determinations have been made for the past twenty years because they
would not allow the determination to focus on the totality of all the
relevant facts and circumstances and would strip the subjectivity needed
to balance the factors from the determination. One commenter added that
the Lowrance memo has open-ended questions that do not state or imply
that particular storage measures must be used or particular levels must
not be present for recycling to be legitimate as the codified factors
would. One commenter stated that hard and fast factors have never been
relied on for a determination and failure of just the storage factor or
of the TARs factor has never been used as a reason for recycling to be
deemed not legitimate. One commenter expressed concern that state
officials would now have to make the same difficult legitimacy decisions
as in the past, but have to apply them broadly and that going from
specific cases to broad applicability to all recycling, that makes all
recycling suspect. (89, 102, 481)

Commenters stated that if the legitimacy factors are codified to apply
to all hazardous wastes, it would be more restrictive than the existing
requirements in the guidance, there would be a higher compliance burden,
and the rule would not be deregulatory. One commenter added that there
was no need for the legitimacy factors to be applied to the materials
that are already excluded because they are already subject to legitimacy
evaluations and the applying legitimacy to these exclusions is
subjecting them to new requirements without notice and comment.  One
commenter added that applying the legitimacy factors to all existing
exclusions could have unintended consequences of changing how the
exclusions apply. (65, 442, 472, 537)

Some commenters stating that legitimacy should not be codified stated
that there is no need to codify the legitimacy guidance. One reason was
that the guidance has worked and that they are not aware of any
situation in which the existing guidance has proven inadequate for
distinguishing between legitimate and sham recycling while another was
that the clarity some stakeholders want through codification will not be
achieved because legitimacy determinations are complex. Commenters also
stated that if the factors are promulgated they won't be used in the
same way as the guidance has been as EPA claims and asks why EPA would
raise this issue in rulemaking if it expected the regulatory community
not to revisit determinations. (102, 152/481, 486)

One commenter stated that EPA should make it clear that prior legitimacy
determinations are grandfathered and remain valid and that all
determinations that mining or mineral processing recycling activity is
legitimate should remain in place. (481)

(2) One commenter stated that as they understand it, EPA's proposed
factors to codify do not significantly differ from the guidance EPA has
been applying over the years particularly as the factors are general and
subject to interpretation in each case. They added that they support the
factors if they are to be used to determine what is truly recycling.
(144)

(3) Commenters stated that replacing the existing guidance with
regulations would simplify the considerations, but “balancing” the
factors as the guidance recommends might be complex, but is necessary.
One commenter stated that the guidance is too flexible, making it too
easy to be ignored and not enforced. (44, 524, 558)

(4) One commenter stated that the legitimacy factors are superfluous and
a regrettable proposal for environmental interests. (479)

9.3.1 - Response

(1) As stated above, the Agency has decided not to codify the legitimacy
factors for existing exclusions. We expect that states and other
implementing agencies will continue to use the existing legitimacy
concept for all recycling as they have in the past in order to ensure
that recycling is real and not sham.

One reason the Agency chose not to codify the legitimacy factors for
existing exclusions in this rule is to avoid any implication that the
regulated community or implementing agencies would be expected to
revisit and reevaluate past legitimacy determinations, which was a
concern expressed by commenters. Nevertheless, although we have not
codified the legitimacy factors for existing exclusions in this rule, it
is especially important that the regulated community and implementing
agencies clearly understand that the concept of legitimate recycling,
which is obviously inherent in the existing recycling regulations, is
unchanged and remains applicable and relevant to all hazardous secondary
material recycling, including any recycling excluded under RCRA Subtitle
C. Because the concept of legitimacy (both in existing explanations and
in the codified legitimacy factors) appropriately explains the very
heart of what real recycling is, it is obvious that existing recycling
exclusions only apply to legitimate recycling.

Because there is no change to the existing exclusions under this final
rule, it is not necessary to consider the status of prior legitimacy
determinations for existing exclusions. Since the rule makes no changes
to the exclusions, no change is caused to any prior
determinations—they have the same status and effect as before the
final rule.

(2) EPA agrees with the commenter that the legitimacy requirements in
the final rule do not differ significantly from the guidance EPA has
provided on legitimacy over the years through preamble discussions and
memorandum. An analysis showing how the four factors are derived from
the Lowrance memo and other existing policy statements is documented in
the preamble to the final rule. This analysis shows why EPA believes
that the legitimacy factors in 40 CFR 260.43 are equivalent to the
existing legitimacy policy that applies to all hazardous secondary
material recycling.

(3) In designing the legitimacy factors to be codified in the final
rule, EPA sought a structure for legitimacy that would be flexible
enough to be applicable to various recycling scenarios, but that would
also provide enough of a structure that it would improve certainty for
the regulated community and would improve the enforceability of
legitimacy for the implementing agencies. EPA believes that the
structure of the legitimacy factors in the final rule achieves this
balance. In response to the 2003 proposal, there was general agreement
among the legitimacy commenters that a recycling process cannot be
legitimate if the hazardous secondary material being recycled does not
provide a useful contribution to the recycling process or product and if
the recycling process does not yield a product or intermediate that is
useful to someone and meeting these factors is mandatory in a legitimacy
determination. However, the other two factors are finalized as factors
that must be considered in every case, but the process can, after
analysis of the facts of the case, be determined to be legitimate in
some cases even when it does not meet those factors. In this way, EPA
has retained the flexibility of the legitimacy guidance to take into
consideration specific industries or specific recycling processes where
either of the factors to be considered is not relevant in determining
legitimacy.

(4) EPA notes that the commenter believes that the legitimacy factor are
superfluous and a regrettable proposal for environmental interests. The
commenter did not provide reasons for this belief, and, therefore, EPA
is not able to respond to the comment with any specifics. EPA believes
that the legitimacy policy that applies to all recycling and the
specific recycling factors codified in this rule are important because
they ensure that recycling under EPA’s exclusions is real recycling
and not a process designed to discard materials in the guise of
recycling.

9.3.2 - Examples of how legitimacy, as described in 2007, might apply to
processes

9.3.2 - Summary

One commenter provided the following example on closed loop recycling
and stated that according to the proposed changes, legitimacy
demonstrations could be required in multiple places:

The raw materials flow through a process reactor followed by multiple
processing steps necessary to produce the refined product. In this
example, the stream leaving the reactor is only characteristically
hazardous. With the exemptions in §261.4(a)(8) and §261.2(e)(1), the
internal recycle streams are excluded from RCRA jurisdiction. (486)

One commenter provided the following example of how the proposed
§261.2(g) relates to §261.4(a)(16) [Comparable fuels]:

A hydrocarbon-based stream generated from at least two sites that is a
characteristic byproduct and is burned in boilers to provide heat to a
heat transfer fluid essential for the process. Until promulgation of the
comparable fuels exemption (§261.38), these boilers were regulated as
BIF units under 40 CFR part 266 subpart H. These sites made the
demonstration that the streams were eligible for the comparable fuels
exemption, and under §261.4(a)(16) these materials were not solid
waste.

The commenter stated that in this example, it is not clear how the
legitimacy criteria would even be applied since the comparable fuels are
consumed in the boiler process and the heat transfer fluids have no
contact with the combustion products, but if EPA applies legitimacy
criteria to all recycling, some sort of legitimacy demonstration would
become necessary anyway.

The commenter added that it would not be de-regulatory at all to require
additional scrutiny in order for the comparable fuels to remain
excluded. Also, the combustion units that burn these materials are no
longer BIF units because these excluded streams were their only
materials to burn. The commenter expressed concern that any new
legitimacy requirement could potentially compromise the regulatory
status of these combustion units unnecessarily, possibly negating the
efficacy of §261.38 and stated that they not believe that these units
would be eligible to re-enter BIF interim status if the regulatory
status were indeed compromised. They stated that the §261.38 provisions
should be more than adequate to demonstrate the exclusion in
§261.4(a)(16) without adding more conditions from proposed §261.2(g).
The annual amount of material is approximately 2.5 MM pounds.

The commenter stated that if EPA believes that the existing conditions
in §261.38 are sufficient, then EPA should either omit §261.38 from
consideration in proposed §261.2(g) or revise the language of
§261.4(a)(16) to indicate that proposed §261.2(g) is satisfied by the
existing §261.38 conditions. (486)

One commenter asked whether compliance with specific criteria or
requirements under pre-existing recycling provisions, such as those in
40 CFR Part 279 for used oil will implicitly meet the legitimacy factors
in the final rule. (534)

9.3.2 - Response

EPA thanks the commenters for providing examples of how they believe
legitimacy applies to their processes. EPA has not codified the
legitimacy provisions for all recycling in this final rule, so the
processes described in these examples, as well as in the 40 CFR part 279
provisions for used oil, continue to be covered by the existing
legitimacy policy, as they have been in the past. EPA, however, believes
that because of the design of the factors and the overall structure of
legitimacy, the factors it is adding to the regulations are consistent
with the factors under the existing legitimacy policy for the reasons
outlined in the 2003 proposal and in the 2008 final rule.

9.3.3 - Examples of how legitimacy, as described in 2003, might apply to
processes

9.3.3 - Summary

One commenter stated that the rigid proposed legitimacy requirements
leave no room for a regulator to take into account whether the secondary
material being recycled is an in-process metal-rich material that is
being further processed in primary production units as part and parcel
of the primary production process or whether any metallic hazardous
constituents contained in the final product of the production process
and that may derive from recycled secondary materials are indigenous to
the production process and, therefore, no different in nature and kind
than the ordinary hazardous constituents that may be contained in a
product of that nature. (89)

9.3.3 - Response

In response to comments on the 2003 proposal EPA proposed a new
structure for the legitimacy factors in the 2007 supplemental proposal
that has been included in the final rule. There was general agreement
among the 2003 commenters that a recycling process cannot be legitimate
if the hazardous secondary material being recycled does not provide a
useful contribution to the recycling process or product and if the
recycling process does not yield a product or intermediate that is
useful to someone and meeting these factors is mandatory in a legitimacy
determination. However, the other two factors are finalized as factors
that must be considered in every case, but the process can, after
analysis of the facts of the case, be determined to be legitimate in
some cases even when it does not meet those factors. In this way, EPA
has retained the flexibility of the legitimacy guidance to take into
consideration specific industries or specific recycling processes where
either of the factors to be considered is not relevant in determining
legitimacy.

Furthermore, EPA notes that unless the recycler was taking advantage of
one of the exclusions or non-waste determinations in the final rule,
they would be covered by the existing legitimacy policy, rather than the
legitimacy provision in this final rule.

9.4 - Industry-specific examples of legitimate recycling

9.4 - Summary

Several commenters submitted examples of industry-specific recycling
practices and how those practices relate to legitimate recycling. One
commenter gave the example of recycling spent pickle liquor in Kraft
pulp mills and discussed how it met three legitimacy criteria (useful
contribution, valuable product/intermediate, and “toxics along for the
ride”) (115).  Another commenter discussed the example of recycling
oil-bearing spent catalysts and the residuals from putting those
materials through a thermal desorber (475). A third commenter discussed
the recycling of reusable shop towels in the industrial laundry industry
and their conclusion that these towels are legitimately recycled (493).

9.4 - Response

The Agency appreciates the information about specific recycling
scenarios and thanks the commenters for providing examples. However,
individual legitimacy determinations have to be made on a case-by-case,
site-specific basis. It is not in the scope of this rulemaking to
address the legitimacy of individual site-specific recycling situations.
Furthermore, EPA notes that unless the recycler was taking advantage of
one of the exclusions or non-waste determinations in the final rule,
they would be covered by the existing legitimacy policy, rather than the
legitimacy provision in this final rule.

9.4.1 - Examples of cases where the legitimacy factors are not relevant

9.4.1 - Summary

Several commenters noted that there is a broad spectrum of recycling
activities and that some legitimacy criteria may be more appropriate
than others for recycling of in-process materials versus materials
recycled outside of the generating industry. One commenter noted that
the only criteria that they believe can be required for in-process
materials recycled within the primary metals and minerals industry is
that the in-process materials make a useful contribution to the
production process (152). Another commenter noted that while they do not
in principle have any objections to the codification of criteria for
legitimate recycling, they do feel there may be difficulties in applying
these criteria to the primary metal extraction, beneficiation, and
mineral processing industry. This commenter believed that difficulties
in applying legitimacy arise because this industry involves sequential
recovery of metals resulting in the production of in-process and
intermediate materials, which should not be considered reclamation of
hazardous secondary materials or wastes (180, 524). The commenter did
note they were pleased with the Agency's statement that previous
legitimacy determinations made or approved by EPA or the states are
essentially grandfathered (524).

One commenter gave an example of re-refining distillation bottoms used
as a feedstock to manufacture asphalt products, most of which are
applied to the land as an example of a secondary material that they
claim would not meet the legitimacy criteria, specifically the TARs
criterion (156).

Another commenter gave an example of reusing spent pickle liquor (K061)
and stated it would not pass a strict application of the legitimacy
criteria due to the presence of hazardous constituents not found in or
at higher concentrations than that found in virgin ferric chloride
(165).

9.4.1 - Response

The Agency respectfully disagrees with the commenter that the only
legitimacy criterion that can be applied to hazardous in-process
materials is the useful contribution factor. The Agency has the
authority to determine whether a hazardous secondary material is being
discarded. Sham recycling is one means of “discard.” The courts have
upheld this authority in U.S. v. Self, 2 F. 3d 1071, 1079 (10th Cir.
1993); U.S. v Marine Shale Processors, 81 F. 3d 1361, 1366 (5th Cir.
1996); Marine Shale Processors v. EPA, 81 F. 3d 1371, 1381-83 (5th Cir.
1996) and American Petroleum Institute v. EPA, 216 F.3d 50, 58-59
(D.C.Cir. 2000).  EPA shows in the record for this rulemaking the
reasonableness of the various factors in the legitimacy requirements.
The factors will stand or fall on their reasonableness. There is no case
law expressing any kind of limitations on the legitimacy criteria.
However, EPA reminds commenters that the codified legitimacy provision
of 40 CFR 260.43 is a condition of the two new recycling exclusions and
the non-waste determinations and that all other recycling excluded under
existing definition of solid waste exclusions continues to operate under
the existing legitimacy concept. Legitimacy determinations are best made
on a case-by-case basis, taking into account all of the information
available about the specific hazardous secondary materials and recycling
practice. To be legitimate under the legitimacy provision of §260.43,
the recycling must meet the two mandatory factors (useful contribution
and valuable product). Furthermore, the other two factors (managed as a
valuable commodity and no significant hazardous constituents in the
product) must be considered and if not met, the generator/recycler must
be able to demonstrate why the recycling is still legitimate.

Furthermore, the Agency notes that individual legitimacy determinations
have to be made on a case-by-case, site-specific basis. It is not in the
scope of this national rulemaking to address the legitimacy of
individual site-specific recycling situations.

9.4.2 - Examples where legitimacy factors are not met, but recycling is
legitimate

9.4.2 - Summary

Several commenters supported EPA's position that there may be particular
recycling scenarios where the recycling may not meet one or both of the
two factors to be considered (managed as a valuable commodity and no
significant hazardous constituents in the product) but the recycling may
still be legitimate (70). One commenter gave extensive details on its
examples to explain how it believes its in-process gold-bearing
secondary materials are processed legitimately on-site to recover gold
and other metal values (89). Another commenter questioned EPA's
authority to codify the legitimacy criteria, stating they believe the
legitimacy criteria could be applied to define as solid waste material
that is not being discarded or disposed of in any ordinary sense of
those terms. This commenter went on to give a hypothetical example of a
chemical still bottom (a secondary material) that is combined with a raw
material to produce a chemical product that is sold for millions of
dollars per year. According to the commenter, the still bottom is
obviously not discarded, which should be the end of the solid waste
inquiry. They believe that adopting the legitimacy criteria would mean
the inquiry is just starting and would raise a lot of issues that
shouldn't be raised (123).

Another commenter gave the example of alternative fuels burned for
energy recovery in cement kilns and discussed how that example would
fare under each legitimacy criterion. The commenter noted that it
believes this recycling scenario meets three criteria easily: managed as
a valuable commodity, provides a useful contribution, and makes a
valuable product. For the “no significant hazardous constituents in
the product” criterion, the commenter notes this has been a confusing
part of determining true recycling. They believe that the key point is
that the product does not contain significant amounts of hazardous
constituents available to the environment and that are not found in
analogous products (172).

One commenter gave examples of chemicals recycled onsite: heptane
recycled onsite in the production of multiple intermediates that are
subsequently used in the manufacture of many diverse chemical products,
acid recycled onsite, and the recycling of rhodium in the manufacture of
acetic anhydride and methanol.  In these examples, the commenter was
concerned about how to evaluate the “no significant hazardous
constituents in the product” legitimacy factor (506).

9.4.2 - Response

The Agency has decided to codify the legitimacy factors essentially as
proposed in the March 2007 supplemental proposal for the two new
recycling exclusions and the non-waste determinations of this final
rule. To be legitimate, the recycling must meet the two mandatory
factors (useful contribution and valuable product). Furthermore, the
other two factors (managed as a valuable commodity and no significant
hazardous constituents in the product) must be considered and if not
met, the generator/recycler must be able to demonstrate why the
recycling is still legitimate. We believe this structure will allow for
legitimate recycling similar to those scenarios described in the
comments. However, EPA reminds commenters that legitimacy determinations
are best made on a case-by-case basis, taking into account all of the
information available about the specific hazardous secondary materials
and recycling practice. It is not in the scope of this rulemaking to
address the legitimacy of individual site-specific recycling situations.

Furthermore, the Agency respectfully disagrees with the commenter who
questioned whether EPA has the authority to make legitimacy
determinations on secondary materials at all, including the hypothetical
chemical still bottoms. The Agency has always had the authority to
determine whether a hazardous secondary material is being discarded.
Sham recycling is one means of “discard.” The courts have upheld
this authority in U.S. v. Self, 2 F. 3d 1071, 1079 (10th Cir. 1993);
U.S. v Marine Shale Processors, 81 F. 3d 1361, 1366 (5th Cir. 1996);
Marine Shale Processors v. EPA, 81 F. 3d 1371, 1381-83 (5th Cir. 1996)
and American Petroleum Institute v. EPA, 216 F.3d 50, 58-59 (D.C.Cir.
2000).

9.5 - Enforcement and documentation/ demonstration of legitimacy

9.5 - Summary

Several commenters asserted that the legitimacy factors (called criteria
in the 2003 proposal) must be codified in order to be enforceable (153,
460, 470, 509, 538). A number of states, including ASTSWMO, noted that
codification of legitimacy will make recycling much easier to enforce
(531, 543). A number of comments also expressed their belief that
generators and/or recyclers should be required to document and keep
records of their claims that a recycling activity is legitimate (69, 76,
110, 153, 171, 185, 460, 475, 488, 539, 543, 544, 558).  One state
specifically commented that EPA should explore “self-certification”
by the generator of the hazardous secondary material to demonstrate that
they are meeting the legitimacy criteria (185). Other commenters
requested that legitimacy determinations not only be documented, but
also be required to be submitted as part of the notification process
(475, 544). Another commenter requested that reclaimers be required to
provide signed certification to generators that they meet the legitimacy
criteria and keep a copy in their files (507). ASTSWMO argued that these
records must be maintained onsite by the recycler and available upon
request by the regulatory agency (153).

Several commenters expressed concerns about enforcing the legitimacy
factors, especially the two factors that must be considered. A few
believed that it was critical for a generator or recycler who believes
one or more of these factors are not applicable to demonstrate and
document why the recycling is still legitimate, even though one or both
factors is not appropriate to that particular recycling practice (153,
538, 539, 543). One commenter was concerned about having to demonstrate
legitimacy for the “no significant hazardous constituents in the
product” factor, given that the term “significant” is not defined.
This commenter noted that the risk of regulatory surprise is made
greater by the regulatory language that says the person claiming a
recycling exclusion must demonstrate that the recycling is legitimate
(190).

Some comments simply expressed the view that regulatory oversight of
recycling facilities, monitoring of recycling practices, and enforcement
will still be required to ensure that legitimate recycling occurs (72,
153, 457, 538, 555, 559).  One commenter noted that even though there is
no current statutory or regulatory requirement to provide notice or
certify legitimacy, the regulated community routinely gathers data and
keeps records establishing legitimacy. This commenter believes that
compliance with the new recycling exclusions can be evaluated by EPA on
exactly the same basis and without overstepping its RCRA authority
(520).

One state commenter also recommended codifying a statement from the
original 1985 definition of solid waste regulations that says “persons
claiming that they are recycling hazardous wastes in a manner excluded
by regulation have the burden of proof that they are within the terms of
the exclusion” (110).

One commenter argued that legitimacy should not apply to existing
exclusions (see section 9.1.2 of this document for the response to that
point) and likewise that §261.2(f) does not apply to the existing solid
waste exclusions of §261.4(a) (74).

One coalition of environmental organizations noted that the proposed
exclusions and legitimacy criteria would effectively nullify any
pre-enforcement review. In addition, the commenter stated that the
vagueness inherent in the legitimacy criteria and EPA's failure to
define clear parameters of what is and is not legitimate recycling make
enforcement nearly impossible (231, 559).

Another industry commenter objected to adopting the legitimacy
regulations at all, claiming that the regulations would impose
staggering compliance burdens and discourage recycling (537). Another
industry commenter stated that legitimacy criteria in the past has been
in the form of guidance and that the Agency cannot enforce based on
guidance. As such, generators were never required to develop and
maintain records to demonstrate legitimacy. This commenter believes that
it will be the generator's responsibility to develop and maintain data
for review upon request even if promulgated as to be “considered.”
(102).

9.5 - Response

The Agency believes that codification of the legitimacy provision of 40
CFR 260.43 will be helpful for oversight and enforcement of the new
recycling exclusions from the definition of solid waste, as well as for
the non-waste determinations. Codification of the legitimacy provision
will also improve enforcement against sham recyclers, which we expect to
help build confidence in and acceptance of hazardous secondary materials
recycling. The Agency, however, is not requiring specific recordkeeping
or documentation of legitimacy in this rule, in part because it has been
the Agency's longstanding position that any definition of solid waste
exclusion that is based on the hazardous secondary material being
recycled must be legitimately recycled. This principle can be traced
back to the original definition of solid waste regulations that were
promulgated on January 4, 1985 (50 FR 638). In addition, making a
legitimate recycling determination to ensure that hazardous secondary
materials being recycled are eligible for a RCRA exclusion has always
been self-implementing and it is not our intent to change the regulatory
burden with this rulemaking.

We believe that codification of the legitimacy provision in §260.43
will clarify and improve legitimacy determinations related to the two
new recycling exclusions and non-waste determinations and how someone
applies legitimacy to these recycling provisions, but do not believe
that a new self-certification or additional recordkeeping is necessary
for documentation. Codification will help with legitimacy demonstrations
and we will monitor how codification of the legitimacy provision is
implemented and make any necessary changes in a future rulemaking.

The Agency has, however, determined that for the purpose of the
legitimacy factors in the final rule, 40 CFR 261.2(f) applies. Section
261.2(f) states that, in the context of an enforcement action to
implement Subtitle C of RCRA, a person claiming that a material is not a
solid waste or is conditionally exempt from regulation is responsible
for showing that they meet the terms of the exclusion and must provide
appropriate documentation to show why they are eligible. For the
legitimacy provisions finalized in this rulemaking, this provision
requires (as it always has) that persons claiming that their recycling
activity is legitimate have the burden to provide documentation showing
how the hazardous secondary materials provide a useful contribution to
the recycling process and how the product of the recycling
activity-whether it is a consumer product or a process intermediate-is
valuable. In addition, the documentation would have to show that the
hazardous secondary material generator or recycler considered the other
two factors and determined for each of them that either the activity
meets the factor or that the factor does not apply to this recycling
activity and why it is not relevant or appropriate to consider. 40 CFR
261.2(f) has always required demonstration of eligibility, including
that the recycling is legitimate for the recycling exclusions to be
applicable.

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

In addition, as part of the final rule’s transfer-based exclusion, the
hazardous secondary material generator has to undertake reasonable
efforts to ensure its hazardous secondary materials will be legitimately
recycled pursuant to §260.43. As part of the reasonable efforts
requirements, generators must document their reasonable efforts per
§261.4(a)(24)(v)(B).

The Agency believes that the codified legitimacy factors, the
enforcement provisions of existing §261.2(f), and the reasonable
efforts required on the part of generators sending hazardous secondary
materials to be recycled under the new transfer-based exclusion will
ensure that the Agency and its state partners can effectively enforce
the recycling regulations and ensure legitimate recycling is occurring.

9.6 - Other approaches to legitimate recycling

9.6 - Summary

Several commenters came up with other types of approaches for dealing
with some of the more complicated issues related to codification of
legitimate recycling. One commenter noted that EPA should establish a
way for states and businesses to reconcile different opinions on
legitimacy and suggested an appeals board made up of states and EPA
(44).

A few commenters suggested issuing some type of updated guidance instead
of codifying the legitimacy factors (79, 102). One commenter stated that
a comprehensive guidance document for evaluating the legitimacy of
different types of use, reuse, and recycling of hazardous secondary
materials would provide the necessary flexibility to apply the
appropriate legitimacy considerations (79).

One commenter suggested an alternative means to dealing with legitimacy
determinations would be to set up a new variance procedure under 40 CFR
part 260 (147).

One state commenter noted that hazardous secondary materials are also
subject to the same regulatory framework as other industrial products
and thus, would be subject to other regulatory scrutiny, such as DOT and
OSHA regulations. This commenter also noted that regulations that
include basic management standards that are universally accepted for
products would also provide evidence that the material is managed as a
commodity (160).

Another commenter expressed their opinion that there should be more
stringent legitimacy criteria for the reuse of hazardous secondary
materials in the treatment of wastes and wastewater than for the reuse
of hazardous secondary materials in the manufacture of products. This
commenter gave as an example the reuse and continued use of spent acidic
and alkaline solutions in wastewater treatment (163).

9.6 - Response

EPA acknowledges that consistency among states is an issue that has been
brought up over the years of implementing the definition of solid waste
regulations as they relate to legitimate recycling. However, the Agency
believes that the codified legitimacy factors will provide the state
implementing agencies with a clearer framework for making legitimacy
determinations for the new recycling exclusions and the non-waste
determinations and the preamble to both the supplemental proposal and
the final rule provide more explanation and examples of how the factors
work. The Agency expects more consistent legitimacy determinations among
the states to be made as a result of the codification of a condition of
legitimate recycling as part of the new broader recycling exclusions and
reminds commenters that all recycling must be legitimate, whether under
an existing definition of solid waste exclusion or one of the new
recycling exclusions in this final rule. Therefore, the Agency does not
believe there is a need to establish an appeals board at this time.

The Agency will, of course, monitor the implementation of this
rulemaking, including the legitimate recycling regulations, and will
assess the need for further guidance and other mechanisms for achieving
more consistency as the rule is implemented.

In response to those commenters who suggested adopting a new variance
procedure for determining on a case-by-case basis whether a specific
recycling activity is legitimate, the Agency did consider the option of
codifying all the legitimacy factors as mandatory with a petition or
variance procedure for those cases where the recycling did not meet one
or more of the factors but was nonetheless still legitimate recycling.
However, the Agency decided the regulatory structure being finalized in
this rule provides enough flexibility to the regulated community and to
implementing agencies to evaluate those cases which do not meet one of
the two factors that must be considered. The Agency did not see any
additional advantage in setting up a new petition process and believes
that the current system, improved by codification, will allow for
consideration of the more unusual legitimate recycling cases.

EPA agrees with the state commenter who noted that other federal
regulatory programs will also apply to products made from recycled
hazardous secondary materials, including both DOT for the transportation
of hazardous materials and OSHA for the protection of workers who work
with and/or manufacture products made from hazardous chemicals. EPA also
agrees that information about other regulatory programs may be useful in
evaluating the legitimacy factors.

As to the comment that there should be more stringent legitimacy
criteria for the use of hazardous secondary materials in the treatment
of wastes and wastewaters, EPA believes the concept of legitimacy
captures the critical elements of legitimate recycling and acknowledges
that in circumstances that warrant closer attention, implementing state
agencies have the authority to ask for more information. However,
individual legitimacy determinations have to be made on a case-by-case,
site-specific basis. It is not in the scope of this rulemaking to
address the legitimacy of individual site-specific recycling situations.

In addition, EPA plans to consider additional guidance on legitimacy
determinations in the future.

10 - Effects of the Proposed Rule on Other programs

10 - Summary

EPA received several miscellaneous comments on the effects of the
proposed rule on other programs.

One commenter noted that one of the objectives identified by RCRA and
EPA policy is to encourage product substitution or process change [RCRA
1003(a)(6)].  The commenter observes that there may be generators who
choose to rely on the proposed exclusion and who will continue their
existing hazardous secondary materials generating practices, rather than
consider and implement product substitutions or process changes that
would result in a net hazard reduction. Yet preamble discussions about
the effects of the proposal on other programs (such as pollution
prevention and toxics reduction), and about the economic impacts and
benefits of the proposal, do not appear to address the potential that it
may be more convenient for some generators to use the proposed exclusion
than to change to less hazardous products. The commenter suggests that
these potentially unintended impacts of the proposal be addressed in the
final rule preamble to ensure the benefits and tradeoffs have been fully
considered in encouraging recycling and promoting other desirable goals,
such as using green" product substitution to replace or minimize
hazardous materials in industrial processes.  [0212-17]

One commenter was concerned that the proposed regulations may have a
deleterious affect on solid waste management operations, public and
private. Counties are heavily involved in the management of
non-hazardous solid waste within their borders. Increased confusion as
to what constitutes proper management of hazardous waste could directly
affect facilities that manage non-hazardous solid waste. Less training,
confusion on the part of the regulated public, potentially less
regulatory scrutiny, reduced requirements for evaluation of wastes and
documentation thereof, less planning for potential emergencies and
decreased awareness of cradle-to-grave responsibility, among other
problems, could all contribute to an increase in the improper disposal
of hazardous waste at our solid waste management facilities. In
particular, the commenters believe that the potential that many
generators of hazardous secondary materials will provide less training
to their employees on the identification, handling, management and
proper disposal of hazardous secondary material could ultimately result
in an increase in hazardous waste being mixed with non-hazardous solid
waste. Training employees to recognize when a waste must be evaluated
and how to do it is key to properly managing hazardous waste.  The
commenters believe that the reduced emergency preparedness that will
likely result if the proposed regulations are adopted could also
potentially result in an increase in hazardous waste being shipped
through our non-hazardous solid waste system. Employees who are not
trained on how to respond to emergencies, including dealing with cleanup
residuals, are more likely to respond inappropriately to emergencies and
to improperly manage the residuals that result.

[0462-29]

One commenter was concerned that EPA's land-based units exclusion for
hazardous secondary materials sets a dangerous precedent under RCRA. The
commenter stated that the impact of this large-scale deregulation of
hazardous waste may have devastating implications for the regulation of
several other solid waste streams. EPA is currently considering
promulgating RCRA subtitle D regulations for coal combustion waste and
cement kiln dust.  These wastes, particularly coal combustion waste, are
widely used as structural fill and minefill.  If it is determined that
coal combustion waste and cement kiln dust deposition in mines or pits
can be construed as "reclamation" or a form of recycling, EPA may
similarly wish to remove coal combustion waste and cement kiln dust from
the universe of solid waste.  The deregulation of such voluminous toxic
waste streams would wreak havoc on human health and the environment.
The failure of EPA to place the most minimal controls on land-based
units holding formerly hazardous wastes, does not bode well for EPA's
prospective treatment of land-based deposition of these larger solid
waste streams.

[0559-57]

10 - Response

 In response to several miscellaneous comments on the effects of the
proposed rule on other programs:

(1) EPA disagrees that the final rule exclusions would cause generators
to use the proposed exclusion rather than to change to less hazardous
products.  Although the exclusions in the final rule are less burdensome
than the Subtitle C hazardous waste regulations, the conditions of the
exclusion still pose implementation costs, and CERCLA liability is still
a factor to be considered.  EPA believes that generators will continue
to work towards reducing toxic chemicals whenever it is technically
feasible to do so.

(2) EPA believes that the conditions of the final rule, including
notification, recordkeeping of shipments, and confirmation of receipts
makes it unlikely that hazardous secondary materials would be co-mingled
with non-hazardous wastes.  Generators are still responsible for
properly identifying their secondary materials, including determining
whether they are solid wastes and if so, whether they are hazardous.
This obligation is not affected by the final rule.

(3) The final definition of solid waste only applies to hazardous
secondary materials that are reclaimed and meet the restrictions and
conditions of the exclusions.  RCRA Subtitle D and other programs are
not affected.

10.1 - Conforming changes to existing exclusions

10.1 - Summary

EPA received overwhelming comments opposing the proposed "conforming
changes" to existing exclusions in the October 2003 proposal (68 FR
61578-61580). Commenters noted that existing exclusions are familiar to
both the states and the regulated community, and making wholesale
adjustments would have had unintended consequences in many cases.
Commenters provided many detailed and specific examples of unintended
impacts to several exclusions and exemptions.  As a result of these
comments, in the March 2007 supplemental proposal EPA proposed to retain
the existing exclusions exactly as written (72 FR 14205), a decision
universally supported by the comments.

[0060-27, 0070-6, 0070-7, 0074-16, 0074-22, 0078-1, 0083-17, 0089-55,
0091-22, 0093-35, 0093-57, 0097-13, 0102-6, 0102-25, 0102-26, 0102-27,
0104-25, 0113-1, 0114-1, 0115-1, 0115-7, 0119-45, 0120-1, 0120-5,
0122-18, 0129-10, 0138-2, 0149-17, 0155-1, 0155-3, 0155-4, 0167-1,
0171-1, 0174-4, 0179-22, 0179-32, 0184-5, 0189-1, 0199-28, 0199-34,
0200-1, 0203-13, 0204-7, 0205-4, 0206-1, 0207-2, 0216-7, 0222-52,
0446-1, 0446-2, 0446-4, 0446-6, 0449-1, 0465-2, 0468-19, 0471.2-65,
0481-14, 0486-16, 0486-59, 0487-2, 0494-10, 0524-4, 0524-6, 0528-10,
0535-11,  0547-1, 0553-2, 0553-5, 0560-2]

EPA received one comment that supported the October 2003 proposal to
replace existing exclusions with the broad exclusion, which stated that
this would be advantageous for regulatory authorities in that the
proposal better defines the parameters used to evaluate whether an
exemption legitimately applies.  [0194-1]

One commenter to the March 2007 supplemental proposal noted that part of
the preamble, which addresses the newly proposed land-based recycling
exclusion, mentions pulping liquor as an example of raw materials and
hazardous secondary materials that EPA "recognize[s] . . . "can be and
are stored in land-based units." 72 FR 14,186. The commenter believed
that this passage could be misconstrued to suggest that spent pulping
liquor might be covered by the land-based exclusion, contrary to EPA's
clear intention that pulping liquor be covered by the existing exclusion
in § 261.4(a)(6). To avoid confusion,  the commenter suggests that EPA
strike "pulping liquors" from any similar passage that might appear in
the preamble to the final rules.

[0446-3]

Other commenters suggested that EPA should specifically state that
various exclusions and alternative regulatory structures are not
affected by the final rule exclusions:

40 C.F.R. § 261.1(e)(1) material used directly as an ingredient or a
substitute for virgin materials or returned to the original process

40 C.F.R. § 261.2(c)(3), Unlisted byproducts or sludges that are
reclaimed

40 C.F.R. § 261.3(a)(1) Bevill mixture rule

40 C.F.R. § 261.4(a)(5), In-situ mining exclusion

40 C.F.R. § 261.4(a)(4), Spent sulfuric acid exclusion

40 C.F.R. § 261.4(a)(8), Secondary materials that are reclaimed and
returned to the original process exclusion

40 C.F.R. § 261.4(a)(13), Recycled scrap metal exclusion

40 C.F.R. § 261.4(a)(14), Shredded circuit boards exclusion

40 C.F.R. § 261.4(a)(17), The exclusion applicable to spent materials
generated within the mineral processing industry that are recovered by
mineral processing or beneficiation

40 C.F.R. § 261.4(a)(20),(21), The zinc fertilizer exclusions

40 C.F.R. § 261.4(b)(7) Bevill rule

40 C.F.R. § 261.5 Conditionally Exempt Small Quantity Generators

40 C.F.R. § 261.33 Commercial chemical products

40 C.F.R. § 262.20 (e) Secondary material recycled pursuant to tolling
agreements

40 C.F.R. § 266.70, The precious metals exemption (particularly that
such materials do not require financial assurance)

40 C.F.R. § 266.100(g), The counterpart to the exemption for precious
metals

40 C.F.R. § 266.100(d), The "smelting, melting and refining furnace"
exemption

Commenters also requested that EPA clarify that existing regulatory
determinations remain valid, including variances regarding the recycling
of F006

[0441-3, 0465-2, 0467-5, 0467-9, 0469-2, 0481-14,  0481-64, 0481-79,
0481-80, 0524-4, 0535-11, 0553-2, 0553-5, 0560-2]

10.1 - Response

EPA agrees with comments supporting retaining the existing exclusions,
exemptions and alternative regulatory structures for various materials.
These regulations are familiar to both the states and the regulated
community, and making wholesale adjustments would have had unintended
consequences in many cases.  The agency reiterates that materials
managed according to these existing provisions will not be affected by
the exclusions in the final rule.   In addition, prior determinations
made by EPA or the state regulatory authority are not affected by the
final rule.  However, the final rule also does not limit the regulatory
agency's authority to revisit regulatory determinations for other
reasons.

10.1.1 - Definition of metals recovery

10.1.1 - Summary

Some comments dealt with the provisions of the regulation that deal with
properly defining which types of burning operations solely involving
metals recovery rather than burning for energy recovery or burning for
destruction.  Provisions explaining the type of operations that process
hazardous secondary material "solely for metals recovery" are found in
40 CFR 266.100(d).

A commenter requested that EPA clarify that the adoption of the proposed
"generator control" exclusion and "transfer-based" exclusion would have
no impact on 40 CFR 266.70 the precious metals exemption , 40 CFR
266.100(g) the counterpart to the exemption for precious metals, and 40
CFR 266.100(d), the "smelting, melting and refining furnace" exemption.

Another commenter noted that Marine Shale Processors, Inc v. USEPA, 81
F.3d 1371 at page 1375 states "In 1991, EPA promulgated new rules
requiring that all devices using thermal combustion to treat hazardous
waste have either a Subpart O permit or a new form of permit for
recycling facilities called a Boiler and Industrial Furnace permit.
Final Rule Burning of Hazardous Waste in Boilers and Industrial
Furnaces, 56 FR 7134, 7138 (1991). These regulations ended the exception
from the permit requirements for facilities engaged in recycling." 40
C.F.R. Subpart H Boiler and industrial Furnace regulations define 12
types of manufacturing devices (boilers and furnaces) that qualify for
this exemption. However, 40 C.F.R. 260.10 definitions and 40 C.F.R.
Subpart H do not define manufacturing. The commenter stated that EPA
must clearly define manufacturing since this is the only exception where
recycling is allowed that uses thermal combustion. In addition, the EPA
must clarify that this exemption only applies to facilities engaged in
manufacturing and not to facilities engaged in waste management.
Another commenter requested EPA address industries that partially
reclaim metals from sludges and wastewaters that are later fully
reclaimed by smelting or electro-winning including the minimum metal
content of the metal sludges and wastewaters that must be received by
the reclamation facility for this activity to be considered legitimate
recycling.  Another commenter requested that EPA clarify that burning
for the purpose of destruction or partial destruction is not legitimate
recycling even if materials or energy is recovered, unless it is
performed in a boiler or industrial furnace.

[0105, 0108, 0118, 0481]

10.1.1 - Response

EPA agrees with comments that the final rule exclusions should have no
impact on 40 CFR 266.70 (precious metals exclusion) and 40 CFR
266.100(d) and (g) (conditional exclusions from the boiler and
industrial furnace (BIF) regulations for "smelting, melting, and
refining furnaces" and precious metals recovery furnaces). Because these
exclusions are exclusions from certain hazardous waste regulations, not
solid waste exclusions, as a general matter, EPA believes that
facilities should have a choice of whether they manage their materials
as hazardous waste under these exclusions or seek an exclusion from the
definition of solid waste through today's final rule.

However, part of what 40 CFR 266.100(d) accomplishes is to define when
an operation involving burning is solely a metals recovery operation
rather than a burning for energy recovery or destruction operation,
neither of which is eligible for today's exclusions. As noted by the
commenters, manufacturing via metals recovery is the only type of
exception where recycling is allowed that uses thermal combustion.  The
distinction between burning for solely metals recovery and burning for
energy recovery or burning for destruction is important, and EPA did not
intend to revise how such material recovery operations were identified,
nor did EPA ask for comment on such a revision.

Thus, for the purpose of defining the type of burning for metals
recovery to be allowed under these exclusions, EPA will reference the
requirements in 40 CFR part 266, subpart H that defines when a
"smelting, melting, and refining" furnace is solely engaged in metals
recovery, but will not require the other conditions that are not related
to distinguishing legitimate materials recovery from burning. Therefore,
under today's final rule, hazardous secondary materials burned for
metals recovery would still be required to meet the minimum metals and
maximum toxic organic metals content specified in 40 CFR part 266 and
the residuals must meet the requirements specified in §266.112 (as part
of defining operations solely involving metals recovery), and would
continue to be exempt from BIF permits, but they would not be subject to
hazardous waste manifests and storage permits, as long as the conditions
of the exclusions promulgated in today's rule are met.

10.1.2 - Should a regulated entity be allowed to choose which exclusion
to follow in those cases where more than one exclusion could apply and,
if so, should the entity be required to document the choice made?

10.1.2 - Summary

Opposition to Proposed Approach

Many commenters opposed EPA's proposal to require generators with
currently-excluded secondary materials to meet conditions of the
existing exclusions rather than using the proposed exclusions, and
instead supported the alternative in which the regulated entity chooses
the most appropriate exclusion to be used. (72 FR 14205)  Commenters
stated that EPA's proposal to compel the regulated entity to continue
using an existing exclusion rather than making use of a different
exclusion limits the flexibility of the generator with no concurrent
environmental benefit.  The existing exclusions and the new exclusions
all define the absence of discard, even if they go about it in a
slightly different way.  For example, while the proposed new exclusions
may not have some of the prescriptive management conditions that some
existing exclusions include, the codified legitimacy criteria
(particularly the one addressing how a material is managed) are an
adequate substitute for such conditions. Imposing an additional layer of
conditions upon existing exclusions would be contrary to EPA's stated
purpose in proposing the rule. See 72 Fed. Reg. 14174. See also 68 Fed.
Reg. 61560.  Such new conditions would also conflict with EPA's stated
intent "not . . . to make substantive changes as to how currently
excluded materials would need to be managed or regulated."

[0089-56, 0472-62, 0468-19, 0473-11, 0479-10, 0481-81, 0486-17, 0486-60,
0492-53, 0524-6, 0524-15, 0528-11, 0535-12]

Comments on Documentation

Some commenters supported the option of requiring the entity to document
their choice of exclusions, noting it would help State agencies ensure
compliance with just one set of requirements.   [0461-10, 0468-19]
Other commenters opposed requiring documentation, noting that generators
are required to determine if a solid waste is a hazardous waste.  40
C.F.R. § 262.11. As part of that overall determination, a generator
must decide whether any of the exclusions in 40 C.F.R. § 261.4 apply.
For almost 30 years, this system has worked well with no requirement
that a generator document that a particular exclusion applies.  No
reason exists now to modify that system to require documentation of
which exclusion might apply.  Moreover, EPA has not even suggested a
possible rationale in the 2007 Supplemental Proposal to require such
documentation.  The existing obligation in 40 C.F.R. § 261.2(f) to be
able to provide documentation of why a material is excluded should be
sufficient. [0481-81, 0492-54]

Support for Proposed Approach

Other commenters supported EPA's proposal to require generators with
currently-excluded secondary materials to meet conditions of the
existing exclusions rather than using the proposed exclusions.  Any
final rule should be clear that generators operating under existing
conditional exclusions, e.g. wood preserving chemicals recovered from
drip pads, must continue to comply with those conditions. Otherwise
there will be no regulated drip pads. Hazardous waste compliance must
necessarily be absolute, otherwise, compliance will be chaotic, and
attorneys will be the only winners in resolving subjective decisions.
The specific exclusions have been developed with careful consideration
of the hazardous proprieties of the materials and conditions set to
ensure proper management of these hazardous properties. If EPA were to
change its current position and allow reclaimers to choose which
exclusion to use, then selecting the use of the DSW exclusion could
circumvent any special conditions that are included in the proposed
spent catalyst exclusion and in other exclusions that have been
implemented. EPA should maintain the current clear requirement that
existing conditional exclusion requirements should be the applicable
conditions and supersede any "generic set of conditions" under this
proposal. [0470-6, 0475-37, 0495-18, 0564-15]

Wood-Preserving Hazardous Secondary Materials

One commenter requested that EPA clarify how the proposal that the
transfer-based exclusion "would not address materials that are currently
excluded from the definition of solid waste according to other existing
provisions of 40 CFR part 261.4(a)” applies to wood preserving wastes.
Because the current 261.4(a)(9) exclusion does not apply to recycling of
materials generated off-site, the commenter believes that the proposed
transfer-based exclusion would cover recycling of wood preserving
solutions generated off-site and transferred for reuse to preserve wood
at the receiving facility. Because applicability of the transfer-based
exclusion may not be clear in this situation, the commenter requested
that EPA add the following clarifying language to the preamble of the
final rule: "Note, however, that if materials are currently excluded
from the definition of solid waste in some, but not all situations, then
these materials would be eligible for exclusion under today's
transfer-based exclusion for the situations in which they are not now
excluded. For example, wood preserving solutions are currently excluded
from the definition of solid waste if they are reused on-site. Because
off-site transfer and reuse in the wood preserving process is not
currently excluded, such transfer and reuse would be eligible for
coverage by today's exclusion." [0449-3, 0449-4]

Closed-Loop Exclusion

Some comments specific focused on the closed-loop exclusion, commenting
that they see no need to require that materials reclaimed using the
closed-loop exclusion under 261.4(a)(8) continue to be required to use
this exclusion. In fact, continued use of this approach can result in
reduced reclamation of valuable materials. A perfect example of this
negative impact is contained in EPA's RCRA Online #140879, which
involves the commenter's site. Because a minor percentage of the
reclaimed solvent could not be returned to the original process
generating it the entire spent solvent material (many thousands of
gallons per year) had to be discarded as hazardous waste because the
conditions of the exclusion could not be met. EPA should not allow such
unintended impacts to continue. The proposed new exclusions are as
protective of human health and the environment as this existing
exclusion. As long as there is no element of discard involved in a
recycling process then a generator/recycler should be allowed to choose
which exclusion to use.  DuPont has not reviewed all of the existing
exclusions that have conditions associated with them.  If there are one
or two where it clearly makes sense to require use of the existing
exclusion because EPA feels that use of the new exclusions would not be
as protective as the existing one, then the Agency should identify only
those existing few - not all of them. [0491-34, 0516-12]

Spent Catalysts

One commenter who commented on both the 2003 and 2007 proposals was
concerned with the interaction with possible future exclusions,
specifically for spent catalysts. The commenter has already proposed a
set of conditions specific to spent catalysts. Such an approach would
remove certain unneeded regulatory burdens, such as a RCRA permit, yet
keep in place enough detailed, enforceable rules to ensure that
generators, reclaimers and state agencies follow exactly what steps are
needed for safe spent catalyst management. The commenter believes that
spent catalysts are hazardous secondary materials that have unique
properties that require their own set of conditions to ensure safe and
effective management. The commenter believes that allowing a generator
and reclaimer to use the general, non waste specific provisions and
conditions of the proposed DSW rule ignores the unique properties of
spent catalyst that have long been recognized by the Agency and led to
the specific listing of spent catalyst as listed waste K171/K172.

The commenter states that EPA should also include in the final rule a
provision that allows EPA to establish other waste specific exclusions
with special conditions in the future. The current proposal does not
mention what options or approach EPA may take, if waste specific
conditional exclusions are needed and promulgated in the future. It
would appear that EPA assumes that there will be no need to establish
conditional exclusions for specific wastes in the future. Mismanagement
of some hazardous secondary materials would certainly appear to be
likely in the future; if this very generic, general broad brush
conditional exclusion is adopted and applied to all hazardous secondary
materials. EPA should consider what action it may need to take in the
future to ensure proper management of certain hazardous secondary
materials, if needed in the future. The commenter believes EPA should
add a provision stating that existing conditional exclusions and any
future conditional exclusions would take precedent over this general
proposal.  [0144-1, 0144-4, 0475-37, 0475-41]

Spent Lead-Acid Batteries

Many of the comments opposing allowing generators a choice of exclusions
were specific to spent lead acid batteries. Commenters stated that
allowing a facility to choose which exclusion applied could undercut the
applicability of Section 266.80 by allowing some used lead-acid battery
reclaimers to use the proposed conditional exclusions in lieu of 266.80.
The battery industry has operated well under this regulatory scheme, and
the commenters support the continuation of these regulations rather than
the deregulation of all "legitimate" recycling as has been suggested.
Deregulation under RCRA is not necessary to promote recycling of lead
and may, in fact, decrease the effectiveness of current incentives for
recycling.  Nonferrous metals, in fact, have a high rate of recycling
despite the current RCRA regulations. In particular, recycling rates for
lead-acid batteries have increased since the imposition of RCRA
requirements. EPA, Municipal Solid Waste in the United States, 2001
Facts and Figures, Table 13, at 69. EPA found that recovery of lead-acid
batteries for recycling has increased since 1980 due to the growing
number of communities that have restricted batteries from disposal at
landfills or combustion facilities. Id. at 72. Relaxation of RCRA
requirements would run counter to these actions, and may eliminate an
incentive to recycling spent lead-acid batteries.

Commenters note that the lead-acid battery recycling industry has an
unfortunate history of cases from years past of environmental harm
resulting from improper management of lead-acid batteries. Several
commenters have found that "a significant number of superfund sites are
former lead battery recycling operations; the liability exemption for
recyclers of lead batteries is the provision with the greatest impact on
the CERCLA program." John C. Cruden, CERCLA Overview, SF 97 ALIABA 397,
424-25 (2001); see also Charles de Saillan, Superfund Reauthorization: A
More Modest Proposal, 27 Envtl. L. Rep. 10201 n.232 (1997) (describing
the hazards associated with badly managed battery recycling sites). A
survey of lead battery recycling sites published in 1997 identified 47
sites containing some form of battery waste material that have been
listed on the NPL or investigated since the inception of CERCLA,
including landfills, salvage yards, battery breaking, and lead smelters.
See Tim Nedwed & Dennis A. Clifford, A Survey of Lead Battery Recycling
Sites & Soil Remediation Processes, 17 Waste Management 257, 260 (1997).
In July of 1991, 18 lead battery sites were on the RCRA Corrective
Action List. Id.

The inception of RCRA requirements decreased the number of contaminated
sites associated with lead-acid battery recycling. In 1991, there were
29 defunct lead-acid battery recycling sites that had been or were being
addressed under the Superfund Program. Michael D. Royer, et al., Control
Technologies for Remediation of Contaminated Soil and Waste Deposits at
Superfund Lead Battery Recycling Sites, 42 J. Air Waste Manage. Assoc.
970, 970 (1992). These sites included facilities involving battery
breaking, secondary lead smelting, or both operations. Id. Based on the
information on CERCLIS, sites listed on the NPL that involved lead-acid
battery recycling all relate to operations that occurred prior to 1990,
or were listed prior to 1990. Indeed, the operations at many of these
sites ended by 1984.

Commenters also noted that failure to clarify the rule with respect to
recycling of lead-acid batteries and their components could lead to
regulatory inconsistencies that could subject some portions of the
lead-recycling industry to less stringent regulations than others. For
example, under the proposed rule, a battery breaker could argue that it
would qualify for one of the new exclusions that paradoxically would
subject the battery breaker to less stringent regulations than the
regulations that would apply to recyclers of intact batteries.
Commenters also note that the 261.2 generator controlled and 261.4
transfer-based exemptions included in the supplemental proposal are not
designed to apply to a system of multiple small generators (garages,
retailers, etc.) such as the one used in lead battery collection
networks.

[0073-3, 0073-8, 0109-3, 0109-6, 0109-7, 0109-9, 0109-12, 0143-8,
0483-2, 0483-4, 0487-1, 0487-2, 0487-3, 0514-1, 0514-3, 0514-3, 0514-4,
0514-10, -514-12]

Precious Metals

Two commenters focused on the precious metals reclamation exclusion
under 40 CFR 266 Subpart F.  The commenters state that it makes no sense
to require special conditions for managing the reclamation of these
materials when other hazardous secondary materials do not have to meet
such conditions.  To require that materials using existing exclusions
containing conditions continue to meet those conditions after
promulgation of these new exclusions is analogous to the existing
regulations where characteristic byproducts that are reclaimed are not
solid wastes, but spent materials that are reclaimed are solid wastes.
No element of discard is involved in either case, but recycling is
discouraged for spent materials.  [0439-1, 0491-34]

"Recyclable Materials"

One commenter focused on the regulations applicable to "recyclable
materials" in 40 CFR 261.6, which provides the standards for
transporters, generators, and facility operators that manage "recyclable
materials." Based on the definition in 40 CFR 261.6(a)(l), many
recyclable materials will also meet the criteria for the proposed term,
"hazardous secondary materials that are reclaimed" (HSMTAR). However,
the existing standards for recyclable materials are significantly more
stringent that the standards in the proposed 40 CFR 261.4 for HSMTAR.
Therefore, there will be situations where materials will be subject to
two sets of regulations that are contradictory in nature.  [0439-1]

More Information Needed

One commenter stated that the rule needed to be further developed before
opining on this issue.  This commenter believes there are significant
deficiencies in the proposed rule that must be fixed prior to making
such a determination. Probably to avoid the potential for gross
circumvention of the speculative accumulation rules by generators the
exclusion should be declared and documented; however, this could be
problematic for permitted facilities managing reclamation residuals and
would also have potential impacts on how the material should be
declared.  This commenter agrees this is a quandary that must be
resolved and is caused by the EPA proposing to allow storage up to the
permitted period by non-permitted facilities. This commenter believes
this is another detail that cannot be resolved until the speculative
accumulation concept for this rule is clarified. [0479-45]

Another commenter recognizes that generators qualifying for more than
one exclusion or exemption have historically been allowed to utilize
whichever one they prefer.  For example, a generator producing a
wastewater treatment sludge from which significant metals are reclaimed
is allowed to utilize either the 265.1(c)(10) wastewater treatment unit
exemption for their wastewater treatment process or the 261.6(c)(2)
recycling exemption, with advantages and disadvantages for both.
However, the March 26 proposal is so sweeping that the commenter
believes that each existing exclusion should be evaluated to determine
whether the requirements of an existing exclusion should, from an
environmental protection standpoint, be left in place by denying certain
waste streams from qualifying for the proposed exclusions too.  For
example, compliance with the 261.4(a)(14)(ii) requirement that circuit
boards be free of mercury switches and lithium metal batteries prior to
shredding is believed to be a requirement that EPA would not want
sidestepped by being able to utilize one of the proposed exclusions
instead of 261.4(a)(14).

[0516-31]

10.1.2 - Response

EPA agrees with comments supporting EPA's proposal to require generators
and recyclers with currently-excluded secondary materials to meet the
material-specific conditions of the existing solid waste exclusions in
40 CFR 261.4(a) rather than using the final rule exclusions.    The
conditions that were developed for those exclusions were found to be
necessary and appropriate under case-specific rulemakings that
determined when the hazardous secondary material in question is not a
solid waste. When developing these rulemakings, the Agency reviewed the
specifics of each of the particular materials and the particular
management methods, and developed individualized conditions and
restrictions tailored to the materials and management methods to
identify which of the materials are not solid wastes.  For example,
broken cathode ray tubes must be transported in closed containers (40
CFR 261.4(a)(22)) and shredded circuit boards need to be free of mercury
switches and relays (40 CFR 261.4(a)(14)).  These individualized
exclusions are specifically designed to address these particular
materials and include conditions and restrictions addressing particular
issues identified by the Agency in its investigation of the material and
its management.

Therefore, the final rule requires that hazardous secondary materials
specifically subject to the material-specific exclusions must continue
to meet the existing conditions or requirements of these
material-specific exclusions in order to be excluded from the definition
of solid waste. Moreover, industry and the states are familiar with
these requirements and EPA believes that changing them would only lead
to confusion in the regulated community.

In addition, to be clear, because the material-specific exclusions are
most appropriate for the materials they were designed to cover, they
remain the controlling exclusions for these materials into the future.
In other words, specific materials covered by the existing
material-specific exclusions may only be excluded from the definition of
solid waste under those exclusions, and the final rule exclusions are
not applicable.

For most of the exclusions in 40 CFR 261.4(a), this provision will have
no practical effect because the current exclusion either (1) has no
conditions, (2) has conditions that overlap with those of the final rule
exclusions (i.e., no speculative accumulation, or land disposal),  (3)
does not involve reclamation, or (4) involves hazardous secondary
materials burned for energy recovery or used in a manner constituting
disposal. These include the exclusions in 40 CFR 261.4(a)(1)–(7), 40
CFR 261.4(a)(10)–(13), 40 CFR 261.4(a)(15)–(16), 40 CFR
261.4(a)(18), and 40 CFR 261.4(a)(20)–(21).  The exclusions in 40 CFR
261.4(a) that are for a specific material and include conditions that
are more specific than those included for the exclusions being finalized
today are those for (1) spent wood preserving solutions (40 CFR
261.4(a)(9)), (2) shredded circuit boards (40 CFR 261.4(a)(14)), (3)
mineral processing spent materials (40 CFR 261.4(a)(17)), (4) spent
caustic solutions from petroleum refining liquid treating processes (40
CFR 261.4(a)(19)), and (5) cathode ray tubes (40 CFR 261.4(a)(22)). For
each of these cases, EPA has made a material-specific determination of
when such a material is not discarded and therefore not a solid waste
and such a determination is more appropriately applied to these
materials than the general conditions of today’s final rule. The
conditions of the material-specific exclusion essentially help define
when that material is legitimately recycled and not discarded.

Wood-Preserving Hazardous Secondary Materials

EPA agrees that the current solid waste exclusion for wood preserving
hazardous secondary materials in 40 CFR 261.4(a)(9) is limited to
on-site recycling. Thus, if managed on-site, these materials would need
to comply with the existing conditions to be eligible for an exclusion
from the definition of solid waste. However, since the current exclusion
does not apply to hazardous secondary materials sent off-site, and the
substance of the exclusion (i.e., drip pad requirements) applies to a
management method not applicable to off-site transfers, the new
exclusion in today's rule would apply to hazardous secondary materials
that are sent off-site for reclamation. Thus, if sent off-site for
legitimate reclamation, these materials could be eligible for today's
exclusion if the restrictions and/or the conditions are met.

Closed-Loop Exclusion

EPA also agrees that hazardous secondary materials recycled via the
closed-loop exclusion at 40 CFR 261.4(a)(8) could be recycled under a
different process and still be eligible for today's exclusions. The
closed-loop exclusion is based on the premise that hazardous secondary
materials reclaimed in a continuous process within an industry are not
discarded and, therefore, are not solid wastes subject to EPA's RCRA
jurisdiction. (See AMC I.) In fact, closed loop recycling is a subset of
materials reclaimed in a continuous industrial process, since materials
may be reclaimed in a continuous process outside of a closed loop
system. EPA did not make a finding that any particular hazardous
secondary material must be reclaimed in a continuous process. The Agency
only determined that closed-loop recycling, in general, should be
excluded. Today's exclusions, however, allow any hazardous secondary
materials to be excluded if reclamation meets the restrictions and/or
conditions set forth in the rules. Thus, a facility currently engaged in
closed-loop recycling could change their processes and still be
excluded, as long as all applicable restrictions and/or conditions are
met.

Spent Catalysts

In addition to the solid waste exclusions currently in 40 CFR 261.4(a),
EPA is planning to propose-in a separate rulemaking from today's final
rule to amend its hazardous waste regulations to conditionally exclude
from the definition of solid waste spent hydrotreating and hydrorefining
catalysts generated in the petroleum refining industry when these
hazardous secondary materials are reclaimed (see entry in the
Introduction to the Fall 2007 Regulatory Plan, 72 FR 69940, December 10,
2007). Spent hydrotreating and hydrorefining catalysts generated in the
petroleum refining industry are routinely recycled by regenerating the
catalyst so that it may be used again as a catalyst. When regeneration
is no longer possible, these spent catalysts are either treated and
disposed of as listed hazardous wastes or sent to RCRA-permitted
reclamation facilities, where metals, such as vanadium, molybdenum,
cobalt, and nickel are reclaimed from the spent catalysts.

EPA originally added spent hydrotreating and hydrorefining catalysts
(waste codes K171 and K172) to the list of RCRA hazardous wastes found
in 40 CFR 261.31 on the basis of toxicity (i.e., these materials were
shown to pose unacceptable risk to human health and the environment when
mismanaged) (63 FR 42110, August 6, 1998). In addition, EPA based its
decision to list these materials as hazardous due to the fact that these
spent catalysts can at times exhibit pyrophoric or self-heating
properties.

It is largely because of these pyrophoric properties that EPA is
considering a separate proposal to conditionally exempt these catalysts
from hazardous waste regulation. This future proposal will allow the
agency to consider and seek comment on specific conditions to address
the pyrophoric properties of these hazardous secondary materials,
particularly during transportation and storage prior to reclamation, in
order for the Agency to determine that they are not being discarded. As
a result of this separate effort, these spent catalysts will not be
eligible for today's exclusions. Once EPA has proposed a conditional
exclusion specifically for these spent catalysts, and after
consideration of public comments, EPA will either finalize a conditional
exclusion specific to these spent catalysts or may decide that the
conditions being promulgated in today's final rule are fully adequate
for the management of these spent catalysts when recycled, and therefore
would remove the restriction preventing these spent catalysts from being
eligible for today's exclusions.

Spent Lead-Acid Battery Recycling

EPA also agrees that spent lead-acid battery recycling should continue
to be regulated under 40 CFR 266.80 or 40 CFR part 273. This is because
these regulations are actually hazardous waste regulations and are not
solid waste exclusions. Continuing the regulation of spent lead-acid
battery (SLAB) recycling as hazardous waste is necessary due to the
unique nature of these batteries. Also, as noted by the commenters, the
current battery recycling regulations are working well. More than 95% of
SLABs are currently recycled and generators of SLABs are exempt from
Superfund liability under the Superfund Recycling Equity Act (SREA),
provided that they meet the requirements of the exemption, including the
requirement to take "reasonable care" to determine that the accepting
facility is in compliance with the substantive environmental
regulations.

Because SREA was based on the current SLAB hazardous waste regulations
under RCRA, changing the regulation of SLABs could have unintended
consequences. For example, the current regulations prohibit
battery-breaking without a permit because such battery-breaking
operations have been high-risk activities. In addition, as noted in our
recycling study, 12% of our damage cases were from battery-breaking
operations. Moreover, the high value of the lead plates and low entry
cost for a battery-breaking facility provides a strong market incentive
for facilities to recycle without investing in adequate management
systems for the discarded battery acid and casings.

In addition, because the RCRA-regulated "generator" of a SLAB is often
the garage or junkyard that removed the battery from the automobile
(rather than the original owner who discarded the battery), the
generator-controlled exclusion could be read to apply to these
operations. Therefore, the reasonable efforts and financial assurance
conditions that are a part of the transfer-based exclusion would not
apply, despite the fact that their activities would resemble waste
management rather than production. Because, in these cases, the SLABs
have effectively already been discarded by the original owners before
they enter the RCRA hazardous waste regulatory system, EPA will continue
to regulate SLABs as solid and hazardous waste under 40 CFR 266.80 or 40
CFR part 273.

Precious Metals Reclamation

EPA also agrees with comments that the exclusions should have no impact
on 40 CFR 266.70 (precious metals exclusion) and 40 CFR 266.100(d) and
(g) (conditional exclusions from the boiler and industrial furnace (BIF)
regulations for "smelting, melting, and refining furnaces" and precious
metals recovery furnaces). Because these exclusions are exclusions from
certain hazardous waste regulations, not solid waste exclusions, as a
general matter, EPA believes that facilities should have a choice of
whether they manage their materials as hazardous waste under these
exclusions or seek an exclusion from the definition of solid waste
through today's final rule.

However, part of what 40 CFR 266.100(d) accomplishes is to define when
an operation involving burning is solely a metals recovery operation
rather than a burning for energy recovery or destruction operation,
neither of which is eligible for today's exclusions. This distinction is
an important one to make, and EPA did not intend to revise how such
material recovery operations were identified, nor did EPA ask for
comment on such a revision.

Thus, for the purpose of defining the type of burning for metals
recovery to be allowed under these exclusions, EPA will reference the
requirements in 40 CFR part 266, subpart H that defines when a
"smelting, melting, and refining" furnace is solely engaged in metals
recovery, but will not require the other conditions that are not related
to distinguishing legitimate materials recovery from burning. Therefore,
under today's final rule, hazardous secondary materials burned for
metals recovery would still be required to meet the minimum metals and
maximum toxic organic metals content specified in 40 CFR part 266 (as
part of the definition of this activity), and would continue to be
exempt from BIF permits, but they would not be subject to hazardous
waste manifests and storage permits, as long as the conditions of the
exclusions promulgated in today's rule are met.

Other Recycling Provisions

For other hazardous secondary materials currently eligible for
management under other exclusions or alternative regulatory structures
that do not include an exclusion from the definition of solid waste
(such as the universal waste regulations in 40 CFR part 273 or the
"recyclable materials" provisions of 40 CFR 261.6), the facility would
have the choice of either continuing to manage the hazardous secondary
material as a hazardous waste under the existing regulations or under
today's exclusions from the definition of solid waste.

10.2 - Effects on RCRA permitted or interim status facilities

10.2 - Summary

EPA received three comments on the discussion of changes to a facility's
permit once it begins operating under the exclusions.  The existence of
the new exclusions will mean that some units that had been storing
hazardous wastes at a facility with a RCRA Part B permit no longer will
have to be covered by the permit because, with the exclusion in place,
the unit no longer will be used to manage hazardous waste.  And, if all
hazardous wastes at the facility qualify for the exclusions, the
facility itself no longer will need a RCRA Part B permit, except perhaps
to address any lingering corrective action obligations (see 72 FR
14205-06).  In both cases, EPA proposed that changes to the Part B
permits (either to remove the unit that now manages only excluded
wastes, or to terminate the permit altogether by modifying its term when
all secondary materials at the facility qualify for exclusion) should be
effected through the Class 1 permit modification procedure of 40 C.F.R.
270.42(a) with prior agency approval.

One commenter agreed that the Class 1 permit modification procedure of
40 C.F.R. 270.42(a) is appropriate for these changes, but questioned the
need for prior agency approval before the modification becomes
effective.  The commenter viewed requiring prior approval in these
circumstances as regulatory overkill-since the exclusions are
self-implementing and the material being managed no longer is hazardous
waste. Even without a prior approval requirement, the agency would have
the authority, under 40 C.F.R. 270.42(a)(1)(iii), to review and reject
the permit modification at the request of any person-in which case, the
permit holder would have to comply with the original permit conditions.
The commenter believed that authority should be sufficient, but if a
RCRA-authorized state wishes to impose a prior approval requirement in
these circumstances, it would be free to do so.  [0452-26]

Another commenter believes that according to the regulations, that this
would be a Class 2 permit modification based on a regulation change, and
that the public should have the opportunity to comment on this change
during a public notice period. The commenter also believes the permit
would have to remain in effect until an enforcement agreement was in
place to require the owner/operator to complete any corrective action.

[0489-29]

A third commenter objected to terminating the permit at all.  The
commenter noted that the permits were issued after a specific finding in
the permit proceeding or the underlying rules that the risk of waste
management justified the controls specified in the permits. The
commenter stated that EPA cannot now decide in a general rule that these
specific findings were erroneous. EPA or a delegated state agency must
review each case and determine on a rational basis that it is now
acceptable from a public health and environmental risk standpoint to
remove these protections.

[0144-3]

10.2 - Response

After considering the comments, EPA continues to believe that changes to
the Part B permits (either to remove the unit that now manages only
excluded wastes, or to terminate the permit altogether by modifying its
term when all secondary materials at the facility qualify for exclusion)
should be effected through the Class 1 permit modification procedure of
40 C.F.R. 270.42(a) with prior agency approval.

Under the Class 1 with prior Agency approval approach, the owner or
operator must submit notification of the permit modification to the
implementing agency, along with documentation demonstrating that the
operations at the unit meet the conditions of the exclusion and that the
unit is used solely to manage excluded hazardous secondary materials. In
addition, the owner or operator must comply with the requirements of 40
CFR 270.42(a)(ii) for public notification. Under §270.42(a)(ii), the
permit modification will not become effective until the owner or
operator receives written approval by the implementing agency. The
implementing agency will approve the permit modification so long as the
owner or operator has complied with the procedural requirements of
§270.42(a) and has demonstrated that the operations meet the conditions
of the exclusion, and that the unit does not manage non-excluded
hazardous wastes.

The Agency disagrees with the comment that prior Agency approval would
be "overkill" for these types of permit modifications.  As discussed in
Section XII of the preamble to the final rule, units managing excluded
hazardous secondary materials would not have to undergo RCRA Subtitle C
closure (as long as the conditions of the exclusion are met).  Although
one of the purposes of the RCRA Subtitle C closure requirements is to
identify and remediate any releases originating from the units, EPA
believes that the specific Subtitle C closure requirements may not be
the most appropriate means of addressing cleanup of releases from these
units, if any have occurred. Rather, the Agency believes that a better
approach to address historical releases from these units, as well as any
future releases, would be as part of corrective action for all releases
at the facility an approach that the Agency believed would achieve the
same environmental results and would provide the owner or operator the
option of integrating the cleanup more closely into the broader facility
response.   Because of this, EPA encourages regulators to work with
owners and operators that seek to modify their permits to remove
conditions applicable to these units that will operate under the
exclusions to verify that there are no unaddressed releases from the
unit. In situations where corrective action is necessary at the unit,
the Agency encourages regulators to work with owners and operators to
assure that the releases from the unit are addressed promptly.
Requiring prior approval gives the regulatory authority a mechanism to
carry out this verification.

The Agency also disagrees with the comment that the Class 2 permit
modification procedures are  necessary to provide the public an
opportunity to comment on the removal of the unit from the permit. The
regulations that govern permit modification classify modifications to
the permit term, to allow for earlier permit termination, as Class 1
with prior Agency approval. The Agency believes that removing permit
conditions for units that are no longer regulated is, in effect,
allowing earlier permit termination at those units. Thus, the Agency
believes that Class 1 with prior Agency approval is the appropriate
designation for these permit modifications.

The Agency agrees that in some cases, a RCRA permit will need to be
maintained even after all units are excluded in order to address
corrective action responsibilities.  As was explained in the October 28,
2003, proposal (see 68 FR 61580) and again in the March 26, 2007,
supplemental proposal (72 FR 14206), the obligation of 40 CFR 264.101 to
address facility-wide corrective action at permitted facilities, which
attaches at permit issuance, is not affected by this final rule, and
remains in effect until corrective action at the facility is completed.

Therefore, an owner or operator of a facility that manages only
hazardous secondary materials excluded under this final rule, who seeks
to terminate the facility's permit by modifying the permit term, must
demonstrate as part of the permit modification request that the
corrective action obligations at the facility have been addressed. The
Agency's corrective action authority at such facilities is not affected
by this rulemaking and the Agency thus retains its authority to address
corrective action at such facilities using all authorities applicable
prior to this rulemaking.

At some facilities, corrective action obligations will likely continue
to be addressed through the corrective action provisions of the permit.
In these cases, maintenance of the permit would ensure that
facility-wide corrective action will be addressed.  Thus, in these
cases, the permit would not be terminated by modifying the permit term,
but would be modified to remove the provisions that applied to the
now-excluded hazardous secondary material.  The facility's permit would,
thereafter, only address corrective action.

In other cases, however, EPA or an authorized state may have available
an alternative federal or state enforcement mechanism, or other federal
or state cleanup authority, through which it could choose to address the
facility's cleanup obligations, rather than continue to pursue
corrective action under a permit.  In these cases, where the alternate
authority would ensure that facility-wide corrective action will be
addressed, maintenance of the permit would not be necessary.

10.2.1 - Should EPA allow a facility to either (1) "close" a unit
without physically removing the now-excluded recyclable materials or (2)
defer closure until the end of the unit's operating life?

10.2.1 - Summary

EPA received many comments on both the 2003 and 2007 proposals regarding
EPA's discussion of the applicability of closure to newly-excluded
units.

Many commenters disagreed with EPA's proposal that "closure of storage
units would not be required when such units cease storing hazardous
wastes and are subsequently used to store the same materials that would
no longer be regulated as wastes" under the proposed exclusion.  68 FR
61581. Commenters argue that the hazardous constituents present in the
waste pose a risk of environmental harm that should be prevented,
regardless of the subsequent status of the waste as excluded material.
Commenters noted that the purpose of the closure requirements is to
assess and clean up contamination at the time that hazardous wastes are
no longer stored in the unit.  If the unit has been used for hazardous
waste storage, an appropriate cleanup should be conducted before
continued use for excluded materials is allowed.  Otherwise, the unit
will exit the RCRA regulatory system and proper cleanup may never be
conducted.  Since RCRA controls would no longer be applicable, the
generator could cease to maintain the area in accordance with the leak
detection, secondary containment, and tank integrity standards.  Any
prior contamination of hazardous constituents would have a pathway for
release to the environment. If closure requirements were applied when
the exclusion becomes effective, at least some interim decontamination
of accumulated hazardous constituents would be addressed.  The cost of
closure would be proportional to the level of hazardous constituents
accumulated over time.  Decreased closure requirements may result in
states bearing the responsibility for cleanup.

Commenters also noted that there is also the potential that the waste
may be rejected by a receiving party for reuse, for a variety of
reasons.  The receiving party is not always obligated to accept the
excluded waste, and may find some other non-hazardous byproduct more
suitable for the process. In such a case the exclusion would cease to
apply and the same material in the storage unit would suddenly be
hazardous again.  If closure and financial assurances were waived, there
would be no mechanism to address the contamination left to the state, if
the unit were subsequently abandoned by the operator.  Since the
continued use of the excluded waste by a receiving party is not
guaranteed, then the commenters believe that full financial assurance
and closure requirements must be maintained.

Two commenters asked that EPA consider a provision that would defer the
required RCRA closure until the unit ceased being used for the
management of excluded materials.  Without this formal closure, units
used to manage excluded HSM may be abandoned at the end of their service
lives, possibly with HSM residues that may then be released to soil,
groundwater or surface water, or worse yet, come in direct contact with
unwitting individuals. While the supplemental proposal, through
incorporation of Subpart H, implies that the unit must be closed at the
end of its service life, the closure requirement is not explicitly
stated. Consequently, the commenter recommends that the final rule
incorporate the sections below to unambiguously require that units
managing excluded HSM are properly closed, ensuring that there are no
releases of hazardous constituents after its service life.

[0067-16, 0068-17, 0077-8, 0095-17, 0098-28, 0104-26, 0119-46, 0231-55,
0489-31, 0538-9]

Other commenters agreed with EPA's conclusion, expressed in the
preamble, that permitted or interim status hazardous waste storage units
managing material subsequently excluded by this proposal would not need
to undergo regulatory "closure" once they ceased storing "hazardous
wastes" due to this exclusion, unless they were previously used to store
other non-excluded hazardous wastes. (68 Fed. Reg. p. 61580-61581)  One
commenter believed that the rule should not penalize TSDFs, and should
allow the discontinuance of the permit without economic penalty or
closure requirement.

One commenter noted that, regarding the primary metals industry, most of
the potential examples of this kind have been maintained to be exempt by
existing law. To sort out and contest all such situations would be a
resource consuming issue without environmental good. The agency and the
states have already been aggressive in declaring releases as CERCLA
releases and would continue to do so, it is assumed, as they saw
appropriate.

However, in order to ensure regulatory certainty, some commenters
recommended that EPA should amend the language in 40 CFR 264.113 and
265.113 to clearly state the concept described in the preamble.  One
option suggested was to add a new paragraph (f) to each of those
sections that reads:  “(f) The exclusion from the definition of solid
waste or hazardous waste under §§ 260.30, 261.2, 261.3, or 261.4 of a
material previously classified as a solid and hazardous waste does not
operate to trigger the closure requirements of paragraphs (a) and (b) of
this section, except where the unit has previously managed other
non-excluded hazardous wastes and does not continue to manage other
hazardous wastes."

Other commenters agreed with EPA's proposal on closure, but also thought
that some preliminary investigation to confirm that contamination is not
present outside of the containment system should be required. The
investigation could include an independent inspection of the containment
system's integrity and a visual inspection of the areas immediately
surrounding the unit. The need for follow-up soil sampling would be
determined based upon the results of this preliminary investigation.

[0093-37, 0143-2, 0178-23, 0179-20, 0203-15, 0452-27, 0473-12, 0473-13,
0484-31, 0492-55, 0492-56, 0509-24]

10.2.1 - Response

EPA agrees with comments supporting the proposed approach of not
requiring closure when a permitted unit is converted to manage solely
excluded hazardous secondary materials, since, typically, it will be
managing the same material, with the only difference being that the
material is now excluded from regulation as a hazardous waste.

However, as the Agency noted in the March 26, 2007 supplemental
proposal, releases from these units are discarded solid and, therefore,
potentially hazardous wastes, and the Agency agrees with commenters'
concerns that such releases should be addressed. Agency believes that a
better approach to address historical releases from these units, as well
as any future releases, would be as part of corrective action for all
releases at the facility; an approach that would achieve the same
environmental results and would provide the owner or operator the option
of integrating the cleanup more closely into the broader facility
response.

EPA also notes that permits that have been issued to these facilities
remain in effect until they are terminated.  The Agency encourages
regulators to work with owners and operators that seek to modify their
permits to remove conditions applicable to these units that will operate
under the exclusions to verify that there are no unaddressed releases
from the unit. In situations where corrective action is necessary at the
unit, the Agency encourages regulators to work with owners and operators
to assure that the releases from the unit are addressed promptly.

However, EPA expects that any funds in closure or post-closure financial
assurance mechanisms will be converted to provide financial assurance
under today's exclusion, assuming the facility is operating under the
transfer-based exclusion. In addition, as described in sections VII.D.
and VIII.D of this preamble, at the end of the operating life of these
units, all owners and operators (i.e., of units operating under either
exclusion promulgated in this final rule) must manage any hazardous
secondary materials that are not recycled, and remove or decontaminate
all hazardous residues and contaminated containment system components,
equipment structures, and soils.

EPA notes that, although units managing excluded hazardous secondary
materials are not subject to the closure regulations, all owners and
operators must still at the end of the unit life manage any remaining
hazardous secondary materials that are not reclaimed and remove or
decontaminate all hazardous residues and contaminated containment system
components, equipment structures, and soils. These hazardous secondary
materials and residues, if no longer intended for reclamation, would
also no longer be eligible for the exclusion (which only applies to
materials that will be reclaimed). Failure to remove these materials
within a reasonable time frame after operations cease could cause the
facility to become subject to full Subtitle C requirements if the Agency
determines that recycling is no longer feasible.

<IP_ADDRESS> - Should EPA allow financial assurances obtained for closure to
be redirected to address corrective action?

<IP_ADDRESS> - Summary

A few commenters addressed EPA’s request for comment on modifying the
regulations to allow financial assurances obtained for closure and/or
post-closure to be redirected to address the corrective action needs at
units that manage only wastes that would be excluded by this proposal.
One commenter supported this approach, arguing that financial assurance
for facility closure should be used to the advantage of the facility.
Another commenter believes EPA should save any such financial assurance
revisions for a future (and much needed), comprehensive rulemaking on
the subject of financial assurance for corrective action. A third
commenter noted that financial assurance can be redirected only if the
instruments are written in a way that allows it, in agreement with the
instrument underwriters.  Accordingly, EPA would have to modify its
generic language for the various financial instruments.  Since closure
cost estimates can be estimated fairly accurately but corrective action
costs cannot (difficult ahead of time to know exactly what and how much
corrective action work needs to be done), it might be advisable to
require facilities to obtain a multiple of estimated closure and/or
corrective action costs as financial assurance to cover unexpected
corrective action contingencies.

[0479-47, 0492-57, 0495-19]

<IP_ADDRESS> - Response

The Agency agrees with comments that support EPA's proposal that funds
obtained for closure at units excluded under §261.2(a)(2)(ii) and
§261.4(a)(23) (under the control of the generator) should be directed
to address releases from the unit.   The Agency encourages regulators to
work with owners and operators that seek to modify their permits to
remove conditions applicable to these units that will operate under the
exclusion of §261.2(a)(2)(ii) and §261.4(a)(23), to verify that there
are no unaddressed releases from the unit. In situations where
corrective action is necessary at the unit, the Agency encourages
regulators to work with owners and operators to assure that the releases
from the unit are addressed promptly.

10.2.2 - Corrective action under the exclusion

10.2.2 - Summary

EPA’s authority to require facility-wide corrective action at
facilities managing only hazardous wastes excluded by the final rule

Two commenters objected to EPA's statement that corrective action
requirements would continue to apply to a facility currently managing
hazardous wastes that become excluded under the final rule. 68 Fed. Reg.
61580.  Commenters believed that while this is surely true where the
facility is managing (or has managed) other hazardous wastes, it would
not be true where the facility is not managing (and has not managed)
other hazardous wastes. Commenters believed that the definition of solid
waste is jurisdictional, and if the materials excluded under EPA's
proposal are not discarded, EPA has no jurisdiction over them under
RCRA, and never has had such jurisdiction. Thus, the commenters believed
that any corrective action requirements that were triggered only by the
erroneous assumption that a given recyclable material was discarded
would not continue to apply.

EPA’s authority to require corrective action for releases from
excluded units

Three commenters provided comments on whether the unit storing excluded
hazardous secondary material would still be considered a solid waste
management unit (SWMU) for the purposes of corrective action.  One
commenter believed that such units should be considered SWMUs and two
did not.  Those who opposed considering such units SWMUs requested that
EPA state that such units would be excluded from regulation where an
owner or operator is performing corrective action under an order from
EPA or its state agency counterpart, as opposed to a permit.  Moreover,
the commenter requested that such units also should be expressly
excluded from further regulation under RCRA's corrective action program.
 Commenters stated that, given the history of the corrective action
program, clear guidance from EPA on this issue is critical to companies
operating under corrective action permits and orders. To avoid
unnecessary confusion, and the inevitable litigation expenses and delays
that would result, EPA should clarify the proposal to make clear that
units used solely to manage secondary materials that no longer will be
regulated as hazardous materials will no longer be considered SWMUs for
purposes of corrective action obligations.

Retroactive application of the exclusion

Commenters also requested that EPA state that the exclusion would apply
retroactively to existing corrective action permits and orders.
According to one commenter, if a material no longer is considered
"discarded" because it is being legitimately reclaimed or recycled, then
a company that initiates its reclamation efforts after the new rule
takes effect certainly would operate under the exclusion. The commenter
also urged EPA to recognize that a company that currently is subject to
corrective action obligations should be entitled to the same relief for
units that no longer are regulated as SWMUs. Thus, even if an owner or
operator currently is subject to a corrective action obligation based on
a release of a material that EPA formerly deemed a solid waste at such a
unit, the fact that the unit is no longer a SWMU should permit the owner
or operator to seek a revision of its corrective action permit or order.

Continuation of the permit to address corrective action

Two commenters supported EPA's statement that "[t]he owner or operator
would have to demonstrate that corrective action obligations at the
facility have been addressed, or, where corrective action obligations
remain, that continuation of the permit is not necessary to assure that
they will be addressed (e.g., where the facilities cleanup obligations
will be addressed under an alternative federal or state enforcement
mechanism, or other federal or state cleanup authority) 72 Fed.
Reg.14205-06.  Commenters stated that these facilities should maintain a
permit until corrective action obligations are satisfied.

Facilities requiring corrective action should not qualify for the
exclusion

One commenter said that facilities with corrective action obligations
should not be exempt, because the need for corrective action may also be
an indicator that they may not operate in a manner protective of the
environment once the controls established by permit conditions are
removed.

Not requiring corrective action at facilities that begin managing
excluded materials after the effective date of this final rule

One commenter requested that the Agency confirm that, where a facility
begins managing excluded materials after the effective date of EPA's
final rule, that activity would not trigger any EPA permitting
requirements (including corrective action requirements).  Only if the
facility then also managed non-excluded-hazardous wastes would RCRA
permitting apply to the facility.

Another commenter, on the other hand, believed that the Agency creates
an arbitrary distinction by committing to enforce corrective action
requirements at facilities with already-issued permits, but then failing
to enforce similar restrictions at facilities that handle the same
materials in the future, and that this artificial distinction fails to
protect human health and the environment.

10.2.2 – Response

EPA’s authority to require facility-wide corrective action at
facilities managing only hazardous wastes excluded by the final rule

The Agency disagrees with commenters that would deny EPA’s authority
to address facility-wide corrective action at facilities currently
managing hazardous wastes that become excluded by the final rule.  EPA
believes that corrective action requirements continue to apply at
excluded facilities that no longer manage hazardous waste, as well as at
those facilities that continue to manage hazardous wastes at other units
at the facility.  The solid waste exclusions in the final rule are not
retroactive; prior to the facilities claiming the exclusion, these
hazardous secondary materials were regulated hazardous wastes and the
facility permitted to manage them was a Treatment, Storage and Disposal
Facility (TSDF), subject to all applicable requirements, including the
corrective action provisions of 3004(u).  Thus, the corrective action
requirements were not triggered by an “erroneous assumption,” as
commenter suggests, but by the facility’s regulatory status as a TSDF.
 The Agency has not taken steps in this final rule to remove those
corrective action requirements; thus, they remain applicable.

It should be noted that, since the advent of the HSWA corrective action
program, the Agency has taken the position that corrective action
requirements continue to apply at facilities that no longer manage
hazardous wastes.  For example, in the preamble of the Subpart S
proposed rule, the Agency stated that “”[c]orrective action may be
required under section 3008(h) whether the facility is operating (prior
to receiving a permit) under interim status, is closing or is closed
under interim status…” (see 55 FR 50798 @ 50855).  (Note that
“closed” includes “clean closed.”  In this situation, corrective
action obligations might remain even though the facility is engaged in
no hazardous waste activities, and RCRA regulated hazardous waste has
been removed from the site.)  Similarly, in a July 24, 2002 final rule
establishing conditions for excluding hazardous secondary materials that
are used to make zinc fertilizers from the regulatory definition of
solid waste, the Agency stated that “[t]he conditional exclusion also
will not affect a facility owner/operator’s corrective action
obligations under RCRA section 3004(u) or 3008(h)” (see 67 FR 48393 @
48400).

To assure that facilities taking advantage of the exclusion for recycled
hazardous secondary materials in this final rule understand their
continuing obligations, the Agency reiterated its longstanding position
on corrective action authority at such facilities in the preamble of the
proposed rule, and again in the preamble of the final rule.  However,
this final rule did not in any way alter the Agency’s position on this
issue.

As is explained below, however, EPA agrees that RCRA corrective action
requirements of sections 3004(u) and 3008(h) do not apply to non-TSD
facilities that begin operation under the exclusion after it becomes
effective, so long as they meet the conditions and restrictions of the
exclusion (facilities that fail to do so may be considered TSDs, and
therefore potentially subject to facility-wide corrective action).

EPA’s authority to require corrective action for releases from
excluded units

It is important to first note that a unit would not meet the conditions
of the exclusion if it was releasing hazardous constituents to the
extent that corrective action would be required.  Further, as was
discussed above, the Agency has taken the position, since the advent of
the corrective action program, that corrective action requirements
continue to apply at facilities that no longer manage hazardous wastes.
This position was not limited to permitted facilities.  For example, in
the preamble of the proposed Subpart S rule, the Agency stated
“corrective action may be required under section 3008(h) whether the
facility is operating (prior to receiving a permit) under interim
status, is closing or is closed under interim status, has lost interim
status, or failed to properly obtain interim status” (see 55 FR 30798,
at 30855, July 27, 1990).   The Agency explained its longstanding
position on this issue in the preamble of the proposed DSW rule, and
again in the preamble of the final rule.  This final rule did not in any
way alter the Agency’s position on this issue.

EPA also disagrees that releases from units storing or reclaiming
hazardous secondary materials are not subject to RCRA corrective action
obligations, if the units are at facilities that are (or were) TSDs.
EPA does agree that the unit managing the excluded hazardous material is
not regulated as a SWMU, so long as the unit complies with the
conditions and restrictions of the exclusion (as is discussed below,
facilities that fail to comply with the conditions and restrictions of
the exclusion may be considered TSDs, and therefore potentially subject
to facility-wide corrective action).  This fact, however, does not
exempt releases from the unit from RCRA corrective action requirements,
if the unit is located at a facility with corrective action obligations.
In the May 1, 1996, Advance Notice of Proposed rulemaking (see 61 FR
19442-3), the Agency discussed the issue of its corrective action
authority to address releases at RCRA treatment, storage, or disposal
facilities, regardless of whether a SWMU is present. There, the Agency
stated, "[g]iven the legislative history of RCRA section 3004(u), which
emphasizes that RCRA facilities should be adequately cleaned up, in
part, to prevent the creation of new Superfund sites, EPA believes that
corrective action authorities can be used to address all unacceptable
risks to human health and the environment from RCRA facilities.  In the
permitting context, remediation of non-SWMU related releases may be
required under the "omnibus" authority.  In other contexts, orders under
RCRA sections 3008(h) or 7003 may require remedial action to address
releases regardless of whether a SWMU is present."  (Note also that, in
many cases, the unit in question will have been a SWMU in the past.)

EPA also notes that an excluded unit could become a TSD unit, making the
facility subject to all applicable requirements.  This situation might
arise where an owner or operator fails to comply with the applicable
conditions and restrictions of the exclusion, and the unit consequently
loses its exclusion. In these situations, the unit itself will once
again become a hazardous waste management unit, and the unit, as well as
materials in the unit, will become subject to all requirements that were
applicable prior to this final rule. Not only will corrective action
authority be available at such a unit, but the closure requirements of
40 CFR part 264 or 265 will once again apply at the unit as well, and
releases from that unit may be addressed through either the corrective
action or the closure process.

There may also be situations where releases occur at an excluded unit
but, based on the site-specific factors, the Agency does not consider
the release to be significant and, therefore, the release does not cause
the unit to lose its exclusion. Failure on the part of the owner or
operator to respond to such releases could be considered an act of
illegal disposal. The Agency generally would address these situations by
taking an enforcement action under RCRA section 3008(a), or other
applicable authorities, to compel cleanup actions and/or impose
penalties. It should be noted that this approach is consistent with the
approach taken by the Agency in a 2002 final rule, in which the Agency
excluded hazardous secondary materials used to make zinc fertilizers
from the definition of solid waste (see "Zinc Fertilizers Made from
Recycled Hazardous Secondary Materials," 67 FR 48400, July 24, 2002).

Finally, there may be situations where releases from the unit, of either
the now excluded hazardous secondary material and/or other hazardous or
solid wastes previously managed in the unit, were not addressed prior to
the unit obtaining its exclusion. As was discussed above, at permitted
and interim status facilities, the status of those releases is
unaffected by this rulemaking, and the Agency retains its authority to
address them under all authorities applicable to them prior to this
final rule, including sections 3004(u) and (v), and section 3008(h).

The Agency also disagrees with the commenter who suggested that units
subject to orders requiring corrective action would no longer be subject
to the requirements of those orders as a result of this rule.   As is
discussed in the following section, the orders issued to those
facilities, once they went into effect, became legally binding
documents, which continue until and unless the regulatory agency takes
steps to modify or revoke them.  This rule has no effect on orders
requiring corrective action.

Retroactive application of the exclusion

EPA disagrees with the commenter stating that the exclusion would apply
retroactively to existing corrective action permits and orders at
facilities or units no longer subject to RCRA permitting or interim
status, when they begin to operate under the exclusion.  Prior to the
facilities claiming the exclusion, these hazardous secondary materials
were regulated hazardous wastes and the facility permitted to manage
them was a Treatment, Storage and Disposal Facility (TSDF), subject to
all applicable requirements, including the corrective action provisions
of 3004(u) -- the solid waste exclusions in the final rule are not
retroactive.  The fact that the unit or facility might now be eligible
for an exclusion does not change that situation.

Permits and orders requiring corrective action are legally binding
documents and are not affected by this final rule.  In addition, the
Agency has long taken the position that corrective action requirements
continue to apply at facilities that no longer manage hazardous wastes.
The Agency explained its longstanding position on this issue in the
preamble of the proposed rule, and again in the preamble of the final
rule.  This final rule did not in any way alter the Agency’s position
on this issue.

Continuation of the permit to address corrective action

The Agency agrees that, at some facilities, corrective action
obligations will likely continue to be addressed through the corrective
action provisions of the permit.   However, the Agency disagrees that
all facilities should maintain a permit until corrective action
obligations are satisfied.  The Agency believes that, in some cases, EPA
or the authorized State may have available an alternative federal or
state enforcement mechanism, or other federal or state cleanup
authority, through which it could choose to address the facility’s
cleanup obligation.  In these cases, where the alternate authority would
ensure that facility-wide corrective action will be addressed,
maintenance of the permit would not be necessary. The Agency’s
corrective action authority at such facilities is not affected by this
rulemaking and the Agency thus retains its authority to address
corrective action at such facilities using all authorities applicable
prior to this rulemaking.

Facilities requiring corrective action should not qualify for the
exclusion

While the Agency agrees with the commenter that excluded units must be
operated in a manner that is protective of the environment, the Agency
disagrees that facilities with corrective action obligations should be
ineligible for the exclusion.  Corrective action responsibilities at a
facility are not necessarily the result of mismanagement of the
recycling unit by the current owner and operator.  For example,
contamination at a facility may be the result of past practices (in some
cases, past practices by a previous owner), and may be the result of
releases from units other than the recycling unit excluded under this
final rule.  In those cases, the contamination would be unrelated to the
manner of operation of the recycling unit by the current owner or
operator, and not an indication that the unit is operated in a manner
that is not protective of human health and the environment.  The Agency
believes that the conditions of the exclusion, including the condition
to contain wastes within the recycling unit, will assure that these
units are operated in a manner that is protective of human health and
the environment, and that those conditions should, therefore, address
the commenter’s concern.  (EPA agrees, however, that units that have
routinely released hazardous constituents in the past will be unlikely
candidates for the exclusion, unless they are significantly upgraded or
operating practices significantly improved.)

Not requiring corrective action at facilities that begin managing
excluded materials after the effective date of this final rule

The Agency agrees with the commenter requesting confirmation that a
facility that never was subject to RCRA permit requirements, and
doesn’t manage excluded materials until after the effective date of
this final rule, does not become subject to RCRA permitting requirements
by managing those excluded materials, so long as the conditions and
restrictions of the exclusion are met.  Therefore, a facility in this
situation is not subject to the RCRA corrective action requirements of
sections 3004(u) or 3008(h).

The Agency disagrees with the second commenter, who argues that EPA
should require facility-wide corrective action at facilities that handle
excluded materials in the future in compliance with the conditions and
restrictions of the exclusion, and that are not former TSDFs with
unfulfilled corrective action obligations.  The corrective action
responsibilities applicable to treatment, storage, and disposal
facilities are not affected by this final rule.  Thus, the Agency
believes that the proposed approach – to continue to require
corrective action at former TSD facilities subject to corrective action
requirements prior to this final rule, but not to impose corrective
action requirements on facilities not currently subject – is
appropriate.  Of course, non-TSD facilities that take advantage of the
exclusion in this final rule that then fail to comply with the
conditions and restrictions of the exclusion and, as a result, become
TSD facilities, would then become subject to all requirements applicable
to TSD facilities, including corrective action requirements.

10.3 - CERCLA/Superfund

10.3 - Summary

Many commenters were concerned that EPA's supplemental proposal may
eliminate CERCLA liability for generators and facilities using the
proposed exclusion.   Commenters were concerned that generators and
facilities whose hazardous wastes are considered hazardous secondary
materials under the proposed exclusion may be exempt from liability as
"arrangers for disposal or treatment" under Section 107 of CERCLA,
because they believe that the courts have held that Section 107 does not
apply to materials that EPA has excluded from the definition of solid
waste. Establishing that the material in question is a "waste" is
important in determining liability under this aspect of the generator or
arranger provision. (Pneumo Abex Corp. v. High Point, Thomasville and
Demon Railroad Co., 142 F.3d 769(4th Cir. 1998); Florida Power & Light
Co. v Allis Chalmers Corp., 893 F. 2d 1313 (11th Cir. 2003))

In addition, commenters said that because CERCLA incorporates the
definitions of "disposal" and "treatment" used in RCRA, some courts have
held that arranger liability necessarily requires a finding that the
material disposed of or treated constituted a "waste." See, e.g.,
Catellus Development Corp. v. United States, 34 F.3d 748, 751 (9th Cir.
1994) (definition of disposal and treatment in RCRA "necessarily
includes the concept of waste"). Thus, the court held that if under
RCRA's implementing regulations a material that is intended for
recycling is exempt from RCRA's definition of solid waste, it would fall
outside the scope of § 107(a)(3) liability. Id. at 751.

Commenters stated that other courts have also held that reclamation of
materials that are not classified as a discarded waste in RCRA
regulations will not subject a party that arranged for their reclamation
to CERCLA liability. Poly-Carb, Inc., 951 F. Supp. at 1527; see also
United States v. Montana Refining Co., 1994 U.S. App. LEXIS 22633, at *2
(9th Cir. Aug. 17, 1994). For example, in Montana Refining Co., the
Ninth Circuit held that the proper approach to analyzing whether a party
arranged for the treatment or disposal of hazardous substances was to
determine whether the substance at issue was a discarded waste under
RCRA.  1994 U.S. App. LEXIS 22633, at *2. The court, citing its then
recent decision in Catellus, explained that a close examination of the
RCRA regulations defining waste in the context of recycling was
necessary to "determine when recycling constitutes an arrangement for
disposal or treatment of a discarded waste." Id. On remand from the
Ninth Circuit, the defendant argued that it did not arrange for
"treatment or disposal" under CERCLA because the phenolic caustic it
sold to an operator for reclamation was not a "waste" under RCRA.
Poly-Carb, Inc., 951 F. Supp. at 1524. The court agreed that the
phenolic caustics would be excluded from the definition of solid wastes
and would not form the basis for CERCLA liability, if the defendant
could show that the reclaimed caustics were excluded from the definition
of solid wastes under EPA's regulations. Id. at 1524, 1527.

Thus, commenters are concerned that facilities may not only be exempted
from RCRA's storage requirements; they also may avoid liability for
environmental damage discovered after the facilities have closed.
Without CERCLA liability, state and federal taxpayers will pay the
financial costs to clean up these facilities, while people in
communities across the nation pay the human health and environmental
cost associated with the contamination. In the preamble, EPA
specifically explains the ability of the generator to shield itself from
liability resulting from the mismanagement of waste by the reclaimer:
"the failure of the reclaimer to meet conditions or restrictions does
not mean the material was considered waste when handled by the
generator, as long as the generator can adequately demonstrate that he
has met his obligations, including the obligation under proposed 40 CFR
§261.4(a)(24)(iv)(A) to make reasonable efforts to ensure that the
material will be recycled legitimately and otherwise managed in a manner
that is protective of human health and the environment.  A generator who
met his reasonable efforts obligations could in good faith ship his
excluded materials to a reclamation facility where, due to circumstances
beyond his control, they were released and caused environmental problems
at that facility. In such situations, and where the generator's decision