that may impact how hazardous secondary materials meet the relevant
criteria, that such changes be considered by the regulatory authority
to ensure that those criteria continue to be met. Codifying this
requirement would help ensure clarity and consistency by providing an
administrative procedure for reconsidering a variance in the event that
the hazardous secondary material no longer meets the relative criteria
for the variance.
2. Proposed Re-Notification Requirement
    The second proposed change to 40 CFR 260.33 is to require
facilities receiving variances or non-waste determinations to re-notify
EPA or the State Director, if the state is authorized for this aspect
of the rule, every two years by March 1 of each even-numbered year and
to notify within 30 days of stopping management of hazardous secondary
materials under the variance or non-waste determination using EPA Form
8700-12 in compliance with 40 CFR 260.42. The current process cannot
track variances or non-waste determinations at a national level and
over time. This lack of tracking can lead to state-to-state
inconsistency in determinations because one state cannot easily access
information regarding similar determinations made by another state. Two
commenters expressed specific concern over this inconsistency, arguing
that variations in stringency can drive jobs out of more-stringent
states and into less-stringent states. These commenters argued that
more detailed or restrictive criteria and EPA oversight are necessary
to ensure that non-waste determinations are issued consistently across
states. One of the commenters also recommended increasing transparency
by making the non-waste determinations available online. Additionally,
lack of tracking inhibits effective oversight of facilities receiving
variances and non-waste determinations because it does not provide
regulatory authorities with a mechanism for receiving updated
information.
    Amending the procedures for variances and non-waste determinations
to require re-notification ensures that regulatory authorities are
provided regularly updated information (such as information regarding
quantities of hazardous secondary materials managed under the
determination). Such updating enables better compliance with the
criteria and with any stipulations of the variance or non-waste
determination. Additionally, this information can be used to identify
facilities which may have undergone changes to their reclamation
process significant enough to trigger a review of the determination
under 40 CFR 260.33(c).
    This proposed change is also based on EPA's experience with the
Sec.  260.42 notification requirement. Since the 2008 DSW final rule
became effective on December 29, 2008, EPA has received a number of
notifications from facilities managing hazardous secondary materials
under the generator-controlled and transfer-based exclusion and has
judged the notification provision to have worked well in enabling
regulatory authorities to monitor compliance of the facilities with the
conditions of the exclusions. Regulatory authorities receive
information on the name and location of the facilities operating under
the exclusion and the types and quantities of hazardous secondary
materials the facility is managing, which allows the regulatory
authority to prioritize inspections, as well as create a list of
facilities that would benefit from training and compliance assistance
on the rule.
    Additionally, notification has allowed regulatory authorities to
follow up with facilities that appear to have misunderstood the
regulations. For example, notification allows regulatory authorities to
contact facilities that notified that they were operating under the
exclusions but were, in fact, residing in a state that had not adopted
the 2008 DSW final rule. Notification in these instances allowed
regulatory authorities to identify problems and to intervene

early to prevent potential mismanagement. Based on experience with
receiving notifications under the 2008 DSW final rule, EPA is convinced
of the value of the notification provision in ensuring proper
implementation of its rules and believes that such notification for
variances and non-waste determinations would increase the transparency
and oversight of facilities receiving a variance or non-waste
determination.
    In addition to re-notification, EPA also plans to increase the
transparency of the variance and non-waste determination petition
processes by providing online access to a list of facilities receiving
variances and non-waste determinations, including any supporting
documentation upon which a determination has been made. Ideally, this
Web site would function as a clearinghouse of information so that the
states could use each other's determinations to inform determinations
within their own state borders. EPA believes this sharing of
information would increase consistency in determinations across states.
EPA plans to work with states to develop a process for collecting
information regarding non-waste determinations so that EPA can include
these facilities in its online database.

B. Proposed Revisions to Partial Reclamation Variance

    The ``partial reclamation'' variance at 40 CFR 260.30(c) applies to
materials that have been reclaimed, but must be reclaimed further
before the materials are completely recovered (i.e., ``partial
reclamation''). In turn, 40 CFR 260.31(c) provides the specific
standards that a material must meet in order to be eligible for a
variance from classification as a solid waste.
    Today, the Agency is proposing to revise the partial reclamation
variance provision of 40 CFR 260.31(c) to clarify when partially-
reclaimed materials are not solid waste because they are commodity-
like. The objectives of these proposed revisions are to clarify the
regulatory language, foster consistent application of the variance
criteria, and make clear that the variance should be granted only when
partial reclamation has produced a commodity-like material. EPA's
proposed modifications of 40 CFR 260.31(c) include (1) revising the
introductory text to clarify when the variance applies; (2) revising
the introductory text to require that all of the decision criteria must
be met; (3) revising the language of all of the decision criteria; and
(4) eliminating the sixth criterion ``other relevant factors.''
1. The Current Partial Reclamation Variance Provision
    Under the current regulations, 40 CFR 260.30, 260.31, and 260.33
together provide variance mechanisms for three types of recycled
materials which the Regional Administrator (or State Director, in an
authorized state) may determine, on a case-by-case basis, are not solid
waste if they meet specified criteria. One of the variances, found in
40 CFR 260.30(c), with associated criteria at 40 CFR 260.31(c),
addresses materials that have been partially reclaimed but must be
reclaimed further before the materials are completely recovered. Under
current 40 CFR 260.31(c), the Regional Administrator may grant a
request for a variance for such materials if, after initial
reclamation, the resulting material is commodity-like. The
determination that a partially reclaimed material is commodity-like is
made using the following six factors:
    (1) The degree of processing the material has undergone and the
degree of further processing that is required;
    (2) The value of the material after it has been reclaimed;
    (3) The degree to which the reclaimed material is like an analogous
raw material;
    (4) The extent to which an end market for the reclaimed material is
guaranteed;
    (5) The extent to which the reclaimed material is handled to
minimize loss; and
    (6) Other relevant factors.
    In the preamble to the 1985 Definition of Solid Waste final rule
(January 4, 1985; 50 FR 655) where this provision was promulgated, EPA
stated that ``the Regional Administrator may weigh these factors as she
sees fit, and may rely on any or all of them to reach a decision.''
2. The Intent of the Partial Reclamation Variance
    When the partial reclamation variance provision was promulgated in
1985, EPA's intent was to provide a mechanism for determining that a
hazardous waste had undergone sufficient reclamation (a type of
processing) to produce a material that was more like a commodity than a
solid waste. The variance would be applicable if the material was
commodity-like, even though some further reclamation was required
before the material became a commercial product. EPA intended that the
variance would be applied at the point that the commodity-like material
was produced. After that point, the material would be managed as a
commodity rather than as a solid and hazardous waste. Prior to the
point that partial reclamation produced a commodity-like material, the
material would have to be managed as a hazardous waste.
    The following discussion illustrates how the Agency intended the
variance to work for a typical treatment system involving three
parties: (1) A generator of hazardous waste; (2) a partial reclamation
facility that receives, stores, and partially reclaims the hazardous
waste to produce a commodity-like material; and (3) a final reclaimer,
or end market, that receives the commodity-like material and uses it as
a substitute for products or intermediates in production processes that
involve further reclamation.
    First, the generator would manage and ship the hazardous waste
following all of the applicable hazardous waste regulations, including
waste quantity determinations, accumulation time limits, generator
accumulation technical requirements, and hazardous waste manifest
procedures for shipping. Second, the partial reclamation facility would
receive the hazardous waste under a hazardous waste manifest. The
facility would also have a RCRA permit for management of the hazardous
waste until the point that the partial reclamation process had produced
a commodity-like material.
    Once the partial reclamation process had produced a commodity-like
material, a partial reclamation variance from classification as solid
waste could be granted. Accordingly, management of the commodity-like
material after that point would not be covered by the partial
reclamation facility's RCRA permit. In addition, the partial
reclamation facility would not be required to use a manifest to ship
the commodity-like material to the final reclaimer.
    Finally, the final reclaimer would receive the commodity-like
material from the partial reclaimer without a manifest. The final
reclaimer would not require a RCRA permit for management of the
commodity-like material because the material is not a solid and
hazardous waste.
    The preceding discussion illustrates how the variance would apply
to a typical three-facility, three-step process. However, the critical
point is not how many steps or facilities are involved, but at what
point the partial reclamation process has produced a commodity-like
material as defined by the criteria in 40 CFR 260.31(c). Depending on
the materials and processes in question, this point could occur at
varying steps in the management of a hazardous waste, at varying
facilities where it is managed.

3. Experience With the Current Partial Reclamation Variance Provision
    EPA has become aware that authorized states across the country have
interpreted and applied the variance provision inconsistently, even in
similar circumstances. This inconsistency may be due to (1) the wide
discretion allowed the regulatory authority to weigh any or all of the
decision criteria in any way it sees fit; (2) lack of clarity in the
decision criteria themselves; or (3) the general sixth criterion
``other relevant factors.''
    This inconsistency has resulted in variances being granted under 40
CFR 260.31(c) for some materials that are not yet commodity-like and
that are still clearly hazardous waste. Therefore, EPA is proposing
revisions to the variance criteria to address the inconsistency among
authorized states, remove ambiguities, and clearly convey the original
intent that only hazardous wastes that have been partially reclaimed to
produce commodity-like materials are eligible for a variance from
classification as solid waste. Consistent and appropriate application
of the partial reclamation variance is necessary so that the hazardous
waste program provides the level of protection of human health and the
environment required by the RCRA statute in all communities in all
areas of the country.
    An illustration of how the revised variance provision would be
applied to a commonly reclaimed hazardous waste example is included in
the Background Document ``F006 Reclamation.'' This document includes a
detailed description of how the proposed revised variance provision
would be used to make determinations about whether a variance would be
appropriate for listed hazardous waste F006 (wastewater treatment
sludges from electroplating operations) at various steps in the
reclamation process.
4. Proposed Revisions To Clarify and Improve the Partial Reclamation
Variance Provision
    As stated above, EPA is proposing several revisions to 40 CFR
260.31(c). Each of the proposed revisions is discussed below.
    a. Revision to clarify the introductory text of 40 CFR 260.31(c).
EPA is proposing to revise the introductory text of 40 CFR 260.31(c) to
clarify when a partial reclamation variance is applicable. The proposed
revised text would make it clear that the Regional Administrator may
grant requests for a variance from classifying as a solid waste those
materials that have been partially reclaimed but must be reclaimed
further before recovery is completed, only if the partial reclamation
has produced a commodity-like material. To qualify for a variance the
material must be legitimately recycled as specified in 40 CFR 260.43,
must be partially-reclaimed as determined by meeting criterion 1, and
must be commodity-like as determined by meeting criteria 2-5.
    The revised text is intended to clarify that the variance is
applicable at the point that partial reclamation has produced a
commodity-like material. The revised text includes the phrase ``has
produced a commodity-like material'' and ``must be commodity-like.''
These changes clarify and reflect EPA's intent that the variance
applies only after partial reclamation has produced a commodity-like
material. The variance does not apply earlier in a process when a
hazardous waste is still present. While not a new regulatory
requirement, the proposed change also highlights that the commodity-
like material must be legitimately recycled. The revised introductory
text also replaces the term ``reclaimed'' with ``partially reclaimed''
to be more specific about when a variance would be applicable (i.e.,
after partial reclamation has produced a commodity-like material,
rather than after full reclamation). Finally, the revised text
clarifies that the first criterion is to be used to determine whether
partial reclamation has occurred and the remaining criteria are to be
used to determine whether a partially-reclaimed material is commodity-
like.
    EPA requests comment on whether the proposed revisions to the
introductory text clarify the variance provision effectively and
whether they will result in appropriate and consistent decisions about
whether and when to grant a variance.
    b. Revision to the introductory text of 40 CFR 260.31(c) to require
that all criteria are met. When the partial reclamation variance
provision was originally promulgated in 1985, EPA stated that the
Regional Administrator or authorized State Director could weigh the
decision criteria ``as she sees fit, and may rely on any or all of them
to reach a decision.'' Based on experience with the variance provision,
EPA is proposing to change the introductory text of 40 CFR 260.31(c) to
require that all criteria must be satisfied before a variance is
granted. EPA is proposing this change for several reasons. First,
criterion 1 emphasizes that the material must have been substantially
partially reclaimed to be eligible for a variance. (This is discussed
further in the next section below.) Second, we believe that each of the
proposed revised criteria numbers 2, 3, 4, and 5 appropriately reflects
a fundamental and essential characteristic of a commodity-like
material. Therefore, all criteria must be met for the material to be
determined to be commodity-like. In addition, clarifying that all of
the criteria must be met will result in more consistent application of
the variance by different decision makers.
    EPA requests comment on whether (1) the revised introductory text
is more clear, (2) the revised criteria appropriately reflect the
fundamental characteristics of a commodity-like material; and (3)
requiring that all criteria must be met to grant a variance will foster
appropriate and consistent variance decisions.
    c. Revisions to all criteria of 40 CFR 260.31(c). EPA is proposing
revisions to all of the criteria in 40 CFR 260.31(c). First, all of the
criteria have been revised to begin with the word ``whether'' to make
it clear that the regulatory authority must make a yes or no
determination as to whether the material meets each criterion. In
addition, all of the criteria have been revised to be clearer and to
better reflect the fundamental characteristics of a commodity-like
material. The proposed changes to each criterion are discussed below.
    1. The degree of processing the material has undergone and the
degree of further processing that is required.
    EPA is proposing to revise the criterion in 40 CFR 260.31(c)(1) to
require consideration of whether the degree of partial reclamation the
material has undergone is substantial.
    This criterion examines the degree of reclamation the material has
undergone to become commodity-like. The more substantial the partial
reclamation step is, the more likely it is that the material generated
by the partial reclamation step is commodity-like.
    First, EPA is proposing to replace the general term ``processing''
with the more specific and accurate term ``partial reclamation.''
Second, EPA is proposing to remove from the criterion the concept that
the initial partial reclamation step that makes a material commodity-
like should be compared to the further reclamation that occurs after
the material has become commodity-like. Experience with the variance
has clarified that the relevant question is whether the partial
reclamation that has been completed is substantial and that the
material produced is not the original hazardous waste. If the material
has been substantially partially reclaimed, it then can be evaluated to
determine whether it is commodity-like using the

remaining criteria. The degree of reclamation that occurs in the final
reclamation step is not indicative of whether the partially-reclaimed
material is commodity-like. This criterion would be satisfied when the
partial reclamation is substantial and has produced a material that is
no longer the original hazardous waste.
    EPA requests comment on whether the proposed revisions to this
criterion clarify when a variance is applicable. EPA also requests
comment on the appropriateness of removing the requirement to compare
the degree of partial reclamation to the degree of final reclamation.
    2. The value of the material after it has been reclaimed.
    EPA is proposing to revise the criterion in 40 CFR 260.31(c)(2) to
require consideration of whether the partially-reclaimed material has
sufficient economic value that it will be purchased for final
reclamation.
    This criterion examines the first of four fundamental
characteristics that indicates that a partially-reclaimed material is
commodity-like, the value of the material produced by the partial
reclamation step.
    EPA is proposing to add the word ``partially-'' before the word
``reclaimed'' to clarify that the criterion applies to the partially-
reclaimed material, not the fully-reclaimed material produced later in
the process. EPA is also proposing to revise this criterion to reflect
the fundamental characteristic that a commodity-like material has
positive economic value. A partially-reclaimed material that is
commodity-like will be purchased by those who use it in manufacturing
and production operations. EPA notes that the value of a material
produced at a later stage of reclamation cannot be used to justify a
variance for the partially-reclaimed material produced earlier in the
process. In other words, the criterion must be applied to the material
as it is at the specific point in the reclamation process where
application of the variance is requested.
    Evidence to support this criterion may include sales information;
demand for the material; and business contracts (e.g., contracts
specifying quantities of material sold, details of the transaction, and
the effective price paid for the partially reclaimed material by
purchasers (i.e., after subtracting transportation costs and any other
goods or services rendered in exchange for the material purchased)).
    EPA requests comment on whether the proposed revisions clarify the
criterion and appropriately describe the fundamental economic value
characteristic of a commodity-like material.
    3. The degree to which the reclaimed material is like an analogous
raw material.
    EPA is proposing to revise the criterion in 40 CFR 260.31(c)(3) to
require consideration of whether the partially-reclaimed material is a
viable substitute for a product or intermediate, produced from virgin
or raw materials, which feeds subsequent production steps.
    This criterion reflects the second of four fundamental
characteristics of a commodity-like material that must go through
further reclamation before it becomes a final commercial product. In
short, the material must be sufficiently analogous to a product or
intermediate used in a manufacturing process to substitute for that
product or intermediate.
    First, as with other criteria, EPA is proposing to add the word
``partially-'' before the word ``reclaimed'' to clarify that the
criterion applies to the partially-reclaimed material, not the fully-
reclaimed material produced later in the process. Second, EPA is
proposing to replace the phrase ``is like an analogous raw material''
with the phrase ``is a viable substitute for a product or intermediate,
produced from virgin or raw materials, which feeds subsequent
production steps.'' This revision is intended to more accurately
describe the fundamental characteristic of a commodity-like material
used in production, which is that it will be used as a viable
substitute for a product or intermediate. A partially-reclaimed
material would meet this criterion if it is analogous to, or, in other
words, would replace, valuable products or intermediates in the
manufacturing process that have been produced (i.e., partially
reclaimed) from raw materials but require further processing
(reclamation) steps before the manufacturing process is complete.
Evidence to support this criterion would include a comparison of the
physical and chemical characteristics of the partially-reclaimed
material being considered for the variance to those of products or
intermediates produced from virgin raw materials.
    EPA requests comment on whether the proposed revisions clarify the
criterion and appropriately describe the fundamental characteristic of
a commodity-like material related to substituting for a product or raw
material in a production process.
    4. The extent to which an end market for the reclaimed material is
guaranteed.
    EPA is proposing to revise this criterion in 40 CFR 260.31(c)(4) to
require consideration of whether there is a guaranteed end market for
the partially-reclaimed material.
    This criterion addresses the third of four fundamental
characteristics of a commodity-like material, whether there is an end
market for the partially-reclaimed material. As with other criteria,
EPA is proposing to add the word ``partially-'' before the word
``reclaimed'' to clarify that the criterion applies to the partially-
reclaimed material for which the variance is sought. An end market for
further reclaimed material produced at a later stage of reclamation
cannot be used to justify a variance for a partially-reclaimed
material. EPA requests comment on whether this proposed revision
clarifies the criterion effectively.
    In addition, although EPA is not proposing any other substantive
changes to the criterion, based on experience with the variance
provision, EPA believes that further explanation of this criterion is
necessary. The criterion requires an evaluation of whether an end
market is guaranteed for the material for which a variance is
requested. For example, if a facility requests a variance for an
incoming hazardous waste, the end market that would have to be
evaluated is the market for the incoming hazardous waste itself. A
demonstrated end market for materials the facility produces later from
the incoming hazardous waste would not be relevant to the analysis for
the incoming waste.
    For an end market for a partially-reclaimed material to be
guaranteed, there must be secure demand and long-term markets for the
material. This would make it unlikely that large quantities of the
material will be stockpiled for long periods of time, lost, or
mismanaged due to insufficient demand. Assessing whether an end market
is guaranteed for the partially-reclaimed material requires that the
applicant for the variance provide end market information for the
material generated by the partial reclamation step. Evidence to support
this criterion may include the material's value as an input to a
production process, traditional usage of quantities of the material,
contractual arrangements for use of the material, and the likely
stability of markets for the material. Furthermore, the end market must
be demonstrated by a record of multiple actual purchases of the
partially-reclaimed material by other parties. Further reclamation that
can only be

conducted by the facility seeking the variance is not proof of an end
market.
    5. The extent to which the reclaimed material is handled to
minimize loss.
    EPA is proposing to revise the criterion in 40 CFR 260.31(c)(5) to
require consideration of whether the partially-reclaimed material is
handled to minimize loss.
    This criterion addresses the fourth of four fundamental
characteristics of a commodity-like material, whether the partially-
reclaimed material is handled to minimize loss, or in other words, is
handled similarly to a commodity. As with other criteria, EPA is
proposing to add the word ``partially-'' before the word ``reclaimed''
to clarify that the criterion applies to the partially-reclaimed
material for which the variance is sought. Management of materials
produced at later stages of reclamation is not relevant to how the
partially-reclaimed material itself is handled. EPA requests comment on
whether this proposed revision clarifies the criterion effectively.
    In addition, EPA's experience with the variance provision indicates
that further explanation of this criterion is necessary. Specifically,
this criterion requires evaluation of how the partially-reclaimed
material is handled before it is further reclaimed. Handling a
partially-reclaimed material to minimize loss indicates that the
material is commodity-like. Generally, persons handling hazardous waste
with little or no economic value do not have the same incentives to
minimize loss as persons handling commodities. Evidence to support this
criterion may include documentation of facility procedures used to
minimize loss (e.g., inspections, training), and storage and management
equipment designed to minimize loss.
    6. Revision to eliminate criterion six.
    Finally, EPA is proposing to eliminate the sixth and final
criterion concerning other relevant factors. When the partial
reclamation variance was promulgated in 1985, EPA believed that this
criterion could help determine whether a material is commodity-like.
However, based on experience with the variance provision, EPA now
believes that criteria numbers 2, 3, 4, and 5 (as proposed to be
revised) together accurately and fully reflect the fundamental
substantive characteristics of a commodity-like material for the
situation where a material has been partially reclaimed but must go on
for further reclamation before it is a final commercial product. We
have not seen other essential characteristics of this type of
commodity-like material identified in variances or applications. Thus,
we are proposing to eliminate this criterion. We also believe that
removing this general criterion will result in more consistent and
appropriate decision-making for partial reclamation variances.
    EPA requests comment on removing the sixth criterion and whether
there are any additional characteristics that should be evaluated to
assess whether a material is commodity-like. EPA also requests comment
on whether one or more of the five remaining criteria should be
consolidated.

C. Proposed Change to Non-Waste Determinations

    EPA is also proposing to add a criterion to both non-waste
determinations that require facilities applying for a non-waste
determination to explain or demonstrate why they cannot meet, or should
not have to meet, the existing DSW exclusions under Sec. Sec.  261.2 or
261.4.\30\ Because commenters to the 2009 DSW public meeting notice
have argued that the non-waste determinations may be burdensome to
states, EPA believes requiring applicants to formally consider and
explain why they are not eligible for an existing DSW exclusion will
reduce the burden on states. This criterion reduces burden on states in
two ways: (1) It requires facilities to consider existing exclusions
and standards first, before pursuing a non-waste determination, which
can, in turn, lead to facilities discovering that their intended
recycling fits under an existing exclusion and therefore a non-waste
determination petition is not needed; and (2) this criterion informs
the state why a facility believes it cannot meet an existing exclusion,
which is likely to be the state's first question before evaluating a
non-waste determination petition. Petitioners also would be allowed to
seek non-waste determinations if they could show that they should not
have to meet the conditions of another exclusion, but rather should be
allowed to operate under a non-waste determination with fewer or
different conditions. However, if EPA or the authorized state
determines that an applicant may, in fact, use an existing solid waste
exclusion under Sec. Sec.  261.2 or 261.4, this may be grounds for
denying a non-waste determination on the basis that regulatory relief
has already been granted.
---------------------------------------------------------------------------

    \30\ The two types of non-waste determinations are (1) a
determination for hazardous secondary materials reclaimed in a
continuous industrial process and (2) a determination for hazardous
secondary materials that are indistinguishable in all relevant
aspects from a product or intermediate.
---------------------------------------------------------------------------

D. Designating the Regional Administrator To Receive Petitions

    Lastly, we are proposing to change the word ``Administrator'' to
``Regional Administrator'' in 40 CFR 260.30, 260.31, 260.32, 260.33,
and 260.34. Due to the case-specific nature of the variances and non-
waste determinations, we believe these decisions should be made by the
Regional Administrator because of his or her regional authority. We
also note that although we propose to assign the decision-making
authority to the Regional Administrator, it is common practice within
EPA to work with other EPA offices, EPA Regions, EPA Headquarters on
decisions that may affect national policy.

E. Request for Comment on Other Possible Steps To Help Ensure National
Consistency and Protectiveness in the Implementation of Variances and
Non-Waste Determinations

    EPA is also requesting comment on other possible steps to help
ensure national consistency and protectiveness in the implementation of
variances and non-waste determinations.
    First, EPA is requesting comment on whether to require variances
and non-waste determinations to be renewed periodically, and, if so,
what time period would be appropriate (e.g., two or five years). A
renewal period would help ensures the hazardous secondary materials
continue to meet the criteria and remain valid over time. To a certain
extent, this concern would be addressed by the proposed revision to 40
CFR 260.33(c), which would require applicants to re-apply for a
variance or non-waste determination in the event of a change in
circumstances that affect how hazardous secondary materials meet the
relevant criteria, and by the proposed biennial re-notification, which
would require the applicant to review the management of their hazardous
secondary materials. However, the proposed revision to 40 CFR 260.33(c)
still relies on the applicant to recognize when there is a need to
reconsider a variance and take action, while a specific renewal period
would mandate a reconsideration. On the other hand, mandating a renewal
period would be an additional burden to the states, and may not be
necessary in all situations. Additionally, regulators could always
stipulate time limits in specific determinations, if warranted. EPA
requests comment on whether to require a renewal period and, if so, how
to minimize the burden on the states.
    The second possible change EPA is requesting comment on is whether
to

require states to share copies of the variance and non-waste
determination petitions and the tentative decisions with EPA to allow
the Agency to comment and to encourage collaboration and national
consistency. EPA and the states share responsibility for environmental
protection and work as partners to solve the nation's environmental
challenges. Because solid waste variances and non-waste determinations
are made on a case-by-case basis, state governments are best situated
to understand and evaluate the specific factors involved with the
company submitting a petition. At the same time, EPA may be familiar
with similar cases in other states or EPA Regions and can often provide
additional expertise and a national perspective on issues that affect
more than one location. As a general matter, the state and EPA
frequently consult on such cases, helping to achieve the best results
possible, taking full advantage of the unique strengths of each
partner.
    However, formalizing this type of collaboration would have the
benefit of reinforcing this working relationship and would help ensure
national consistency. Thus, EPA requests comment on whether to require
authorized states to forward to EPA copies of solid waste variance and
non-waste determinations petitions and tentative decisions on those
petitions for review and comment.

XII. Request for Comment on Re-Manufacturing Exclusion

A. Background

    In addition to the proposed changes to the definition of solid
waste discussed in Sections VII-XI of this preamble, EPA is requesting
comment on a focused exclusion from the definition of solid waste for
certain types of higher-value hazardous secondary materials \31\ which
are being re-manufactured into commercial-grade products.
---------------------------------------------------------------------------

    \31\ ``Higher-value'' hazardous secondary materials are those
who have a higher value than most types of hazardous secondary
materials and can be used in manufacturing commercial-grade
products.
---------------------------------------------------------------------------

    The goal of the re-manufacturing exclusion would be to encourage
sustainable materials management by identifying specific types of
transfers of hazardous secondary materials to third parties that, under
appropriate conditions, do not involve discard and can result in
extending the useful life of a commercial-grade chemical.
    Sustainable materials management, as discussed in more detail in
Section V.J. of this preamble, considers system-wide impacts, and
represents a shift away from end-of-life waste management and toward a
more sustainable future that avoids unintended consequences. The
benefits of sustainable materials management broadly include potential
reductions in energy used, more efficient use of materials, more
efficient movement of goods and services, conservation of water,
reduced greenhouse gas and other air emissions, and reduced volume and
toxicity of waste. In particular, when hazardous secondary materials
can be kept in the manufacturing process, rather than disposed of, or
used in a lower-value process such as cleaning or degreasing,
substantial environmental benefits can be obtained.
    As discussed in Section VII of this preamble, EPA is proposing to
replace the transfer-based exclusion found in 40 CFR 261.4(a)(24) and
(a)(25) with an alternative Subtitle C regulatory scheme because of the
potential for adverse impacts to human health and the environment from
discarded hazardous secondary materials. EPA believes that such a
standard would be more appropriate for hazardous secondary material
because (1) the Agency reasonably believes (as explained in detail in
the 2008 DSW final rule) that, absent specific conditions, transfers of
hazardous secondary materials to third-party reclaimers generally
involve discard, and (2) the conditions of the 2008 DSW final rule have
serious gaps, particularly the incentives to accumulate larger volumes
of hazardous secondary materials, the reduction in oversight resulting
from eliminating the permit requirement for storage, and the reduction
in the public's access to information and the opportunity for public
participation, that could create a potentially unacceptable likelihood
of adverse effects to human health and the environment from such
discarded material.
    However, as also discussed in Section VII, EPA acknowledges that
some specific types of hazardous secondary materials are more like
valuable commodities than solid wastes, and thus the act of
transferring them to a third party under appropriate conditions does
not necessarily involve discard. From a sustainable materials
management perspective, these materials are the ideal candidates for
focused regulatory changes that would address their life-cycle impacts
and help extend their useful life. Many of the other exclusions in 40
CFR 261.4(a) were developed for these types of hazardous secondary
materials, and the non-waste determination process under 40 CFR
260.34(c) provides an administrative process for additional hazardous
secondary materials that are indistinguishable from a product to be
determined to be non-wastes.
    To further encourage sustainable materials management,, EPA is
requesting comment on an exclusion for the transfer of higher-value
hazardous secondary materials from one manufacturer to another, for the
purpose of extending the useful life of the original material product
by keeping such materials in commerce to reproduce a commercial grade
of the original material product (a process that for the purpose of
this preamble discussion EPA is defining as ``re-manufacturing''). Re-
manufacturing these higher-value hazardous secondary materials can have
significantly lower environmental impact than creating these material
products and using them one time in their virgin state and then
transferring them for off-site treatment and disposal, especially with
regards to non-renewable materials. Thus, re-manufacturing allows the
material products to be used again, lowering their life-cycle
environmental impacts significantly.
    Specifically, EPA has reached a preliminary conclusion that, under
appropriate conditions, the potential for discard in inter-company re-
manufacturing transfers for certain higher-value spent solvents would
be low because they will be incorporated into the manufacturing process
rather than accumulated or disposed of. Once these solvents are re-
manufactured to commercial grade, they can be used as replacements for
virgin commercial grade solvents. The economic incentive for a company
receiving the spent solvents would be to sell or directly use (avoiding
purchase of virgin product) the re-manufactured solvent products to
realize an economic value. The company sending these higher-value
hazardous secondary materials for re-manufacturing is expected to have
little economic incentive to pay the receiving company more than a
nominal amount of money, since it would already be transferring
something of intrinsic market value (materials that can be easily re-
manufactured for profit). So, unlike the RCRA-permitted waste handler
which can charge a considerable fee for receiving discarded waste, the
company receiving these higher-value hazardous secondary materials for
re-manufacturing is expected to realize most of its profit from the
sale or use of re-manufactured solvents.
    Once re-manufacturing processes are in place, EPA expects that
solvent re-manufacturers would be competitive with solvent
manufacturers even in the event of a downturn in the sizable

chemical markets. Companies would also have the flexibility to redirect
re-manufacturing capacity to manufacturing should it ever make economic
sense to do so, leaving little economic reason to accumulate unsold or
unused re-manufactured solvents.
    Although the following discussion focuses mainly on spent solvents,
EPA would welcome information on other types of non-renewable hazardous
secondary materials that could benefit from a focused regulatory change
that would encourage sustainable materials management and be protective
of human health and the environment.

B. Conditions for the Re-Manufacturing Exclusion

    Given the wide variety of hazardous secondary materials and
industrial processes, EPA believes it is reasonable to set conditions
for the exclusion which there is supporting evidence that discard will
be avoided and risk will be controlled. The supporting evidence that
EPA is relying on for defining the conditions of this exclusion has
been gathered from some of the Agency's ongoing efforts to promote
sustainability and resource conservation.
    In particular, the Green Engineering Program within the Office of
Chemical Safety and Pollution Prevention (OCSPP) has for several years
been studying re-manufacturing scenarios for ``once-used'' solvents in
several industry sectors that use solvents as chemical manufacturing
and processing aids. By focusing on the life-cycle (cradle-to-grave)
impact of the manufacture, process, and use of chemicals, and reviewing
Toxics Release Inventory (TRI) production-related waste reporting, EPA
has found that a large, but often hidden lifecycle environmental impact
of a final consumer product is from the solvents used to produce the
consumer product. For example, pharmaceutical manufacturers use at
least 100 kg of solvents to make 1 kg of active pharmaceutical
ingredient. The lifecycle impact of these solvent streams, which often
are disposed after a single use under current regulatory conditions, is
very high.EPA has determined that the environmental impacts from
solvents used as manufacturing and processing aids could be
significantly reduced if the product life of solvents used for these
purposes were extended to more than a single use.\32\
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    \32\ U.S. EPA Benefits of the Re-manufacturing Exclusion, June
2011.
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    Based on this information, EPA proposes that all of the following
conditions would need to be satisfied for eligibility under a re-
manufacturing exclusion. The purpose of these conditions is to ensure
that the exclusion would focus on higher-value hazardous secondary
materials that are being re-manufactured rather than discarded.
    (1) The hazardous secondary material consists of one or more of the
following solvents: Toluene, xylenes, ethylbenzene, 1,2,4-
trimethylbenzene, chlorobenzene, n-hexane, cyclohexane, methyl tert-
butyl ether, acetonitrile, chloroform, chloromethane, dichloromethane,
methyl isobutyl ketone, N,N-dimethylformamide, tetrahydrofuran, n-butyl
alcohol, ethanol, and methanol;
    (2) The hazardous secondary material originated from using one or
more of the above-listed solvents in commercial grade for reacting,
extracting, purifying, or blending chemicals in the pharmaceutical,
organic chemical, or plastics and resins manufacturing sectors, or the
paint and coatings sector;
    (3) After re-manufacturing, the continuing use of the solvent is
limited to reacting, extracting, purifying, or blending chemicals in
the pharmaceutical, organic chemical, or plastics and resins
manufacturing sectors, or the paint and coatings sector, or using them
as ingredients in a product. These allowed continuing uses correspond
to chemical functional uses enumerated under the proposed modification
to the Inventory Update Rule of the Toxic Substances Control Act (40
CFR parts 704, 710-711), including Industrial Function Codes U015
(solvents consumed in a reaction to produce other chemicals) \33\ and
U030 (solvents become part of the mixture).\34\
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    \33\ U015 Intermediates: Chemical substances consumed in a
reaction to produce other chemical substances for commercial
advantage. A residual of the intermediate chemical substance which
has no separate function may remain in the reaction product.
    \34\ U30 Solvents (which become part of product formulation or
mixture): Chemical substance used to dissolve another substance
(solute) to form a uniformly dispersed mixture (solution) at the
molecular level. Examples include diluents used to reduce the
concentration of an active material to achieve a specified effect
and low gravity materials added to reduce cost.
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    (4) After re-manufacturing, the continuing use of the solvent does
not involve cleaning or degreasing oil, grease, or similar material
from textiles, glassware, metal surfaces, or other articles (These
disallowed continuing uses correspond to chemical functional uses in
Industrial Function Code U029 under the proposed modification of the
Inventory Update Rule of the Toxics Substances Control Act);
    (5) Additionally, both the hazardous secondary material generator
and the re-manufacturer would have to
    a. Notify EPA or the State Director, if the state is authorized for
the program, and update the notification every two years per 40 CFR
260.42;
    b. Develop and maintain a re-manufacturing plan which includes
information on the types and expected annual volumes of solvents to be
re-manufactured, the processes and industry sectors that generate the
solvents, the specific uses and industry sectors for the re-
manufactured solvents and the legitimacy of the re-manufacturing
process;
    c. Maintain records of shipments and confirmations of receipts for
a period of three years from the dates of the shipments;
    d. Prior to re-manufacturing, store the hazardous spent solvents in
tanks or containers that meet technical standards that would be the
same as those found in 40 CFR part 264 subparts I and J, with the tanks
and containers being labeled or otherwise having an immediately
available record of the material being stored; \35\ During re-
manufacturing, and during storage of the hazardous secondary materials
prior to re-manufacturing, ensure that there is effective control of
hazardous air emissions by complying with all applicable NESHAP
standards, and with the requirements of 40 CFR part 264 or 265 subparts
AA, BB, CC; and
---------------------------------------------------------------------------

    \35\ These standards would be specified in the regulatory
language of this exclusion, but would be the same technical
standards as those required in 40 CFR part 264 subparts I and J.
---------------------------------------------------------------------------

    e. Meet the requirements prohibiting speculative accumulation per
40 CFR 261.1(c)(8).
    The rationale for the data elements under each condition is
provided below. EPA requests comment on each of the conditions, the
specific data elements under each condition, and/or any other types of
scenarios that might also meet EPA's proposed definition of re-
manufacturing (i.e., the transfer of a higher-value secondary material
from one manufacturer to another, for the purpose of keeping the
hazardous secondary material in commerce to produce a commercial grade
product). In addition, EPA requests comment on whether, as part of the
re-manufacturing plan, the hazardous secondary materials generator and
the re-manufacturer should be required to estimate the energy and
environmental benefits of re-manufacturing versus the use of virgin
feedstock.

1. Designated Solvents
    EPA has identified 18 chemicals that could be included in the re-
manufacturing exclusion. They are toluene, xylenes, ethylbenzene,
1,2,4-trimethylbenzene, chlorobenzene, n-hexane, cyclohexane, methyl
tert-butyl ether, acetonitrile, chloroform, chloromethane,
dichloromethane, methyl isobutyl ketone, N,N-dimethylformamide,
tetrahydrofuran, n-butyl alcohol, ethanol, and methanol.\36\
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    \36\ U.S. EPA, Selection of Industry Sectors, Chemicals and
Functions in the Re-manufacturing Exclusion, June 2011.
---------------------------------------------------------------------------

    EPA believes that including these 18 chemicals in a re-
manufacturing exclusion is a good opportunity for reducing the risks
associated with these chemicals at the present time. Risk is a function
of hazard and exposure, and, from a hazard perspective, all of these
chemicals have suspected or recognized hazardous health effects
associated with their manufacture, processing, and use.\37\ Although
EPA and industry have been working to find substitutes for the more
hazardous of these solvents, or find ways to use less of them, this has
not yet been achieved.\38,\ \39\ With respect to the pharmaceutical
sector in particular, complex chemical processes already registered
with the Food and Drug Administration are involved, and EPA has found
this a very challenging area to address. In addition, some of these
solvents are building block and primary intermediate chemicals, making
them difficult to replace. Until lower-risk substitutes for these
solvents are found, it is helpful from a health risk standpoint to
minimize the volume of solvents manufactured and to limit exposure to
those already manufactured. This is something that the re-manufacturing
exclusion can help achieve.
---------------------------------------------------------------------------

    \37\ Allen, D., Shonnard, D, Green Engineering: Environmentally
Conscious Design of Chemical Processes, Risk Concepts, chapter 2,
pgs 35-62, Austin, S., US EPA Editor, Published by Prentice-Hall,
2001.
    \38\ For information on U.S. EPA's Green Chemistry Program, see
http://www.epa.gov/gcc/.
    \39\ Information on the American Chemical Society's Green
Chemistry Institute's Pharmaceutical Roundtable is available via the
ACS Web site http://portal.acs.org/portal/acs/corg/content.
---------------------------------------------------------------------------

    The exclusion can help reduce exposure to these solvents in three
ways. First, the exclusion would extend the useful life of existing
solvents, which would reduce the health risks associated with their
manufacture by slowing the rate at which they are manufactured. Second,
the exclusion would reduce exposure to solvents already manufactured by
reducing the fuel blending of spent solvents. Re-manufacturing a spent
solvent will eliminate the need for blending it with another spent
solvent to satisfy the fuel-ratio requirements of incinerators and
cement kilns. This, in turn, will reduce the fugitive emissions
associated with unloading and loading containers of volatile solvents
at fuel-blending facilities. All solvents are volatile, and virtually
all spent solvents must go through the fuel-blending process prior to
disposal.\40\ Third and finally, the exclusion can reduce the potential
exposure from any transportation incidents, since it is likely spent
solvents can be transported shorter distances for re-manufacturing
purposes than they can for disposal purposes.\41\
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    \40\ U.S. EPA, Selection of Industry Sectors, Chemicals and
Functions in the Re-manufacturing Exclusion, June 2011.
    \41\ Id.
---------------------------------------------------------------------------

    These 18 solvents are used in large volumes as chemical
manufacturing aids, chemical processing aids, and chemical formulation
aids (generally referred to as ``processing aids'' for the purpose of
this rule). The ``processing aids'' solvents assist in the reaction,
extraction, purification, and blending of ingredients and reactive
products, but are not themselves reacted. These processing aid
solvents, once used, can then be re-manufactured to commercial grade
again. These higher-value solvents were selected because there are
existing markets for all these solvents to be re-manufactured to serve
similar purposes to those of the original commercial-grade materials.
    Note that, as explained below, these hazardous spent solvents would
only be eligible if their originating use was of a specific type, and
if they are re-manufactured to serve certain types of commercial
functions. This restriction would help limit the exclusion to higher-
value materials and processes that resemble manufacturing more than
waste management.
    EPA believes that spent solvents are particularly appropriate for
the re-manufacturing exclusion because they are derived from a non-
renewable resource (petroleum), and they are manufactured in the
industrial chemicals sector, which, according to EPA's report on
sustainable materials management, ranks third overall as far as direct
adverse overall impact to the environment.\42\ EPA requests comment on
whether these solvents are appropriate for inclusion in the re-
manufacturing exclusion, and whether there are other solvents,
chemicals or other types of hazardous secondary materials that should
be included in the re-manufacturing exclusion. In particular, EPA
requests comment on opportunities for re-manufacturing other types of
non-renewable hazardous secondary materials, such as metal catalysts or
other types of metal-bearing hazardous secondary materials.
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    \42\ U.S. EPA. 2020 Vision Report: Sustainable Materials
Management: The Road Ahead, Table 1, page 25. http://www.epa.gov/waste/inforesources/pubs/vision.htm. The other top ranked sectors
are electric services (1) and cotton production
(2).
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2. Chemical Functions
    EPA believes that the re-manufactured chemical product should serve
a similar functional purpose as the original commercial-grade material
so that it can substitute for virgin product, since it is this
substitution that displaces some manufacturing of virgin product and
fosters a system where the original solvent remains in commerce and is
not discarded. EPA has identified the following chemical functions for
possible inclusion in the re-manufacturing exclusion: chemical
manufacturing aid (reacting, extracting, blending and/or purifying
chemicals), and chemical processing aid (extracting, blending and
purifying chemicals).\43\ The solvents used for these functions can be
separated readily from the other reaction components and therefore do
not get contaminated as do solvents used for cleaning or degreasing
operations, which are more likely to become discarded.
---------------------------------------------------------------------------

    \43\ U.S. EPA, Selection of Industry Sectors, Chemicals and
Functions in the Re-manufacturing Exclusion, June 2011.
---------------------------------------------------------------------------

    More environmental benefits will be obtained by maximizing the
number of times a chemical product can be used at high-purity grade as
an aid to chemical manufacturing and processing, before it is used for
at lower-purity as a cleaner or degreaser. While it is possible to
extend the product life of a used chemical as a cleaner/degreaser, it
takes significantly less energy to bring solvents used as chemical
manufacturing aids back to commercial grade than to bring solvents used
as cleaners and degreasers back to lower grade functionality, making
re-manufacturing of the higher-value solvents more economically
feasible.
    Accordingly, the functions that the re-manufactured chemical
products should serve would be the same as those enumerated above, plus
the use in the formulation of the final product (a function which
causes the solvent to remain in the product), or use as a chemical
intermediate (a function which causes the solvent to be consumed in a
chemical reaction).
    With respect to the hazardous secondary material generator, this

exclusion would focus on the functions of aiding chemical manufacturing
and processing because the solvents performing these functions retain
their original physical and chemical properties. In these functions,
the solvents do not get contaminated by substances from which they are
difficult to separate, such as inks and greases, but only get mixed
with pure product ingredients, from which they can be separated readily
in a commercially feasible manner. Furthermore, manufacturing and
processing operations can be more easily controlled in terms of
exposure and releases, whereas the spent solvents from downstream uses
such as degreasing and cleaning operations are of inherently lower-
value and these downstream operations result in more widespread
exposure and releases and a higher potential for discard.
    EPA requests comment on whether these chemical functions are
appropriate for inclusion in the exclusion and whether there are other
chemical functions that should also be included in the re-manufacturing
exclusion.
3. Manufacturing Sectors
    EPA intends that any exclusion would be limited to companies whose
primary business is manufacturing, rather than waste management, as
indicated by particular NAICS codes. EPA has identified the operations
of four manufacturing sectors as candidates for the re-manufacturing
exclusion: Pharmaceutical manufacturing (NAICS 325412), basic organic
chemical manufacturing (NAICS 325199), plastics and resins
manufacturing (NAICS 325211), and the paints and coatings manufacturing
sectors (NAICS 325510). Manufacturers within these four sectors all use
one or more of the eighteen identified solvents as chemical
manufacturing, processing, and formulation aids in high volumes. Based
on the Toxics Release Inventory information, these four sectors are
also closely associated with the chemical functions identified in the
exclusion and currently use a high volume of the solvents for the
functional purposes included in this exclusion. Therefore, these four
sectors seem to be good candidates for inclusion in the exclusion.\44\
---------------------------------------------------------------------------

    \44\ U.S. EPA, Selection of Industry Sectors, Chemicals and
Functions in the Re-manufacturing Exclusion, June 2011
---------------------------------------------------------------------------

    As discussed earlier, companies whose primary business is the sale
of a commercial product do not operate under the same market forces as
commercial recyclers, whose profit depends on maximizing the amount of
hazardous secondary material accepted, creating a perverse market
incentive to over-accumulate hazardous secondary material, resulting in
discard. It is not intended that the exclusion could be utilized by a
commercial recycler even if it undertook reclamation operations
involving the chemicals and chemical functions described above.
Commercial recyclers are best regulated by the RCRA hazardous waste
standards since waste handling is their primary business and RCRA
standards are the primary governing standards for this line of
business.
    EPA requests comment on whether these sectors are appropriate for
inclusion in the exclusion, and whether there are other industry
sectors that should be included in the re-manufacturing exclusion. In
particular, while the re-manufacturing exclusion on which EPA is
requesting comment focuses on those industry sectors that generate
large volumes of spent solvents, we also are interested in other
industry sectors that would generate other materials, especially other
types of non-renewable materials, such as metal-bearing hazardous
secondary materials. For example, the ``2020 Vision Report'' identifies
industry sectors that could be evaluated and for which significant
environmental gains could be realized through sustainable materials
management. Thus, EPA requests comment on which sectors provide the
most opportunity for reducing overall environmental impact by
encouraging sustainable materials management through re-
manufacturing.\45\
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    \45\ For an analysis of materials, products and services ranked
by overall environmental impact, see U.S. EPA. 2020 Vision Report:
Sustainable Materials Management: The Road Ahead, Table 1, page 25.
http://www.epa.gov/waste/inforesources/pubs/vision.htm.
---------------------------------------------------------------------------

4. Additional Exclusion Conditions
    EPA has identified the following additional conditions as necessary
for the proper implementation of a re-manufacturing exclusion and to
ensure that the hazardous secondary materials are managed in a way that
does not involve discard.
    a. Notification. Notification under a re-manufacturing exclusion
would serve the same purpose and operate similarly to the notification
provision found at 40 CFR 260.42. In other words, hazardous secondary
material generators and re-manufacturers would have to submit a
notification prior to operating under the exclusion and by March 1 of
each even-numbered year thereafter using EPA form 8700-12 to the EPA
Regional Administrator or the State Director, in an authorized state.
Additionally, these facilities would have to notify within 30 days of
stopping management of hazardous secondary materials under the
exclusion. The notification would include:
     The name, address and EPA ID number (if applicable) of the
facility;
     The name and telephone number of a contact person;
     The NAICS and TRI code of the facility;
     When the facility expects to begin managing the hazardous
secondary material in accordance with the re-manufacturing exclusion;
     A list of the hazardous secondary materials that would be
managed according to the new standard (reported as the EPA hazardous
waste numbers that would apply if the materials were managed as
hazardous waste);
     The quantity of each hazardous secondary material solvents
to be managed annually; and
     The certification signed and dated by an authorized
representative of the facility.
    The intent of the notification requirement is to provide basic
information to the regulatory agencies about who will be managing
hazardous secondary materials under the re-manufacturing exclusion. The
specific information included in the notification requirement enables
regulatory agencies to monitor compliance and to ensure hazardous
secondary materials are managed in accordance with the exclusion and
not discarded.
    b. Re-manufacturing plan. A key issue for a re-manufacturing
exclusion would be how the facilities operating under the exclusion
would demonstrate that they meet the requirements (e.g., that the
hazardous secondary materials, functions, and manufacturing sectors are
those identified in the exclusion). A straightforward method would be
to require a re-manufacturing plan to be prepared and maintained by
both the hazardous secondary material generator and re-manufacturer
that includes information on the types and expected annual volumes of
solvents to be excluded, the processes and industry sectors that
generate the chemicals, the specific uses and industry sectors--for the
re-manufactured solvents, and the legitimacy of the re-manufacturing
process (see Section X for further discussion on legitimacy). The
hazardous secondary material generator would also be required to make
arrangements with the re-manufacturer to jointly develop this plan and
to verify the appropriateness of the hazardous secondary materials for
the re-

manufacturing process before claiming the exclusion, thus helping
ensure that the hazardous secondary material will be re-manufactured
and not discarded.
    c. Record of shipments and confirmations of receipts. Under a re-
manufacturing exclusion, generators and re-manufacturers would need to
maintain at the facility records of shipments of hazardous secondary
materials for a period of three years. Specifically, for each shipment
of hazardous secondary material, the generator and re-manufacturer
would need to maintain documentation of when the shipment occurred, who
the transporter was, and the type and quantity of the hazardous
secondary materials in the shipment. This recordkeeping requirement may
be fulfilled by ordinary business records, such as bills of lading.
However, EPA requests comment on whether for ease of implementation and
enforcement, it should require more standardized record-keeping, such
as the use of a standardized bill of lading.
    In addition, generators would need to maintain confirmations of
receipt for all off-site shipments of hazardous secondary materials in
order to verify that the hazardous secondary materials reached their
intended destination and were not discarded. These receipts must be
maintained at the facility for a period of three years from when they
were created. Specifically, the documentation of receipt would include
the name and address of the re-manufacturer, and the type, quantity,
and date of hazardous secondary materials received. The Agency might
not require a specific template or format for confirmation of receipt
since routine business records (e.g., financial records, bills of
lading, copies of Department of Transportation (DOT) shipping papers,
and electronic confirmation of receipt) would contain the appropriate
information sufficient for meeting this requirement. However,
documented information must be verifiable. Therefore, EPA requests
comment on whether for ease of implementation and enforcement, it
should require more standardized record-keeping, such as requiring a
standard method of confirmation of receipt and/or keeping this
information in a readily accessible file.
    This provision is being proposed in order that all parties
responsible for the excluded hazardous secondary materials would be
able to demonstrate that the materials were in fact sent for re-
manufacturing and arrived at the intended facility and were not
discarded in transit.
    d. Management in tanks and containers. Solvents, whether virgin or
spent, are best stored in tanks or containers that possess inherent
controls to address issues such a volatile air emissions, leaks, and
fires or explosions. As discussed in Section VI of this preamble, spent
solvents present particular management challenges associated with the
storage of liquids containing volatile organic chemicals and include
both halogenated and non-halogenated organic chemicals, which represent
a broad range of chemicals and associated hazards.
    EPA believes that by focusing on higher-value spent solvents going
to re-manufacturing, a re-manufacturing exclusion reduces the chance of
mismanagement of the spent solvents. However, given the history of
solvent mismanagement, as demonstrated in the damage cases found in
environmental problems study,\46\ EPA also believes it would be
appropriate to make an explicit condition that spent solvents excluded
under a re-manufacturing exclusion be labeled or otherwise have an
immediately available record of the material being stored and be stored
prior to re-manufacturing in tanks or containers that meet technical
standards that will ensure that the solvents will go to re-
manufacturing and will not be discarded via leaks, spills or
explosions.
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    \46\ U.S. EPA An Assessment of Environmental Problems Associated
With Recycling of Hazardous Secondary Materials (EPA-HQ-RCRA-2002-
0031-0355).
---------------------------------------------------------------------------

    For ease of implementation, EPA requests comment on establishing
explicit tank and container standards which meet the technical
standards that would be the same as those found in 40 CFR part 264
subparts I and J. The tank and container standards of 40 CFR part 264
were developed for hazardous wastes, but an analysis of the full set of
technical requirements under subparts I and J shows that they are
comparable to product storage standards from a number of sources,
including regulations promulgated under the Occupational Safety and
Health Act (OSHA), DOT, and industry standards, and may also be
appropriate standards for storage prior to re-manufacturing.\47\
Establishing technical standards equivalent to subparts I and J has the
benefit of using standards that the regulated community are already
familiar with, and which are designed to prevent the spent solvents
from being discarded through leaks or explosions. EPA also believes
that during re-manufacturing and storage prior to re-manufacturing,
there should be effective controls of hazardous air emissions. This can
be ensured by requiring that equipment, vents, and tanks meet the
technical standards of the National Emission Standards for Hazardous
Air Pollutants (NESHAP) applicable to the sector, or absent such
standards for the particular operation or piece of equipment covered by
the exemption, then the standards equivalent to those found in 40 CFR
part 264 or 265 subparts AA (vents), BB (equipment) and CC (tank
storage).
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    \47\ U.S. EPA Equivalent Containment Standards for the Re-
manufacturing Exclusion, June 2011.
---------------------------------------------------------------------------

    EPA requests comment on using these standards or other alternative
standards that would be appropriate for helping to demonstrate that the
excluded spent solvents under the re-manufacturing exclusion are being
managed as a commodity rather than being discarded.
    e. No speculative accumulation. In addition to the other
conditions, hazardous secondary materials under a re-manufacturing
exclusion would still be subject to the speculative accumulation
restrictions in 40 CFR 261.1(c)(8), which includes both a time
limitation and a requirement that the facility be able to show that
there is a feasible means of recycling/recovering the hazardous
secondary material. This helps ensure that the materials are re-
manufactured and not discarded.
    EPA requests comment on whether these conditions are appropriate
and whether there are additional conditions that should be also
included in any re-manufacturing exclusion.

C. Benefits of Re-Manufacturing Exclusion

    The solvents identified as possible candidates for a re-
manufacturing exclusion are highly energy-intensive and carbon-
intensive at their creation and destruction. Therefore, any step
towards extending the useful life of these solvents (e.g., re-
manufacturing via distillation) significantly reduces the energy use
and carbon release associated with these solvents, as well as other
pollutants associated with their manufacturing and disposal.\48\ Using
solvents multiple times instead of once means fewer solvents need to be
produced and destroyed, which reduces the energy consumed for solvent
production and destruction. That is, less fuel is needed to re-
manufacture solvents than to produce solvents from virgin materials.
The reduction in fuel for manufacturing is significant because solvent
manufacture is energy intensive due to a combination of the high and
low temperature manufacturing steps involved. Also, less fuel is needed
to destroy solvents (at very high temperatures) if fewer solvents are
being

destroyed. Lastly, less pollution, including carbon, is released from
the solvents themselves when incinerated or burned as fuel at the end
of their useful life if fewer solvents are being incinerated or
burned.\49\
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    \48\ U.S. EPA Benefits of the Re-manufacturing Exclusion, June
2011.
    \49\ U.S. EPA Benefits of the Re-manufacturing Exclusion, June
2011.
---------------------------------------------------------------------------

    There is also a benefit of reduced transportation impacts
associated with extending the useful life of solvents. EPA research
indicates that in numerous instances the transport involved in
transferring a quantity of spent solvents for purposes of re-
manufacturing (including any delivery to secondary users) is measurably
less than the transport required for an equal quantity of solvents
disposed of and replaced with new solvents.\50\ In addition,
transportation impacts of virgin feedstocks would also be reduced.
Thus, allowing hazardous secondary material generators to re-
manufacture solvents is also likely to reduce the risks to communities
by reducing the likelihood of transportation accidents involving
hazardous materials, as well as reducing other adverse environmental
impacts from fuel consumed in transportation.
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    \50\ U.S. EPA Benefits of the Re-manufacturing Exclusion, June
2011.
    .
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    Further, reduced manufacturing of virgin solvents would reduce the
quantity of ingredients needed and the toxic and hazardous pollutant
releases associated with solvent manufacture. Moreover, a re-
manufacturing exclusion would create a business-case incentive for
hazardous secondary material generators to re-manufacture solvents.
Reducing the economic barriers to solvent re-manufacturing (in
particular, avoiding the costs associated with RCRA permitting) would
make it commercially feasible for more chemical manufacturers to re-
manufacture solvents, and would thus serve to encourage chemical
manufacturers to reduce the overall environmental impacts of solvent
manufacturing and use.
    Finally, the benefit of limiting the functions of re-manufactured
material to those performed by chemical manufacturers, processors, and
formulators is that there are existing commercial purposes for re-
manufactured solvents, which would limit or prevent the over-
accumulation of the spent solvents, which also reduces the likelihood
for discard.

D. Potential Rulemaking Variance Process To Add Candidates for Re-
Manufacturing Exclusion

    EPA is requesting comment in today's proposal on a re-manufacturing
exclusion that is narrowly defined to apply to 18 solvents used for
specific functions within four industry sectors. However, it is
possible that other hazardous secondary materials, industry sectors,
and/or functional uses may also be suitable candidates for the re-
manufacturing exclusion if they involve the transfer of a higher-value
hazardous secondary material from one manufacturer to another, for the
purpose of re-manufacturing a material with significant commercial
value. If the Agency were to promulgate a re-manufacturing exclusion,
EPA is requesting comment on whether to also include a specific
petition process where petitioners may apply to EPA to request a
hazardous secondary material, industry sector, and/or functional use be
added to the exclusion.
    The petition process would be similar to 40 CFR 260.20, where any
person may petition the Administrator to modify or revoke any
provisions of the hazardous waste rules. Thus, in the context of a re-
manufacturing exclusion, any person would be able to petition the
Administrator to add or remove hazardous secondary materials, industry
sectors, and/or specific use functions to the list of hazardous
secondary materials qualifying for this exclusion. To be successful,
the petitioner would need to demonstrate to the satisfaction of the
Administrator that the proposed regulatory amendment (1) meets the goal
of the re-manufacturing exclusion, which is to encourage sustainable
materials management by extending the productive life of a hazardous
secondary material; (2) involves the transfer of a higher-value
hazardous secondary material from one manufacturer to another for the
purpose of re-manufacturing the hazardous secondary material to produce
a product of significant commercial value; and, (3) results in neither
the hazardous secondary materials nor the products recovered being
discarded when the conditions of the exemption are followed. The
application could be required to include (1) the petitioner's name and
address; (2) a statement of the petitioner's interest in the proposed
action; (3) a description of the proposed action, including the
specific hazardous secondary material, industry (i.e., NAICS code) and
functional use (i.e., industrial functional code listed in 40 CFR
710.52(c)(4)(i)(C)); and (4) a statement of the need and justification
for the proposed action, including any supporting tests, studies, or
other information.
    Under this possible petition process, the Administrator would make
a tentative decision to grant or deny a petition and then publish
notice of such tentative decision, either in the form of an advanced
notice of proposed rulemaking, a proposed rule, or a tentative
determination to deny the petition, in the Federal Register for written
public comment. The Administrator could, at his discretion, hold an
informal public hearing to consider oral comments on the tentative
decision.
    After evaluating all public comments, the Administrator would make
a final decision by publishing in the Federal Register a regulatory
amendment or a denial of the petition.

E. Other Issues Related to a Possible Re-Manufacturing Exclusion

    A re-manufacturing exclusion, as described above, would be based on
a direct business arrangement between the hazardous secondary material
generator of spent solvents and the re-manufacturer, such that the
spent solvents would be shipped directly from the generator to the re-
manufacturer. Therefore, EPA does not believe that it would be
necessary or appropriate to include intermediate storage facilities in
the exclusion. We also believe that including such intermediate storage
facilities would make it harder to keep track of the hazardous
secondary materials and would increase storage time frames, potentially
increasing the likelihood that the hazardous secondary materials will
not be safely recycled. However, the Agency also recognizes that not
allowing intermediate storage facilities to be part of the transaction
may have an adverse impact on small businesses since such intermediate
storage facilities would allow small businesses to ship their spent
solvent, that are likely generated in limited quantities, to the
intermediate facility for consolidation before they go to the re-
manufacturer. Thus, EPA requests comment on this issue.
    Similarly, EPA anticipates that re-manufacturing arrangements would
be made within the United States, so that the companies involved would
be governed by the same set of laws and regulations as far at their re-
manufacturing agreements are concerned. EPA requests comment on
limiting the re-manufacturing exclusion to the United States, or
requiring the generator to notify the receiving country through EPA and
obtain consent from that country before shipment of the

hazardous secondary materials takes place. These notice and consent
requirements, which would be the same as those currently required under
the transfer-based exclusion (see 40 CFR 261.4(a)(25)), would provide
notification to the receiving country so that it can ensure that the
hazardous secondary materials are reclaimed rather than disposed of or
abandoned. As an additional benefit, these requirements would allow the
receiving country the opportunity to consent or refuse consent based on
its analysis of whether the re-manufacturing facility can properly
manage the hazardous secondary materials in an environmentally sound
manner within its borders.
    EPA also requests comment on other possible conditions that could
be added to any re-manufacturing exclusion. In particular, EPA requests
comment on whether it should require the re-manufacturer to have
financial assurance. EPA required financial assurance for recyclers
under the transfer-based exclusion. Since the re-manufacturing
exclusion will be limited to higher-value solvents going to
manufacturers with a greater flexibility than commercial recyclers to
adjust to unstable markets, there may be less of a need for financial
assurance under this proposed exclusion. However, EPA requests comment
on whether financial assurance should nevertheless be included as a
condition to best ensure against discard. EPA also requests comment on
whether it should add public participation requirements and/or a
regulatory agency approval (short of a RCRA permit) before a re-
manufacturer may start handling hazardous secondary materials sent from
another company. EPA received input during its environmental justice
review of the 2008 DSW final rule that the absence of an opportunity
for public input was a deficiency of the transfer-based exclusion.
However, since the re-manufacturing exclusion will be limited to
manufacturing facilities, typically at their already existing
locations, and actually may reduce the environmental impacts at such
facilities, the need for public participation may be less. However, EPA
requests comment on whether it should nevertheless require a public
participation process to ensure that neighbors of a facility are aware
that it will be handling hazardous secondary materials sent from other
companies, and have input about how the protective conditions required
by the proposed exclusion will be met. Finally, EPA requests comment on
whether companies should be required to keep records and/or report to
EPA about the environmental benefits (e.g., reduced air emissions,
energy savings, reduced transportation impacts) that are realized
through their use of the re-manufacturing exclusion. EPA could then use
this information to measure performance of the exclusion, enable public
reporting of results, and facilitate information transfer in which
other companies can learn how to achieve similar benefits.
Additionally, we note that many companies already take advantage of
reporting tools in order to track progress towards corporate
sustainability goals and thus we believe that reporting would not pose
an undue burden on facilities.

XIII. Request for Comment on Revisions to Other Recycling Exclusions
and Exemptions

A. Background Information on Other Recycling Exclusions and Exemptions

    As part of the 2008 DSW rulemaking, EPA developed a report, ``An
Assessment of Environmental Problems Associated with Recycling of
Hazardous Secondary Materials'' (environmental problems study), which
analyzed 218 recycling damage cases.\51\ The goal of the environmental
problems study was to identify and characterize environmental problems
that have been attributed to hazardous secondary materials recycling
activities. EPA then used the findings from this study to craft a
number of conditions for the 2008 DSW final rule, which were
specifically designed to target the major causes of damage and thus
help define ``discard'' of hazardous secondary materials. These
conditions, however, were applied only to the 2008 DSW exclusions. In
developing today's proposal, we are interested in whether these
conditions should be codified for the pre-2008 recycling exclusions and
exemptions.
---------------------------------------------------------------------------

    \51\ The original environmental problems study, published
January 11, 2007, reviewed 208 damage cases. Based on information
submitted by commenters, EPA reviewed an additional 10 recycling
damage cases in an addendum to the environmental problems study,
published July 14, 2008.An Assessment of Environmental Problems
Associated with Recycling of Hazardous Secondary Materials, U.S.
EPA, January 11, 2007 and addendum. Report: http://www.regulations.gov/search/Regs/home.html#documentDetail?R=09000064801f3efb. Addendum (July 2008):
http://www.regulations.gov/search/Regs/home.html#documentDetail?R=09000064806b5741, Addendum (June 2011)
found in today's docket.
---------------------------------------------------------------------------

    As part of the ``Environmental Justice Analysis of the Definition
of Solid Waste Rule'' (EJ analysis), EPA reviewed and analyzed each
damage case in the environmental problems study, including five
additional damage cases that were identified after the 2008 DSW final
rule was promulgated, and determined the regulatory provision that
likely, or potentially, governed the management of the hazardous
secondary materials. This analysis was based on the type of hazardous
secondary material and the date of the damage case (related to the
effective date of the regulatory provision), the results which can be
found in the docket for this rulemaking.\52\
---------------------------------------------------------------------------

    \52\ U.S. EPA Correlation of Recycling Damage Cases with
Regulatory Exclusions, Exemptions or Alternative Standards.
---------------------------------------------------------------------------

    From this analysis, we conclude that over half of the damage cases
in this study were associated with hazardous secondary materials that
were likely excluded or exempted from Subtitle C under an existing
(pre-2008) regulatory provision. For example, 52 damage cases (23%) are
associated with scrap metal that is likely excluded under 261.4(a)(13)
and/or 261.6(a)(3)(ii). Drum reconditioning accounted for 23 damage
cases (10%), in which the residuals are likely excluded under 40 CFR
261.7. Additionally, 35 damage cases (16%) were associated with
recycling of batteries that are likely managed under 40 CFR 273.2 and/
or 40 CFR part 266 subpart G. Based on these results, and given that
many of the pre-2008 recycling exclusions specify limited or no
conditions, we believe that these provisions may not be adequately
enforceable in order to protect human health and the environment. Thus,
we are requesting comment today on codifying specific conditions for
these recycling exclusions.
    EPA emphasizes that we are not reopening comment on any substantive
provisions of the regulatory exclusions or exemptions. The inclusion of
requirements for legitimacy, containment, and notification are strictly
meant as means to better enforce the regulations. Moreover, EPA
believes that the containment condition--as with the legitimacy
criteria--is implicit in all of the regulations to which it would
apply. If secondary material is not contained when it is being
recycled, it is simply being discarded.
    As part of the 2008 DSW final rulemaking, we reviewed the recycling
studies and public comments in order to develop conditions that defined
discard of hazardous secondary materials. Four conditions required for
the generator-controlled exclusion in 40 CFR 261.4(a)(23)--legitimate
recycling, no speculative accumulation, containment, and notification--
constitute what we believe to be the minimum requirements necessary to
define when recycled

hazardous secondary materials are not discarded. Therefore, it seems
prudent to review past exclusions and exemptions to ensure these
regulatory provisions clearly require these newly codified standards.
    Specifically, we are requesting comment on codifying the legitimate
recycling standard in 40 CFR 260.43, additional recordkeeping
requirements in the speculative accumulation standard in 40 CFR
261.1(c)(8), the contained standard in 40 CFR 260.10, and the
notification provision in 40 CFR 260.42 for 32 regulatory provisions
that exclude or exempt certain types of recycling from full Subtitle C
regulation. A list of these 32 regulatory provisions can be found
below. The new legitimacy standard would apply to all regulatory
provisions except for 40 CFR 261.7, because it involves determining
whether residues in containers are regulated, and no hazardous
secondary material is being reclaimed. The contained standard and
notification condition would apply to all provisions, although
facilities operating under provisions that already contain specific
regulatory requirements would have to continue meeting those
requirements. The additional recordkeeping requirements for speculative
accumulation would only apply to those regulatory provisions already
subject to speculative accumulation (i.e., hazardous secondary material
being used or reused per 261.2(e), characteristic by-products and
sludges being reclaimed as noted in 40 CFR 261.2 Table 1, and the
recycling-related exclusions in 40 CFR 261.4(a)), but would not apply
to commercial chemical products being reclaimed (see 40 CFR 261.2 Table
1) or to recycling provisions that apply to recycling of solid or
hazardous wastes (as noted in the chart below).

------------------------------------------------------------------------
          --Citation                      Description
------------------------------------------------------------------------
                   260 & 261 Definition of Solid Waste
------------------------------------------------------------------------
1--260.30..............................  Procedures for variances and
                                          non-waste determinations.
2--261.2 (e)...........................  Use/Reuse.
3--261.2 Table 1.......................  Characteristic sludges being
                                          reclaimed.
4--261.2 Table 1.......................  Characteristic by-products
                                          being reclaimed.
5--261.2 Table 1.......................  Commercial chemical products
                                          being reclaimed.
------------------------------------------------------------------------
         261.4(a) Exclusions from the Definition of Solid Waste
------------------------------------------------------------------------
6--261.4(a)(6).........................  Pulping Liquors.
7--261.4(a)(7).........................  Spent Sulfuric Acid.
8--261.4(a)(8).........................  Closed-Loop Recycling.
9--261.4(a)(9).........................  Spent Wood Preservatives.
10--261.4(a)(10).......................  Coke By-Product Wastes.
11--261.4(a)(11).......................  Splash Condenser Dross Residue.
12--261.4(a)(12).......................  Hazardous Oil-Bearing Secondary
                                          Materials and Recovered Oil
                                          from Petroleum Refining
                                          Operations.
13--261.4(a)(13).......................  Processed Scrap Metal.
14--261.4(a)(14).......................  Shredded Circuit Boards.
15--261.4(a)(16).......................  Comparable Fuels.
16--261.4(a)(17).......................  Mineral Processing Spent
                                          Materials.
17--261.4(a)(18).......................  Petrochemical Recovered Oil.
18--261.4(a)(19).......................  Spent Caustic Solutions from
                                          Petroleum Refining.
19--261.4(a)(20).......................  Hazardous Secondary Materials
                                          Used to Make Zinc Fertilizers.
20--261.4(a)(21).......................  Zinc Fertilizers Made from
                                          Recycled Hazardous Secondary
                                          Materials.
21--261.4(a)(22).......................  Used Cathode Ray Tubes (CRTs).
------------------------------------------------------------------------
          261.4(b) Solid wastes which are not hazardous wastes
------------------------------------------------------------------------
22--261.4(b)(12).......................  Spent Chlorofluorocarbon
                                          Refrigerants.
23--261.4(b)(14).......................  Used Oil Distillation Bottoms
                                          used to manufacture asphalt
                                          products.
------------------------------------------------------------------------
     261.6 Requirements for recyclable materials (hazardous wastes)
------------------------------------------------------------------------
24--261.6(a)(3)(ii)....................  Scrap metal.
25--261.6(a)(3)(iii)...................  Waste-derived fuels from
                                          refining processes.
26--261.6(a)(3)(iv)....................  Unrefined waste-derived fuels
                                          and oils from petroleum
                                          refineries.
27--261.6(c)(2)........................  Reclaimers that do not store.
------------------------------------------------------------------------
          261.7 Residues of hazardous waste in empty containers
------------------------------------------------------------------------
28--261.7..............................  Residues of hazardous waste in
                                          empty containers.
------------------------------------------------------------------------
   Part 266 Standards for the Management of Specific Hazardous Wastes
------------------------------------------------------------------------
29--266 Subpart C......................  Recyclable Materials Used in a
                                          Manner Constituting Disposal.
------------------------------------------------------------------------
30--266 Subpart F......................  Materials Utilized for Precious
                                          Metal Recovery.
31--266 Subpart G......................  Spent Lead-Acid Batteries Being
                                          Reclaimed.
32--266 Subpart H......................  Hazardous Waste Burned in
                                          Boilers and Industrial
                                          Furnaces.
------------------------------------------------------------------------

    Note that the possible changes discussed below would be in addition
to the proposed application of the definition of legitimacy to all
recycling, discussed in Section X of this preamble, and the request for
comment on

additional recordkeeping for speculative accumulation, discussed in
Section IX.B.2 of this preamble.

B. Possible Changes to Other Exclusions and Exemptions

1. Contained Standard
    Under the 2008 DSW final rule, hazardous secondary materials must
be contained, whether they are stored in land-based units or non-land-
based units. Generally, such material is considered ``contained'' if it
is placed in a unit that controls the movement of the hazardous
secondary material out of the unit and into the environment. Hazardous
secondary materials that are released to the environment are not
destined for recycling and are clearly discarded. Additionally,
hazardous secondary materials that are not contained, and have not been
immediately recovered, are not being managed as valuable commodities,
which is relevant to determining whether the recycling process is
legitimate. Lastly, requiring that hazardous secondary materials be
contained ensures that the materials are managed in a manner protective
of human health and the environment.
    In the environmental problems study, mismanagement of hazardous
secondary materials was determined to be the cause, or one of the
causes, in 11 percent of the damage cases. Since many of these damage
cases have been associated with a pre-2008 recycling provision, we
believe it appropriate to close this gap by specifically requiring
compliance with the contained standard in 40 CFR 260.10. Of course,
facilities operating under provisions that already contain management
requirements would have to continue meeting those requirements.
2. Notification
    Under the 2008 DSW final rule, facilities managing hazardous
secondary materials are required to submit a notification prior to
operating under the exclusions and by March 1 of each even-numbered
year thereafter to the EPA Regional Administrator or State Director, if
a state is authorized for the program, using the Site ID form, EPA Form
8700-12. The intent of this notification requirement is to provide
basic information to regulatory authorities in order to enable adequate
compliance monitoring and to ensure hazardous secondary materials are
managed according to the exclusion and are not discarded. For example,
in the notification, EPA requires facilities to include the quantity of
hazardous secondary materials that will be managed under each exclusion
and disclose whether certain types of hazardous secondary materials
will be managed in land-based units. This information can be used to
assist RCRA inspectors in determining which facilities may warrant
greater oversight and provides a basis for setting enforcement
priorities. Furthermore, requiring facilities to notify when they have
stopped managing hazardous secondary materials allows states to follow
up at those facilities and ensure that the hazardous secondary
materials have not been discarded.
    Notification information is collected in EPA's RCRAInfo database,
which is the national repository of all RCRA Subtitle C site
identification information, whether collected by a state or EPA. EPA
provides public access to this information through EPA's public Web
site.\53\
---------------------------------------------------------------------------

    \53\ http://www.epa.gov/epawaste/hazard/dsw/impresource.htm.
---------------------------------------------------------------------------

    The 2008 DSW final rule differed from other prior exclusions
because it required facilities claiming the exclusion to notify EPA, or
the authorized state, using an established EPA form (i.e., the Site ID
form) and required facilities to re-notify every two years. Together,
these requirements provide regulatory authorities with regularly
updated data in a consistent format that enables them to collect,
store, access, use, and publicly share information about these
facilities. In contrast, many of the pre-2008 DSW recycling exclusions
and exemptions do not contain any notification requirement and the few
provisions that do require notification do not require a specific
format for submitting the information or periodic updates. This results
in facilities providing information in various forms, such as letters,
which makes it difficult for regulatory authorities to share and use
the information.
    Additionally, a one-time notification requirement has limited
value. With a one-time notification approach, there is no assurance
that the information collected in EPA's databases over time will
accurately reflect facilities that are managing hazardous secondary
materials according to the exclusions. Therefore, the Agency can
imagine instances where extensive resources are required to be spent on
`cleaning up' the data before regulatory authorities can use it to
identify facilities who are currently managing hazardous secondary
materials under the exclusions. With a one-time notification, we can
also foresee problems where regulatory agencies spend time and
resources monitoring compliance at facilities that have since stopped
managing hazardous secondary materials at some point in the past. This
inefficient use of resources would lower the overall effectiveness of
regulators' ability to monitor compliance and could potentially
increase the risk of environmental damage from abuse.
    In the time since the 2008 DSW final rule became effective, we have
received more than 40 notifications from facilities managing hazardous
secondary materials under the generator-controlled and/or transfer-
based exclusions. This information has directly enabled regulatory
authorities to monitor compliance and assist implementation via
guidance materials and training. Additionally, notification has had the
added benefit of identifying facilities that planned to manage
hazardous secondary materials under the rule, but were, in fact,
ineligible for the exclusions. (For example, we have received
notifications from facilities located in a state that had not adopted
the 2008 DSW final rule.) Notification in these instances allowed
regulatory authorities to identify problems and to intervene early to
prevent potential mismanagement.
    In the case of the many of the pre-2008 recycling exclusions and
exemptions, we do not require notification (and even in those instances
where we require notification, it is a one-time notification) and thus
have no reliable or efficient way to receive information that enables
regulatory authorities to adequately monitor these exclusions and
exemptions. We believe this gap increases the risk of environmental
damage stemming from improper management of hazardous secondary
materials being recycled. We, therefore, are requesting comment on
whether to require notification for those facilities operating under
pre-2008 recycling exclusions and exemptions.
    Specifically, we are requesting comment on codifying notification
under Sec.  260.42 for facilities managing hazardous secondary
materials under the pre-2008 recycling provisions. For those exclusions
and exemptions that already require a one-time notification,
notification under Sec.  260.42 would replace, and not duplicate, the
one-time notification requirement.

XIV. Effect of This Proposal on Other Programs

A. Effect on Permitted and Interim Status Facilities

    In the 2008 DSW final rule, EPA discussed how that rule would
affect permitted and interim status facilities.

Specifically, the Agency explained that permitted and interim status
disposal facilities that manage hazardous wastes excluded under the
2008 DSW final rule are affected by the final rule in a number of ways,
depending on the situation at the facility. (74 FR 64715-7) If a
permitted facility seeks to either terminate its operating permit or to
remove units from its permit as a result of the 2008 DSW final rule, a
facility must submit a Class I permit modification request with prior
Agency approval; however, the obligation to address facility-wide
corrective action remains in effect. Similarly, for facilities
operating under interim status, the owner or operator retains
responsibility for unaddressed corrective action obligations at the
facility.
    However, if EPA finalizes today's proposal to replace the transfer-
based exclusion with an alternative Subtitle C regulatory approach, EPA
anticipates that the number of permitted and interim status facilities
that are able to take advantage of the exclusion would be significantly
reduced, because most of the permitted and interim status facilities
affected by the 2008 final rule are excluded under the transfer-based
exclusion. Furthermore, if EPA finalizes the re-manufacturing exclusion
discussed in Section XII of this preamble, the Agency would not expect
TSDFs to be affected, since that exclusion would be limited to
manufacturers. Regardless of the ultimate scope of the exclusion,
however, facilities with units covered by the exclusion should continue
to refer to the preamble in the 2008 final rule (at FR 64715-17) for a
discussion of the effect of the exclusion on permitted and interim
status facilities.

B. Effect on CERCLA

    In 1999, Congress enacted the Superfund Recycling Equity Act
(SREA), explicitly defining those hazardous substance recycling
activities that may be exempted from liability under CERCLA (CERCLA
section 127). Today's proposal, if finalized, would not change the
universe of recycling activities that could be exempted from CERCLA
liability pursuant to CERCLA section 127. The proposal would only
change the definition of solid waste for purposes of the RCRA Subtitle
C requirements. The proposal also would not limit or otherwise affect
EPA's ability to pursue potentially responsible persons under section
107 of CERCLA for releases or threatened releases of hazardous
substances.

C. Effect on the Derived-From Rule

    In the 2008 DSW final rule (October 30, 2008, 73 FR 64692), EPA
notes that the ``derived from'' rule articulated in 40 CFR 261.3(c)(2)
does not apply to residuals from the reclamation of hazardous secondary
materials excluded under the generator-controlled and transfer-based
exclusions. These residuals are a new point of generation for the
purposes of applying the hazardous waste determination requirements of
40 CFR 262.11. If the residuals exhibit a hazardous characteristic, or
they themselves are a listed hazardous waste, they would be considered
hazardous wastes (unless otherwise exempted) and would have to be
managed accordingly. If they did not exhibit a hazardous
characteristic, or were not themselves a listed hazardous waste, they
would have to be managed in accordance with applicable state or Federal
requirements for non-hazardous wastes. EPA believes that in most cases,
this would not be an issue because residuals from hazardous secondary
material reclamation that may be of concern would either themselves be
listed hazardous waste (i.e., still bottoms from the reclamation of
solvents listed in 40 CFR 261.31) or would exhibit a characteristic
(i.e., residuals from metals reclamation with hazardous metals
concentrations above the toxicity characteristic in 40 CFR 261.24). EPA
requests comment, including for any available data, on the
hazardousness of reclamation residuals and whether the derived-from
rule would need to be modified to regulate these residuals as hazardous
waste.

D. Effect on Spent Petroleum Catalysts

    In the 2008 DSW final rule, EPA deferred the question of whether
spent petroleum catalysts should be eligible for the exclusions pending
further consideration of the pyrophoric properties of the spent
petroleum catalysts (73 FR 64714). EPA noted that the Agency was
planning to propose--in a separate rulemaking from the 2008 DSW final
rule--an amendment to its hazardous waste regulations to conditionally
exclude from the definition of solid waste spent hydrotreating and
hydrorefining catalysts generated in the petroleum refining industry
when these hazardous secondary materials are reclaimed. Spent
hydrotreating and hydrorefining catalysts generated in the petroleum
refining industry are routinely recycled by regenerating the catalyst
so that it may be used again as a catalyst. When regeneration is no
longer possible, these spent catalysts are either treated and disposed
of as listed hazardous wastes or sent to RCRA-permitted reclamation
facilities, where metals, such as vanadium, molybdenum, cobalt, and
nickel are reclaimed from the spent catalysts. EPA originally added
spent hydrotreating and hydrorefining catalysts (waste codes K171 and
K172) to the list of RCRA hazardous wastes found in 40 CFR 261.31 on
the basis of toxicity (i.e., these materials were shown to pose
unacceptable risk to human health and the environment when mismanaged)
(63 FR 42110, August 6, 1998). In addition, EPA based its decision to
list these materials as hazardous due to the fact that these spent
catalysts can at times exhibit pyrophoric properties (i.e., can ignite
spontaneously in contact with air).
    It was largely because of these pyrophoric properties that the
petroleum catalysts exhibit that EPA deferred the question of whether
spent petroleum catalysts should be included in the 2008 DSW final rule
exclusions. While spent petroleum catalysts can be a valuable source of
recoverable metals, the risk of these hazardous secondary materials
spontaneously igniting when in contact with air is not a property that
most metal recyclers would be expected to address, and thus, present
additional risks that are not presented by other types of metal-bearing
hazardous secondary materials and are therefore may be most
appropriately managed as hazardous waste when recycled.
    Under today's proposal, EPA is proposing to replace the transfer-
based exclusion with an alternative Subtitle C regulatory approach, and
if finalized, would make the question of the eligibility of most types
of spent catalyst recycling for the 2008 DSW final rule exclusions
moot.\54\ However, EPA is also proposing to add a regulatory definition
of the ``contained'' standard which includes a requirement to address
the risk of fires and explosions. This provision, if properly
implemented, could address the pyrophoric properties of the spent
petroleum catalysts (as well as other types of ignitibility or
reactivity). EPA requests comment on whether this provision would
adequately address the potential for discard of spent petroleum
catalysts due to fire and explosions, thereby allowing EPA to remove
the ineligibility of K171 and K172 from the DSW exclusion, and on other
regulatory options, including adding more conditions (such as specific
container

standards) specific to pyrophoric materials to the exclusion.
---------------------------------------------------------------------------

    \54\ The spent catalysts would be eligible for the alternative
Subtitle C regulations discussed in Section VIII of this preamble.
---------------------------------------------------------------------------

XV. Implementation Issues With 2008 DSW Final Rule

    The 2008 DSW final rule became Federally effective on December 29,
2008. The rule was effective immediately in states and territories for
which EPA manages the RCRA program, specifically Alaska, Iowa, the U.S.
Virgin Islands, the Northern Mariana Islands, American Samoa, and
Tribal lands. The rule does not go into effect in states that are
authorized to manage their own RCRA programs unless and until the state
adopts the rule. Currently, four states--Idaho, Illinois, New Jersey,
and Pennsylvania--have adopted the rule. Within the states and
territories where the 2008 DSW final rule is effective, more than 40
facilities have notified that they are managing hazardous secondary
materials under the generator-controlled and/or the transfer-based
exclusion.
    EPA believes that it is important to support effective
implementation of the 2008 DSW final rule in order to ensure that
hazardous secondary materials are properly managed and not discarded.
Our goal is to reduce the risk of mismanagement of hazardous secondary
materials that may occur from misunderstanding the regulations and
incorrect implementation of the requirements and conditions. To this
end, we have worked with the EPA Regions and states to provide training
and guidance materials for regulators and the regulated community.
Since the 2008 DSW final rule was codified, there have been number of
questions from states and the regulated community regarding how the
rule should be implemented and how it operates in special
circumstances.
    Today, we are taking the opportunity to clarify these issues in the
context of the 2008 DSW final rule. It should be noted that some of
these implementation issues are specific to the transfer-based
exclusion found at 40 CFR 261.4(a)(24), which EPA is proposing to
replace with alternative management standards under Subtitle C of RCRA.
If EPA finalizes this change, some of these issues would become moot.

A. Mixing of Hazardous Secondary Materials Excluded Under 40 CFR
261.4(a)(24) With Similar Hazardous Wastes \55\
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    \55\ This section restates our policy on this issue, which is
published in the ``Guidance for Mixing Hazardous Secondary Materials
Received Under the 40 CFR 261.4(a)(24) Exclusion from the Definition
of Solid Waste with Regulated Hazardous Wastes.'' This guidance can
be found in RCRAOnline and on our DSW Implementation Web site at
http://www.epa.gov/epawaste/hazard/dsw/impresource.htm.
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    One issue regards whether hazardous secondary materials excluded
under 40 CFR 261.4(a)(24) can be mixed with other similar hazardous
wastes within permitted units or exempt recycling units and how such
mixing would affect the requirements of the generator and the
reclaimer. Under Sec.  261.4(a)(24), which covers hazardous secondary
materials transferred off-site for reclamation, hazardous secondary
material generators may send their materials to a facility that
operates under a RCRA Part B permit or interim status standards. In
this case, generators are not required to conduct reasonable efforts on
the reclaimer as long as the RCRA Part B permit extends to the
management of the hazardous secondary materials in question. We believe
Part B permits or the interim status standards provide adequate
assurance that the hazardous secondary materials will be well managed,
specifically because the hazardous secondary materials are managed in
units that are subject to stringent design and operating standards, the
reclaimer must demonstrate financial assurance, and the materials are
subject to the corrective action requirements in the event of
environmental problems.
    EPA understands that some reclaimers are receiving the same type of
hazardous secondary materials for reclamation from multiple generators,
with some amount excluded under Sec.  261.4(a)(24) and some amount
regulated as hazardous waste. The regulatory status of the material
depends on how the generator who sent the materials chose to manage and
transfer the materials off site. We also understand that reclaimers are
interpreting Sec.  261.4(a)(24) to mean that hazardous wastes and
hazardous secondary materials must be stored in separate units and
reclaimed independently of each other in order to preserve the
regulatory status of the excluded material and the exclusion for the
generators that transferred the hazardous secondary materials to the
reclaimer.
    It is clear in the 2008 DSW final rule that EPA allows hazardous
secondary materials that are excluded from full Subtitle C regulation
to be managed under a RCRA Part B permit or interim status standards.
Managing hazardous secondary materials under a RCRA Part B permit
affords further assurance that the hazardous secondary materials will
be properly managed and reclaimed. Additionally, we believe that taking
advantage of the existing recycling infrastructure both improves
efficiency under the rule and increases opportunities for recycling.
    Section 261.4(a)(24) states that the exclusion applies if the
hazardous secondary materials are generated and transferred ``for the
purpose of reclamation.'' Thus, a reclaimer mixing excluded hazardous
secondary materials with regulated hazardous wastes of the same type
may only mix the materials for the purpose of reclamation (and not for
the purpose of, for example, burning for energy recovery or disposal).
    Prior to mixing, the reclaimer must manage the excluded hazardous
secondary materials under Sec.  261.4(a)(24) up to the point that they
mix the excluded materials with similar materials that are regulated
hazardous waste. The reclaimer must comply with all applicable
conditions of Sec.  261.4(a)(24) because it is receiving hazardous
secondary materials transferred for the purpose of reclamation and
excluded from the definition of solid waste. The reclaimer must
therefore meet the applicable conditions of the Sec.  261.4(a)(24)
exclusion, including legitimate reclamation, recordkeeping, financial
assurance, containment of hazardous secondary materials, notification,
and the prohibition on speculative accumulation.
    A reclaimer may only mix hazardous secondary materials excluded
under Sec.  261.4(a)(24) with regulated hazardous waste for the purpose
of reclamation. This can be satisfied by mixing in units that are
dedicated for reclamation, such as storage units that are connected to
reclamation units by hard pipes or other conveyance; storage units that
are solely used to store materials prior to the reclamation process;
and recycling units. Additionally, a reclaimer is not mixing for the
purpose of reclamation if the reclaimer first mixes the materials and
then makes a determination whether the mixture should be reclaimed or
sent for burning or disposal. This determination must be made prior to
mixing the excluded hazardous secondary materials with regulated
hazardous wastes.
    After mixing the excluded hazardous secondary materials with
regulated hazardous waste, the reclaimer must manage the entire mixture
as hazardous waste for the purpose of reclamation. Excluded hazardous
secondary materials cannot be mixed with regulated hazardous waste and
still maintain the exclusion from the definition of solid waste. If
excluded hazardous secondary materials are

mixed with hazardous waste, the resulting mixture is a hazardous waste.
This follows the general principle that RCRA applicability cannot be
avoided by mixing a hazardous waste with another material.\56\
Therefore, the reclaimer must comply with the standard hazardous waste
regulations applicable to hazardous waste managed by an off-site
reclaimer (i.e., 40 CFR 261.6(c) and (d) or 40 CFR part 264 or 265).
The mixture must be stored and managed in compliance with the hazardous
waste regulations applicable to hazardous waste managed by an off-site
reclaimer (i.e., 40 CFR 261.6(c) and (d) or 40 CFR part 264 or 265). If
a reclaimer mixes hazardous secondary materials and other similar
hazardous wastes in a recycling unit, the mixture would be considered
hazardous waste, but the unit would be generally exempt from regulation
under 40 CFR 261.6(c)(2).
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    \56\ Horsehead Resource Development Co., Inc. v. EPA, 16 F3d
1246 (February 1994).
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    Mixing by the reclaimer of excluded hazardous secondary materials
received under 40 CFR 261.4(a)(24) with regulated hazardous wastes does
not affect the requirements applicable to generators who shipped the
hazardous secondary materials, provided that the hazardous secondary
materials are transferred for the purpose of reclamation and the
reclaimer complies with all applicable conditions of Sec.  261.4(a)(24)
prior to mixing. Excluded hazardous secondary materials mixed with
regulated hazardous wastes of the same type become hazardous waste at
the point of mixing and must be managed as such after that point.
Therefore, generators transferring hazardous secondary materials under
Sec.  261.4(a)(24) to a reclaimer who mixes may manage the hazardous
secondary materials under the Sec.  261.4(a)(24) exclusion (e.g.,
longer storage times, shipping without a manifest) because the
hazardous secondary materials have not yet been mixed with regulated
hazardous wastes. (Of course, the generator and the reclaimer must meet
all applicable conditions of Sec.  261.4(a)(24) prior to mixing.)

B. Rejected Loads

    A second issue regards shipments of hazardous secondary material
transferred off-site by the generator for reclamation, but that are
subsequently rejected by the reclaimer (otherwise known as ``rejected
loads''). Because 40 CFR 261.4(a)(24) states that the exclusion applies
if the hazardous secondary material is generated and transferred ``for
the purpose of reclamation,'' EPA has received questions regarding how
generators and reclaimers should handle rejected loads.
    Although EPA did not explicitly address rejected loads in the
preamble to the 2008 DSW final rule, we offered some guidance in our
Response to Comments document for that action. Specifically, we state
that if hazardous secondary materials transferred off-site for
reclamation are subsequently rejected by the reclaimer, the generator
can choose to send the hazardous secondary materials to another
reclamation facility, provided the generator continues to comply with
the conditions of the exclusion, including the speculative accumulation
limits.
    Prior to arranging for transport to an alternate reclamation
facility, hazardous secondary material generators must make reasonable
efforts to ensure the alternate reclamation facility intends to
properly and legitimately reclaim the hazardous secondary material and
must keep records of the off-site shipment and confirmation of its
receipt as required under the 2008 DSW final rule. If a hazardous
secondary material generator is unable to reclaim the hazardous
secondary material in compliance with the speculative accumulation
provision and the other terms of the exclusion, it must manage the
materials as solid and hazardous waste according to the RCRA Subtitle C
hazardous waste regulations. Furthermore, we believe the recordkeeping
conditions (records of all off-site shipments and confirmations of
receipt) are sufficient to ensure the hazardous secondary materials are
properly managed if a rejected shipment must be returned to the
hazardous secondary material generator or sent to an alternate
reclamation facility.
    In the event of a rejected load, generators and reclamation
facilities should contact their regulatory authority in order to
receive instructions on a case-by-case basis. Reclamation facilities
should document their rejected loads, including information such as the
EPA ID number, name, and address of the generator, the date the
facility received the hazardous secondary material, a description and
quantity of the material, the ultimate destination and disposition of
the material, and an explanation of why the load was rejected.
Additionally, we note that efforts to prevent rejected loads may help
to avoid this issue altogether, for example, by sending test samples of
the hazardous secondary material to a reclaimer to ensure that
legitimate reclamation can be performed prior to sending the first
shipment.

C. Interstate Transport

    A third implementation issue regards the transport of excluded
hazardous secondary materials from or to a state that has adopted the
2008 DSW final rule to or from a state that has not adopted the rule
and what conditions would apply in each state. Specifically, if the
originating state has adopted the 2008 DSW final rule, but the
receiving (or transfer) state has not adopted the rule, the hazardous
secondary materials (1) are subject to the hazardous waste requirements
of the receiving state that has not adopted the rule upon reaching the
border of that state (e.g., manifesting requirements); (2) must go to a
RCRA-permitted facility (or other authorized designated facility), and,
if stored, materials must be managed in permitted storage units (or
when applicable under interim status requirements); and (3) cannot go
to an unpermitted recycling facility which is not a designated facility
in a state that has not adopted the rule because such a facility would
not meet the conditions of the exclusion (e.g., financial assurance)
and since the receiving state would not have adopted the exclusion.
    If the originating state has not adopted the rule, but the
receiving state has adopted the rule, the hazardous secondary materials
(1) must be managed as regulated hazardous waste not only in the
originating state, but also in the receiving state that has adopted the
rule (e.g., may be sent to a permitted recycling facility, in the
receiving state, which has notified that it is operating under the
exclusion, but must then be stored only in permitted units at that
facility) and (2) would not be eligible for the exclusion because the
generator in the originating state that has not adopted the rule would
not meet the conditions and requirements of the exclusion. In
particular, the fact that the generator would not have notified EPA
that it is sending the hazardous secondary material to an excluded
reclamation facility, and would not have performed a ``reasonable
efforts'' audit under 40 CFR 261.4(a)(24)(v)(B) to ensure that the
hazardous secondary material will be safely and legitimately reclaimed
could undermine the proper implementation of the 2008 DSW exclusion.
    As noted in written comments submitted in response to the May 2009
public meeting Federal Register Notice, some states that do not plan on
adopting the 2008 DSW final rule in full would like the generators in
their states to be able to send their hazardous secondary materials to
facilities without RCRA permits that are operating under the 40

CFR 261.4(a)(24) transfer-based exclusion in states that have adopted
the rule\57\ One possible solution for such a state might be to adopt
the requirements applicable to generators in the 2008 DSW final rule
(found in 40 CFR 261.4(a)(24)(i-v and vii)), in addition to the state's
hazardous waste requirements, for those generators that wish to ship to
reclaimers without RCRA permits whose operations are covered by the
exclusion. In most cases, a generator following the generating state's
hazardous waste requirements would also meet the 2008 DSW final rule
requirements (i.e., no speculative accumulation, meeting DOT transport
requirements, containment, records of shipments), since the state's