As discussed earlier, EPA is requesting comment on allowing a hazardous recyclable materials manifest as an alternative to the hazardous waste manifest. Another option may be to use basic shipping records to document off-site shipments of the hazardous recyclable materials. This approach would be similar to how universal wastes are managed under streamlined hazardous waste regulations. However, EPA notes that two of the factors used to determine if a waste is appropriate to be considered a universal waste is if the risk posed by the waste during accumulation and transport is relatively low compared to other hazardous wastes, and whether the quantities generated by each generator are relatively small (see 40 CFR 273.81).
3.	Personnel Training, Contingency Plan, and Emergency Procedures
      Under the proposed alternative standards, large quantity generators must meet the same personnel training, contingency plan and emergency procedures as they would under the hazardous waste requirements.  One alternative could be to apply standards similar to the small quantity generator requirements for management of hazardous recyclable materials by hazardous recyclable material generators. Small quantity generator requirements for personnel training, contingency planning and emergency procedures may be particularly appropriate if EPA also, as discussed above, applies a limit to the maximum amount of hazardous recyclable materials accumulated on-site at any one time. These reduced requirements may be appropriate if the maximum quantity of hazardous recyclable materials is limited because of the decreased risks associated with smaller quantities of materials present at any point in time.
4.	Biennial Report
      Under RCRA Subtitle C, large quantity generators of hazardous waste must submit biennial reports to their regulatory authority that describe the type and quantity of hazardous waste generated, as well as how the waste was managed (among other information). However, a biennial reporting requirement may be duplicative of the requirement for generators of hazardous recyclable materials to renotify in compliance with 40 CFR 260.42, which also requires generators to report the type and quantity of hazardous secondary materials generated and reclaimed. Eliminating the biennial reporting requirement may avoid duplication in reporting and reduce paperwork burden on generators of hazardous recyclable materials. EPA requests comment on using the renotification in lieu of requiring biennial reports.
IX. Revisions to the Exclusion for Hazardous Secondary Materials that are Legitimately Reclaimed Under the Control of the Generator
A. Summary of Current Exclusion
   In the 2008 DSW final rule, EPA excluded from the definition of solid waste those hazardous secondary materials that are legitimately reclaimed under the control of the generator, provided the materials are contained in the units in which they are stored, are not speculatively accumulated, and are reclaimed within the United States or its territories. Under the 2008 DSW final rule, the generator must also periodically notify EPA or the authorized state (as discussed previously) that it is operating under the exclusion. The regulatory provision excluding hazardous secondary materials under the control of the generator that are managed in land-based units is currently found at 40 CFR 261.4(a)(23), while the provision excluding such materials that are managed in non-land-based units is currently found at 40 CFR 261.2(a)(2)(ii). A land-based unit is defined in 40 CFR 260.10 as an area where hazardous secondary materials are placed in or on the land before recycling, but this definition does not include land-based production units. Examples of land-based units include surface impoundments and piles. Examples of non-land-based units include tanks, containers, and containment buildings.
      The definition of "hazardous secondary material generated and reclaimed under the control of the generator" is currently found at 40 CFR 260.10. Hazardous secondary materials are considered "under the control of the generator" under the following circumstances:
   *  they are generated and then reclaimed at the generating facility; or
   *  they are generated and reclaimed at different facilities, if the generator certifies that the hazardous secondary materials are sent either to a facility controlled by the generator or to a facility under common control with the generator, and that either the generator or the reclaimer has acknowledged responsibility for the safe management of the hazardous secondary materials; or
   *  they are generated and reclaimed pursuant to a written agreement between a tolling contractor and toll manufacturer, if the tolling contractor certifies that it has entered into a tolling contract with a toll manufacturer and that the tolling contractor retains ownership of, and responsibility for, the hazardous secondary materials generated during the course of the manufacture, including any releases of hazardous secondary materials that occur during the manufacturing process.
      Under this provision, the hazardous secondary materials must be contained, whether they are stored in land-based or non-land-based units. The materials are also subject to the speculative accumulation requirements of 40 CFR 261.1(c)(8), as well as the provisions for legitimate recycling at 40 CFR 260.43. Finally, under 40 CFR 260.42, the generator (and the reclaimer, if the generator and reclaimer are located at different facilities) must send a notification prior to operating under the exclusion and by March 1 of each even-numbered year thereafter to the EPA Regional Administrator or, in an authorized state, to the State Director.
   	By maintaining control over, and potential liability for, the hazardous secondary materials and the reclamation process, the generator ensures that such materials have not been discarded. When reclaimed under the control of the generator, the hazardous secondary materials are being handled as a valuable commodity rather than a waste. However, if such hazardous secondary materials are released into the environment and are not recovered for legitimate recycling immediately, they have been discarded (i.e., are solid and hazardous wastes) and the generator is subject to all applicable federal and state regulations, as well as applicable cleanup authorities. (See 73 FR 64680, October 30, 2008 for a more detailed discussion of the generator-controlled exclusion.)
B. Proposed Changes to Generator-Controlled Exclusion
      As discussed in Section V.I.2 of today's proposal, EPA is not proposing to withdraw the generator controlled exclusion. In the 2008 DSW final rule, EPA determined that if the generator maintains control over the recycled hazardous secondary materials and if the materials are legitimately recycled under the standards established in the final rule and not speculatively accumulated within the meaning of EPA's regulations, then the hazardous secondary materials are not discarded. This is because the hazardous secondary materials are being treated as a valuable commodity rather than as a waste. By maintaining control over, and potential liability for, the reclamation process, the generator ensures that the hazardous secondary materials are not discarded (see 73 FR 64676). EPA has not received any information that would cause the Agency to reverse this determination, and this continues to be the underlying rationale for the generator-controlled exclusion.
      However, EPA does believe that revisions to the generator-controlled exclusion are needed in order to ensure that it operates as intended and does not result in discarded hazardous secondary material posing a significant risk to human health and the environment. The proposed changes are in five areas: (1) the contained standard, (2) notification as a condition, (3) recordkeeping for speculative accumulation, (4) recordkeeping for the tolling provision, and (5) clarifying edits to the regulatory text. In each of the five areas, the proposed changes are intended to improve the implementation of the generator-controlled exclusion to ensure that it is correctly functioning to only exclude hazardous secondary material that is not discarded.
1. Contained Standard
      Under the generator-controlled exclusion, hazardous secondary materials must be contained, regardless of whether they are stored in land-based units or non-land-based units. The contained standard is a key provision for determining that a hazardous secondary material is not discarded. Hazardous secondary materials that are not contained and are instead released to the environment are not destined for recycling and are clearly discarded. In today's proposed rule, EPA is retaining the "contained" condition based on the same rationale used in the 2008 DSW final rule, but is adding a regulatory definition of contained to make it easier for implementing agencies and the regulatory community to determine that a material is contained.
      In the preamble to the 2008 DSW final rule (73 FR 64681), the Agency stated that such material is "contained" if it is placed in a unit that controls the movement of the hazardous secondary materials out of the unit and into the environment. However, EPA did not provide specific guidance on how an implementing agency or the regulated community would determine if a unit did adequately control the movement of hazardous secondary materials and meet the contained standard.
      In the same preamble, EPA also discussed the issue of releases to the environment from stored hazardous secondary materials and when such materials could be considered "contained." We stated that in the event of a release to the environment, the hazardous secondary materials remaining in the unit may or may not meet the terms of the exclusion, and specifically stated that such hazardous secondary materials would be considered wastes if a "significant" release occurred as a result of its not being managed as a valuable raw material, intermediate, or product, including storing acidic materials in a tank not suitable for such materials or failure to monitor the structural integrity of a tank, resulting in releases. If these releases were not immediately recovered, they would be considered discarded and, if hazardous, subject to the appropriate federal or state regulations and applicable authorities. The Agency also noted that a "significant" release is not necessarily large in volume. For example, unaddressed small releases to the environment could cause significant damage over time and, if the hazardous secondary materials are managed in such a way that such unaddressed releases are likely to continue, the hazardous secondary materials still remaining in the unit could be considered discarded because they were not being managed as a valuable raw material, intermediate, or product.
      Conversely, the Agency also said that a unit in good condition could experience small releases resulting from normal operations of the facility, or a released material could be captured by secondary containment before being released to the environment. In those cases, the unit would retain its exclusion from the RCRA hazardous waste regulations and the hazardous secondary material in the unit would still be excluded from the definition of solid waste, even though any such materials that had been released would be considered discarded if not immediately recovered and would be subject to appropriate regulation.
      EPA did not finalize a regulatory definition of "contained," nor did the 2008 DSW final rule impose specific performance or storage standards. In response to comments on the 2007 DSW supplemental proposal suggesting such specific standards, EPA stated its belief that such detailed measures were unnecessary for hazardous secondary materials that are handled as valuable products and are destined for recycling. Rather, in the Agency's view at that time, regulatory authorities could determine whether such hazardous secondary materials were contained by considering site-specific circumstances (such as local conditions) and measures employed by the facility (such as liners, leak detection measures, and monitoring) to determine whether the hazardous secondary materials were contained in a storage unit.
      Since implementation of the 2008 DSW final rule, the Agency has reconsidered its position about whether a regulatory definition of "contained" might be necessary for hazardous secondary materials managed under the control of the generator. EPA has received a considerable number of inquiries from state authorities and the regulated community about how to determine if a hazardous secondary material is contained. In particular, there have been many questions about when a release is "significant" and when hazardous secondary materials remaining in a unit that has suffered a release should be considered discarded.
      Of particular concern is the lack of preventative measures in the contained standard in the 2008 DSW final rule, which is noted as a major regulatory gap in the environmental justice analysis discussed in Section VI of this preamble. As noted above, EPA did not provide specific guidance on which types of units would be considered as adequately containing a hazardous secondary material. In the 2008 DSW final rule preamble, only the absence of containment, i.e., a release to the environment, is discussed, and even then the confusion over whether a release is "significant" makes proper implementation of the contained standard problematic.
      Given that the contained standard is one of the major requirements for determining that hazardous secondary materials reclaimed under the generator-controlled exclusion are not discarded, this lack of specificity has the potential to undermine the exclusion. That is, if the primary or only way to determine that the hazardous secondary material is not contained is to wait until it is released to the environment, then the 2008 DSW final rule increases the likelihood of discard for these materials. The Agency therefore has considered whether adding a regulatory definition of "contained" could resolve this uncertainty without sacrificing the flexibility that would allow the implementing authority to take into account a wide variety of case-specific circumstances when necessary.
      For these reasons, EPA is today proposing to amend 40 CFR 260.10 to include a regulatory definition of "contained." Under today's proposal, a hazardous secondary material is contained if it is managed in a unit, including a land-based unit as defined in §260.10, 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 materials to the environment. Such releases may include, but are not limited to, releases through surface transport by precipitation runoff, releases to 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 does not hold incompatible materials 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 are considered to be contained.
      This 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 being discarded. We note that the criteria in  proposed 40 CFR 261.4(a)(23)(i) are all measures  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 that  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 appropriateness of specific measures undertaken to ensure a hazardous secondary material is contained would depend on the material in the unit. For example, in the case of land-based piles of hazardous secondary materials in the form of fine particulate matter, a covering to prevent wind-blown dust could demonstrate that the unit was designed to prevent releases of such  materials. On the other hand, land-based piles of hazardous secondary materials in the form of scrap metal that is unlikely be carried off by the wind would not need  a covering to be considered contained.
      If these criteria were not met and a release of the hazardous secondary materials subsequently occurred that was not immediately recovered, the materials remaining in the unit would be considered solid and hazardous wastes and the unit would be subject to the appropriate hazardous waste regulations.
      Also, to clarify the regulatory status of units from which releases have occurred, the Agency is also proposing to add to 40 CFR 261.4(a)(23) the following: (1) a hazardous secondary material released to the environment is discarded and a solid waste unless it is immediately recovered for the purpose of reclamation; and (2) hazardous secondary material managed in a unit with leaks or other continuing or intermittent unpermitted releases of the hazardous secondary material to the environment is discarded and a solid waste.

      In the preamble to the 2008 DSW final rule, EPA referred to "significant" releases as the criterion to determine whether hazardous secondary materials remaining in the unit should be considered wastes. We believe that today's proposed codification better expresses our intent that all releases are of potential concern. However, under today's proposal, in the event of a release from a unit to the environment, the hazardous secondary materials that remain in the unit could still meet the terms of the exclusion,  as long as the other provisions of the containment definition are met. A single release that is quickly addressed would not generally affect the regulatory status of the hazardous secondary materials still contained in the unit. Sometimes a material may escape from primary containment and may be captured by secondary containment or some other mechanism that would prevent the hazardous secondary materials from being released to the environment or would allow immediate recovery of the materials. In that case, the unit would not be subject to the RCRA hazardous waste regulations and the hazardous secondary materials in the unit would still be excluded from the definition of solid waste, even though any such materials that had been released would be considered discarded if not immediately recovered for reclamation and would be subject to appropriate regulation.
      EPA also notes that certain units may be subject to occasional precipitation runoff that consists essentially of water, with trace amounts of hazardous constituents. For example, precipitation runoff containing trace amounts of metals may occur from units storing furnace bricks collected from production units and stored on the ground in walled bins before being used as feedstocks in the metals production process. Similarly, metal components from fired ammunition or other scrap metal  are  sometimes stored on the ground before being sent for recycling, and precipitation may run off  from this unit. As long as such runoff does not contain hazardous secondary material (e.g., it is essentially rainwater with trace amounts of metals),  it would not be considered a "release of hazardous secondary material." Therefore, the runoff  would not cause the land-based units to be subject to Subtitle C controls. On the other hand, if the hazardous secondary material itself is swept away by the runoff (e.g., if the hazardous secondary material consists of fine particulate matter, such as electric arc furnace dust), this transport via precipitation runoff could be considered a "release of a hazardous secondary material" and that pile may not be considered contained.
      A unit that has had a release of hazardous secondary materials  and is likely to have one in the future (as demonstrated by not meeting the three factors in the standard) is not "contained" and is therefore a solid waste and the unit would be subject to Subtitle C regulation. In order to determine whether a unit that has had a release is likely to suffer future releases, the regulatory authorities should consider all the factors in proposed 40 CFR 261.4(a)(23)(i). The Agency believes that this procedure is more likely to provide effective guidance to regulatory authorities and the regulated community than the current criterion of "significant."
      EPA notes that under today's proposal, this definition of "contained" would apply to both land-based units and non-land-based units under the generator-controlled exclusion. For the reasons explained in section IX.B.5 of this preamble, EPA is proposing to place all requirements for both types of units in 40 CFR 261.4(a)(23).
      The Agency solicits comment on whether the proposed changes to 40 CFR 261.4(a)(23)(i) will be effective in improving the implementability and enforceability of the "contained" requirement, and on whether additional requirements might be needed to achieve this end, or to ensure the hazardous secondary material is not discarded. We also request comment on whether the proposed regulatory definition of "contained" allows sufficient flexibility to regulatory authorities to evaluate site-specific circumstances that might be relevant to whether a hazardous secondary material could be considered discarded.
2. Notification
a. Summary. Under 40 CFR 260.42, hazardous secondary material generators, tolling contractors, toll manufacturers, intermediate facilities, and reclaimers managing hazardous secondary materials under 40 CFR 261.2(a)(2)(ii), 261.4(a)(23), (24), or (25), are required to submit a notification prior to operating under these exclusions and by March 1 of each even-numbered year thereafter to their regulatory authority. Facilities must also notify their regulatory authority within 30 days of stopping management of hazardous secondary materials under the rule.
      The intent of the notification requirement is to provide basic information to the regulatory agencies about who will be managing hazardous secondary materials under the exclusion. The specific information included in the notification requirement enables regulatory agencies to monitor compliance and to ensure that the hazardous secondary materials are managed according to the exclusion and not discarded. Notification information is collected in EPA's RCRAInfo database, which is the national repository of all RCRA Subtitle C site identification information, whether collected by a state authority or EPA. As explained in the 2008 DSW final rule, EPA believes our authority to request such information is inherent in our authority to determine whether a material is discarded. We consider this to be the minimum information needed to enable credible evaluation of the status of hazardous secondary materials under section 3007 of RCRA and to ensure that the terms of the exclusions are being met by generators and reclaimers. EPA continues to support the underlying rationale outlined in the 2008 DSW final rule for the need to collect this information. (See 73 FR 64682, October 30, 2008, for a more detailed discussion of our authority to collect this information.)
      As codified, the requirement to provide this notification is not a condition of the exclusions. Thus, although failure to comply with the requirement constitutes a violation of RCRA, it does not affect the excluded status of the hazardous secondary material.
b. Proposed changes. We are proposing today to make the notification provision in 40 CFR 260.42 a condition of the generator-controlled exclusion in 40 CFR 261.4 (a)(23).
	In the 2009 Federal Register notice announcing the June 2009 DSW public meeting, EPA listed as an issue for discussion whether notification should be a condition, rather than a requirement, of the exclusions. A number of commenters weighed in on both sides of this issue. On one hand, commenters stated that keeping notification as a requirement would create an unintended incentive for hazardous secondary material generators, intermediate facilities and reclaimers not to notify, because those who chose not to notify would likely evade oversight for many years and, if caught, could simply regard the violation as a "paperwork violation," and regard the possible penalty for that violation as a cost of doing business. These commenters also argued that the failure of a hazardous secondary material generator, intermediate facility or reclaimer to provide notification is a strong indication that these entities are either unaware of or trying to circumvent the regulatory requirements. In both cases, these actions potentially increase the likelihood for environmental damage. Therefore, failure to notify should be regarded as more serious than a reporting violation and should remove the excluded status of the hazardous secondary materials.
	Conversely, some commenters supported maintaining notification as a requirement, arguing that if an entity fails to notify, it does not necessarily indicate that the hazardous secondary materials were discarded and, therefore, should not automatically affect the excluded status of such materials.
	At issue here are not the specifics of the notification in 40 CFR 260.42, but rather the consequences an entity would face for failing to notify. Thus, if notification is a requirement under the authority of RCRA section 3007 of the exclusion, it means that failure to notify would constitute a violation of the notification regulations. On the other hand, if notification is a condition of the exclusion, it means failure to notify would potentially result in the loss of the exclusion for the hazardous secondary materials (i.e., the hazardous secondary materials would become solid and hazardous wastes and subject to full Subtitle C regulation).
	In the 2008 DSW final rule, EPA considered the notification requirement as providing basic information to regulatory authorities, but determined that notification, in and of itself, did not allow regulatory authorities to directly determine that hazardous secondary materials were discarded. In other words, a generator or intermediate facility/reclaimer could fail to notify yet still be legitimately reclaiming (or storing the material prior to reclamation) their hazardous secondary materials according to the conditions of the exclusion (73 FR 64739, October 30, 2008).
	 However, the notification provision is also the only formal indication of a facility's intent to reclaim a hazardous secondary material under the conditional exemption and not discard it. For example, if during an inspection of a large quantity generator of hazardous waste, EPA were to discover a hazardous secondary material that had been stored on-site for more than 90 days without a RCRA permit (an act that would typically be a violation of the hazardous waste regulations), a previously filed notification would be an indication that the facility was planning to reclaim the hazardous secondary material under the conditions of the exclusion. Absent such a notification, it would be difficult for the facility to justify its true intentions for the hazardous secondary material. Failure to meet the notification provision would be a strong indication that the facility either did not intend to comply with or was unaware of the provisions of the exclusion, since it failed to comply with the first step for claiming the exclusion. In both cases, the lack of notification could indicate that the hazardous secondary material may be mismanaged.
	Making notification a condition of the rule would further discourage facilities from trying to evade enforcement by not notifying because the costs of not notifying could be significantly higher than if notification remains a requirement. Notification is important for informing regulators and the public about hazardous secondary materials activity and, without such notification, regulators are unable to effectively monitor compliance. Additionally, state commenters have argued that enforcement discretion is commonly used to distinguish between the unintentional administrative oversight of "not notifying" and a blatant attempt at evading enforcement. Making notification a condition of the exclusion provides states the ability to properly enforce against this latter group, while leaving the flexibility to tailor enforcement in appropriate cases. EPA is therefore proposing today to make the notification provision in § 260.42 a condition of the generator-controlled exclusion in § 261.4(a)(23). Additionally, we are also requesting comment on making notification a condition of the re-manufacturing exclusion and of the other recycling exclusions and exemptions (see Section XII "Request for Comment on Re-manufacturing Exclusion" and Section XIII "Request for Comment on Revisions to Other Recycling Exclusions and Exemptions").
3. Recordkeeping for Speculative Accumulation
       In addition to the containment provision, hazardous secondary materials that are generated and legitimately reclaimed under the control of the generator are subject to the speculative accumulation provisions of 40 CFR 261.1(c)(8). If these hazardous secondary materials are speculatively accumulated, they are considered discarded. EPA did not propose changes to the speculative accumulation provisions in the March 26, 2007, DSW proposal and has not reopened any substantive provision of the speculative accumulation requirement.
      However, since implementation of the 2008 DSW final rule, EPA has received questions from regulatory authorities about enforcement of the speculative accumulation requirement. In particular, enforcement personnel have suggested that ease of enforcement would be greatly facilitated if persons subject to the speculative accumulation requirement were required to post a start date for the accumulation. In this way, inspectors and other regulatory authorities could quickly ascertain how long a facility has been storing an excluded hazardous secondary material, and, therefore, whether that facility was in compliance with the storage time limits of 40 CFR 261.4(a)(23)(iii) and 40 CFR 261.1(c)(8).
      EPA agrees with this suggestion and is therefore proposing to amend 40 CFR 261.4(a)(23)(iii) to require persons operating under the generator-controlled exclusion to place a label on the storage unit indicating the first date that the excluded hazardous secondary material began to be accumulated. In cases where placing a label on the storage unit is not practicable (e.g., if materials are stored in a surface impoundment), we are proposing as an alternative to amend 40 CFR 261.4(a)(23)(iii) to require persons operating under the generator-controlled exclusion to document in an inventory log the first date that the excluded hazardous secondary material began to be accumulated. EPA also notes that we are not proposing any changes or otherwise reopening the substantive requirements of the speculative accumulation condition.
      The Agency notes that placing labels on storage units or entering accumulation start dates in inventory logs is likely to already be part of normal business operations at many facilities. For this reason, we believe that this proposed requirement is not unduly burdensome and will provide a greater degree of clarity and certainty both to the regulated community and to regulatory authorities who are trying to determine when excluded hazardous secondary materials began to be accumulated. EPA solicits comment on whether this proposed requirement will be effective in meeting this goal and on whether other methods of measuring storage durations and/or identifying start dates would be equally effective (such as a requirement to post accumulation start dates in storage areas, within a specified number of feet of the storage unit).
       As proposed, this recordkeeping provision would only apply to the exclusion under 40 CFR 261.4(a)(23). However, the same arguments for tracking accumulation start dates could be made more broadly for all recycling subject to the speculative accumulation limits. Thus, EPA is also requesting comment on whether to add this recordkeeping requirement to the speculative accumulation provision in 40 CFR 261.1(c)(8) itself.
4. Tolling Provision
      Under the 2008 DSW final rule, hazardous secondary materials are eligible for the generator-controlled exclusion if they are generated and reclaimed pursuant to a written agreement between a tolling contractor and toll manufacturer, if the tolling contractor certifies that it has entered into a contract with a toll manufacturer and that the tolling contractor retains ownership of, and responsibility for, the hazardous secondary materials generated during the course of the manufacture, including any releases of hazardous secondary materials that occur during the manufacturing process.
      For purposes of this exclusion, a tolling contractor is a person who arranges for the production of a product or intermediate made from specified unused materials through a written contract with a toll manufacturer. The toll manufacturer is the person who produces a product or intermediate made from specified unused materials pursuant to a written contract with a tolling contractor. Under the 2008 DSW final rule, the tolling contractor must certify that it has a written contract with the toll manufacturer to manufacture a product or intermediate made from specified unused materials, and that the tolling contractor will reclaim the hazardous secondary materials generated during the manufacture of the product or intermediate. The tolling contractor must also certify that it retains ownership of, and liability for, the hazardous secondary materials that are generated during the course of the manufacture, including any releases of hazardous secondary materials that occur during the manufacturing process at the toll manufacturer's facility. This certification should be made by an official familiar with the terms of the written contract and should be retained at the site of the tolling contractor.
      However, there were no requirements to keep records of shipments of hazardous secondary materials sent or received pursuant to the written contract between the tolling contractor and the tolling manufacturer. Since implementation of the final rule, the Agency has received inquiries from regulatory authorities regarding the enforceability of the tolling provision. These authorities believe that it would be easier to determine if tolling contractors and manufacturers were in compliance with the requirements for the tolling exclusion if records were kept of these shipments. The Agency agrees with these suggestions and is therefore proposing to amend 40 CFR 261.4(a)(23)(ii) to add a recordkeeping requirement for tolling contractors and manufacturers.
      The proposed language would require the tolling contractor to maintain at its facility for no less than three years records of all hazardous secondary materials received pursuant to the written contract with the tolling manufacturer. It would also require the tolling manufacturer to maintain at its facility for no less than three years records of all hazardous secondary materials shipped pursuant to its written contract with the tolling contractor. In both cases, 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 pursuant to the written contract. These requirements may be satisfied by routine business records (e.g., financial records, bills of lading, copies of DOT shipping papers, or electronic confirmations). EPA solicits comment on whether this proposed requirement would make the exclusion for hazardous secondary materials generated pursuant to a tolling contract easier to enforce. We also solicit comment on other information which would be appropriate for the recordkeeping requirements.
      While not specifically raised by regulatory authorities, the same question of enforceability could be raised if a hazardous secondary material is generated and reclaimed at different facilities where both facilities are under the control of the generator. Therefore, EPA also solicits comments on whether the recordkeeping requirement should also apply to hazardous secondary materials reclaimed off-site at the same company under 40 CFR 261.4(a)(23).
      Furthermore, the Agency is also soliciting comment on whether the specific tolling exclusion for hazardous secondary materials generated and reclaimed under the control of the generator should be retained or eliminated. We note that since implementation of the 2008 DSW final rule, no facilities have notified that they are operating under the tolling exclusion, which, in any event, applies only to a small subset of generators and reclaimers. The definitions under this exclusion (with its attendant certifications) are complicated and involve applying the exemption to companies other than the original generators and relying on contractual commitments to ensure generator control. If the exclusion is going to be only infrequently utilized, while possibly adding some additional risks of discard, it might be better for both the regulated community and regulatory authorities if it were not part of the exclusions granted to hazardous secondary materials generated and reclaimed under the control of the generator. Instead, persons operating under tolling arrangements would be eligible for the proposed alternative hazardous waste regulations for hazardous recyclable materials transferred to a third-party for reclamation. These proposed alternative regulations are discussed in Section VIII of this preamble. If this approach were finalized, there would be no need for definitions and certifications that are specific to tolling arrangements. On the other hand, the tolling contractor conducting the reclamation might need to obtain a RCRA storage permit. Toll manufacturing can be an efficient method for material production and the Agency does not wish to unnecessarily discourage sustainable reclamation practices under these arrangements. EPA requests comment on the likelihood and extent to which generators expect to rely on toll manufacturing arrangements and on the risks and benefits of including tolling arrangements in our proposed alternative regulatory scheme, or on maintaining their eligibility under the generator-controlled exclusion.
5. Other Changes
      The Agency is also proposing a number of structural changes to the regulations in the 2008 DSW final rule in order to make the generator controlled exclusion simpler and easier to understand. In the 2008 DSW final rule, the requirements for non-land-based units operating under the generator-controlled exclusion were found at 40 CFR 261.2(a)(2)(ii), while the requirements for land-based units operating under the same exclusion were found at 40 CFR 261.4(a)(23). Since the requirements for the two types of units are identical, we believe that all the requirements for units operating under the control of the generator should be placed in one regulatory provision. We are therefore proposing to move the requirements listed in 40 CFR 261.2(a)(2)(ii) to 40 CFR 261.4(a)(23). We believe this will provide more clarity and transparency to all users of the regulations.
      Another proposed change concerns the definitions of terms applicable to the generator-controlled exclusion. In the 2008 DSW final rule, these definitions (including certification requirements) were found in 40 CFR 260.10. We are proposing today to move these definitions to 40 CFR 261.4(a)(23). We believe that placing all definitions applicable to the generator-controlled exclusion together with the requirements for that exclusion in the same regulatory section will make it easier to locate and understand this exclusion in a single reading.
X. Revisions to the Definition of Legitimacy
A. Summary of Current Definition of Legitimacy
      Under the RCRA Subtitle C definition of solid waste, certain hazardous secondary materials, if recycled, are not solid wastes and, therefore, are not subject to RCRA's "cradle to grave" management system. The basic idea behind this principle is that recycling of these hazardous secondary materials often closely resembles industrial manufacturing rather than waste management. However, due to the economic incentives for managing hazardous secondary materials outside the RCRA Subtitle C regulatory system, there is a potential for some handlers to claim that they are recycling the hazardous secondary materials when, in fact, they are conducting waste treatment and/or disposal.
      To guard against this, EPA has long articulated the need to distinguish between legitimate (i.e., true) recycling and sham recycling, beginning with the preamble to the 1985 regulations that discussed the definition of solid waste (50 FR 638, January 4, 1985) and continuing through the 2008 DSW final rule. The legitimacy provision that is required for the definition of solid waste final exclusions and non-waste determinations promulgated in the 2008 DSW final rule (40 CFR 260.43) is designed to distinguish between real recycling activities --  legitimate recycling -- and sham recycling, an activity undertaken by an entity to avoid the requirements of managing a hazardous secondary material as a hazardous waste. This provision is substantively the same as the Agency's long-standing policy that has been expressed in our earlier preamble discussions and policy statements. The legitimacy provision applicable to these exclusions and non-waste determinations is based on the 2003 DSW proposal, the 2007 DSW supplemental proposal, the 2008 DSW final rule, and all relevant information available to EPA as contained in the rulemaking record for the 2008 DSW final rule. The preamble to the 2008 DSW final rule contains the operative discussion on the four legitimacy factors that should be used when making legitimate recycling determinations.
      In the 2008 DSW final rule, hazardous secondary materials that are not legitimately recycled are discarded materials and, therefore, are solid wastes (40 CFR 260.43). This provision also states that any facility claiming an exclusion at § 261.2(a)(2)(ii), § 261.4(a)(23), § 261.4(a)(24), or § 261.4(a)(25) or using a non-waste determination at § 260.30(d) or (e) must be able to demonstrate that its recycling activity is legitimate.
      The structure of the legitimacy standard in the 2008 DSW final rule has two parts. The first part includes a requirement that hazardous secondary materials being recycled must provide a useful contribution to the recycling process or to the product of the recycling process and a requirement that the product of the recycling process is valuable. These two factors make up the core of legitimacy and, therefore, a process that does not conform to them cannot be a legitimate recycling process, but would be considered sham recycling.
      The second part of legitimacy in the 2008 DSW final rule includes two factors that must be considered, but not necessarily met, when a recycler is making a legitimacy determination. That is, EPA believed that these two factors that must be considered when making a legitimacy determination did not always need to be met. This was because the Agency is aware of a few situations in which a legitimate recycling process does not conform to one or both of these two factors, yet the reclamation activity would still be considered legitimate.
      EPA did not believe that this will be a common occurrence, but in recognition that legitimate recycling may still occur in these situations, EPA promulgated the factors that address the management of the hazardous secondary materials and the presence of hazardous constituents in the product of the recycling process as factors that must be considered in the overall legitimacy determination, but not factors that must always be met.
      Following is a summary of the four legitimacy factors that were codified in the 2008 DSW final rule. The preamble to the 2008 DSW final rule includes a lengthy discussion of the four legitimacy factors that is the operative discussion for making legitimate recycling determinations (73 FR 64700, October 30, 2008).
Summary of the Four Factors in the 2008 DSW Final Rule
Factor 1 -- Useful Contribution: "Legitimate recycling must involve a hazardous secondary material that provides a useful contribution to the recycling process or to a product of the recycling process...The hazardous secondary material provides a useful contribution if it (i) contributes valuable ingredients to a product or intermediate; or (ii) replaces a catalyst or carrier in the recycling process; or (iii) is the source of a valuable constituent recovered in the recycling process; or (iv) is recovered or regenerated by the recycling process; or (v) is used as an effective substitute for a commercial product" (40 CFR 260.43(b)(1)).
	This factor expresses the principle that hazardous secondary materials should contribute value to the recycling process. This factor is an essential element to legitimate recycling because real recycling is not occurring if the hazardous secondary materials being added or recovered do not add anything to the process or recycled product. This factor is intended to prevent the practice of adding hazardous secondary materials to a manufacturing operation simply as a means of disposing of them, or of recovering only small amounts of a constituent, both of which EPA would consider sham recycling. For hazardous secondary materials to meet this factor, not every constituent or component of the hazardous secondary material has to make a contribution to the recycling activity. For example, a legitimate recycling operation involving precious metals might not recover all of the components of the hazardous secondary material, but would recover precious metals with sufficient value to consider the recycling process legitimate. In addition, the recycling activity does not have to involve the hazardous component of the hazardous secondary materials if the value of the contribution of the non-hazardous component justifies the recycling activity.
Factor 2 -- Valuable Product or Intermediate: "The recycling process must produce a valuable product or intermediate...The product or intermediate is valuable if it is (i) sold to a third-party or (ii) used by the recycler or the generator as an effective substitute for a commercial product or as an ingredient or intermediate in an industrial process" (40 CFR 260.43(b)(2)).
	This factor expresses the principle that the product or intermediate of the recycling process should be a material of value, either to a third party who buys it from the recycler, or to the generator or recycler itself, who can use it as a substitute for another material that it would otherwise have to buy or obtain for its industrial process. This factor is an essential element of the concept of legitimate recycling because recycling cannot be occurring if the product or intermediate of the recycling process is not of use to anyone and, therefore, is not a real product. This factor is intended to prevent the practice of running hazardous secondary materials through an industrial process for the purpose of avoiding the costs of hazardous waste management, rather than for the purpose of using the product or intermediate of the recycling activity. Such a practice would be sham recycling.
Factor 3 -- Managed as a Valuable Commodity: "The generator and the recycler should manage the hazardous secondary material as a valuable commodity. Where there is an analogous raw material, the hazardous secondary material should be managed, at a minimum, in a manner consistent with the management of the raw material. Where there is no analogous raw material, the hazardous secondary material should be contained. Hazardous secondary materials that are released to the environment and are not recovered immediately are discarded" (40 CFR 260.43(c)(1)).
      This factor expresses the principle that hazardous secondary materials being recycled should be managed in the same manner as other valuable materials. This factor requires those making a legitimacy determination to look at how the hazardous secondary materials are managed before they enter the recycling process. In EPA's view, a recycler will value hazardous secondary materials that provide an important contribution to its process or product and, therefore, will manage those hazardous secondary materials in a manner consistent with how it manages a valuable feedstock. If, on the other hand, the recycler does not manage the hazardous secondary materials as it would a valuable feedstock, that behavior may indicate that the hazardous secondary materials may not be recycled, but rather will be released into the environment and discarded.
Factor 4 -- Comparison of Toxics in the Product: "The product of the recycling process does not (i) contain significant concentrations of any hazardous constituents found in Appendix VIII of part 261 that are not found in analogous products; or (ii) contain concentrations of any hazardous constituents found in Appendix VIII of part 261 at levels that are significantly elevated from those found in analogous products; or (iii) exhibit a hazardous characteristic (as defined in part 261 subpart C) that analogous products do not exhibit" (40 CFR 260.43(c)(2)).
      This factor expresses the principle that when making a legitimacy determination, one needs to look at the concentrations of the hazardous constituents found in the product made from the hazardous secondary materials and compare them to the concentrations of hazardous constituents in analogous products that were not made from hazardous secondary materials. Any of the following three situations could be an indicator of sham recycling: a product that contains significant levels of hazardous constituents that are not found in the analogous products; a product with significantly higher levels of hazardous constituents than were in the analogous products; or a product that exhibits a hazardous characteristic that analogous products do not exhibit.
      Any of these situations could indicate that sham recycling is occurring because in lieu of proper hazardous waste disposal, the recycler could have incorporated hazardous constituents into the final product when they are not needed to make the product effective for its purpose. This factor, therefore, is designed to determine when toxics that are "along for the ride" are discarded in a final product and, therefore, the hazardous secondary materials are not being legitimately recycled. Evaluating the significance of levels of hazardous constituents in products of the recycling process may involve taking into consideration several variables, such as the type of product, how it is used and by whom, whether or not the elevated levels of hazardous constituents compromise the efficacy of the product, the availability of the hazardous constituents to the environment, and others.
      In addition to promulgating the legitimate recycling provision in the 2008 DSW final rule, EPA included a discussion of how the current legitimacy policy continues to apply to existing recycling exclusions and how the four factors included in the legitimacy provision at 40 CFR 260.43 are substantively the same as the current legitimacy policy. The Agency included a lengthy discussion of how it developed the legitimacy factors in 40 CFR 260.43 by closely examining the questions and sub-questions in its long-standing policy memo on the subject, OSWER Directive 9441.1989(19) (April 26, 1989), also known as the Lowrance Memo, and in the relevant Federal Register preambles, and converting this policy guidance into four direct factors. The detailed explanations of how each of the four factors is derived from the Lowrance Memo and other existing policy statements can be found at 73 FR 64708 - 64710, October 30, 2008.
B. Proposed Changes to the Definition of Legitimacy
1. Legitimacy Codified for All Recycling
      In today's action, EPA is proposing to codify the legitimate recycling requirement for all hazardous secondary materials recycling. In the October 28, 2003, proposal at 68 FR 61581 - 61588, EPA discussed its position on the relevance of legitimacy to hazardous secondary materials recycling in general and to the redefinition of solid waste specifically. At that time, we proposed to codify in the RCRA hazardous waste regulations four general criteria to be used in determining whether recycling of hazardous secondary materials is legitimate. In the supplemental proposal of March 26, 2007, at 72 FR 14197 - 14201, we proposed two changes to the 2003 proposed legitimacy criteria and asked for public comment on those changes. The changes were (1) a restructuring of the proposed criteria, called "factors" in that proposal, to make two of them mandatory, while leaving the other two as factors to be considered, and (2) additional guidance on how the economics of the recycling activity should be considered in a legitimate recycling determination.
      EPA's 2008 DSW final rule codified legitimacy for the recycling covered by the exclusions and non-waste determinations in that rulemaking. However, at that time, EPA did not codify the legitimacy factors for other recycling exclusions/activities, but explained that the concept of legitimacy finalized in that rule as a restriction or a condition for the final exclusions and the non-waste determinations is not substantively different from the Agency's longstanding policy that has been expressed in our earlier preamble discussions and policy statements.
      Upon further consideration of legitimacy, EPA believes that codifying the legitimacy factors for all recycling would provide a number of benefits. These benefits include ensuring that this important requirement is more readily accessible to the public, including the regulated community, by being published in the Federal Register and in the Code of Federal Regulations. EPA also expects that this action will prevent or minimize fraudulent or sham recycling, which will make the legitimacy provision a more enforceable standard for states and other entities implementing RCRA. In the Regulatory Impact Analysis for this proposed rule, we estimate that 5,321 facilities are currently recycling hazardous secondary materials in the U.S. For these facilities, this requirement that is currently implicit in the regulations and described in guidance would become an explicit regulatory requirement.
a. What is the proposed scope of the legitimacy provision? If codified for all recycling, the definition of legitimacy would apply to these types of hazardous secondary materials, in addition to the final exclusions and non-waste determinations promulgated in the 2008 DSW final rule:
   * Hazardous recyclable materials that are managed under today's proposed alternative Subtitle C regulations for hazardous recyclable materials.
   * Hazardous secondary materials that, because they are recycled, are excluded or exempted from Subtitle C regulation under other regulatory provisions (e.g., see the exclusions from the definition of solid waste in 40 CFR 261.4(a)).
   * Materials formally determined to be non-wastes under the procedures in 40 CFR 260.34.
   * Recyclable hazardous wastes that are regulated under Subtitle C prior to recycling or subject to reduced regulation.
	The concept of legitimate recycling is also used to determine if a unit is a recycling unit exempt from RCRA Subtitle C permitting or is a regulated waste treatment or storage unit subject to full RCRA Subtitle C permitting. If finalized for all recycling, the legitimacy factors would apply to these situations as well.
	One important note is that EPA has previously examined in depth a number of waste-specific and industry-specific recycling activities and has promulgated specific regulatory exclusions or provisions that address the legitimacy of these practices in much more specific terms than the general factors being promulgated today. Thus, there would be situations where today's proposed broadly applicable factors would overlap with these more specific legitimacy provisions.
      One example is the regulation for zinc fertilizers made from recycled hazardous secondary materials. In the zinc fertilizer regulation, among the requirements established by EPA are specific numerical limits on five heavy metal contaminants and dioxins in the zinc fertilizer product exclusion at 40 CFR 261.4(a)(21). These limits would be the "comparable" standard for those contaminants when determining if the recycling meets legitimacy factor 4 (Comparison of Toxics in the Product). However, if fertilizer made from hazardous secondary materials contains other hazardous constituents that do not have specific numerical limits in 40 CFR 261.4(a)(21), then the generator or recycler would need to compare the levels of those hazardous constituents with those in an analogous fertilizer product not made from hazardous secondary materials. Other examples of more specific legitimacy provisions are found in the regulations for comparable fuels at § 261.38, the use constituting disposal provisions in part 266 subpart C, and the burning for energy recovery and material recovery provisions in part 266 subpart H.
      In doing a legitimacy determination on a fuel made from hazardous secondary material under the comparable fuels exclusion, the regulations contain concentration limits for a comprehensive list of chemicals. If the fuel meets those limits, it would generally meet legitimacy factor 4 (unless it contains a hazardous constituent that is not on the list of chemicals in § 261.38 Table 1). However, the regulated entity would need to consider the other legitimacy factors as well in making an overall legitimacy determination on the hazardous secondary material being burned as a comparable fuel.
      For hazardous secondary materials being used in a manner constituting disposal under 40 CFR part 266 subpart C, a person would need to determine if the hazardous secondary material being recycled in this way meets all four legitimacy factors in 40 CFR § 260.43, in addition to meeting the conditions of 40 CFR part 266 subpart C. Meeting the applicable treatment standards as required by § 266.20 would not substitute for meeting legitimacy factor 4 because those standards are technologically-based standards and are not based on a comparison to an analogous product. Those standards in some cases would be more stringent while in other cases, they may be less stringent.
      The legitimacy provisions would also apply to hazardous secondary materials being burned either for energy recovery or material recovery under 40 CFR part 266 subpart H. For those materials being burned for metals recovery, meeting the concentration limits in 40 CFR 266.100(d)(2) would be considered comparable for the sake of legitimacy factor 4. The regulated entity would have to ensure that the recycling meets the other legitimacy factors as well to be in compliance with the overall legitimate recycling provision.
      EPA is proposing that these more specific provisions remain applicable and that the legitimacy factors would not replace them. That is, regulated entities would need to comply with both the specific regulatory conditions of their recycling exclusions, as well as any of the legitimate recycling factors not explicitly covered by the specific recycling exclusion. The Agency seeks public comment on the overlap between the general legitimacy provision and the specific recycling exclusions.
b. Why is EPA proposing to codify legitimacy for all recycling? In the 2008 DSW final rule, EPA explained that it was finalizing codified legitimacy factors only for the exclusions and non-waste determinations in that rule to avoid confusion among the regulated community and state and other implementing regulatory agencies about the status of recycling under existing exclusions. At the time, EPA did not expect members of the regulated community to revisit their previously-made legitimacy determinations.
	After evaluating the comments in response to the May 27, 2009, public meeting notice (74 FR 25200) and concerns brought up in the subsequent public meetings, EPA has determined that the benefits from having identical codified legitimacy requirements outweigh concerns about making administrative changes to the requirement. One codified legitimacy standard will be less confusing and more clear to the regulated community, implementing agencies and the public.
	EPA's environmental problems study documents a number of recycling damage cases that have resulted from sham recycling. For example, several cases of sham recycling detail cases of lead- and other metal-contaminated materials from secondary lead smelters and battery recyclers being used as fill in residential neighborhoods and as play sand for children. These are clear cases of sham recycling, but can be difficult for states and other implementing agencies to enforce against because the requirement is not in the regulations. EPA believes that including legitimacy in the regulations for all recycling will make it easier to enforce these sham recycling cases and will help implementing agencies fulfill their mandate to protect human health and the environment.
      EPA also believes that there will be benefits to the environment from requiring those who are recycling under existing exclusions and other provisions to do this kind of evaluation of their recycling process with legitimacy considerations in mind. EPA believes that codifying the legitimacy factors for all recycling and the requirement to document legitimacy determinations, as discussed below, will result in more thorough, accurate and consistent legitimacy determinations. However, as we discuss below, documentation of the legitimacy determination (i.e., how the hazardous secondary material meets the legitimacy factors) needs only to be available from the effective date of this rule.
      EPA continues to believe that the four legitimacy factors we are proposing to codify for all recycling are substantively the same as the existing policy found in previous Federal Register preamble statements and its long-standing policy memo on the subject (i.e., the Lowrance Memo). An analysis that shows how the four factors are derived from and equivalent to the Lowrance Memo and other policy statements is in the 2008 DSW final rule preamble (73 FR 64708 - 64710). In addition, EPA continues to believe that the vast majority of recycling of hazardous secondary materials in the regulated community is currently legitimate and would already meet all four legitimacy factors.
      It is the Agency's belief that it is an advantage for the regulatory agencies to have the regulatory requirements for legitimacy be identical for all recycling processes and to have the legitimacy provision promulgated in the regulations. Because legitimacy is an inherent concept underlying all of the current recycling exclusions, the legitimate recycling standard already applies to all hazardous secondary materials recycling and hazardous waste recycling, whether such recycling remains under the hazardous waste regulations or is excluded from the definition of solid waste. Therefore, the change being proposed today would result in the details of an existing standard being added to the regulations and thereby being more publicly available.
      It has been our long-standing policy and it is well understood throughout the regulated community and the implementing state regulatory agencies that recycling must be legitimate. EPA firmly believes that the legitimacy factors are a simplification and clarification of this existing policy and, as such, the large majority of existing determinations should not change or need to be revisited. We are reiterating today that simply codifying the legitimacy standard is not changing the underlying principles of legitimate recycling that have existed since the basic RCRA DSW structure was put in place in 1985.
      We recognize that under some of the existing exclusions, certain conditions may fulfill certain legitimacy factors or considerations, but this is not universally the case for all of the recycling exclusions. Even under the existing exclusions, there remains the possibility of someone claiming an existing recycling exclusion as a means of discarding their hazardous waste. Thus, simply meeting the conditions of an exclusion does not automatically ensure that the recycling is legitimate and codifying the legitimacy factors for all recycling emphasizes this fact. The codified legitimacy factors would apply to all future recycling of hazardous secondary materials as well, unless we establish specific legitimacy conditions for a specific recycling practice that stand in for the more general factors.
      EPA is asking for comments on this proposed approach to the legitimate recycling requirement. EPA is particularly interested in examples of cases where it would not be appropriate for the legitimacy factors to be codified.
2. All Legitimacy Factors Being Mandatory
a. What structure is EPA proposing for the legitimacy factors? In this proposed rule, EPA is reconsidering the current legitimacy structure and proposing that all the legitimacy factors be mandatory. EPA is proposing also that a petition process be available if a legitimate recycling process can be shown to be legitimate even though it does not meet one or both of the factors that currently have to be considered.
      As stated above, in the 2008 DSW final rule, EPA finalized a structure for legitimacy that included two factors that had to be met and two factors that had to be considered, but not necessarily met. We stated that we thought this approach would be clearer than the guidance for legitimacy being followed at that time, but would still provide some flexibility in those cases where recycling did not meet all the legitimacy factors, but the recycling activity was still legitimate.
      In this proposal, EPA is reconsidering its position on this issue and now believes that it would be most appropriate for all legitimacy factors to be mandatory, with a petition process for those cases where the recycling process is legitimate, even though factor 3 or factor 4 or both are not met. EPA is proposing this administrative change in the structure of the legitimacy factors for several reasons. Comments in response to EPA's May 27, 2009, notice of a public meeting and comments provided at that public meeting on June 30, 2009, reiterated that most of the state agencies that would be responsible for implementing the DSW regulations when the state has adopted the program support an approach in which all legitimacy factors are mandatory. EPA also expects that making all of the legitimacy factors mandatory would be less complicated across the overall RCRA Subtitle C program and would improve both the effectiveness and the protectiveness of the legitimacy provision.
      Commenters also argued that the legitimacy provision does not effectively address EPA's expectation that most recycling should meet all four legitimacy factors and leaves too much leeway for potential sham operations. A structure with four mandatory factors and a petition process for an entity that believes that its recycling is legitimate despite not meeting factor 3 or factor 4 or both does convey EPA's belief that these exceptions to the legitimacy factors are rare.
	In addition, EPA had believed that the two mandatory factors and two factors to be considered would be protective of human health and the environment because, under the regulations in 40 CFR 260.43, exceptions to all four factors being met would only happen in cases of recycling that was legitimate anyway -- that is, cases where either factor 3 or factor 4 were not met would have to have valid reasons for still being legitimate. However, it is not clear that this result will always occur in practice. Continued confusion about how the regulations work and concerns from state agencies that are and will be responsible for the enforcement and implementation of this provision are making EPA revisit its previous decision that this structure would be protective.
	Specifically, in the design of the legitimacy provision in the 2008 DSW final rule, EPA did not intend to make it possible for materials going for reclamation to be mismanaged or to allow recycled products that could pose a risk into the market. EPA heard in further comments, however, that states and implementing agencies remained concerned that the structure of the factors would lead to these outcomes. These comments about the protectiveness of the legitimacy structure received from those regulators during actual implementation of the 2008 DSW final rule are one of the main reasons that EPA is rethinking its approach.
	EPA continues to believe that the majority of recycling currently taking place would meet all legitimacy factors, but recognizes that there may be instances where recycling may be legitimate, but not meet one or both of the two factors that were labeled "to be considered" in the 2008 DSW final rule. It is critical that the legitimacy regulations be flexible enough to allow for these situations, particularly if the regulations are going to apply to all recycling. Therefore, EPA is proposing a petition process for facilities that believe that their recycling processes are legitimate despite not meeting one or both of these two final factors. EPA's proposal for how this petition process would work is described later in this section.
	Comments in response to the May 27, 2009, Federal Register notice also demonstrated that despite EPA's efforts to clarify what it meant by "factors to be considered" and how the Agency thought that structure would work in implementation of legitimacy, many commenters still found the requirement confusing and believed the regulated community as a whole would be confused as well. EPA believes that a structure where all factors must be met with a petition process for any exceptions would be more straightforward than the current two mandatory factors with two factors that have to be considered.
	EPA notes that the ultimate determination of legitimacy would be the same under either approach (i.e., whether factors 3 and 4 "must be considered" or "must be met"). Under the current structure requiring the factors be considered, a person making a legitimacy determination regarding a recycling process that does not meet one or both of these factors (i.e., is not being managed as a valuable commodity or has elevated levels of hazardous constituents in the product) would need a strong reason for why the recycling is still legitimate and, in the case of an enforcement action, would be required to demonstrate that reason. Under the proposed restructuring of the factors, under the same scenario, the recycler would be required to demonstrate legitimacy up front as part of a petition process and receive EPA approval before claiming an exemption. In other words, there would be no substantive distinction between the final legitimacy determination under the two approaches, but the administrative process for making that determination would be different.
	One potential concern with the proposed new structure is that it will require all entities making a legitimacy determination to reassess whether they meet all four factors and, if a facility's recycling does not meet factor 3 or factor 4 or both, it would either have to reengineer the process or submit a petition for a legitimacy variance. However, under the revisions being proposed today, all recyclers of hazardous secondary materials would be required to consider the legitimacy of their recycling in order to document that their recycling is legitimate for their files. Therefore, under EPA's proposal, the only burden on top of that requirement would be in the instance where a facility would need to submit a petition of a legitimacy variance.
	Finally, in designing the legitimacy factors that apply throughout the RCRA program, particularly in the various parts of the definition of solid waste, EPA is striving for consistency and cohesiveness. EPA's recent Identification of Non-Hazardous Secondary Materials that are Solid Wastes final rule (76 FR 15456, March 21, 2011) includes legitimacy factors for non-hazardous secondary materials that are burned in combustion units as fuels or used as ingredients. Despite the differences in the circumstances covered by that rule and this proposed rule, the legitimacy concepts are similar. EPA's non-hazardous secondary material rule mandates that all legitimacy factors must be met and in proposing to alter the legitimacy factors for hazardous secondary materials, EPA is proposing to line up these concepts in a consistent manner.
b. Petition process for legitimacy. As stated above, EPA believes it is critical that the legitimacy requirement have flexibility for those situations where a facility is recycling legitimately, but is not meeting factor 3 and/or factor 4. The petition process being proposed would be a mechanism for that flexibility, while also allowing the implementing agency to review the site-specific nature of the recycling practice and ensure that it is legitimate. EPA is seeking comment on the various aspects of this proposed process. EPA believes that the situations that would warrant legitimacy variances are rare, but seeks comment again on specific recycling scenarios that are legitimate yet do not meet either legitimacy factor 3 and/or legitimacy factor 4.
	Commenters to the 2007 DSW supplemental proposal suggested the idea of a petition process with four mandatory factors. EPA considered this option for the 2008 DSW final rule, but did not finalize it. However, after determining that an approach to legitimacy with all four factors being mandatory may be most appropriate, EPA is returning to the idea of a petition process to provide the needed flexibility and oversight to legitimacy determinations.
Information to be included in the petition
	Of primary interest, the petition would need to include information on the hazardous secondary material being recycled and the recycling process itself in the context of the four legitimacy factors. EPA continues to believe that legitimacy factors 1 and 2 -- which state that the material being recycled has to provide a useful contribution to the recycling product or process and that the process must produce a valuable product or intermediate -- have to be met for recycling to be considered legitimate. A facility would be eligible to submit a petition for a legitimacy variance to its implementing agency under § 260.43(c) if it has met legitimacy factors 1 and 2, but for some reason does not meet either factor 3, the requirement that the hazardous secondary material is managed as a valuable commodity, or factor 4, the requirement that the levels of any contaminants in the product of the recycling process be comparable to or lower than an analogous product or both.
      Thus, the legitimacy variance petition would include a narrative description of how the facility's recycling process addresses each of the four legitimacy factors. For the factor or factors that the process does not meet, the petition would have to explain how the recycling process does not meet the factor(s), but why the recycling should nevertheless be determined to be legitimate.
If, for example, the recycling process does not meet factor 3, the petition would include an in-depth description of how the hazardous secondary materials are managed and stored on-site and how analogous raw materials, if there are any, are stored on-site, as well as an explanation for why the storage of the hazardous secondary materials is different yet still indicative of management as a valuable product or intermediate. It may be appropriate to include photos or engineering specifications to illustrate the nature of the material storage. As described below, the Agency is also proposing to modify the language of this factor slightly to allow for situations where the hazardous secondary material is stored in a way that is different from the analogous raw material, but is stored in a manner equally protective. We are proposing that in those situations, a person would not have to petition for a legitimacy variance simply because the storage method was different than how the analogous raw material was stored.
      For a recycling process that does not meet factor 4 because the levels of contaminants in the product of the recycling process are not comparable to or lower than the levels in an analogous product, the petition should include a description of the product and its uses and an explanation of why the recycling is legitimate despite the elevated contaminant levels from the hazardous secondary material. This explanation could include considerations such as the lack of plausible exposure pathways to humans and the environment from the product, the bioavailability of the toxics in the product, or other factors, as appropriate. It may also be appropriate in this section to include relevant product specifications, either from the specific facility or industry-wide, as well as results from any toxicity testing of the product of the recycling process.
      In the 2008 DSW final rule, EPA gave the following example of where recycling could still be considered legitimate, even though the contaminant levels could be considered significantly higher than an analogous product. The example of 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. 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. In fact, the Agency is considering codifying the determination that the reuse of foundry sands for mold making in a foundry's sand loop using a non-thermal reclamation process is legitimate recycling and thus, these facilities would not need to submit a legitimacy variance petition since the Agency has already examined the practice and determined it is legitimate recycling. The Agency requests comment on this and on whether there are other similar cases where existing legitimacy determinations should be codified.
	In addition, the facility submitting a petition would also be required to include in its petition a detailed description of its process and its hazardous secondary materials, including, where applicable, material flow charts or diagrams, or other information the implementing agency may request. Because of the case-by-case nature of legitimacy determinations, the implementing agency reviewing the petition will need this detailed information to make an accurate assessment of the legitimacy of the process.
Process for evaluating the petition
	EPA is proposing that this petition process be managed by the state agencies where a state implements the RCRA Subtitle C program. In states where EPA implements Subtitle C, the petition process would be run by the appropriate EPA Regional office.
      EPA is proposing that in responding to a legitimacy variance petition, the implementing agency would follow the same procedures already in place for variances from solid waste, variances to be classified as a boiler, and for non-waste determinations in § 260.33. After evaluating the petition for a legitimacy variance and, if necessary, visiting the requesting facility, the implementing agency would issue a draft notice tentatively granting or denying the application. Notification of the tentative decision would be provided by newspaper advertisement or radio broadcast in the locality where the recycler is located and be made available on EPA's Web site. The implementing agency would then accept comment on the tentative decision for at least 30 days and may also hold a public hearing. The implementing agency would issue its final decision after receipt of comments and after any public meetings.
      Upon receiving a legitimacy variance, EPA is proposing that the facility include this information in the appropriate place of the RCRA Site ID Form (EPA Form 8700-12). EPA is proposing to revise this form to provide a place to check that a legitimacy variance has been received. The variance would not expire as long as the conditions relevant to the legitimacy variance described in the original petition do not change. The facility would be required to confirm that its process has not changed by re-notifying every two years, also through the RCRA Site ID Form. The facility should keep records of its legitimacy variance as part of its legitimacy documentation.
	EPA is seeking comment on the legitimacy petition process as proposed here and how the design of this process would work for both implementing agencies and facilities that may have to submit such a petition. In addition, EPA is seeking information on how many facilities may have to submit legitimacy petitions under this proposed requirement.
3. Proposed New Language for Legitimacy Factor 3 (Managed as a Valuable Commodity)
	The 2008 DSW final rule codified four factors as part of the § 260.43 definition of legitimacy, as summarized above. Factor 3 addressed the management of the hazardous secondary materials before it is recycled. Specifically, the regulatory language for this factor reads as follows:
      "The generator and the recycler should manage the hazardous secondary material as a valuable commodity. Where there is an analogous raw material, the hazardous secondary material should be managed, at a minimum, in a manner consistent with the management of the raw material. Where there is no analogous raw material, the hazardous secondary material should be contained. Hazardous secondary materials that are released to the environment and are not recovered immediately are discarded."
	In making all legitimacy factors mandatory, the first sentence of the regulatory language would be revised to read as follows: "The generator and the recycler must manage the hazardous secondary material as a valuable commodity." In addition, the Agency is proposing that the language following that sentence be changed to the following to more closely reflect the intent of the provision: "Where there is an analogous raw material, the hazardous secondary material, must be managed, at a minimum, in a manner consistent with the management of the raw material or in an equally protective manner." Thus, a generator or recycler would not have to submit a petition for a legitimacy variance if their hazardous secondary material is stored in a different manner than the analogous raw material, as long as that storage was as protective as the way the analogous raw material was stored. For example, a hazardous secondary material in powder form that is shipped in a woven super sack in good condition (i.e., that does not leak or spill) and stored in an indoor containment area would be considered managed "in an equally protective manner" as an analogous raw material that is shipped and stored in drums.
      The entire new proposed paragraph at 40 CFR 260.43(a)(3) would read as follows: "The generator and the recycler must manage the hazardous secondary material as a valuable commodity. Where there is an analogous raw material, the hazardous secondary material must be managed, at a minimum, in a manner consistent with the management of the raw material or in an equally protective manner. Where there is no analogous raw material, the hazardous secondary material must be contained. Hazardous secondary materials that are released to the environment and are not recovered immediately are discarded."
      In addition, EPA would like to clarify that managing a hazardous secondary material in a manner consistent with the management of an analogous raw material can include situations where the raw material and the hazardous secondary material (e.g., scrap metal) are both stored on the ground.
	EPA requests comment on these changes to the language in factor 3.
4. Proposed New Language for Legitimacy Factor 4 (Comparison of Toxics in the Product)
   The 2008 DSW final rule codified four factors as part of the § 260.43 definition of legitimacy, as summarized above. Factor 4 addressed the issue of toxics along for the ride in the products made from hazardous secondary materials. Specifically, the regulatory language for this factor reads as follows:
      "40 CFR 260.43(c)(2): The product of the recycling process does not (i) contain significant concentrations of any hazardous constituents found in Appendix VIII of part 261 that are not found in analogous products; or (ii) contain concentrations of any hazardous constituents found in Appendix VIII of part 261 at levels that are significantly elevated from those found in analogous products; or (iii) exhibit a hazardous characteristic (as defined in part 261 subpart C) that analogous products do not exhibit" (emphasis added).
	The agency is proposing to change the wording within the regulatory language of this legitimacy factor from "significant" and "significantly elevated" to "comparable to or lower than" because it more clearly reflects the intent of this factor. The agency believes "comparable to or lower than" means that any contaminants present in the product made from hazardous secondary materials are within a small acceptable range. In making this change, we also are simplifying the regulatory text by combining subparagraphs (i) and (ii) since it is no longer necessary to separate those instances where the hazardous constituents are or are not present in the analogous product. This language is also 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.
      For example, 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.
      In a second example, 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 would indicate that the recycled product is not comparable to an analogous product and, thus, the recycling process is really a sham.
      Another example is if zinc galvanizing metal made from hazardous secondary materials that were reclaimed contains 500 parts per million (ppm) of lead, while the same zinc product made from raw materials typically contains 475 ppm. These 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 submits a petition and receives a determination from the implementing agency that other factors demonstrate otherwise and the recycling activity is determined to be legitimate.
      In another example, 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 new proposed language for 40 CFR 260.43(a)(4) would read as follows: "The product of the recycling process (i) must contain concentrations of any hazardous constituents found in Appendix VIII of part 261 at levels that are comparable to or lower than those found in analogous products or (ii) must not exhibit a hazardous characteristic (as defined in part 261 subpart C) that analogous products do not exhibit.

	EPA requests comment on these changes to the language in factor 4 and specifically, whether any commenters have examples of where this change in language would change the outcome of the legitimacy determination. If EPA were to receive specific information on numerous cases where the product of hazardous secondary material recycling had levels of hazardous constituents that were not comparable to those found in products made from raw materials, but the Agency still considered the recycling to be legitimate, such information would be important in EPA's final decision about whether factor 4 should be mandatory or should remain a factor "to be considered."
	In addition, EPA requests comment on whether it would be helpful for the Agency to develop additional guidance on what constitutes "comparable" levels of hazardous constituents for certain products of hazardous secondary materials reclamation.   For most types of hazardous secondary materials reclamation, EPA does not believe that additional guidance would be needed. For example, the three most common types of hazardous secondary materials reclamation -- solvents recovery, metals recovery, and acid regeneration --  are expected to result in recycled products that are easily compared to their non-recycled counterparts. This is because it is EPA's understanding that the products of solvents recovery, metals recovery, and acid regeneration are generally indistinguishable from products made from raw materials. Users and recyclers of these common industrial materials are very familiar with the formulations of these commercial products and can easily identify whether there are hazardous constituents at elevated levels beyond what is typically found in these products. This could be informed by product specifications, where such specifications are available for the hazardous constituents.  However, there may be some types of products from recycled hazardous secondary materials which are less common or more unusual for which guidance might be useful. EPA requests comment on whether such guidance would be useful and, if so, for which specific products made from hazardous secondary materials, and encourages commenters to submit data or identify which sources of data could be used to develop such guidance.
      Commenters should also provide views, and related data, on what parameters may be used to characterize "comparable levels" for classes of hazardous secondary materials. EPA requests the data for specific hazardous secondary materials, including identification of the industrial process, industrial sector, and the specific use for the hazardous secondary material.
5. Documentation of Legitimacy
      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. Specifically, 40 CFR 260.43 states that any facility claiming an exclusion at § 261.2(a)(2)(ii), § 261.4(a)(23), § 261.4(a)(24), or § 261.4(a)(25) or using a non-waste determination at § 260.30(d) or (e) must be able to demonstrate that its recycling activity is legitimate.
      Although there was no specific recordkeeping requirement that went along with the ability to demonstrate legitimacy in the 2008 DSW final rule, EPA stated that we expected that in the event of an inspection or an enforcement action by an implementing agency, the recycler would be able to show how it made the overall legitimacy determination per § 261.2(f). 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. Under the 2008 DSW final rule, when a recycling process does not conform to one or both of the two non-mandatory factors under § 260.43(c), the Agency would expect the facility to show that it considered the factor(s) and why the recycling activity overall remains legitimate. Although § 261.2(f) will still apply in enforcement actions, we have since decided that it would be most useful to implementing agencies if the information documenting a recycling activity as legitimate was assembled in advance and available at all times.
      After implementing the DSW exclusions in several states since its promulgation in 2008, we have determined that documentation of legitimacy is an important step in ensuring compliance with this provision and will make oversight and enforcement more effective. We are therefore proposing today to require that persons who perform the recycling include documentation in their paperwork to explain how their hazardous secondary materials are legitimately recycled. We generally expect that this documentation would be a narrative description, which could include photographs or other illustrations of how the recycling of their hazardous secondary materials meets all four factors of legitimate recycling. All recyclers of hazardous secondary materials would need to maintain this documentation on site where the recycling occurs for the duration of the recycling operations and for three years after the recycling operations cease. If the recycling occurs on-site at a generator's facility rather than at the recycler's facility, then the documentation would be maintained at the generator's facility.
      Written documentation would 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. In addition, generators sending materials to third-party recyclers could also ask for a copy of the recycler's legitimacy documentation to ensure that their materials are going to legitimate recycling.
      This provision would require that persons claiming that their recycling activity is legitimate have the burden to provide written documentation showing how the hazardous secondary materials provide a useful contribution to the recycling process, how the product of the recycling activity -- whether it is a product or process intermediate -- is valuable, how the generator or the recycler manages the hazardous secondary materials as a valuable commodity, and how the levels of any hazardous constituents in the product made from hazardous secondary materials are comparable to or lower than those in analogous products made from virgin materials. If the hazardous secondary material recycler determines that one or both of the latter two factors were not met, it would need to produce documentation that it has petitioned the implementing agency for a legitimacy variance, as described above, and received a determination that the recycling was indeed legitimate, even though one or both of those factors were not met.
      The Agency is not proposing any specific 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 materials provide 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 specific ways in which useful contribution can be achieved. The recycler would need to document how the hazardous secondary materials 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 metals 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 proposed in 40 CFR 260.10.
         * Comparison of toxics in the product legitimacy factor --  the recycler would include any data or information that shows that the levels of hazardous constituents in the product are comparable to or lower than those found in analogous products. For example, if a recycling process produced paint, the levels of hazardous constituents in the paint would be compared to the levels of the same constituents found in a similar paint made from virgin raw materials. This comparison would be included in the documentation of this legitimacy determination. A recycler is also allowed to perform this evaluation by comparing the hazardous constituents in the hazardous secondary material feedstock with those in an analogous raw material feedstock. This may be easier in cases where the recycler knows that the hazardous secondary material is very similar in profile to the raw material. It may also be preferable in cases where the recycler creates an intermediate which is later processed again and may end up in two or more products, where there is no analogous product or when production of the product of the recycling process has not yet begun.
      As discussed above, the Agency is also proposing that the legitimacy standard be codified for all hazardous secondary material recycling, not only for the specific DSW exclusions promulgated in the 2008 DSW final rule. As part of ensuring that all hazardous secondary material recycling is legitimate, we are proposing that recyclers under these other exclusions and those recycling under the Subtitle C hazardous waste regulations (which often are subject to reduced regulatory requirements) also maintain documentation in their files of why their recycling is legitimate. This proposed administrative requirement would apply to all recycling that is ongoing after the effective date of the final rule adopting this requirement. We are interested in receiving public comment on this issue.
      As far as how documentation would work for existing exclusions, as we noted in the 2003 DSW proposal, EPA has already examined in depth a number of waste-specific and industry-specific recycling activities and has promulgated specific regulatory exclusions or provisions that address the legitimacy of these practices in much more specific terms than the
general factors that were finalized as part of the 2008 DSW exclusions and non-waste determination process. One example is the regulation for zinc fertilizers made from recycled hazardous secondary materials. In the zinc fertilizer regulation, among the requirements established by EPA are specific numerical limits on five heavy metal contaminants and dioxins in the zinc fertilizer product exclusion at 40 CFR 261.4(a)(21). We believe that data showing the zinc fertilizer product meets those numerical limits would be sufficient for documenting that the product meets legitimacy factor 4 (comparison of toxics in the product) for these contaminants. As noted earlier, if fertilizer made from hazardous secondary materials contains other hazardous constituents that do not have specific numerical limits in 40 CFR 261.4(a)(21), then the generator or recycler would need to compare the levels of those hazardous constituents with those in an analogous fertilizer product not made from hazardous secondary materials. Other examples of existing exclusions where EPA has established specific conditions that are related to their legitimacy determinations are shredded circuit boards excluded under 40 CFR 261.4(a)(14), which must be free of mercury switches, mercury relays, and nickel-cadmium and lithium batteries, and comparable fuels excluded under 40 CFR 261.4(a)(16), which must meet specific levels for hazardous constituents (thus, meeting legitimacy factor 4).
      The conditions developed for the recycling exclusions in § 261.4(a) were found to be necessary under material-specific rulemakings that determined when the particular hazardous secondary materials in question are not solid wastes. When EPA originally made the decision that these hazardous secondary materials are not solid waste, the Agency took into account the relevant factors about the hazardous secondary materials, including how the materials were managed and what toxic chemicals were present.
      Thus, for those specific exclusions in § 261.4(a) that have conditions that relate directly to legitimacy, documentation that shows that the recycling facility meets those conditions would be what is necessary to show that the recycling of such material is meeting those specific legitimacy factors. However, a recycling facility would also have to include a description of how it meets the other legitimacy factors that may not be reflected in the waste-specific conditions of the exclusion, in its legitimacy documentation.
	EPA is requesting comment on the requirement for documentation of legitimacy from facilities performing the recycling, for both the 2008 DSW exclusions and for the existing recycling exclusions. In particular, EPA is requesting comment on whether the proposed documentation requirement is necessary for implementation and enforcement of the legitimacy provision.

XI. Revisions to Solid Waste Variances and Non-Waste Determinations
      The Agency is also proposing today to modify the existing regulation of solid waste variances at 40 CFR 260.31(c), 40 CFR 260.33 and 40 CFR 260.34 to foster greater consistency on the part of implementing agencies and help ensure the protectiveness of the implementation of the solid waste variances and non-waste determinations. Specifically, EPA is proposing to do the following:
         1.       Revise 40 CFR 260.33(c) to require facilities to re-apply for a variance in the event of a change in circumstances that affects how a material meets the criteria upon which a solid waste variance has been based;
         2.       Add a provision at 40 CFR 260.33(d) stating that facilities receiving a variance or non-waste determination must provide notification as required by § 260.42 of this chapter;
         3.       Revise the criteria for the partial reclamation variance in 40 CFR 260.31(c) to more clearly explain when the variance applies and to require, among other things, that the criteria for this variance must be reviewed and evaluated collectively, since each criterion reinforces and supports other criterion;
         4.       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 §§ 261.2 or 261.4; and
         5.       Designate the Regional Administrator as the EPA recipient of petitions for variance and non-waste determinations.
Finally, EPA is requesting comment on other possible steps to help ensure national consistency and protectiveness in the implementation of variances and non-waste determinations.
      In response to the May 27, 2009, Federal Register notice announcing the DSW public meeting, commenters identified issues with the implementation of the non-waste determination process, arguing that (1) determinations can lead to inconsistency among states and may negatively impact economies for states that are more stringent in their determinations; (2) determinations may require a large amount of state resources to review and process; and, (3) determinations that are indefinitely approved may not receive the proper level of oversight required to ensure that legitimate and safe reclamation is occurring.
      While these comments were focused on the non-waste determination petition process in the 2008 DSW final rule (which was the focus of the public meeting), they can apply equally to the solid waste variances as well, since the procedures in 40 CFR 260.33 are intended to apply to both. Thus, EPA is proposing to make changes that affect both the solid waste variances and the non-waste determinations.
A. Proposed Revisions to Procedures for Variances and Non-Waste Determinations Found 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 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 proposed rule, EPA is proposing two changes to 40 CFR 260.33. First, EPA is proposing to make all variances subject to the provision in 40 CFR 260.33(c) that would require an applicant to re-apply for a variance in the event that the material no longer meets the relevant criteria. Second, EPA is proposing to make all variances and non-waste determinations subject to the biennial notification requirements in 40 CFR 260.42.
1. Requirement that an Applicant Re-apply in the Event the Material No Longer Meets the Relevant Criteria
      The 2008 DSW final rule noted that once a non-waste determination has been granted, the applicant is obligated to ensure the hazardous secondary material continues to meet the criteria of the non-waste determination, including any conditions specified therein by the regulatory authority. If a change occurs that affects how the hazardous secondary materials meet the relevant criteria and (if applicable) any conditions as specified by the regulatory authority and the applicant fails to re-apply to the Administrator for a formal determination, the hazardous secondary materials may be determined to be solid and hazardous waste and subject to the RCRA Subtitle C hazardous waste requirements (73 FR 64712 - 13, October 30, 2008). This requirement was codified at 40 CFR 260.33(c).
      The requirement that the hazardous secondary materials determined to not be a solid waste 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. The 2008 DSW final rule codified this requirement in order to enhance clarity and assist in its implementation, but only focused on the non-waste determination provisions because that was the scope of that rule.
      EPA is now proposing to explicitly apply 40 CFR 260.33(c) to all the solid waste variances, as well as the non-waste determination provisions listed in 40 CFR 260.30 to ensure that if there are changes that may impact how hazardous secondary materials meet the relevant criteria, that such changes be considered by the regulatory authority to ensure that those criteria continue to be met. Codifying this requirement would help ensure clarity and consistency by providing an administrative procedure for reconsidering a variance in the event that the hazardous secondary material no longer meets the relative criteria for the variance.
2. Proposed Re-notification Requirement
      The second proposed change to 40 CFR 260.33 is to require facilities receiving variances or non-waste determinations to re-notify EPA or the State Director, if the state is authorized for this aspect of the rule, every two years by March 1 of each even-numbered year and to notify within 30 days of stopping management of hazardous secondary materials under the variance or non-waste determination using EPA Form 8700-12 in compliance with 40 CFR 260.42. The current process cannot track variances or non-waste determinations at a national level and over time. This lack of tracking can lead to state-to-state inconsistency in determinations because one state cannot easily access information regarding similar determinations made by another state. Two commenters expressed specific concern over this inconsistency, arguing that variations in stringency can drive jobs out of more-stringent states and into less-stringent states. These commenters argued that more detailed or restrictive criteria and EPA oversight are necessary to ensure that non-waste determinations are issued consistently across states. One of the commenters also recommended increasing transparency by making the non-waste determinations available online. Additionally, lack of tracking inhibits effective oversight of facilities receiving variances and non-waste determinations because it does not provide regulatory authorities with a mechanism for receiving updated information.
	Amending the procedures for variances and non-waste determinations to require re-notification ensures that regulatory authorities are provided regularly updated information (such as information regarding quantities of hazardous secondary materials managed under the determination). Such updating enables better compliance with the criteria and with any stipulations of the variance or non-waste determination. Additionally, this information can be used to identify facilities which may have undergone changes to their reclamation process significant enough to trigger a review of the determination under 40 CFR 260.33(c).
      This proposed change is also based on EPA's experience with the § 260.42 notification requirement. Since the 2008 DSW final rule became effective on December 29, 2008, EPA has received a number of notifications from facilities managing hazardous secondary materials under the generator-controlled and transfer-based exclusion and has judged the notification provision to have worked well in enabling regulatory authorities to monitor compliance of the facilities with the conditions of the exclusions. Regulatory authorities receive information on the name and location of the facilities operating under the exclusion and the types and quantities of hazardous secondary materials the facility is managing, which allows the regulatory authority to prioritize inspections, as well as create a list of facilities that would benefit from training and compliance assistance on the rule.
      Additionally, notification has allowed regulatory authorities to follow up with facilities that appear to have misunderstood the regulations. For example, notification allows regulatory authorities to contact facilities that notified that they were operating under the exclusions but were, in fact, residing in a state that had not adopted the 2008 DSW final rule. Notification in these instances allowed regulatory authorities to identify problems and to intervene early to prevent potential mismanagement. Based on experience with receiving notifications under the 2008 DSW final rule, EPA is convinced of the value of the notification provision in ensuring proper implementation of its rules and believes that such notification for variances and non-waste determinations would increase the transparency and oversight of facilities receiving a variance or non-waste determination.
      In addition to re-notification, EPA also plans to increase the transparency of the variance and non-waste determination petition processes by providing online access to a list of facilities receiving variances and non-waste determinations, including any supporting documentation upon which a determination has been made. Ideally, this website would function as a clearinghouse of information so that the states could use each other's determinations to inform determinations within their own state borders. EPA believes this sharing of information would increase consistency in determinations across states. EPA plans to work with states to develop a process for collecting information regarding non-waste determinations so that EPA can include these facilities in its online database.
B. Proposed Revisions to Partial Reclamation Variance
      The "partial reclamation" variance at 40 CFR 260.30(c) applies to materials that have been reclaimed, but must be reclaimed further before the materials are completely recovered (i.e., "partial reclamation"). In turn, 40 CFR 260.31(c) provides the specific standards that a material must meet in order to be eligible for a variance from classification as a solid waste.
      Today, the Agency is proposing to revise the partial reclamation variance provision of 40 CFR 260.31(c) to clarify when partially-reclaimed materials are not solid waste because they are commodity-like. The objectives of these proposed revisions are to clarify the regulatory language, foster consistent application of the variance criteria, and make clear that the variance should be granted only when partial reclamation has produced a commodity-like material. EPA's proposed modifications of 40 CFR 260.31(c) include (1) revising the introductory text to clarify when the variance applies; (2) revising the introductory text to require that all of the decision criteria must be met; (3) revising the language of all of the decision criteria; and (4) eliminating the sixth criterion "other relevant factors."
1. The Current Partial Reclamation Variance Provision
      Under the current regulations, 40 CFR 260.30, 260.31, and 260.33 together provide variance mechanisms for three types of recycled materials which the Regional Administrator (or State Director, in an authorized state) may determine, on a case-by-case basis, are not solid waste if they meet specified criteria. One of the variances, found in 40 CFR 260.30(c), with associated criteria at 40 CFR 260.31(c), addresses materials that have been partially reclaimed but must be reclaimed further before the materials are completely recovered. Under current 40 CFR 260.31(c), the Regional Administrator may grant a request for a variance for such materials if, after initial reclamation, the resulting material is commodity-like. The determination that a partially reclaimed material is commodity-like is made using the following six factors:
      (1)	The degree of processing the material has undergone and the degree of further processing that is required;
      (2)	The value of the material after it has been reclaimed;
      (3)	The degree to which the reclaimed material is like an analogous raw material;
      (4)	The extent to which an end market for the reclaimed material is guaranteed;
      (5)	The extent to which the reclaimed material is handled to minimize loss; and
      (6)	Other relevant factors.
      In the preamble to the 1985 Definition of Solid Waste final rule (January 4, 1985; 50 FR 655) where this provision was promulgated, EPA stated that "the Regional Administrator may weigh these factors as she sees fit, and may rely on any or all of them to reach a decision."
2. The Intent of the Partial Reclamation Variance
      When the partial reclamation variance provision was promulgated in 1985, EPA's intent was to provide a mechanism for determining that a hazardous waste had undergone sufficient reclamation (a type of processing) to produce a material that was more like a commodity than a solid waste. The variance would be applicable if the material was commodity-like, even though some further reclamation was required before the material became a commercial product. EPA intended that the variance would be applied at the point that the commodity-like material was produced. After that point, the material would be managed as a commodity rather than as a solid and hazardous waste. Prior to the point that partial reclamation produced a commodity-like material, the material would have to be managed as a hazardous waste.
      The following discussion illustrates how the Agency intended the variance to work for a typical treatment system involving three parties: (1) a generator of hazardous waste; (2) a partial reclamation facility that receives, stores, and partially reclaims the hazardous waste to produce a commodity-like material; and (3) a final reclaimer, or end market, that receives the commodity-like material and uses it as a substitute for products or intermediates in production processes that involve further reclamation.
      First, the generator would manage and ship the hazardous waste following all of the applicable hazardous waste regulations, including waste quantity determinations, accumulation time limits, generator accumulation technical requirements, and hazardous waste manifest procedures for shipping. Second, the partial reclamation facility would receive the hazardous waste under a hazardous waste manifest. The facility would also have a RCRA permit for management of the hazardous waste until the point that the partial reclamation process had produced a commodity-like material.
      Once the partial reclamation process had produced a commodity-like material, a partial reclamation variance from classification as solid waste could be granted. Accordingly, management of the commodity-like material after that point would not be covered by the partial reclamation facility's RCRA permit. In addition, the partial reclamation facility would not be required to use a manifest to ship the commodity-like material to the final reclaimer.
      Finally, the final reclaimer would receive the commodity-like material from the partial reclaimer without a manifest. The final reclaimer would not require a RCRA permit for management of the commodity-like material because the material is not a solid and hazardous waste.
      The preceding discussion illustrates how the variance would apply to a typical three-facility, three-step process. However, the critical point is not how many steps or facilities are involved, but at what point the partial reclamation process has produced a commodity-like material as defined by the criteria in 40 CFR 260.31(c). Depending on the materials and processes in question, this point could occur at varying steps in the management of a hazardous waste, at varying facilities where it is managed.
3. Experience With the Current Partial Reclamation Variance Provision
      EPA has become aware that authorized states across the country have interpreted and applied the variance provision inconsistently, even in similar circumstances. This inconsistency may be due to (1) the wide discretion allowed the regulatory authority to weigh any or all of the decision criteria in any way it sees fit; (2) lack of clarity in the decision criteria themselves; or (3) the general sixth criterion "other relevant factors."
      This inconsistency has resulted in variances being granted under 40 CFR 260.31(c) for some materials that are not yet commodity-like and that are still clearly hazardous waste. Therefore, EPA is proposing revisions to the variance criteria to address the inconsistency among authorized states, remove ambiguities, and clearly convey the original intent that only hazardous wastes that have been partially reclaimed to produce commodity-like materials are eligible for a variance from classification as solid waste. Consistent and appropriate application of the partial reclamation variance is necessary so that the hazardous waste program provides the level of protection of human health and the environment required by the RCRA statute in all communities in all areas of the country.
      An illustration of how the revised variance provision would be applied to a commonly reclaimed hazardous waste example is included in the Background Document "F006 Reclamation." This document includes a detailed description of how the proposed revised variance provision would be used to make determinations about whether a variance would be appropriate for listed hazardous waste F006 (wastewater treatment sludges from electroplating operations) at various steps in the reclamation process.
4. Proposed Revisions to Clarify and Improve the Partial Reclamation Variance Provision
      As stated above, EPA is proposing several revisions to 40 CFR 260.31(c). Each of the proposed revisions is discussed below.
a. Revision to clarify the introductory text of 40 CFR 260.31(c). EPA is proposing to revise the introductory text of 40 CFR 260.31(c) to clarify when a partial reclamation variance is applicable. The proposed revised text reads as follows:
      (c) The Regional Administrator may grant requests for a variance from classifying as a solid waste those materials that have been partially reclaimed but must be reclaimed further before recovery is completed, if the partial reclamation has produced a commodity-like material. To qualify for a variance the material must be legitimately recycled as specified in 40 CFR 260.43, must be partially-reclaimed as determined by meeting criterion 1 below, and must be commodity-like as determined by meeting criteria 2 - 5 below:
	The revised text is intended to clarify that the variance is applicable at the point that partial reclamation has produced a commodity-like material. The revised text includes the phrase "has produced a commodity-like material" and "must be commodity-like." These changes clarify and reflect EPA's intent that the variance applies only after partial reclamation has produced a commodity-like material. The variance does not apply earlier in a process when a hazardous waste is still present. While not a new regulatory requirement, the proposed change also highlights that the commodity-like material must be legitimately recycled. The revised introductory text also replaces the term "reclaimed" with "partially reclaimed" to be more specific about when a variance would be applicable (i.e., after partial reclamation has produced a commodity-like material, rather than after full reclamation). Finally, the revised text clarifies that the first criterion is to be used to determine whether partial reclamation has occurred and the remaining criteria are to be used to determine whether a partially-reclaimed material is commodity-like.
	EPA requests comment on whether the proposed revisions to the introductory text clarify the variance provision effectively and whether they will result in appropriate and consistent decisions about whether and when to grant a variance.