SEQ CHAPTER \h \r 1 ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 260 and 261

EPA-HQ- RCRA-2002-0031; FRL-

RIN 2050-AG31

Revisions to the Definition of Solid Waste

AGENCY: Environmental Protection Agency.

ACTION: Final Rule.

SUMMARY: The Environmental Protection Agency (EPA) is today publishing a
final rule that revises the definition of solid waste to exclude certain
hazardous secondary materials from regulation under Subtitle C of the
Resource Conservation and Recovery Act (RCRA). The purpose of this final
rule is to encourage safe, environmentally sound recycling and resource
conservation and to respond to several court decisions concerning the
definition of solid waste.

DATES: This final rule is effective on [Insert date 180 days after
publication in the Federal Register.

ADDRESSES: EPA has established a docket for this action under Docket ID
No. EPA-HQ- RCRA-2002-0031. All documents in the docket are listed on
the www.regulations.gov web site. Although listed in the index, some
information is not publicly available, e.g., CBI or other information
whose disclosure is restricted by statute. Certain other material, such
as copyrighted material, is not placed on the Internet and will be
publicly available only in hard copy form. Publicly available docket
materials are available either electronically in   HYPERLINK
"http://www.regulations.gov"  www.regulations.gov  or in hard copy at
the OSWER Docket, EPA/DC, EPA West, Room 3334, 1301 Constitution Ave.,
N.W., Washington DC. The Public Reading Room is open from 8:30 a.m. to
4:30 p.m. Monday through Friday, excluding legal holidays. The telephone
number for the Public Reading Room is<PHONE_NUMBER>, and the telephone
number for the OSWER Docket is<PHONE_NUMBER>.

FOR FURTHER INFORMATION CONTACT: For more detailed information on
specific aspects of this rulemaking, contact Marilyn Goode, Office of
Solid Waste, Hazardous Waste Identification Division, MC 5304P,
Environmental Protection Agency, 1200 Pennsylvania Ave. N.W., Washington
DC 20460,<PHONE_NUMBER>, (  HYPERLINK<EMAIL_ADDRESS><EMAIL_ADDRESS> or Tracy Atagi, Office of Solid Waste, Hazardous
Waste Identification Division, MC 5304P, Environmental Protection
Agency, 1200 Pennsylvania Ave. N.W., Washington DC 20460, at (703)
308-8672 (  HYPERLINK<EMAIL_ADDRESS><EMAIL_ADDRESS>.

SUPPLEMENTARY INFORMATION:

A. Does this Action Apply to Me?

	Entities potentially affected by today's action include approximately
5,600 facilities in 280 industries in 21 economic sectors that generate
or recycle hazardous secondary materials that are currently regulated as
RCRA Subtitle C hazardous wastes (e.g., secondary materials such as
industrial co-products, by-products, residues, and unreacted
feedstocks). Approximately 60% of these affected facilities are
classified in NAICS code economic sectors 31, 32, and 33
(manufacturing). The remaining economic sectors, which have more than
ten affected industries each, are in NAICS codes 48 (transportation), 42
(wholesale trade), and 56 (administrative support, waste management and
remediation). About 1.5 million tons per year of hazardous secondary
materials generated and handled by these entities may be affected, of
which the most common types are metal-bearing hazardous secondary
materials (e.g., sludges and spent catalysts) for commodity metals
recovery and organic chemical liquid hazardous secondary materials for
recovery as solvents. Today's action is expected to result in regulatory
and materials recovery cost savings to these industries of approximately
$95 million per year. Taking into account impact estimation uncertainty
factors, today’s action could result in cost savings ranging from $41
million to $138 million per year to these industries in any future year.
More detailed information on the potentially affected entities,
industries, and industrial materials, as well as the economic impacts of
this rule (with impact uncertainty factors), is presented in section
XXI.A of this preamble and in the "Regulatory Impact Analysis''
available in the docket for this final rule.

B. Why is EPA Taking this Action?

	There are two primary purposes of today's action. One purpose is to
respond to a series of seven decisions by the U.S. Court of Appeals for
the D.C. Circuit (1987 to 2000), which, taken together, have provided
EPA with additional direction regarding the proper formulation of the
RCRA regulatory definition of solid wastes for purposes of Subtitle C. A
second purpose is to codify the RCRA concept of "legitimate recycling,"
which is a key component of EPA’s approach to recycling hazardous
secondary materials.

	Today's action is not intended to bring new wastes into the RCRA
hazardous waste regulatory system and it does not do so. By removing
unnecessary controls over certain hazardous secondary materials, and by
providing more explicit and consistent criteria for determining the
legitimacy of recycling practices in general, EPA expects that today's
action will encourage and expand the safe, beneficial recycling of
additional hazardous secondary materials. Today's action is consistent
with EPA’s longstanding policy of encouraging the recovery, recycling,
and reuse of valuable resources as an alternative to disposal (i.e.,
landfilling and incineration), while at the same time maintaining
protection of human health and the environment. It also is consistent
with the resource conservation goal of the Congress in enacting the RCRA
statute (as evidenced by the statute’s name), and with EPA’s vision
of how the RCRA program could evolve over the long term to promote
economic sustainability and more efficient use of resources. EPA’s
long-term vision of the future of the RCRA waste management program is
discussed in the document "Beyond RCRA: Prospects for Waste and
Materials Management in the Year 2020," which is available on EPA’s
website at:   HYPERLINK "http://www.epa.gov/epaoswer/osw/vision.htm"
http://www.epa.gov/epaoswer/osw/vision.htm .

Preamble Outline

BACKGROUND

Statutory Authority

Which Revisions to the Regulations is EPA Finalizing Today?

What is the History of these Rules?

How do the Final Rules Compare to Those Proposed on March 26, 2007?

How Does the Concept of Discard Relate to The Final Rule?

When will the Final Rules Become Effective?

DETAILED DESCRIPTION OF TODAY’S FINAL RULE

Exclusion for Hazardous Secondary Materials that are Legitimately
Reclaimed Under the Control of the Generator

Exclusion for Hazardous Secondary Materials that are Transferred for the
Purpose of Legitimate Reclamation

Legitimacy

Non-Waste Determination Process

EFFECT ON OTHER PROGRAMS

Effect on Other Exclusions

Effect on Permitted and Interim Status Facilities

Effect on Superfund

Effect on Imports and Exports

MAJOR COMMENTS

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

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

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

XVIII. Major Comments on Legitimacy

XIX. Major Comments on the Non-Waste Determination Process

STATE AUTHORIZATION

XX. How Will Today’s Regulatory Changes be Administered and Enforced
in the States?

ADMINISTRATIVE REQUIREMENTS

XXI. Administrative Requirements for this Rulemaking

BACKGROUND

Statutory Authority

	These regulations are promulgated under the authority of sections 2002,
3001, 3002, 3003, 3004, 3007, 3010, and 3017 of the Solid Waste Disposal
Act of 1970, as amended by the Resource Conservation and Recovery Act of
1976 (RCRA), as amended by the Hazardous and Solid Waste Amendments of
1984 (HSWA), 42 U.S.C. 6912, 6921, 6922, 6923, 6924, 6927, 6930, and
6938. These statutes, combined, are commonly referred to as “RCRA.”

II.	Which Revisions to the Regulations is EPA Finalizing Today?

	In today’s rule, EPA is revising the definition of solid waste to
exclude from regulation under Subtitle C of RCRA (42 U.S.C. 6921 through
6939(e)) certain hazardous secondary materials which are being
reclaimed. We have defined hazardous secondary materials as those which
would be classified as hazardous wastes if discarded. We are also
promulgating regulatory factors for determining when recycling is
legitimate. The Agency first proposed changes reflecting court decisions
on the definition of solid waste, as well as regulatory criteria for
legitimacy, on October 28, 2003 (68 FR 61558). We then published a
supplemental proposal on March 26, 2007 (72 FR 14172).

Today’s preamble is organized as follows: this section of the preamble
(Section II) describes the four principal regulatory revisions that are
finalized in this rule: (1) an exclusion for certain hazardous secondary
materials legitimately reclaimed under the control of the generator
within the United States or its territories; (2) a conditional exclusion
for hazardous secondary materials that are transferred for the purpose
of legitimate reclamation; (3) a case-by-case non-waste determination
procedure; and (4) codification of factors for determining when
recycling is legitimate. Section III describes the history of these
revisions, including relevant court cases and the original proposal
(October 28, 2003, 68 FR 61558). Section III also describes the
Agency’s independent analyses of successful recycling practices,
environmental problems associated with recycling of hazardous secondary
materials, and potential effects of market forces on the management of
such materials, and provides an overview of the March 26, 2007,
supplemental proposal (72 FR 14172). Section IV explains the ways in
which the 2007 supplemental proposal differs from today’s rule.
Section V discusses how this rule is related to the concept of
“discard,” and Section VI indicates the effective date of the rule.
Sections VII–X contain detailed descriptions of all regulatory
provisions promulgated today. Sections XI–XIV describe the effect of
this rule on other exclusions, permitted and interim status facilities,
Superfund, and imports/exports. Sections XV–XIX contain a discussion
of all major public comments received on the March 26, 2007,
supplemental proposal, along with the Agency’s responses to these
comments. Section XX describes how this rule will be administered and
enforced in the states, and Section XXI describes the administrative
requirements for this rulemaking.

Below is a summary of the principal regulatory revisions promulgated
today.

A. Exclusion for Hazardous Secondary Materials That Are Legitimately
Reclaimed Under the Control of the Generator in Non-Land-Based Units

This provision—40 CFR 261.2(a)(2)(ii)—would exclude certain
hazardous secondary materials (i.e., listed sludges, listed by-products,
and spent materials) that are generated and legitimately reclaimed
within the United States or its territories under the control of the
generator, when such materials are handled only in non-land-based units
(e.g., tanks, containers, or containment buildings). This provision
applies to hazardous secondary materials that are not spent lead-acid
batteries or listed wastes K171 or K172, or otherwise subject to
specific management conditions under 40 CFR 261.4(a). Under this
provision, the hazardous secondary materials must be contained in such
units and they are subject to the speculative accumulation requirements
of 40 CFR 261.1(c)(8). In addition, under 40 CFR 260.42, the generator
(and the reclaimer, if the generator and reclaimer are located at
different facilities) must send a notification at least every two years
to the EPA Regional Administrator or, in an authorized state, to the
state director.

Hazardous secondary materials would be considered “under the control
of the generator” under the following circumstances:

(1) They are generated and then reclaimed at the generating facility; or

(2) They are generated and reclaimed at different facilities, if the
generator certifies that the hazardous secondary materials are sent
either to a facility controlled by the generator or to a facility under
common control with the generator, and that either the generator or the
reclaimer has acknowledged responsibility for the safe management of the
hazardous secondary materials; or

(3) They are generated and reclaimed pursuant to a written agreement
between a tolling contractor and toll manufacturer, if the tolling
contractor certifies that it has entered into a tolling contract with a
toll manufacturer and that the tolling contractor retains ownership of,
and responsibility for, the hazardous secondary materials generated
during the course of the manufacture, including any releases of
hazardous secondary materials that occur during the manufacturing
process.

This exclusion does not include the recycling of hazardous secondary
materials that are inherently waste-like under 40 CFR 261.2(d),
hazardous secondary materials that are used in a manner constituting
disposal or used to produce products that are applied to or placed on
the land (40 CFR 261.2(c)(1)), or hazardous secondary materials burned
to recover energy or used to produce a fuel or otherwise contained in
fuels (40 CFR 261.2(c)(2)).

B. Exclusion for Hazardous Secondary Materials That Are Legitimately
Reclaimed Under the Control of the Generator in Land-Based Units

	This provision—40 CFR 261.4(a)(23)—contains requirements that are
identical to those that apply to hazardous secondary materials generated
and legitimately reclaimed under the control of the generator within the
United States or its territories and are handled in non-land-based units
in 40 CFR 261.2(a)(2)(ii), described above. Land-based units are defined
in 40 CFR 260.10 as an area where hazardous secondary materials are
placed in or on the land before recycling. Examples of land-based units
are surface impoundments and piles. This provision applies to hazardous
secondary materials that are not spent lead-acid batteries or listed
wastes K171 or K172, or otherwise subject to specific management
conditions under 40 CFR 261.4(a).

C. Exclusion for Hazardous Secondary Materials That Are Transferred for
the Purpose of Legitimate Reclamation

	This conditional exclusion—40 CFR 261.4(a)(24), hereinafter referred
to as the “transfer-based exclusion”—applies to hazardous
secondary materials (i.e., spent materials, listed sludges, and listed
by-products) that are generated and subsequently transferred to a
different person or company for the purpose of reclamation. As long as
the conditions and restrictions to the exclusion are satisfied, the
hazardous secondary materials would not be subject to Subtitle C
regulation.

Hazardous secondary material generators, reclaimers, and intermediate
facilities (i.e., other facilities storing hazardous secondary materials
for more than 10 days) must all submit a notification at least every two
years to the EPA Regional Administrator or, in an authorized state, to
the state director (see 40 CFR 260.42). In addition, hazardous secondary
materials managed at such facilities may not be speculatively
accumulated as defined in §262.1(c)(8) (see 40 CFR 261.4(a)(24)(i)).

Conditions applicable to generators of hazardous secondary materials are
found at 40 CFR 261.4(a)(24)(iv) and include containment of such
materials, reasonable efforts to ensure that the intermediate facility
or reclaimer intends to manage or recycle the hazardous secondary
material properly and legitimately, and retention of records of off-site
shipments for three years. Conditions applicable to intermediate
facilities and reclaimers of hazardous secondary materials are found at
40 CFR 261.4(a)(24)(v) and include containment of such materials,
transmittal of confirmations of receipt to generators, maintenance of
records for hazardous secondary materials received and sent off-site,
financial assurance, and (for reclaimers) proper management of
residuals. In addition, if any of the hazardous secondary materials
excluded under 40 CFR 261.4(a)(24) are generated and then exported to
another country for reclamation, the exporter must notify and obtain
consent from the receiving country, and file an annual report. This
requirement is codified in 40 CFR 261.4(a)(25).

Like the previously discussed exclusion for hazardous secondary
materials reclaimed under the control of the generator, this exclusion
would not apply to hazardous secondary materials that are inherently
waste-like under 40 CFR 261.2(d), hazardous secondary materials that are
used in a manner constituting disposal or used to produce products that
are applied to or placed on the land (40 CFR 261.2(c)(1)), or hazardous
secondary materials burned to recover energy or used to produce a fuel
or are otherwise contained in fuels (40 CFR 261.2(c)(2)).

D. Codification of Legitimacy

	Under the RCRA Subtitle C definition of solid waste, certain hazardous
secondary materials, if recycled, are not solid wastes and, therefore,
are not subject to RCRA’s “cradle to grave” management system. The
basic idea behind this principle is that recycling of these materials
often closely resembles industrial manufacturing rather than waste
management. However, due to economic incentives for managing hazardous
secondary materials outside the RCRA regulatory system, there is a
potential for some handlers to claim that they are recycling the
hazardous secondary materials when, in fact, they are conducting waste
treatment and/or disposal. To guard against this, EPA has long
articulated the need to distinguish between “legitimate” (i.e.,
true) recycling and “sham” recycling, beginning with the preamble to
the 1985 regulations that discussed the definition of solid waste (50 FR
638, January 4, 1985) and continuing through today’s final rule.

	In the October 28, 2003, proposed rule (68 FR 61581-61588) on the
definition of solid waste, we proposed codifying four criteria (called
“factors” in today’s rule) to determine when recycling of
hazardous secondary materials is legitimate. In the March 26, 2007,
supplemental proposal in section XI of the preamble (72 FR 14197), we
refined our original proposal in response to public comments. In
today’s final rule, we are finalizing the factors to be used in
determining whether recycling is legitimate with the structure basically
as proposed in 2007 (40 CFR 261.2(g)).

E. Non-Waste Determinations

Today’s rule establishes a non-waste determination process that
provides persons with an administrative process for receiving a formal
determination that their hazardous secondary materials are not discarded
and, therefore, not solid wastes when reclaimed. This process is
voluntary and is available in addition to the two self-implementing
exclusions included in today’s rule. There are two types of non-waste
determinations: (1) a determination for hazardous secondary materials
reclaimed in a continuous industrial process; and (2) a determination
for hazardous secondary materials indistinguishable in all relevant
aspects from a product or intermediate.

For hazardous secondary materials reclaimed in a continuous industrial
process, the non-waste determination will be based on the following four
criteria: (1) the extent that the management of the hazardous secondary
material is part of the continuous primary production process; (2)
whether the capacity of the production process would use the hazardous
secondary material in a reasonable time frame; (3) whether the hazardous
constituents in the hazardous secondary material are reclaimed rather
than discarded to the air, water, or land at significantly higher levels
from either a statistical or from a health and environmental risk
perspective than would otherwise be released by the production process;
and (4) other relevant factors that demonstrate the hazardous secondary
material is not discarded.

For hazardous secondary materials which are indistinguishable in all
relevant aspects from a product or intermediate, the non-waste
determination will be based on the following five criteria: (1) whether
market participants treat the hazardous secondary material as a product
or intermediate rather than a waste; (2) whether the chemical and
physical identity of the hazardous secondary material is comparable to
commercial products or intermediates; (3) whether the capacity of the
market would use the hazardous secondary material in a reasonable time
frame; (4) whether the hazardous constituents in the hazardous secondary
material are reclaimed rather than discarded to the air, water, or land
at significantly higher levels from either a statistical or from a
health and environmental risk perspective than would otherwise be
released by the production process; and (5) other relevant factors that
demonstrate the hazardous secondary material is not discarded.

The process for the non-waste determination is the same as that for the
solid waste variances found in 40 CFR 260.30.

III. What is the History of these Rules?

A. Background

	RCRA gives EPA the authority to regulate hazardous wastes (see, e.g.,
RCRA sections 3001-3004). The original statutory designation of the
subtitle for the hazardous waste program was Subtitle C and the national
hazardous waste program is referred to as the RCRA Subtitle C program.
Subtitle C is codified at 42 USC 6921 through 6939e. “Subtitle C”
regulations are found at 40 CFR Parts 260 through 279. “Hazardous
wastes” are the subset of solid wastes that present threats to human
health and the environment (see RCRA section 1004(5)). EPA also may
address solid and hazardous wastes under its endangerment authorities in
section 7003. (Similar authorities are available for citizen suits under
section 7002.)

Materials that are not solid wastes are not subject to regulation as
hazardous wastes under RCRA Subtitle C. Thus, the definition of “solid
waste” plays a key role in defining the scope of EPA’s authorities
under Subtitle C of RCRA. The statute defines “solid waste” as
“...any garbage, refuse, sludge from a waste treatment plant, water
supply treatment plant, or air pollution control facility and other
discarded material... resulting from industrial, commercial, mining, and
agricultural operations, and from community activities...” (RCRA
Section 1004 (27) (emphasis added)).

	Since 1980, EPA has interpreted “solid waste” under its Subtitle C
regulations to encompass both materials that are destined for final,
permanent treatment and placement in disposal units, as well as certain
materials that are destined for recycling (45 FR 33090–95, May 19,
1980; 50 FR 604–656, Jan. 4, 1985 (see in particular pages
616–618)). EPA has offered three arguments in support of this
approach:

The statute and the legislative history suggest that Congress expected
EPA to regulate as solid and hazardous wastes certain materials that are
destined for recycling (see 45 FR 33091, citing numerous sections of the
statute and U.S. Brewers’ Association v. EPA, 600 F. 2d 974 (D.C. Cir.
1979); 48 FR 14502–04, April 3, 1983; and 50 FR 616–618).

Hazardous secondary materials stored or transported prior to recycling
have the potential to present the same types of threats to human health
and the environment as hazardous wastes stored or transported prior to
disposal. In fact, EPA found that recycling operations have accounted
for a number of significant damage incidents. For example, hazardous
secondary materials destined for recycling were involved in one-third of
the first 60 filings under RCRA’s imminent and substantial
endangerment authority, and in 20 of the initial sites listed under the
Comprehensive Environmental Response, Compensation and Liability Act
(CERCLA) (48 FR 14474, April 4, 1983). Congress also cited some damage
cases which involve recycling. (H.R. Rep. 94-1491, 94th Cong., 2d Sess.,
at 17, 18, 22). More recent data (i.e., information on damage incidents
occurring after 1982) included in the rulemaking docket for today’s
final rule corroborate the fact that recycling operations can result in
significant damage incidents.

Excluding all hazardous secondary materials destined for recycling would
allow materials to move in and out of the hazardous waste management
system depending on what any person handling the hazardous secondary
material intended to do with them. This seems inconsistent with the
mandate to track hazardous wastes and control them from “cradle to
grave.”

Hence, EPA has interpreted the statute to confer jurisdiction over at
least certain hazardous secondary materials destined for recycling. The
Agency has therefore developed in part 261 of 40 CFR a definition of
“solid waste” for Subtitle C regulatory purposes. (Note: This
definition is narrower than the definition of “solid waste” for RCRA
endangerment and information-gathering authorities (See 40 CFR 261.1(b).
Also Connecticut Coastal Fishermen’s Association v. Remington Arms
Co., 989 F.2d 1305, 1315 (2d Cir.1993) holds that EPA’s use of a
narrower and more specific definition of solid waste for Subtitle C
purposes is a reasonable interpretation of the statute. See also
Military Toxics Project v. EPA, 146 F.3d 948 (D.C. Cir. 1998).)

	EPA has always asserted that hazardous secondary materials are not
excluded from its jurisdiction simply because someone claims that they
will be recycled. EPA has consistently considered hazardous secondary
materials destined for “sham recycling” to be discarded and, hence,
to be solid wastes for Subtitle C purposes (see 45 FR 33093, May 19,
1980; 50 FR 638-39, Jan. 4, 1985). The U.S. Court of Appeals for the
D.C. Circuit has agreed that materials undergoing sham recycling are
discarded and, consequently, are solid wastes under RCRA (see American
Petroleum Institute v. EPA, 216 F.3d 50, 58–59 (D.C.Cir. 2000)).

B. A Series of D.C. Circuit Court Decisions on the Definition of Solid
Waste

	Trade associations representing mining and oil refining interests
challenged EPA’s 1985 regulatory definition of solid waste. In 1987,
the D.C. Circuit held that EPA exceeded its authority “in seeking to
bring materials that are not discarded or otherwise disposed of within
the compass of ‘waste’” (American Mining Congress v. EPA (“AMC
I”), 824 F.2d 1177, 1178 (D.C. Cir. 1987)).

	The Court held that certain of the materials EPA was seeking to
regulate were not “discarded materials” under RCRA section 1004(27).
The Court also held that Congress used the term “discarded” in its
ordinary sense, to mean “disposed of” or “abandoned” (824 F.2d
at 1188–89). The Court further held that the term “discarded
materials” could not include materials “...destined for beneficial
reuse or recycling in a continuous process by the generating industry
itself (because they) are not yet part of the waste disposal problem”
(824 F.2d at 1190). The Court held that Congress had directly spoken to
this issue, so that EPA’s definition was not entitled to deference
under Chevron U.S.A., Inc. v. NRDC , 467 U.S. 837 (1984) (824 F.2d at
1183, 1189–90, 1193).

	At the same time, the Court did not hold that recycled materials could
not be discarded. The Court mentioned at least two examples of recycled
materials that EPA properly considered within its statutory
jurisdiction, noting that used oil can be considered a solid waste (824
F.3d at 1187 (fn 14)). Also, the Court suggested that materials disposed
of and recycled as part of a waste management program are within EPA’s
jurisdiction (824 F. 2d at 1179).

Subsequent decisions by the D.C. Circuit also indicate that some
materials destined for recycling are “discarded” and therefore
within EPA’s jurisdiction. In particular, the Court held that emission
control dust from steelmaking operations listed as hazardous waste
“K061” is a solid waste, even when sent to a metals reclamation
facility, at least where that is the treatment method required under
EPA’s land disposal restrictions program (American Petroleum Institute
v. EPA (“API I”), 906 F.2d 729 (D.C. Cir. 1990)). In addition, the
Court held that it is reasonable for EPA to consider as discarded (and
solid wastes) listed wastes managed in units that are in part wastewater
treatment units, especially where it is not clear that the industry
actually reuses the materials (AMC II, 907 F. 2d 1179 (D.C. Cir. 1990)).

	It also is worth noting that two other Circuits also have held that EPA
has authority over at least some materials destined for reclamation
rather than final discard. The U.S. Court of Appeals for the 11th
Circuit found that “[i]t is unnecessary to read into the term
‘discarded’ a congressional intent that the waste in question must
finally and forever be discarded” (U.S. v. ILCO, 996 F.2d 1126, 1132
(11th Cir. 1993) (finding that used lead batteries sent to a reclaimer
have been “discarded once” by the entity that sent the battery to
the reclaimer)). In addition, the Fourth Circuit found that slag held on
the ground untouched for six months before sale for use as road bed
could be a solid waste (Owen Electric Steel Co. v. EPA, 37 F.3d 146, 150
(4th Cir. 1994)).

	In 1998, EPA promulgated a rule in which EPA claimed Subtitle C
jurisdiction over hazardous secondary materials recycled by reclamation
within the mineral processing industry, the “LDR Phase IV rule” (63
FR 28556, May 26, 1998). In that rule, EPA promulgated a conditional
exclusion for all types of mineral processing hazardous secondary
materials destined for reclamation. EPA imposed a condition prohibiting
land-based storage prior to reclamation because it considered hazardous
secondary materials from the mineral processing industry that were
stored on the land to be part of the waste disposal problem (63 FR
28581). The conditional exclusion decreased regulation over spent
materials stored prior to reclamation, but increased regulation over
by-products and sludges that exhibit a hazardous characteristic, and
that are stored prior to reclamation. EPA noted that the statute does
not authorize it to regulate “materials that are destined for
immediate reuse in another phase of the industry’s ongoing production
process.” EPA, however, took the position that materials that are
removed from a production process for storage are not “immediately
reused,” and therefore are “discarded” (63 FR 28580).

	The mining industry challenged the rule, and the D.C. Circuit vacated
the provisions that expanded jurisdiction over characteristic
by-products and sludges destined for reclamation (Association of Battery
Recyclers v. EPA (“ABR”), 208 F.3d 1047 (D.C. Cir. 2000)). The Court
held that it had already resolved the issue presented in ABR in its
opinion in AMC I, where it found that “...Congress unambiguously
expressed its intent that ‘solid waste’ (and therefore EPA’s
regulatory authority) be limited to materials that are ‘discarded’
by virtue of being disposed of, abandoned, or thrown away” (208 F.2d
at 1051). It repeated that materials reused within an ongoing industrial
process are neither disposed of nor abandoned (208 F.3d at 1051–52).
It explained that the intervening API I and AMC II decisions had not
narrowed the holding in AMC I (208 F.3d at 1054–1056).

	Notably, the Court did not hold that storage before reclamation
automatically makes materials “discarded.” Rather, it held that
“... at least some of the secondary material EPA seeks to regulate as
solid waste (in the mineral processing rule) is destined for reuse as
part of a continuous industrial process and thus is not abandoned or
thrown away” (208 F.3d at 1056).

	In its most recent opinion dealing with the definition of solid waste,
Safe Food and Fertilizer v. EPA (“Safe Food”), 350 F.3d 1263 (D.C.
Cir. 2003), the Court upheld an EPA rule that excludes from the
definition of solid waste hazardous secondary materials used to make
zinc fertilizers, and the fertilizers themselves, so long as the
recycled materials meet certain handling, storage and reporting
conditions and the resulting fertilizers have concentration levels for
lead, arsenic, mercury, cadmium, chromium, and dioxins that fall below
specified thresholds (Final Rule, “Zinc Fertilizers Made From Recycled
Hazardous Secondary Materials” (“Fertilizer Rule”), 67 FR 48393,
July 24, 2002). EPA determined that if these conditions are met, the
secondary materials used to make the fertilizer have not been discarded.
The conditions apply to a number of recycled materials not produced in
the fertilizer production industry, including certain zinc-bearing
hazardous secondary materials, such as brass foundry dusts.

	EPA’s reasoning was that market participants, consistent with the
EPA-required conditions in the rule, would treat the exempted materials
more like valuable products than like negatively-valued wastes and,
thus, would manage them in ways inconsistent with discard. In addition,
the fertilizers derived from these recycled feedstocks are chemically
indistinguishable from analogous commercial products made from raw
materials (350 F.3d at 1269). The Court upheld the rule based on EPA’s
explanation that market participants manage materials in ways
inconsistent with discard, and the fact that the levels of contaminants
in the recycled fertilizers were “identical” to the fertilizers made
with virgin raw materials. The Court held that this interpretation of
“discard” was reasonable and consistent with the statutory purpose.
The Court noted that the identity principle was defensible because the
differences in health and environmental risks between the two types of
fertilizers are so slight as to be substantively meaningless.

	However, the Court specifically stated that it “need not consider
whether a material could be classified as a non-discard exclusively on
the basis of the market-participation theory” (350 F.3d at 1269). The
Court only determined that the combination of market participants’
treatment of the materials, EPA required management standards, and the
“identity principle” are a reasonable set of tools to establish that
the recycled hazardous secondary materials and fertilizers are not
discarded.

C. 2003 Proposal to Revise the Definition of Solid Waste

	Prompted by concerns articulated in various Court opinions decided up
to that point, in October 2003, EPA proposed a rule that material
generated and reclaimed in a continuous process within the same industry
is not discarded for purposes of Subtitle C, provided the recycling
process is legitimate (68 FR 61558, October 28, 2003). “Same
industry” was defined as industries sharing the same 4-digit North
American Industry Classification System (NAICS) code.

In the same notice, EPA also solicited comment on several different
alternatives to the proposed exclusion. The first alternative was
whether to exclude from the definition of solid waste those hazardous
secondary materials that are generated and reclaimed in a continuous
process on-site (as defined in 40 CFR 260.10), even if different
industries were involved. This exclusion would be based on the premise
that materials recycled on-site in a continuous process are unlikely to
be discarded because they would be closely managed and monitored by a
single entity that is intimately familiar with both the generation and
reclamation of the hazardous secondary material. In addition, no
off-site transport of the hazardous secondary material (with its
attendant risks) would occur, and there would be few questions about
potential liability in the event of mismanagement or mishap.

The second alternative was an exclusion for certain situations within
the chemical manufacturing industry that might present unique recycling
situations. Specifically, within the chemical manufacturing industry,
the first manufacturer contracts out production of certain chemicals to
another manufacturer (referred to as batch or tolling operations). The
second manufacturer may generate hazardous secondary materials that
could be returned to the first chemical manufacturer for reclamation.

The third alternative would have provided a broader conditional
exclusion from the RCRA hazardous waste regulations for essentially all
hazardous secondary materials that are legitimately recycled by
reclamation. The purpose of this broader exclusion would have been to
encourage reclamation by lowering costs of recycling, while still
protecting human health and the environment. The Agency suggested that
additional requirements or conditions might be appropriate to protect
human health and the environment for this broader exclusion, compared to
the same-industry exclusion that we proposed. Examples of such
additional conditions could include recordkeeping and reporting
requirements, along with safeguards on storage or handling.

In response to the October 2003 proposal, a number of commenters
criticized the Agency specifically for not having conducted a study of
the potential impacts of the proposed regulatory changes. These
commenters expressed the general concern that deregulating hazardous
secondary materials that are reclaimed in the manner proposed could
result in mismanagement of these materials and, thus, could create new
cases of environmental damage that would require remedial action under
federal or state authorities. Some of the commenters further cited a
number of examples of environmental damage that were attributed to
hazardous secondary material recycling, including a number of sites
listed on the Superfund National Priorities List (NPL).

	However, other commenters to the October 2003 proposal expressed the
view that the great majority of these cases of recycling-related
environmental problems occurred before RCRA, CERCLA, or other
environmental programs were established in the early 1980s. These
commenters further argued that these environmental programs—most
notably, RCRA's hazardous waste regulations and the liability provisions
of CERCLA—have created strong incentives for proper management of
recyclable hazardous secondary materials and recycling residuals.
Several commenters further noted that, because of these developments,
industrial recycling practices have changed substantially since the
early 1980s and present day generators and recyclers are much better
environmental stewards than in the pre-RCRA/CERCLA era. Thus, they
argued, cases of “historical” recycling-related environmental damage
are not particularly relevant or instructive with regard to modifying
the current RCRA hazardous waste regulations for hazardous secondary
materials recycling.

D. Recycling Studies

	In light of these comments on the October 2003 proposal, and in
deliberating on how to proceed with this rulemaking effort, the Agency
decided that additional information on hazardous secondary material
recycling would benefit the regulatory decision-making process, and
would provide stakeholders with a clearer picture of the hazardous
secondary material recycling industry in this country. Accordingly, the
Agency examined three basic issues that we believed were of particular
importance to informing this rulemaking effort:

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

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

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

	Reports documenting these studies have been available for comment in
the docket for this rulemaking, under the following titles:

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

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

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

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

The successful recycling study has provided information to the Agency
that has helped us determine what types of controls would be appropriate
for hazardous secondary materials sent for reclamation to determine that
they are handled as commodities rather than wastes. EPA found that
responsible recycling practices used by generators and recyclers to
manage hazardous secondary materials fall into two general categories.
The first category includes the audit activities and inquiries performed
by a generator of a hazardous secondary material to determine whether
the entity to which it is sending such material is equipped to
responsibly manage it without the risk of releases or other
environmental damage. These recycling and waste audits of other
companies’ facilities form a backbone of many of the transactions in
the hazardous secondary materials market. The second category of
responsible recycling practices consists of the control practices that
ensure responsible management of any given shipment of hazardous
secondary material, such as the contracts under which the transaction
takes place and the tracking systems in place that can inform a
generator that its hazardous secondary material has been properly
managed.

As discussed later in today’s preamble, these findings helped inform
EPA’s decision to require that a hazardous secondary material
generator conduct reasonable efforts to ensure its materials are
properly and legitimately recycled, and to require certain recordkeeping
requirements.

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

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

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

The market forces study uses accepted economic theory to describe how
various market incentives can influence a firm’s decision-making
process when the recycling of hazardous secondary materials is involved.
This study helps explain some of the possible fundamental economic
drivers of both the successful and unsuccessful recycling practices,
which, in turn, helped the Agency to design the exclusions being
finalized today.

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

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

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

Further discussion of the recycling studies, including the methodology
and limitations of the studies, can be found in the 2007 supplemental
proposal (72 FR 14178-83), and the studies themselves can be found in
the docket for today’s rulemaking.

E. 2007 Supplemental Proposal to Revise the Definition of Solid Waste

To provide public notice on the recycling studies discussed above, in
2007, EPA published a supplemental proposal (72 FR 14172, March 26,
2007). In addition, based on the comments received on the October 2003
proposal, EPA also decided to restructure our approach to revising the
definition of solid waste to more directly consider whether particular
materials are not considered “discarded” and thus are not solid and
hazardous wastes subject to regulation under Subtitle C of RCRA. We
agreed with the many commenters on the October 2003 proposal who said
that whether materials are recycled within the same NAICS code is not an
appropriate indication of whether they are discarded. NAICS designations
are designed to be consistent only with product lines, so that the
effect of our October 2003 proposal would be that hazardous secondary
materials generated and reclaimed under the control of the generator
would not be excluded, even though the generator has not abandoned the
material and has every opportunity and incentive to maintain oversight
of, and responsibility for, the material that is reclaimed (see ABR, 208
F.2d at 1051 (noting that discard has not taken place where the producer
saves and reuses secondary materials)).

	Instead, in 2007, EPA proposed two exclusions for hazardous secondary
materials recycled under the control of the generator (one exclusion
would apply to hazardous secondary materials managed in non-land-based
units, whereas the other exclusion would apply to hazardous secondary
materials managed in land-based units) and an additional exclusion for
hazardous secondary materials transferred to another party for
reclamation.

For the exclusions for hazardous secondary materials reclaimed under the
control of the generator, EPA described three circumstances under which
we believe that discard does not take place and where the potential for
environmental releases is low to non-existent. The three situations
involve legitimately recycling of hazardous secondary materials that are
generated and reclaimed at the generating facility, at a different
facility within the same company, or through a tolling arrangement.
Under all three circumstances, the hazardous secondary materials must be
generated and reclaimed within the United States or its territories.
Because the hazardous secondary material generator in these situations
still finds value in the hazardous secondary materials, has retained
control over them, and intends to use them, EPA proposed to exclude
these materials from being a solid waste and, thus, from regulation
under Subtitle C of RCRA if the recycling is legitimate (see 40 CFR
261.2(g)), and if the hazardous secondary materials are not
speculatively accumulated.

In those cases, however, where generators of hazardous secondary
materials do not reclaim the materials themselves, it often may be a
sound business decision to ship the hazardous secondary materials to a
commercial facility or another manufacturer for recycling in order to
avoid the costs of disposing of the material. In such situations, the
generator has relinquished control of the hazardous secondary materials
and the entity receiving such materials may not have the same incentives
to manage the hazardous secondary material as a useful product,
especially if they are paid a fee for managing the hazardous secondary
materials.

Accordingly, for the exclusion for hazardous secondary materials
transferred to another party for reclamation, the Agency proposed
conditions that, when met, would indicate that these hazardous secondary
materials are not discarded. One of the conditions would require the
generator to make reasonable efforts to determine that its hazardous
secondary materials will be properly and legitimately recycled (thus
demonstrating the hazardous secondary material is not being discarded).
Another condition would require the reclamation facility to have
adequate financial assurance (thus demonstrating that the hazardous
secondary material will not be abandoned). In addition, EPA proposed
that both the generator and reclaimer would need to maintain shipping
records (to demonstrate that the hazardous secondary material was sent
for reclamation and was received by the reclaimer), and the reclaimer
would be subject to additional storage and residual management standards
(to address the instances of discard observed at off-site reclamation
facilities in the damage cases).

In addition, in 2007, EPA’s supplemental proposal included a
case-by-case petition process to allow applicants to demonstrate that
their hazardous secondary materials are not discarded and therefore are
not solid wastes.

Finally, in 2007, EPA proposed a definition of legitimate recycling that
restructured the legitimacy factors originally proposed in October 2003.
The proposed legitimacy factors would be used to determine whether the
recycling of hazardous secondary materials is legitimate.

IV. How do the Provisions in the Final Rule Compare to Those Proposed on
March 26, 2007?

	EPA is finalizing the regulations largely as proposed in 2007, with
some revisions and clarifications. The following is a brief overview of
the revisions to the proposal, with references to additional preamble
discussions for more detail.

For the exclusion for hazardous secondary materials that are
legitimately reclaimed under the control of the generator, we are
clarifying the scope of the exclusion, including addressing issues with
defining “on-site,” “same company,” and “tolling
arrangement.” We have also added additional data elements to the
notification requirement, and have clarified that the hazardous
secondary materials must be contained when managed in non-land-based
units, as well as in land-based units, because hazardous secondary
material that are released to the environment and not immediately
recovered are discarded.. We have also revised the definition of
land-based unit to be “an area where hazardous secondary materials are
placed in or on the land before recycling.”  For further discussion of
the generator-controlled exclusion, see section VII of this preamble.

For the exclusion for hazardous secondary materials that are transferred
for the purpose of reclamation, we are clarifying that hazardous
secondary materials held at a transfer facility for less than ten days
will be considered to be in transport. We are also allowing the use of
intermediate facilities that store hazardous secondary materials for
more than 10 days, provided the facilities comply with the same
conditions applicable to reclamation facilities. In addition, the
hazardous secondary material generator must select the reclamation
facility (or facilities) that can be used and must perform reasonable
efforts on both the intermediate facility and reclamation facility (or
facilities), and the intermediate facility must send the hazardous
secondary material to the reclamation facility that the generator
selected. For the reasonable efforts condition, we have included
specific questions in the regulatory language, and are requiring both
documentation and certification. We are also clarifying how the
financial assurance condition applies to reclamation and intermediate
facilities excluded under the transfer-based exclusion, including
tailored regulatory language for financial assurance specific to these
types of facilities. For further discussion, see section VIII of this
preamble.

	For the codification of legitimacy, we are finalizing the regulatory
language basically as proposed in 2007, with some clarifications. For
further discussion, see section IX of this preamble.

Finally, for the non-waste determination process, we have limited the
categories for non-waste determinations to materials reclaimed in a
continuous industrial process and materials indistinguishable from
products and we have revised the criteria to make them more consistent
across the two categories of non-waste determinations. Furthermore, we
are not finalizing the non-waste determination for materials reclaimed
under the control of the generator via a tolling arrangement or similar
contractual arrangement. For further discussion, see section X and XIX
of this preamble.

V. How Does the Concept of Discard Relate to the Final Rule?

	In the March 2007 supplemental proposal, EPA explained how the concept
of “discard” is the central organizing idea behind the revisions to
the definition of solid waste being finalized today (72 FR 14178).
Basing the revisions on “discard” reflects the fundamental logic of
the RCRA statute. As stated in RCRA Section 1004(27), “solid waste”
is defined as “…any garbage, refuse, sludge from a waste treatment
plant, or air pollution control facility and other discarded material
…resulting from industrial, commercial, mining and agricultural
activities….” Therefore, in the context of this final rule, a key
issue is the circumstances under which a hazardous secondary material
that is recycled by reclamation is or is not discarded.

	The March 2007 supplemental proposal represented a shift from the
approach taken in the October 2003 proposal, which proposed to exclude
from the definition of solid waste any hazardous secondary material
generated and reclaimed in a continuous process within the same
industry, provided the reclamation was legitimate. “Same industry”
was defined as industries sharing the same 4-digit NAICS code. The basis
for that proposed exclusion was the holding in American Mining Congress
v. EPA (“AMC I”), 824 F.2d 1177 (D.C. Cir. 1987) that materials
destined for beneficial reuse of recycling in a continuous process by
the generating industry are not discarded (68 FR 61563, 61564–61567).

	Commenters critical of the October 2003 proposal argued, among other
things, that EPA failed to present a reasoned analysis of the indicia of
discard (72 FR 14184–14185). In evaluating these comments, EPA
determined that the effect of our October 2003 proposal would be that
some hazardous secondary materials generated and reclaimed under the
control of the generator would not be excluded, even though the
generator had not abandoned the material and had every opportunity and
incentive to maintain oversight of, and responsibility for, the
hazardous secondary material being reclaimed. Under these circumstances,
we determined in 2007 that discard has generally not occurred (72 FR
14185). Therefore, in the March 2007 supplemental proposal, EPA decided
to examine the concept of discard, which is the driving principle behind
the court’s holdings on the definition of solid waste, rather than
trying to fit materials into specific fact patterns addressed by the
court (see 72 FR 14175).

	EPA continues to believe that the concept of discard is the most
important organizing principle governing the determinations we have made
in today’s final rule. In the series of decisions discussed above
relating to the RCRA definition of solid waste, the Court of Appeals for
the D.C. Circuit has consistently cited a plain language definition of
discard, as meaning "disposing, abandoning or throwing away." Today’s
final rule is consistent with that definition. Below is a discussion of
each provision of the final rule with an explanation of how it relates
to discard. Further discussion of the concept of discard and its
relationship to specific provisions and ways of implementing this rule
is found in sections V.A through V.D, below.

The Agency also incorporates in this preamble to the final rule all
determinations in the March 2007 supplemental proposal, except to the
extent they are inconsistent with the determinations in this preamble,
regarding the conditions for the solid waste exclusions. In addition,
EPA notes that it did not reopen the specific details of the speculative
accumulation regulation regarding the time periods under which materials
are to be recycled, since these periods have been part of the Agency’s
regulations for many years and are familiar to persons who are affected
by the regulations.

A. Discard and the Generator-Controlled Exclusions

	In the March 2007 supplemental proposal, EPA determined that if the
generator maintains control over the recycled hazardous secondary
material, the material is legitimately recycled under the standards
established in the proposal, and the material is not speculatively
accumulated within the meaning of EPA’s regulations, then the
hazardous secondary material is not discarded. This is because the
hazardous secondary material is being treated as a valuable commodity
rather than as a waste. By maintaining control over, and potential
liability for, the recycling process, the generator ensures that the
hazardous secondary materials are not discarded (see ABR 208 F.3d 1051
(“Rather than throwing these materials [destined for recycling] away,
the producers saves them; rather than abandoning them, the producer
reuses them.”)) (72 FR 14178).

	EPA continues to believe that when a generator legitimately recycles
hazardous secondary material under its control, the generator has not
abandoned the material and has every opportunity and incentive to
maintain oversight of, and responsibility for, the hazardous secondary
material that is reclaimed.

In determining when recycling occurs “under the control” of the
generator, EPA looked at three scenarios: recycling performed on-site,
recycling performed within the same company, and recycling performed
under certain specific tolling arrangements.

	In the March 2007 supplemental proposal, EPA noted that, of the 208
recycling cases that caused environmental damage, only 13 (approximately
6%) occurred as a result of on-site recycling. We also agreed with
commenters on the October 2003 proposal who asserted that “generators
who recycle materials on-site (even if the reclamation takes place in a
different NAICS code) are likely to be familiar with the material and
more likely to maintain responsibility for the materials” (72 FR
14185).

	EPA also determined that this rationale applies to reclamation taking
place within the same company. In the case of same-company recycling,
both the generating facility and the reclamation facility (if they are
different) would be familiar with the hazardous secondary materials and
the company would be ultimately liable for any mismanagement of the
hazardous secondary materials. Under these circumstances, the incentive
to avoid such mismanagement would be so strong that mismanagement also
would be unlikely.

	In the case of certain tolling operations, EPA determined in the March
2007 supplemental proposal that a certain specific type of tolling
arrangement provides equivalent assurance that recycling is performed
“under the control of the generator” and does not constitute
discard. Under this type of arrangement, one company (the tolling
contractor) contracts with a second company (the toll manufacturer) to
produce a specialty chemical from specified virgin materials identified
in the tolling contract. The toll manufacturer produces the chemical and
the production process generates a hazardous secondary material (such as
a spent solvent) which is routinely reclaimed at the tolling
contractor’s facility. The typical toll manufacturing contract
contains detailed specifications about the product to be manufactured,
including management of any hazardous secondary materials that are
produced and returned to the tolling contractor for reclamation. Under
this scenario, the hazardous secondary material continues to be managed
as a valuable product, so discard has not occurred. Moreover, because
the contract specifies that the tolling contractor retains ownership of,
and responsibility for, the hazardous secondary materials, there is a
strong incentive to avoid any mismanagement or release. In essence, the
tolling contractor has outsourced a step in its manufacturing process,
but continues to take responsibility and maintain control of the process
as a whole, including both the virgin materials going into the process
and the product and hazardous secondary materials resulting from the
process.

	For all three of these generator-controlled exclusions —reclamation
performed on-site, within the same company, and via certain tolling
arrangements—EPA continues to find that the facility owner still finds
value in the hazardous secondary materials, has retained control over
them, and intends to reclaim them. Therefore, EPA is finalizing an
exclusion for these materials, with certain restrictions discussed
below.

	In the March 2007 supplemental proposal, EPA also noted that management
in a land-based unit does not automatically indicate a hazardous
secondary material is being discarded. As long as the hazardous
secondary material is contained and is destined for recycling under the
control of the generator, it would still meet the terms of the
exclusion. However, if the hazardous secondary material is not managed
as a valuable product and, as a result, a significant release from the
unit occurs, the hazardous secondary material in the land-based unit
would be considered discarded (72 FR 14186). Thus, EPA proposed that the
hazardous secondary material must be contained in the land-based unit in
order for the exclusion to be applicable.

	However, in making this finding that hazardous secondary materials
managed in a land-based unit must be contained in order to retain the
exclusion, EPA did not intend to imply that hazardous secondary
materials managed in non-land-based units do not need to be contained.
Hazardous secondary materials released to the environment are not
destined for recycling and are clearly discarded whether they originated
from a land-based unit or not. Because non-land-based units do not
involve direct contact with the land, in the March 2007 supplemental
proposal, EPA did not include an explicit “contained” restriction
for these units. However, as commenters noted, it is still possible for
non-land-based units to leak or otherwise release significant amounts of
hazardous secondary materials to the environment, even if they are not
in direct contact with the land, resulting in those materials being
discarded. Thus, for today’s final rule, EPA is requiring that
hazardous secondary materials must be contained (whether it is managed
in land-based units or non-land-based units) in order to identify the
hazardous secondary materials that are not being discarded and,
therefore, are not solid wastes.

Another restriction on the generator-controlled exclusions is the
prohibition against speculative accumulation. As noted in the March 2007
supplemental proposal, restrictions on speculative accumulation (40 CFR
261.1(c)(8)) have been an important element of the RCRA hazardous waste
recycling regulations since they were promulgated on January 4, 1985.
Historically, hazardous secondary materials excluded from the definition
of solid waste generally become wastes when they are speculatively
accumulated, because, at that point, they are considered to be unlikely
to be recycled and therefore discarded. According to this regulatory
provision, a hazardous secondary material is accumulated speculatively
if the person accumulating it cannot show that the material is
potentially recyclable; further, the person accumulating the hazardous
secondary material must show that during a calendar year (beginning
January 1) the amount of such material that is recycled, or transferred
to a different site for recycling, must equal at least 75% by weight or
volume of the amount of that material at the beginning of the period. As
noted in the March 2007 supplemental proposal, this provision already
applies to hazardous secondary materials that are not otherwise
considered to be wastes when recycled, such as materials used as
ingredients or commercial product substitutes, materials that are
recycled in a closed-loop production process, or unlisted sludges and
by-products being reclaimed (72 FR 14188). Given that a significant
portion of the damage cases stemmed from over-accumulation of hazardous
secondary materials, EPA continues to believe that a restriction on
speculative accumulation is needed to determine that the hazardous
secondary material is being recycled and is not discarded.

In addition, as with all recycling exclusions under RCRA, the excluded
hazardous secondary materials must be recycled legitimately. As
discussed in section IX of this preamble, EPA has long articulated the
need to distinguish between "legitimate" (i.e., true) recycling and
"sham" recycling, beginning with the preamble to the 1985 regulations
that established the definition of solid waste (50 FR 638, January 4,
1985) and continuing with the October 2003 proposed codification of
criteria for identifying legitimate recycling. Because there can be a
significant economic incentive to manage hazardous secondary materials
outside the RCRA regulatory system, there is a potential for some
handlers to claim that they are recycling, when, in fact, they are
conducting waste treatment and/or disposal in the guise of recycling.
While the legitimacy construct applies to both excluded recycling and
the recycling of regulated hazardous wastes, hazardous secondary
materials that are not legitimately recycled (i.e., that are being
treated and/or disposed in the guise of recycling) are discarded
materials and, therefore, are solid wastes.

A final restriction on the generator-controlled exclusion from the
definition of solid waste is that the hazardous secondary material must
be generated and recycled within the United States. Because hazardous
secondary materials that are exported for recycling passes out of the
regulatory control of the federal government, making it difficult to
determine if these activities are “under the control of the
generator” and because, as noted in the March 2007 supplemental
proposal, we do not have sufficient information about most recycling
activities outside of the United States to decide whether discard is
likely or unlikely (72 FR 14187), EPA continues to find that this
restriction is needed to properly define when the hazardous secondary
material is not being discarded.

B. Discard and the Transfer-Based Exclusion

	As EPA noted in the March 2007 supplemental proposal, in cases where
generators of hazardous secondary materials do not reclaim the materials
themselves, it often may be a sound business decision to ship the
hazardous secondary materials to be reclaimed to a commercial facility
or another manufacturer in order to avoid the costs of disposing of the
material.

In such situations, EPA determined that the generator has relinquished
control of the hazardous secondary materials and the entity receiving
such materials may not have the same incentives to manage them as a
useful product (72 FR 14178). This is evidenced by the results of the
study of recycling-related environmental problems, found in the docket
of today’s final rule. Of the 208 damage cases EPA identified for the
March 2007 supplemental proposal, 195 (about 94%) were from off-site
third-party recyclers, with clear instances of discard resulting in risk
to human health and the environment, including cases of large-scale soil
and ground water contamination with remediation costs in some instances
in the tens of millions of dollars.

In addition, the market forces study in the docket for today’s
rulemaking supports the conclusion that the pattern of discard at
off-site, third party reclaimers is a result of inherent differences
between commercial recycling and normal manufacturing. As opposed to
manufacturing, where the cost of raw materials or intermediates (or
inputs) is greater than zero and revenue is generated primarily from the
sale of the output, hazardous secondary materials recycling can involve
generating revenue primarily from receipt of the hazardous secondary
materials (72 FR 14182). Recyclers of hazardous secondary materials in
this situation may thus respond differently from traditional
manufacturers to economic forces and incentives, accumulating more
inputs (hazardous secondary materials) than can be processed
(reclaimed). In addition, commercial recyclers appear to have less
flexibility than in-house recyclers (e.g., during price fluctuations,
in-house recyclers can more easily switch from recycling to disposal or
from recycled inputs to virgin inputs, which commercial recyclers
cannot) (72 FR 14183).

After reviewing public comments on the recycling studies (see section
XV.D. of today’s preamble), EPA continues to believe that conditions
are needed under the transfer-based exclusion for the Agency to
determine that these hazardous secondary materials are not discarded.

	One key condition that reflects the basic premise underlying the
exclusion is the condition that the hazardous secondary material
generator perform and document reasonable efforts to ensure that its
hazardous secondary material will be properly and legitimately recycled.
As EPA explained in the March 2007 supplemental proposal, in order to
demonstrate that hazardous secondary materials will not be discarded,
generators who transfer their hazardous secondary materials to a third
party must have a reasonable understanding of who will be reclaiming the
materials and how they will be managed and reclaimed and a reasonable
assurance that the recycling practice is safe and legitimate (72 FR
14194). In order for a generator to determine whether its hazardous
secondary materials are not solid wastes because they are not discarded,
the generator must make a reasonable effort to ensure that the reclaimer
intends to legitimately recycle the material pursuant to 40 CFR 261.2(g)
and not discard it, and that the reclaimer (and any intermediate
facility) will properly manage the material.

	EPA continues to find that the reasonable efforts condition is critical
in determining when hazardous secondary materials sent to another party
for reclamation are not discarded. According to the study of successful
recycling practices found in the docket for today’s rulemaking,
generators of hazardous secondary materials frequently perform audit
activities and inquiries to determine whether the entity to which they
are sending hazardous secondary materials is equipped to responsibly and
legitimately reclaim and manage those materials without the risk of
releases or other environmental damage. These recycling and waste audits
of other companies’ facilities form a backbone of many of the
transactions in the hazardous secondary materials markets. As noted in
the March 2007 supplemental proposal, EPA’s study of good practices
for recycling quotes one large recycling and disposal vendor as stating
that of its new customers, 60% of the large customers and 30%–50% of
the smaller customers now perform audits on them (72 FR 14191). Thus,
although these practices are not universal, they do indicate that there
are currently many generators who recognize the risk of third-party
recyclers discarding their hazardous secondary materials and who take
responsibility to ensure that this discard does not occur. By codifying
the reasonable efforts condition of the transfer-based exclusion, EPA
believes that hazardous secondary materials generated by companies who
take this type of responsibility are not being discarded.

EPA has developed a reasonable efforts condition that is objective and
is based on the types of information that are typically gathered in
environmental audits currently performed by generators. However, one
piece of information that is not included under the reasonable efforts
provision being finalized today is the financial health of the
reclamation facility. While EPA agrees with comments received that state
that evaluating the financial health of a company can be a useful
exercise, and encourages companies to do so, it is not an activity that
lends itself to an objective standard that would be workable in a solid
waste identification regulation.

However, the financial health of a reclamation facility can still be a
crucial consideration in determining whether discard is taking place.
According to the successful recycling study, an examination of a
company’s finances is an important part of many environmental audits.
In addition, the environmental problems study showed that bankruptcies
or other types of business failures were associated with 138 (66%) of
the damage cases, and the market forces study identified a low net worth
of a firm as a strong indication of a sub-optimal outcome of recycling.

To address the issue of the correlation of financial health with the
absence of discard, EPA proposed in the March 2007 supplemental proposal
to require that reclamation facilities obtain financial assurance. The
financial assurance requirements are designed to help EPA determine that
the hazardous secondary material generator is not discarding the
hazardous secondary material by sending it to a reclamation facility
that is financially unsound.

In addition, by obtaining financial assurance, the owner/operator of the
reclamation facility (or intermediate facility) is making a direct
demonstration that it will not abandon the hazardous secondary material.
Discard through abandonment was a major cause of damages identified in
the environmental problems study. Of the 208 damage cases, 69 (33%)
involved abandoned materials. By obtaining financial assurance, a
reclaimer (or intermediate facility) is demonstrating that even if
events beyond its control make its operations uneconomical, the
hazardous secondary material will not be abandoned.

Another major cause of damages identified in the environmental problems
study was mismanagement of recyclable materials, constituting the
primary cause of damage in 81 (40%) of the 208 cases. Accordingly, in
the March 2007 supplemental proposal, EPA proposed a condition for
reclaimers that they must manage the hazardous secondary materials in at
least as protective a manner as they would an analogous raw material,
and in such a way that the hazardous secondary materials would not be
released into the environment (72 FR 14195). After reviewing the
comments, EPA continues to find that such a condition is needed for the
Agency to determine that the hazardous secondary materials are not
discarded.

The third major source of damages identified in the environmental
problems study was mismanagement of residuals generated from the
reclamation activity, constituting the primary cause of damage in 71
(34%) of the 208 cases. As discussed in the March 2007 supplemental
proposal, EPA found that in many cases, the residuals were comprised of
the most hazardous components of the hazardous secondary materials
(e.g., polychlorinated biphenyls (PCBs) from transformers) and were
simply disposed of in on-site landfills or piles, with little regard for
the environmental consequences of such mismanagement or possible CERCLA
liabilities associated with cleanup of these releases. Therefore, EPA
proposed that “any residuals that are generated from reclamation
processes will be properly managed. If any residuals exhibit a hazardous
characteristic according to subpart C of 40 CFR part 261, or themselves
are listed hazardous wastes, they are hazardous wastes (if discarded)
and must be managed according to the applicable requirements of 40 CFR
parts 260 through 272’’ (72 FR 17195). EPA continues to find that
this condition is important to clarify the regulatory status of these
waste materials, and to emphasize in explicit terms that the residuals
generated from reclamation operations must be managed properly (i.e.,
consistent with federal and state requirements).

Finally, other provisions of the transfer-based exclusion help ensure
that the hazardous secondary material is properly transferred to the
reclamation facility for recycling. Only the hazardous secondary
material generator, transporter, intermediate facility and reclaimer can
handle the material. (Note that, as with hazardous waste, a hazardous
secondary material can be held up to 10 days at a transfer facility and
still be considered as being transported). The hazardous secondary
material generators, intermediate, and reclamation facilities claiming
the exclusion must keep records of the hazardous secondary material
shipments, and reclamation and intermediate facilities must send
confirmations of receipt back to the hazardous secondary material
generator. Thus, all parties responsible for the excluded hazardous
secondary materials will be able to demonstrate that the materials were
in fact sent for recycling and arrived at the intended facility and were
not discarded in transit. For hazardous secondary material generators
who are exporting to other countries for recycling, notice and consent
must be obtained, thus facilitating oversight of the hazardous secondary
material when sent beyond the borders of the United States, helping to
ensure that it is recycled rather than discarded.

C. Discard and Non-Waste Determinations

	In addition to the exclusions discussed above, the Agency is also
finalizing a process for obtaining a case-specific non-waste
determination for certain hazardous secondary materials that are
recycled. This process allows a petitioner to receive a formal
determination from EPA (or the state, if the state is authorized for
this provision) that its hazardous secondary material is not discarded
and therefore is not a solid waste. The procedure allows EPA or the
authorized state to take into account the particular fact pattern of the
reclamation operation to determine that the hazardous secondary material
in question is not a solid waste.

	The determination is available to applicants who demonstrate (1) that
their hazardous secondary materials are reclaimed in a continuous
industrial process, or (2) that the materials are indistinguishable in
all relevant aspects from a product or intermediate.

	As discussed earlier, court decisions have made it clear that hazardous
secondary materials reclaimed in a continuous industrial process are not
discarded and, therefore, are not solid waste. As discussed in the March
2007 supplemental proposal, EPA believes that the generator-controlled
exclusion also excludes from the definition of solid waste hazardous
secondary materials recycled in a continuous industrial process (72 FR
14202). In effect, hazardous secondary materials reclaimed in a
continuous process are a subset of the hazardous secondary materials
reclaimed under the control of the generator that are excluded under
today’s rule.

However, EPA also recognized in the March 2007 supplemental proposal
that production processes can vary widely from industry to industry.
Thus, in some cases, EPA may need to evaluate case-specific fact
patterns to determine whether an individual hazardous secondary material
is reclaimed in a continuous industrial process, and therefore not a
solid waste. EPA continues to believe that this is best done through a
case-by-case procedure and is, therefore, finalizing the non-waste
determination process today.

	In addition to ruling that hazardous secondary materials recycled
within a continuous industrial process are not discarded and therefore
not solid waste, the courts have also said that hazardous secondary
materials destined for recycling in another industry are not
automatically discarded. In the Safe Food decision, the Court stated,
“[n]obody questions that virgin . . . feedstocks are products rather
than wastes. Once one accepts that premise, it seems eminently
reasonable to treat [recycled] materials that are indistinguishable in
the relevant respects as products as well” (350 F.3d at 1269). In Safe
Food, the court accepted EPA’s determination that the “relevant
respects” were that “  SEQ CHAPTER \h \r 1 market participants treat
the…materials more like valuable products rather than like
negatively-valued wastes managing them in ways inconsistent with
discard, and that the fertilizers derived from these recycled feedstocks
are chemically indistinguishable from analogous commercial products made
from virgin materials.” Id. As a result, EPA recognized in the March
2007 supplemental proposal, and continues to believe today, that there
may be some instances that would benefit from a non-waste determination
(72 FR 14203). Thus, we are also finalizing the non-waste determination
process for hazardous secondary materials indistinguishable in all
relevant aspects from a product or intermediate.

VI. When will the Final Rules Become Effective?

	This final rule is effective on [insert date 180 days after publication
in the Federal Register.

DETAILED DESCRIPTION OF TODAY’S FINAL RULE

VII. Exclusion for Hazardous Secondary Materials that are Legitimately
Reclaimed Under the Control of the Generator

A. What Is the Purpose of This Exclusion?

	Sections 261.2(a)(2)(ii) and 261.4(a)(23), being finalized today,
exclude from the definition of solid waste those hazardous secondary
materials which remain under the control of the generator when
reclaimed. By maintaining control over, and potential liability for, the
hazardous secondary materials and the reclamation process, the generator
ensures that such materials have not been discarded. When reclaimed
under the control of the generator, the hazardous secondary materials
are being treated as a valuable commodity rather than a waste. However,
if such hazardous secondary materials are released into the environment
and are not recovered immediately, they have been discarded and the
generator is subject to all applicable federal and state regulations, as
well as applicable cleanup authorities.

B. Scope and Applicability

	EPA is today excluding from the definition of solid waste those
hazardous secondary materials that are legitimately reclaimed under the
control of the generator, provided they are not speculatively
accumulated and they are reclaimed within the United States or its
territories. In addition, the generator must submit a notification of
the exclusion to EPA or the authorized state and the hazardous secondary
material must be contained in the units in which it is stored. The
provision excluding hazardous secondary materials that are under the
control of the generator and that are managed in land-based units is
found at 40 CFR 261.4(a)(23), while the provision excluding such
materials that are managed in non-land-based units is found at 40 CFR
261.2(a)(2)(ii).  A land-based unit is defined in 40 CFR 260.10 as an
area where hazardous secondary materials are placed in or on the land
before recycling.  Examples of land-based units include surface
impoundments and piles.

	The definition of “hazardous secondary material generated and
reclaimed under the control of the generator” is finalized in 40 CFR
260.10 and consists of three parts. The first part applies to hazardous
secondary materials generated and legitimately reclaimed at the
generating facility. For purposes of this exclusion, “generating
facility” means all contiguous property owned, leased, or otherwise
controlled by the hazardous secondary material generator, and
“hazardous secondary material generator” means any person whose act
or process produces hazardous secondary materials at the generating
facility. A facility that collects hazardous secondary materials that
have been discarded by other persons (for example, when
mercury-containing equipment is collected through a special collection
program) is not the hazardous secondary material generator of those
materials.

Under this definition, if a generator contracts with a different company
to reclaim hazardous secondary materials at the generator’s facility,
either temporarily or permanently, the materials would be considered
under the control of the generator. However, generators sometimes
contract with a second company to collect hazardous secondary materials
at the generating facility and the materials are subsequently reclaimed
at the facility of the second company. In that situation, the hazardous
secondary materials would no longer be considered “under the control
of the generator” and would instead be managed under the exclusion for
materials transferred for reclamation.

	The second part of the definition applies to hazardous secondary
materials generated and legitimately reclaimed at different facilities
if the reclaiming facility is controlled by the generator or if a person
as defined in §260.10 controls both the generator and the reclaimer.
For purposes of this exclusion, “control” means the power to direct
the policies of the facility, whether by the ownership of stock, voting
rights, or otherwise, except that contractors who operate facilities on
behalf of a different person as defined in §260.10 shall not be deemed
to “control” such facilities. Thus, when a contractor operates two
facilities, each of which is owned by a different company, hazardous
secondary materials generated at the first facility and reclaimed at the
second facility are not considered “under the control of the
generator” and must use the exclusion for such materials that are
transferred for reclamation.

Under the definition promulgated in today’s final rule, the generating
facility must provide one of two certifications: (1) that the generating
facility will send the indicated hazardous secondary materials to the
reclaiming facility, which is controlled by the generating facility, and
that either the generating facility or the reclaiming facility has
acknowledged full responsibility for the safe management of such
hazardous secondary materials; or (2) that the generating facility will
send the hazardous secondary materials to the reclaiming facility, that
both facilities are under common control, and that either the generating
facility or the reclaiming facility has acknowledged full responsibility
for the safe management of such hazardous secondary materials.

	The third part of the definition applies to hazardous secondary
materials that are generated pursuant to a written contract between a
tolling contractor and a toll manufacturer and legitimately reclaimed by
the tolling contractor. For purposes of this exclusion, a tolling
contractor is a person who arranges for the production of a product or
intermediate made from specified virgin materials through a written
contract with a toll manufacturer. The toll manufacturer is the person
who produces a product or intermediate made from specified virgin
materials pursuant to a written contract with a tolling contractor.
Under today’s final rule, the tolling contractor must certify that it
has a written contract with the toll manufacturer to manufacture a
product or intermediate made from specified virgin materials, and that
the tolling contractor will reclaim the hazardous secondary materials
generated during the manufacture of the product or intermediate. The
tolling contractor must also certify that it retains ownership of, and
liability for, the hazardous secondary materials that are generated
during the course of the manufacture, including any releases of
hazardous secondary materials that occur during the manufacturing
process at the toll manufacturer’s facility.

C. Restrictions and Requirements

Hazardous secondary materials must be contained. The regulations at 40
CFR 261.2(a)(ii) and 40 CFR 261.4(a)(23) apply to hazardous secondary
materials that are generated and legitimately reclaimed under the
control of the generator in the United States or its territories. Under
these provisions, the hazardous secondary materials must be contained,
whether they are stored in land-based units or non-land-based units.
Generally, such material is “contained” if it is placed in a unit
that controls the movement of the hazardous secondary material out of
the unit. These restrictions support EPA’s determination that
materials managed in this manner are not discarded.

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

Conversely, a tank or a surface impoundment in good condition may
experience small releases resulting from normal operations of the
facility.  Sometimes a material may escape from primary containment and
may be captured by secondary containment or some other mechanism that
would prevent the material from being released to the environment. In
that case, the unit would retain its exclusion from RCRA hazardous waste
regulation and the hazardous secondary materials in the unit would still
be excluded from the definition of solid waste, even though any such
materials that had been released would be considered discarded if not
immediately recovered and would be subject to appropriate regulation.
One specific example of “contained” hazardous secondary materials
would be furnace bricks collected from production units and stored on
the ground in walled bins before being used as feedstocks in the metals
production process. If there were very small releases from the walled
bins due to precipitation runoff, such releases would not cause the
storage bins to be subject to Subtitle C controls.

It should be noted that a “significant” release is not necessarily
large in volume. Such a release could include an unaddressed small
release from a unit that, if allowed to continue over time, would cause
significant damage. Any one release may not be significant in terms of
volume. However, if the cause of such a release remains unaddressed and
hazardous secondary materials are managed in such a way that the release
is likely to continue, the materials in the unit would not be contained.
For example, a rusting tank or containers that are deteriorating may
have a slow leak that, if unaddressed, would cause a significant
environmental impact. Similarly, a surface impoundment with a slow,
unaddressed leak to groundwater would result in significant damage.
Another example would be a large pile of lead-contaminated finely ground
dust without any provisions to prevent wind dispersal of the dust. Such
releases, if unaddressed, would mean that the hazardous secondary
materials remaining in the unit were not being managed as a valuable raw
material, intermediate, or product and that the materials had been
discarded. As a result, the hazardous secondary materials in the unit
would be hazardous wastes and these units would be subject to the RCRA
hazardous waste regulations.

Speculative accumulation. In addition to the containment provision,
hazardous secondary materials that are generated and legitimately
reclaimed under the control of the generator are subject to the
speculative accumulation provisions of 40 CFR 261.1(c)(8). If these
materials are speculatively accumulated, they are considered discarded.
EPA did not propose changes to the speculative accumulation provisions
in its March 26, 2007 proposal.

Notification. Under today’s rule, hazardous secondary material
generators, tolling contractors, toll manufacturers, and reclaimers
(where the generator and reclaimer are part of the same company, but
located at different facilities) managing hazardous secondary materials
reclaimed under the control of the generator are required to submit a
notification prior to operating under this exclusion and at a minimum of
every two years thereafter to the EPA Regional Administrator using EPA
Form 8700-12. The notice must include:

•	The name, address and EPA ID number (if applicable) of the facility;

•	The name and telephone number of a contact person;

•	The NAICS code of the facility;

•	The exclusion under which the hazardous secondary materials will be
managed (e.g., 40 CFR 261.2(a)(2(ii) and/or 40 CFR 261.4 (a)(23) for
hazardous secondary materials managed in a land-based unit);

•	When the facility expects to begin managing the hazardous secondary
materials in accordance with the exclusion;

•	A list of hazardous secondary materials that will be managed
according to the exclusion (reported as the EPA hazardous waste numbers
that would apply if the hazardous secondary materials were managed as
hazardous waste);

•	For each hazardous secondary material, whether the material, or any
portion thereof, will be managed in a land-based unit;

•	The quantity of each hazardous secondary material to be managed
annually; and

•	The certification (included in EPA Form 8700-12) signed and dated by
an authorized representative of the facility.

	Generators and reclaimers are required to notify on a per facility
basis. In other words, facilities managing hazardous secondary materials
will need to submit a notification form in accordance with the
exclusion. One notification cannot cover two or more facilities.
Furthermore, each facility need only use one notification form to list
all of the hazardous secondary materials to be managed under the
exclusion (i.e., facilities need not file separate notifications for
each hazardous secondary material). The notification requirement is not
calendar-based and thus a facility can notify (and re-notify) at any
time of the year. Facilities may also choose to re-notify more
frequently and according to their own calendar-based schedule (as long
as the schedule meets the requirement of re-notifying a minimum of every
two years).

Hazardous secondary material generators, tolling contractors, toll
manufacturers, and reclaimers (where the generator and reclaimer are
part of the same company, but located at different facilities) must also
re-notify within 30 days of a change to the name, address, or EPA ID
number of the facility; the type of exclusion that applies; if
additional hazardous secondary materials will be managed under the
exclusion; or whether the hazardous secondary material will be managed
in a land-based unit. For example, a facility must re-notify if it
previously notified it is operating under the generator-controlled
exclusion and then subsequently chooses to manage hazardous secondary
material under the transfer-based exclusion. Additionally, a facility
must re-notify if it chooses to manage additional hazardous secondary
materials that were not included on the initial (or previous)
notification; however, a facility does not need to re-notify if it
chooses to stop managing a specific type of hazardous secondary material
that was included in a previous notification, and could just update its
list of hazardous secondary materials during the regular re-notification
submitted every two years. Another example of when a facility must
re-notify following a change is when a facility has previously notified
it is not managing hazardous secondary materials in a land-based unit,
but then subsequently chooses to use a land-based unit. Since generators
and reclaimers must notify ‘a minimum’ of every two years, if a
facility happens to notify in the event of a change, it can just
re-notify two years from the date of the notification submitting the
change.

We are also requiring facilities that stop managing hazardous secondary
materials in accordance with the exclusion, to notify the Regional
Administrator using the same EPA Form 8700-12. Notification in this
instance serves two objectives: (1) it allows states to follow up with
the facility to verify that the hazardous secondary material has not
been discarded; and (2) it maintains the usability of the database to
enable states to monitor compliance and, for today’s transfer-based
exclusion, to assist generators with performing reasonable efforts on
potential reclaimers. We consider a facility to have ‘stopped’
managing hazardous secondary materials when at least one of the
following occurs: the facility chooses to manage the hazardous secondary
materials as hazardous waste or the facility chooses to temporarily
suspend management of hazardous secondary materials and does not expect
to manage any amount of hazardous secondary materials for at least one
year. For example, a facility that has previously notified it is
managing hazardous secondary materials under the exclusion, but then
subsequently chooses to stop managing all hazardous secondary materials
for a period of at least one year, must notify the Regional
Administrator. However, if this same facility only stopped managing one
type of hazardous secondary material (but continued to manage another
type of hazardous secondary material under the exclusion) it would not
need to notify, and could just update its list of hazardous secondary
materials during the next periodic re-notification submitted every two
years. Additionally, if a facility requests release of financial
assurance under 40 CFR 261.143(h), it is clear the facility has
‘stopped’ managing hazardous secondary materials, and, therefore,
must notify the Regional Administrator (for additional clarification,
notification does not ‘trigger’ the process for releasing financial
assurance; instead, a facility wishing to be released from financial
assurance obligations must notify it has ‘stopped’ managing
hazardous secondary materials). Of course, a facility could certainly
choose to begin managing hazardous secondary materials again and would
simply have to submit a notification in compliance with 40 CFR 260.42.

We note that the requirement to provide this notification is not a
condition of the exclusion. Thus, failure to comply with the requirement
constitutes a violation of RCRA, but does not affect the excluded status
of the hazardous secondary materials.

We believe our authority to request such information is inherent in our
authority to determine whether a material is discarded, and we consider
this to be the minimum information needed to enable credible evaluation
of the status of hazardous secondary materials under section 3007 of
RCRA and to ensure that the terms of the exclusions are being met by
generators and reclaimers. EPA further believes that RCRA section 3007
allows us to gather information about any material when we have reason
to believe that it may be a solid waste and possibly a hazardous waste
within the meaning of RCRA section 1004(5). Section 2002 also gives EPA
authority to issue regulations necessary to carry out the purposes of
RCRA.

We also note that after EPA promulgates regulations listing a material
as a hazardous waste or identifying it by its characteristics, section
3010 of RCRA requires generators of such materials to submit a
notification to EPA within 90 days. Since the changes finalized today
could substantially affect the universe of facilities in the Subtitle C
system, we believe the notifications are appropriate.

The intent of this notification requirement is to provide basic
information to regulatory agencies about who will be managing hazardous
secondary materials under the exclusion. The specific information
included in today’s notification requirement will enable regulatory
agencies to monitor compliance adequately and to ensure hazardous
secondary materials are managed according to the exclusion and not
discarded. For example, in the notification, EPA requires facilities to
include the quantity of hazardous secondary materials that will be
managed according to the exclusion and whether certain types of
hazardous secondary materials will be managed in land-based units. This
information can be used to assist RCRA inspectors in determining which
facilities may warrant greater oversight and provides a basis for
setting enforcement priorities. Furthermore, requiring facilities to
notify when they have stopped managing hazardous secondary materials
allows states to follow-up and ensure that hazardous secondary materials
were not discarded.

This notification requirement is the same as the notification
requirement for today’s transfer-based exclusion found in section
VIII.C. of today’s preamble.

Sending to an intermediate facility. We note that under this exclusion,
hazardous secondary materials may not be sent to an intermediate
facility as defined in 40 CFR 260.10 (i.e., a facility, other than a
generator or reclaimer, that stores hazardous secondary materials for
more than 10 days). If hazardous secondary materials are sent to
intermediate facilities, they would not meet the definition of hazardous
secondary materials reclaimed under the control of the generator, and
they are subject to the conditions of the transfer-based exclusion,
discussed below.

D. Terminating the Exclusion

Units managing excluded hazardous secondary materials are not subject to
the closure regulations in 40 CFR parts 264 and 265 subpart G. However,
when the use of these units is ultimately discontinued, all owners and
operators must 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. While this final rule does not set a specific time
frame for these activities, the Agency believes that they typically
should be completed within the time frames established for analogous
activities. For example, the requirements for product tanks under 40 CFR
261.4(c) allow 90 days for removal of hazardous material after the unit
ceases to be operated for manufacturing. This time frame should serve as
a guideline for regulators in determining on a case-by-case basis
whether owners and operators have completed these activities within in a
reasonable time frame. In any event, these hazardous secondary materials
remain subject to the speculative accumulation restrictions in 40 CFR
261.1(a)(8), which includes both a time limitation and a requirement
that the facility be able to show there is a feasible means of recycling
the hazardous secondary material.

E. Enforcement

Under today’s rule, hazardous secondary materials generated and
legitimately reclaimed within the United States under the control of the
generator are excluded from RCRA Subtitle C regulation, but are subject
to certain restrictions, principally speculative accumulation and
containment. Persons that handle these hazardous secondary materials are
responsible for maintaining the exclusion by ensuring that these
restrictions are met. If the hazardous secondary materials are not
managed pursuant to these restrictions, they are not excluded. They
would then be considered solid and hazardous wastes if they were listed
or they exhibited a hazardous waste characteristic for Subtitle C
purposes from their point of generation. Persons operating under the
exclusion are also required to notify EPA or the authorized state.

Persons taking advantage of today’s exclusion that fail to meet the
requirements may be subject to an enforcement action. EPA could choose
to bring an enforcement action under RCRA section 3008(a) for violations
of the hazardous waste requirements occurring from the time the
hazardous secondary materials are generated through the time they are
ultimately disposed of or reclaimed. The Agency believes that this
approach provides hazardous secondary material generators with an
incentive to handle or (in the case of tolling) to ensure that their
contractors handle the hazardous secondary materials pursuant to the
requirements. It also encourages each hazardous secondary material
generator to take appropriate steps to ensure that such materials are
properly handled and legitimately recycled by others in the management
chain. If there is a release of the hazardous secondary materials into
the environment, they are considered discarded and subject to all
applicable hazardous waste regulations and cleanup authorities.

VIII. Exclusion for Hazardous Secondary Materials that are Transferred
for the Purpose of Legitimate Reclamation

	Today, EPA is also finalizing an exclusion from the definition of solid
waste for hazardous secondary materials that are generated and
subsequently transferred to another company or person for the purpose of
reclamation (i.e., “transfer-based exclusion”), provided that
certain conditions are met. Reclamation that conforms to these
conditions would not involve discard, and therefore the hazardous
secondary materials would not be regulated as solid waste. As with all
recycling-related exclusions and exemptions, such excluded hazardous
secondary materials would also need to be recycled legitimately, as
determined according to the provisions of 40 CFR 261.2(g). For further
discussion on how the transfer-based exclusion relates to the concept of
discard, see section V.B. of this preamble.

The conditions that must be met for this exclusion are based on our
analysis of how successful third-party recycling currently operates
(and, conversely, how unsuccessful third-party recycling practices can
result in recyclable hazardous secondary materials being discarded), and
are supported by the information contained in the rulemaking record,
including the recycling studies found in the public docket for today’s
rulemaking and discussed previously in section III.D. of today’s
preamble and in the preamble to the March 2007 supplemental proposal at
72 FR 14178–14183. For example, the study of good current recycling
practices indicates that many responsible generators examine the
recycler's technical capabilities, business viability, environmental
track record, and other relevant questions before sending hazardous
secondary materials for recycling. Currently, these recycler audits,
which can be thought of as a form of environmental “due diligence,”
are in essence a precaution to minimize the prospect of incurring CERCLA
liability in the event that the recycling, or lack thereof, results in
release of the material to the environment. The fact that these
companies are willing to incur the expense of auditing recyclers as a
business practice is of itself a marketplace affirmation that sending
hazardous secondary materials to other companies for recycling involves
some degree of risk. Although these risks may be small when the recycler
is a well established, successful enterprise with a good record of
environmental stewardship, it also is apparent that not all recyclers
fit this profile, as evidenced in the study of environmental problems
associated with hazardous secondary materials recycling. Thus, we
believe that there is sufficient basis for the Agency to place certain
conditions on this exclusion for the generator to determine that the
hazardous secondary material is not discarded, particularly since we
expect that this rulemaking could encourage some companies that are
currently not involved with hazardous secondary materials recycling to
enter the business.

A. What is the Purpose of this Exclusion?

	In finalizing this conditional exclusion, EPA's objectives are to
encourage the recycling of hazardous secondary materials and reduce
unnecessary regulatory compliance costs to industry, while still
maintaining protection of human health and the environment. After
considering the entire rulemaking record, including comments submitted
by the public, we continue to believe that this exclusion is a workable,
common-sense approach to meeting these objectives; is well supported by
the record for this rulemaking, including the recycling studies that EPA
has conducted; and, in important ways, reflects current good industry
practices that are used by responsible generators for recycling
hazardous secondary materials.

B. Scope and Applicability

	The conditional exclusion for the transfer-based approach applies to
hazardous secondary materials that are currently regulated as hazardous
wastes because their recycling involves reclamation—specifically,
spent materials, listed sludges, and listed by-products. It would not be
available for hazardous secondary materials that are regulated as
hazardous wastes for other reasons, such as “inherently waste-like
materials,” materials that are “used in a manner constituting
disposal,” or “materials burned for energy recovery.” The
conditional exclusion also does not apply to materials that are
currently excluded from the definition of solid waste according to
other, existing provisions of 40 CFR part 261. For example, the
exclusion for broken cathode ray tubes requires them to be transported
in closed containers per 40 CFR 261.4(a)(22). Today's exclusion does not
supersede or otherwise affect these other exclusions, and such hazardous
secondary materials will need to be managed in accordance with those
existing exclusions. For a discussion of how this exclusion relates to
particular existing exclusions and additional details involving these
exclusions, see section XI of today’s preamble.

This exclusion is available to hazardous secondary material generators,
transporters, intermediate facilities, or reclaimers. In the March 2007
supplemental proposal, EPA proposed that the hazardous secondary
material must be transferred directly from the generator to the
reclaimer and not be handled by anyone else other than a transporter.
Thus, as proposed, a generator that wished to maintain the excluded
status of its hazardous secondary materials would not be able to ship
those materials to a middleman, such as a broker. We said that we
believed that a generator who ships materials to a middleman, such as a
broker typically does not know who will ultimately manage and reclaim
them, or how they will be reclaimed (72 FR 14189). However, we requested
comment on allowing middlemen to participate in the exclusion.

Comments on the proposal disputed the assumption that the generator does
not know the final destination when shipping to an intermediate
facility, saying that in certain cases the generator works with an
intermediate facility to choose the reclamation facility and the final
destination is arranged by contract before the hazardous secondary
materials are shipped. Commenters also asserted that such arrangements
allow for consolidation of shipments, making recycling economical for
small businesses who generate hazardous secondary materials.

EPA agrees with the comments that some types of intermediate facilities
could participate in the exclusion, while still allowing the hazardous
secondary material generator to perform reasonable efforts to ensure
that the hazardous secondary material is properly and legitimately
recycled. Thus, in the final rule, EPA has determined that intermediate
facilities will be allowed under the transfer-based exclusion. However,
to limit the exclusion to those intermediate facilities where discard
will not occur, if the hazardous secondary material will be passing
through an intermediate facility, the hazardous secondary material
generator must make contractual arrangements with the intermediate
facility to ensure that the hazardous secondary material is sent on to
the reclamation facility or facilities identified by the generator and
must perform reasonable efforts on the intermediate facility, as well as
on the reclamation facility. Also, the intermediate facility must send
the hazardous secondary material to the reclaimer designated by the
generator.

In addition, the intermediate facility must meet the same conditions as
the reclamation facility for the same reasons the reclamation facility
must meet them. Section VIII.C.4. below discusses additional details as
to why these conditions need to apply to the reclamation facilities and
this reasoning applies equally to intermediate facilities involved in
the process. Of the 208 damage cases in the environmental problems
study, 45 (22%) were from intermediate facilities. Therefore, EPA
believes the record for requiring the conditions for the reclamation
facility also supports promulgation of the same conditions for
intermediate facilities.

	In addition, in the March 2007 supplemental proposal, the Agency
recognized that, in some cases, recycling of an excluded hazardous
secondary material may involve more than one reclamation step. For
example, a recyclable hazardous secondary material, such as an
electroplating secondary material, might have a relatively high moisture
content and a somewhat variable chemical composition. Such materials
might need to be dried and blended to a suitable, consistent
specification before they are amenable to a “final” reclamation
process (e.g., metals smelting). In this example, the two different
reclamation processes might be conducted by different companies and/or
at different facilities. The Agency continues to see no reason to
discourage this kind of recycling. The transfer-based exclusion
finalized today is available for hazardous secondary materials that are
recycled by means of one or more reclamation processes, including when
they occur at more than one reclamation facility.

The conditions for generators and reclaimers under the terms of this
exclusion would apply in the same way, regardless of how many
reclamation steps were involved with recycling of an excluded material.
For example, if the excluded hazardous secondary material were reclaimed
by more than one facility or company, the generator of such material
would need to make reasonable efforts to examine each facility or
company involved in the reclamation process to ensure that the hazardous
secondary materials would be properly and legitimately recycled. We
believe that this is a consistent application of the idea of requiring
“reasonable efforts” as a condition of this exclusion. Where
recycling of a hazardous secondary material involves more than one
reclamation step at more than one facility, generators should
nevertheless be well informed as to how the materials will be reclaimed,
and by whom, throughout the recycling process. Additionally, each
reclaimer (including ‘partial reclaimers’) managing hazardous
secondary materials must meet all the reclaimer conditions listed under
40 CFR 261.4(a)(24), as well as the recordkeeping requirements.

C. Conditions and Requirements

1. Provisions Applicable to the Hazardous Secondary Materials Generator,
the Reclamation Facility, and any Intermediate Facility.

Prohibition on speculative accumulation As a condition of the
transfer-based exclusion, hazardous secondary materials cannot be
speculatively accumulated (40 CFR 261.1(c)(8)) at the hazardous
secondary material generator, reclamation facility, or intermediate
facility. Restrictions on speculative accumulation have been an
important element of the RCRA hazardous waste recycling regulations
since they were promulgated on January 4, 1985. According to this
regulatory provision, hazardous secondary materials are accumulated
speculatively if the person accumulating them cannot show that the
material is potentially recyclable; further, the person accumulating the
hazardous secondary material must show that during a calendar year
(beginning January 1) the amount of such material that is recycled or
transferred to a different site for recycling is at least 75% by weight
or volume of the amount of the hazardous secondary material present at
the beginning of the period. It is also the same prohibition that is
being promulgated today for the generator-controlled exclusions.

Notification. Under today’s transfer-based exclusion, hazardous
secondary material generators, reclaimers, and intermediate facilities
are required to send a notification prior to operating under this
exclusion and at a minimum of every two years thereafter to the EPA
Regional Administrator using EPA Form 8700-12. The notice must include:

The name, address, and EPA ID number (if applicable) of the facility;

The name and telephone number of a contact person;

The NAICS code of the facility;

The exclusion under which the hazardous secondary materials will be
managed (e.g., whether the hazardous secondary materials are managed
under the transfer-based exclusion in 40 CFR 261.4(a)(24) and/or under
the exclusion for hazardous secondary materials exported for reclamation
in 40 CFR 261.4 (a)(25));

For reclaimers and intermediate facilities managing hazardous secondary
materials, whether the reclaimer or intermediate facility has financial
assurance for the management of such hazardous secondary materials (not
applicable for hazardous secondary material generators);

When the facility expects to begin managing the hazardous secondary
materials in accordance with the exclusion;

A list of hazardous secondary materials that will be managed according
to the exclusion (reported as the EPA hazardous waste numbers that would
apply if the hazardous secondary materials were managed as hazardous
waste);

For each hazardous secondary material, whether the material, or any
portion thereof, will be managed in a land-based unit;

The quantity of each hazardous secondary material to be managed
annually; and

The certification (included in EPA Form 8700-12) signed and dated by an
authorized representative of the facility.

Hazardous secondary material generators, reclaimers and intermediate
facilities must also re-notify within 30 days of a change to the name,
address, or EPA ID number (if applicable) of the generator, reclaimer,
or intermediate facility; the type of exclusion that applies; whether
the reclaimer or intermediate facility has financial assurance; if
additional hazardous secondary materials are managed under the
exclusion; or whether the hazardous secondary materials will be managed
in a land-based unit. Since generators, reclaimers and intermediate
facilities must notify ‘at a minimum’ of every two years, if a
facility happens to notify in the event of a change, it can just
re-notify two years from the date of the notification submitting the
change.

If a facility has submitted a notification, but then subsequently stops
managing hazardous secondary materials in accordance with the exclusion,
the facility must re-notify the Regional Administrator using the same
EPA Form 8700-12. We consider a facility to have ‘stopped’ managing
hazardous secondary materials when one of the following occurs: the
facility chooses to manage the hazardous secondary materials as
hazardous waste; the facility requests release from financial assurance
per 40 CFR 261.143(h); or the facility chooses to temporarily suspend
management of hazardous secondary materials and does not expect to
manage any amount of hazardous secondary materials for at least one
year. Of course, a facility could certainly choose to begin managing
hazardous secondary materials again and would simply have to submit a
notification in compliance with 40 CFR 260.42.

The requirement to provide this notification is not a condition of the
exclusion. Thus, failure to comply with the requirement constitutes a
violation of RCRA, but does not affect the excluded status of the
hazardous secondary materials.

This notification requirement is the same as the notification
requirement for the generator-controlled exclusion. For further
discussion on the notification, including examples of when a facility
must re-notify in the event of a change, see section VII.C. of today’s
preamble.

Hazardous secondary materials must be contained. Another condition of
the transfer-based exclusion applicable to hazardous secondary material
generators, reclamation facilities, and intermediate facilities is that
the hazardous secondary materials must be contained in their management
units. Hazardous secondary materials released from any unit are
discarded and would be subject to the hazardous waste regulations,
unless they are immediately cleaned up. Hazardous secondary materials
remaining in a unit that experiences a release may also be considered
discarded in certain cases. This is the same as the restriction that is
being promulgated for the generator-controlled exclusions. For further
discussion on the containment provisions, including examples of how they
might be applied in case-specific situations, see section VII.C. of
today’s preamble.

2. Provisions Applicable to the Hazardous Secondary Material Generator

Reasonable efforts. Today's final rule requires generators to make
reasonable efforts to ensure that their hazardous secondary materials
are properly and legitimately recycled before shipping or otherwise
transferring them to a reclamation facility or any intermediate
facility. As discussed previously, this condition effectively requires
that generators perform a type of environmental “due diligence” on a
reclaimer or any intermediate facility to ensure that those facilities
intend to properly manage the hazardous secondary materials as
commodities and legitimately recycle rather than discard them. We
believe that this condition reflects the existing best practices of many