and that otherwise fit the scope of the study (as
described further in the study). The Agency believes that the occurrence
of certain types of environmental problems associated with current
recycling practices shows that discard has occurred. In particular,
instances where materials were abandoned (e.g., in warehouses) and which
required removal overseen by a government agency and expenditure of
public funds clearly demonstrate that the hazardous secondary material
was discarded. Of the 208 damage cases, 69 (33%) involve abandoned
materials. The relatively high incidence of abandoned materials likely
reflects the fact that bankruptcies or other types of business failures
were associated with 138 (66%) of the cases.

In addition, the pattern of environmental damages that resulted from the
mismanagement of recyclable materials (including contamination of soils,
groundwater, surface water and air) is a strong indication that the
hazardous secondary materials were generally not managed as valuable
commodities and were discarded. Of the 208 damage cases, 81 cases (40%)
primarily resulted from the mismanagement of recyclable hazardous
secondary materials. Mismanagement of recycling residuals was the
primary cause in 71 cases (34%). Often, in the case of mismanagement of
recycling residues, reclamation processes generated residuals in which
the toxic components of the recycled materials were separated from the
non-toxic components, and these portions of the hazardous secondary
material were then mismanaged and discarded. Examples of this include a
number of drum reconditioning facilities, where large numbers of used
drums were cleaned out to remove small amounts of remaining product such
as solvent, and these wastes were then improperly stored or disposed.

These findings helped inform EPA's decision to require that the
hazardous secondary material be contained in the unit and managed in a
manner that is at least as protective as an analogous raw material
(where there is an analogous material),  that the recycling residuals be
properly managed, and that the reclamation facility and any intermediate
facilities have financial assurance. In addition, the relatively small
proportion of cases of damages from on-site recycling (13 of the 208
cases (6%)) lends support for EPA's decision to include fewer
limitations on the exclusion for hazardous secondary materials recycled
under the control of the generator.

The market forces study uses accepted 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. This
study helps explain some of the possible fundamental economic drivers of
both successful and unsuccessful recycling practices, which, in turn,
helped the Agency to design the exclusions in the final rule. As pointed
out by some commenters to the October 2003 proposed rule and confirmed
in the study, the economic forces shaping the behavior of firms that
recycle hazardous secondary materials are often different from those at
play in manufacturing processes using virgin materials. The market
forces study uses economic theory to provide information on how certain
characteristics can influence three different recycling models to
encourage or discourage an optimal outcome. The three recycling models
examined are: (1) commercial recycling, where the primary business of
the firms is recycling hazardous secondary materials that are accepted
for recycling from off-site industrial sources (which usually pay a
fee); (2) industrial intra-company recycling, where firms generate
hazardous secondary materials as by-products of their main production
processes and recycle the hazardous secondary materials to produce
products for sale or for their own reuse in production; and (3)
industrial inter-company recycling, where firms whose primary business
is not recycling either use or recycle hazardous secondary materials
obtained from other firms, with the objective of reducing the cost of
their production inputs. The report looks at how the outcome from each
model is potentially affected by three market characteristics: (1) value
of the recycled product, (2) price stability of recycling output or
inputs, and (3) net worth of the firm.

While an individual firm's decision-making process is based on many
factors and attempting to extrapolate a firm's likely behavior from a
few factors is a simplification, when used in conjunction with other
pieces of information, the economic theory provides a useful
understanding of the economic factors influencing the behavior of firms
that recycle hazardous secondary materials.

For example, according to the market forces study, the industrial intra-
and inter-company recyclers have more flexibility in adjusting to
unstable recycling markets (e.g., during price fluctuations, these
companies can more easily switch from recycling to disposal or from
recycled inputs to virgin inputs). Therefore, they would be expected to
be less likely to have environmental problems from over-accumulated
materials. On the other hand, certain specific types of commercial
recycling, where the product has low value, the prices are unstable,
and/or the firm has a low net worth, could be more susceptible to
environmental problems from over-accumulation of hazardous secondary
materials, especially when compared to recycling by a well-capitalized
firm that yields a product with high value. In both cases, these
predicted outcomes appear to be supported by the results of the
environmental problems study, which show the majority of problems occur
at off-site commercial recyclers.

However, as shown by the study of successful recycling practices,
generators who might otherwise be at risk for a large liability from
poorly managed recycling at other companies have addressed this issue by
carefully examining the recyclers to which they send their hazardous
secondary materials to ensure that they are technically and financially
capable of performing the recycling. In addition, we have seen that
successful recyclers (both commercial and industrial) have often taken
advantage of mechanisms, such as long-term contracts to help stabilize
price fluctuations, and allow recyclers to plan their operations better.

The 2007 proposal provided public notice and opportunity to comment on
these studies and on the conditions EPA determined would be appropriate
to address the issues raised by these studies.  The record for the final
rule supports the conditions and restrictions that allow EPA to
appropriately define when hazardous secondary material reclamation does
not result in discard.

Finally, EPA notes that according to Agency records, the Freedom Of
Information Act (FOIA) request from Safe Food and Fertilizer concerning
"Recycling of Hazardous Waste"  was withdrawn and it was closed on May
19, 2004.

7.2 - Scope and applicability of proposed conditional exclusion

7.2 - Summary

EPA received several miscellaneous comments on the scope and
applicability of the proposed broad option under which hazardous
secondary materials generated and subsequently transferred to another
company or person for the purpose of reclamation would be excluded from
the definition of solid waste upon certain conditions being met
("transfer-based exclusion").

(1)  One commenter requested that RCRA permitted facilities that also
meet all of the requirements for the exclusion should be able to process
both excluded and regulated hazardous secondary materials, and that RCRA
Permitted facilities should be able to manage both excluded materials
and non-excluded through the same units, as long as the excluded
hazardous secondary material is handled, stored, and reclaimed in a
manner that meets the full requirements for the exclusion. [507-40,
507-42]

(2) One commenter said that dealerships often send materials off-site
for recycling through other than tolling agreements.  These include used
solvents, paints, batteries, scrap metals, oils, etc.  The commenter
suggests that the transfer-based exclusion for these activities would
provide little if any regulatory benefit to small quantity and
conditionally exempt generators, especially given the significant
additional compliance responsibilities that must be met to qualify for
the exclusion.   These responsibilities include significant mandates for
recordkeeping and due diligence.   Consequently, the commenter suggests
that this proposed conditional exclusion is unlikely to encourage small
quantity and conditionally exempt facilities to engage in additional
recycling.

[0523-9]

(3) One commenter does not support using the legitimacy criteria as a
sole basis for a "broader exclusion." [0217-22]

(4) One commenter noted that EPA's preamble to the proposed regulations
makes a distinction between "restrictions" - which are also referred to
as "pre-conditions" - and "conditions" for the exclusion.  72 FR 14188
col 3.  The preamble does not explain what the difference between these
terms is, and in fact indicates that both restrictions and conditions
will be enforced in the same way.  72 FR 14197 col 1 ("If a generator
fails to meet any of the above-described conditions or restrictions on
the management of hazardous secondary materials that are applicable to
the generator, then the materials would be considered discarded by the
generator and would be subject to RCRA subtitle C regulations …").  In
the absence of any explanation in the preamble for this distinction, the
commenter assert they were unable to effectively comment on whether the
difference is significant.  However, if EPA means basically the same
thing, the comment urged for the sake of clarity that the preamble to
the final rule simply refer to "conditions" that apply to the generator
for this exclusion. [558-25]

7.2 - Response

In response to miscellaneous comments on the scope and applicability of
the proposed transfer-based exclusion:

(1) EPA agrees that RCRA permitted facilities that also meet all of the
requirements for the exclusion should be able to process both excluded
and regulated hazardous secondary materials, and that RCRA permitted
facilities should be able to manage both excluded materials and
non-excluded through the same units (if allowed under the RCRA permit),
as long as the excluded hazardous secondary material is handled, stored,
and reclaimed in a manner that meets the full requirements for the
exclusion.  Nothing in the final rule precludes this from occurring.

(2) EPA's goal is to encourage small businesses to participate in the
final rule exclusions to the extent practicable, and has included
provisions in the final rule that help do so, including allowing
intermediate facilities to participate in the transfer-based exclusion,
and to waive the reasonable efforts requirements when hazardous
secondary material is sent to a RCRA permitted facility for recycling.

(3) EPA agrees that additional conditions beyond legitimacy are needed
for the transfer-based exclusion and has included such conditions in the
final rule.

(4) EPA appreciates the comment on the difficultly in distinguishing
between "restrictions" - which are also referred to as "pre-conditions"
- and "conditions" for the exclusion. (72 FR 14188).  The Agency has
attempted to be clearer in the use of terms for the final rule.

7.3 - Brokers, intermediate facilities, and multiple reclaimers

7.3 - Summary

BROKERS AND INTERMEDIATE FACILITIES

In its March 2007 supplemental proposal, EPA requested comment on a
restriction in the proposed transfer-based exclusion for hazardous
secondary materials transferred for reclamation, Under the proposed
restriction, 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
(0110-17, 0217-15, 0457-18, 0463-7, 0485-11, 0488-10, 0495-6 0521-11,
0521-12, 0531-10,  0538-16, 0538-18, 0548-12, 0549-7, 0564-28).

Other commenters objected to this proposed limitation (0104-24, 0104-27,
0162-2, 0458-36, 0468-10, 0468-11, 0473-8, 0492-28, 0503-2, 0507-8,
0507-17, 0518-9, 0526,-16, 0529-25, 0534-5, 0534-13, 0534-14). They
argued that many persons who generate smaller quantities of hazardous
secondary materials need help in consolidating shipments to make
transportation and reclamation economically feasible (0139-4, 0215-4,
0216-4, 0452-12, 0458-12, 0467-12, 0472-26, 0478-10, 0486-8, 0491-21,
0507-14, 0529-25, 0534-15, 0553-4). 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 (0081-7, 0083-10, 0097-12,
0149-25, 0179-17, 0460-3, 0468-23, 0479-25, 0482-17, 0503-4, 0503-5,
0503-6, 0503-7, 0507-14, 0511-5, 0518-8, 0550-1, 0558-28).  These
commenters believed that EPA's proposed limitation could discourage
reclamation by persons who generate smaller quantities of hazardous
secondary materials. One commenter noted that its industry is unlikely
to use intermediaries (0131-5).  A commenter also asked EPA to clarify
the status of brokers who arrange for reclamation without actually
taking possession of the hazardous secondary material (0081-7).

Most of the commenters who suggested that intermediate facilities be
eligible for the exclusion also suggested conditions for these
facilities. One commenter said that the generator should be required to
select the reclaimer through a contract (0503-3). Another commenter
suggested requiring the generator to specify contractually where the
material is to go for reclamation and within what period of time (the
commenter suggested limiting the period to 90-180 days), and requiring
the intermediate facility to certify to the generator that the material
was in fact sent to the reclamation facility and on what date.  This
commenter also suggested that intermediate facilities should be required
to provide to reclaimers contact information for each generator whose
material was consolidated for shipment to the reclaimer.  The reclaimer
should then be required to keep this information for three years
(0452-13. 0452-14, 0452-17).  One commenter also said that intermediate
facilities should be required to demonstrate when the hazardous
secondary materials are received and when they were shipped to the
reclaimer (0482-17). Another commenter suggested allowing the use of
intermediate facilities where they can certify that they are using a
specific reclaimer that meets the conditions of the exclusion (0491-21).
 Another commenter said that generators should be required to obtain
confirmation of receipt from recyclers (0529-25).

Some commenters supported notification on the part of intermediate
facilities (0526-16, 0458-36). One commenter suggested that generators
should be required to ascertain from brokers who will ultimately reclaim
the materials and how the materials will be reclaimed (0526-16).  Some
commenters said that generators should be required to perform reasonable
efforts on intermediate facilities (0452-13, 0472-26, 0473-8, 0492-28,
0503-3, 0534-15, 0538-16, 0558-28). One commenter said that reasonable
efforts should not be necessary if the intermediate facility had a RCRA
permit or if hazardous secondary materials were stored for less than 10
days (0558-29). Another commenter suggested that intermediate facilities
should be subject to financial assurance requirements (0553-4).

One commenter  argued that intermediate facilities should be required to
have a RCRA Part B permit or interim status (0558-28). Another commenter
said that use of intermediate facilities should be allowed only when
such facilities are part of the same company as the reclaimer (0507-14).

Another commenter said that holding time for intermediate facilities
should be limited to 10 days and that transporters should be licensed
hazardous waste haulers (0553-4). One commenter suggested that hazardous
secondary materials sent to intermediate facilities should remain
containerized during shipment (0452-31).

Another commenter suggested ensuring that different generators'
hazardous secondary materials are not commingled, requiring intermediate
facilities to help generators comply with applicable transportation
requirements, and requiring intermediate facilities to provide for
transportation (0503-3).

Two commenters asked the Agency to clarify that materials could be
transported between generators and reclaimers by multiple carriers or by
third party carriers, rather than by transporters owned and operated by
one of the parties to the transaction (0081-7, 0491-21).

One commenter asked that we clarify that residuals from reclamation
sent for disposal may be handled by persons other than the generator,
reclaimer, or transporter, and that the eligibility of the residuals
being reclaimed would not be affected (0492-28). This commenter also
asked the Agency to clarify the status of regenerated spent catalyst
that may be used by a facility other than the generator.

MULTIPLE RECLAIMERS

	Some commenters said that because reclamation sometimes involves
multiple steps, the Agency should allow multi-step reclamation under the
exclusion (0204-1, 0475-22, 0491-30). Another commenter said that
multiple reclamations steps are more likely to involve discard, and that
these scenarios should be handled under the non-waste determination
process or through a specific exclusion under 261.4(a) (0470-28).
Another commenter expressed concern that regulatory authorities would
not be able to track hazardous secondary materials that are reclaimed in
such a manner, and that the materials would lose value as they moved
through various reclamation processes (0543-15).

7.3 - Response

BROKERS AND 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.  We also believe that
storage at such facilities under the restrictions and conditions of 40
CFR 261.4(a)(24) is  completely consistent with not discarding the
materials by ensuring they are reclaimed and the restrictions and
conditions are met. Including intermediate facilities ensures that
hazardous secondary materials generators who need to consolidate
materials to make reclamation more affordable and practical may take
advantage of the exclusion for their materials that are not discarded,
as is ensured by the fact that they meet our conditions and
requirements. To this end, we have added a new definition of
"intermediate facility" to 40 CFR 260.10 and we have added language to
40 CFR 261.4(a)(24) addressing these facilities.

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 §260.10 under
today's regulation. In response to the commenter who asked about the
status of brokers, we note that this rule does not address such persons.
A "broker" 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.

The Agency agrees with those commenters who suggested contracts between
generators and intermediate facilities, and also with those who
suggested that generators be required to select the ultimate reclaimer
and be aware of how the hazardous secondary materials are ultimately
reclaimed.  To that end, this final rule requires the hazardous
secondary material generator to make contractual arrangements with the
intermediate facility to ensure that the hazardous secondary material is
sent to the reclamation facility identified by the hazardous secondary
material generator. The rule also states that intermediate facilities,
as well as reclaimers, must send confirmations of receipt for all
off-site shipments of hazardous secondary materials to the hazardous
secondary material generator. Confirmations of receipt must include the
name and address of the reclaimer or intermediate facility, the type and
quantity of hazardous secondary materials received and the date on which
the hazardous secondary materials were received.  Generators,
intermediate facilities, and reclaimers must maintain records for three
years of all shipments received or sent off-site. Such records must
contain the name of the transporter and date of the shipment, the name
and address of the hazardous secondary material generator and of any
reclaimer or intermediate facility from which hazardous secondary
materials were received, the type and quantity of hazardous secondary
material in the shipment, and the names and addresses of any subsequent
reclaimers or intermediate facilities if the hazardous secondary
materials were sent off-site.

We do not agree with the commenter who requested that contracts between
generators and intermediate facilities should specify that hazardous
secondary materials accumulated by the latter should be sent for
reclamation within a certain time period.  We believe that the
applicable speculative accumulation requirements of 261.1(c)(8) are
sufficient to demonstrate that hazardous secondary materials sent to