absence of discard, because it may show a material is "being treated as
a valuable commodity rather than as a waste," 72 Fed. Reg. 14178.
However, the commenter believed that conditions of meeting highly
prescriptive and detailed recordkeeping, certification, or materials
management requirements would go far beyond defining the absence of
discard, and merely constitute a new set of regulatory mandates.

[0197-14, 0481-10, 0492-3, 0492-12, 0492-58]

2.1.5 - Response

EPA disagrees with comments that state that the conditions and
restrictions for the exclusions are not relevant to defining discard.
EPA's authority use conditions to define when a hazardous secondary
material is long-established, and was most recently upheld in Safe Food
and Fertilizer v. EPA ("Safe Food"), 350 F.3d 1263 (D.C. Cir. 2003).  As
discussed in Section V of the preamble to the final rule and elsewhere
in this response to comments document, EPA's record establishes the link
of each of the conditions or restrictions for the exclusions in the
final rule to the concept of discard, or otherwise explains EPA's
authority to impose specific requirements.  Once again, the comments beg
the question.  The mere assertion that a material is not a waste does
not make it so.  EPA is entitled to define reasonable restrictions and
conditions for hazardous secondary material that will be reclaimed to
distinguish when such material is not discarded .  See, API II, 216 F.3d
at 59 (EPA may regulate sham recycling because it is meant to regulate
only discarded materials).

<IP_ADDRESS> - "Contained" and discard

<IP_ADDRESS> - Summary

Containment Prohibited by Case Law - Comments

Some commenters objected to the restriction that hazardous secondary
material excluded under the proposed rules must be "contained" in the
unit, asserting that such a condition is prohibited by recent case law
(particularly when applied to mining and mineral processing) and
improperly relies on an ambiguous and undefined standard that fails to
provide required regulatory certainty, and is also not supported by the
Agency’s analysis of past recycling practices.

Commenters stated that EPA's assertion of RCRA authority over the
storage of mineral processing materials prior to reclamation is
blatantly illegal under principles of res judicata. The D.C. Circuit, in
both AMC I and ABR, explicitly addressed this issue and rejected EPA's
prior attempts to exert jurisdiction over stored in-process materials in
the mining and mineral processing industry that had not been discarded.
ABR, 203 F.3d at 1053; AMC I, 824 F.2d at 1192-93. The ABR court also
noted that, in the portion of the Phase IV regulation that dealt with
the definition of solid waste for materials that are generated and
reclaimed within the mineral processing industry, "EPA's dividing line
between 'waste' and non-waste is the manner of storage."  The court
concluded that this classification is based "on an improper
interpretation of 'discarded' and an incorrect reading of our AMC I
decision." ABR, 208 F.3d at 1051 and 1056.  Accordingly, commenters
believe that EPA must strike its "storage" conditions from the proposed
"generator control" and "transfer-based" exclusions.

Land-Based Unit Defined As Discarded - Comments

Commenters claim that under this proposal some reclaimed hazardous
secondary materials would be defined as “discarded" only because it is
managed in a land-based unit. This clearly conflicts with the ABR
holding that the method of storage of mineral processing secondary
materials to be recycled cannot be a basis, by itself, for classifying
such material as "discarded" or as solid waste.  EPA's assertion of RCRA
authority over the storage of mineral processing materials prior to
reclamation is blatantly illegal under principles of res judicata and
AMC I and ABR, where the D.C. Circuit explicitly addressed this issue
and rejected EPA's prior attempts in 1985 and 1998 to exert its
jurisdiction over stored in-process materials in the mining and mineral
processing industry that had not been discarded.  ABR, 203 F.3d at 1053;
AMC I, 824 F.2d at 1192-93.

Containment in Land-Based Unit Lacks Basis - Comments

Commenters note that EPA asserts that management of hazardous secondary
materials to be recycled in land-based units "presents a greater
potential for releases to the environment than management in
non-land-based units." 72 Fed. Reg. at 11186.  However, it was not clear
what this assertion is based upon as the recycling studies that EPA
commissioned did not clearly identify alleged damage caused by recycled
mineral processing secondary materials that are managed in land-based
units. Therefore the commenter believes that the proposed conditional
exclusion lacks a fundamental basis and should be deleted.

Containment Should not Apply to Heap Leaching Or Other Production Units
- Comments

The commenters believe that a close examination of EPA's proposed 2007
Supplemental Proposal actually reveals that EPA's relevant regulatory
language in the "generator control" and "transfer-based" exclusions
should not apply to land-based production units.  Only secondary
materials "managed" in "land-based units," as defined in 40 C.F.R. §
260.10, must be contained.  Accordingly, commenters believe that EPA's
proposed regulatory requirements in both the "generator control" and
"transfer-based" exclusions that secondary materials "managed" in
"land-based units as defined in § 260.10" must be "contained" should
not apply to heap and dump leach production units, or to the use of
secondary materials as part of these production operations.

Commenters note that the mining and mineral processing industry utilizes
land-based production units as critical elements of their production
operations. The copper and gold sectors in particular use heap and dump
leaching technology as integral parts of their production operations.
Generally, ores are placed on the ground, sometimes on pads, and
leaching solutions, e.g., acids or cyanides, are applied to the ores to
recover the desired metal in solution.  These valuable, product-laden
solutions are collected and then sent to subsequent phases of copper and
gold production operations. Commenters assert that when the mining and
mineral processing industry uses secondary acid streams, or other
secondary materials, in land-based production units, they are not
discarded.  Under a lawful and proper regulatory definition of solid
waste, there would be no question that use of secondary materials in
this manner, and the land-based mining and mineral processing industry
production operations where they are used, would not be regulated.

Trade Press Article - Comments

One comment quoted a trade press article in which an EPA official, Bob
Dellinger, was quoted as stating that the term, "discard," goes "beyond"
tossing out or abandoning a material.  Mr. Dellinger stated that the
waste generator must ensure that material will be truly recycled and not
just transferred to another facility where it might be abandoned.  The
commenter states that this approach is "flat out wrong" because the term
"discard" extends only to materials that are thrown out or abandoned.

[0459-1, 0459-2, 0459-3, 0468-9, 0472-17, 0481-31, 0481-32, 0481-34,
0481-40, 0481-41, 0481-42, 0481-44, 0481-47, 0486-27, 0537-6, 0537-15]

<IP_ADDRESS> - Response

Containment Prohibited by Case Law - Response

EPA disagrees that including in the exclusions from the definition of
solid waste the provision that hazardous secondary materials must be
"contained" contradicts the court's finding in ABR that EPA does not
have the authority to define when hazardous secondary materials are not
discarded. By limiting the exclusion to hazardous secondary materials
that are contained, EPA is defining "discard" for this material.

While it is true that the court has said that materials recycled in a
continuous process by the generating industry are not solid wastes,
commenters have failed to demonstrate how hazardous secondary materials
that are not contained meet that description. It is a self-evident fact
that hazardous secondary materials released to the environment (e.g.,
causing soil and groundwater contamination) are not "destined for
recycling" or "recycled in a continuous process;" thus, they are part of
the waste disposal problem. Moreover, to the extent that significant
releases to the environment from a unit remain unaddressed, it is
reasonable to conclude that the material remaining in the unit is also
actively being discarded.

It is important to note that the hazardous secondary materials that
remain in the unit are not solid wastes, unless the releases from the
storage unit indicate that these materials are not being managed as
valuable commodities and are, in fact, discarded. 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 unit 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.

EPA also notes that, if a facility believes that their hazardous
secondary material is not discarded despite the fact that it is not
contained in the unit, the facility has the option of applying for a
non-waste determination.  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. While the court overturned EPA's regulations for casting too wide
a net over continuous industrial processes, it acknowledged that there
are a large number of processes, some of which may be continuous and
some of which may not. Determining what is a continuous process in the
mineral processing industry, according to the Court, would require
examination of the details of the processes and does not lend itself,
well, to broad abstraction. Specifically, the Court stated,

Some mineral processing secondary materials covered under the Phase IV
Rule may not proceed directly to an ongoing recycling process and may be
analogous to the sludge in AMC II. The parties have presented this
aspect of the case in broad abstraction, providing little detail about
the many processes throughout the industry that generate residual
material of the sort EPA is attempting to regulate under RCRA,  208 F.3d
at 1056

In the case of today's final rule, which applies across industries,
there are far larger and more diverse processes. While EPA believes it
is establishing a reasonable set of principles in defining when a
hazardous secondary material is not discarded, they must still be
applied to the details of the industrial processes in question.

In addition, EPA believes it is important to note that these comments
persist in improperly interpreting opinions of the D.C. Circuit with
regard to the definition of solid waste.  Most importantly, AMC I and
ABR provide no res judicata for any particular material in any
particular industry.  The D.C. Circuit in API II stated as much:

 "We only held that in-process secondary materials are not "discarded"
so that EPA could not regulate them; we did not address the discard
status of any of the particular materials discussed in the briefs.  See
AMC I, 824 F.2d at 1181 (describing the petroleum refining process); cf.
 Battery Recyclers, 208 F.3d at 1056 (holding that "all we can say with
certainty is that at least some of the secondary material EPA seeks to
regulate" is not discarded)." API II, 216 F.3d at 56.

The D.C. Circuit in ABR, indeed, criticized EPA for saying that any
placement on the ground regardless of how long it was stored before
reinsertion into the production process was prohibited because the
material is discarded.  ABR at 208 F.3d at 1051 (material "placed on the
ground for only a few minutes before being put back into the production"
would be subject to RCRA).  This by no means says that any storage
whatsoever of recycled material is not subject to RCRA.

In this rule, EPA has made every effort to make material subject to its
regulations only if it is discarded.  Thus, this regulation takes a very
different approach from that taken in the rules reviewed in AMC I and
ABR.  Any placement on the land will not result in material being
considered a waste, only material placed on the land not in accordance
with conditions directly related to discard.  This explanation,
summarized above in this response and in the discussion in the
rulemaking record, deals directly with discard and is consistent with
the D.C. Circuit's discussion of that term.  Land-based storage is by no
means prohibited, but material stored on the land so that it is
carelessly released to the environment is hardly undiscarded material.

EPA appreciates the comment's discussion of land-based storage and
expects that the companies involved will ensure that when such storage
involves hazardous secondary materials reclamation that it complies with
the conditions of this regulation for ensuring that material is not
discarded.  However, again, the comments persist in misinterpreting the
case law.  The important point is that ABR did not hold that storage
before reclamation, even on the land, automatically makes materials
"discarded" or not 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).  The court just as readily noted:

"Some mineral processing secondary materials covered under the Phase IV
Rule may not proceed directly to an ongoing recycling process and may be
analogous to the sludge in AMC II.  The parties have presented this
aspect of the case in broad abstraction, providing little detail about
the many processes throughout the industry that generate residual
material of the sort EPA is attempting to regulate under RCRA."  Id.

Land-Based Unit Defined As Discarded - Response

EPA disagrees with commenters' claim that under this proposal some
reclaimed hazardous secondary material would be defined as “discarded"
only because it is managed in a land-based unit.  On the contrary, the
exclusion at 40 CFR 261.4(a)(23) specifically states that hazardous
secondary materials reclaimed under the control of the generator are not
solid wastes when managed in a land-based unit, as long at the material
is contained and is not speculatively accumulated.  Again, hazardous
secondary material that is not contained (e.g., that causes soil and
groundwater contamination) is not "destined for recycling" or "recycled
in a continuous process."  It is not the management in a land-based unit
that would cause such materials to be considered hazardous waste, it is
the lack of containment.

Containment in Land-Based Unit Lacks Basis - Response

However, EPA agrees with comments that state that the recycling study of
environmental problems includes both hazardous secondary materials
managed in land-based units and in non-land-based units.   While many of
the damages were from hazardous secondary materials managed in
land-based units (e.g., uncontrolled waste piles), and the fact that
many hazardous secondary materials are more likely to enter the
environment if they are in direct with the ground, some damages did
occur in units that might be considered non-land-based units (e.g.,
piles on concrete pads).  By specifying in the March 2007 supplemental
proposal 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 the final rule, rather than deleting the containment provision
for land-based unit, EPA is instead requiring that hazardous secondary
materials must be contained whether it is managed in land-based units or
non-land-based units, thus properly identifying the hazardous secondary
materials that are not being discarded and, therefore, are not solid
wastes.  Again, hazardous secondary material that is not contained
(e.g., that causes soil and groundwater contamination) is not "destined
for recycling" or "recycled in a continuous process."  It is not the
management in a land-based unit that would cause such materials to be
considered hazardous waste, it is the lack of containment.

Containment Should not Apply to Heap Leaching Or Other Production Units
- Response

In response to comments questioning whether the final rule exclusions
would apply to mining and mineral processing production units, or to the
use of secondary materials as part of these production operations, EPA
notes that the final rule exclusions only apply to hazardous secondary
material, which are defined as a "secondary material (e.g., spent
material, by-product or sludge) that, when discarded, would be
identified as hazardous waste under part 261 of this chapter."  The
final rule also does not affect existing solid waste exclusions.  If a
material wouldn't otherwise be identified as hazardous waste, or has
already been determined to not be discarded under other regulatory
provisions, then the final rule exclusions would not be relevant.
Commenters should consult their authorized state or EPA Regional
enforcement office for case-specific questions, which are outside the
scope of the final rule.

Trade Press Article - Response

Finally, in response to the comment quoting a trade press article, this
article refers to the official's use of the "vernacular" and EPA here
takes up the media's of the term.  The rulemaking record provides
extensive discussion of the use of "reasonable efforts" condition and
why it is a reasonable and appropriate indicator of discard and that is
the official Agency position.  This discussion is the basis for the
Agency's determination regarding discard under RCRA.  Mr. Dellinger was
simply using the "vernacular" to make it clear that a company official
may not simply raise the defense that his company did not dump the
material into the environment, but another company to which it shipped
the material actually did.  That is a poor defense to the claim that
discard did not occur - particularly if the company made no effort to
ensure that proper recycling would happen.  EPA stands by its
explanation of the condition in the rulemaking record, as well as Mr.
Dellinger's use of the "vernacular” in the context of a discussion
with a member of the public press.

<IP_ADDRESS> - Reasonable efforts and discard

<IP_ADDRESS> - Summary

EPA Lacks Authority To Impose Reasonable Efforts - Comments

Two commenters argued that EPA lacks the authority under RCRA to impose
the "reasonable efforts" conditions.  One commenter asserted that EPA
lacks the authority to subject facilities to requirements or conditions
when using secondary materials in production operations that are never
discarded.  The other commenter argued that it is tantamount to a
requirement to conduct due diligence on the recycling facility.  Nothing
in the legislative history of the statute or the subsequent court
decisions on the definition of solid waste yield any hint of such
authority.  Even CERCLA does not require due diligence. Instead,
concerns about liability, shareholder interest, and the marketplace
drive the need for companies to conduct such due diligence activities in
the absence of any regulatory requirement to do so.

Allowing these current market and business influences to guide companies
in conducting due diligence has worked well. Many companies already
audit their potential recyclers to ensure that the facilities receiving
materials meet the company's minimum expectations.   The potential
liabilities associated with sending hazardous secondary materials to
facilities ill-equipped to recycle the materials are sufficiently high
so as to render a regulatory requirement on environmental due diligence
unnecessary.  Commenters believe that EPA should delete this condition.

[0481-10, 0481-61, 0525-3]

Reasonable Efforts Linked to Prerequisites for a Lawful Exclusion from
the Definition Of Solid Waste - Comment

One commenter stated that the reasonable efforts condition is directed
at what they consider the two essential prerequisites for a lawful
exclusion from the definition of solid waste that have evolved from the
court cases: legitimate recycling that is not discard, and protection of
human health and the environment.  See, e.g., Safe Food and Fertilizer
v. EPA, 350 F.3d 1263 (D.C. Cir. 2003).

[0558-33]

<IP_ADDRESS> - Response

EPA Lacks Authority To Impose Reasonable Efforts - Response

EPA disagrees with comments stating that the Agency does not have the
authority to impose a "reasonable efforts" condition on generators
transferring hazardous secondary materials to a third party for
reclamation.  EPA has concluded, based on its studies of the recycling
industry, that it is a reasonable exercise of its discretion to include
the reasonable efforts condition in this rule.  The Agency rejects the
viewpoint, so often expressed, that there is a particular set of
conditions that may be imposed under the statute to determine whether a
material is discarded.  The cases allow EPA to use reasonable and
appropriate conditions to identify materials that are not discarded.
EPA does not wish to belabor this point further.  Moreover, even though
market forces and business influences can be expected to guide companies
in conducting due diligence, the studies EPA has conducted indicate that
there will be companies that will manage hazardous secondary materials
in a way that results in discard and thus that the conditions and
restrictions included in the final rule are appropriate to identify
those materials that are not discarded.

In fact, in contradiction of the idea that market and business
influences will properly guide companies, 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 the final rule preamble and comment responses elsewhere in this
response to comment document), 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 that 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 260.43
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 are a critical component of many of the
transactions in 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 the regulation appropriately indicates that hazardous
secondary materials generated by companies who take this type of
responsibility are not being discarded.

In response to the comment that stated that nothing in the legislative
history of the statute or the subsequent court decisions on the
definition of solid waste indicates the RCRA provides authority to
require due diligence, EPA notes that the reasonable effort requirement
is an appropriate condition that identifies material that is not
discarded.    Generators who do not wish to perform reasonable efforts
can either not claim the exclusion or can send their hazardous secondary
materials to a RCRA permitted or interim status facility.

The argument, common among some of the comments to this rule, that EPA
lacks any authority to impose conditions on materials that are never
discarded begs the ultimate question to be decided with respect to
secondary materials that are reclaimed.  The mere assertion that
material is not discarded does not make it so.  This argument is that
same the was made by industry in API II and was soundly rejected by the
D.C. Circuit.  Specifically, the court stated the following:

"Industry petitioner CMA makes one argument, premised solely on Chevron
step one. CMA argues that EPA has no authority to regulate any
petrochemical recovered oil under any circumstances because such
materials are not "discarded."  The reasonableness of the conditions
adopted by EPA as part of its exclusions are not challenged because, in
CMA's opinion, no such conditions may be imposed.

This Chevron plain meaning argument fails because EPA is correct that
abandoning a material is discarding even if labeled recycling.  EPA is
not violating AMC I's definition of discard.  To the contrary, the
premise of EPA's rule is sound precisely because it is meant to regulate
only discarded materials.  EPA can regulate material "discarded" through
sham recycling even though it cannot regulate under RCRA materials that
are not discarded.  Speculatively accumulated recovered oil is a clear
example of a condition imposed under the exclusion which shows that some
petrochemical recovered oil can indeed be considered as discarded.  Even
if, assuming for the sake of argument, the rule's many conditions might
incidentally regulate oil containing chemicals not caused by sham
recycling (and therefore not discarded), that is beyond the claim we
consider today.  Presumably a refiner in a specific case could attempt
to show that additional chemicals in the oil are not a product of
adulteration, not discarded, and outside EPA's authority to regulate
such material under RCRA.  We therefore deny CMA's petition as to
petrochemical recovered oil."  216 F.3d at 59.

Accordingly, the proper objections to EPA's conditions would be to argue
that they are not reasonable indicia of discard, or there is no
opportunity to show that material is, in fact, not discarded.  In this
rule EPA has explained why the conditions imposed are reasonable indicia
of discard and there would be ample opportunity in enforcement
proceedings for companies to show that their material is, in fact, not
discarded.

EPA also notes that the concept is not unique; the Superfund Recycling
Equity Act (SREA), Section 127 of CERCLA, 42 U.S.C. § 9627, exempts
certain persons who "arranged for recycling of recyclable materials"
from liability for arranging for disposal under Sections 107(a)(3) and
107(a)(4) when, among other things, they have exercised reasonable care
to determine whether a recycling facility is in compliance with all
applicable environmental laws. 42 U.S.C. § 127(c)(5).  Furthermore,
there are numerous CERCLA cases in which persons have sent material for
recycling and have been held to be arrangers for disposal because the
recyclers have handled material improperly resulting in a Superfund site
being created.  Courts generally evaluate whether the shipper either had
control over the process or knowledge of potential disposal, or whether
the shipper was actually sending a commodity to be recycled.  See,
Morton International, Inc. v. A.E. Staley Manufacturing Co., 343 F.3d
669 (3rd Cir. 2003) (CERCLA liability for a company that sent material
for mercury processing that became a Superfund site; liability did not
depend on ownership or possession alone); Cadillac Fairview/California,
Inc. v. United States, 41 F.3d 562 (9th Cir. 1994) (liability for
recycling of sulfur tar bottoms); Catellus Development Corp. v. United
States, 34 F.3d 748 (9th Cir. 1994) (liability for recycling of
automotive batteries); United States v. Montana Refining Co., 1994 U.S.
App. LEXIS 22633, (9th Cir. Aug. 17, 1994) (confirming Catellus,
remanding PolyCarb); United States v. PolyCarb, Inc., 951 F. Supp. 1518
(D. Nev. 1996) (liability for sending caustic for reclamation); Chatham
Steel Corp. v. Brown, 858 F. Supp. 1130 (N.D. Fla. 1994) (liability for
sale for recycling of spent batteries); California v. Summer Del Caribe,
Inc., 821 F. Supp. 574 (N.D. Cal. 1993) (liability for recycling of
solder dross produced as a by product of manufacturing process);
Chesapeake & Potomac Tel. v. Peck Iron & Metal, 814 F. Supp. 1269 (E.D.
Va. 1992) (liability for recovery of lead from used batteries);  United
States v. Pesses, 794 F. Supp. 151 (W.D. Pa. 1992) (sellers of scrap
metal to a reprocessor); United States v. A & F Materials, 582 F. Supp.
842 (S.D.Ill. 1984) (liability for caustic solution produced in the
course of the manufacture of jet aircraft to a company which used it to
neutralize acidic oil); but see Pneumo Abex Corp. v. High Point,
Thomasville and Denton R.R. Co., 142 F.3d 769 (4th Cir. 1998) (used rail
car bearings were commodities and recyclers paid a competitive price).
The CERCLA cases show that arrangers cannot turn a blind eye to the
activities of the reclaimer, and through the reasonable efforts
condition, today's rule echoes that same principle.  See, Catellus
Development Corp. v. United States, 34 F.3d 748, 752 (9th Cir. 1994)
(rejecting the argument of a company that it could not be liable as an
arranger under CERCLA because it sent materials released to the
environment to be recycled because such a formulation "would allow
defendants to simply 'close their eyes' to the method of disposal of
their hazardous substances, a result contrary to the policies underlying
CERCLA"); accord United States v. Aceto Agr. Chemicals Corp., 872 F.2d
1373, 1382 (8th Cir. 1989).   There is no CERCLA case, nor would we
expect one in the future, where courts simply said that a material sent
for recycling is not a RCRA solid waste without examining the conditions
under which the material was sent. The fact is that a person who sends
material for recycling will, in fact, become an arranger for disposal if
that person does not comply with the regulations established today and
does not make reasonable efforts to ensure that material will be
responsibly recycled.

Reasonable Efforts Linked to Prerequisites to a Lawful Exclusion from
the Definition Of Solid Waste - Response

While EPA agrees with the comment that the reasonable efforts condition
is directed at the issue of identifying legitimate recycling that is not
discard, EPA disagrees with the comment that Safe Food designated
protection of human health and the environment as an "essential
prerequisite" to a lawful exclusion from the definition of solid waste.
In the regulation challenged in Safe Food, EPA had determined that
certain recycled materials used to make zinc fertilizers and the
fertilizers themselves are not solid wastes so long as they are not
speculatively accumulated and meet certain handling, storage and
reporting conditions and (in the case of the fertilizers themselves)
have concentration levels for lead, arsenic, mercury, cadmium, chromium,
and dioxins that fall below specified thresholds.  350 F.3d at 1265.

These conditions would mean that the recycled materials have not been
"discarded" as RCRA defines the term.  These conditions would apply to a
number of materials not produced in the fertilizer production industry,
including electric arc furnace dust generated in steel production,
commonly known by its RCRA designation "K061."  350 F.3d at 1266.

The court rejected the argument that, as a matter of plain meaning,
recycled material destined for immediate reuse within an ongoing
industrial process is never considered "discarded," whereas material
that is transferred to another firm or industry for subsequent recycling
must always be solid wastes.  350 F.3d at 1268.  Instead, the court
determined "whether the agency's interpretation of ... 'discarded' . . .
is, reasonable and consistent with the statutory purpose," by evaluating
the validity of EPA's explanation that market participants treat the
exempted materials more like valuable products 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.  350 F.3d at 1269.

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."  The market-participation theory
was not challenged.  Thus, it left open the possibility that market
participation could, by itself, lead to classification of a material as
not being a solid waste.  Id.

The court only determined whether the combination of market
participation and "identity" is enough to establish that the recycled
fertilizers are not "discarded."  The question, therefore, was whether
the identity principle, when used in conjunction with indicators like
market valuation and management practices, is a reasonable tool for
distinguishing products from wastes.  The court found that it is.  Id.
Thus, the court left open issues whether market valuation or management
practices, alone, is/are reasonable to distinguish products from wastes.

The remainder of the opinion discusses whether EPA's analysis that the
levels of contaminants in the recycled products were "identical" to the
products made with virgin materials when contaminant levels in the
recycled products were sometimes considerably higher.  350 F.3d at
1269-72.

The court determined that it could affirm EPA's determination if, based
on the Agency's analysis of health and environmental risks, the
differences are so slight as to be substantively meaningless.  The court
found that "the apparent differences in the EPA's exclusion ceilings and
the contaminant levels in the virgin fertilizer samples lose their
significance when put in proper perspective--namely, a perspective based
on health and environmental risks."  Those who argue that a risk
assessment is required latch on to the word "proper" to argue that a
risk assessment is always required.  The court made no such
determination.  It only decided that in this case a risk assessment
analysis was proper.  In fact for non-dioxin contaminants the court did
not demand as detailed a risk assessment.

While Safe Food does not require a risk assessment of the environmental
and health effects of recycling of materials that are not wastes, there
are certain indications in the court's opinion that show how the Agency
may evaluate certain aspects of risk.  For example, in Safe Food under
the identity principle the court indicated that comparison of levels
would be appropriate between products made from raw materials and
products made from recycled materials.  Further, if there were an
apparent discrepancy between the products, the Agency could examine
relative risks.  The degree of analysis, however, would depend on the
circumstances in particular cases.  Note that the analysis of dioxin,
chromium and other substances varied depending on the relationship of
the levels in the different products.  Furthermore, there are various
places in this rule where EPA has chosen to consider whether discard
occurs that have some relationship to risk.  For example, material is
discarded if it is stored in a way that is not contained, residuals have
to be managed so they are not improperly released to the environment,
and legitimacy factors have to consider whether in some circumstances
the recycling is merely an excuse for disposing of unwanted toxic
materials.

<IP_ADDRESS> - Financial assurance and discard

<IP_ADDRESS> - Summary

Two commenters asserted that EPA lacks authority under RCRA to impose
financial assurance requirements on facilities using secondary materials
in production operations which are never discarded. They believe that
this condition does not define the absence of discard and would
effectively impose a waste management requirement upon a non-waste.
[0481-65, 0492-43]

<IP_ADDRESS> - Response

EPA disagrees with comments stating that the Agency lacks the authority
to impost financial assurance requirements on third-party facilities
accepting excluded hazardous secondary material intended for recycling.
 EPA's record for today's rulemaking demonstrates that third-party
recycling of hazardous secondary materials has been and continues to be
part of the waste disposal problem, and, without the conditions being
finalized today, these hazardous secondary materials would be solid
wastes. Of the 208 damage cases in EPA's study of environmental problems
associated with post-RCRA, post CERCLA hazardous secondary materials
recycling, 94% appeared to take place at commercial off-site facilities.
Moreover, EPA's study of how market forces impact recycling demonstrates
that these damages are consistent with our understanding of how the
business model for commercial recycling can lead to sub-optimal results.
As opposed to manufacturing, where the cost of inputs, either raw
materials or intermediates, is greater than zero and revenue is from the
sale of the output, recycling conducted by commercial hazardous
secondary materials recyclers involves generating revenue from receipt
of the hazardous secondary materials, as well as from the sale of
output. Recyclers of hazardous secondary materials in this situation can
have a short-term incentive to accept more hazardous secondary materials
than they can economically or safely recycle, resulting in the hazardous
secondary materials eventually being discarded.

The financial assurance condition for the transfer-based exclusion is
directly linked to this situation. By obtaining financial assurance, the
owner or operator of the reclamation facility is making a direct
demonstration that it will not abandon the hazardous secondary material.
Of the 208 damage cases, 69 (or 33%) were primarily caused by
abandonment of the hazardous secondary material by the recycler. None of
69 facilities whose damages were primarily caused by abandonment had
financial assurance.

Under the transfer-based exclusion, financial assurance is the means by
which the recycler demonstrates an investment in the future of the
recycled materials; even if the market changes in such a way that the
recycler can no longer process the hazardous secondary materials, by
obtaining financial assurance, it has made certain that the hazardous
secondary materials will not be abandoned and therefore not discarded.
EPA therefore disagrees with the comment that the financial assurance
condition is not related to discard of the material.

Moreover, financial assurance also addresses the correlation of
financial health of a reclamation facility with the absence of discard
of hazardous secondary materials. According to the successful recycling
study, an examination of a company's finances is an important part of
many of the environmental audits generators currently use to determine
that their hazardous secondary materials will not be discarded. In
addition, the environmental problems study showed that bankruptcies or
other types of business failures were associated with 138 (66%) of the
damage cases, and the market forces study identified a low net worth of
a firm as a strong indication of a sub-optimal outcome of recycling
(i.e., over-accumulation of hazardous secondary materials, resulting in
releases to the environment and abandonment of hazardous secondary
materials).

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

<IP_ADDRESS> - "Generator-controlled" and discard

<IP_ADDRESS> - Summary

Some commenters objected to some provisions of the
"generator-controlled" exclusion, arguing that they are unrelated to
discard.

Commenters asserted that the generator's written certification included
in the proposed definition of "hazardous secondary material generated
and reclaimed under the control of the generator" in 40 CFR §260.10
does not change the fact that the materials are being recycled and hence
are not "solid wastes;" this requirement amounts to impermissible
regulation of non-discarded material. [0518-5, 0537-16]

One commenter also argued that the limitation under the
generator-controlled exclusion that material must be generated and
reclaimed within the United States or its Territories has nothing to do
with whether material is actually discarded, and it therefore makes
little sense as part of the RCRA definition of solid waste.  Instead,
this limitation appears to reflect a concern that EPA might have trouble
scrutinizing recycling scenarios involving materials that are either
generated or reclaimed abroad.  This concern, however, would seem to be
misplaced.  EPA has the ability to require any information it needs from
the in-country facility involved in the recycling activity, and such a
facility would have the burden of showing that it really is recycling
the material at issue (or sending it to be recycled, as the case may
be).  EPA could then pursue enforcement if material supposedly being
reclaimed is not.  There is therefore no need - or legal basis - to
treat material as "discarded" just because it happens to cross an
international boundary. [0537-17]

<IP_ADDRESS> - Response

EPA disagrees with comments that the Agency does not have the authority
to impose the certification requirements provided in the definition of
"hazardous secondary material generated and reclaimed under the control
of the generator" in 40 CFR §260.10.

In the case of same-company recycling, EPA's rationale for extending the
"under the control of the generator" exclusion to such situations was
that 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. However, due to existing complexities in corporate
structure, ownership and liability, defining "same company" in a way
that ensures that the generation and recycling of the hazardous
secondary material is under the control of the generator is not
possible. The certification is needed to clarify the responsibilities of
the generator and reclaimer and help regulatory authorities determine
whether a facility was eligible for this exclusion.  Thus the generating
facility must certify that it controls the reclaiming facility, or that
the generating facility and the reclaiming facility are under common
control. In addition, the generator must certify that either the
generating facility or the reclaiming facility acknowledges full
responsibility for the proper management of the hazardous secondary
materials, thus demonstrating the material is not discarded.

In the case of certain tolling operations, EPA has determined 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.

The certification requirement is therefore needed in this case to
demonstrate that a facility is eligible for an exclusion under a tolling
contract.  The tolling contractor must certify that it has a written
contract with the toll manufacturer to manufacture a product or
intermediate which is made from virgin materials specified by the
tolling contractor, and that the tolling contractor will reclaim the
hazardous secondary materials generated during the course of this
manufacture. The tolling contractor must also certify that it retains
ownership of, and responsibility for, the hazardous secondary materials
that are generated during the course of the manufacture, including any
releases of hazardous secondary materials that occur during the
manufacturing process, thus demonstrating that he continues to take
responsibility and maintain control of the process as a whole and the
material has not been discarded.

EPA also disagrees with comments that argue that the limitation under
the generator-controlled exclusion that material must be generated and
reclaimed within the United States or its Territories has nothing to do
with whether material is actually discarded.  Because hazardous
secondary materials that are exported for recycling pass 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, EPA does
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 under the
control of the generator and not being discarded.

<IP_ADDRESS> - Speculative accumulation and discard

<IP_ADDRESS> - Summary

Some commenters agreed with EPA's proposal to include a prohibition on
speculative accumulation in the final rule exclusions.  Commenters said
that the concept is sound and it makes sense to use the definition that
has been in EPA's rules for many years, as EPA proposes to do.
Commenters also agreed that speculative accumulation is a reasonable
condition that relates to "discard" and that these are reasonable
conditions with which the regulated community is very familiar.

[0179-16, 0491-3]

Other commenters, while not opposing the prohibition on speculative
accumulation, would prefer that it be treated as a condition to be
considered in determining if a particular material is in fact being
beneficially reused rather than discarded, but with some flexibility to
allow for specific circumstances that may be involved. For example, if a
secondary material is being used as a legitimate and valuable feedstock
in the production of products, effectively substituting for, and thereby
conserving, virgin materials, the Agency should be less concerned with
whether something less than 75% of the inventory present on January 1
has been used during a given year.  Under demonstrated adverse market
conditions, this should not result in the remaining material being
classified as a waste, so long as a legitimate market still exists.

[0093-28, 0203-10]

One commenter (who commented both in 2003 and 2007) objected to the
imposition of speculative accumulation on the mining and mineral
processing industry.  The commenter recognizes that at some point in
time, if a material being stored for use is not actually used, it may
cross the line of discard and become abandoned or disposed of and also
understand that EPA has long used the definition of speculative
accumulation in 40 C.F.R. Q 261.l(c)(8) to identify the relevant point
in time, and this definition has worked well for a wide variety of
industries.  However, given the operational realities of the primary
metals and minerals industry, the commenter believes that EPA's current
speculative accumulation rules are too restrictive for this industry,
and provided specific examples, including furnace bricks and reverts
from copper smelters.  The commenter urges EPA to specify that materials
within this industry are "in process" during the first year after their
production; only after the one-year period should materials start to be
subject to a speculative accumulation "clock."

[0152-10, 0481-12, 0481-70, 0481-71]

<IP_ADDRESS> - Response

In response to comments on the speculative accumulation provisions in
the final rule, EPA notes that 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.

EPA agrees with comments that state that the speculative accumulation
provision is a reasonable condition that relates to "discard" and with
which the regulated community is very familiar.   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 are 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, 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 characteristic
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.

EPA disagrees with comments that request that the restriction be treated
as a "condition to be considered" in determining if a particular
material is in fact being beneficially reused rather than discarded
instead of a strict restriction, and with comments that say the mining
and mineral processing industry should have more flexibility than other
industrial sectors in implementing speculative accumulation provisions.
 EPA believes that the existing variance process in 40 CFR 260.31(a) is
adequate for dealing with those cases where materials are accumulated
speculatively when the facility can demonstrate that sufficient amounts
of the material will be recycled in the following year

2.1.6 - Conditions in the proposal are not sufficient to protect against
discard and must be strengthened

2.1.6 - Summary

Commenters argue that before EPA can lawfully claim that excluded
materials are not discarded, the Agency would need to strengthen the
conditions to protect human health and the environment.  Commenters
argue that EPA cannot lawfully determine that hazardous materials are
not discarded prior to recycling if the conditions are not adequate to
protect human health and the environment.  Safe Food and Fertilizer v.
EPA, 350 F.3d 1263, 1268 (D.C. Cir. 2003) (court upheld EPA rule that
excluded hazardous materials used to make zinc fertilizers, provided
conditions were met that ensured the excluded materials would "not
endanger human health or the environment."). Commenters assert that the
minimal conditions in the proposal are not sufficient to protect against
discard and must be strengthened.  Commenters note that in the Damage
Case Study, EPA identified 208 damage cases that are post-RCRA and
Superfund.  The practices documented in these damage cases need to be
addressed by protective management standards in the final rule.

[0558-1, 0559-33]

Commenters also argue that EPA's proposed rule, which exempts excluded
hazardous wastes from any of RCRA's stringent handling, transportation,
and storage requirements, is inconsistent with Congress' intent that
hazardous wastes would be strictly regulated.  The statutory scheme of
RCRA makes clear that Congress intended to regulate not just the
ultimate disposal, but also the management, of hazardous wastes. See 42
U.S.C. § 6901(5) ("[T]he placement of inadequate controls on hazardous
waste management will result in substantial risks to human health and
the environment.").  A primary purpose of RCRA is to avoid the expense
of remediation by applying prior controls.  See id. §§ 6901(6) ("[I]f
hazardous waste management is improperly performed in the first
instance, corrective action is likely to be expensive, complex, and time
consuming."); 6902(a)(4)&(5) ("The objectives of this chapter are to
promote the protection of health and the environment and to conserve
valuable material and energy resources by - assuring that hazardous
waste management practices are conducted in a manner which protects
human health and the environment; [and] requiring that hazardous waste
be properly managed in the first instance thereby reducing the need for
corrective action at a future date.").

To effectuate these goals, Congress set forth the hazardous waste
management requirements that would apply to generators, transporters,
and treatment, storage, and disposal facilities.  Generators and
transporters were expected to properly store and ship hazardous wastes
and to maintain comprehensive records regarding the types and amounts of
such wastes.  As a matter of statute, for example, Congress required EPA
to develop regulations for a manifest system "and any other means
necessary to assure that all such hazardous waste generated is
designated for treatment, storage, or disposal in, and arrives at [TSD]
facilities." 42 U.S.C. § 6922(a)(5). EPA was also directed to establish
regulations governing the appropriate type of containers used for
hazardous waste storage and transport, labeling of the containers, and
detailed recordkeeping practices.  42 U.S.C. §§ 6922(a); 6923(a).
Congress clearly considered the manner in which wastes were held and
shipped, pending their ultimate treatment or disposal, of the utmost
importance.

When Congress passed RCRA in 1976 and the Hazardous and Solid Waste
Amendments of 1984, it evidenced a deep concern with the problems
presented by improper hazardous waste disposal on land. It expressly
found that certain classes of land disposal facilities were "not capable
of assuring long-term containment of certain hazardous wastes, and
[that] to avoid substantial risk to human health and the environment,
reliance on land disposal should be minimized or eliminated, and land
disposal, particularly landfill and surface impoundment, should be the
least favored method for managing hazardous wastes."  42 U.S.C. §
6901(b)(7); see also H.R. Rep. No. 94-1491 (1976), reprinted in 1976
U.S.C.C.A.N. 6238, 6241 (expressing belief that Congress was
"eliminat[ing] the last remaining loophole in environmental law, that of
unregulated land disposal of discarded materials and hazardous wastes.")

Accordingly, Congress imposed extremely stringent restrictions on the
handling, treatment, storage, and disposal of hazardous wastes so as to
protect against contamination of the land.  For example, Congress
enacted sharp restrictions on a wide range of previously-used land
disposal practices, including open dumping, 42 U.S.C. § 6902(a)(3), the
use of salt domes for waste disposal, 42 U.S.C. § 6924(b), and the
placement of liquid hazardous waste directly in a landfill, 42 U.S.C. §
6924(c).  In the 1984 amendments, Congress supplemented these
restrictions with the "land ban" requirements, described above, in which
Congress imposed "sweeping restrictions on the land disposal of
hazardous waste" by prohibiting landfill and surface impoundment
disposal of such waste unless its hazardous constituents are first
treated or the waste is disposed of in "no migration" facilities.  42
U.S.C. §§ 6924(d), (e), (f), (g), (m); Battery Recyclers, 208 F.3d at
1050; API I, 906 F.2d at 733.

Congress further addressed with remarkable specificity the criteria that
hazardous waste disposal facilities must satisfy in order to accept
waste.  As a matter of statute, for example, each such facility must,
among other things, use two liners and a leachate collection system, and
provide for groundwater monitoring and leak detection, in addition to
complying with requirements set by EPA. 42 U.S.C. § 6924(o). Such
detailed requirements for hazardous waste disposal amply demonstrate
Congress's desire to protect against contamination of the land.

Commenters believe that EPA's proposed regulation flies in the face of
these concerns.  They believe that EPA has forsaken the statute's
emphasis on preventative hazardous waste management in favor of
after-the fact enforcement and remediation. Compare 42 U.S.C. §
6902(a)(5) (One objective of RCRA is "requiring that hazardous wastes be
properly managed in the first instance thereby reducing the need for
corrective action at a future date.").  EPA has abandoned Congress'
directive that wastes be tracked from the point of generation to the
point of disposal "to assure that all such hazardous waste  arrives at
[TSD] facilities," 42 U.S.C. § 6922(a)(5), for a voluntary system of
compliance, based on the unsupported belief that the wastes' value will
guarantee their safe handling.  EPA's view also defies logic. In the
vast majority of instances, generators are paying to get rid of the
substances EPA refuses to call 'waste."  The wastes in this instance may
have some value, but for many recyclers, their profit is made by the
removal of these wastes from the generators.  Thus the belief that the
"value" of the wastes to the recycler will prevent their mismanagement
and disappearance is ill-founded.

Commenters also noted that EPA identified 208 damage cases that are
post-RCRA and Superfund.  Commenters believe this large number of damage
cases justifies the need for management standards  In particular,
commenters expressed concern with the large number of damage cases
related to over-accumulation and abandonment (33 percent) and damage
cases related to mismanagement of recycling residuals (also 33 percent).
 72 FR 14181 col 2.  Commenters stated that practices documented in
these damage cases need to be addressed by protective management
standards in the final rule.

Commenters also stated that EPA must answer why manifests are not
necessary to track shipments to other firms and industries in order to
ensure that the material is actually recycled and not illegally
disposed.  Recall the court's admonition that EPA must reconcile its
interpretation of discard with "RCRA's acknowledged objective to
establish a cradle-to-grave regulatory structure for the safe handling
of hazardous wastes." API I, 906 F.2d at 741 (internal quotes omitted),
citing United Technologies Corp. v. EPA, 821 F.2d 714, 716 (D.C. Cir.
1987). EPA must answer why storage of hazardous secondary materials
prior to recycling should not be conducted in facilities with financial
assurance for closure and cleanup, in order to prevent the creation of
more bankrupt contaminated recycling sites as documented in these
comments. EPA must answer how environmental protection is assured if
generators no longer face Superfund liability for mismanagement of
materials that EPA has by rule redefined as "commodity-like" and not
wastes, as discussed further below.  EPA must answer why hazardous
secondary materials can be stored with no tank or container standards,
no training of employees, no inspections of storage areas, no
contingency plan for accidents, and no other protective standards. These
are serious concerns from the perspective of health and environmental
risk that receive scant or no attention in the proposed rule.  One
commenter noted that in the 2007 proposal, EPA said that excluding all
hazardous secondary materials destined for recycling "seems inconsistent
with the mandate to track hazardous wastes and control them from 'cradle
to grave.'"  (72 FR 14176)

Lastly, commenters argue that the proposed exclusion, combined with the
"legitimate recycling" criteria, thwarts Congress' goals of eliminating
unregulated land disposal of hazardous wastes. EPA proposes to allow
storage of hazardous wastes on the ground -ostensibly both at the point
of generation and recycling - so long as analogous raw materials are
also stored on the ground. Storage of wastes in open piles would not be
prohibited, nor would storage in containers not specifically designed to
contain hazardous wastes.

[0119-81, 0231-30, 0231-31, 0558-7, 0559-33, 0559-35, 0564-17]

2.1.6 - Response

Commenters argue that before EPA can lawfully claim that excluded
materials are not discarded, the Agency would need to strengthen the
conditions to protect human health and the environment.  Commenters
argue that EPA cannot lawfully determine that hazardous materials are
not discarded prior to recycling if the conditions are not adequate to
protect human health and the environment.  Safe Food and Fertilizer v.
EPA, 350 F.3d 1263, 1268 (D.C. Cir. 2003) (court upheld EPA rule that
excluded hazardous materials used to make zinc fertilizers, provided
conditions were met that ensured the excluded materials would "not
endanger human health or the environment."). Commenters assert that the
minimal conditions in the proposal are not sufficient to protect against
discard and must be strengthened.  Commenters note that in the Damage
Case Study, EPA identified 208 damage cases that are post-RCRA and
Superfund.  The practices documented in these damage cases need to be
addressed by protective management standards in the final rule.

[0558-1, 0558-33]

Commenters also argue that EPA's proposed rule, which exempts excluded
hazardous wastes from any of RCRA's stringent handling, transportation,
and storage requirements, is inconsistent with Congress' intent that
hazardous wastes would be strictly regulated.  The statutory scheme of
RCRA makes clear that Congress intended to regulate not just the
ultimate disposal, but also the management, of hazardous wastes. See 42
U.S.C. § 6901(5) ("[T]he placement of inadequate controls on hazardous
waste management will result in substantial risks to human health and
the environment.").  A primary purpose of RCRA is to avoid the expense
of remediation by applying prior controls.  See id. §§ 6901(6) ("[I]f
hazardous waste management is improperly performed in the first
instance, corrective action is likely to be expensive, complex, and time
consuming."); 6902(a)(4)&(5) ("The objectives of this chapter are to
promote the protection of health and the environment and to conserve
valuable material and energy resources by - assuring that hazardous
waste management practices are conducted in a manner which protects
human health and the environment; [and] requiring that hazardous waste
be properly managed in the first instance thereby reducing the need for
corrective action at a future date.").

To effectuate these goals, Congress set forth the hazardous waste
management requirements that would apply to generators, transporters,
and treatment, storage, and disposal facilities.  Generators and
transporters were expected to properly store and ship hazardous wastes
and to maintain comprehensive records regarding the types and amounts of
such wastes.  As a matter of statute, for example, Congress required EPA
to develop regulations for a manifest system "and any other means
necessary to assure that all such hazardous waste generated is
designated for treatment, storage, or disposal in, and arrives at [TSD]
facilities." 42 U.S.C. § 6922(a)(5). EPA was also directed to establish
regulations governing the appropriate type of containers used for
hazardous waste storage and transport, labeling of the containers, and
detailed recordkeeping practices.  42 U.S.C. §§ 6922(a); 6923(a).
Congress clearly considered the manner in which wastes were held and
shipped, pending their ultimate treatment or disposal, of the utmost
importance.

When Congress passed RCRA in 1976 and the Hazardous and Solid Waste
Amendments of 1984, it evidenced a deep concern with the problems
presented by improper hazardous waste disposal on land. It expressly
found that certain classes of land disposal facilities were "not capable
of assuring long-term containment of certain hazardous wastes, and
[that] to avoid substantial risk to human health and the environment,
reliance on land disposal should be minimized or eliminated, and land
disposal, particularly landfill and surface impoundment, should be the
least favored method for managing hazardous wastes."  42 U.S.C. §
6901(b)(7); see also H.R. Rep. No. 94-1491 (1976), reprinted in 1976
U.S.C.C.A.N. 6238, 6241 (expressing belief that Congress was
"eliminat[ing] the last remaining loophole in environmental law, that of
unregulated land disposal of discarded materials and hazardous wastes.")

Accordingly, Congress imposed extremely stringent restrictions on the
handling, treatment, storage, and disposal of hazardous wastes so as to
protect against contamination of the land.  For example, Congress
enacted sharp restrictions on a wide range of previously-used land
disposal practices, including open dumping, 42 U.S.C. § 6902(a)(3), the
use of salt domes for waste disposal, 42 U.S.C. § 6924(b), and the
placement of liquid hazardous waste directly in a landfill, 42 U.S.C. §
6924(c).  In the 1984 amendments, Congress supplemented these
restrictions with the "land ban" requirements, described above, in which
Congress imposed "sweeping restrictions on the land disposal of
hazardous waste" by prohibiting landfill and surface impoundment
disposal of such waste unless its hazardous constituents are first
treated or the waste is disposed of in "no migration" facilities.  42
U.S.C. §§ 6924(d), (e), (f), (g), (m); Battery Recyclers, 208 F.3d at
1050; API I, 906 F.2d at 733.

Congress further addressed with remarkable specificity the criteria that
hazardous waste disposal facilities must satisfy in order to accept
waste.  As a matter of statute, for example, each such facility must,
among other things, use two liners and a leachate collection system, and
provide for groundwater monitoring and leak detection, in addition to
complying with requirements set by EPA. 42 U.S.C. § 6924(o). Such
detailed requirements for hazardous waste disposal amply demonstrate
Congress's desire to protect against contamination of the land.

Commenters believe that EPA's proposed regulation flies in the face of
these concerns.  They believe that EPA has forsaken the statute's
emphasis on preventative hazardous waste management in favor of
after-the fact enforcement and remediation. Compare 42 U.S.C. §
6902(a)(5) (One objective of RCRA is "requiring that hazardous wastes be
properly managed in the first instance thereby reducing the need for
corrective action at a future date.").  EPA has abandoned Congress'
directive that wastes be tracked from the point of generation to the
point of disposal "to assure that all such hazardous waste  arrives at
[TSD] facilities," 42 U.S.C. § 6922(a)(5), for a voluntary system of
compliance, based on the unsupported belief that the wastes' value will
guarantee their safe handling.  EPA's view also defies logic. In the
vast majority of instances, generators are paying to get rid of the
substances EPA refuses to call 'waste."  The wastes in this instance may
have some value, but for many recyclers, their profit is made by the
removal of these wastes from the generators.  Thus the belief that the
"value" of the wastes to the recycler will prevent their mismanagement
and disappearance is ill-founded.

Commenters also noted that EPA identified 208 damage cases that are
post-RCRA and Superfund.  Commenters believe this large number of damage
cases justifies the need for management standards  In particular,
commenters expressed concern with the large number of damage cases
related to over-accumulation and abandonment (33 percent) and damage
cases related to mismanagement of recycling residuals (also 33 percent).
 72 FR 14181 col 2.  Commenters stated that practices documented in
these damage cases need to be addressed by protective management
standards in the final rule.

Commenters also stated that EPA must answer why manifests are not
necessary to track shipments to other firms and industries in order to
ensure that the material is actually recycled and not illegally
disposed.  Recall the court's admonition that EPA must reconcile its
interpretation of discard with "RCRA's acknowledged objective to
establish a cradle-to-grave regulatory structure for the safe handling
of hazardous wastes." API I, 906 F.2d at 741 (internal quotes omitted),
citing United Technologies Corp. v. EPA, 821 F.2d 714, 716 (D.C. Cir.
1987). EPA must answer why storage of hazardous secondary materials
prior to recycling should not be conducted in facilities with financial
assurance for closure and cleanup, in order to prevent the creation of
more bankrupt contaminated recycling sites as documented in these
comments. EPA must answer how environmental protection is assured if
generators no longer face Superfund liability for mismanagement of
materials that EPA has by rule redefined as "commodity-like" and not
wastes, as discussed further below.  EPA must answer why hazardous
secondary materials can be stored with no tank or container standards,
no training of employees, no inspections of storage areas, no
contingency plan for accidents, and no other protective standards. These
are serious concerns from the perspective of health and environmental
risk that receive scant or no attention in the proposed rule.  One
commenter noted that in the 2007 proposal, EPA said that excluding all
hazardous secondary materials destined for recycling "seems inconsistent
with the mandate to track hazardous wastes and control them from 'cradle
to grave.'"  (72 FR 14176)

Lastly, commenters argue that the proposed exclusion, combined with the
"legitimate recycling" criteria, thwarts Congress' goals of eliminating
unregulated land disposal of hazardous wastes. EPA proposes to allow
storage of hazardous wastes on the ground -ostensibly both at the point
of generation and recycling - so long as analogous raw materials are
also stored on the ground. Storage of wastes in open piles would not be
prohibited, nor would storage in containers not specifically designed to
contain hazardous wastes.

[0119-81, 0231-30, 0231-31, 0558-7, 0559-33, 0559-35, 0564-17]

EPA disagrees that the restrictions to the under the control of the
generator exclusions or the conditions we are requiring for the
transfer-based exclusion are inadequate. Each of the restrictions and/or
conditions is specifically linked to defining when the hazardous
secondary materials are not discarded and to ensuring that the
regulatory authority has the information needed to oversee the
exclusion. Because of these restrictions and conditions, the hazardous
secondary materials are not solid waste and therefore are not subject to
the Subtitle C hazardous waste regulations.  EPA also points out that it
is not making its finding on discard solely based on the "value" of the
recycled material.  "Value" is one aspect of the Agency's findings and,
contributes to the ultimate determination that materials complying with
the conditions and restrictions of this regulation are not discarded.
EPA acknowledges that materials that have become discarded and are later
shown to have "value" are still wastes when recycled.  This rule,
however, deals with materials that have not been discarded in the first
instance.

Specifically, for hazardous secondary materials reclaimed under the
control of the generator, the fact that the generator maintains control
and liability for the hazardous secondary materials, either by managing
them on-site, within the same company, or under a specific tolling
contract, is itself an indication that the materials are not discarded.
The prohibition on speculative accumulation (as defined in 261.1(c)(8)),
addresses both the situation in which a large percentage of the
hazardous secondary material is accumulated over the year without being
recycled and the situation where there is no feasible means of recycling
the hazardous secondary material, regardless of volume. Finally, the
requirement that the hazardous secondary materials must be contained in
the unit recognizes the reality that hazardous secondary materials that
are released to the environment are discarded.

For hazardous secondary materials transferred to another party for
reclamation, the fact that the generator is required to make reasonable
efforts to ensure that its hazardous secondary materials are properly
and legitimately reclaimed demonstrates that the generator is not simply
disposing of the material, but instead is taking responsibility that the
hazardous secondary materials will be recycled. In addition, by
maintaining a record of each shipment and a confirmation of receipt, the
generator demonstrates that it continues to take responsibility for
knowing the ultimate disposition of its hazardous secondary materials.
Furthermore, by obtaining financial assurance, the reclamation facility
demonstrates that it has also taken on the responsibility to ensure that
the hazardous secondary materials will not be abandoned in the event
that circumstances make it impossible for the facility to reclaim the
hazardous secondary materials. For further discussion of how these and
other restrictions and/or conditions of the exclusions are linked to
defining when hazardous secondary materials are not discarded, see
sections V,VII-IX and XVI-XVIII of the final rule preamble. Support for
the Agency's determination regarding which materials are not discarded
is also found throughout the rulemaking record in this proceeding.

EPA also disagrees that specifying further engineering conditions, such
as secondary containment, liners, and leak detection systems, is needed
to determine which hazardous secondary materials are not being
discarded. The restrictions EPA has established and the conditions that
EPA is finalizing today address a variety of hazardous secondary
materials and reclamation operations that are linked to defining the act
of discard, rather than specifying a particular technology that may not
be appropriate in some cases.

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

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

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

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

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

While EPA agrees that the results of the environmental problems study do
indicate a need for certain conditions, the Agency believes that the
final rule conditions address the finding of the study.  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.

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.

Specific Legal Issues

1.  The essential response to these comments is that EPA has issued
reasonable conditions and restrictions on reclaimed material to ensure
that it will not become a solid waste.   However, the Agency also
responds to the misconceptions and misinterpretations expressed in the
comments.  To the overall viewpoint that the regulations are
inconsistent with Congress' intent to impose strict requirements on
hazardous wastes responds that the case law has been equally clear that
Congress has also limited EPA to the regulation of solid wastes -
material that has been disposed of, abandoned or thrown away.  See, AMC
I and ABR.  Citation to provisions regarding hazardous waste regulation
only begs the question as to whether material is a solid waste in the
first instance.  None of the provisions cited by comments on this rule
changes the statutory structure and the need to determine whether
material is a solid waste.  Comments are merely recycling old arguments
that have been previously rejected by the courts.

2.  The comments are plainly incorrect that the Safe Food case requires
a determination by EPA that material will "not endanger human health or
the environment."  In the regulation challenged in Safe Food, EPA had
determined that certain recycled materials used to make zinc fertilizers
and the fertilizers themselves are not solid wastes so long as they are
not speculatively accumulated and meet certain handling, storage and
reporting conditions and (in the case of the fertilizers themselves)
have concentration levels for lead, arsenic, mercury, cadmium, chromium,
and dioxins that fall below specified thresholds.  350 F.3d at 1265.

These conditions would mean that the recycled materials have not been
"discarded" as RCRA defines the term.  These conditions would apply to a
number of materials not produced in the fertilizer production industry,
including electric arc furnace dust generated in steel production,
commonly known by its RCRA designation "K061."  350 F.3d at 1266.

The court rejected the argument that, as a matter of plain meaning,
recycled material destined for immediate reuse within an ongoing
industrial process is never considered "discarded," whereas material
that is transferred to another firm or industry for subsequent recycling
must always be solid wastes.  350 F.3d at 1268.  Instead, the court
determined "whether the agency's interpretation of ... 'discarded' . . .
is, reasonable and consistent with the statutory purpose," by evaluating
the validity of EPA's explanation that market participants treat the
exempted materials more like valuable products 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.  350 F.3d at 1269.

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."  The market-participation theory
was not challenged.  Thus, it left open the possibility that market
participation could, by itself, lead to classification of a material as
not being a solid waste.  Id.

The court only determined whether the combination of market
participation and "identity" is enough to establish that the recycled
fertilizers are not "discarded."  The question, therefore, was whether
the identity principle, when used in conjunction with indicators like
market valuation and management practices, is a reasonable tool for
distinguishing products from wastes.  The court found that it is.  Id.
Thus, the court left open issues whether market valuation or management
practices, alone, is/are reasonable to distinguish products from wastes.

The remainder of the opinion discusses whether EPA's analysis that the
levels of contaminants in the recycled products were "identical" to the
products made with virgin materials when contaminant levels in the
recycled products were sometimes considerably higher.  350 F.3d at
1269-72.

The court determined that it could affirm EPA's determination if, based
on the Agency's analysis of health and environmental risks, the
differences are so slight as to be substantively meaningless.  The court
found that "the apparent differences in the EPA's exclusion ceilings and
the contaminant levels in the virgin fertilizer samples lose their
significance when put in proper perspective--namely, a perspective based
on health and environmental risks."  Those who argue that a risk
assessment is required latch on to the word "proper" to argue that a
risk assessment is always required.  The court made no such
determination.  It only decided that in this case a risk assessment
analysis was proper.  In fact for other non-dioxin contaminants the
court did not demand as detailed an analysis of how the products made
from raw materials differ from those made with recycled materials.

3. EPA also disagrees with comments that argue the burden is on the
Agency to prove lack of necessity of hazardous waste requirements.  EPA
has determined material is not a solid waste in the first instance, for
a number of reasons all of which show that material is treated as a
commodity not as a waste.  If the material is not treated as a commodity
in the first instance, it becomes subject to RCRA.  The Agency has no
obligation to prove the need NOT to impose any particular hazardous
waste requirement, such as manifests, financial assurance, closure,
assurance of environmental protection, training of employees, and
contingency plans.  Moreover, the suggestion by comments that many
occasions of serious releases to the environment from recycling
activities occurred after RCRA and CERCLA became law does not argue for
imposing stricter hazardous waste regulations, but does argue for
enforcement of existing regulations - as well as arguing for strict
enforcement of these new regulations on the definition of solid waste.
EPA believes that the regulations promulgated today will be no less
protective of public health and the environment that restrictive command
and control hazardous waste regulations.

4.  EPA takes strong issue with the comments that argue that generators
do not face Superfund liability for mismanagement of materials that EPA
has by rule redefined as "commodity-like" and not wastes,  The fact is
that, if the material is mismanaged, Superfund liability does not
change.  If the original generator of the material has made reasonable
efforts to determine that the recycler(s) will recycle responsibly, we
should not be expecting those generators to be liable under CERCLA as
arrangers for disposal.  Nor does EPA believe that they would be liable
under CERCLA in any event.  Under current law, if the generator of a
material that could become a CERCLA hazardous material released to the
environment and knew or should have known that the material could be
released, the generator would still be liable as an arranger for
disposal.

5.  EPA strongly disagrees with the comment that this rule allows
unrestricted storage on the land.  EPA has, in fact, promulgated
provisions that land storage must be contained.  There is no need to
belabor this point.

2.2 - Other matters of consistency of regulation with court rulings and
statutory responsibilities

2.2 - Summary

EPA received several miscellaneous issues relating to consistency of the
proposed revisions with court rulings and statutory responsibilities:

(1) Commenter does not agree with EPA's statement in the 2003 proposal
that "such an on-site recycling exclusion would not be based on the
direction of the D.C. Circuit Court." 68 Fed. Reg. at 61575. Rather, the
court's decisions prescribe what recycling is clearly outside of EPA's
jurisdiction, not the limits of EPA's jurisdiction. Any confusion on
this issue ought to now be resolved by Safe Food & Fertilizer. [0091-20]

(2) Commenter is concerned that the current regulatory structure
presents substantial disincentives to achieving the Nation's resource
conservation and recovery goals enunciated in RCRA. 42 U.S.C. § 6902]
Careful revision of the definition of solid waste can correct this error
by conforming the regulations EPA seeks to modify in this proposal to
the policy Congress established in the Pollution Prevention Act of 1990
(42 U.S.C. § 13101 (b)): that the recycling of industrial secondary
materials be given precedence over treatment and disposal of them.  This
rulemaking presents an opportunity to correct these regulatory glitches
and create the incentives to recycle that Congress clearly intended in
these two statutes. [0093-3]

(3) Commenter requests that the final rule include a more detailed
explanation of EPA's current understanding of its statutory authority
and the statutory meaning of "discarded material" in light of the recent
court rulings. This explanation needs to go further than the one
included in the October 28,2003 preamble to the proposed rule. This
requested articulation of statutory authority should explain how each
regulatory exemption or exclusion relates to statutory authority. In
other words, for each exemption or exclusion, please indicate that is it
either: a statutory solid waste but not a regulatory solid waste, or
neither a statutory or regulatory solid waste. For example, the statute
defines sludge as a solid waste but the regulations do not regulate
characteristic sludge being reclaimed as a solid waste. The existing
regulations and the proposed amendments both place conditions and
requirements (e.g., notification) on materials that are not regulatory
solid waste; where does the authority come from to place a requirement
on the management of a material that is not a solid waste? It would
obviously have to come from the statute or it could not be enforced.
[0171-11]

(4) Commenter asserts that the preamble to the proposal suggests that
the rulemaking is a response to decisions of the U.S. Court of Appeals
for the DC Circuit.  However, the Agency fully responded to these
decisions on March 13, 2002, when the Agency removed the byproduct and
sludge provisions of the 1998 mineral processing exclusion.  67 FR
11251.  The courts did not require any further action by EPA, and the
Agency should not imply that this rulemaking is anything other than an
exercise of the Bush Administration's policy preferences. [0343-3]

2.2 - Response

In response to several miscellaneous issues relating to consistency of
the proposed revisions with court rulings and statutory
responsibilities:

(1) The comment on EPA's language regarding on-site recycling in the
2003 proposal has been overtaken by events.  In the March 2007
supplemental proposal, EPA determined that if the generator maintains
control over the recycled hazardous secondary material (including
maintaining control by recycling the material on-site), 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, and the material is contained, 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. Thus, the generator's maintaining control over, and
potential liability for, the recycling process, are among the factors
that would ensure that the hazardous secondary materials are not
discarded.

Certainly, on-site recycling may or may not be recycling of a waste. See
API II discussion of "oil-bearing wastewater", 216 F.3d at 55-58.  In
API II the court discussed whether recycling of this wastewater was part
of production or part of waste treatment.  The court was unable to reach
a conclusion, but for in that case the fact that recycling was done
on-site and, presumably, under the control of generator were irrelevant
for purposes of determining whether material was a waste or not.  The
applicable inquiry was whether the wastewater was discarded.   For
purposes of this rule generator control, including on-site recycling,
has relevance but it is not controlling.

The comment is correct to the extent that AMC I and ABR do not describe
the limits of EPA's jurisdiction, but only those materials, generally,
that are clearly outside of RCRA jurisdiction.  In addition, EPA agrees
with the comment's citation to Safe Food to the extent that the D.C.
Circuit cases do not limit EPA's ability to define solid wastes only to
materials recycled within an industry and, thus, materials shipped to
another industry may not be solid wastes also.

(2) One reason EPA is issuing this rule is to encourage recycling.  It
seems likely, moreover, that all parties can agree that safe recycling
ought to be encouraged.  However, it is clear that parties have very
divergent views as to what constitutes safe recycling.  The Agency
intends by issuing this final rule it will comport with the policy of
encouraging safe recycling.

(3) EPA agrees that the 2003 proposal lacked a carefully considered
discussion of the meaning of discard under RCRA.  The Agency believes
that the Supplemental Proposal and the final rule have remedied this
problem.  The final rule explains how the conditions and restrictions on
the handling of various materials subject to the exclusion relate to
whether the material is discarded or not.  The Agency points out that
only "discarded" material may be considered a solid waste and that the
case law states that material is a solid waste only if it is discarded.
Any restrictions or conditions imposed by this final regulation relates
to the determination whether a material is discarded and the rulemaking
record discusses the relationship to discard for every condition or
restriction.

(4) EPA's position is that this rulemaking was prompted by the various
decisions of the D.C. Circuit.  There is no requirement imposed by the
courts to issue this rule, nor has the Agency implied there is such a
requirement.

2.2.1 - 2003 proposal inappropriately "parses" the court decision and is
not linked to discard

2.2.1 - Summary

Commenters assert that in the 2003 proposal, EPA improperly "parses"
prior D.C. Circuit Decisions to support its proposal. In the
redefinition of solid waste proposal, as was the case with the provision
in the Phase IV Land Disposal Restriction (LDR) Rule that was at issue
in the ABR litigation, EPA improperly parses language in a prior D.C.
Circuit decision to justify its proposed exclusion. A brief discussion
of the Phase IV Rule is instructive.

In the Phase IV LDR Rule, EPA regulated as "solid waste" and, if
exhibiting a "hazardous" waste characteristic, as "hazardous" wastes
mineral processing "secondary materials" that were "generated and
reclaimed within the primary mineral processing industry," unless
exclusionary criteria from the definition of "solid waste" were
satisfied. See 63 Fed. Reg. at 28,637-638. In particular, mineral
processing "secondary materials" that met EPA's definitions as "spent
materials," "sludges," and "by-products" were "solid" wastes when
reclaimed, unless the mineral processor stored the materials in tanks,
containers, buildings or on approved pads prior to recycling. Id. EPA
concluded that placement of these materials directly on the land prior
to recycling, regardless of how brief the land placement, would cause
the materials to become "discarded" and, as such, regulated as "solid
wastes." Id.

In promulgating this provision, EPA cited to prior D.C. Circuit
decisions as authority to conclude that the decisions "absolutely bar
the agency from treating secondary materials as 'discarded' if and only
if 'reclamation is continuous in the sense that there is no interdiction
in time - i.e., materials moving from one step of a recovery process to
another without a break in the process, as for storage.'" ABR, 208 F.3d
at 1052 (citing 63 Fed. Reg. at 28,581). Further, EPA cited to the same
decisions to assert that "continuous" meant "immediate reuse." Id.
According to the D.C. Circuit, in vacating EPA's regulation of these
recycled materials as "solid wastes":

EPA reads, or rather misreads, these passages to mean that it may treat
secondary materials as 'discarded' whenever they leave the production
process and are stored for any length of time. For one thins, "the
language of an opinion is not always to be parsed as though we were
dealing with language of a statute."

208 F.3d at 1052 (internal citations omitted).

In crafting the proposed exclusion in the redefinition of solid waste
proposal, EPA limits the exclusion to materials that "are generated and
reclaimed in a continuous process within the same industry." 68 Fed.
Reg. at 61,560. This limitation on the scope of the exclusion mirrors
language in a prior D.C. Circuit decision wherein the Court stated:

In sum, our analysis of the statute reveals clear Congressional intent
to extend EPA's authority only to materials that are truly discarded,
disposed of, thrown away, or abandoned [and] these materials have not
yet become part of the waste disposal problem; rather they are destined
for beneficial reuse or recycling in a continuous process by the
generating industry itself.

AMC, 824 F.2d at 1190, 1186. Thus, it is clear that, contrary to the
D.C. Circuit's admonition in the ABR decision, EPA again parses the
Court language to justify a proposed exclusion that runs afoul of RCRA.
EPA must comply with the plain language of the statute and only regulate
"discarded" materials.

The Court's "big picture" message to the Agency was that it had no
authority over materials until they were ready for discard, as that word
is commonly understand. The "specific" message relevant to the material
streams under litigation included acknowledgement that those particular
streams were not discarded because they were used in a continuous
process within the same generating industry.  EPA did not mean for the
Agency to assume that only those materials used in a continuous process
within the same generating industry escaped the definition of discard.

Commenters also note that, for the paragraph in AMC I where the court
used the oft-quoted phrase "by the generating industry itself."  824
F.2d at 1186, EPA seems to construe these few words as authority for the
broad regulatory framework of the proposed rule that excludes all
hazardous secondary materials reclaimed by any facility "within the same
industry."  However, the paragraph from the court's opinion belies EPA's
interpretation. The court said:

[I]t seems clear that EPA need not regulate "spent" materials that are
recycled and reused in an ongoing manufacturing or industrial process.11
[Footnote 11 states in part: "we fail to see how not regulating
in-process secondary materials in an on-going production process will
subvert RCRA's waste disposal management goals."]  These material have
not yet become part of the waste disposal problem; rather, they are
destined for beneficial reuse or recycling in a continuous process by
the generating industry itself.

AMC I, 824 F.2d at 1185-86. Taken as a whole, in context, and read
carefully, the court's opinion was plainly referring to the type of
immediate reuse of "in-process" materials in the generator's "on-going
production process" represented by the mineral processing operations
that served as the "factual backdrop" of the case.  There is no reason
to believe that the court intended its opinion to be broader than the
facts.  Indeed, the court said in API II, 216 F.3d at 56, that it did
not rule on any of the other factual situations presented in industry's
briefs in AMC I, and thus the court expressly declined to issue a
broader ruling.  The court has also twice warned EPA against parsing
individual words in its opinions. AMC I, 824 F.2d at 1183 n.6; ABR, 208
F.3d at 1049.  Yet EPA again falls into the trap of treating the words
"continuous process" and "within the generating industry" from the
court's opinions "as if they were statutory terms in need of a
regulatory definition."  208 F.3d at 1049. Indeed, that is exactly what
EPA has done in the proposed rule, rather than paying attention to the
court's reasons and full discussion.

Most importantly, the court in Safe Food held that material transferred
to another firm or industry may be considered "discarded," if the
material "can reasonably be considered part of the waste disposal
problem."  350 F.3d at 1266. The word "may" is also critical, because
the court held that RCRA does not compel the conclusion that such
materials are per force discarded.  EPA has discretion, provided "the
agency's interpretation of 'discarded' is permissible, that is,
reasonable and consistent with the statutory purpose." Id., citing
American Mining Congress v. EPA, 907 F.2d 1179, 1186-87 (D.C. Cir. 1990)
(AMC II) (internal ellipses and quotation marks omitted).  In the end,
in determining whether materials shipped by the producer to another
company within the same or different industry for recycling should be
considered discarded, "[t]he answer depends on the EPA's reasons."  Id.

[0086-4, 0087-5, 0093-5, 0093-13, 0102-18, 0112-2, 0119-4, 0197-2,
0211-1, 0481-25]

2.2.1 - Response

EPA generally agrees with this comment and has changed the thrust of the
October 2003 to focus on excluding materials from regulation that are
not "discarded."  As a result, in 2007 the Agency decided to restructure
the 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.  However, as expressed elsewhere in this Response to
Comment document and in the rulemaking record, there is no reason to
assume that the principles in ABR only apply to the mineral processing
industry or that all recycling activities in that industry are somehow
excluded from the definition of solid waste.  The court has said as much
by noting that some recycling in the industry is covered under RCRA and
some is not.  ABR, 208 F.3d at 1056.  In fact, EPA believes that, by
imposing particular restrictions and conditions to determine which
materials are wastes or not, the Agency has remedied the disappointment
of the court in parties presenting the details of the many processes
involved in the industry in "broad abstraction."  Moreover, as noted by
the comment on Safe Food, EPA has not limited the definition of solid
waste determination to intra-industry transfers.

3 - Recycling Studies

3 - Summary

Commenters noted that in contrast to EPA's 2003 proposed rulemaking
concerning the definition of solid waste, the Agency this time around
has produced data on the state of the hazardous waste recycling
industry. In fact, EPA cites three reports to support its proposed
action.  These reports were generated in response to allegations in 2003
that EPA had no rational basis for its October 28, 2003 proposed
rulemaking (72 FR 14178). In 2003, the Sierra Club, among other
commenters, pointed out that EPA had not examined the potential
environmental and economic impacts of a large-scale deregulation of
hazardous waste. Id.  Thus, in response, EPA produced the following
three reports, "An Assessment of Environmental Problems Associated with
Recycling of Hazardous Secondary Materials," "An Assessment of Current
Good Practices for Recycling of Hazardous Secondary Materials" and
"Potential Effects of Market Forces on the Management of Hazardous
Recyclable Materials" (72 FR 14179).

Commenters state that, while EPA claims that these reports "have
informed many of the Agency's policy decisions in developing this
regulatory proposal," (72 FR 14179) it is clear that EPA has ignored the
fundamental import of these studies. Commenters also assert that the
Agency seems to highlight only that data and information that would
support an effort to broaden the exclusion from the definition of solid
waste.  In addition, commenters stated that EPA's conclusions often
overreach, pushing proposed exclusions into areas beyond what can be
considered true recycling.  Finally, commenters were concerned that EPA
based its proposal on reports that are "not definitive, peer-reviewed
documents of a technical nature."

[0548-20, 0559-6]

3 - Response

EPA disagrees with comments that state that the Agency has only
highlighted information that would support broadening an effort to
exclude hazardous secondary material from the definition of solid waste
and otherwise ignores the import of the studies.  On the contrary, EPA
presented extensive information on environmental damages that have
resulted from recycling hazardous secondary materials in the 2007
supplemental proposal (72 FR 14180 - 14182) and has used this
information in developing appropriate conditions for the exclusions in
the final rule.

While the documents are based on publicly available information and are
not designed to be statistically representative, the information in the
reports has shown that (1) some companies, even today, fail to properly
recycle their hazardous secondary materials, resulting in hazardous
secondary materials becoming discarded and posing risk to human health
and the environment, and (2) many generators take specific actions to
ensure that their hazardous secondary materials are properly recycled.
While EPA is unable to use the information to estimate how often these
two events occur, the information is still adequate for EPA to (1)
determine that conditions are needed to define those situations where
discard does not occur, and (2) use industry's best practices to inform
the development and definition of those conditions.

3.1 - Successful recycling study

3.1 - Summary

(1) Commenters speaking generally about the successful recycling study
stated that many of the practices mentioned in the study have been in
place in the mining and mineral processing industry and that, in another
industry, recycling is what makes the operations economically viable.
(465, 481, 506)

(2) ISRI commented that their standard, RIOS, was misidentified in the
good recycling study and is called "Recycling Industry Operating
Standard," not "Recycling Industries' Operating Standard." Likewise,
another standard of theirs is called "OSHAS 18001," not "OSHA 18001."
ISRI stated that RIOS can help facilities with meeting consumer
standards and complying with environmental and health and safety
regulation. (518)

3.1 - Response

(1) EPA agrees that it believes that many of the practices outlined in
the good practices study are in place already at many facilities,
including those in the industries mentioned.

(2) EPA did not update the good recycling study and, therefore, did not
make the changes requested by ISRI in their comment, but appreciates the
corrections.

3.1.1 - Scope of successful recycling study

3.1.1 - Summary

(1) The container reconditioning industry commented that they are
disappointed not to be mentioned in the study. (513)

(2) One other commenter had several comments about the scope of the good
practices study. They argue that the examples of "successful" recycling
practices in the study arose in direct response to the Agency's
regulatory programs under RCRA but the Agency is using their existence
to justify the removal of those regulations, "dismantling" the
protective structure and that this logic is circular. They add that the
Agency should consider that the presence of regulations and expected
audits may be the primary motivation behind the behavior of
"responsible" companies. (481)

Commenters state that the Agency assumes in its study that because some
large corporations have "corporate responsibility" programs, all
generators will manage their hazardous secondary materials in exemplary
ways despite its recognition that "the real effects of these policies
are hard to gauge." They argue that the existence of some such programs
(not quantified by Agency) does not explain why Agency thinks 100% of
secondary materials it proposes to exclude will continue to be carefully
managed once the regulatory incentives are gone and that people will be
more irresponsible, unconcerned with any penalties. (548)

Finally, they comment that it would have been useful if EPA had
researched enforcement actions taken against "less responsible"
companies. (548)

3.1.1 - Response

(1) EPA recognizes that there are examples of responsible management of
recyclable materials throughout industry and that it did not include all
possible examples of these behaviors in its study.

(2) EPA agrees that the exact effects of corporate responsibility
programs are hard to gauge, but thinks that collectively the practices
outlined in the good recycling study were useful in informing EPA's
decisions about appropriate conditions for its exclusion. EPA does think
that looking at a company's corporate responsibility programs is a way
to gauge that company's general attitude and approach towards
environmental responsibility as a whole and can be useful in developing
a more complete picture of that company's environmental ethic and
likelihood to have environmentally responsible practices in place.

EPA addressed the behaviors of "less responsible" recyclers in its study
of environmental problems.

3.1.2 - Methodology of successful recycling study

3.1.2 - Summary

One commenter stated that they thought it would have been useful if the
Agency had looked at less-responsible companies as well in its study of
good recycling practices to determine what role regulations play in a
company's decision to have good recycling practices and suggests that in
the absence of full Subtitle C regulation, companies will no longer
perform these practices. (548)

3.1.2 - Response

EPA responds that it believes that the intent behind a company's
decision to have good recycling practices is not relevant to how the
good practices study was used in the development of this rulemaking. The
study was intended to help EPA determine which kinds of regulatory
requirements would be appropriate and effective conditions for its
exclusions, not to predict what behaviors would occur if all regulatory
controls were lifted. Specifically, the Agency sought the kinds of
practices a company employs to ensure the responsible management its
hazardous materials. In addition, the Agency has incorporated many of
the good practices it found as a result of this study into the
conditions of the rulemaking and, therefore, is confident that
facilities currently using these practices will continue to do so even
if they can take advantage of the exclusion from the definition of solid
waste.

3.1.3 - Findings of successful recycling study

3.1.3 - Summary

Agrees With Study Findings

(1) Several comments stated that they agree with the study's findings
that generators do perform audits that the audits are essential for the
generator to determine if materials are actually being recycled, and
that the audits typically cover the items discussed in the study. One
commenter added that companies with good practices also often have
control mechanisms for tracking materials and another agreed with the
study's discussion of Environmental Management Systems (EMS) and stated
that they are evidence of good recycling practices. (457, 481, 507, 558)

(2) Several commenters also agreed with the study's finding that the
responsible management practices that have developed for management of
hazardous secondary materials are in part because of the incentives of
CERCLA liability. RCRA liability and concerns about corporate
responsibility also have played a role. (60, 436, 481, 507)

Disagrees With Study Findings

(3) Several commenters stated that the good recycling practices study
focused mainly on larger companies and that its findings are not
applicable to smaller companies. Specifically, the commenters stated
that smaller companies are less likely to do environmental audits of
their recyclers, to know how their material will be reclaimed, to
understand the severity of Superfund liability and balance it properly
against the costs of proper waste management, to have a public
environmental policy, or to make decisions about management of their
materials based on the value of the material rather than on the
regulatory requirements. (495, 521, 536, 564)

(4) Commenters disagreed with EPA's assumptions and representations
about what motivates generators to manage materials in one way or
another. In particular, one commenter stated that short-term cost
savings play a very large role in the decision-making process and
another argued that the value of a material is much less important than
environmental regulation, particularly for small generators. (509, 521,
532, 564)

(5) On the other hand, one commenter stated that EPA should add to its
findings that a core function of a recycling audit is the generator
examining the recycling process to ensure it is legitimate. (507)

Study Shows Why We Need Regulations

(6) Several commenters argued that the findings of the good recycling
practices study demonstrate the value and importance of the hazardous
waste regulations instituted in the early 1980s because they have
resulted in oversight and may be the primary motivator for the current
good practices illustrated in the study. Commenters specifically
mentioned the value of financial assurance at reclamation facilities and
liability and one pointed out that generators of non-hazardous waste do
not tend to conduct audits, so under the exclusions similar behavior may
occur. One commenter followed up on this point by arguing that EPA
should not, therefore, be using the good practices study as a
justification for the exclusions for materials reclaimed under the
control of the generator and for materials transferred for reclamation.
(457, 470, 479, 548, 564)

(7) In addition, one commenter stated that the argument that recyclers
manage materials responsibly because of CERCLA liability and concerns
about corporate responsibility and public relations is invalid because
if that were the case, there would never be any violations of
environmental regulations. (532)

Study Shows Why We Do Not Need Regulation

(8) Alternatively, commenters also argued that the findings of the good
recycling practices study demonstrate that hazardous waste regulations
are not necessary because of CERCLA liability and a reclaimer's other
concerns discussed in the study, such as corporate reputation.
Specifically, the commenters stated that permits for reclaimers,
financial assurance, and reasonable efforts are unnecessary as
conditions of the exclusion because generators already examine these
topics voluntarily in audits. One commenter stated that they were
unaware of any cases of environmental irresponsibility regarding
characteristic sludges and by-products, although they have been excluded
from the definition of solid waste since 1985, meaning the materials
covered by the exclusions should not need regulation either. (93, 465,
468, 518)

Other

(9) One commenter argued that the case study on electronics recycling in
the good practices study is not applicable to most of the waste
scenarios being impacted by the rule. (479)

(10) One commenter stated that the good practices study presented CHWMEG
as being the "answer" for how generators were going to do reasonable
efforts, but argued that this is not the case because reclaimers cannot
belong to CHWMEG. (479)

(11) One commenter, in discussing a generator's general decision about
whether to recycle or not, stated that that concerns about CERCLA and
corporate image are not what drives companies to recycle, it is
economics. (482)

3.1.3 - Response

(1) & (2) EPA appreciates the statements from commenters who agree with
the findings of the study of good recycling practices that reconfirm
some of the study's findings.

(3) EPA agrees that the focus on larger companies is a feature of the
study and discusses it in the methodology section of the report's
introduction. Because many of the contacts for interviews for the report
came out of the public comments on the October 2003 proposed rule, much
of the information in the report came from companies large enough to
have staff responsible for submitting public comments to federal
proposed rulemakings. However, where possible and appropriate, the study
does examine the options for small businesses, as well as what small
businesses are doing that approximates the audit programs and other
practices of larger companies. The Agency did find that many small
companies are concerned with questions of liability in their hazardous
secondary materials recycling and often either belong to auditing
consortiums or already do smaller audits by mail and telephone if they
cannot afford to set up visits to the recycling facilities to examine
them in person.

(4) EPA responds to this comment about generators' motivations by
stating that the motivations the commenter describes most likely do play
a role in some generators' decision-making, depending on the industry
and the nature of the materials managed. EPA maintains, however, that
regardless of these intents or motivations, the usefulness of this study
to the development of the rulemaking is unchanged.

(5) EPA appreciates this suggestion and agrees that an examination of
legitimacy is a good use of an audit, but did not update the findings to
its study.

(6) EPA responds that it does not use the good recycling practices study
as justification for removing regulation but, rather, looked to the
study to determine which conditions are the most appropriate for the
exclusion. EPA notes that, for example, financial assurance, mentioned
by the commenter as valuable, was one of the behaviors that EPA found
important and is a condition of the exclusion.

(7) EPA disagrees that the statement that "recyclers manage materials
responsibly because of CERCLA liability and concerns about corporate
responsibility and public relations" is invalid and believes that the
existence of violations of environmental regulations by some handlers of
hazardous materials does not mean that no one behaves for the reasons
outlined in the study.

(8) EPA does not agree that the study indicates that no regulatory