Regulatory Impact Analysis

                        EPA's 2011 Proposed Revisions
                    to the Industrial Recycling Exclusions
                     of the RCRA Definition of Solid Waste

                                Co-Authored By:

            Mark Eads, Economist<PHONE_NUMBER><EMAIL_ADDRESS>                   US Environmental Protection Agency (EPA)
              Office of Resource Conservation and Recovery (ORCR)
                  1200 Pennsylvania Avenue NW, Mailstop 5307P
                            Washington DC 20460 USA
                           http://www.epa.gov/waste

                               DPRA Incorporated
   Project contact: David Gustafson<PHONE_NUMBER><EMAIL_ADDRESS>                           5206 Zenith Avenue South
                          Minneapolis, MN  55410 USA
                              http://www.dpra.com

                                 30 June 2011

                                    Preface

            This RIA was in large part built upon updated and revised data and analyses borrowed from EPA's September 25, 2008 "Regulatory Impact Analysis" (RIA) in support of EPA's October 30, 2008 RCRA "Definition of Solid Waste" (DSW) final rule.  The 2008 RIA is available to the public in Adobe PDF electronic format (204 pages) as document ID nr. EPA-HQ-RCRA-2002-0031-0602 at http://www.regulations.gov.  DPRA Inc. authored Chapters 3, 4, 5, and 7 of this RIA as a sub-contractor to Industrial Economics Inc. under work assignment 3-09 and 4-09 of EPA contract EP-W-07-011.  The period of performance for these work assignment were from September 09 to December 31, 2010 and March 21, 2011 to June 30, 2011.  Mark Eads, an economist for EPA's Office of Resource Conservation & Recovery (ORCR) was EPA's work assignment manager and author of the Executive Summary and Chapters 1, 2, 6 and 8 (section 8A) of this RIA.  Jon Silberman, Attorney-Advisor to EPA's Office of Enforcement & Compliance Assurance (OECA) Planning, Measured & Oversight Division contributed to Chapter 8 (sections 8B & 8C).

            The primary data source used in this RIA for identifying potentially affected industrial entities and associated annual waste tonnages for the 2011 proposed revisions to the DSW is EPA's RCRA Hazardous Waste "Biennial Report" (BR).  When EPA launched this RIA in September 2010, the most recent BR data year available was 2007, which is applied in this RIA.  However, in late November 2010, the 2009 BR data became available on EPA's BR website at http://www.epa.gov/waste/inforesources/data/biennialreport/index.htm.  For purpose of comparison before (2005) and after (2009) to the 2007 data year applied in this RIA, the two tables below (Table A & Table B) display the aggregate nationwide BR counts of industrial hazardous waste recycling facilities and their corresponding reported annual tonnages of waste recycled for 2005, 2007 and 2009.  Facility counts remained fairly stable although recycling tonnage continued to decline in 2009 compared to 2007.

                                    Table A
Count of Industrial Hazardous Waste Generator Facilities that Recycled Waste as Reported in the BR
      (Recycled Onsite by the Generator or Shipped Offsite for Recycling)
                        Type of Recycling (by BR code)
                                     2005
                                     2007
                                     2009
1. H010 Metals
                                     2,438
                                     2,121
                                     2,066
2. H020 Solvents
                                     2,525
                                     2,146
                                     2,022
3. H039 Others (e.g., acids)
                                      891
                                      907
                                     1,134
                                                         Non-duplicative Totals
                                     4,928
                                     4,447
                                     4,502
                                                              Percentage Change
                                      N/A
                                     -9.8%
                                     +1.2%
                                    Table B
Tonnage of Industrial Hazardous Wastes Recycled by Generator Facilities Reported in the BR
      (Recycled Onsite by the Generator or Shipped Offsite for Recycling)
                               Type of Recycling
                                     2005
                                     2007
                                     2009
H010 Metals
                                    904,671
                                    821,536
                                    869,777
H020 Solvents
                                    230,627
                                    255,127
                                    198,148
H039 Others (e.g., acids)
                                    277,484
                                    276,743
                                    201,340
                                                         Non-duplicative Totals
                                   1,412,782
                                   1,353,406
                                   1,269,265
                                                              Percentage Change
                                      N/A
                                     -4.2%
                                     -6.2%

                               Table of Contents

      Abstract															4
      Executive Summary														5
                  Chapter 1	Problem Statement (Justification for Regulatory Action)								18
                  Chapter 2	Regulatory Options Evaluated in this RIA (8 Sets of Options)							24
                  Chapter 3	Baseline Industrial Entities & Materials Potentially Affected by the 2011 Proposed Revisions			34
                  	3A.	2008 DSW Recycling Exclusions: Baseline Industrial Recycling Potentially Affected			34
                  	3B.	Pre-2008 DSW Recycling Exclusions: Baseline Industrial Recycling					46
                  	3C.	Annual Rate of Future Adoption of the 2008 DSW Recycling Exclusions					54
                  	3D.	Baseline Industrial Waste Disposal Which May Switchover to 2008 DSW Recycling Exclusions		56
                  Chapter 4	Estimate of Baseline Cost Savings to Industry for the Existing DSW Recycling Exclusions			72
                  	4A.	Baseline Cost Savings Estimation Methodology								72
                  	4B.	Baseline Regulatory Cost Savings for the 2008 DSW Recycling Exclusions				85
                  	4C.	Baseline Regulatory Cost Savings for the Pre-2008 DSW Recycling Exclusions				101
                  	4D	 Summary of Baseline De-Regulatory Cost Savings Estimates						103
                  Chapter 5	Estimate of Industry Costs to Comply with the 2011 Proposed Revisions						104
                  	Option 1:	Withdraw the 2008 DSW Exclusion for Offsite Transfer Recycling				104
                  	Option 2:	Implement Alternative RCRA Subtitle C Regulation for Offsite Transfer Recycling		105
                  	Option 3:	Revise the 2008 DSW Exclusion for Generator-Controlled Recycling				115
                  	Option 4:	Revise the Recycling "Legitimacy" Provisions of the 2008 DSW Final Rule			117
                  	Option 5:	Revise the 1985 Partial Recycling Variance & 2008 DSW Non-Waste Petition Processes		126
                  	Option 6:	Add a "Re-Manufacturing" DSW Exclusion							132
                  	Option 7:	Revise the Pre-2008 DSW Recycling Exclusions							145
                  	Option 8:	Other Possible Revisions Not Included in the 2011 Proposed Revisions				151
                  	Summary:	Estimated Industry Costs to Meet Options 1 to 7 (Excluding Option 8)				155
                  Chapter 6	Sensitivity Analyses (6 Cost Estimation Uncertainty Factors)							175
                  Chapter 7	Supplemental Analyses												188
                  	7A.	Regulatory Planning and Review (1993 Executive Order 12866)						188
                  	7B.	Small Business Impact Analysis (1980 RFA/1996 SBREFA)						189
                  	7C.	Unfunded Mandates Analysis (1995 UMRA)								200
                  	7D.	Federalism Implications (1999 Executive Order 13132)							203
                  	7E.	Energy Impact Analysis (2001 Executive Order 13211)							204
                  	7F.	Improving Regulation & Regulatory Review (2011 Executive Order 13563)			204
                  Chapter 8	Potential Environmental & Economic Benefits of the 2011 Proposed Revisions					209
                  Appendices															221
                  	Appendix A	2007 Count of 6-Digit NAICS Code Industries Potentially Affected				222
                  	Appendix B	Calculation of Cost Adjustment Factors								228
                  	Appendix C	TRI Solvent Disposal Data for Four Option 6 "Re-Manufacturing" Industries			244
                  	Appendix D	Small Business Count Data to Support the RFA/SBREFA Analysis				254

                                   Abstract

Introduction: This RIA evaluates the potential future impacts of seven proposed revisions (i.e., regulatory options) to EPA's RCRA "Definition of Solid Waste" (DSW) regulatory exclusions for industrial recycling.  The DSW regulatory exclusions are designed by EPA to provide incentives for increased industrial recycling of "hazardous secondary materials" in lieu of managing and discarding such materials as wastes in compliance with the relatively more costly terms and conditions of RCRA Subtitle C "hazardous waste" regulations.

Affected Entities: Two distinct groups (populations) totaling between 5,983 and 8,992 industrial facilities per year potentially affected:
   * 2008 DSW exclusions: 6 of the 7 proposed revisions (Options 1 thru 6) could affect EPA's most recent 2008 DSW recycling exclusions potentially involving between 662 ("base case") and 3,671 ("upper-bound") average annual future counts of RCRA-regulated facilities.
   * Pre-2008 DSW exclusions: 3 of the 7 revisions (Options 4, 5, 7) in part or in whole could affect EPA's pre-2008 DSW recycling exclusions (spanning 1985 and 1998) involving 5,321 industrial facilities operating with pre-2008 DSW exclusions.

Benefits: This RIA presents a qualitative description of three categories of expected future environmental and economic benefits for the proposed revisions: (1) reduction in future environmental damage cases associated with industrial recycling; (2) improved environmental compliance; and (3) reduced liability, less regulatory uncertainty, and lower legal and credit costs for recycling facilities.

Costs: This RIA estimates the future average annualized costs to industry to comply with the 7 proposed revisions at between (2011$ @7% discount rate over 50-years 2015 to 2064):
   * Base case scenario: Range of $7.2 million per year (Options 3 to 7 only) to $13.1 million per year (all Options 1 to 7) affecting 662 "base case" average annual facilities expected to implement the 2011 proposed revisions, plus 100% of the current 5,321 pre-2008 DSW exclusion facilities adopting relevant options of the 2011 proposed DSW revisions.
   * Upper-bound scenario: $7.4 million per year (Options 3 to 7 only) and $47.5 million per year (Options 1 to 7) affecting 3,671 average annual facilities expected to implement the 2011 proposed DSW revisions, plus 100% of the 5,321 pre-2008 DSW exclusion facilities.

Net Impact: Netting out the $7.3 to $13.1 million average annual future costs for the 7 proposed revisions, from the 2011$-updated DSW regulatory cost savings baseline of $86.7 million per year  -  consisting of $79.3 million per year cost savings associated with pre-2008 DSW exclusions, plus $7.4 million cost saving per year for 13% adoption rate of the 2008 DSW recycling exclusions  -  yields a future average annual net cost savings for all DSW exclusions of $73.6 to $79.5 million per year (@7% "base case" discount rate over 50-years 2015 to 2064).

Supplemental Analyses: The 2011 DSW proposal is expected: (1) to have an annual effect less than the $100 million "economically significant" threshold under Executive Order 12866: Regulatory Planning and Review; (2) to have a "No SISNOSE" small business impact under EPA's RFA/SBREFA "sales test" threshold; (3) to impose less than $100 million in annual direct costs on state, local, and tribal governments, or on the private sector, under the UMRA threshold; (4) to impose less than EPA's $25 million annual direct cost threshold on state/local governments under Executive Order 13132: Federalism Implications; and (5) to not have an adverse effect on energy supply, distribution, or use under Executive Order 13211: Regulations that Affect Energy Supply, Distribution or Use.
                               Executive Summary

A.  Purpose of EPA's 2011 Proposed Revisions to DSW Recycling Exclusions

The Environmental Protection Agency (EPA) is proposing to revise the regulatory exclusions for certain types of industrial recycling from the "definition of solid waste" (DSW) under Subtitle C of the 1976 Resource Conservation and Recovery Act (RCRA).  The DSW recycling exclusions involve industrial hazardous secondary materials intended for recycling (i.e., reclamation, recovery, regeneration, or reuse) rather than discard (i.e., disposal).  Some of the DSW recycling exclusions date back to 1985, whereas other DSW recycling exclusions are relatively new (2008).  The exclusions provide eligible industrial facilities with avoided and lower de-regulated costs, compared to more costly compliance with RCRA's full regulatory requirements for hazardous waste management, provided that facilities meet certain eligibility criteria, and comply with certain operating conditions and requirements.  Under the DSW exclusions, industrial recyclable materials are not "wastes" because they are recycled, not discarded (i.e., not disposed), and thus are considered "hazardous secondary materials" rather than "hazardous wastes" if alternatively discarded rather than recycled.

EPA's 2011 proposed revisions to the DSW recycling exclusions are in response to a January 2009 petition submitted to the EPA by the Sierra Club (San Francisco, CA), claiming potential increases in risks to human health and the environment associated with recycling of DSW-excluded industrial hazardous secondary materials.  With these proposed revisions EPA intends to ensure that the exclusions, as implemented, encourage recycling in industrial operations under conditions necessary to protect human health and the environment from potential mismanagement of hazardous secondary materials, for example, if such hazardous materials destined for recycling instead become discarded or otherwise mismanaged, resulting in potentially harmful environmental releases of the hazardous materials.  Some proposed revisions potentially affect EPA's October 2008 DSW recycling exclusions, while other proposed revisions potentially affect pre-2008 DSW recycling exclusions which date between 1985 and 1998.

B.  Proposed Revisions Evaluated in this RIA (8 Sets of Options)

Option 1:	Withdraw the 2008 DSW Exclusion for Offsite Transfer Recycling
Withdraw the 2008 DSW exclusion at 40 CFR 261.4(a)(24) and (25) for hazardous secondary materials that are transferred offsite for the purpose of reclamation, and replace it with alternative RCRA Subtitle C regulations for hazardous recyclable materials under Option 2 below.
   * Option 2 below is a companion to this option, as it presents a regulatory alternative for offsite reclamation if the 2008 DSW offsite reclamation exclusion is withdrawn.

Option 2:	Implement Alternative RCRA Subtitle C Regulation for Offsite Transfer Recycling
As a corollary to Option 1 above, implement an alternative RCRA Subtitle C regulation for hazardous recyclable materials that are transferred offsite for reclamation.  Waste generators would need to meet the following requirements:
      (2A) Notification: Submit a notification prior to operating under this new RCRA regulation, and thereafter biennially using EPA Form 8700-12.
      (2B) Reclamation plan: Make advance arrangements for legitimate reclamation and documents those arrangement in a reclamation plan.
      (2C) Accumulation: Allow accumulation of hazardous recyclable materials by the generator for up to one year, but accumulate no more than two shipments of hazardous recyclable materials at any one time.
      (2D) Management: Meets labeling, emergency preparedness, contingency planning and management standards similar to those required for hazardous waste generators.
      (2E) Transportation: Sends the hazardous recyclable materials under either a hazardous recyclable materials manifest or a hazardous waste manifest to a RCRA permitted reclamation facility and maintain records of shipments for three years..

Option 3:	Revise the 2008 DSW Exclusion for Generator Controlled Recycling
Modify the 2008 DSW exclusion for hazardous secondary materials reclaimed under the control of the generator by:
      (3A) Add a regulatory definition of "contained" to the 2008 DSW generator-controlled recycling exclusion.
      (3B) Make notification a condition of the 2008 DSW generator-controlled recycling exclusion.
      (3C) Add a recordkeeping requirement for speculative accumulation.
      (3D) Add a recordkeeping requirement for reclamation under the 2008 DSW "toll manufacturing" recycling exclusion.
      (3E) Eliminate the 2008 DSW "toll manufacturing" recycling exclusion.
      (3F) Relocate the non-land based and land-based unit operational requirements in 40 CFR 261 so they both appear in the same section.

Option 4:	Revise the 2008 DSW Definition of "Legitimate" Recycling
Revise the 2008 DSW definition of legitimate recycling (i.e., legitimacy) by:
      (4A) Apply the codified definition to all industrial recycling under the pre-2008 DSW set of regulatory exclusions.
      (4B) Make all four legitimacy factors mandatory with a petition process for cases where one factor is not met but the recycling is still legitimate for the 2008 DSW regulatory exclusions and hazardous wastes being recycled under Subtitle C.
      (4C) Require documentation of recycling legitimacy for the 2008 DSW regulatory exclusions and hazardous wastes being recycled under Subtitle C.

            Option 5:	Revise the 1985 Partial Recycling Variance and 2008 DSW Non-Waste Determination Petition Processes
Modify the non-waste determination petition process by:
	(5A) Require that applicants re-apply in the event the material no longer meets the relevant criteria under 40 CFR 260.33(c).
      (5B) Require biennial notification using EPA Form 8700-12 in compliance with 40 CFR 260.42.
      (5C) Modify the 1985 40 CFR 260.31(c) DSW variance for partially recycled materials:
      (1) Require all six of the 1985 criteria for evaluating partial recycling variance applications be met, not "on any or all of them."
            (2) Modify wording of five of the six criteria to make it clear at what point in the recycling process the variance is intended to apply.
      (5D) Non-waste determination petitioners must demonstrate why they cannot or should not meet existing DSW exclusions (at 40 CFR 261.2 or 261.4).
      (5E) Change the word  "Administrator" to "Regional Administrator" in 40 CFR 260.30 to 260.34, due to the regional- and case-specific nature of non-waste determinations.

Option 6:	Add a new "Re-Manufacturing" DSW Exclusion
Add a new DSW recycling exclusion involving inter-company transfer for off-site reclamation of solvents via "re-manufacturing" (i.e., transfer from one manufacturer to another) for the purpose of extending the useful life of the original solvent, by keeping the solvent in commerce to reproduce a commercial grade of the original solvent for continued use as a "processing aid" to manufacturing.  This exclusion would operate according to five eligibility criteria and three other sub-options:
(6A) Five eligibility criteria:
      (1) 18 types of solvent chemicals only.
            (2) Three types of solvent "processing aid" functional uses only (i.e., chemical manufacturing aid, chemical processing aid, or chemical formulation aid) by both generators and re-manufacturers; not involving cleaning or de-greasing solvent uses, plus a chemical intermediate function in which the chemical gets consumed (destroyed) in chemical manufacturing reactions.
            (3) Four manufacturing sectors only (NAICS 325199 basic organic chemical manufacturing, NAICS 325211 plastics & resins manufacturing, NAICS 325412 pharmaceutical manufacturing, and NAICS 325510 paints & coatings manufacturing).
      (4) Five exclusion conditions for both generators and re-manufacturers (initial and biennial notification, re-manufacturing plan, 3-year recordkeeping of shipments, management in tanks or containers, and no speculative accumulation). (6B) Use of intermediate storage facilities not allowed for this exclusion.
      (6C) Add other conditions or restrictions including, but not limited to, additional recordkeeping and reporting requirements, management standards, financial assurance requirements, and public participation requirements.  Note: this roughly- and incompletely-defined sub-option is not evaluated in this RIA
      (6D) Petition process for requests to add certain chemicals, industries, and/or chemical function uses to the re-manufacturing criteria.

Option 7:	Revise pre-2008 DSW Recycling Exclusions & Exemptions
This revision to the pre-2008 DSW exclusions for recyclable materials will require:
      (7A) Containment ("contained") standards for excluded hazardous secondary material  -  applies to 31DSW exclusions
      (7B) Biennial notification for facilities operating under the various exclusions and exemptions  -  applies to 31 DSW exclusions
      (7C) Recordkeeping for speculative accumulation in all cases  -  applies to 40 CFR 261.4 DSW exclusions

Option 8:	Other Options for Revising the 2008 DSW Recycling Exclusions Evaluated in this RIA But Not Proposed
Other options evaluated during the initial formulation of this RIA that are not proposed:
      (8A) "Contained" performance standard for the 2008 DSW offsite transfer recycling exclusion.
      (8B) Intermediate facility restriction for the 2008 DSW offsite transfer recycling exclusion.
      (8C) Provision for facilities in non-adopting states to qualify for the 2008 DSW offsite transfer recycling exclusion.

C.  Potential Industry Costs for Complying With the 2011 Proposed Revisions

C1.  "Base Case" Adoption Scenario Cost Estimates

This RIA aggregates (i.e., adds-up) the incremental regulatory cost estimates for Options 1 to 7 listed above (not including Option 8) under two alternative future implementation (i.e., future adoption) scenarios: "13% base case scenario" and "74% upper-bound scenario".  Each scenario uses a 7% base case discount rate over the future 50-year period of 2015 to 2064, as well as two alternative discount rates (0% and 3%) for purpose of sensitivity analysis.  Each scenario consists of two industrial facility sub-populations which the 2011 proposed revisions might affect: (a) facilities which may operate under the 2008 DSW final rule exclusions and (b) facilities which are currently operating under the pre-2008 DSW exclusions (which were promulgated between 1985 and 1998).  The two alternative future implementation scenarios are:

   * 13% "base case" adoption scenario: Based on the actual average annual 2.33-year (December 28, 2008 through April 26, 2011) adoption rate for the 2008 DSW final rule.
         o 2008 DSW final rule exclusions:
            Assumes an average annual count of 13% (i.e., 662) of the 5,007 currently eligible RCRA-regulated industrial facilities (as of 2007) will adopt the 2008 DSW final rule exclusions, as revised according to the 2011 proposed revisions.
         o Pre-2008 DSW exclusions:
            Assumes an average annual count of 100% of the 5,321 industrial facilities (as of 2007) currently operating with pre-2008 DSW exclusions, will adopt the 2011 proposed revisions to the pre-2008 DSW exclusions.
   * 74% "upper-bound" adoption scenario: Based on the count of currently eligible RCRA-regulated facilities in the 44 states which might adopt the 2008 DSW final rule exclusions:
         o 2008 DSW final rule exclusions:
            Assumes an average annual count of 74% (i.e., 3,671) of the 5,007 currently eligible RCRA-regulated industrial facilities (as of 2007) will adopt the 2008 DSW final rule exclusions, as revised according to the 2011 proposed revisions.
         o Pre-2008 DSW exclusions:
            Assumes an average annual count of 100% of the 5,321 industrial facilities (as of 2007) currently operating with pre-2008 DSW exclusions, will adopt the 2011 proposed revisions to the pre-2008 DSW exclusions.

For purpose of summary, Exhibit A and Exhibit B below present this RIA's estimated industry compliance costs (or net cost savings) under the 13% base case scenario for Options 1 to 7 listed above.  Because Option 1, Option 2, and Option 6 are not mutually exclusive, there are two alternative ways to add-up the impacts across all seven options:
      Exhibit A (All Options 1 to 7): If Option 1 is selected then the baseline cost savings in Option 2 and 6 are included.
      Exhibit B (Only Options 3 to 7):  If Option 1 is NOT selected then the baseline cost savings in Options 2 and 6 are excluded to avoid double-counting.

                                   Exhibit A
           Potential Future Regulatory Compliance Costs to Industry
for EPA's 2011 Proposed Revisions to the RCRA "Definition of Solid Waste" (DSW) Industrial Recycling Exclusions
Note: Costs in this Exhibit are Incremental to the Cost Savings Estimated for the 2008 DSW Final Rule as "Baseline"
 13% "Base Case" Future Adoption Scenario And All Options 1 to 7 Selected
                              Proposed Revisions
                             (Regulatory Options)
             Average annual future affected industrial facilities
                      Cost estimates ($millions in 2011$)
                          @alternative discount rates

                                      0%
                                      3%
                                      7%
Average Annualized Costs (50-years 2015 to 2064):
1. Withdraw the 2008 DSW exclusion for offsite transfer recycling
                                      662
                                                                       $11.991
                                                                        $8.645
                                                                        $5.671
2. Implement alternative Subtitle C regulation for offsite transfer recycling
                                      662
                                                                       ($0.834)
                                                                       ($0.315)
                                                                        $0.099
3. Revise the 2008 DSW exclusion for generator-controlled recycling
                                      37
                                                                        $0.382
                                                                        $0.276
                                                                        $0.181
4. Revise the 2008 DSW definition of recycling "legitimacy"
                                    10,254
                                                                        $7.722
                                                                        $6.862
                                                                        $5.891
5. Revise the 1985 Variance and 2008 DSW non-waste determination petition process
                                      379
                                                                        $0.056
                                                                        $0.051
                                                                        $0.044
6. Add a new "re-manufacturing" DSW exclusion*
                                      30
                                                                       ($0.414)
                                                                       ($0.299)
                                                                       ($0.196)
7. Revise pre-2008 DSW recycling exclusions (1985 to 1998)
                                     5,321
                                                                        $1.883
                                                                        $1.674
                                                                        $1.437
                                                       Column totals (1 to 7) =
                                                                       $20.786
                                                                       $16.894
                                                                       $13.127
Present Value Costs (50-years 2015 to 2064):
1. Withdraw the 2008 DSW exclusion for offsite transfer recycling
                                      662
                                                                      $599.550
                                                                      $222.408
                                                                       $78.264
2. Implement alternative Subtitle C regulation for offsite transfer recycling
                                      662
                                                                      ($41.700)
                                                                       ($8.104)
                                                                        $1.366
3. Revise the 2008 DSW exclusion for generator-controlled recycling
                                      37
                                                                       $19.100
                                                                        $7.101
                                                                        $2.498
4. Revise the 2008 DSW definition of recycling "legitimacy"
                                    10,254
                                                                      $386.100
                                                                      $176.537
                                                                       $81.300
5. Revise the 1985 Variance and 2008 DSW non-waste determination petition process
                                      379
                                                                        $2.800
                                                                        $1.312
                                                                        $0.607
6. Add a new "re-manufacturing" DSW exclusion*
                                      30
                                                                      ($20.700)
                                                                       ($7.692)
                                                                       ($2.705)
7. Revise pre-2008 DSW recycling exclusions (1985 to 1998)
                                     5,321
                                                                       $94.150
                                                                       $43.067
                                                                       $19.832
                                                       Column totals (1 to 7) =
                                                                    $1,039.300
                                                                      $434.628
                                                                      $181.162

                                   Exhibit B
           Potential Future Regulatory Compliance Costs to Industry
for EPA's 2011 Proposed Revisions to the RCRA "Definition of Solid Waste" Industrial Recycling Exclusions
Note: Costs in this Exhibit are Incremental to the Cost Savings Estimated for the 2008 DSW Final Rule as "Baseline"
13% "Base Case" Future Adoption Scenario and Options 1 and 2 NOT Selected (Only Options 3 to 7)
                              Proposed Revisions
                             (Regulatory Options)
             Average annual future affected industrial facilities
                      Cost estimates ($millions in 2011$)
                          @alternative discount rates

                                      0%
                                      3%
                                      7%
Average Annualized Costs (50-years 2015 to 2064):
1. Withdraw the 2008 DSW exclusion for offsite transfer recycling
                               Not Selected = 0
                                                              Not Selected = $0
                                                              Not Selected = $0
                                                              Not Selected = $0
2. Implement alternative Subtitle C regulation for offsite transfer recycling
                               Not Selected = 0
                                                              Not Selected = $0
                                                              Not Selected = $0
                                                              Not Selected = $0
3. Revise the 2008 DSW exclusion for generator-controlled recycling
                                      37
                                                                        $0.000
                                                                        $0.000
                                                                        $0.000
4. Revise the 2008 DSW definition of recycling "legitimacy"
                                    10,254
                                                                        $7.318
                                                                        $6.571
                                                                        $5.691
5. Revise the 1985 Variance and 2008 DSW non-waste determination petition process
                                      379
                                                                        $0.057
                                                                        $0.044
                                                                        $0.044
6. Add a new "re-manufacturing" DSW exclusion*
                                      30
                                                                        $0.000
                                                                        $0.000
                                                                        $0.000
7. Revise pre-2008 DSW recycling exclusions (1985 to 1998)
                                     5,321
                                                                        $1.883
                                                                        $1.674
                                                                        $1.437
                                                       Column totals (3 to 7) =
                                                                        $9.258
                                                                        $8.289
                                                                        $7.172
Present Value Costs (50-years 2015 to 2064):
1. Withdraw the 2008 DSW exclusion for offsite transfer recycling
                               Not Selected = 0
                                                              Not Selected = $0
                                                              Not Selected = $0
                                                              Not Selected = $0
2. Implement alternative Subtitle C regulation for offsite transfer recycling
                               Not Selected = 0
                                                              Not Selected = $0
                                                              Not Selected = $0
                                                              Not Selected = $0
3. Revise the 2008 DSW exclusion for generator-controlled recycling
                                      37
                                                                        $0.005
                                                                        $0.003
                                                                        $0.001
4. Revise the 2008 DSW definition of recycling "legitimacy"
                                    10,254
                                                                      $365.900
                                                                      $169.051
                                                                       $78.540
5. Revise the 1985 Variance and 2008 DSW non-waste determination petition process
                                      379
                                                                        $2.850
                                                                        $1.132
                                                                        $0.607
6. Add a new "re-manufacturing" DSW exclusion*
                                      30
                                                                        $0.000
                                                                        $0.000
                                                                        $0.000
7. Revise pre-2008 DSW recycling exclusions (1985 to 1998)
                                     5,321
                                                                       $94.150
                                                                       $43.067
                                                                       $19.832
                                                       Column totals (3 to 7) =
                                                                      $462.905
                                                                      $213.252
                                                                       $98.980
Notes:
* $0 displayed in the Exhibit for Option 6 to indicate that based on the nationwide incremental analysis method presented in this RIA based on the entire RCRA-regulated universe of potentially relevant and eligible facilities, facilities would not be expected to incur incremental costs for Option 6 even though Chapter 5 of this RIA presents potential incremental costs for meeting the conditions (sub-options) of Option 6 without Option 1 (i.e., "without Option 1" = the 2008 DSW final rule exclusions remain in place), because Option 6 would be voluntary, not mandatory.  Consequently, facilities engaged in solvent recycling could chose to operate under either the 2008 DSW offsite transfer recycling exclusion, or under the Option 6 solvent re-manufacturing exclusion, depending upon which option provides the greatest net cost savings at the micro-economic (i.e., single facility) level.  This RIA did not conduct a micro-economic analysis for Option 6.  However, it is conceivable that Option 6 could yield future annual benefits without Option 1 if the additional conditions (cost element 6C of this RIA) are not finalized with Option 6, which would provide added economic incentive for facilities to operate under Option 6 rather than the 2008 DSW recycling exclusions.

C2.  Cost Estimate Uncertainty Ranges (Sensitivity Analysis)
Not revealed in the cost estimates in Exhibit A and B above are uncertainties in numerical values applied in this RIA as cost computation factors.  As defined and derived in Chapter 6 of this RIA, there are six cost estimation uncertainty factors which may influence the future annual cost of each option in any given year.  Exhibit C below presents how each of the uncertainty factors could affect the actual economic impacts of the DSW final rule in any given future year.  These six factors are not necessarily additive (i.e., compounding) in any given year.

                                   Exhibit C
Sensitivity of Estimated Industry Cost for Implementing the 2011 Proposed Revisions to the DSW Recycling Exclusions
                  to Six Cost Estimation Uncertainty Factors
Note: Costs in this Exhibit are Incremental to the Cost Savings Estimated for the 2008 DSW Final Rule as "Baseline"
13% "Base Case" Adoption Scenario for All Options 1 to 7; 50-year period-of-analysis 2015 to 2064; 2011$; 7% discount rate
                       Type of cost Uncertainty Factor*
                    Numerical Uncertainty Range in Factor*
                              Cost Estimate Range
                                  ($millions)

                                    Low-end
                                   High-end
                                    Low-end
                                   High-end
                   Average Annual Cost Estimate (without uncertainty applied) =
                                  $13.1/year
                              (source: Exhibit A)
                                       1
State government adoption uncertainty
                                   No change
                    (13% "base case" facilities adopt)
                                     +263%
                      (74% upper-bound facilities adopt)
                                  $13.1/year
                                  $47.5/year
                                       2
Future fluctuations in annual tonnages of hazardous secondary materials generated and destined for recycling
                                     -58%
                                     +42%
                                   $5.5/year
                                  $18.6/year
                                       3
Within-year discrepancy between generation & management tonnages
                                     -34%
                                     +39%
                                   $8.6/year
                                  $18.2/year
                                       4
RCRA SQGs in this RIA
                                     +58%
                                     +148%
                                  $20.7/year
                                  $32.5/year
                                       5
Physical & chemical quality of secondary materials available for viable recycling
                                     -10%
                                     -10%
                                  $11.8/year
                                  $11.8/year
                                       6
Expected accuracy of impact estimates
                                     -20%
                                     +30%
                                  $10.5/year
                                  $17.0/year
                                                   Range across all 6 factors =
                                     -58%
                                     +263%
                                   $5.5/year
                                  $47.5/year
Note:
* A potential 7[th] cost uncertainty factor is future fluctuations in market prices of recovered commodities from recycled materials.  However, the 7[th] factor is not applied in this RIA because it influences the micro-economic decisions by facilities to switch from disposal to recycling of their hazardous secondary materials, which is only a relatively small fraction of the total industry implementation cost savings estimate for the 2008 DSW recycling exclusions and the 2011 proposed revisions.

D.  Potential Benefits of the Proposed Revisions

Chapter 8 of this RIA identifies three categories of potential future benefits of the 2011 proposed revisions to DSW recycling exclusions.  However, this RIA does not quantify or monetize these benefit categories:

   * Benefit #1: Reduction in future environmental damages associated with industrial recycling of hazardous secondary materials (Options 1, 2, 6).
   * Benefit #2: Improved environmental compliance:
         o Clearer and more specific regulatory standards improve environmental compliance (Options 3, 4, 7, 8).
         o More stringent recordkeeping provisions improve environmental compliance (Options 3, 4, 7).
         o Self-reporting requirements (e.g., notification requirements) improve environmental compliance (Options 2, 3, 5, 7).
         o Increased likelihood of detection and potential penalty for non-compliance improves environmental compliance (Options 2, 3, 4, 5, 7).
   * Benefit #3: More specific standards result in reduced liability, less uncertainty for the regulated entity, and lower legal and credit costs (Options 3, 4, 7, 8).

E.  Findings of Supplemental Analyses

      E1.  Regulatory Planning and Review (1993 Executive Order 12866)

Executive Order 12866, as amended by Executive Order 13258, requires EPA to determine whether a regulatory action is "significant" and therefore subject to Office of Management and Budget (OMB) review and the requirements of the Executive Order.  As defined in Executive Order 12866, a "significant regulatory action" is any regulatory action that is likely to result in a rule that may: (1) have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or Tribal governments or communities; (2) create a serious inconsistency or otherwise interfere with an action taken or planned by another agency; (3) materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof; or (4) raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in the Executive Order.

      Finding: Based on the cost analyses presented in this RIA, the 2011 DSW proposed revisions are not expected to be "economically significant" because in aggregate, the proposed revisions are not expected to have a future annual effect on the economy of $100 million or more, even when non-discounted (i.e., 0% discount rate):

   * 7% discount rate:  Annual costs for the 2011 proposed revisions to the pre-2008 and 2008 DSW exclusions are estimated between:
         o 13% base case adoption:	$7.2 million per year (all Options 1 to 7) and $13.1 million per year (only Options 3 to 7).
         o 74% upper-bound adoption:	$7.4 million per year (all Options 1 to 7) and $47.5 million per year (only Options 3 to 7).
   * 0% discount rate:  Annual costs under the 74% upper-bound adoption scenario are between $11.5 million and $67.7 million per year.

      E2.  Small Business Impact Analysis (1980 RFA/1996 SBREFA)

Because the DSW recycling exclusions are voluntary, as well as deregulatory compared to full regulation of recycling under RCRA Subtitle C regulations, there is no adverse impact to small entities subject to the DSW exclusions.  However, the 2011 proposed revisions to the DSW exclusions are expected to incrementally increase future costs to industrial facilities for complying with the 2011 proposed conditions for the DSW recycling exclusions.  According to the requirements of the 1980 Regulatory Flexibility Act (RFA) as amended by the 1996 Small Business Regulatory Enforcement Fairness Act (SBREFA), Federal regulatory agencies are required to make initial determinations if proposed regulatory actions may have a "significant economic impact on a substantial number of small entities" (SISNOSE).  Small entities include small businesses, small organizations, and small governmental jurisdictions.  EPA's 2011 proposed DSW revisions could potentially affect the following cumulative counts of facilities by year 2064 over the 50-year period of this RIA (Note: cumulative counts are higher than the average annual facility counts reported elsewhere in this RIA):

   * 13% "base case" adoption scenario:		6,497 industrial facilities cumulative count to 2064
         o Consisting of 1,176 2008 DSW exclusion facilities+ 5,321 pre-2008 RCRA exclusion facilities
   * 74% "upper-bound" adoption scenario:	9,102 industrial facilities cumulative count to 2064
         o Consisting of 3,781 2008 DSW exclusion facilities + 5,321 pre-2008 RCRA exclusion facilities

These facilities are located in 622 industries at the 6-digit NAICS code level (as listed in Appendix A).  This RIA evaluated 27 NAICS industries with the largest number of facilities potentially affected (i.e., in NAICS sub-sectors 32, 33, 54, 56, 61, 62, 92).  The percentage of small businesses operating under DSW recycling exclusions is estimated in this RIA as 14% (see Chapter 7), based on analysis of businesses operating under the 2008 DSW exclusions as of October 2010.  Thus, this RIA assumes that 14% of industrial facilities which may be affected by the 2011 proposed revisions are owned by small businesses.

This RIA evaluated potential impacts on small businesses, by comparing the total compliance cost in each industry on a per-facility average annual cost basis for compliance with all of the proposed revision options, to the respective per-facility average annual business revenues in each industry.

      Finding: The average annual impact on small businesses is estimated to be significantly less than 1% of annual sales for all small entities.  The highest impact as a percentage of sales is estimated at 0.41% of annual sales.  The total number of small businesses impacted at this level is estimated at 21 small entities under the 13% base-case adoption scenario, and 30 small entities under the 74% adoption scenario, which represents 2.3% to 2.4%, respectively, of the 910 (13% scenario) to 1,274 (74% scenario) small entities which could be impacted by the proposed revisions to the 2008 and pre-2008 recycling exclusions.

Based on the results of this "sales test" method as interpreted relative to the impact thresholds presented in the "SISNOSE decision process" table of EPA's November 2006 final guidance for RFA compliance, this RIA concludes that the 2011 proposed revisions to the DSW recycling exclusions will not have a "significant economic impact on a substantial number of small entities" (i.e., "No SISNOSE").

   E3.  Unfunded Mandates Analysis (1995 UMRA)

Potential future annual added costs to state, local, and tribal governments could include the following eleven paperwork activities associated with Option 2, Option 4, Option 5, Option 6, and Option 7 of the 2011 proposed revisions to the DSW recycling exclusions:

   1. Receive, review and file biennial notifications (Options 2, 4, 6, & 7)
   2. Receive, review and file reclamation plan (Option 2)
   3. Receive, Review and approve emergency plans (Option 2)
   4. Receive, review and file notification of compliance regarded affected release area (Option 2)
   5. Review RCRA permit applications and enter into database (Option 2)
   6. Evaluate legitimacy petitions (Option 4)
   7. Evaluate legitimacy documentation (Options 4)
   8. Receive, review, and file re-application for variance or non-waste determination (Option 5)
   9. EPA provides online public access to a list (including documentation) of facilities receiving non-waste determinations (Option 5).
   10. Petition process for re-manufacturing exclusion (Option 6)
   11. Other State paperwork requirements under existing paperwork requirements covering 2008 revisions to the RCRA definition of solid waste, RCRA hazardous waste manifest system requirements, hazardous waste generator standards, hazardous waste specific unit requirements and special waste processes and types, and air emission standards for tanks, surface impoundment and containers.

As estimated in this RIA (Chapter 7), the maximum state government share of estimated future annual regulatory costs under all options (i.e., Options 1 to 7 combined) is:

   * 13% "base case" adoption scenario:		$8.5 million per year
   * 74% "upper bound" adoption scenario:	$9.1 million per year

No impacts are expected for local or tribal governments.  Because the impacts of all the regulatory options are expected to result in expenditures well below the UMRA $100 million threshold for state governments, this RIA concludes that the 2011 DSW rule is not an unfunded mandate according to this UMRA cost threshold.

   E4.  Federalism Implications (1999 Executive Order 13132)

The 1999 Federalism Executive Order 13132 (Federal Register, Vol.64, No. 153, 10 Aug 1999) furthers the policies of the 1995 Unfunded Mandates Reform Act (UMRA) by establishing federalism principles, federalism policymaking criteria, and a state/local government consultation process for the development of Federal regulations that have federalism implications.  Federalism implications refers to regulations and other Federal policies and actions that have substantial direct effects on states, on the relationship between the Federal government and the states, or on the distribution of power and responsibilities among the various levels of government.  For purpose of complying with the Section 6 consultation process of EO 13132, this section of the RIA evaluates whether the 2011 proposed revisions to the DSW recycling exclusions (i.e., Option 1 thru Option 7) may "impose substantial direct compliance costs" on state/local governments.  EPA's 2008 guidance for compliance with EO 13132 describes two numerical methods (i.e., numerical tests) for evaluating whether an EPA rule may have federalism implications with respect to the "substantial direct compliance costs" criterion:

   * $25 million test: Annualized direct compliance costs to state/local governments in aggregate of $25 million or more
   * 1% test: Annualized direct compliance costs to state/local governments equal or exceed 1% of state/local government annual revenues

As listed above in the prior (UMRA) section, potential future annual added costs to state, local, and tribal governments could include the following 11 paperwork activities associated with Option 2, Option 4, Option 5, Option 6, and Option 7 of the 2011 proposed revisions:

   1. Receive, review and file biennial notifications (Option 2, 4, 6, & 7)
   2. Receive, review and file reclamation plan (Option 2)
   3. Receive, Review and approve emergency plans (Option 2)
   4. Receive, review and file notification of compliance regarded affected release area (Option 2)
   5. Review RCRA permit applications and enter into database (Option 2)
   6. Evaluate legitimacy petitions (Option 4)
   7. Evaluate legitimacy documentation (Option 4)
   8. Receive, review, and file re-application for variance or non-waste determination (Option 5)
   9. EPA provides online public access to a list (including documentation) of facilities receiving non-waste determinations (Option 5).
   10. Petition process for re-manufacturing exclusion (Option 6)
   11. Other State paperwork requirements covering 2008 revisions to the RCRA definition of solid waste, RCRA hazardous waste manifest system requirements, hazardous waste generator standards, hazardous waste specific unit requirements and special waste processes and types, and air emission standards for tanks, surface impoundment and containers.

As displayed in the prior (UMRA) section above, the state government share of estimated future annual direct costs is estimated in this RIA at $8.5 million per year for the 13% base case adoption scenario, and $9.1 million per year for the 74% upper bound adoption scenario.  No added costs are expected for local or tribal governments.  Because these direct costs are well below the $25 million test threshold, this RIA concludes that the 2011 DSW rule does not meet the Federalism cost threshold.

      E5.  Energy Impact Analysis (2001 Executive Order 13211)

White House Executive Order 13211 "Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use" (66 FR 28355, May 22, 2001) requires Federal agencies to prepare and submit a Statement of Energy Effects to OMB for those matters identified as significant energy actions.  As defined in Executive Order 13211, a "significant energy action" is any action by an agency that promulgates or is expected to lead to the promulgation of a final rule or regulation, including notices of inquiry, advance notices of proposed rulemaking, and notices of proposed rulemaking that: (1) is a significant regulatory action under Executive Order 12866 or any successor order and is likely to have a significant adverse effect on the supply, distribution, or use of energy; or (2) is designated by OMB as a significant energy action.  EPA's 2011 proposed revisions to the DSW recycling exclusions do not involve the supply, distribution, or use of energy, nor are the proposed revisions over $100 million in expected future annual effect (i.e., "significant") under Executive Order 12866.  Thus, Executive Order 13211 does not apply to the 2011 proposed rule.

      E6.  Improving Regulation & Regulatory Review (2011 Executive Order 13563)

The basic framework, scope, and contents of this RIA represent a "benefit-cost analysis" which is the type of analysis required under section 6(a)(2)(B) of the 1993 Executive Order 12866.  Furthermore, for rules which are expected to have more than a $100 million per year "economically significant" annual effect on the economy, Section 6(a)(2)(C) of Executive Order 12866 requires Federal regulatory agencies (such as the EPA) to assess the potential effects of the benefits and costs of the proposed regulation on economic and market efficiency, productivity, employment, competitiveness, health, safety, and the natural environment.  The January 2011 Executive Order 13563 "Improving Regulation and Regulatory Review" reaffirmed the principles, structures, and definitions established by Executive Order 12866.  However, because the 2011 DSW proposed rule is not expected to be an "economically significant" rule according to the quantified and monetized benefits (i.e., cost savings) and costs as estimated elsewhere in the prior chapters of this RIA, this RIA does not attempt to provide quantitative assessments of these other effects, but provides the following qualitative information about some of these other effects.

EPA anticipates the 2011 DSW proposed rule, if promulgated, may increase net employment in the long-term, for the following reason.  EPA is proposing revisions to a set of 35 existing exclusions to RCRA industrial waste management regulations which EPA promulgated between 1985 and 2008.  EPA promulgated three of the 35 exclusions in 2008, and the 32 other exclusions EPA promulgated between 1985 and 2002.  Facilities in industries which are eligible to operate under these exclusions realize annual savings in regulatory costs, compared to operating under full RCRA Subtitle C hazardous waste regulations without these exclusions.  However, not all state governments have adopted each of these existing 35 exclusions, particularly with regard to the most recent 2008 set of three RCRA exclusions for operations involving industrial recycling of hazardous secondary materials which are not discarded.  As of almost three years after EPA's promulgation of the 2008 exclusions, only four states (ID, IL, NJ, and PA) have voluntarily adopted the exclusions, and only 49 industrial facilities have notified EPA regional offices they are operating under the 2008 exclusions.

One reason why more states have not yet adopted the 2008 exclusions, as well as not yet adopted the pre-2008 exclusions, is some states do not believe some of the exclusions are fully protective of human health and the environment.  During EPA's 2008 DSW exclusions rulemaking, 12 state governments commented to EPA on the 2007 DSW exclusions re-proposed rule, they were not likely to adopt the one or more of the three 2008 DSW final rule exclusions.  These 12 states account for 23% of foregone RCRA regulatory cost savings to industries compared to nationwide cost savings potential under hypothetical total adoption of the 2008 DSW exclusions by all states.

For the 32 existing pre-2008 RCRA industrial recycling exclusions an average of eight states representing 5.3% of nationwide total RCRA industrial hazardous waste generation have not yet adopted 12 of those 32 exclusions, and 24 states have not adopted at least one of the 32 exclusions.  Because it is EPA's intention in the 2011 DSW proposed rule, to remedy the concerns of these non-adopting states about the under-protectiveness of these exclusions, EPA believes that once promulgated, more states may be induced to adopt both the pre-2008 and the 2008 DSW exclusions, thereby making more industrial facilities eligible for regulatory cost savings, which they may pass-thru to their customers in the form of lower prices for goods and services thereby improving market efficiency, stimulating economic growth, and creating jobs in those industries.
                                   Chapter 1
                               Problem Statement
                     (Justification for Regulatory Action)

Note: This RIA interchangeably uses the words "recycling", "reclamation", "recovery", "reuse" and "regeneration" as synonyms.  However, there are distinct RCRA regulatory differences in the usage of these words (source: July 1, 2010 version of 40 CFR 261.1(c)), as follows:
* A material is ``reclaimed'' if it is processed to recover a usable product, or if it is regenerated. Examples are recovery of lead values from spent batteries and regeneration of spent solvents. In addition, for purposes of Sec. Sec. 261.2(a)(2)(ii), 261.4(a)(23), and 261.4(a)(24) smelting, melting, and refining furnaces are considered to be solely engaged in metals reclamation if the metal recovery from the hazardous secondary materials meets the same requirements as those specified for metals recovery from hazardous waste found in Sec. 266.100(d)(1)-(3), and if the residuals meet the requirements specified in Sec. 266.112.
* A material is ``used or reused'' if it is either:    (i) Employed as an ingredient (including use as an intermediate) in an industrial process to make a product (for example, distillation bottoms from one process used as feedstock in another process). However, a material will not satisfy this condition if distinct components of the material are recovered as separate end products (as when metals are recovered from metal-containing secondary materials); or    (ii) Employed in a particular function or application as an effective substitute for a commercial product (for example, spent pickle liquor used as phosphorous precipitant and sludge conditioner in wastewater treatment).
* A material is ``recycled'' if it is used, reused, or reclaimed.
This RIA does not include burning wastes for "energy recovery" or otherwise "using wastes as fuel" as forms of waste recycling in the scope of EPA's 2011 proposed revisions to the DSW or to this RIA.  The word "re-manufacturing" has a distinct definition in Option 6 of this RIA.

1A.	Purpose of EPA's 2011 Proposed Regulatory Changes

The Environmental Protection Agency (EPA) is proposing to revise the industry regulatory compliance requirements (i.e., conditions) of the recycling exclusions of the "definition of solid waste" (DSW) under Subtitle C of the 1976 Resource Conservation and Recovery Act (RCRA).  The DSW exclusions involve industrial hazardous secondary materials intended for recycling (i.e., reclamation, recovery, regeneration, or reuse) rather than disposal.  Some of the DSW exclusions date back to 1985, whereas other DSW exclusions are relatively new (2008).

EPA's 2011 proposed regulatory revisions are in part, in response to a January 2009 petition submitted to the EPA by the Sierra Club (San Francisco, CA), about potential increases in risks to human health and the environment associated with recycling of industrial hazardous secondary materials excluded under EPA's three 2008 DSW exclusions.  These proposed revisions are intended to ensure that the 2008 DSW exclusions encourage recycling in industrial operations under conditions necessary to protect human health and the environment from potential mismanagement of hazardous secondary materials, for example, if such hazardous materials destined for recycling instead become discarded or otherwise mismanaged, resulting in potentially harmful environmental releases of the hazardous materials.  In addition, EPA is also proposing revisions to the 32 pre-2008 RCRA exclusions for industrial hazardous secondary material recycling.

The proposed revisions would affect two sets of DSW exclusions and hazardous waste recycling under Subtitle C:

   1. Revisions to 2008 DSW exclusions:  Revise the 2008 DSW exclusions for certain types of hazardous secondary materials that are conditionally excluded from the DSW.  EPA promulgated these exclusions in October 2008 to encourage the recovery and reuse of valuable resources as an alternative to disposal (discard) of such materials as waste, while at the same time maintaining protection of human health and the environment. (73 FR 64688, October 30, 2008).
   2. Revisions to pre-2008 DSW exclusions:  Add additional regulatory conditions to the pre-2008 DSW exclusions for recyclable materials.  The proposed additions include (1) recordkeeping; (2) biennial notification, (3) containment standards, and (d) increasing the number of mandatory eligibility criteria.  The pre-2008 DSW recycling exclusions date between 1985 and 1998.
   3. Revisions to hazardous waste recycling under Subtitle C:  Revise the definition of legitimacy for materials that are regulated under Subtitle C prior to recycling or subject to reduced regulation.  The concept of legitimate recycling is used to determine if a unit is a recycling unit exempt from RCRA Subtitle C permitting or is a regulated waste treatment or storage unit subject to full RCRA Subtitle C permitting.

1B.	Justification for EPA's Proposed Regulatory Changes

EPA's 2011 proposed revisions to the DSW recycling exclusions are required by law (RCRA).  The proposed revisions constitute EPA's notice of action in response to a petition submitted to EPA under section 7004(a) of RCRA:

      RCRA Section 7004(a) Petition.  -  Any person may petition the [EPA] Administrator for the promulgation, amendment, or repeal of any regulation under this Act.  Within a reasonable time following receipt of such petition, the [EPA] Administrator shall take action with respect to such petition and shall publish notice of such action in the Federal Register, together with the reasons therefor.

On January 29, 2009, the Sierra Club submitted an administrative petition under RCRA section 7004(a), 42 U.S.C. 6974(a),  to the Administrator of EPA requesting that EPA repeal the October 2008 revisions to the DSW and stay the implementation of the rule.  The petition argued that the revised regulations are unlawful and that they increase threats to public health and the environment without producing compensatory benefits, and therefore, should be repealed.  Among other things, the petition singled out the lack of regulatory definitions in the 2008 DSW exclusions for the words "contained" and "significant release."  The petition also disagreed with EPA's findings that the 2008 DSW exclusions would have no adverse environmental impacts, including the finding there would be no adverse impact to environmental justice communities (i.e., minority and low-income populations) or children's health.  Here is an excerpt from the petition (page 2):

      "EPA promulgated the DSW Rule on October 30, 2008. The Rule exempted 1.5 million tons (over 3 billion pounds) of hazardous waste from stringent regulation under RCRA, relieving companies handling the most dangerous substances regulated by EPA from complying with requirements intended to protect human health and the environment. The Rule is an impermissible abdication of the agency's statutory mandate to prevent spills, midnight dumping, and poor management practices that contaminate air, soil, and water, especially in the minority and low-income neighborhoods disproportionately affected by pollution. By EPA's own analysis the winners are those who wish to "recycle" hazardous waste without the burden of safeguards that have proven effective in reducing harm. The losers are those communities near more than 5,000 chemical companies, pharmaceutical manufacturers, and industrial waste facilities that handle hazardous waste or through which the billions of pounds of deregulated hazardous materials will be transported."

On March 6, 2009, a coalition of industry associations ("industry coalition") submitted a letter to the EPA Administrator in response to the January 2009 Sierra Club petition.  The industry coalition consisted of the following organizations (listed below in alphabetical order):

   1. Alliance of Automobile Manufacturers
   2. American Chemistry Council (ACC)
   3. American Coke & Coal Chemicals Institute (ACCCI)
   4. American Forest & Paper Association (AF&PA)
   5. Metals Industries Recycling Coalition (MIRC)  -  this organization is a coalition of the following organizations:
         a. American Iron & Steel Institute (AISI)
         b. Copper & Brass Fabricator's Council
         c. Copper Development Association Inc. (CDA)
         d. International Metals Reclamation Company, Inc. (Inmetco)
         e. Specialty Steel Industry of North America (SSINA)
         f. Steel Manufacturers Association (SMA)
   6. National Paint & Coatings Association (NPCA)
   7. Treated Wood Council (TWC)
   8. Synthetic Organic Chemical Manufacturers Association (SOCMA)

This letter requested that EPA deny the Sierra Club's petition on the grounds that the 2008 DSW exclusions comport with prior court cases construing the scope of EPA's jurisdiction to regulate solid waste under RCRA, and that the 2008 DSW exclusions achieve significant economic and conservation benefits, while imposing significant controls on the hazardous secondary material recycling industry that are fully protective of the environment.  The letter also responds to each of the specific points raised by the Sierra Club in its petition.  Here is an excerpt from the industry coalition letter (page 3):

      "The conditions imposed under the Rule on the generators, reclaimers, intermediate facilities, and transporters seeking to avail themselves of the Rule's exclusions are significant. These conditions, entirely ignored by Sierra Club, are based on the evidence in the record, and are designed to ensure that hazardous secondary materials reclaimed under the Rule's exclusions, are done so legitimately while protecting public health and the environment from potential hazards associated with such hazardous secondary material recycling. Along will the other conditions, the "reasonable efforts" and "financial assurance" requirements in particular, will prevent, if not entirely eliminate, the types of mismanagement and abandonment EPA identified during the rulemaking as having contributed to environmental harm at some recycling facilities."

   * June 2009 EPA Public Meeting

In response to the Sierra Club's administrative petition, EPA issued a May 27, 2009, Federal Register notice (74 FR 25200) describing possible actions and optional paths forward and announcing a public meeting on June 30, 2009, to allow the public and interested stakeholders to provide input to the decision-making process.  EPA's May 2009 published notice announcing the planned public meeting, described the scope of possible EPA action.  The concept of "discard" was the main concept governing the realm of action.  As stated in RCRA section 1004(27):

      "[S]olid waste'' is defined as "any garbage, refuse, sludge from a waste treatment plant, water supply treatment plant, or air pollution control facility and other discarded material ,,, resulting from industrial, commercial, mining and agricultural activities.''

EPA's May 2009 meeting notice stated EPA did not intend to repeal the 2008 DSW exclusions as requested in Sierra Club's 2009 petition:

      "Because the final revisions to the definition of solid waste are closely tied to EPA's interpretation of ``discard,'' EPA does not expect to completely repeal the rule or stay its implementation, because such an action could result in hazardous secondary materials that are not discarded being regulated as hazardous waste. In particular, EPA said that it does not expect to repeal either the exclusion for hazardous secondary materials reclaimed under the control of the generator or the non-waste determination petition process. However, the Agency stated that there may be opportunities to revise other parts of the definition of solid waste rule, such as the definition of legitimacy and the transfer-based exclusion, in ways that could increase environmental protection, while still appropriately defining when a hazardous secondary material being reclaimed is a solid waste" (74 FR 25203).

A total of 33 individuals provided verbal comments at EPA's June 30, 2009 public meeting.

   * EPA's Settlement Agreement with the Sierra Club

On September 7, 2010, EPA signed a settlement agreement with the Sierra Club under which EPA agreed to propose a rule which would address, at minimum, the issues raised in the Sierra Club's administrative petition.  As announced in the Federal Register (Vol.74, No.100, May 27, 2009), EPA's June 30, 2009 public meeting addressed four issue areas for potential revision of the 2008 DSW recycling exclusions:

   1. Definition of "contained"
   2. Revisions to notification requirements
   3. Definition of "legitimacy"
   4. Revisions to the offsite transfer-based recycling exclusion

The Sierra Club petition also included a request for EPA to immediately stay and revoke the 2008 DSW recycling exclusions. To support this request, the petition asserted that EPA's industrial hazardous secondary materials recycling damage case study demonstrates that hazardous waste recycling has caused substantial harm to health and the environment and that the 2008 DSW final rule increases the likelihood of greater future harm.  The petition also asserted that the 2008 DSW final rule does not account for the instability of recycling markets and that current financial conditions increase the risk of hazardous waste abandonment.  In addition, the petition asserted that the 2008 DSW final rule will not substantially increase recycling and that the economic benefits are few and will only accrue to deregulated industries. Additionally, the petition claimed that there would be job losses in the hazardous waste treatment industry and increased worker health problems as a result of the rule.

EPA addressed the Sierra Club's request to revoke the 2008 DSW final rule in whole and stay its implementation in the May 27, 2009 public meeting notice, which continues to reflect EPA's current thinking.  In that notice, EPA stated at 74 FR 25202:

      "The scope of possible changes to the definition of solid waste is governed by the concept of "discard."  As discussed in the preamble to the DSW final rule, EPA used the concept of discard as the central organizing idea behind the October 2008 revisions to the definition of solid waste.  As stated in RCRA section 1004(27), ``solid waste'' is defined as ". . . any garbage, refuse, sludge from a waste treatment plant, water supply treatment plant, or air pollution control facility and other discarded material . . .resulting from industrial, commercial, mining and agricultural activities.'' (emphasis added)  Therefore, in the context of the DSW final rule, a key issue relates to the circumstances under which a hazardous secondary material that is recycled by reclamation is or is not discarded (73 FR 64675).  In exercising its discretion in the DSW final rule to define what constitutes "discard" for hazardous secondary materials reclamation, EPA included an explanation of how each provision of the final rule relates to discard (73 FR 64676-64679).....
      .....Because the final revisions to the definition of solid waste are closely tied to EPA's interpretation of the concept of "discard," EPA does not plan to repeal the rule in whole or stay its implementation.  Such an action could result in hazardous secondary materials that are not discarded being regulated as hazardous waste.  In particular, EPA does not expect to repeal either the exclusion for hazardous secondary materials reclaimed under the control of the generator or the non-waste determination petition process.
      However, EPA believes that there may be opportunities to revise or clarify the definition of solid waste rule, particularly with respect to the definition of legitimacy and the transfer-based exclusion, in ways that could improve implementation and enforcement of the provisions, thus increasing environmental protection, while still appropriately defining when a hazardous secondary material being reclaimed is a solid waste and subject to hazardous waste regulation."

EPA's Federal Register notice for the 2011 proposed revisions to the DSW includes a discussion of several potential changes to the three 2008 DSW exclusions.  In addition, EPA is proposing conforming changes to the 32 pre-2008 DSW and other RCRA industrial recycling exclusions.

   * EPA's New Environmental Justice Analysis for DSW Recycling Exclusions

The Sierra Club petition asserted that EPA's conclusion that the 2008 DSW final rule would have no adverse environmental impacts, and therefore would have no disproportional adverse impacts to minority and low-income communities, is unsupported by the administrative record.  Many commentors (including those at EPA's 2009 public meeting and those who responded with written comments) expressed strong concerns that EPA did not adequately address environmental justice (EJ) in the rulemaking.

In response to these concerns, EPA committed to perform a more rigorous and thorough analysis of the EJ impacts of the 2008 DSW final rule.  EPA committed to producing a new EJ analysis to evaluate the potential disproportionate impacts of the 2008 DSW final rule, on both of these two EJ groups (i.e., minority and low-income populations).  EPA's shared its January 2009 draft methodology for the EJ analysis with the public in January 2010, and presented the draft methodology to the National Environmental Justice Advisory Committee (NEJAC) and discussed it at three public roundtable meetings (January 28, 2010 New Orleans, LA; February 23, 2010 EPA Potomac Yard Conference Center, Arlington, VA; and February 25, 2010 Web Conference).  EPA considered the public comments raised in those meetings and conducted the new EJ analysis.  EPA's EJ analysis contractor (ICF Inc.) completed a preliminary draft for EPA internal review in October 2010.
                                   Chapter 2
                   Regulatory Options Evaluated in This RIA

The scope of revisions to the RCRA DSW exclusion regulations evaluated in this RIA, include the following options and sub-options.

Option 1:	Withdraw the 2008 DSW Exclusion for Offsite Transfer Recycling
Withdraw the 2008 DSW exclusion at 40 CFR 261.4(a)(24) and (25) for hazardous secondary materials that are transferred offsite for the purpose of reclamation, and replace it with alternative RCRA Subtitle C regulations for hazardous recyclable materials under Option 2 below.
   * Option 2 below is a companion to this option, as it presents a regulatory alternative for offsite reclamation if the 2008 DSW offsite reclamation exclusion is withdrawn.

Option 2:	Implement Alternative RCRA Subtitle C Regulation for Offsite Transfer Recycling
As a corollary to Option 1 above, implement an alternative RCRA Subtitle C regulation for hazardous recyclable materials that are transferred offsite for reclamation.  Waste generators would need to meet the following requirements:
      (2A) Notification: Submit a notification prior to operating under this new RCRA regulation, and thereafter biennially using EPA Form 8700-12.
      (2B) Reclamation plan: Make advance arrangements for legitimate reclamation and documents those arrangement in a reclamation plan.
      (2C) Accumulation: Allow accumulation of hazardous recyclable materials by the generator for up to one year, but accumulate no more than two shipments of hazardous recyclable materials at any one time.
      (2D) Management: Meets labeling, emergency preparedness, contingency planning and management standards similar to those required for hazardous waste generators.
      (2E) Transportation: Sends the hazardous recyclable materials under either a hazardous recyclable materials manifest or a hazardous waste manifest to a RCRA permitted reclamation facility and maintain records of shipments for three years.

Option 3:	Revise the 2008 DSW Exclusion for Generator Controlled Recycling
Modify the 2008 DSW exclusion for hazardous secondary materials reclaimed under the control of the generator by:
      (3A) Add a regulatory definition of "contained".
      (3B) Make notification a condition of the exclusion.
      (3C) Add a recordkeeping requirement for speculative accumulation.
      (3D) Add a recordkeeping requirement for reclamation under toll manufacturing agreements.
      (3E) Eliminate the 2008 DSW "toll manufacturing" recycling exclusion.
      (3F) Relocate the non-land based and land-based unit operational requirements in 40 CFR 261 so they both appear in the same section.

Option 4:	Revise the 2008 DSW Definition of "Legitimate" Recycling
Revise the 2008 DSW definition of legitimate recycling (i.e., legitimacy) by:
      (4A) Apply the codified definition to all industrial recycling under the pre-2008 set of regulatory exclusions.
      (4B) Make all 4 legitimacy factors mandatory, with a petition process where one factor is not met but the recycling is still legitimate for the 2008 DSW regulatory exclusions and hazardous wastes being recycled under Subtitle C.
      (4C) Require documentation of recycling legitimacy for the 2008 DSW regulatory exclusions and hazardous wastes being recycled under Subtitle C.

            Option 5:	Revise the 1985 Partial Recycling Variance and 2008 DSW Non-Waste Determination Petition Processes
            Modify the non-waste determination petition process by requiring:
      (5A) Require applicants to re-apply in the event the material no longer meets the relevant criteria under 40 CFR 260.33(c).
      (5B) Require biennial notification using EPA Form 8700-12 in compliance with 40 CFR 260.42.
      (5C) Modify the 1985 40 CFR 260.31(c) DSW variance for partially recycled materials:
               EPA's 1985 40 CFR 260.31 RCRA regulation contains three DSW variances for certain types of recyclable industrial materials:
   *                    40 CFR 260.31(a): Materials accumulated without 75% being recycled within one year.
   *                    40 CFR 260.31(b): Materials that are reclaimed and then reused within the original primary process in which generated.
   *                    40 CFR 260.31(c): Materials that have been partially reclaimed but must be reclaimed further before recovery is completed.
                The CFR regulatory text for each of these three variances states that EPA's determination of whether to grant requests for these variances "will be based on the following criteria/factors."  However, when EPA originally promulgated this variance on January 4, 1985 (Federal Register, Vol.50, No.3, pages 614 to 668), EPA stated in the preamble for two of the three variances (i.e., (b) and (c)), that the Regional Administrator or authorized state under variance (b) "can rely on any or all of these criteria, and can weigh them as he deems appropriate," and under variance (c) "may weigh these factors as she sees fit, and may rely on any or all of them to reach a decision." Upon EPA's reflection and experience, this approach under variance (c) is too ambiguous and further clarification is required.  More specifically, EPA believes the six criteria for variance (c) must be reviewed and evaluated collectively since each criterion reinforces and supports the other criteria.  Failure to meet any one criterion is sufficient not to grant a variance.  Similarly, EPA believes that modifying the six criteria to make it clear at what point in the reclamation process the variance is intended to apply would foster greater clarity and consistency in application.  Therefore, this option consists of two corresponding revisions to 40 CFR 260.31(c):
                  (1) Require all six of the 1985 criteria for evaluating partial recycling variance applications be met, not "on any or all of them."
                  (2) Modify wording of five of the six criteria to make it clear at what point in the recycling process the variance is intended to apply would foster greater clarity and consistency in application, as follows (additions shown in italics):
               1.                      The degree of processing the material has undergone by the initial partial reclamation process and the degree of further processing that is required.
               2.                      The value of the material after it has been partially reclaimed.
               3.                      The degree to which the partially reclaimed material is like an analogous raw material entering the final reclamation process.
               4.                      The extent to which an end market for the partially reclaimed material is guaranteed.
               5.                      The extent to which the partially reclaimed material is handled to minimize loss.
               6.                      Other relevant factors.
                  This option would not require RCRA-authorized state government agencies or EPA Regional Offices to re-visit previously granted variances.
      (5D) Non-waste determination petitioners to demonstrate why they cannot or should not meet existing DSW exclusions (at 40 CFR 261.2 or 261.4).
       (5E) Change the word "Administrator" to "Regional Administrator" in 40 CFR 260.30 to 260.34, due to the regional- and case-specific nature of non-waste determinations.

Option 6:	Add a "Re-Manufacturing" DSW Exclusion
Add a new DSW recycling exclusion involving inter-company transfer for off-site reclamation of solvents via "re-manufacturing" (i.e., transfer from one manufacturer to another) for the purpose of extending the useful life of the original solvent, by keeping the solvent in commerce to reproduce a commercial grade of the original solvent for continued use as a "processing aid" to manufacturing.  This exclusion would operate according to the following five eligibility criteria and three other sub-options:
      (6A)  Eligibility criteria:
            (6A.1) 18 types of solvents only:
               1. Toluene
               2. Xylenes
               3. Ethylbenzene
               4. 1,2,4-trimethylbenzene
               5. Chlorobenzene
               6. n-hexane
               7. Cyclohexane
               8. Methyl tert-butyl ether
               9. Acetonitrile
               10. Chloroform
               11. Chloromethane
               12. Dichloromethane
               13. Methyl isobutyl ketone
               14. N,N-dimethylformamide
               15. Tetrahydrofuran
               16. Ethanol
               17. n-butyl alcohol
               18. Methanol
            (6A.2) Solvents (a) to be re-manufactured originate from, and (b) after re-manufacturing must be used in, three types of functional uses as manufacturing "processing aids" (i.e., not cleaning or de-greasing operations):
               1. Chemical manufacturing aid (reacting, extracting, and/or purifying chemicals)  -  plus for the re-manufacturer use as a chemical intermediate function in which the chemical gets consumed (destroyed) in chemical manufacturing reactions.
               2. Chemical processing aid (extracting and purifying chemicals)
               3. Chemical formulation aid (blending chemicals)
            (6A.3) Solvents to be re-manufactured originate from four manufacturing sectors only:
               1. NAICS 325199 basic organic chemical manufacturing
               2. NAICS 325211 plastics & resins manufacturing
               3. NAICS 325412 pharmaceutical manufacturing
               4. NAICS 325510 paints & coatings manufacturing
            (6A.4) Five exclusion conditions for both the generator and the re-manufacturer:
               1. Initial notification and update notification every 2-years.
               2. Maintain onsite a copy of a re-manufacturing plan.
               3. 3-year recordkeeping of shipments and shipment confirmation receipts between generator and re-manufacturer.
               4. (a) Prior to re-manufacturing store solvents in labeled tanks or containers meeting 40 CFR 264 subparts I and J RCRA Subtitle C hazardous waste regulations for the design, operation & maintenance, inspection, and end-of-life closure of containers and tanks, respectively; and (b) during re-manufacturing comply with 40 CRF 264 subparts AA, BB, CC RCRA hazardous waste regulations for process vent, equipment leak, and tank/ container air emission controls, respectively.
               5. No speculative accumulation according to the RCRA hazardous waste regulation 40 CFR 261.1(c)(8): during a calendar year at least 75% of the material accumulated onsite from the beginning of the year to be recycled (either onsite or offsite) is actually recycled.
       (6B)  Use of intermediate storage facilities not allowed for this exclusion.
      (6C)  Addition of other conditions or restrictions including, but not limited to, additional recordkeeping and reporting requirements, management standards, financial assurance requirements, and public participation requirements.  Note: this RIA does not evaluate this roughly- and incompletely-defined sub-option.
      (6D)  Petition process for requests to add certain chemicals, industries, and/or chemical function uses to the re-manufacturing criteria.

Option 7:	Revise pre-2008 DSW Recycling Exclusions & Exemptions
Revise the pre-2008 DSW recycling exclusions for recyclable materials by requiring:
      (7A) Containment ("contained") standards for excluded hazardous secondary material  -  applies to 31 DSW exclusions*(7B) Biennial notification for facilities operating under the various exclusions and exemptions  -  applies to 31 DSW exclusions*
      (7C) Recordkeeping for speculative accumulation in all cases  -  applies to 40 CFR 261.4 DSW exclusions*
* Note: Exhibit 2A below identifies the three different sets of exclusions under each of the three sub-options in Option 7.  However, because EPA needed to launch and formulate the analyses for this RIA a few months before EPA defined the three detailed lists of affected RCRA exclusions under Option 7, this RIA evaluated Option 7 --- and all other options affecting pre-2008 DSW regulatory exclusions --- by applying the 16 pre-2008 DSW exclusions listed in Exhibit 2A of EPA's 2008 "Regulatory Impact Analysis" (RIA) for the October 2008 DSW final rule.  The list of 16 pre-2008 DSW exclusions applied in this RIA, is also presented in the baseline cost analysis chapter of this RIA.  Because of the facts that (a) the 16 pre-2008 DSW exclusions listed in Exhibit 2A also cover all manufacturing industries (i.e., NAICS 31, 32, 33), and (b) manufacturing industries constitute 88% of the top-50 US nationwide hazardous waste generation annual tonnage (source: Exhibit 1.9 of EPA's 2009 RCRA Hazardous Waste Biennial Report at http://www.epa.gov/waste/inforesources/data/br09/national09.pdf), using the 16 pre-2008 DSW exclusions to represent all of the 32 exclusions listed in Exhibit 2A, is a reasonable estimation approach.  Other industries in the top-50 hazardous waste generators are in economic sub-sectors NAICS 221, 236, 423, 424, 454, 488, 493, 531, 541, 562, 611, 924, 928.  However, not all of these other industries have industrial operations or waste types which may be eligible under the other recycling exclusions.

Option 8:	Other Options Evaluated in this RIA Not Listed Above
Other options were evaluated during the process of developing this RIA that are not proposed.  These options include the following:
      (8A) Contained performance standard for transfer-based exclusion,
      (8B) Intermediate facility restriction for transfer-based exclusion,
      (8C) Provision for facilities in non-adopting states to qualify under the transfer-based exclusion, and

                                  Exhibit 2A
List of Pre-2008 DSW Recycling Exclusions and Exemptions Potentially Affected Under Option 7
                                   Row Item
                      RCRA Regulatory Exclusion Citation
                             Exclusion Description
  (types of eligible industrial processes or industrial secondary materials)
                       Conditions to Meet RCRA Exclusion
                         Require Legitimate Recycling
                                    260.43
                             Require Notification
                                    260.42
                               Require Contained
                                    260.10
                       Require Speculative Accumulation
                                  261.1(c)(8)
260 & 261 Definition of Solid Waste
                                       1
                                    260.30
Procedures for variances and non-waste determinations
Meet eligibility criteria; terms of variance or non-waste determination
                                      Yes
                                      Yes
   Yes (In addition to management standards set by variance/determination.)
                No - limits determined on a case-by-case basis.
                                       2
                                   261.2 (e)
Use/Reuse
Reclamation prohibited; must be returned to the original process; no land placement; No burning for energy recovery; must meet speculative accumulation limits
                                      Yes
                                      Yes
                                      Yes
              (Speculative accumulation limits already required.)
                                       3
                                 261.2 Table 1
Characteristic sludge being reclaimed
Must meet speculative accumulation limits
                                      Yes
                                      Yes
                                      Yes
              (Speculative accumulation limits already required.)
                                       4
                                 261.2 Table 1
Characteristic by-products being reclaimed
Must meet speculative accumulation limits
                                      Yes
                                      Yes
                                      Yes
              (Speculative accumulation limits already required.)
                                       5
                                 261.2 Table 1
Commercial chemical products being reclaimed
None
                                      Yes
                                      Yes
                                      Yes
                                      No
261.4(a) Exclusions from the Definition of Solid Waste
                                       6
                                  261.4(a)(6)
Pulping Liquors
Must meet speculative accumulation limits
                                      Yes
                                      Yes
                                      Yes
              (Speculative accumulation limits already required.)
                                       7
                                  261.4(a)(7)
Spent Sulfuric Acid
Must meet speculative accumulation limits
                                      Yes
                                      Yes
                                      Yes
              (Speculative accumulation limits already required.)
                                       8
                                  261.4(a)(8)
Closed-Loop Recycling
Only tank storage; connected by pipes; no controlled flame combustion; must meet speculative accumulation limits; no burning for energy recovery, no land placement
                                      Yes
                                      Yes
            Yes (In addition to management standards in exclusion.)
              (Speculative accumulation limits already required.)
                                       9
                                  261.4(a)(9)
Spent Wood Preservatives
Reused on-site for intended purpose; managed to prevent releases; meets drip pad standards; one-time notification
                                      Yes
                                     Yes
            Yes (In addition to management standards in exclusion.)
                                      Yes
                                      10
                                 261.4(a)(10)
Coke By-Product Wastes
No land disposal
                                      Yes
                                      Yes
                                      Yes
                                      Yes
                                      11
                                 261.4(a)(11)
Splash Condenser Dross Residue
Shipped in drums; no land disposal
                                      Yes
                                      Yes
                                      Yes
                                      Yes
                                      12
                                 261.4(a)(12)
Hazardous Oil-Bearing Secondary Materials and Recovered Oil from Petroleum Refining Operations
No land placement; must meet speculative accumulation limits; coke product also does not exhibit characteristic
                                      Yes
                                      Yes
                                      Yes
              (Speculative accumulation limits already required.)
                                      13
                                 261.4(a)(13)
Processed Scrap Metal
None
                                      Yes
                                      Yes
                                      Yes
                                      Yes
                                      14
                                 261.4(a)(14)
Shredded Circuit Boards
Stored in containers sufficient to prevent release; free of mercury switches, batteries
                                      Yes
                                      Yes
            Yes (In addition to management standards in exclusion.)
                                      Yes
                                      15
                                 261.4(a)(16)
Comparable Fuels
Meet requirements of 261.38
                                      Yes
                                      Yes
            Yes (In addition to management standards in exclusion.)
              (Speculative accumulation limits already required.)
                                      16
                                 261.4(a)(17)
Mineral Processing Spent Materials
Legitimately recycled; Must meet speculative accumulation limits storage standards; notification
                                      Yes
                                      Yes
            Yes (In addition to management standards in exclusion.)
              (Speculative accumulation limits already required.)
                                      17
                                 261.4(a)(18)
Petrochemical Recovered Oil
Oil is characteristic only; No placement on the land; Must meet speculative accumulation limits; meets definition of associated organic chemical manufacturing facility
                                      Yes
                                      Yes
                                      Yes
              (Speculative accumulation limits already required.)
                                      18
                                 261.4(a)(19)
Spent Caustic Solutions from Petroleum Refining
No land placement; must meet speculative accumulation limits
                                      Yes
                                      Yes
                                      Yes
              (Speculative accumulation limits already required.)
                                      19
                                 261.4(a)(20)
Hazardous Secondary Materials Used to Make Zinc Fertilizers
Must meet speculative accumulation limits; one-time notice; storage standards; shipment records; annual reports
                                      Yes
                                      Yes
            Yes (In addition to management standards in exclusion.)
              (Speculative accumulation limits already required.)
                                      20
                                 261.4(a)(21)
Zinc Fertilizers Made from Recycled Hazardous Secondary Materials
Contaminant limits; sampling and analysis; records
                                      Yes
                                      Yes
            Yes (In addition to management standards in exclusion.)
                     No- zinc fertilizers already recycled
                                      21
                                 261.4(a)(22)
Used Cathode Ray Tubes (CRTs)
No disposal; must meet speculative accumulation limits; meet export requirements
                                      Yes
                                Yes (within US)
                                Yes (within US)
              (Speculative accumulation limits already required.)
261.4(b) Solid wastes which are not hazardous wastes (i.e., exclusions from the RCRA Definition of Hazardous Waste)
                                      22
                                 261.4(b)(12)
Spent Chlorofluorocarbon Refrigerants
Must be reclaimed
                                      Yes
                                      Yes
                                      Yes
                                      No
                                      23
                                 261.4(b)(14)
Used Oil Distillation Bottoms used to manufacture asphalt products
None
                                      Yes
                                      Yes
                                      Yes
                                      No
261.6 Requirements for recyclable materials
                                      24
                                261.6(a)(3)(ii)
Scrap metal
None
                                      Yes
                                      Yes
                                      Yes
                                      No
                                      25
                               261.6(a)(3)(iii)
Waste-derived fuels from refining processes
None
                                      Yes
                                      Yes
                                      Yes
                                      No
                                      26
                                261.6(a)(3)(iv)
Unrefined waste-derived fuels and oils from petroleum refineries
No distillation; meets used oil specs under 279.11
                                      Yes
                                      Yes
                                      Yes
                                      No
                                      27
                                  261.6(c)(2)
Reclaimers that do not store
Subject to notification, AA/BB, manifest
                                      Yes
                                      Yes
                                      Yes
                                      No
261.7 Residues of hazardous waste in empty containers
                                      28
                                     261.7
Residues of hazardous waste in empty containers
Quantity limits; handling conditions
       No- Does not involve reclamation of hazardous secondary materials
                                      Yes
                                      Yes
                                      No
Part 266 Standards for the Management of Specific Hazardous Wastes
                                      29
                                 266 Subpart C
Recyclable Materials Used in a Manner Constituting Disposal
Meet treatment standards
                                      Yes
                                      Yes
            Yes (In addition to management standards in exclusion.)
                                      No
                                      30
                                 266 Subpart F
Materials Utilized for Precious Metal Recovery
Notification; export requirements; records; must meet speculative accumulation limits
                                      Yes
                                      Yes
                                      Yes
              (Speculative accumulation limits already required.)
                                      31
                                 266 Subpart G
Spent Lead-Acid Batteries Being Reclaimed
Multiple conditions.
                                      Yes
                                      Yes
                                      Yes
                                      No
                                      32
                                 266 Subpart H
Hazardous Waste Burned in Boilers and Industrial Furnaces
Multiple conditions.
                                      Yes
                                      Yes
            Yes (In addition to management standards in exclusion.)
                                      No
                                           Column total counts with "Yes" =
                                      30
                                      31
                                      31
                                      18
* Note: Criteria for Selecting Conditions:
Legitimate Recycling - Must involve recycling/recovery
Notification - Must have conditions that need compliance monitoring
Contained- Must not already contain management standards
Changes to Speculative Accumulation

                                   Chapter 3
       Baseline Industrial Entities & Materials Potentially Affected
        by the 2011 Proposed Revisions to the DSW Recycling Exclusions

This chapter identifies the types and associated counts/quantities of industrial facilities, hazardous secondary materials, and hazardous wastes potentially affected by the 2011 proposed revisions to the DSW exclusions.  These counts/quantities form the physical basis in this RIA for estimating potential industry costs from the 2011 proposed revisions.  Because some of the 2011 proposed revisions potentially affect the 2008 DSW final rule recycling exclusions, whereas other 2011 proposed revisions potentially affect the pre-2008 DSW exclusions, this chapter presents two separate populations of potentially affected facilities/materials/wastes, each based on different databases.

3A.	2008 DSW Recycling Exclusions:  Baseline Industrial Recycling Potentially Affected

The RCRA Hazardous Waste Biennial Report (http://www.epa.gov/osw/inforesources/data/biennialreport/index.htm) is a census of the company identity, location, industrial sources, waste types, waste quantities, and methods of hazardous waste generation, shipment, receipt, and TSDR management (i.e., treatment, storage, disposal, recycling) at two classes of RCRA-regulated facilities:

   *    Generators:	 RCRA hazardous waste large quantity generators (i.e., LQG sites which generate 1,000 kilograms (2,200 pounds) or more of hazardous waste in any single calendar month).  LQGs are required to complete a single "Form GM" for each hazardous waste generated in each data year.  In 2007, 16,387 LQGs submitted about 210,000 GM forms to the RCRA Biennial Report  The count of GM forms indicates the count of waste streams generated by LQGs in each data year.

   *    Receivers:	 RCRA hazardous waste TSDR facilities are required to complete a "Form WR" for all hazardous wastes received in the data year.  Each Form WR contains separate "waste blocks" (i.e., data fields) for reporting data on separate waste streams received from different generators.  In 2007, 541 waste receivers submitted about 873,000 WR form waste blocks.  The count of WR form waste blocks indicates the count of waste streams received by TSDRFs in each year.

The RCRA Biennial Report (BR) includes both one-time generated industrial wastes (e.g., equipment closure, corrective action site cleanup) as well as annually recurring generated industrial process wastes.  This database is the primary source used in this RIA to identify the 2008 DSW final rule current (i.e., baseline) hazardous secondary materials generated that have the potential to become affected by technical provisions under the 2011 DSW proposed rule.  These hazardous secondary materials were reported as hazardous wastes in the 2007 BR.  Small quantity generators (i.e., SQGs which generate between 100 and 1,000 kilograms per month) and conditionally exempt small quantity generators (i.e., CESQGs which generate less than 100 kilograms per month) are not required to submit hazardous waste data to the BR.  However, SQG waste quantities may be reflected in the BR because SQGs typically rely on offsite commercial TSDRFs for management of their hazardous wastes.
The BR is the most complete set of data on industrial hazardous waste generation available given it is a census of LQGs and TSDRFs.  It is the best existing database for evaluating changes to RCRA regulations, given the fact that data are reported on the waste stream level by single facilities (some facilities may generate multiple and different waste streams within any given year).  As mentioned previously, the Biennial Report does not explicitly include data for SQGs and CESQGs.  Consequently, the regulatory cost savings estimates might be expected to increase if the universe of SQGs and CESQGs were explicitly included in this RIA.  However, this increase would mostly occur from addition of SQG data because CESQGs are already excluded from most RCRA regulations.

Pre-2008 recycling exclusions under RCRA regulations (i.e., 40 CFR 261.2(3) and 261.4(a)) provided 32 DSW exclusions for recycling of certain types of industrial hazardous secondary materials (Exhibit 2A).  The earliest DSW exclusion dates back to 1985.  The respective counts of industries, facilities, and waste streams potentially affected by the 2008 DSW final rule did not apply to these pre-2008 excluded industries and hazardous secondary materials.  The 2011 DSW proposed rule does affect these excluded hazardous secondary materials.  Accurate data on the nationwide annual quantities of pre-2008 excluded hazardous secondary materials are not readily available because they are not subject to biennial reporting to the EPA under the RCRA Subtitle C hazardous waste regulations.  Data that EPA has identified for pre-2008 excluded hazardous secondary materials are presented at the end of the chapter.

Exhibits 3A to 3G below summarize the Biennial Report (BR) dataset for baseline hazardous waste recycling for 2007 for wastes affected by the 2008 DSW final rule.  Data year 2007 is used in this RIA to represent the current (i.e., baseline) year because EPA had to launch this RIA before the more recent data year 2009 became available.  The BR database only contains the primary NAICS code for each waste generator and waste management facility.  However, many industrial facilities have more than one NAICS code corresponding to different types of industrial operations within a single facility, but the entire quantity of hazardous waste undergoing recycling is reported under a single NAICS code for each single facility in the BR dataset.

For each historical data year (i.e., 1991, 1993, 1995, 1997, 1999, 2001, 2003, 2005, 2007) the BR national total "management" quantity (tons) does not necessarily equal the national total "generation" quantity (tons) because:

   1. Some hazardous waste tonnages may be double-counted in "management" because they undergo two or more management steps in a management train.
   2. Some wastes may have been generated near year-end but managed (i.e., treated, recycled or disposed) in the next year.
   3. Export of generated wastes for management in other countries.
   4. Import of wastes generated in other countries for management in the US.

Exhibit 3A below summarizes the three types of recycling included in the RCRA Biennial Report, and their associated 2007 count of facilities and hazardous waste management tonnages, distinguished between onsite and offsite recycling.

                                  Exhibit 3A
      Three Categories of RCRA Hazardous Waste Baseline Recycling (2007*)
                      Hazardous Waste Recycling Category
                      (Biennial Report management code**)
                                       A
                                       B
                                       C
                                       D
                                    E (C+D)
                                       F
                                       G
                                    H (F+G)

         2007 count of facilities generating wastes that are recycled
                 2007 count of waste streams that are recycled
                      2007 Count of Facilities Recycling
                    2007 Quantity Recycled (tons per year)

                                    Onsite
                        Offsite (Received from offsite)
                               Total facilities
                                    Onsite
                        Offsite (Received from offsite)
                               Total (tons/year)
H010: Metals recovery: high temperature metals recovery, retorting, secondary smelting, & other metals recovery (e.g., ion exchange, reverse osmosis, acid leaching).
                                     2,019
                                     4,093
                                      50
                                      104
                                      137
                                    265,626
                                   1,064,888
                                   1,330,514
H020: Solvents recovery: fractionation/ distillation, thin film evaporation, & solvent extraction.
                                     2,101
                                     3,211
                                      392
                                      76
                                      456
                                    106,147
                                    222,784
                                    328,931
H039: Other recovery: acid regeneration, waste oil recovery, non-solvent organic liquids recovery, & other miscellaneous recovery methods except energy recovery or use as fuel.
                                      867
                                     1,334
                                      36
                                      32
                                      65
                                    150,784
                                    184,309
                                    335,093
                                                       Non-duplicative totals =
                                     4,321
                                     8,584
                                      467
                                     (75%)
                                      189
                                     (30%)
                                      624
                                    (100%)
                                    522,557
                                     (26%)
                                   1,471,981
                                     (74%)
                                 1.995 million
                                    (100%)
 Explanatory Notes:
* * All data represents counts and quantities included in the 2007 National Biennial Report: http://www.epa.gov/osw/inforesources/data/br07/national07.pdf. Some facilities recycled wastes in more than one management method, and some facilities both generated onsite and received from offsite. Thus, the facility counts and percentages will sum to more than 100%.
* ** Beginning with BR data year 2001, EPA changed the BR hazardous waste management codes.  For a comparison of the new waste management codes with pre-2001 codes, see p.81 of "2001 Hazardous Waste Report Instructions and Forms": http://www.epa.gov/osw/inforesources/data/brs01/ins-frms01.pdf.
Exhibit 3B below compares the 2007 baseline recycling data (Columns E & F) to data on hazardous waste total generation (Columns A & B) and to total management (Columns C & D), according to 2-digit NAICS code economic sub-sector.

                                  Exhibit 3B
Identity of Industries Generating & Recycling RCRA Hazardous Wastes Which are Currently Recycled (2007)*
                                     Item
                              Economic Sub-Sector
                             (2-digit NAICS Code)
                                       A
                                       B
                                       C
                                       D
                                       E
                                       F
                                  G (F/D)x100
                                  H (100%-G)

                               Waste Generation
                               Waste Management
                                Waste Recycling

                              Count of Generators
                            Tons Per Year Generated
                              Count of Receivers
                             Tons Per Year Managed
                              Count of Recyclers
                            Tons Per Year Recycled
                                  % Recycled
                                % Not Recycled
                                       1
                                      11
Ag, Forestry, Fishing, Hunting
                                                                             27
                                                                          2,094
                                                                              1
                                                                             70
                                                                              1
                                                                             70
                                                                         100.0%
                                                                             0%
                                       2
                                      21
Mining
                                                                            123
                                                                         18,010
                                                                              4
                                                                            399
                                                                              2
                                                                              4
                                                                           1.0%
                                                                          99.0%
                                       3
                                      22
Utilities
                                                                            593
                                                                         30,891
                                                                              9
                                                                          4,654
                                                                              1
                                                                        <0.5
                                                                       <0.1%
                                                                      >99.9%
                                       4
                                      23
Construction
                                                                            309
                                                                         43,080
                                                                              4
                                                                            714
                                                                              3
                                                                            669
                                                                          93.7%
                                                                           6.3%
                                       5
                                      31
Manufacturing
                                                                            172
                                                                         18,531
                                                                             11
                                                                          6,627
                                                                              7
                                                                            136
                                                                           2.1%
                                                                          97.9%
                                       6
                                      32
Manufacturing
                                                                          4,198
                                                                     24,167,001
                                                                            454
                                                                     25,956,865
                                                                            202
                                                                        535,749
                                                                           2.1%
                                                                          97.9%
                                       7
                                      33
Manufacturing
                                                                          6,045
                                                                      4,706,082
                                                                            449
                                                                      3,904,876
                                                                            213
                                                                      1,085,944
                                                                          27.8%
                                                                          72.2%
                                       8
                                      42
Wholesale Trade
                                                                            601
                                                                         94,812
                                                                             24
                                                                        537,435
                                                                             13
                                                                         16,549
                                                                           3.1%
                                                                          96.9%
                                       9
                                      44
Retail Trade
                                                                            265
                                                                          1,935
                                                                              1
                                                                              6
                                                                              1
                                                                              6
                                                                         100.0%
                                                                           0.0%
                                      10
                                      45
Retail Trade
                                                                             61
                                                                          1,629
                                                                              1
                                                                        <0.5
                                                                              -
                                                                              -
                                                                             0%
                                                                           100%
                                      11
                                      48
Transportation
                                                                            778