in the recycled product is comparable to or lower than those found in
analogous products. This provision is what EPA proposed in the 2011 DSW
proposal, which included a discussion of how meeting product
specifications could indicate that a recycling process is legitimate,
as well as a request for comments on how EPA should determine what
``comparable'' levels of hazardous constituents are when determining
the legitimacy of a recycling process. In response to comments received
on this point, EPA has added to this paragraph that the product of the
recycling process would be comparable if it meets widely-recognized
commodity standards that include levels that specifically address the
hazardous constituents that are in the product.
    As stated above, the first part of Sec.  260.43(a)(4)(i)(B) is
similar to the provision that EPA proposed in the 2011 DSW proposal. In
this provision, EPA has decided to finalize language replacing the
terms ``significant'' and ``significantly elevated,'' which were
promulgated in the 2008 DSW final rule, with the phrase ``comparable to
or lower'' because it more clearly reflects the intent of this factor.
``Comparable to or lower than'' means that any contaminants present in
the product made from hazardous secondary materials are present at
levels at or lower than the levels contained in an analogous product,
or if higher, would be within a small acceptable range. This language
is consistent with the Identification of Non-Hazardous Secondary
Materials that are Solid Wastes final rule (76 FR 15456, March 21,
2011). However, we are not changing the basic meaning of this factor.
Operationally, the terms ``comparable'' and ``not significant'' or
``not significantly elevated'' are the same for hazardous secondary
materials recycling and the examples the Agency provided in the 2008
DSW final rule preamble that explained how the Agency envisions this
factor working are still appropriate. Those examples are repeated here.

     If paint made from reclaimed solvent contains
significant amounts of cadmium, but the same type of paint made from
virgin raw materials does not contain cadmium, it could indicate
that the cadmium serves no useful purpose and is being passed though
the recycling process and discarded in the product. Thus, the levels
of cadmium would not be considered ``comparable'' and the paint
would fail this legitimacy factor, unless the recycler can conduct
the necessary analysis and prepare documentation stating why the
recycling is still legitimate. In addition, the recycler would need
to certify and provide notice to the implementing agency of this
activity.
     If a lead-bearing hazardous secondary material was
reclaimed and then that material was used as an ingredient in making
ceramic tiles and the amount of lead in the tiles was significantly
higher than the amount of lead found in similar tiles made from
virgin raw materials, the recycler should look more closely at the
factors to determine the overall legitimacy of the process. The
significantly higher levels of lead may indicate that the recycled
product is not comparable to an analogous product and, thus, the
recycling process is really a sham. Alternatively, the recycler may
be able to demonstrate the recycling is still legitimate even though
it does not contain lead at comparable levels by, for example,
showing the toxics are not bioavailable. If this is the case, the
recycler would need to document the analysis and certify the
legitimacy of the recycling practice, as well as provide notice to
the implementing agency.
     If zinc galvanizing metal made from hazardous secondary
materials that are reclaimed contains 500 parts per million (ppm) of
lead, while the same zinc product made from raw materials typically
contains 475 ppm, the levels would be considered comparable since
they are within a small acceptable range and, thus, the product
would meet this factor. If, on the other hand, the lead levels in
the zinc product made from reclaimed hazardous secondary materials
were considerably higher, these levels may not be comparable, and
would require the recycler to look more closely at this factor since
it may indicate that the product was being used to illegally dispose
of the lead and that the activity is sham recycling, unless the
recycler can conduct the necessary assessment and prepare
documentation stating why the recycling is still legitimate. In
addition, the recycler would need to certify and provide notice to
the implementing agency of this activity.
     If a ``virgin'' solvent contains no detectable amounts
of barium, while spent solvent that has been reclaimed contains a
minimal amount of barium (e.g., 1 ppm), this difference would likely
be considered comparable.

    The second part of Sec.  260.43(a)(4)(i)(B) relies not on a
comparison of levels of hazardous constituents between a product of the
recycling process and an analogous product, but on the product of the
recycling process meeting widely-recognized commodity standards and
specifications. In this case, meeting a widely-recognized standard and
specification would indicate that the recycling is legitimate if that
standard and specification includes levels for the hazardous
constituents that are found in the product of the recycling process.
    EPA decided that using a product's ability to meet product
specifications as an indicator of legitimate recycling would make the
determination of legitimate recycling straight-forward in many cases
where the product of the recycling is clearly a commodity in wide use
in commerce. Although not spelled out in the regulatory language used
in the 2008 DSW final rule, consideration of whether the product of a
recycling process meets quality specifications has been part of the
legitimacy determination since the Lowrance Memo in 1989, which
included several questions to this effect as part of its determination
of whether there is a guaranteed market for the product (i.e., Are
there industry recognized product specifications for the product? Is it
listed in industry news letters? Is the reclaimed product a recognized
commodity?). Including this provision on product specifications as part
of this final rulemaking will limit uncertainty from recyclers about
whether their processes are legitimate.
    However, despite the value of product standards, EPA did not want
to state that meeting any product specification was an indicator of
legitimacy because any recycler could design its own specification and
point to that as a way to circumvent the requirement. Therefore, this
requirement requires that the commodity standards being met be widely-
recognized. By ``widely-recognized commodity standard,'' EPA

means a standard that is used throughout an industry to describe a
certain product and that is widely-available to anyone producing the
product. A specific example of such a widely-recognized standard agency
would be ASTM International, which has standards covering a wide
variety of manufactured goods.\31\ However, for specialty batch
chemical manufacturers or other types of specialty manufacturing where
widely-recognized commodity standards are not available, customer
specifications would be sufficient.
---------------------------------------------------------------------------

    \31\ ASTM International, formerly known as the American Society
for Testing and Materials (ASTM), develops and delivers
international voluntary consensus standards. Its Web site states
that 12,000 ASTM standards are used around the world to improve
product quality, enhance safety, facilitate market access and trade,
and build consumer confidence. http://www.astm.org/ABOUT/aboutASTM.html.
---------------------------------------------------------------------------

    In addition, for this part of factor 4, the commodity standards and
specifications being referenced must specifically address those
hazardous constituents that may be different between the analogous
product and the product generated from using the hazardous secondary
material in the recycling process. EPA is making this explicit in the
regulations to avoid a situation in which a product from a process that
is recycling hazardous secondary materials meets a widely-recognized
product specification, but does not include any levels for the
hazardous constituents that are in the hazardous secondary material. A
product specification could have been developed without any thought
that the feedstock for that product might include some hazardous
constituents that could be toxic to human health and the environment
and, therefore, not include them. We are concerned with the potential
that the analogous product could be substituted with the recycled
product without full disclosure of potential toxics that may be in the
recycled product. Using a standard or specification that does not
address the hazardous constituents of concern to demonstrate meeting
factor 4 of the legitimacy requirements where there is an analogous
product would ignore the primary concern of this factor and would allow
elevated levels of toxics from the hazardous secondary material into
the final product.
    b. Factor 4 when there is no analogous product. Commenters on EPA's
2011 DSW proposal expressed concern that, in many cases of hazardous
secondary materials recycling, there may not be an analogous product
with which a facility can compare the product of the recycling process.
Commenters described recycling processes that were designed to use a
specific hazardous secondary material to make a useful product and
processes that always incorporated a hazardous secondary material back
into the generating process during manufacturing. Paragraph
260.43(a)(4)(ii) describes how a facility can meet factor 4 in these
situations.
    EPA had not previously identified a separate methodology for
meeting factor 4 in the situation where there is no analogous product,
but the support in the comments in response to EPA's request for input
on the use of product specifications made it clear that this approach
could be effective in the case where there is no analogous product.
Therefore, EPA is stating in Sec.  260.43(a)(4)(ii)(A) that a product
of the recycling process is comparable to a legitimate product or
intermediate when ``the product of the recycling process is a commodity
that meets widely-recognized commodity standards and specifications.''
EPA gives the example in the regulatory text of commodity specification
grades for common metals, which would be relevant to scrap metal
recyclers, among other metal recyclers.
    As stated above for paragraph (A), EPA decided that using a
product's ability to meet product standards and specifications as an
indicator of legitimate recycling would make the determination of
legitimate recycling more straight-forward in many cases where the
product of the recycling is clearly a commodity in wide use in
commerce. This would limit uncertainty from recyclers about whether
their processes are legitimate.
    However, despite the value of product standards and specifications,
EPA did not want to state that meeting any product standard or
specification was an indicator of legitimacy because any recycler could
design its own specification and point to that as a way to circumvent
the requirement. Therefore, this requirement requires that the
commodity standards and specifications being met be widely-recognized.
By ``widely-recognized commodity standard and specification,'' EPA
means a standard or specification that is used throughout an industry
to describe a certain product and that is widely-available to anyone
producing the product. A specific example of such a widely-recognized
standard agency would be ASTM International, which has standards
covering a wide variety of manufactured goods. Note, for this part of
factor 4, the commodity standard or specification must be widely
recognized, but would not necessarily address a specific hazardous
constituent, since there is no analogous product to compare it to. EPA
has determined that recycled products that do not have analogous
products can ``stand alone'' in that they are not substitutes for
virgin products and thus, either succeed or fail based on their
inherent characteristics, including any hazardous constituents
contained therein. Therefore, EPA has determined that market forces
appropriately dictate whether these types of recycled products meet the
technical provisions of factor 4.
    EPA also wanted to address the situation in which a manufacturing
process produces a hazardous secondary material that is then recycled
back into the process from which they were generated. In some cases,
the product is always manufactured using this kind of feedback loop
and, therefore, there is no analogous product with which it can be
compared. EPA has included in today's final rule a provision that
states that when ``hazardous secondary materials being recycled are
returned to the original process or processes from which there were
generated to be reused, the product of the recycling process is
comparable to a legitimate product or intermediate.'' That is, in those
situations, the recycling process meets factor 4.
    Recycling that takes place under EPA's closed loop recycling
exclusion at Sec.  261.4(a)(8) would be an example of manufacturing
that would consistently include the hazardous secondary material being
returned to the original process from which it was generated and that
would meet the legitimacy factors being discussed here. Another
situation about which commenters expressed concern was mineral
processing to produce primary metals, because these processes always
include materials looping back into the process to ensure that all the
valuable metals that can be extracted from the ore are being collected
for use. For example, in precious metals production, hazardous
secondary materials from various stages in the process contain
concentrations of both precious metals and hazardous constituents that
are higher than concentrations in ore. The concentrations of hazardous
constituents and precious metals in these hazardous secondary materials
vary depending on the makeup of the ore from which they came. In order
to glean the most valuable product from processing the ore, these
hazardous secondary materials are routinely put back into the
production units that process the virgin materials and are put

through the process again. Commenters from the precious metals industry
argued in their comments that they consider this legitimate recycling
of secondary materials (that may be hazardous) and that because of the
variation in the makeup of the materials going back into the process,
determining whether factor 4 has been met would be difficult. Thus, EPA
has determined that the recycling process in these situations--that is,
in which the hazardous secondary material is returned to the original
production process, or the processes from which it was generated--would
meet factor 4.
    EPA has determined that recycling hazardous secondary materials in
this manner is not a concern as far as ``toxics along for the ride''
are concerned because the hazardous secondary materials came out of the
very same process and contain the same hazardous constituents that are
already in the manufacturing process. These hazardous constituents
originated in the raw materials of the process that are being used with
or without the recycling loop. Prohibiting the recycling of hazardous
secondary materials in these situations because of factor 4 would not
be changing the amount or nature of hazardous constituents in the
product that comes out of the manufacturing process. In addition, that
kind of prohibition would be misguided from a resource conservation
perspective because it could limit the recycling of these materials
back into a process, which leads to a more efficient process and
therefore conserves the use of raw materials in manufacturing.
    c. Documentation, certification and notice process for factor 4.
EPA designed the provisions above to make it more clear how a material
can meet factor 4. In addition, they provide additional flexibility to
this factor, where it makes environmental and economic sense. These
added provisions address most of the comments that EPA received stating
that a particular sector or industry would have trouble meeting factor
4.
    EPA recognizes, however, that despite these changes, there may
still be instances where recycling is legitimate, but is unable to meet
the technical provisions of factor 4 as it is written because the
product of the recycling process has levels that are not comparable to
analogous products or because the product of the recycling process
cannot be compared to an analogous product, but does not fit under
Sec.  260.43(a)(4)(ii).\32\
---------------------------------------------------------------------------

    \32\ Note that a recycling facility can also compare the
hazardous constituents in the hazardous secondary material to an
analogous feedstock, if that approach works better for a particular
recycling process.
---------------------------------------------------------------------------

    It is critical that the legitimacy regulations be flexible enough
to allow for situations like this, particularly with the regulations
applying to all recycling. In this final rulemaking, EPA has replaced
the petition process that it proposed in the 2011 DSW proposal with a
documentation, certification and notice process for factor 4.
    Specifically, when a recycling facility has determined that it must
take advantage of the documentation, certification and notice process,
either because the product of the recycling process has levels that are
not comparable to analogous products or because the product of the
recycling process cannot be compared to an analogous product (and Sec.
260.43(a)(4)(ii) does not apply), it must determine that its recycling
process is legitimate despite the levels of hazardous constituents in
the product. The regulatory text for this provision explains that in
doing this analysis, the facility making the determination can consider
``lack of exposure from toxics in the product, lack of the
bioavailability of the toxics in the product, or other relevant
considerations which show that the recycled product does not contain
levels of hazardous constituents that pose a significant human health
or environmental risk.''
    A consideration of lack of exposure from the toxics in a product
would involve an assessment of the process to determine if the
hazardous constituents are likely to come into contact with humans or
the environment in a way that will harm them. For example, a product
that is more of an intermediate in a recycling process and stays within
an industrial setting where it is contained and where everyone coming
into contact with it is familiar with any hazards that it poses could
be considered a candidate for this certification because there is
limited exposure to human health and the environment from the product.
A consumer product, on the other hand, that will be leaving an
industrial setting and entering the market where certain hazardous
constituents may not be expected and may not have limited exposure to
human health and the environment is unlikely to be eligible for this
exception to factor 4.
    For example, as previously explained in the 2008 DSW final rule and
the 2011 DSW proposed rule, EPA has determined that the reuse of lead
contaminated foundry sands may or may not be legitimate, depending on
the use. The use and reuse of foundry sands for mold making in a
facility's sand loop using a non-thermal reclamation process under
normal industry practices has been found to be legitimate because the
sand is part of an industrial process where there is little chance of
the hazardous constituents being released into the environment or
causing damage to human health and the environment when it is kept
inside, because there is lead throughout the foundry's process, and
because there is a clear value to reusing the sand, even though the
levels of hazardous constituents in the sands may not be comparable to
the analogous product. However, in the case of lead contaminated
foundry sand used as children's play sand, the same high levels of lead
would disqualify this use from being considered legitimate recycling.
    An assessment of lack of the bioavailability of toxics in the
product could be a more complicated analysis that would examine whether
the hazardous constituents in the final product are bound up with the
other constituents in such a way that they would not be released when
coming into contact with humans or the environment over the lifetime of
the product. Although this would be a sophisticated assessment, a
facility wishing to perform this kind of analysis to inform a
legitimacy determination under this certification process can do so.
    EPA has included the phrase ``other relevant considerations which
show that the recycled product does not contain levels of hazardous
constituents that pose a significant human health or environmental
risk'' in the regulation to account for other situations that may
arise. An example that was submitted in the comments to the proposal
that could be an ``other relevant consideration'' in making this
determination is when the reclaimed product contains compounds that are
not in analogous products, but the products exhibit similar physical
and chemical risk profiles and therefore are not posing an increased
risk. There may be other considerations regarding factor 4 like these
that could also be relevant to the legitimacy of a recycling process;
however, the Agency thinks these are limited.
    After determining that its process is still legitimate, the
recycling facility would prepare documentation explaining its
assessment. This should take the form of a description of the process
in question and an explanation of the analysis performed to determine
legitimacy, including any relevant diagrams and flow charts, as well as
any

relevant sampling data. In addition, the documentation must include a
certification statement that states that recycling is legitimate and
that is signed by the responsible official at the recycling facility.
The language for the certification is not mandated in the regulations,
but an acceptable example would be ``I certify that the hazardous
secondary recycling process described in these pages is a legitimate
recycling process.''
    The documentation and certification of legitimate recycling would
have to be maintained or available on-site for as long as the recycling
process is operating at the site and for three years after the
recycling operation has ceased.
    In addition to preparing and maintaining this documentation, the
recycling facility would notify its Regional Administrator (or State
Director, in authorized states) that it is taking advantage of this
provision by reporting the type of hazardous secondary material and the
recycling process being used to produce a product with elevated levels
of hazardous constituents (or a product that has no widely-known
commodity standards for the hazardous constituents) through EPA Form
8700-12, otherwise known as the Site ID form.\33\ When a facility
documents, certifies, and submits notice under factor 4, it is
addressing factor 4 for the purposes of the introductory language of
Sec.  260.43, which requires that all requirements of the paragraph be
addressed.
---------------------------------------------------------------------------

    \33\ EPA will revise EPA form 8700-12 to incorporate this
notification. In the interim, persons may notify using the
``Comments'' box on the form.
---------------------------------------------------------------------------

    EPA has decided to finalize this self-implementing certification
process rather than the proposed petition process to reduce burden on
facilities who are taking advantage of this provision, as well as on
the regulatory agencies implementing the regulations. Because this
requirement for documentation and a certification that must be
maintained on-site does not include an approval process, facilities do
not have to wait for any decisions from their implementing agencies
about whether their recycling is legitimate.
    However, the notification aspect of the legitimacy regulations
being finalized today adds some limited, but important, oversight to a
process that would otherwise be taking place out of sight of the
regulating agencies all together, that is, the decision that a
recycling process that does not meet factor 4 is still legitimate. The
notification gives EPA and the authorized states information about
which recycling facilities are producing products from recycled
hazardous secondary materials that have elevated levels of hazardous
constituents when compared to non-recycled products (or are producing
recycled products that have no non-recycled analogue and no widely
recognized commodity specifications). This notification facilitates
oversight and inspections of the recycling facility concerning the
legitimacy of the recycling process, allowing EPA and authorized states
to continue to use existing authorities to determine whether the
recycling is legitimate.
    EPA has chosen this approach because it maintains the self-
implementing nature of the regulations, while providing enough
information to EPA and the authorized states to gather the necessary
information. In these ways, this approach addresses the main concerns
raised by the stakeholders in the comments to this rulemaking.
    A facility that claims to be operating a recycling process that is
legitimate under this provision could be subject to an enforcement
action if the Agency determines that the recycling is sham. As always,
a facility with questions about the regulated status of its hazardous
secondary material can contact its implementing agency for assistance
in making a waste determination.

C. Changes From the Proposal

1. Prohibition of Sham Recycling
    In today's final rule, EPA is codifying the requirement that all
hazardous secondary material recycling must be legitimate. However,
instead of amending the text of each recycling exemption and exclusion,
we are instead codifying a provision in Sec.  261.2(g) that states that
any hazardous secondary material found to be sham recycled is discarded
and thus, a solid waste. This more clearly reflects our intent and our
long-standing policy that only those facilities truly recycling should
be eligible for an exclusion based on recycling the hazardous secondary
materials. We did not intend to cause facilities that are legitimately
recycling to revisit their practices or for state agencies to revisit
past legitimacy determinations. However, we do want to make clear that
sham recycling is not real recycling and thus, any hazardous secondary
material being sham recycled is a solid and potentially a hazardous
waste. By making a clear statement in the definition of solid waste,
the Agency is placing the appropriate emphasis on this issue, that is,
that sham recycling is discard.
2. Documentation
    When the Agency codified the legitimacy standard in the 2008 DSW
final rule, we did not require specific documentation regarding the
legitimacy determination, although the regulatory language stated that
persons claiming to be excluded from hazardous waste regulation because
they are engaged in reclamation must be able to demonstrate that the
recycling is legitimate. In the 2011 DSW proposal, we proposed to
require that persons who perform recycling include documentation in
their paperwork to explain how their hazardous secondary materials are
legitimately recycled.
    After reviewing the public comments, we have decided that, as a
general matter, documentation of legitimacy is not necessary for most
hazardous secondary materials recycling. Instead, we will continue to
rely on the current provision in Sec.  261.2(f) that requires
respondents to demonstrate that the material is not a waste. Section
261.2(f) requires persons claiming that materials are not solid waste
or are conditionally exempt from RCRA Subtitle C regulation to provide
appropriate documentation of these claims.
    However, we are finalizing two exceptions to the general case where
documentation of legitimate recycling is not required. The first is
that we are finalizing a requirement for facilities reclaiming
hazardous secondary materials under the control of the generator, that
is, any facility claiming the exclusion at Sec.  261.4(a)(23), to
document the legitimacy of the reclamation process. We have determined
that it is important for those facilities to document the legitimacy of
their recycling process, given the wide variety of hazardous secondary
materials and industrial processes that can claim to be operating under
the generator-controlled exclusion with relatively few conditions.
After implementing the DSW exclusions in several states since its
promulgation in October 2008, we have determined that documentation of
legitimacy for this particular exclusion is important in ensuring
compliance and will make oversight and enforcement more effective. We
are therefore requiring that persons who perform reclamation under the
control of the generator to include documentation and explain how their
hazardous secondary materials are legitimately reclaimed. We expect
this documentation to be a narrative description, which could include
photographs or other illustrations or process diagrams of how the
reclamation of their hazardous

secondary materials meets the legitimacy factors. Reclaimers of
hazardous secondary materials will need to maintain this documentation
on-site where the reclamation occurs for the duration of the
reclamation operations and for three years after the reclamation
operations cease. Written documentation will provide an easily
available explanation of the facility's rationale for the legitimacy of
its process that is available to the implementing agency on regular
inspections or as part of compliance assistance.
    The other exception where documentation is required is for those
facilities whose product made from recycled hazardous secondary
materials does not meet factor 4, but would still be considered a
legitimately recycled product. Those facilities would need to maintain
documentation as to why, in fact, the recycling is still legitimate as
it relates to factor 4. For a more detailed explanation of that
documentation requirement, refer to section VIII.B.6 above.
3. Factor 4
    In the 2011 DSW proposal, EPA's proposed factor 4 contained two
main requirements to ensure that hazardous constituents were not
``along for the ride'' and being discarded in a final product under the
guise of recycling. The proposed regulation stated that the product of
the recycling process would have to have concentrations of hazardous
constituents that are at levels comparable to or lower than those found
in analogous products. In addition, the proposal stated that the
product of the recycling process could not exhibit a hazardous
characteristic that analogous products did not also exhibit.\34\ EPA
recognized that there would be some legitimate recycling operations
that may not meet this requirement, and so proposed to address this
situation through a petition process in which a facility that did not
meet factor 4 could petition its implementing agency, whether that be a
state environmental agency or an EPA Region, and get agreement from
that agency that its operations were legitimate.
---------------------------------------------------------------------------

    \34\ The language in the proposed regulatory text for this
paragraph mistakenly included an ``or'' instead of an ``and''
between these two requirements of factor 4 although the preamble
discussion on page 76 FR 44124, column 2, correctly used ``and.''
Several commenters pointed this error out to the Agency in their
comments.
---------------------------------------------------------------------------

    Although this approach would provide a way for operations that are
legitimate, but don't meet factor 4 to still operate, commenters from
both the industrial sector, as well as from state regulatory agencies,
commented that this approach was not ideal. Commenters from industry
suggested that there would be more petitioners under this provision
than EPA had anticipated because certain large sectors of industry
would likely be uncertain about whether their recycling would meet the
factor as written and would be compelled to petition their implementing
agencies. Commenters provided some real world examples to illustrate
their concerns with factor 4 that EPA closely examined when redrafting
the language for this provision.
    Commenters also were concerned that the petition process itself
might take too long if the implementing agencies receive petitions from
many facilities and that the response time might end up being very
lengthy. Several of the states that could be responsible for replying
to these petitions also commented that they were not in favor of a
petition process because the resources that would be required to
respond to the petitions are not available in the state program
offices.
    EPA made several changes to factor 4 in response to these comments
and has determined that factor 4, as we are finalizing it today, better
addresses the wide variety of industrial recycling processes. There are
four main changes to the final language of factor 4 as compared to the
2011 DSW proposed regulation.
    First, instead of the two basic proposed provisions that depend on
a comparison with an analogous product, factor 4 as finalized
acknowledges that sometimes there is no analogous product available for
a comparison. Subparagraph (i) covers how a recycling process meets the
factor if there is an analogous product whereas subparagraph (ii),
which was not part of the proposed regulatory language, covers how a
product with no analogous product can meet factor 4.
    Secondly, the finalized regulatory language has provisions for how
widely-recognized industry standards and specifications can be used to
meet factor 4. EPA took comment on the usefulness of specifications for
evaluating hazardous constituents in the product and has determined
that as long as the standards and specifications being relied upon are
widely recognized industry wide standards and specifications for a
product (and in the case of (i), that they address the hazardous
constituents in question), meeting them would be appropriate to show
that hazardous constituents are not being discarded under the guise of
recycling. This should make determinations regarding factor 4 simpler
for a wide range of industries producing common industrial commodities.
EPA did not intend to interfere with long-standing legitimate recycling
in these industries and this addition to the regulatory language should
clarify for those industries that when they are meeting the extensive
commodity standards and specifications for their products, they meet
factor 4 as well.
    The third change is the addition under Sec.  260.43(a)(4)(ii)(B) of
language that states that hazardous secondary materials that are being
recycled by being returned to the original process(es) from which they
were generated meet factor 4. In closed loop recycling and in several
other kinds of recycling, such as in mining and mineral processing,
hazardous secondary materials generated from an industrial process are
regularly returned to that same process to remove more of the valuable
constituent from them. The hazardous constituents in the secondary
material are no different than what is already in the process and
returning them makes the entire manufacturing process more efficient
since it requires fewer raw materials.
    EPA has stated in the past that it would not consider this practice
a concern from the perspective of factor 4 because the comparison in
question is supposed to be between final products, but it was clear
from the comments to the proposal that this question was still a
concern to many facilities. When adding subparagraph (ii) for
situations where there is no analogous product for a comparison, EPA
also added this language to make it clear that processes in which the
hazardous secondary materials are returned to the original process do
meet factor 4.
    Collectively, these changes to the language of factor 4 are an
improvement from EPA's 2011 proposal as the changes clarify when factor
4 is met for a wide variety of industrial processes. Furthermore, a
generator can use its knowledge of the materials it uses and of the
recycling process to make legitimacy determinations under factor 4.
Thus, testing would be rarely required for a recycler to meet this
factor because it would only be necessary when the product of the
recycling does not meet widely-recognized specifications, is not an in-
process material, and when the recycler does not sufficiently know what
is in their final product to make a determination using generator
knowledge.
    Finally, EPA has changed proposed factor 4 to require any facility
that does not meet the technical provisions of this

factor and yet is still legitimately recycling to document, certify,
and provide notice that even though the recycling process does not meet
the technical provisions of this factor, the recycling process is
nevertheless legitimate. This requirement replaces the proposed
petition process. The comments EPA received on the petition process
expressed concern that the process would be expensive for facilities
who wanted to take advantage of it and would place too much of a burden
on implementing agencies. Comments also argued that EPA's estimate of
the number of facilities that would be likely to submit petitions was
overly conservative. Although the changes to factor 4 described here
will address the concerns of many of the facilities who stated that
they would have to submit a petition, the Agency also determined that a
self-implementing process to allow those recyclers to address factor 4
would be more in keeping with the existing policy on legitimacy.
    The certification process requires that a facility go through the
same thought process and assessment about hazardous constituents that
are incorporated into the final product that would have been required
by the petition process (and that is currently consistent with the
Agency's legitimacy policy in the Lowrance Memo). However, instead of
having to submit a petition to an implementing agency when the process
is legitimate despite not meeting the technical provisions of factor 4,
the facility can document and certify the assessment that it has done
and submit a notification on the Site ID form. This is a minimal
burden, particularly as the Site ID form is a form that many of these
facilities are already submitting to EPA for other reasons. In
addition, these facilities are not left waiting for a response from an
agency as they may have had to under the proposed petition procedure.
    All in all, these changes to factor 4 will make this part of the
legitimacy requirement consistent with the current policy in the
Lowrance Memo and Federal Register preamble discussions and allow for
all four legitimacy factors to be requirements that must be met without
adversely affecting existing legitimate recycling.

IX. Revisions to Solid Waste Variances and Non-Waste Determinations

    The Agency is finalizing today several modifications to the
regulation of solid waste variances and non-waste determinations at 40
CFR 260.31(c), 40 CFR 260.33, and 40 CFR 260.34 to ensure protection of
human health and the environment and foster greater consistency on the
part of implementing agencies. These final revisions include:
    (1) Revise 40 CFR 260.33(c) to require facilities to send a notice
to the Administrator (or the State Director, if the state is
authorized) in the event of a change in circumstances that affects how
a hazardous secondary material meets the relevant criteria upon which a
variance or non-waste determination has been based. The Administrator
may issue a determination that the hazardous secondary material
continues to meet the relevant criteria of the variance or non-waste
determination or may require the facility to re-apply for the variance
or non-waste determination;
    (2) Include a provision at 40 CFR 260.33(d) that variances and non-
waste determinations shall be effective for a fixed term not to exceed
ten years. No later than six months prior to the end of this term,
facilities must re-apply if they want to maintain the variance or non-
waste determination;
    (3) Include a provision at 40 CFR 260.33(e) stating that facilities
receiving a variance or non-waste determination must provide
notification as required by 40 CFR 260.42;
    (4) Revise the criteria for the partial reclamation variance in 40
CFR 260.31(c) to clarify when the variance applies and to require,
among other things, that the all criteria for this variance must met;
and
    (5) Revise the criteria for the non-waste determination in 40 CFR
260.34 to require that petitioners explain or demonstrate why their
hazardous secondary materials cannot meet, or should not have to meet,
the existing DSW exclusions under 40 CFR 261.2 or 261.4.
    A discussion of the public comments on the 2011 DSW proposal and
Agency responses can be found in section XVIII of this preamble and the
full response to comment document is in the docket for the rulemaking.

A. Revisions to Procedures for Variances and Non-Waste Determinations
in 40 CFR 260.33

    Under the current regulatory framework, 40 CFR 260.30 provides the
Administrator with the authority to grant a variance from the
definition of solid waste or a non-waste determination on a case-by-
case basis if the hazardous secondary materials are recycled in a
particular manner. The practical effect of both the solid waste
variances and the non-waste determinations is the same; once a petition
is granted by EPA, or the authorized state, the hazardous secondary
material is not regulated as a solid or hazardous waste. The procedures
for these variances and non-waste determinations are found in 40 CFR
260.33.
    In today's rule, EPA is finalizing three changes to 40 CFR 260.33.
First, EPA is requiring in 40 CFR 260.33(c) that facilities send a
notice to the Administrator (or the State Director, if the state is
authorized) in the event of a change in circumstances that affect how a
hazardous secondary material meets the relevant criteria upon which a
variance or non-waste determination has been based. Second, EPA is
establishing in 40 CFR 260.33(d) an effective term limit of ten years
for variances and non-waste determinations unless the petitioner re-
applies to the Agency to have the variance or non-waste determination
renewed. Third, EPA is requiring in 40 CFR 260.33(e) that facilities
re-notify every two years under 40 CFR 260.42.
1. Requirement That an Applicant Send Notice in the Event the Material
No Longer Meets the Relevant Criteria
    EPA is modifying 40 CFR 260.33(c) to require, in the event of a
change in circumstances that affects how a hazardous secondary material
meets the relevant criteria contained in 40 CFR 260.31, 260.32, or
260.34 upon which a variance or non-waste determination has been based,
the applicant must send a description of the change in circumstances to
the Administrator (or the State Director, if the state is authorized).
The Administrator then may issue a determination that the hazardous
secondary material continues to meet the relevant criteria of the
variance or non-waste determination or may require the facility to re-
apply for the variance or non-waste determination.
    The requirement that the hazardous secondary materials must
continue to meet the relevant criteria of a solid waste variance or
non-waste determination is inherent in the regulations. Failure to meet
the criteria could indicate that the hazardous secondary materials are
discarded and a solid waste and would trigger the need to re-examine
the circumstances of the recycling. EPA is codifying this change to 40
CFR 260.33(c) to ensure that if there are changes that may impact how
the hazardous secondary material meets the relevant criteria, that such
changes be considered by the regulatory authority to ensure that those
criteria continue to be met. This requirement will ensure clarity and
consistency by providing an administrative procedure for reconsidering
a variance or non-waste determination in the event that

the hazardous secondary material no longer meets the relative criteria.
    In some cases, a full re-application for a variance or non-waste
determination may not be necessary. Under today's final rule, in the
event of a change, the facility must send a description of the change
in circumstances to the regulatory authority and it is the regulatory
authority that will determine whether the facility must re-apply for a
variance or non-waste determination. This change in procedure allows
the regulatory authority to avoid spending unnecessary resources re-
reviewing petitions where the change in circumstances is found to be of
no consequence to the original variance or non-waste determination the
regulatory authority has granted.
2. Term Limit on Variances and Non-Waste Determinations
    EPA is adding a provision to 40 CFR 260.33(d) that solid waste
variances and non-waste determinations shall be effective for a fixed
term not to exceed ten years. No later than six months prior to the end
of this term, facilities must re-apply for a variance or non-waste
determination if they want to maintain the variance or non-waste
determination. A facility may continue to operate under an expired
variance or non-waste determination if they have submitted an
application for a new variance or non-waste determination six months
prior to the end of the term limit and have not yet received a final
decision on that application from their regulatory authority.
    Variances and non-waste determinations are granted based on the
case-by-case circumstances of a particular hazardous secondary material
being recycled. Many of the variance and non-waste determination
criteria specifically consider factors such as, the manner in which the
hazardous secondary material is recycled, the market factors of the
recycling process, the value of the hazardous secondary material, and
contractual arrangements. However, these factors do not remain static
and, instead, tend to change and evolve over time. It is therefore
prudent that regulatory authorities periodically review these case-by-
case situations to ensure that the hazardous secondary material
continues to meet the criteria of the variance or non-waste
determination.
    Variances and non-waste determinations are granted for a fixed term
not to exceed ten years from the date the facility is granted a
variance or non-waste determination. If, for example, due to a change
in circumstances, a facility is required to re-apply for a variance or
non-waste determination within the 10-year time limit of its initial
petition, then an automatic re-application would not be initiated until
ten years after its second variance or non-waste determination is
granted, unless otherwise specified by the regulatory authority.
Additionally, regulators may stipulate time limits of less than 10
years, if warranted.
3. Re-Notification Requirement
    EPA is adding a provision to 40 CFR 260.33(e) to require facilities
receiving variances or non-waste determinations to send a notification
of this activity prior to operating under the regulatory provision and
by March 1 of each even-numbered year thereafter to the Regional
Administrator (or State Director, if the state is authorized) using EPA
Form 8700-12 in compliance with 40 CFR 260.42. Additionally, these
facilities must notify within 30 days of stopping management of
hazardous secondary materials under the variance or non-waste
determination.
    The intent of the notification is to enable variances and non-waste
determinations to be tracked nationally and over time, which
facilitates state-to-state consistency in determinations. Additionally,
notifications enable effective oversight of facilities receiving
variances and non-waste determinations because it provides regulatory
authorities with a mechanism for receiving regularly updated
information (such as information regarding quantities of hazardous
secondary materials managed under the 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).
    EPA finds that the notification requirement under 40 CFR 260.42 has
worked well in enabling regulatory authorities to monitor compliance of
facilities operating under the 2008 DSW final rule. 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 identify problems so as to intervene early to
prevent potential mismanagement. EPA is convinced of the value of the
notification provision in ensuring proper implementation of its rules.
Therefore, notification for variances and non-waste determinations will
increase transparency and oversight of facilities receiving a variance
or non-waste determination.

B. Revisions to Partial Reclamation Variance in 40 CFR 260.30(c)

    The ``partial reclamation'' variance in 40 CFR 260.30(c) applies to
hazardous secondary 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 partially-reclaimed material must meet in
order to be eligible for a variance from classification from solid
waste.
    In this final rule, EPA is revising 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 the revisions are to clarify the regulatory
language, foster consistent application of the variance criteria, and
emphasize that the variance should be granted only when partial
reclamation has produced a commodity-like material. EPA's modifications
to 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 to provide greater
clarity; and (4) eliminating the sixth criterion, ``other relevant
factors.''
1. Purpose of Revisions to Partial Reclamation Variance
    When the partial reclamation variance was promulgated in 1985,
EPA's original intent was to provide a mechanism for determining if a
hazardous secondary material 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.

    However, EPA has become aware that authorized states across the
country have applied the variance provision differently in similar
circumstances. These differences may be due to: (1) The wide discretion
allowed to 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.''
    As a result, variances have been granted under 40 CFR 260.31(c) for
some materials that are not commodity-like. Therefore, EPA is
finalizing revisions to the variance criteria to address the
inconsistency among authorized states, remove ambiguities, and clearly
convey the intent of the partial reclamation variance that only
partially reclaimed hazardous secondary materials that have produced
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: Providing Context--The Example of F006
Electroplating Sludges,'' \35\ which is included in the docket for this
rulemaking. This document includes a detailed description of how the
revised variance provision would be used to make determinations about
whether a variance would be appropriate for the listed hazardous waste
F006 (wastewater treatment sludges from electroplating operations) at
various steps in the reclamation process.
---------------------------------------------------------------------------

    \35\ Docket ID: EPA-HQ-RCRA-2010-0742-0016.
---------------------------------------------------------------------------

2. Revisions to Introductory Text of 40 CFR 260.31(c)
    EPA revised the introductory text of 40 CFR 260.31(c) to clarify
when a partial reclamation variance is applicable and to identify what
factors must be used to make a determination that a partially-reclaimed
material is commodity-like. The revised text states:

    The Administrator may grant requests for a variance from
classifying as a solid waste those hazardous secondary materials
that have been partially reclaimed, but must be reclaimed further
before recovery is completed, if the partial reclamation has
produced a commodity-like material. A determination that a
partially-reclaimed material for which the variance is sought is
commodity-like will be based on whether the hazardous secondary
material is legitimately recycled as specified in Sec.  260.43 of
this part and on whether all of the following decision criteria are
satisfied:

As noted above, the revised text replaces the word ``reclaimed'' with
``partially-reclaimed'' and clarifies that the variance is applicable
at the point that partial reclamation ``has produced a commodity-like
material.'' These changes clarify and reflect EPA's intent that the
variance applies only after partial reclamation has produced a
commodity-like material and does not apply prior to producing a
commodity-like material.
    To make a determination that a partially-reclaimed material is
commodity-like, EPA revised the introductory text to require that such
a determination will be based on whether the hazardous secondary
material is legitimately recycled and whether all the decision criteria
are satisfied.
3. Revisions to Criteria for Partial Reclamation Variance
    Each criterion under 40 CFR 260.31(c) has been revised to begin
with the word ``whether'' to require that the regulatory authority must
make a yes or no determination as to whether the material meets each
criterion. In addition, each criterion has been revised to clarify and
incorporate the characteristics of a commodity-like material.
    The first criterion in 40 CFR 260.31(c)(1) asks whether the degree
of partial reclamation the material has undergone is substantial as
demonstrated by using a partial reclamation process other than the
process that generated the hazardous waste. By using a partial
reclamation process other than the process that generated the hazardous
waste, the more likely that the material will be commodity-like.
Changes from the original language of the criterion include (1)
replacing the general word ``processing'' with the words ``partial
reclamation''; and (2) removing from the criterion ambiguity that could
lead a regulatory authority to apply the variance after the initial
partial reclamation process when a commodity-like material is not
produced until completion of further reclamation.
    The second criterion in 40 CFR 261.31(c)(2) asks whether the
partially-reclaimed material has sufficient economic value that it will
be purchased for further reclamation. Changes from the original
language of the criteria include: (1) Adding 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; and (2) revising the wording to reflect
the fundamental characteristic that a commodity-like material has
sufficient economic value that it will be purchased for further
reclamation. 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 ``partially-reclaimed''
material 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 materials; and
business contracts, such as contracts specifying quantities of material
sold, details of the transaction, and the effective price paid for the
partially-reclaimed material by purchasers. The price paid for the
partially-reclaimed material should be calculated after subtracting
transportation costs and any other goods or services rendered in
exchange for the material purchased.
    The third criterion in 40 CFR 260.31(c)(3) asks whether the
partially-reclaimed material is a viable substitute for a product or
intermediate produced from virgin or raw materials and which is used in
subsequent production steps. Changes from the original language of the
criteria include (1) adding 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; and (2) replacing 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 is used in
subsequent production steps.'' This revision is intended to demonstrate
that a partially-reclaimed, commodity-like material is one that will be
used as a viable substitute for a product or intermediate in
production. 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.
    The fourth criterion in 40 CFR 260.31(c)(4) asks whether there is a
market for the partially-reclaimed material as demonstrated by known
customer(s) who are further reclaiming the material (e.g., records of
sales and/or contracts and evidence of subsequent

use, such as bills of lading). Changes from the original language of
the criteria include (1) adding 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; (2) deleting the word ``guaranteed'' since markets are
often unpredictable; (3) deleting the word ``end'' prior to the word
``market'' since the partially-reclaimed material could be sold to
another reclaimer before it is sold to a final manufacturer or final
reclaimer; and (4) adding the phrase, ``as demonstrated by known
customer(s) who are further reclaiming the material (e.g. record of
sales and/or contracts, and evidence of subsequent use, such as bills
of lading),'' to clarify how a facility may demonstrate a market for
the partially-reclaimed material. Additionally, this change ensures
that the partially-reclaimed material is being shipped for further
reclamation rather than being potentially stockpiled by the partial
reclaimer. Evidence to support this criterion may include the
material's value as an input to a production process; traditional usage
of quantities of the partially-reclaimed material; and the likely
stability of markets for the material. A market for further reclaimed
material produced at a later stage of reclamation cannot be used to
justify a variance for a partially-reclaimed material. For example, if
a facility requests a variance for an incoming partially-reclaimed
hazardous waste, the market that would have to be evaluated is the
market for the incoming partially-reclaimed hazardous waste itself, not
the final product.
    The fifth criterion in 40 CFR 260.31(c)(5) asks whether the
partially-reclaimed material is handled to minimize loss. Changes from
the original language of the criteria includes adding 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. 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 secondary
materials with little or no economic value do not have the same
incentives to minimize loss as persons handling commodities. The
management of materials produced at later stages of the reclamation
process is not relevant to whether the partially-reclaimed material is
eligible for a variance. 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.
    Finally, in today's final rule, EPA is removing the sixth criterion
in 40 CFR 260.31(c)(6), which allowed the regulatory authority to
consider other relevant factors when deciding whether a partially-
reclaimed materials is commodity-like. 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 has learned that
this criterion may have contributed to different determinations of
whether the same partially-reclaimed material is commodity-like.
Accordingly, EPA has determined that the appropriate and complete set
of criteria to consider when determining whether a partially-reclaimed
material is commodity-like are criteria (1)-(5).

C. Revisions to Non-Waste Determinations Found in 40 CFR 260.34

    In today's final rule, EPA is adding a criterion to non-waste
determinations in 40 CFR 260.34 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 40 CFR
261.2 or 261.4.\36\ Commenters to the 2009 DSW public meeting notice
have argued that the non-waste determinations may be burdensome to
states, and thus, requiring applicants to formally consider and explain
why they are not eligible for an existing DSW exclusion will reduce the
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 regulatory authority why a facility believes it
cannot meet an existing exclusion, which is likely to be the regulatory
authority's first question before evaluating a non-waste determination
petition. Petitioners also would be allowed to seek a non-waste
determination if they could demonstrate 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 40
CFR 261.2 or 261.4, this may be grounds for denying a non-waste
determination on the basis that regulatory relief has already been
provided.
---------------------------------------------------------------------------

    \36\ 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.
---------------------------------------------------------------------------

X. Effect on Facilities Currently Operating Under Solid Waste
Exclusions

A. Effect on Pre-2008 Solid Waste Exclusions

    The final rule does not supersede any of the pre-2008 solid waste
exclusions or other prior solid waste determinations or variances,
including determinations made in letters of interpretation and
inspection reports. If a hazardous secondary material has been
determined not to be a solid waste for whatever reason, such a
determination remains in effect, unless the authorized state decides to
revisit the regulatory determination under their current authority. In
addition, if a hazardous secondary material has been excluded from
hazardous waste regulations--for example, under the Bevill exclusion in
40 CFR 261.4(b)(7)--the regulatory status of that material will not be
affected by today's rule.
    However, there are two revisions to the regulations that, while
they do not directly affect the regulatory status of excluded hazardous
secondary materials, may impact facilities' responsibilities under an
existing exclusion. These two revisions are (1) a new recordkeeping
requirement for speculative accumulation; and (2) a documentation,
certification, and notification requirement for recycling processes
which are legitimate despite having levels of hazardous constituents
that are not comparable to or unable to be compared to a legitimate
product. These requirements must be met by the effective date of the
rule, which is July 13, 2015.
1. Revised Speculative Accumulation Requirement
    Under the revised speculative accumulation requirement in Sec.
261.1(c)(8), all persons subject to the speculative accumulation
requirements (for example, persons reclaiming characteristic by-
products and sludges under 40 CFR 261.2(c)(3) and persons reclaiming
hazardous secondary

materials under a definition of solid waste exclusion under 40 CFR
261.4(a), such as the sulfuric acid exclusion at Sec.  261.4(a)(7) or
the generator-controlled exclusion at Sec.  261.4(a)(23)) must label
their storage unit(s) by indicating the first date that the material
began to be accumulated. If placing a label on the storage unit is not
practicable, the accumulation period must be documented through an
inventory log or other appropriate method.
2. Prohibition of Sham Recycling and Definition of Legitimate Recycling
    The codification of the prohibition of sham recycling (Sec.
261.2(g)), and the definition of legitimate recycling (Sec.  260.43)
being finalized today will not impose any new requirements on persons
recycling under the pre-2008 recycling exclusions, except in the case
where the product of the recycling process (1) has levels of hazardous
constituents that are not comparable to or lower than those in a
legitimate product (i.e., are significantly elevated) or (2) is unable
to be compared to a legitimate product and the product of the recycling
process is not a widely recognized commodity (e.g., scrap metal) and is
not returned to the original production process (e.g., closed loop
recycling).
    In this case, the person performing the recycling must conduct the
necessary analysis and prepare documentation stating why the recycling
is still legitimate. Persons may consider exposure from toxics in the
product, the bioavailability of the toxics in the product, and other
relevant considerations which show that the recycled product does not
contain levels of hazardous constituents that pose a significant human
health or environmental risk. The documentation must include a
certification statement that the recycling is legitimate and must be
maintained on-site. The person performing the recycling must also
notify his Regional Administrator (or State Director, if the state is
authorized) of this activity using EPA Form 8700-12.

B. Effect on Facilities Operating Under the 2008 Solid Waste Exclusions

1. Facilities Operating Under Generator-Controlled Exclusion (40 CFR
261.2(a)(2)(ii) or 261.4(a)(23)) \37\
---------------------------------------------------------------------------

    \37\ Today's rule consolidates the 2008 generator-controlled
exclusion at 40 CFR 261.2(a)(2)(ii) and 40 CFR 261.4(a)(23) into one
exclusion at 40 CFR 261.4(a)(23).
---------------------------------------------------------------------------

    Because today's rule includes more stringent standards for the
generator-controlled exclusion at 40 CFR 261.4(a)(23), facilities that
are currently managing hazardous secondary materials under these
provisions must ensure they are complying with the more stringent
standards by the effective date of the rule, which is July 13, 2015 (or
in an authorized state, by the effective date in that state). The new
provisions include (1) complying with the regulatory definition of
``contained'' found in 40 CFR 260.10; (2) maintaining shipping records
for reclamation under same-company and toll manufacturing agreements;
(3) (for the person performing the recycling) documenting how the
recycling meets all four factors of the legitimacy definition in 40 CFR
260.43,\38\ and (4) meeting the new emergency preparedness and response
conditions.
---------------------------------------------------------------------------

    \38\ As part of the requirement of meeting 40 CFR 260.43, if the
product of recycling contains levels of hazardous constituents that
are not comparable to or are unable to be compared to a legitimate
product, the person performing the recycling must document, certify
and notify the appropriate Regional Administrator of why the
recycling is still legitimate. Where there is no analogous product
made from virgin materials, the product of the recycling process is
comparable to a legitimate product or intermediate if the product of
the recycling process is a commodity that meets widely recognized
commodity standards and specifications, or the hazardous secondary
materials being recycled are returned to the original process or
processes from which they were generated to be reused.
---------------------------------------------------------------------------

    Under the new regulatory definition of contained, a hazardous
secondary material is contained if it is managed in a unit (which can
include a land-based unit such as a pile) that meets the following
criteria: (1) The unit is in good condition, with no leaks or other
continuing or intermittent unpermitted releases of the hazardous
secondary materials to the environment, and is designed, as appropriate
for the hazardous secondary material, to prevent releases of the
hazardous secondary material to the environment. Unpermitted releases
are releases that are not covered by a permit (such as a permit to
discharge to water or air) and may include, but are not limited to,
releases through surface transport by precipitation runoff, releases to
soil and groundwater, wind-blown dust, fugitive air emissions, and
catastrophic unit failures; (2) the unit is properly labeled or
otherwise has a system (such as a log) to immediately identify the
hazardous secondary materials in the unit; and (3) the unit holds
hazardous secondary materials that are compatible with other hazardous
secondary materials placed in the unit and is compatible with the
materials used to construct the unit and addresses any potential risks
of fires or explosions. Hazardous secondary materials in units that
meet the applicable requirements of 40 CFR part 264 or 265 (e.g., tanks
and containers) are presumptively contained.
    Under the new requirements to document shipments for reclamation
performed under the same-company and toll manufacturing provisions of
the generator-controlled exclusion at 40 CFR 261.4(a)(23), generating
and receiving facilities must maintain records of hazardous secondary
materials sent or received under this exclusion at their facilities for
no less than three years. The records must contain the name of the
transporter, the date of the shipment, and the type and quantity of the
hazardous secondary material shipped or received. The requirements may
be satisfied by routine business records (e.g., financial records,
bills of lading, copies of DOT shipping papers, or electronic
confirmations).
    Persons performing the recycling of hazardous secondary materials
under the generator-controlled exclusion of 40 CFR 261.4(a)(23) must
also maintain documentation of their legitimacy determination on-site.
Documentation must be a written description of how the recycling meets
all four factors in 40 CFR 260.43(a). Documentation must be maintained
for three years after the recycling operation has ceased.
    The Agency is not requiring any particular format for the
documentation of legitimacy; however, we expect that the recycler would
have written documentation describing the recycling process and how it
meets each legitimacy factor. For example:

     Useful contribution legitimacy factor--the recycler
would document how the hazardous secondary material(s) provides a
useful contribution to the recycling process or to the product or
intermediate of the recycling process. The regulatory text for this
factor provides five ways in which a useful contribution can be
achieved. The recycler would need to document how the hazardous
secondary material(s) add value and/or are useful to the recycling
process in one or more of these ways: (i) Contributing valuable
ingredients to a product or intermediate; (ii) replacing a catalyst
or carrier in the recycling process; (iii) providing a valuable
constituent to be recovered; (iv) being regenerated; or (v) being
used as an effective substitute for a commercial product. For
example, if the hazardous secondary material is a source of a
valuable constituent, such as a precious metal, the document would
explain the specific precious metal(s) recovered and their value to
the process.
     Valuable product or intermediate legitimacy factor--the
recycler would explain how the product or intermediate made from
hazardous secondary material is valuable, either in a monetary sense
or through its intrinsic value. If the product made from hazardous
secondary material is sold, the

documentation of sale could be proof of the value of the material to
a third party. Such documentation could be in the form of a
selection of receipts or contracts and agreements that establish the
terms of the sale or transaction. A recycler that has not yet
arranged for the sale also could demonstrate value by showing that
the product or intermediate can replace another product or
intermediate that is available in the marketplace. Demonstrating
intrinsic value may be less straightforward than demonstrating the
value of products that are sold in the marketplace, but could
involve an explanation of the industrial process that shows how the
product of the recycling process or intermediate replaces an
alternative product that would otherwise have to be purchased.
     Managed as a valuable commodity legitimacy factor--the
recycler would include a description of how the hazardous secondary
material is managed and explain how this management is similar or
provides equivalent protection to the management of an analogous raw
material. That is, the documentation would describe how the
hazardous secondary material is stored and handled prior to being
inserted into the recycling process. Where there is no analogous raw
material, the recycler would explain how the management of the
hazardous secondary material ensures that the material is contained
as discussed in 40 CFR 260.10.

    Comparison of comparability of the product of recycling to a
legitimate product factor--the recycler would include any data or
information that shows that (1) the levels of hazardous constituents in
the product are comparable to or lower than those found in analogous
products, or are comparable to levels that meet widely-recognized
commodity standards (in the case where the commodity standards include
levels that specifically address those hazardous constituents), or (2)
if there is no analogous product, that the product meets widely
recognized commodity standards, or that hazardous secondary materials
being recycled are returned to the original process or processes from
which they were generated to be reused. If the product of the recycling
process has levels of hazardous constituents that are not comparable to
or unable to be compared to a legitimate product, but the recycling is
still legitimate, the person performing the recycling must conduct the
necessary analysis and prepare documentation stating why the recycling
is, in fact, still legitimate. Persons can consider exposure from
toxics in the product, the bioavailability of the toxics in the
product, and other relevant considerations which show that the recycled
product does not contain levels of hazardous constituents that pose a
significant human health or environmental risk. The documentation must
include a certification statement that the recycling is legitimate and
must be maintained on-site. In addition, the person performing the
recycling must notify his Regional Administrator (or the State
Director, if the state is authorized) of this activity using EPA Form
8700-12.
    Finally, under the new standards for emergency preparedness and
response found in 40 CFR part 261 subpart M, generators that accumulate
less than or equal to 6,000 kg of hazardous secondary material on site
must comply with the emergency preparedness and response requirements
equivalent to those in part 265 subpart C, which discuss maintaining
appropriate emergency equipment on site, having access to alarm
systems, maintaining needed aisle space, and making arrangements with
local emergency authorities. A generator must also have a designated
emergency coordinator who must respond to emergencies and must post
certain information next to the telephone in the event of an emergency.
For generators that accumulate more than 6,000 kg of hazardous
secondary material on site, EPA is requiring that generators comply
with requirements equivalent to those in part 265 subparts C and D,
which includes all the requirements already discussed above for those
accumulating less than or equal to 6,000 kg, as well as requiring a
contingency plan and sharing the plan with local emergency responders.
2. Facilities Operating Under Transfer-Based Exclusion (40 CFR
261.4(a)(24) or (25))
    Because today's rule replaces the transfer-based exclusion at 40
CFR 261.4(a)(24) and (25) with a verified recycler exclusion,
facilities that are currently managing hazardous secondary materials
under the transfer-based exclusion at 40 CFR 261.4(a)(24) must meet the
terms of the verified recycler exclusion by the effective date of the
rule, which is July 13, 2015 (or in an authorized state, by the
effective date in that state). That is, facilities operating under the
transfer-based exclusion who wish to continue operating under the
verified recycler exclusion must send in a new notification form and
meet the additional conditions in the verified recycler exclusion,
including the emergency preparedness and response condition. In
addition, any reclamation facility or intermediate facility that does
not have a RCRA permit or is not operating under interim status must
stop managing the hazardous secondary material under the transfer-based
exclusion until they apply for and receive a variance from either EPA
or the authorized state under the verified recycling exclusion. (As of
February 2014, there were no facilities without a RCRA Subtitle C
permit recycling under the transfer-based exclusion, so EPA does not
expect this impact to occur).
    Because the verified recycler exclusion is limited to recycling in
the United States, facilities exporting hazardous secondary material
under 40 CFR 261.4(a)(25) must cease operating under this exclusion by
the effective date of the rule. The facility must notify his Regional
Administrator (or State Director, if the state is authorized) using EPA
Form 8700-12 that they have stopped managing hazardous secondary
materials under the exclusion in accordance with 40 CFR 260.42(b).
Facilities must submit this notification within 30 days of stopping
management of hazardous secondary materials under this exclusion. Note
that facilities that manage hazardous secondary materials under both
the export exclusion at 40 CFR 261.4(a)(25) and the transfer-based
exclusion at 40 CFR 261.4(a)(24) and/or and the generator-controlled
exclusion at 40 CFR 261.4(a)(23) would not notify that they have
stopped managing hazardous secondary materials, but would instead
update their notification to make it clear they are no longer using the
export exclusion at 40 CFR 261.4(a)(25).

XI. 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
spent 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 therefore may
be most appropriately managed as hazardous waste when recycled.
    Under today's final rule, EPA has added a regulatory definition of
the ``contained'' standard as it applied to the generator controlled
exclusion (40 CFR 261.4(a)(23)) and to the verified recycler exclusion
(40 CFR 261.4(a)(24)). This new definition includes a requirement to
address the risk of fires and explosions. This provision addresses the
pyrophoric properties of the spent petroleum catalysts (as well as
other types of ignitibility or reactivity) for the purposes of the
generator-controlled exclusion and the verified recycler exclusion.
Therefore, EPA has revised the generator-controlled exclusion to allow
spent petroleum catalysts to be eligible for that exclusion, and is
also allowing spent petroleum catalysts to be eligible for the verified
recycler exclusion.

XII. Effect on CERCLA

    A primary purpose of today's final rule is to encourage the safe,
beneficial reclamation of hazardous secondary materials. In 1999,
Congress enacted the Superfund Recycling Equity Act (SREA), explicitly
defining those hazardous substance recycling activities that may be
exempted from liability under the Comprehensive Environmental Response,
Compensation and Liability Act (CERCLA) (CERCLA section 127). Today's
final rule does not change the universe of recycling activities that
could be exempted from CERCLA liability pursuant to CERCLA section 127.
Today's final rule only changes the definition of solid waste for
purposes of the RCRA Subtitle C requirements. The final rule also does
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.

XIII. General Comments on the 2011 Proposed Revisions to the Definition
of Solid Waste

    EPA received hundreds of comments on the July 2011 DSW proposal,
most of which were quite detailed and raised multiple issues. Below is
an overview of some of the major comments on general aspects of the
proposals and a summary of EPA's responses to those comments. For a
complete discussion of all the comments and EPA's responses to those
comments, please see 2014 Revisions to the Definition of Solid Waste
Final Rule Response to Comment Document found in the docket for today's
rulemaking.

A. EPA's Legal Authority To Regulate Hazardous Waste Recycling

Comments: EPA's Authority
    EPA received many comments that asserted that EPA has no authority
to regulate legitimate recycling, because commenters believe that
hazardous secondary materials sent for recycling are not discarded and
therefore, are not solid wastes. The comments state that EPA has
misread the intent of Congress, citing previous court cases, noting the
``analysis of the statute reveals clear Congressional intent to extend
EPA's authority only to materials that are truly discarded, disposed
of, thrown away, or abandoned'' (AMC I, 824 F.2d at 1190). They go on
to argue that materials being recycled do not fall into one of these
enumerated activities.
    Specifically, many of the comments cite the ABR decision (which in
turn cites earlier court decisions), where the court noted that EPA's
authority is ``limited to materials that are `discarded' by virtue of
being disposed of, abandoned, or thrown away'' and that ``[s]econdary
materials destined for recycling are obviously not of that sort. Rather
than throwing them away, the producer saves them, rather than
abandoning them, the producer reuses them'' (ABR 208 F.3d at 1051). The
court also noted that ``To say that when something is saved it is
thrown away is an extraordinary distortion of the English language''
(Id. at 1053).
    Many commenters took issue with EPA's decision to withdraw the
transfer-based exclusion. These comments criticize EPA's rationale that
``subsequent activities are more likely to involve discard, given that
the generator has relinquished control of the hazardous secondary
material'' (72 FR 14178). In particular, commenters cited Safe Food and
Fertilizer, stating that the D.C. Circuit addressed an argument by the
petitioners in the case that ``material that is transferred to another
firm or industry for subsequent recycling'' is discarded and subject to
RCRA regulation. 350 F.3d 1263, 1268 (D.C. Cir. 2003). The court said:

    [W]e have never said that RCRA compels the conclusion that
material destined for recycling in another industry is necessarily
`discarded.' . . . Although ordinary language seems inconsistent
with treating immediate reuse within an industry's ongoing
industrial process as a `discard' . . . the converse is not true. As
firms have ample reasons to avoid complete vertical integration . .
. firm-to-firm transfers are hardly good indicia of a `discard' as
the term is ordinarily understood. Id.

EPA's Response: EPA's Authority
    EPA disagrees with the comments that Congress did not intend to
give EPA the authority to regulate hazardous waste recycling. As EPA
noted in the July 2011 DSW proposal, the RCRA statute and the
legislative history suggest that Congress expected EPA to regulate as
solid and hazardous wastes certain materials that are destined for
recycling (see 76 FR 44097, citing numerous sections of the statute and
U.S. Brewers' Association v. EPA, 600 F. 2d 974 (D.C. Cir. 1979); 48 FR
14502-04, April 3, 1983; and 50 FR 616-618). Moreover, the case law
discussed above clearly shows instances where EPA properly regulated
the recycling of solid and hazardous wastes.
    EPA also disagrees with comments that EPA cannot consider the fact
that the generator has relinquished control of the hazardous secondary
material (along with other factors that indicate discard) in deciding
to withdraw the transfer-based exclusion. EPA's authority to regulate
such transfers is clear: As the Court noted in Safe Food, ``materials
destined for future recycling by another industry may be considered
`discarded'; the statutory definition does not preclude application of
RCRA to such materials if they can reasonably be considered part of the
waste disposal problem'' (350 F.3d at 1268).
    EPA's record for today's rulemaking demonstrates that third-party
recycling of hazardous secondary materials has been and continues to be
part of the waste disposal problem. As noted in the July 2011 DSW
proposal, EPA has already evaluated these hazardous

secondary materials (for example, during a hazardous waste listing
determination) and determined them to be solid and hazardous wastes.
(76 FR 44109) Therefore, a conditional exclusion must reasonably be
expected not to result in the excluded hazardous secondary material
being discarded. Of the 250 damage cases evaluated in the 2014
environmental problems study, 229 (or approximately 92%) were from
reclamation activities of off-site third-party recyclers, with clear
instances of discard resulting in risk to human health and the
environment, including cases of large-scale soil and ground water
contamination with remediation costs in some instances in the tens of
millions of dollars.\39\
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    \39\ U.S. EPA, An Assessment of Environmental Problems
Associated with Recycling of Hazardous Secondary Materials (Updated)
December 2014.
---------------------------------------------------------------------------

    In addition, the market forces study in the docket for the 2008 DSW
final rule supports the conclusion that the pattern of discard at off-
site, third-party reclaimers is a result of inherent differences
between commercial recycling and normal manufacturing. As opposed to
manufacturing, where the cost of raw materials or intermediates (or
inputs) is greater than zero and revenue is generated primarily from
the sale of the output, hazardous secondary materials recycling can
involve generating revenue primarily from the receipt of the hazardous
secondary materials. Recyclers of hazardous secondary materials in this
situation may thus respond differently from traditional manufacturers
to economic forces and incentives, accumulating more inputs (hazardous
secondary materials) than can be processed (reclaimed). In addition,
commercial third-party recyclers have less flexibility than in-house
recyclers in changing how they manage their hazardous secondary
materials (e.g., during price fluctuations, in-house recyclers can more
easily switch from recycling to disposal or from recycled inputs to
virgin inputs, while commercial third-party recyclers cannot switch to
disposal without obtaining a RCRA permit) (73 FR 64674).

B. Supporting Record

Comments: Environmental Problems Study
    Many commenters raised issues with EPA's use of the environmental
problems study as part of the record for today's rule.\40\ Some
commenters argued that EPA should not use 1982 as the cut-off year for
investigating ``relatively recent'' damage cases. These commenters said
that, given that the first major set of Subtitle C regulations were
promulgated in 1980, going back to 1982 unfairly and inappropriately
stacks the deck in favor of finding a higher number of damage cases
because it took many years for companies to figure out who was subject
to the RCRA Subtitle C regulations. Additionally, these commenters
noted that the vast majority of damage cases began operation prior to
1982 and thus contamination on these sites was likely the result of
historic poor management during a period of little to no oversight.
Commenters believed that the early 1990s would be a more appropriate
cut-off date than 1982. One of the commenters also argued that the
damage cases are not reliable, either from a lack of information,
because they reflect outdated and inapplicable management practices, or
have been greatly mischaracterized and should not be used to support
any of the proposed changes to the DSW rule.
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    \40\ An Assessment of Environmental Problems Associated With
Recycling of Hazardous Secondary Materials (EPA-HQ-RCRA-2002-0031-
0355).
---------------------------------------------------------------------------

    Other commenters argued that the large majority of damage cases
identified by EPA were caused by either a lack of knowledge of RCRA,
blatant disregard for the law, or unavoidable accidents. These
commenters noted that many of the damage cases involved civil or
criminal violations, indicating that the problem was non-compliance
with the regulations, not from a lack of regulations.
    Another commenter disagreed with EPA's negative portrayal of the
waste management industry and argued that EPA should have conducted
more research to obtain an understanding of the necessary and positive
role of the hazardous waste management industry.
EPA's Response: Environmental Problems Study
    The Agency maintains that the scope of the environmental problems
study is appropriate for the purpose of the DSW rulemaking effort.
Specifically, we continue to find that 1982 is an appropriate cut-off
year for the damage case study as it best reflects the point where
companies became aware of their responsibilities and liabilities for
safe management of their hazardous secondary materials intended for
recycling.\41\ While the CERCLA statute and the initial RCRA hazardous
waste regulations became effective in 1980, there was an initial
``phase in'' period during which industry and other affected entities
began to change their practices with regard to hazardous material
recycling, and during which federal and state agencies were developing
guidelines and procedures for implementing these new authorities. Thus,
we deliberately did not include a number of recycling damage cases that
occurred during the early 1980s that appeared to have been caused by
companies and individuals who were not cognizant of their new
responsibilities and potential liabilities under RCRA and CERCLA.
---------------------------------------------------------------------------

    \41\ We would note, however, that even if EPA changed the date
to the 1990's, EPA still identified dozens of damage cases, and
thus, changing the cut-off date, as some commenters suggest, would
not impact the study's overall findings.
---------------------------------------------------------------------------

    As to the issue that there are facilities in the report that began
operations prior to 1982, we agree that the facilities themselves may
have begun operating earlier than the timeframe. However, the
methodology for the analysis only includes facilities where the
recycling operations occurred after 1982, and the environmental damages
associated with those operations occurred after 1982. As a result, more
than 600 damage cases were removed from consideration, leaving only
those cases that EPA was confident have a clear link between post-1982
recycling practices and environmental damage.
    Of the damage cases that met our criteria, we agree that for
certain types of damage, such as groundwater or soil contamination,
determining when exactly the damage occurred and which property owner
caused the damage is difficult. However, in general, the damage cases
include multiple types of damage and certain damage, such as
abandonment of materials or observed violations of proper storage and
containment, can be easily attributed to current facility owners and to
post-1982 activities. For example, Alco Pacific, a lead recycling
facility may have started operations in 1954, but it was 1990 when the
company abandoned 98 drums and left over 1,300 cubic yards of lead-
contaminated rubber debris and sand with no containment to prevent
dispersal from wind or rainwater. Additionally, it was 1989 when Myers
Drum, a drum reconditioning facility, was found to be storing 95% of
their 20,000 drums on their side and that spillage, sump overflows, and
structural failures were observed. In 1986, Continental Steel, which
manufactured wire and rod products from scrap metal, abandoned their
facility leaving 220 drums of product material and 50 containers of
lead-cadmium batteries on-site. These damages occurred well after RCRA
and CERCLA became effective.
    Regarding the lack of information in some of its damage cases, as
EPA stated in its 2007 environmental problem

study, many of the cases that were investigated were well documented.
This was the case, for example, for many of the Superfund National
Priority List (NPL) sites. However, in many other cases, it was not
possible given the limitations of the study to document all facts.
Often, there was considerable technical information as to the nature
and extent of the contamination at the site, but relatively little
information regarding the activities and circumstances that originally
caused it. For some of the sites, we were able to collect only very
basic information. However, for each site that was identified in the
environmental problems study, we had sufficient information to
determine that the damage resulted from recycling operations. Thus, we
continue to maintain that the environmental problems study is
appropriate to use in the development of the final rule.
    EPA also disagrees with the commenter who argued that the
environmental problems study only demonstrates non-compliance of
existing regulations and therefore does not justify the promulgation of
tighter requirements under today's final rule. On the contrary, the
frequency of the damage cases, including violations of regulations
demonstrates the need for greater, not less, oversight.
    Furthermore, as part of a separate analysis, EPA has considered
whether recycling of hazardous secondary materials under the 2008 DSW
final rule could result in increased risk to human health and the
environment and determined it is a complex issue because of the
interactions between how the regulations are written and how they are
implemented. Under the 2008 DSW final rule, EPA presumed that the
conditions of the rule would prevent any increase in risk. However,
what the 2008 DSW analysis failed to take into account was whether the
conditions of the rule would operate as effectively in the real world
as the more detailed requirements of the RCRA hazardous waste
regulations.
    A more detailed comparative analysis of the regulatory requirements
under the 2008 DSW final rule with the hazardous waste regulations
reveals potentially significant gaps in environmental protection under
the 2008 DSW final rule. Examples of these gaps include the absence of
measures to ensure compliance, incentives to accumulate larger volumes
of hazardous secondary materials, the potential for increased releases,
such as during storage and transportation of the hazardous secondary
materials, the lack of prescriptive standards for storage and
containment, potential issues associated with the interstate transport
of hazardous secondary materials for recycling, and reduction in access
to information and the opportunity for public participation. RCRA is a
preventative statute and by design seeks to prevent damage before it
occurs; relying solely on enforcement without addressing the root
causes of the damage could needlessly increase the frequency, severity,
and cost of damage cases. Therefore, EPA has chosen to finalize the
changes to the 2008 DSW final rule being promulgated today.
    Finally, EPA disagrees with comments stating we have not considered
the positive role of the hazardous waste management industry. In
development of the DSW rulemakings, the Agency specifically conducted a
study of successful recycling that examined how responsible generators
and recyclers of hazardous secondary materials ensures that recycling
is done in an environmentally safe manner.\42\ However, as EPA noted in
the 2008 DSW final rule, the successful recycling study indicates that
many responsible generators examine the recycler's technical
capabilities, business viability, environmental track record, and other
relevant questions before sending hazardous secondary materials for
recycling. Currently, these recycler audits, which can be thought of as
a form of environmental ``due diligence,'' are in essence a precaution
to minimize the prospect of incurring CERCLA liability in the event
that the recycling, or lack thereof, results in the release of material
to the environment. However, the fact that these companies are willing
to incur the expense of auditing recyclers as a business practice is of
itself a marketplace affirmation that sending hazardous secondary
materials to other companies for recycling involves some degree of
risk. (73 FR 64683)
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    \42\ U.S. EPA, An Assessment of Good Current Practices for
Recycling of Hazardous Secondary Materials, November 2006 (EPA-HQ-
RCRA-2002-0031-0354).
---------------------------------------------------------------------------

Comments: Correlation of Recycling Damage Cases With Regulatory
Exclusions, Exemptions or Alternative Standards
    Although at least one commenter supported the analysis titled
``Correlation of Recycling Damage Cases with Regulatory Exclusions,
Exemptions, or Alternative Standards,'' \43\ which is included in the
docket for this rulemaking. However, most commenters argued that this
analysis was flawed and that EPA should gather information in a more
responsible manner, such as with an information collection request
(ICR).
---------------------------------------------------------------------------

    \43\ Docket ID: EPA-HQ-RCRA-2010-0742-0010.
---------------------------------------------------------------------------

    Many commenters pointed out that EPA only identified seven
exclusions that were ``likely'' correlated to some damage cases, yet
EPA in its 2011 DSW proposal considered adding requirements to 32
exclusions. These commenters argued that this record was insufficient
for justifying additional conditions.
    Some commenters also took issue with how EPA assigned regulatory
exclusions to certain damage cases. For example, a few commenters said
that none of the five damage cases correlated to precious metals
involved recycling of in-process secondary materials as part of
precious metals mining and primary mineral processing, but rather
involved off-site entities that were attempting to recover precious
metals from photographic film, circuit boards, and other secondary
materials generated by industry.
    One commenter said that EPA identifies 35 cases that allegedly
involve spent batteries; however, two of these involve non-lead
batteries and thus are irrelevant and a third involves printed circuit
boards. This commenter goes on to say that, of the remaining 32 lead-
acid battery-related facilities for which EPA has identified known
dates of operation, none began business operations after the 1982 and
1985 adoption of the RCRA regulations that control lead-acid battery
collection and recycling. This commenter believed that the primary
contamination at these sites almost certainly pre-dated RCRA and thus
EPA cannot use these cases to support changes to 40 CFR 266.80. Another
commenter said that none of the environmental damage associated with 52
damage cases could be shown to be the result of companies ``likely''
operating under the 261.4(a)(13) scrap metal exclusion and/or the
261.6(a)(3)(ii) scrap metal recycling exemption.
    A few commenters argued that EPA has not compared the number of
damage cases to the total number of recyclers and thus we do not know
what percentage of all facilities the damage cases represent. Another
commenter noted that the 132 damage cases that EPA correlated to the
pre-2008 recycling exclusions makes up only 2.5% of the 5,321
facilities that EPA estimates are using the exclusions (a total number
which this commenter believes EPA underestimates).

EPA's Response: Correlation of Recycling Damage Cases With Regulatory
Exclusions, Exemptions or Alternative Standards
    The goal of EPA's analysis to correlate damage cases with existing
exclusions was to assess whether certain hazardous secondary material
recycling exclusions, exemptions, or alternate standards are adequately
protecting human health and the environment. Because the majority of
exclusions, exemptions, and alternative standards do not include
notification requirements, EPA does not have precise data regarding
which and how many facilities are recycling hazardous secondary
materials under reduced regulation. This lack of data hinders EPA's
ability to collect information regarding what regulations a specific
facility was operating under when damage occurred. Because this
information is limited, the Agency had developed a methodology that
correlates the type of hazardous secondary materials identified in the
damage cases to regulations that likely governed the management of the
hazardous secondary material. EPA used this methodology to identify
patterns related to the types of hazardous secondary material involved
in damage cases and whether those materials were likely to be managed
under an exclusion, exemption, or alternate standard.
    EPA understands commenters' concerns regarding the limitations of
this analysis, including that EPA could only correlate with confidence
7 of the 32 recycling exclusions to damage cases in its environmental
problems study. This result is more a lack of precision in the data and
less that some recycling exclusions have no damage cases. For example,
because notification is not required for these exclusions, we can only
conservatively identify damage case correlations where the type of
hazardous secondary material very clearly matches to an exclusion
(e.g., scrap metal). We lack information to make inferences for broadly
applicable exclusions, (e.g., use/reuse) or for broadly defined
hazardous secondary materials (e.g., metal-bearing wastes). Therefore,
by virtue of some exclusions' broad applicability, we were unable to
correlate them to specific damage cases. Additionally, due to the lack
of data, it is difficult to analyze current trends in damage cases, and
thus even more difficult to accurately project what the number of
future damage cases might be under different scenarios. However,
although it is difficult to assign specific damage cases to certain
exclusions, we note that in the environmental problems study only nine
of the damage cases were operating under a RCRA permit at the time of
damage. Thus, EPA can generally conclude that the majority of the
damage cases at third party recyclers were operating outside of RCRA,
inferring these facilities were either operating illegally or operating
under an exclusion, exemption, or alternate standard, or no standard.
    Regarding other comments on the analysis, including comments on
specific damage case-to-exclusion pairings and on comparing the number
of damage cases to the total number of affected entities, EPA agrees
with commenters that more information is needed prior to taking final
action on specific conditions of the pre-2008 recycling provisions. EPA
finds it may need to consider each exclusion in terms of evaluating
specific regulatory gaps and whether additional conditions are needed
to ensure protection of human health and the environment. Therefore, we
are not finalizing specific conditions for the pre-2008 recycling
provisions in today's rule and are instead deferring action until EPA
can more adequately address commenters' concerns, including comments on
the record. Before the Agency would take any such action, the Agency
would provide the regulated community, as well as other stakeholders
the opportunity for notice and comment.

XIV. Major Comments on the Exclusion for Hazardous Secondary Materials
Legitimately Reclaimed Under the Control of the Generator and
Recordkeeping for Speculative Accumulation

A. Proposed Changes to 2008 Final Rule

    In its July 2011 DSW proposal, EPA proposed or solicited comment on
certain changes to the 2008 DSW exclusion from the definition of solid
waste for hazardous secondary materials legitimately reclaimed under
the control of the generator. The first change was adding a regulatory
definition of ``contained'' for units storing hazardous secondary
materials. The definition included factors which, if met, would
demonstrate that the unit was contained. Under the proposal, a storage
unit is contained if it is in good condition, with no leaks or other
continuing or intermittent unpermitted releases of the hazardous
secondary material to the environment, and is designed, as appropriate
for the hazardous secondary materials to prevent releases of hazardous
secondary material to the environment. Such releases may include, but
are not limited to, releases through surface transport by precipitation
runoff, releases to soil and groundwater, wind-blown dust, fugitive air
emissions, and catastrophic unit failures. The unit must also be
properly labeled or otherwise have a system (such as a log) to
immediately identify the hazardous secondary materials in the unit.
Finally, the unit must not hold incompatible materials and must address
any potential risks of fires or explosions. The definition also stated
that hazardous secondary materials stored in units that meet the
applicable requirements of 40 CFR parts 264 or 265 are considered to be
contained.
    The second change concerned new recordkeeping requirements for
speculative accumulation, ``same-company'' recycling, and recycling
under certain tolling arrangements. With respect to speculative
accumulation, EPA proposed to require generators and reclaimers
operating under the generator-controlled exclusion to post accumulation
start dates to allow inspectors and other regulatory authorities to
quickly ascertain how long hazardous secondary materials had been in
storage. If placing a label on the storage unit is not practicable, the
first date that the excluded hazardous secondary material began to be
accumulated must be entered in an inventory log. We also solicited
comment on whether to add the proposed recordkeeping requirement to the
general speculative accumulation provision at 40 CFR 261.1(c)(8),
thereby extending the requirement to all recyclers subject to that
provision. We also proposed a recordkeeping requirement for tolling
contractors and toll manufacturers operating under the tolling
exclusion, which would require maintaining records of hazardous
secondary materials sent or received pursuant to the tolling contract.
We also solicited comment on whether to add a similar recordkeeping
requirement to generators and reclaimers operating under the ``same-
company'' exclusion.
    The third change concerned making notification a condition rather
than a requirement of the exclusions. In addition, we proposed two
structural changes. These were (1) placing the requirements for land-
based units and non-land-based units in one regulatory provision (40
CFR 261.4(a)(23)), since the requirements for both types of units are
the same; and (2) placing most definitions applicable to the generator-
controlled exclusion in 40 CFR 261.4(a)(23) (together with the
requirements) instead of in 40 CFR 260.10.

Comments: Authority for Proposed Changes
    Many commenters supported all or some of these changes, either as
proposed or with suggested modifications. Their comments are discussed
below in reference to the specific changes that the Agency proposed.
Some commenters, however, stated that EPA did not have the authority to
impose conditions (particularly the ``contained'' standard) on
hazardous secondary materials recycled under the control of the
generator. These commenters generally believed that materials recycled
under these exclusions are not discarded, and that EPA provided no new
evidence that would justify the proposed changes. According to these
commenters, the proposed changes are tantamount to treating the
materials as wastes instead of valuable commodities, and are
inconsistent with the ABR decision. One commenter noted that generators
already have incentives to prevent releases of hazardous secondary
materials because of potential liability, corporate values of
stewardship and environmental responsibility, and public relations.
EPA's Response: Authority for Proposed Changes
    The Agency has determined that the conditions proposed in our July
2011 DSW proposal are needed in order to ensure that the exclusion
operates as intended and does not result in discarded hazardous
secondary material posing significant risk to human health and the
environment. We agree that generators and reclaimers operating under
the generator-controlled exclusion have incentives to ensure that the
hazardous secondary materials are safely managed. Nevertheless, the
conditions we proposed are needed to ensure that the generator-
controlled exclusion will correctly function to exclude only hazardous
secondary material that is not discarded.
    Specifically, the proposed ``contained'' requirement is a key
provision for determining whether a hazardous secondary material is
being managed as a valuable commodity. Such materials that are not
contained and are instead released to the environment are not destined
for recycling and are clearly discarded. The proposed definition
specifies factors which, if met, demonstrate that the hazardous
secondary materials in a unit are handled as valuable raw materials,
intermediates, or products and thus are not discarded. We note that the
criteria in proposed 40 CFR 261.4(a)(23)(i) are all performance
measures, as opposed to specific technical standards, suggested by
commenters in response to the June 2009 public meeting on the 2008 DSW
final rule. These criteria also exemplify practices discussed in the
preamble to the 2008 DSW final rule regarding containment of hazardous
secondary materials, such as ways to prevent releases and operation and
maintenance of the storage unit in the same manner as a production
unit.
    The proposed recordkeeping requirement for speculative accumulation
(which would require posting of accumulation start dates on the storage
unit or in an inventory log) would allow inspectors and other
regulatory authorities to quickly ascertain how long a facility has
been storing an excluded hazardous secondary material, and whether the
storage time exceeds existing limits under 40 CFR 261.1(c)(8). If such
limits have been exceeded, the material would be discarded. The
proposed recordkeeping requirement for the tolling exclusion (which
would require records of shipments sent and received under tolling
contracts) would also aid regulatory agencies in determining if tolling
contractors and manufacturers are in compliance with the requirements
for the exclusion and whether the hazardous secondary materials in
question have been properly accounted for. A similar requirement to
keep records of shipments sent and received under ``same-company''
recycling (for which the Agency solicited comment in the July 2011 DSW
proposal) would serve the same purpose. Finally, submitting a
notification to EPA is the only formal indication of a facility's
prospective intent to reclaim a hazardous secondary material under this
exclusion. For these reasons, EPA has determined that its proposed
changes to the generator-controlled exclusion are necessary to
demonstrate that hazardous secondary materials have not been discarded.
The changes are therefore within the Agency's RCRA authority.
Comments: Scope of Proposed Changes
    One commenter noted that the proposed rule would allow lead-acid
battery recyclers to operate under the generator-controlled exclusion
instead of the requirements in 40 CFR 266.80(b). This commenter
believed that the latter requirements, specifically tailored to battery
recyclers, are more appropriate for these facilities.
EPA's Response: Scope of Proposed Changes
    In response to this comment, it was not the Agency's intent that
spent lead-acid batteries be managed under the generator-controlled
exclusion. The 2008 DSW final rule contained a provision (40 CFR
261.2(c)(4)(iv)) stating that spent lead-acid batteries were not
eligible for the generator-controlled exclusion (nor were materials
subject to material-specific standards under 261.4(a) or the listed
hazardous wastes K171 or K172). The omission of this provision from the
July 2011 DSW proposal as related to spent lead-acid batteries and
material-specific standards was inadvertent, and EPA is therefore
retaining it in this final rule (see 40 CFR 261.4(a)(23)(ii)(E)).
However, for reasons discussed in section XI of this preamble, listed
hazardous wastes K171 and K172 should be eligible for the generator-
controlled exclusion; therefore, we are not including those wastes in
this provision.
Comments: Exports
    Another commenter noted that the text of proposed 40 CFR
261.4(a)(23)(i)(B) could initially be read to suggest that hazardous
secondary materials may be transferred to a location outside the United
States or its territories as long as the foreign receiving facility is
under the control of the generator. It is not until one reads proposed
40 CFR 261.4(a)(23)(ii)(A) that the reader learns that the receiving
facility must be in the United States or its territories. This
commenter suggested revising the introductory text of 40 CFR
261.4(a)(23) to refer to recycling within the United States or its
territories and deleting the subsequent condition.
EPA's Response: Exports
    EPA agrees with this commenter who suggested modifying the
introductory text of the generator-controlled exclusion to include a
reference to the requirement that hazardous secondary materials
legitimately reclaimed under the exclusions must be recycled within the
United States or its territories. We have therefore revised 40 CFR
261.4(a)(23) to read as follows: ``Hazardous secondary material
generated and legitimately reclaimed within the United States or its
territories and under the control of the generator, provided that the
material complies with paragraphs (a)(23)(i) and (ii) of this
section.'' We have also deleted the condition in proposed CFR
261.4(a)(23)(ii)(A) and renumbered the following subparagraphs.

B. Exclusion for Materials Recycled On-Site

Comments: On-Site Exclusion
    In the 2008 DSW final rule, EPA promulgated an exclusion from the
definition of solid waste for hazardous secondary materials that are
generated and legitimately reclaimed at the generating facility. In the
July 2011 DSW proposal, the Agency did not propose any changes to the
scope of this exclusion. Commenters on the proposal generally supported
excluding on-site recycling from the definition of solid waste, stating
that such recycling did not involve discard and was not likely to pose
environmental risks. However, one commenter argued that the exclusion
for hazardous secondary materials recycled under the control of the
generator was too broad and should be narrowed to materials recycled
under a ``continuous industrial process,'' i.e., recycled in the same
process of which they are a byproduct, by the same generator, and at
the same generating facility. If the exclusion was narrowed to this
extent, it would preclude ``same-company'' or tolling recycling from
being eligible for the exclusions. It would presumably also preclude
certain types of on-site recycling that might involve different
processes from being excluded under the definition of solid waste.
EPA's Response: On-Site Exclusion
    EPA has determined that if hazardous secondary materials are
generated and legitimately reclaimed at the generating facility (as
well as a facility within the same company) under the conditions
specified in today's rule, these materials have not been discarded. We
do not agree with the comment that the exclusion should be limited to
recycling of hazardous secondary materials under a ``continuous
industrial process,'' i.e., it takes place in the same process of which
the materials are a byproduct, by the same generator and at the same
generating facility. If hazardous secondary materials are recycled on-
site at the generating facility using different processes, this
circumstance does not mean that the generator has relinquished control
of the materials or that they have been discarded. We are therefore
finalizing this provision as proposed at 40 CFR 261.4(23)(i)(A).

C. Exclusion for Materials Recycled by the Same Company

    In the 2008 DSW final rule, EPA promulgated an exclusion from the
definition of solid waste for hazardous secondary materials that were
generated and legitimately reclaimed off-site by the same ``person'' as
defined in 40 CFR 260.10, if the generator performed one of two
certifications. Under the first certification, the generating facility
certified that it controlled the reclaiming facility; under the second
certification, the generating facility certified that it was under
common control with the reclaiming facility. In the July 2011 DSW
proposal, the Agency solicited comment on whether to add a
recordkeeping requirement to this exclusion that would require both the
generating and reclaiming facilities to retain records for no less than
three years of all hazardous secondary material shipped under the
exclusion. The records would have to contain information which could be
satisfied by routine business records (e.g., financial records, bills
of lading, copies of DOT shipping papers, or electronic confirmations).
There was general support for this condition from those commenters who
addressed it.
Comments: Same-Company Exclusion
    Some commenters supported this exclusion. They believed that
generators using the exclusion have strong incentives to ensure that
hazardous secondary materials are not discarded by maintaining control
over, and potential liability for, the reclamation process. However,
other commenters believed that any off-site transport of hazardous
secondary materials involved environmental risks that should be
addressed by (at the least) requiring a hazardous waste manifest or by
subjecting ``same-company'' off-site recycling to the proposed
alternative Subtitle C standards for hazardous secondary materials that
are transferred for the purpose of reclamation. Some commenters said
that when hazardous secondary materials are transported off-site, the
generator has little de facto control over such materials.
    One commenter noted that proposed 40 CFR 261.4(a)(23)(i)(B) omitted
the alternative certification for same-company recycling that occurs
when the generating facility and the reclaiming facility are under
common control. This certification was included in the 2008 DSW final
rule.
EPA's Response: Same-Company Exclusion
    The Agency continues to find that same-company recycling does not
involve discard since it occurs under the control of the generator.
Such control means that both the generating facility and the
reclamation facility are familiar with the hazardous secondary
materials and the company would be ultimately liable for any
mismanagement of the hazardous secondary materials. Under these
circumstances, the incentive to avoid such mismanagement would be
sufficiently strong to greatly reduce the risks of transport, thus
rendering unnecessary the use of the hazardous waste manifest or
requiring the hazardous secondary materials to be reclaimed under the
verified recycling exclusion. However, as noted above, the Agency
solicited comment in its July 2011 DSW proposal on a recordkeeping
requirement that would require both the generating and reclaiming
facilities to retain records for no less than three years of all