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March 26, 2007

Part II

Protection Agency
40 CFR Parts 260 and 261
Revisions to the Definition of Solid
Waste; Proposed Rule
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14172 Federal Register / Vol. 72, No. 57 / Monday, March 26, 2007 / Proposed Rules

ENVIRONMENTAL PROTECTION Docket Center, Room B102, 1301 (202) 566–1744, and the telephone
AGENCY Constitution Avenue, NW., Washington, number for the OSWER Docket is 202–
DC, Attention Docket ID No. EPA–HQ– 566–0270.
40 CFR Parts 260 and 261 RCRA–2002–0031. Such deliveries are FOR FURTHER INFORMATION CONTACT: For
[EPA–HQ–RCRA–2002–0031–FRL–8289–9] only accepted during the docket’s more detailed information on specific
normal hours of operation, and special aspects of this rulemaking, contact
RIN 2050–AG31 arrangements should be made for Marilyn Goode, Office of Solid Waste,
deliveries of boxed information. Hazardous Waste Identification
Revisions to the Definition of Solid Instructions: Direct your comments to
Waste Division, MC 5304P, Environmental
Docket ID Number EPA–HQ–RCRA– Protection Agency, 1200 Pennsylvania
AGENCY: Environmental Protection 2002–0031. EPA’s policy is that all Ave., NW., Washington, DC 20460 (703)
Agency. comments received will be included in 308–8800, (goode.marilyn@epa.gov) or
ACTION: Supplemental Proposed Rule. the public docket without change and Tracy Atagi, Office of Solid Waste,
may be made available online at Hazardous Waste Identification
SUMMARY: The Environmental Protection http://www.regulations.gov, including Division, MC 5304P, Environmental
Agency (EPA) is today publishing a any personal information provided, Protection Agency, 1200 Pennsylvania
supplemental proposal which would unless the comment includes Ave., NW., Washington, DC 20460, at
revise the definition of solid waste to information claimed to be Confidential (703) 308–8672 (atagi.tracy@epa.gov).
exclude certain hazardous secondary Business Information (CBI) or other
materials from regulation under Subtitle information whose disclosure is
C of the Resource Conservation and restricted by statute. Do not submit A. Regulated Entities
Recovery Act (RCRA). We are also information that you consider to be CBI
Entities potentially affected by this
soliciting comments on regulatory or otherwise protected through http://
action include about 4600 facilities in
factors to be used to determine whether www.regulations.gov or e-mail. The
530 industries in 17 economic sectors
recycling of hazardous secondary http://www.regulations.gov Web site is
that generate or recycle hazardous
materials is legitimate. The Agency first an ‘‘anonymous access’’ system, which
secondary materials which are currently
proposed changes to the definition of means EPA will not know your identity
regulated as RCRA Subtitle C hazardous
solid waste on October 28, 2003 (68 FR or contact information unless you
61558). The purpose of this proposal is provide it in the body of your comment. wastes (e.g., industrial co-products, by-
to encourage safe, environmentally If you send an e-mail comment directly products, residues, unreacted
sound recycling and resource to EPA without going through http:// feedstocks). About 80 percent of these
conservation and to respond to several www.regulations.gov your e-mail affected facilities are classified in
court decisions concerning the address will be automatically captured NAICS code economic sectors 31, 32,
definition of solid waste. and included as part of the comment and 33 (manufacturing), and the
that is placed in the public docket and remainder are in NAICS code economic
DATES: Comments must be received on
made available on the Internet. If you sectors 21 (mining), 22 (utilities), 23
or before May 25, 2007. Under the
submit an electronic comment, EPA (construction), 42 (wholesale trade), 44
Paperwork Reduction Act, comments on
recommends that you include your and 45 (retail trade), 48 and 49
the information collection provisions
name and other contact information in (transportation), 51 (information), 54
must be received by OMB on or before
the body of your comment and with any (professional, scientific and technical
April 25, 2007.
disk or CD–ROM you submit. If EPA services), 56 (administrative support,
ADDRESSES: Submit your comments,
cannot read your comment due to waste management and remediation), 61
identified by Docket ID No. EPA–HQ (educational services), 62 (health care
–RCRA 2002–0031 by one of the technical difficulties and cannot contact
you for clarification, EPA may not be and social assistance, and 81 (other
following methods: services). About 0.65 million tons per
http://www.regulations.gov: Follow able to consider your comment.
Electronic files should avoid the use of year of recyclable industrial materials
the on-line instructions for submitting
special characters, any form of handled by these entities may be
E-mail: Comments may be sent by encryption, and be free of any defects or affected, of which the most common
electronic mail (e-mail) to RCRA- viruses. types are metal-bearing hazardous
docket@epa.gov, Attention Docket ID Docket: All documents in the docket secondary materials (e.g., sludges and
No. EPA–HQ–RCRA–2002–0031. are listed in the http:// spent catalysts) for commodity metals
Fax: Fax comments to: 202–566–0270, www.regulations.gov index. Although recovery, and organic chemical liquids
Attention Docket ID No. EPA–HQ– listed in the index, some information is for recycling as solvents. This proposed
RCRA 2002–0031. not publicly available, such as CBI or rule, if promulgated, is expected to
Mail: Send comments to: OSWER other information whose disclosure is result in regulatory and materials
Docket, EPA Docket Center, Mail Code restricted by statute. Certain other recovery cost savings to these industries
5305T, Environmental Protection material, such as copyrighted material, of approximately $107 million per year.
Agency, 1200 Pennsylvania Avenue, will be publicly available only in hard Taking into account impact estimation
NW., Washington, DC 20460, Attention copy. Publicly available docket uncertainty factors, this rule, if
Docket ID No. EPA–HQ–RCRA–2002– materials are available either promulgated, could affect between 0.3
0031. In addition, please mail a copy of electronically in http:// to 1.7 million tons per year of industrial
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your comments on the information www.regulations.gov or in hard copy at hazardous secondary materials handled
collection provisions to the Office of the OSWER Docket, EPA/DC, EPA West, by 3600 to 5400 entities in 460 to 570
Information and Regulatory Affairs, Room B102, 1301 Constitution Ave., industries, resulting in $93 million to
Office of Management and Budget NW., Washington, DC. The Public $205 million per year of net cost
(OMB), Attn: Desk Officer for EPA, 725 Reading Room is open from 8:30 a.m. to savings. More detailed information on
17th St., Washington, DC 20503. 4:30 p.m. Monday through Friday, the potentially affected entities,
Hand delivery: Deliver comments to: excluding legal holidays. The telephone industries, and industrial materials, as
Environmental Protection Agency, EPA number for the Public Reading Room is well as the economic impacts of this

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rule (with impact uncertainty factors), is VII. How Does the Concept of Discard Relate and legitimately reclaimed1 within the
presented in section XVI.A of this to These Proposed Exclusions? United States or its territories 2 and are
preamble and in the ‘‘Economics VIII. Recycling Studies. only handled in non-land-based units
Background Document’’ available in the IX. Exclusion for Hazardous Secondary
(e.g., tanks, containers, containment
Materials That Are Legitimately
docket for this rulemaking. Reclaimed Under the Control of the
buildings). The exclusion would apply
Generator: Proposed 40 CFR 260.10, to hazardous secondary material that is
B. What To Consider When Preparing
261.2(a)(1), 261.2(a)(2), 261.2(c)(3), reclaimed under the control of the
Comments for EPA
261.4(a)(23). generator, if the materials are not
1. Submitting CBI. Do not submit this X. Conditional Exclusion for Hazardous speculatively accumulated. In addition,
information to EPA through http:// Secondary Materials That Are EPA is proposing to include in 40 CFR
www.regulations.gov or e-mail. Clearly Transferred for the Purpose of 260.42 a requirement that the generator
mark part of all information that you Reclamation: Proposed 40 CFR would be required to submit a one-time
claim to be CBI. For CBI information in 261.2(c)(3), 261.4(a)(24), 261.4(a)(25). notification to EPA or the authorized
a disk or CD–ROM that you mail to EPA, XI. Legitimacy: Proposed 40 CFR 261.2(g).
XII. Petitions for Non-waste Classification:
state. Hazardous secondary material
mark the outside of the disk or CD–ROM Proposed 40 CFR 260.30(d), 260.30(e), would be considered ‘‘under the control
as CBI and then identify electronically 260.30(f), 260.34. of the generator’’ under the following
within the disk or CD–ROM the specific XIII. Effect of This Proposal on Other circumstances:
information that is claimed as CBI. In Programs. (1) It is generated and then reclaimed
addition to one complete version of the XIV. Measurement of the Performance at the generating facility; or
comment that includes information Outcomes of This Supplemental (2) It is generated and reclaimed by
claimed as CBI, a copy of the comment Proposal. the same company, if the generator
that does not contain the information XV. How Would These Proposed Regulatory certifies that it is under the same
claimed as CBI must be submitted for Changes Be Administered and Enforced ownership as the reclaimer and that the
in the States?
inclusion in the public docket. XVI. How Has EPA Fulfilled the
owner company has acknowledged
Information so marked will not be Administrative Requirements for This responsibility for safe management of
disclosed, except in accordance with Rulemaking? the hazardous secondary materials; or
procedures set forth in 40 CFR Part 2. (3) It is generated and reclaimed
2. Tips for Preparing Your Comments. I. Statutory Authority pursuant to a written agreement
When submitting comments, remember between a tolling contractor and batch
These regulations are proposed under
to: manufacturer, if the tolling contractor
the authority of sections 2002, 3001,
• Identify the rulemaking by docket retains ownership of, and responsibility
3002, 3003, 3004, 3007, 3010, and 3017
number and other identifying for, the hazardous secondary materials
of the Solid Waste Disposal Act of 1970,
information (subject heading, Federal that are generated during the course of
as amended by the Resource
Register date and page number). the manufacture.
Conservation and Recovery Act of 1976
• Follow directions. The Agency may This proposed exclusion would not
(RCRA), as amended by the Hazardous include recycling practices that involve
ask for commenters to respond to
and Solid Waste Amendments of 1984 discard of materials. These practices
specific questions or organize comments
(HSWA), 42 U.S.C. 6921, 6922, 6923, include recycling of inherently waste-
by referencing a Code of Federal
and 6924. like materials (40 CFR 261.2(d)),
Regulations (CFR) part or Section
number. II. What Is the Scope of This recycling of materials that are used in a
• Explain why you agree or disagree; Supplemental Proposal? manner constituting disposal or used to
suggest alternatives and substitute produce products that are applied to or
language for your requested changes. In today’s notice, EPA is proposing to placed on the land (40 CFR 261.2(c)(1)),
• Describe any assumptions and revise the definition of solid waste in and burning of materials for energy
provide any technical information and/ order to exclude from regulation under recovery or used to produce a fuel or
or data that you used. Subtitle C of RCRA certain hazardous otherwise contained in fuels (40 CFR
• If estimating burden or costs, secondary materials sent for recycling. 261.2(c)(2)). This proposed exclusion is
explain methods used to arrive at the We are also seeking comment on certain further described in section IX of this
estimate in sufficient detail to allow for changes to the proposed regulatory
it to be reproduced. factors for determining whether 1 In this context, the terms ‘‘recycling’’ and

• Provide specific examples to recycling is legitimate. The Agency first ‘‘reclamation’’ are not necessarily synonymous.
proposed changes to the definition of ‘‘Recycling typically involves a series of activities,
illustrate any concerns and suggest including storage and other handling steps that
alternatives. solid waste, as well as regulatory criteria culminate in the production of a valuable end
• Make sure to submit comments by for legitimacy, on October 28, 2003 (68 product of some kind. Thus, if materials need to be
the comment period deadline identified FR 61581–61588). reclaimed in order to produce a valuable end
product, the reclamation activity can be thought of
above. The scope of the regulatory changes as one step in the overall recycling process. See
Preamble Outline proposed today are as follows: proposed § 261.4(g). Further explanation of the term
‘‘reclamation’’ can be found in the preamble to the
I. Statutory Authority. A. Exclusion for Materials That Are October 2003 proposal at 68 FR 61564.
II. What Is the Scope of This Supplemental Legitimately Reclaimed Under the 2 EPA has proposed to limit this exclusion to
Proposal? Control of the Generator in Non-Land- hazardous secondary materials reclaimed within
III. What Is the Intent of This Supplemental the United States or its territories because it does
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Based Units
Proposal? not have sufficient information related to recycling
IV. How Does This Supplemental Proposal activities outside of the United States or its
This provision, with regulatory territories to make the same general finding that it
Relate to the October 2003 Proposal? language proposed in 40 CFR has made for materials legitimately recycled under
V. How Is Hazardous Waste Recycling 261.2(a)(2)(ii), would exclude certain the control of the generator. However, as noted
Currently Regulated? below, EPA requests comment on whether the
VI. What Is the History of Recent Court
hazardous secondary materials (i.e.,
Agency should promulgate a conditional exclusion
Decisions on the Definition of Solid spent materials, listed sludges, and for exported hazardous secondary material
Waste? listed byproducts) that are generated otherwise meeting the criteria for this rule.

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preamble. We note that the Agency is previously discussed exclusion for by making two of these factors
considering expanding its regulations hazardous secondary materials recycled mandatory and two non-mandatory
for comparable fuels in a separate under the control of the generator, this considerations, and providing further
rulemaking. exclusion would not cover recycling of guidance and clarification on how the
inherently waste-like materials, economics of recycling should be
B. Exclusion for Materials That Are
recycling of materials that are used in a considered in making legitimacy
Legitimately Reclaimed Under the
manner constituting disposal, and determinations. The changes are
Control of the Generator in Land-Based
burning of materials for energy recovery. described in section XI of this preamble.
The proposed exclusion is described in
This provision, with regulatory III. What Is the Intent of This
more detail in section X of this
language proposed in 40 CFR Supplemental Proposal?
261.4(a)(23), would exclude certain Today’s supplemental proposal would
hazardous secondary materials that are D. Petition Process for Non-Waste revise and clarify the RCRA definition
generated and legitimately reclaimed Determinations of solid waste as it pertains to certain
within the United States or its territories In addition to the exclusions types of hazardous secondary materials
and handled in land-based units (e.g., discussed above, the Agency also is that would not be considered wastes
surface impoundments, waste piles). proposing a petition process, with subject to regulation under RCRA
This provision requires that hazardous regulatory language found in proposed Subtitle C. This notice builds on our
secondary materials managed in land- 40 CFR 260.30(d), 260.30(e), 260.30(f), October 28, 2003 proposal (68 FR
based units must be contained in such and 260.34, for obtaining a case-specific 61558) which was initiated partially in
units. non-waste determination for certain response to decisions by the United
hazardous secondary materials that are States Court of Appeals for the DC
C. Conditional Exclusion for Materials
recycled. This process would allow a Circuit, which, taken together, have
That Are Transferred for the Purpose of
petitioner to receive a formal provided the Agency with additional
determination from the Agency that its direction in this area.
This conditional exclusion, with hazardous secondary material is clearly This proposal represents an important
regulatory language proposed in 40 CFR not ‘‘discarded’’ and therefore is not a restructuring of the RCRA regulations
261.4(a)(24), (hereinafter referred to as solid waste. The procedure would allow that distinguish wastes from non-waste
the ‘‘transfer-based exclusion’’) would EPA or the authorized state to take into materials for RCRA purposes, and that
apply to hazardous secondary materials account the particular fact pattern of the ensure environmental protections over
(i.e., spent materials, listed sludges, and recycling and to determine that the hazardous secondary materials recycling
listed byproducts) that are generated hazardous secondary material in practices. As such, it also is an
and subsequently transferred to a question is not a solid waste without opportunity for the Agency to clarify in
different person or company for the imposing additional requirements. The a regulatory context the concept of
purpose of reclamation. As long as the determination would be available to ‘‘legitimate recycling,’’ which has been
conditions to the exclusion are satisfied, petitioners who could demonstrate that and is a key component of RCRA’s
the hazardous secondary materials their hazardous secondary materials regulatory program for recycling, but
would not be subject to Subtitle C were recycled in a continuous industrial which to date has been implemented
regulation. The conditions are intended process, or that the materials were without regulatory criteria. Today’s
to ensure that such materials are indistinguishable in all relevant aspects supplemental proposal thus includes
handled as commodities rather than from a product or intermediate, or that specific regulatory provisions for
wastes. They will also help guarantee the materials were under the control of determining when hazardous secondary
that protection of human health and the the generator via a tolling arrangement materials are recycled legitimately.
environment will not be compromised or similar contractual arrangement. The Today’s supplemental proposal is de-
in the absence of hazardous waste petition process for the non-waste regulatory in nature because certain
regulatory requirements for these determinations would be the same as recyclable materials that have heretofore
materials. It is important to note that that for the variances from the definition been subject to the hazardous waste
when hazardous secondary materials are of solid waste found in 40 CFR 261.31. regulations would no longer be
generated and reclaimed within the This process and the criteria for making regulated as hazardous waste. The
United States pursuant to a written these determinations, are described in factors to consider for legitimate
agreement between a tolling contractor section XII of this preamble. recycling codify existing principles
and a batch manufacturer as defined in without increasing regulation. This
proposed 40 CFR 260.10, these materials E. Legitimacy proposal is not intended to bring new
would be subject to the requirements of On October 28, 2003 (68 FR 61581– wastes into the RCRA regulatory system.
proposed 40 CFR 261.2(a)(ii) or 61588), EPA extensively discussed our By removing unnecessary hazardous
261.4(a)(23) rather than the more position on the relevance of legitimacy waste regulatory controls over certain
extensive requirements of proposed 40 to hazardous waste recycling in general recycling practices, and by providing
CFR 261.4(a)(24). and to the redefinition of solid waste more explicit criteria for determining
If any of the hazardous secondary specifically. We proposed to codify in the legitimacy of recycling practices in
materials under proposed 40 CFR the RCRA regulations four general general, EPA expects that this proposal
261.4(a)(24) are generated and then criteria to be used in determining will encourage the safe, beneficial
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exported to another country for whether recycling of hazardous recycling of hazardous secondary
reclamation, we are also proposing that secondary materials is legitimate. In materials. This regulatory initiative is
the exporter notify the receiving country today’s action, we are proposing thus consistent with the Agency’s
of the export through EPA and obtain changes to the proposed legitimacy longstanding policy of encouraging the
consent from that country before criteria and asking for public comment recovery and reuse of valuable resources
shipment of the material. This on these revisions. The changes consist as an alternative to land disposal, while
requirement is proposed to be codified of a restructuring of the proposed at the same time maintaining protection
in 40 CFR 261.4(a)(25). Like the criteria, called factors in this proposal, of human health and the environment.

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It also is consistent with one of the materials into specific fact patterns Hazardous secondary materials that
primary goals of the Congress in addressed by the court. EPA is therefore are currently not regulated as wastes
enacting the RCRA statute (as evidenced proposing (1) an exclusion for when they are recycled include, for
by its name), and with the Agency’s hazardous secondary materials that are example, those which are used or
vision of how the RCRA program could generated and then reclaimed under the reused directly as effective substitutes
evolve over the longer term to promote control of the generator; (2) a for commercial products, and those
sustainability and more efficient use of conditional exclusion for hazardous which can be used as ingredients in an
resources.3 secondary materials that are generated industrial process, provided the
and then transferred to another person materials are not being reclaimed. See
IV. How Does This Supplemental
for the purpose of reclamation; and (3) 40 CFR 261.2(e). In essence, EPA
Proposal Relate to the October 2003
a petition process for obtaining a case- considers these types of recycling
specific non-waste determination for practices to be more akin to normal
On October 28, 2003 (68 FR 61558), certain hazardous secondary materials industrial production rather than waste
the Agency proposed to exclude from that are recycled. Today’s notice also management.
the definition of solid waste any proposes a restructuring of the In contrast, in some recycling
material generated and reclaimed in a previously proposed legitimacy criteria practices, the hazardous secondary
continuous process within the same and further clarification and guidance material cannot be used as is and must
industry, provided the reclamation was on how the economics of the recycling be significantly processed before it can
legitimate. ‘‘Same industry’’ was transaction should be considered in be reused in a manner similar to
defined as industries sharing the same making legitimacy determinations. A products in commerce. In these cases,
4-digit North American Industry detailed description of today’s proposed EPA has found that the material may be
Classification System (NAICS) code. regulatory changes and the reasons for more ‘‘waste-like’’ and the hazardous
The basis for that exclusion was the not finalizing the October 2003 proposal secondary materials therefore have been
holding in American Mining Congress v. are discussed in sections IX, X, XI, and regulated as hazardous wastes. One type
EPA (‘‘AMC I’’), 824 F.2d 1177 (DC Cir. XII of this preamble. of recycling that falls within this
1987)) that materials destined for category and that is especially relevant
beneficial reuse of recycling in a V. How Is Hazardous Waste Recycling to this rule is reclamation of certain
continuous process by the generating Currently Regulated? types of hazardous secondary materials.
industry are not discarded. In order to Reclamation involves the processing of
The basic regulatory provisions for
be eligible for the exclusion, the hazardous secondary materials in some
defining ‘‘solid wastes’’ and ‘‘hazardous
hazardous secondary material could not way in order so that they can be used
wastes’’ under RCRA are found in part
be speculatively accumulated under or reused. See 40 CFR 261.1(c)(4) and 40
261 of Title 40 of the Code of Federal
261.1(c)(8). In addition, the generator of CFR 261.2(c)(3). An example of
Regulations (CFR). To be subject to
such materials would be required to reclamation is processing of a spent
submit a one-time notification to EPA or RCRA’s hazardous waste regulatory
solvent to restore its solvent properties
the authorized State with contact program, a material must be a solid
before it is suitable for reuse as a
information, the type of material that waste that is also a hazardous waste. A
solvent. As explained elsewhere in
would be excluded, and the industry solid waste is a hazardous waste if it is
today’s preamble, this supplemental
that generated the material. In the explicitly listed as such (in subpart D of
proposal would reexamine the
October 2003 proposal, the Agency also part 261), or if it exhibits one or more
regulatory status of these hazardous
proposed to codify in the RCRA of the hazardous characteristics (as
secondary materials and de-regulate a
regulations four criteria to be used in specified in subpart C of part 261).
specific subset of these materials that
determining whether recycling of In general, hazardous wastes are are recycled by being reclaimed.
hazardous secondary material was subject to RCRA’s full ‘‘cradle to grave’’ In the existing Part 261 regulations,
legitimate. We also solicited comment regulatory system from the time they are EPA identified other types of recycling
on a broader conditional exclusion from generated to the time that they are practices that are fully regulated
RCRA regulation for essentially all ultimately disposed. However, because, we concluded, they involve
hazardous secondary materials that are hazardous secondary materials often can discard of materials. These practices
legitimately recycled. For a discussion be recycled instead of being disposed, include recycling of ‘‘inherently waste-
of public comments received on our which can change how those wastes are like’’ materials (40 CFR 261.2(d)),
proposed exclusion, see section IX of regulated. The ‘‘definition of solid recycling of materials that are ‘‘used in
this preamble. waste’’ regulations in part 261 in effect a manner constituting disposal,’’ or
After evaluating comments received separate recyclable hazardous secondary ‘‘used to produce products that are
on the October 2003 proposal and materials into two broad categories— applied to or placed on the land,’’(40
conducting an independent analysis, those that are classified as solid wastes CFR 261.2(c)(1)) and ‘‘burning of
EPA decided to restructure its approach. when recycled, and are therefore subject materials for energy recovery’’ or ‘‘used
Following the decision of the DC Circuit to regulation under Subtitle C of RCRA to produce a fuel or otherwise contained
Court in Association of Battery if they are listed or characteristic in fuels’’ (40 CFR 261.2(c)(2)). Today’s
Recyclers v. EPA (‘‘ABR’’)( 208 F.3d hazardous wastes, and those that are not supplemental proposal is not intended
1047 (DC Cir. 2000), EPA has decided to considered solid wastes when they are to affect how these recycling practices
examine the principles behind the recycled, and thus are not regulated. It are regulated.
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court’s holdings on the definition of should be understood that the term The current regulations also provide
solid waste, rather than trying to fit ‘‘hazardous secondary material’’ as it is certain specific exemptions and
used in today’s rule and preamble exclusions from the definition of solid
3 The Agency’s long-term ‘‘vision’’ of the future of therefore refers to both categories of waste for particular recycling practices.
the RCRA program is discussed in the document recyclable materials; that is, materials For example, pulping liquors from
‘‘Beyond RCRA: Prospects for Waste and Materials
Management in the Year 2020,’’ which is available
that are regulated as hazardous wastes paper manufacturing that are reclaimed
on the Agency’s Web site http://www.epa.gov/ when recycled, and materials that are in a pulping liquor recovery furnace and
epaoswer/osw/vision.htm. not considered wastes when recycled. then reused in the pulping process are

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excluded from regulation under 40 CFR secondary materials destined for definition of ‘‘solid waste’’ for RCRA
261.4(a)(6). In some cases, these recycling as ‘‘waste,’’ while excluding endangerment and information-
exclusions specify certain conditions others. gathering authorities. See 40 CFR
that must be met in order to qualify for Since 1980, EPA has interpreted 261.1(b) and Connecticut Coastal
and maintain the excluded status of the ‘‘solid waste’’ under its Subtitle C Fishermen’s Association v. Remington
recycled material. An example of such regulations to encompass both materials Arms Co., 989 F.2d 1305, 1315 (2d Cir.
a ‘‘conditional exclusion’’ is the one that are destined for final, permanent 1993), holding that EPA’s use of a
provided in 40 CFR 261.4(a)(9) for spent placement in disposal units, as well as narrower and more specific definition of
wood preserving solutions that are some materials that are destined for solid waste for Subtitle C purposes is a
reclaimed and reused. EPA is proposing recycling. 45 FR 33090–95 (May 19, reasonable interpretation of the statute.
that hazardous secondary materials that 1980); 50 FR 604–656 (Jan. 4, 1985) (see See also Military Toxics Project v. EPA,
are currently excluded with specific especially pages 616–618). EPA has 146 F.3d 948 (DC Cir. 1998).)
requirements or conditions should be offered three arguments in support of Under its current Subtitle C
required to continue to meet those this approach: regulations, EPA classifies as solid
requirements (e.g., the drip pad • The statute and the legislative wastes some—but not all—hazardous
requirements for the wood preserving history suggest that Congress expected secondary materials that are recycled by
exclusion). In addition, recycling of EPA to regulate as solid and hazardous ‘‘reclamation.’’ The regulations define
such materials at new facilities, or at wastes certain materials that are ‘‘spent materials’’ as being ‘‘discarded’’
existing facilities that are not currently destined for recycling (see 45 FR 33091, if they are destined for reclamation.
operating under the terms of an existing citing numerous sections of the statute However, ‘‘commercial chemical
exclusion, would also be subject to the and U.S. Brewers’ Association v. EPA, products’’ are not defined as
existing applicable regulatory exclusion, 600 F.2d 974 (DC Cir. 1979); 48 FR ‘‘discarded’’ when reclaimed. In
rather than today’s proposed exclusions. 14502–04 (April 3, 1983); and 50 FR
addition, byproducts and sludges are
For a fuller discussion of this issue, see 616–618).
defined as ‘‘discarded’’ when reclaimed
• Hazardous secondary materials
section XIII of this preamble. In that on a case-by-case basis. That is, EPA
stored or transported prior to recycling
section, we solicit comment on allowing considers these materials to be
have the potential to present the same
regulated entities to choose which ‘‘discarded’’ when they are specifically
types of threats to human health and the
exclusion they would be subject to in listed as a hazardous waste at 40 CFR
environment as hazardous wastes stored
cases where more than one exclusion 261 Subpart D. See Table 1 to 40 CFR
or transported prior to disposal. In fact,
could apply. 261.2. EPA has also promulgated three
EPA found that recycling operations
VI. What Is the History of Recent Court have accounted for a number of exceptions from the Subtitle C
Decisions on the Definition of Solid significant damage incidents. For definition for materials destined for
Waste? example, materials destined for reclamation. See 260.31(b) and (c); 40
recycling were involved in one-third of CFR 261.4(a)(8).
A. Background Finally, EPA has always asserted that
the first 60 filings under RCRA’s
RCRA gives EPA the authority to imminent and substantial endangerment materials are not excluded from its
regulate the disposal of ‘‘solid wastes’’ authority, and 20 of the initial sites jurisdiction simply because someone
under its non-hazardous waste program. listed under CERCLA. (48 FR 14474, claims that they will be recycled. EPA
See, e.g., RCRA sections 1008(a), 4001 April 4, 1983.) Congress also cited some has consistently considered hazardous
and 4004(a). RCRA also gives EPA damage cases which can be interpreted secondary materials destined for ‘‘sham
authority to regulate hazardous wastes. to involve recycling. (H.R. Rep. 94– recycling’’ to be discarded and, hence,
See, e.g., RCRA sections 3001–3004. 1491, 94th Cong., 2d Sess., at 17, 18, to be solid wastes for Subtitle C
‘‘Hazardous wastes’’ are the subset of 22). More recent data (i.e., information purposes. See 45 FR 33093 (May 19,
solid wastes that present threats to on damages occurring after 1982) 1980), 50 FR 638–39 (Jan. 4, 1985). The
human health and the environment. See included in the rulemaking docket for U.S. Court of Appeals for the DC Circuit
section 1004(5). EPA also may address today’s supplemental proposal has agreed that materials undergoing
solid and hazardous wastes under its corroborate the fact that recycling sham recycling are discarded and,
endangerment authorities in section operations can result in significant consequently, are solid wastes under
7003. (Similar authorities are available damage incidents. (See section IV.B.2 of RCRA. See American Petroleum
for citizen suits under section 7002.) today’s preamble.) Institute v. EPA, 216 F.3d 50, 58–59 (DC
Materials that are not solid wastes are • Excluding all hazardous secondary Cir. 2000).
generally not subject to regulation under materials destined for recycling would B. A Series of DC Circuit Court
RCRA Subtitle C. Thus, the definition of allow materials to move in and out of Decisions
‘‘solid waste’’ plays a key role in the hazardous waste management
defining the scope of EPA’s authorities system depending on what any person Trade associations representing
under RCRA. handling the material intended to do mining and oil refining interests
The statute defines ‘‘solid waste’’ as with it. This seems inconsistent with challenged EPA’s 1985 regulatory
‘‘* * * any garbage, refuse, sludge from the mandate to track hazardous wastes definition of solid waste. In 1987, the
a waste treatment plant, water supply and control them from ‘‘cradle to DC Circuit held that EPA exceeded its
treatment plant, or air pollution control grave.’’ authority ‘‘in seeking to bring materials
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facility and other discarded material EPA has interpreted the statute to that are not discarded or otherwise
* * * resulting from industrial, confer jurisdiction over at least certain disposed of within the compass of
commercial, mining, and agricultural hazardous secondary materials destined ‘waste.’ ’’ American Mining Congress v.
operations, and from community for recycling. The Agency has therefore EPA (‘‘AMC I’’), 824 F.2d 1177, 1178
activities * * *’’ (RCRA Section 1004 developed in Part 261 of 40 CFR a (DC Cir. 1987). Although the Court
(27) (emphasis added)). In its RCRA definition of ‘‘solid waste’’ for Subtitle clearly articulated this concept, it did
hazardous waste regulations, EPA has C regulatory purposes. (Note: This not specify which portions of the rules
historically defined certain hazardous definition is narrower than the exceeded EPA’s authority. It more

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generally ‘‘granted the petition for authority over at least some materials disposed of, abandoned, or thrown
review.’’ destined for reclamation rather than away.’’ 208 F.2d at 1051. It repeated that
The Court held that certain of the final discard. The U.S. Court of Appeals materials reused within an ongoing
materials EPA was seeking to regulate for the 11th Circuit found that ‘‘[i]t is industrial process are neither disposed
were not ‘‘discarded materials’’ under unnecessary to read into the term of nor abandoned. 208 F.3d at 1051–52.
section 1004(27). After reviewing ‘discarded’ a congressional intent that It explained that the intervening API I
numerous statutory provisions and the waste in question must finally and and AMC II decisions had not narrowed
portions of the legislative history, the forever be discarded.’’ U.S. v. ILCO, 996 the holding in AMC I. 208 F.3d at 1054–
Court held that Congress used the term F.2d 1126, 1132 (11th Cir. 1993) 1056.
‘‘discarded’’ in its ordinary sense, to (finding that used lead batteries sent to At the same time, the Court did not
mean ‘‘disposed of’’ or ‘‘abandoned 824 a reclaimer have been ‘‘discarded once’’ hold that storage before reclamation
F.2d at 1188–89. The Court further held by the entity that sent the battery to the automatically makes materials
that the term ‘‘discarded materials’’ reclaimer). The Fourth Circuit found ‘‘discarded.’’ Rather, it held that ‘‘* * *
could not include materials * * * that slag held on the ground untouched at least some of the secondary material
destined for beneficial reuse or for six months before sale for use as EPA seeks to regulate as solid waste (in
recycling in a continuous process by the road bed could be a solid waste. Owen the mineral processing rule) is destined
generating industry itself (because they) Electric Steel Co. v. EPA, 37 F.3d 146, for reuse as part of a continuous
are not yet part of the waste disposal 150 (4th Cir. 1994). industrial process and thus is not
problem. 824 F.2d at 1190. The Court Considering all of these decisions abandoned or thrown away.’’ 208 F.3d
held that Congress had directly spoken (except the API case decided in 2000), at 1056.
to this issue, so that EPA’s use of a in 1998, EPA promulgated a rule in In its most recent opinion dealing
conflicting definition was not entitled to which EPA claimed Subtitle C with the definition of solid waste, Safe
deference under Chevron U.S.A., Inc. v. jurisdiction over hazardous secondary Food and Fertilizer v. EPA, 350 F.3d
NRDC, 467 U.S. 837 (1984). 824 F.2d at materials recycled by reclamation 1263 (DC Cir. 2003), the Court upheld
1183, 1189–90, 1193. within the mineral processing industry an EPA rule that excludes from the
At the same time, the Court did not (the ‘‘LDR Phase IV rule’’) (63 FR 28556 definition of solid waste hazardous
hold that no recycled materials could be (May 26, 1998)). In that rule, EPA secondary materials used to make zinc
discarded. The Court mentioned at least promulgated a conditional exclusion for fertilizers, and the fertilizers
two examples of recycled materials that all types of mineral processing themselves, so long as the recycled
EPA properly considered within its hazardous secondary materials destined materials meet certain handling, storage
statutory jurisdiction, noting that used for reclamation. EPA imposed a and reporting conditions and the
oil can be considered a solid waste. 824 condition prohibiting land-based storage resulting fertilizers have concentration
F.3d at 1187 (fn 14). Also, the Court prior to reclamation because it levels for lead, arsenic, mercury,
suggested that materials disposed of and considered hazardous secondary cadmium, chromium, and dioxins that
recycled as part of a waste management materials from the mineral processing fall below specified thresholds. Final
program are within EPA’s jurisdiction. industry that were stored on the land to Rule, ‘‘Zinc Fertilizers Made From
824 F.2d at 1179. Subsequent decisions be part of the waste disposal problem Recycled Hazardous Secondary
by the DC Circuit also indicate that (63 FR at 28581). The conditional Materials’’ (‘‘Fertilizer Rule’’), (67 FR
some materials destined for recycling exclusion decreased regulation over 48393 (2002)). EPA determined that if
are ‘‘discarded’’ and therefore within spent materials stored prior to these conditions are met, the recycled
EPA’s jurisdiction. In particular, the reclamation, but increased regulation materials have not been discarded. The
Court held that emission control dust over by-products and sludges that conditions apply to a number of
from steelmaking operations listed as exhibit a hazardous characteristic, and recycled materials not produced in the
hazardous waste ‘‘K061’’ is a solid that are stored prior to reclamation. EPA fertilizer production industry, including
waste, even when sent to a metals noted that the statute does not authorize certain zinc-bearing hazardous
reclamation facility, at least where that it to regulate ‘‘materials that are secondary materials such as brass
is the treatment method required under destined for immediate reuse in another foundry dusts.
EPA’s land disposal restrictions phase of the industry’s ongoing EPA’s reasoning was that market
program. American Petroleum Institute production process.’’ EPA, however, participants, consistent with the EPA-
v. EPA (‘‘API I ’’), 906 F.2d 729 (DC Cir. took the position that materials that are required conditions in the rule, would
1990). The Court held that it is removed from a production process for treat the exempted materials more like
reasonable for EPA to consider as storage are not ‘‘immediately reused,’’ valuable products than like negatively-
discarded (and solid wastes) listed and therefore are ‘‘discarded’’ (63 FR at valued wastes and, thus, would manage
wastes managed in units that are part of 28580). them in ways inconsistent with discard.
wastewater treatment units, especially The mining industry challenged the In addition, the fertilizers derived from
where it is not clear that the industry rule, and the DC Circuit vacated the these recycled feedstocks are chemically
actually reuses the materials. (‘‘AMC provisions that expanded jurisdiction indistinguishable from analogous
II’’), 907 F.2d 1179 (DC Cir. 1990). Also, over characteristic by-products and commercial products made from raw
the Court found that EPA potentially sludges destined for reclamation. materials. 350 F.3d at 1269. The court
had jurisdiction over oil-bearing Association of Battery Recyclers v. EPA upheld the rule based on EPA’s
wastewaters recycled at petroleum (‘‘ABR’’), 208 F.3d 1047 (DC Cir. 2000). explanation that market participants
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refineries, although in the rule under The Court held that it had already manage materials in ways inconsistent
review EPA failed to provide a rational resolved the issue presented here in its with discard, and the fact that the levels
basis for asserting jurisdiction. opinion in AMC I, where it found that of contaminants in the recycled
American Petroleum Institute v. EPA ‘‘* * * Congress unambiguously fertilizers were ‘‘identical’’ to the
(‘‘API II ’’), 216 F.3d 50, 57–58 (DC Cir. expressed its intent that ‘solid waste’ fertilizers made with raw materials. The
2000). (and therefore EPA’s regulatory court held that this interpretation of
It also is worth noting that two other authority) be limited to materials that ‘‘discard’’ was reasonable and consistent
Circuits also have held that EPA has are ‘discarded’ by virtue of being with the statutory purpose. The court

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noted that the identity principle was which a material that is recycled by have the same incentives to manage the
defensible because the differences in reclamation is or is not discarded. hazardous secondary material as a
health and environmental risks between In the series of decisions discussed useful product. Accordingly, the Agency
the two types of fertilizers are so slight above relating to the RCRA definition of believes that conditions are needed for
as to be substantively meaningless. solid waste, the Court of Appeals for the the Agency to determine that this
However, the Court specifically stated DC Circuit has consistently cited a plain material is not discarded. However, if
that it ‘‘need not consider whether a language definition of discard, as the recycler legitimately recycles the
material could be classified as a non- meaning ‘‘disposing, abandoning or hazardous secondary material, it is not
discarded exclusively on the basis of the throwing away.’’ EPA believes that this regulated as a solid waste, provided
market-participation theory.’’ 350 F.3d is a workable and logical definition of certain additional conditions are met.
at 1269. The court only determined that the term, and the underlying logic of Further discussion of the Agency’s
the combination of market participants’ today’s proposed exclusions is rationale for this concept appears in
treatment of the materials, EPA required consistent with this definition. section X.A. of this preamble.
management standards and the The basic rationale that EPA is This is the general logic we have used
‘‘identity principle’’ are a reasonable set applying in this case differentiates in developing the exclusions in today’s
of tools to establish that the recycled between recycled hazardous secondary supplemental proposal. The proposed
secondary materials and fertilizers are materials over which the generator exclusion for hazardous secondary
not discarded. maintains control and recycled materials that are recycled under the
hazardous secondary materials over control of the generator is based on the
C. 2003 Proposed Revisions to the which the generator relinquishes
Definition of Solid Waste notion that as long as the generator has
control. If the generator maintains control over the recycling process, has
As a result of the court decision in control over the recycled hazardous chosen to legitimately reclaim it within
ABR to vacate the provisions in the May secondary material and it is legitimately the United States or its territories,
1998 final rule that increased regulation recycled under the standards retains liability in the event that the
of characteristic by-products and established in this proposal and the hazardous secondary materials (be they
sludges from mineral processing, EPA material is not speculatively the materials that were generated,
promulgated a final rule removing from accumulated within the meaning of residuals from a reclamation process, or
the Code of Federal Regulations the EPA’s regulations, the hazardous both) are somehow released into the
byproduct and sludge provisions (67 FR secondary material is not discarded. environment, these materials are not
11251 (Mar. 13, 2002)). Later, prompted This is because the material is being discarded. In addition, if the materials
by concerns articulated in the various treated as a valuable commodity rather are managed in a land-based unit, the
Court opinions up to the ABR decision, than as a waste. By maintaining control generator must ensure that the materials
EPA issued the October 2003 notice, over, and potential liability for, the are contained. Of course, if such
which proposed that material generated recycling process, the generator ensures hazardous secondary materials are
and reclaimed in a continuous process that the materials are not discarded. See released into the environment and are
within the same industry is not ABR 208 F.3d at 1051 (‘‘Rather than not recovered in a timely manner, these
discarded for purposes of Subtitle C, throwing these materials [destined for materials have been discarded and the
provided that the recycling process is recycling] away, the producers saves generator is subject to all applicable
legitimate. However, for the reasons them; rather than abandoning them, the federal and state regulations, and
described elsewhere in today’s notice, producer reuses them.’’). However, applicable cleanup authorities. The
we are proposing different types of when the hazardous secondary
‘‘broader’’ exclusion for materials that
exclusions from the definition of solid materials are managed in land-based
are transferred by the generator to
waste in this supplemental proposal units (e.g., waste piles, surface
another person or company for
that we believe more directly consider impoundments, etc), the hazardous
reclamation is based on the idea
whether particular materials are not secondary materials must be contained,
subsequent activities are more likely to
considered ‘‘discarded’’, and are not or they may be considered discarded,
involve discard, given that the generator
solid and hazardous wastes subject to even if they remain under the control of
has relinquished control of the
regulation under Subtitle C of RCRA. the generator. While placement on the
hazardous secondary material, and
The October 2003 proposal and how it land would not in itself constitute
additional conditions are needed for the
relates to today’s supplemental proposal discard, when hazardous secondary
materials are not being managed as a Agency to determine that these
is further discussed elsewhere in today’s
valuable product and, as a result, a materials are not discarded.
significant release occurs, such VIII. Recycling Studies
VII. How Does the Concept of Discard materials would be considered
Relate to These Proposed Exclusions? discarded. Further discussion of these A. Purpose of Studies
The concept of ‘‘discard’’ is the concepts appears in section IX of this In response to the October, 2003
central organizing idea behind today’s preamble. proposal, a number of commenters
supplemental proposal, which reflects In those cases, however, where criticized the Agency specifically for not
the fundamental logic of the RCRA generators of hazardous secondary having conducted a thorough study of
statute. As stated in RCRA Section materials do not re-use or recycle the the potential impact of the proposed
1004(27), ‘‘solid waste’’ is defined as materials themselves, it often may be a regulatory changes. These commenters
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‘‘* * * any garbage, refuse, sludge from sound business decision to ship the expressed the general concern that
a waste treatment plant, or air pollution material to be recycled to a commercial deregulating hazardous secondary
control facility and other discarded facility or another manufacturer in order materials that are reclaimed in the
material * * * resulting from industrial, to avoid the costs of disposing of the manner proposed could result in
commercial, mining and agricultural material. In such situations, the mismanagement of these materials, and
activities* * *’’ Therefore, in the generator has relinquished control of the thus could create new cases of
context of this supplemental proposal, a hazardous secondary material and the environmental damage that would
key issue is the circumstances under entity receiving such materials may not require remedial action under federal or

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state authorities. Some of the • ‘‘An Assessment of Environmental publicly available information on the
commenters further cited a number of Problems Associated With Recycling of Internet focused on the subject of
examples of environmental damage that Hazardous Secondary Materials’’ recycling of hazardous secondary
were attributed to hazardous material • ‘‘Potential Effects of Market Forces materials. The study uses these sources
recycling, including a number of sites on the Management of Hazardous to assemble an overall picture of the
listed on the Superfund National Recyclable Materials’’ good practices that are currently in use
Priorities List (NPL). The findings of these background by a number of companies. The full
However, a number of other studies have informed many of the study can be found in the docket for
commenters expressed the view that the Agency’s policy decisions in developing today’s supplemental proposal,
great majority of these cases of this regulatory proposal. However, it available at http://www.regulations.gov.
recycling-related environmental should be understood that these three The successful recycling study found
problems occurred before RCRA, reports are not definitive, peer-reviewed two main drivers behind companies
CERCLA or other environmental documents of a technical nature. We adopting responsible recycling practices
programs were established in the early fully acknowledge that in some respects in the management of their hazardous
1980s. These commenters further argued they may not paint a complete picture, secondary materials. The first is concern
that these environmental programs— or capture every detail of the subject of liability under the Comprehensive
most notably, RCRA’s hazardous waste matter that was examined. However, we Environmental Response,
regulations, and the liability provisions believe that the information in the Compensation, and Liability Act
of CERCLA—have created strong studies provides an important (CERCLA), also known as Superfund.
incentives for proper management of perspective on current recycling Under CERCLA, a company can be held
recyclable materials and recycling practices, and that it supports our policy liable as an arranger for disposal for
residuals. Several commenters further direction in developing today’s contamination caused by its materials
noted that because of these supplemental proposal. EPA solicits sent for recycling at another facility’s
developments, industrial recycling comment on the policy and regulatory site. Therefore, it is in that company’s
practices have changed substantially implications of the information in these best interest to ensure that the facility to
since the early 1980s, and present day studies. which it sends its waste is not likely to
generators and recyclers are much better become a Superfund site or to fall under
environmental stewards than in the pre- B. Results CERCLA in the future either because of
RCRA/CERCLA era. Thus, they argued, 1. Successful Recycling Practices financial failure or because of bad
cases of ‘‘historical’’ recycling-related materials management practices. The
environmental damage are not One of the studies that EPA has threat of Superfund liability was cited
particularly relevant or instructive with completed is an examination of what by many of the sources for the
regard to modifying the current RCRA practices many generators and recyclers responsible recycling study as the main
hazardous waste regulations for currently use to ensure that their reason for the development of their
hazardous material recycling. hazardous secondary materials are audit programs in this area.
In light of these comments and in recycled safely and responsibly. One The other reason for adoption of
deliberating on how to proceed with purpose of this study was to provide the responsible recycling practices cited
this rulemaking effort, the Agency Agency and the rulemaking record with falls into a broad category of concerns
decided that additional information on another angle from which to view the about corporate responsibility and
hazardous material recycling would hazardous secondary material recycling public relations. Many companies now
benefit the regulatory decision-making industry. In addition, the results of this have very public environmental policies
process, and would provide study suggest what kinds of regulatory and have implemented environmental
stakeholders with a clearer picture of controls might be appropriate for these management systems that are part of
the hazardous material recycling hazardous secondary materials to their programs for corporate
industry in this country. Accordingly, determine that they are handled as responsibility. Although the real effects
the Agency examined three basic issues commodities rather than wastes. The of these corporate policies are hard to
that we believed were of particular practices have helped the Agency gauge, EPA observed during this study
importance to informing this develop elements of the supplemental that audit programs that were developed
rulemaking effort: proposal presented today. in response to CERCLA, now are
• How do responsible generators and The Agency has long heard from maintained as part of a philosophy of
recyclers of hazardous secondary various representatives of industry and corporate responsibility, which is part
materials ensure that recycling is done other stakeholders that management of of the image a corporation sells to its
in an environmentally safe manner? hazardous secondary materials has customers.
• To what extent have hazardous changed and improved since the EPA found that responsible recycling
secondary material recycling practices inception of the RCRA hazardous waste practices used by generators and
resulted in environmental problems in regulations in the early 1980s and that recyclers to manage hazardous
recent years, and why? these hazardous secondary materials are secondary materials fall into two general
• Are there certain economic forces or being managed much more carefully categories. The first category includes
incentives specific to hazardous than they were historically. The the audit activities and inquiries
secondary material recycling that can successful recycling study examines performed by a generator of a material
explain why environmental problems which improved practices are used by to determine whether the entity to
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can sometimes originate from such many companies in the industry and the which it is sending the hazardous
recycling activities? reasons the practices are implemented. secondary material is equipped to
Reports documenting these studies To complete this study, EPA spoke responsibly manage those materials
are in the administrative record for this with representatives from multiple without the risk of releases or other
rulemaking, under the following titles: organizations that regularly manage environmental damage. These recycling
• ‘‘An Assessment of Current Good hazardous secondary materials, both for and waste audits of other companies’
Practices for Recycling of Hazardous recycling and for treatment followed by facilities form a backbone of many of the
Secondary Materials’’ disposal, and examined literature and transactions in the hazardous secondary

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materials market. The second category materials that they are not equipped to activity. In this context, ‘‘recycling-
of responsible recycling practices recycle. In these contracts, the two related activities’’ included—
consists of the control practices that parties can lay out specifications for the • accumulation or storage of
ensure responsible management of any make-up of materials being shipped to hazardous secondary materials by the
given shipment of hazardous secondary the recycler and describe the protocol generator, the recycler or an
material, such as the contracts under for actions taken if a material not intermediary;
which the transaction takes place and meeting these specifications arrives at • illegal disposal or abandonment of
the tracking systems in place that can the recycling facility. In some cases, the recyclable hazardous secondary
inform a generator that its hazardous recycler can still handle the material, materials or recycling residuals;
secondary material has been properly but may charge the generator an • transportation of recyclable
managed. additional fee for having to alter the hazardous secondary materials;
In this study, EPA found that certain material to meet specifications. In other • ‘‘sham’’ recycling operations (i.e.,
generators of hazardous secondary cases, the recycler may not be able to illegal disposal or treatment disguised
materials perform facility audits—a kind accept the material at all. Through the as recycling);
of environmental due diligence—on the contract mechanism, both parties then • production and/or use of
facilities to which they send their agree on whether that hazardous contaminated products from recycled
materials. These audits can take many secondary material should be returned hazardous secondary materials,
forms and can be of varying degrees of to the generator or sent to a different reclamation and/or production
complexity, depending on the recycler or waste disposal facility. processes;
secondary material or, in some cases, on EPA also found that knowing whether • management of residuals from
the size and sophistication of the materials conform to the contract reclamation or production processes, or
generator. Although large companies are specifications necessitated sampling of • other activities associated with the
more likely to perform in-depth facility the hazardous secondary material management of recyclable hazardous
audits, possibly because they more arriving at a recycler. Several recyclers secondary materials, recycling residuals,
frequently have environmental health told EPA that they sample each rail car, or the products of recycling processes.
and safety divisions coordinating audits truck, and drum arriving at their The study identified a number of
or because they may have greater facilities before accepting them. cleanup sites at which a recycling
amounts of hazardous secondary Legitimate recycling practices operate as process had operated, but where other
materials they are sending off-site, some a manufacturing process might and sources of contamination made it
smaller companies are also performing there is tight control over the nature of extremely difficult to determine with
some kind of audit on the recycling the materials being recycled. Recyclers any certainty that the recycling activity
facility receiving the hazardous who are seeking to make a salable contributed to the environmental
secondary material. product will make sure that the inputs problems at the site. These cases were
The exact nature of each generator’s meet specifications. not included in this study.
audit process will vary, but there are Due to time and resource limitations, • Relatively recent cases. Many of the
some common elements. Often the audit EPA’s examination of successful environmental problems that were
has two parts: (1) A remote screening recycling practices was not exhaustive, examined in the course of this study
audit during which the auditor as we were able to gather information occurred before RCRA, CERCLA or other
examines the recycler’s compliance from a limited number of sources. We environmental programs were
history and financial records and the believe that the practices and situations established in the early 1980s. The
recycler may fill out a questionnaire outlined in the study are representative Agency believes that, for the purpose of
about its operations and facility and (2) of industry practices performed by this rulemaking effort, these ‘‘historical’’
a visit to the recycler’s facility, which many companies, but ask today for recycling-related damage cases are
can take anywhere from several hours to comments on the results of the study much less relevant and instructive than
several days. Some common elements and for relevant information not cases which have occurred within the
examined in both phases of an audit represented therein. current regulatory and liability
include: (1) Site history; (2) history of ‘‘landscape.’’ This belief is based in
compliance with environmental 2. Environmental Problems Associated large part on the findings of our
requirements and permits; (3) general With Recycling of Hazardous Secondary companion study of current good
appearance and housekeeping at the Materials hazardous secondary material recycling
facility; (4) description of process design a. Scope and objectives of the study. practices, which indicate that in today’s
and capability; (5) residuals The general goal of this study was to era (though there are exceptions), most
management; (6) financial soundness of identify and characterize environmental generators and recyclers are aware of
the recycler; and (7) possession of problems that have been attributed to their environmental responsibilities,
adequate pollution liability and general some type of hazardous secondary and generally make considerable efforts
insurance. material recycling activity, and that are to ensure that materials are recycled and
In addition to generators auditing relevant for the purpose of this otherwise managed responsibly.
recycling facilities, another example of rulemaking effort. The Agency believes Therefore, all the cases included in the
a practice that EPA believes helps to that discarding is more likely to occur data for this study occurred after 1982.
ensure responsible management is the if environmental problems exist. • Cases involving recycling of
design of hazardous secondary materials Specifically, we sought to identify the regulated hazardous secondary
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recycling contracts and tracking systems following types of cases: materials that are specifically excluded
to manage information about the • Cases where environmental damage from RCRA regulation. The study was
location of a particular container and to clearly can be attributed to some type of intended to identify environmental
document its eventual recycling. recycling activity. In conducting this problems associated with recycling of
Recycling contracts are normal study, we limited our search to those regulated hazardous secondary
business practice and minimize the environmental problems in which materials, as well as those involving the
potential for recyclers to receive environmental damages were clearly recycling of hazardous secondary
shipments of hazardous secondary caused by some type of recycling-related materials that are not regulated because

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they are subject to a specific regulatory while at some of the sites, we were able such as battery casings, while a number
exemption or exclusion (see, for to collect only very basic information. were much more substantial and
example, the exclusions in 40 CFR In addition, because of time and expensive, with large-scale soil and
261.4). The Agency was interested in resource limitations, the search for ground water contamination, and
these types of problems because they potentially relevant cases was not remediation costs in the tens of millions
may indicate the extent to which exhaustive. For example, we did not of dollars. A surprising number of cases
environmental damages can occur even systematically survey all state (sixty-nine) involved materials that were
when recycling is conducted under a environmental agencies for relevant abandoned in one way or another.
stringent regulatory regime, and cases, nor did we search paper files in The study also tried to identify the
whether such environmental problems EPA Regional Offices. Because of this cause of the environmental problems for
may be more or less prevalent for relatively limited scope, we believe that each case that was investigated. In large
materials that are not regulated as the cases we have identified and part, we were able to identify, or at least
hazardous wastes. The study was not described in this report in effect infer, how the problems occurred,
designed to identify cases involving represent those that were relatively easy although for four percent of the cases
recycling of non-hazardous materials to find, and that there are likely to be examined, we were unable to determine
such as paper, glass, rubber, or plastics. additional cases that we did not the primary cause of damage. However,
b. Methodology. The initial task of identify. However, we have no reason to in only a few cases were we able to
this study was to identify as many think that additional cases would identify with any certainty why they
recycling-related environmental substantially change the overall picture. occurred. For example, in
problems that were relevant to the scope Nevertheless, the Agency requests approximately one-third of the cases, we
and purpose of the study as possible information on relevant cases of were able to conclude that
(the preceding section of this preamble environmental problems that we did not mismanagement of recycling residuals
describes the types of cases that were identify, as well as comments or was at least partly the cause of
considered relevant to the study). supplemental information on those that contamination problems. We were
Potential cases were identified from a were characterized in the report. If you unable, however, to identify why the
variety of sources, including: provide data on additional cases of residuals were managed improperly.
• Comments on the October 28, 2003, environmental problems from recycling, Mismanagement of the hazardous
proposed rule Appendix 2 of the study is a good secondary materials prior to their
• The Superfund National Priorities resource for the types of information reclamation or reuse caused
List most useful to the Agency, particularly contamination at forty percent of sites,
• National EPA data bases maintained when the problem occurred; the type of whereas mismanagement of recycling
for the CERCLA, RCRA, and recycling practice involved; whether residuals was the primary cause at
enforcement programs recycling occurred at an on-site or off- thirty-four percent of the sites. Often, at
• Contacts with staff in state site recycling facility; the types of the latter category of sites, reclamation
environmental agencies hazardous secondary materials being processes generated residuals in which
• Contacts with staff in EPA Regional recycled; and how and why the problem the toxic components of the recycled
Offices occurred. materials became concentrated, and
• State agency data bases maintained c. Summary of findings. The study these wastes were then mismanaged.
for state Superfund programs and other identified 208 cases in which Examples of this include a number of
environmental programs environmental damages of some kind drum reconditioning facilities, where
• Internet searches occurred from some type of recycling large numbers of used drums were
• News media reports activity and that fit the scope of the cleaned out to remove small amounts of
For those environmental problems study. Such damages included leaks, remaining product such as solvent, and
found at recycling facilities or resulting spills, dumps, or other types of releases these wastes were then improperly
in the mismanagement of hazardous that were serious enough to require stored or disposed of.
secondary materials to be recycled that some type of cleanup action. They also As already noted, sixty-nine of the
were relevant to the study, we gathered included instances where materials cases examined in the study involved
available information to identify certain were abandoned (e.g., in warehouses) abandonment of recyclable hazardous
key facts relating to when the problem and which required removal overseen secondary materials as the primary
occurred, the type of recycling practice by a government agency and cause of damage. In most of these cases,
involved, the types of materials expenditure of public funds. However, business failure appears to have been
recycled, how and why the the study did not include situations in the main reason the hazardous
environmental damage occurred, and which environmental regulatory secondary materials were abandoned.
other key data (these data are violations occurred, but did not result in Seven of the cases that were examined
summarized in tabular form in actual damage to the environment or appear to have been outright ‘‘sham’’
Appendix 1 of the report entitled The human health. recyclers. In most of these cases,
Assessment of Environmental Problems With regard to the types of materials companies advertised themselves to
Associated With Recycling of Hazardous associated with the cases that were local generators as recyclers and
Secondary Materials). A written documented in the study, most common accumulated considerable quantities of
description of each case was then were scrap metals, solvents, used oil, waste materials, but did not actually
prepared—these are in Appendix 2 of non-ferrous metals, lead-acid batteries, recycle them. These sites were also then
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the same report. and used drums sent for cleaning and abandoned.
Many of the cases that were reconditioning. Less common were Since a considerable number of
investigated, including many of the cases involving mercury, precious commenters to the October 2003
Superfund sites, were well-documented, metals, and hazardous foundry sands. proposal supported the idea of a
and we were able to assemble relatively The types of environmental damage regulatory exclusion for on-site
complete profiles for those cases. For that occurred varied widely; many were recycling (i.e., at the generating facility),
many other cases, however, much less relatively small incidents involving the study also distinguished between
complete information was available, contaminated soils and/or residuals, environmental problems from recycling

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that occurred at off-site, commercial cleanup funds became available by material is involved. Because the study
recycling facilities, and those from means of a RCRA-required financial is largely theoretical, the results should
recycling on-site. Thirteen (6%) of the assurance mechanism, such as a surety be interpreted with caution, but it does
208 cases were determined to be from bond. Thirteen of the facilities appear to provide insights that can explain some
recycling that occurred on-site. This have been cited for serious permit of the possible fundamental economic
relatively small proportion of cases may violations, either before or as a result of drivers of both the successful and
signify that on-site recycling is the damage incident. In four cases, the unsuccessful recycling practices, which
inherently less likely to result in facility permits were revoked because of in turn help us to design the exclusions
environmental problems, for various compliance issues. Eleven of the that we are proposing today.
reasons. However, it may also be that twenty-four facilities were found to be The October 2003 proposal was based
recycling conducted at facilities no longer in business, because of in part on the premise that some types
generating hazardous secondary bankruptcy or for other reasons. of recycling are more akin to
materials occurs at fewer facilities than Of the 208 cases that were manufacturing than waste management
recycling by commercial facilities or documented in the study, fifty-one were and therefore are not appropriate for
that these types of environmental or are listed on the CERCLA National regulation as waste management. [‘‘In
problems are not as well documented, Priorities List (NPL). Fifty-five EPA’s view, a recycler will value
or for other reasons are more difficult to additional cases were addressed under secondary materials that provide an
identify, given the scope and CERCLA authorities, but the sites were important contribution to his process or
methodology of the study. The Agency not listed on the NPL. State cleanup product and will manage them in a
solicits comment and additional data on authorities were used to address sixty- manner consistent with a valuable
the issue of environmental problems five of the cases, while thirty were feedstock material (i.e., will manage
from on-site recycling that occurred addressed using RCRA corrective action them to minimize their loss)’’; 68 FR
since 1982 and where the problems are authorities. For nineteen of the cases, 61583].
clearly attributable to the recycling we were unable to identify what However, as pointed out by some
activity. We are particularly seeking remedial program, if any, was used to commenters to the proposed rule, the
facts about any instances that are not clean up the sites. (In some cases, there economic forces shaping the behavior of
captured in the study, particularly was more than one type of cleanup firms that recycle hazardous secondary
answering the questions of when the action at a site). materials can be different from those at
recycling took place, what type of For eighty-nine of the cases, we were play in manufacturing processes using
recycling practices were involved, what able to identify the costs, or at least cost virgin materials. For example, the
the environmental problem was, and estimates, associated with addressing inherent value of hazardous secondary
what caused the problem. the environmental problems caused by materials can be much lower than virgin
The study also addressed whether or recycling activities. Thirty-seven of materials used in manufacturing,
not instances of environmental damage these cases required less than one resulting in a different set of economic
occurred at hazardous waste recycling million dollars to clean up; forty-four incentives. Additionally, different
facilities with RCRA permits (Note: cost between one and ten million economic incentives between the
RCRA does not require Part B permits dollars; and eight cost more than ten recycling of hazardous secondary
for the recycling processes themselves; million dollars to remediate. materials and manufacturing may arise
typically, permits are issued to such It is possible that these cost data are due to differences in these two business
facilities when hazardous secondary incomplete and are not an accurate models. As opposed to manufacturing,
materials are stored prior to recycling.) representation of actual cleanup costs where the cost of raw materials or
RCRA permitted hazardous waste for the entire sample of 208 cases. For intermediates (or inputs) is greater than
management facilities are subject to one thing, cost data were much easier to zero and revenue is generated primarily
relatively stringent, facility-specific find for CERCLA-lead cleanups than from the sale of the output, some
requirements, and in general are given cleanups done under other programs. models of hazardous materials recycling
more oversight by regulatory agencies Another uncertainty with regard to involve generating revenue primarily
than facilities without permits. For these cost data is that in some cases, it from receipt of the hazardous secondary
these reasons, these cases are of was not possible to distinguish between materials. Recyclers of hazardous
particular interest to the Agency with cleanup costs that were incurred secondary materials in this situation
regard to this rulemaking. specifically to address recycling-related may thus respond differently from
Twenty-four of the cases identified contamination, and costs for other traditional manufacturers to economic
were, at one time or another, operating cleanup activities at the site. The forces and incentives.
under RCRA hazardous waste permits. Agency solicits additional information An increased understanding of these
However, only nine clearly appear to from commenters regarding cleanup aspects of hazardous secondary material
have been operating under RCRA costs (actual or estimated) incurred in recycling can help to craft a rule that
permits at the time the damage remediating these recycling-related takes advantage of the positive
occurred. Two of these cases involved environmental problems. economic forces, and compensates for
fires and/or explosions. the negative ones, in order to produce
The study also looked at some of the C. Potential Effects of Market Forces on an optimal amount of recycling. An
financial circumstances regarding clean the Management of Recyclable optimal amount of recycling is one that
up of environmental problems. At Hazardous Secondary Materials maximizes the net benefits (private and
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thirteen of the twenty-four hazardous EPA also has completed a study of social benefits minus private and social
waste permitted facilities, all or part of how market forces can affect the costs). One sub-optimal outcome of not
the funds used to clean up management of recyclable hazardous providing a proper balance could be too
environmental damages were secondary materials. This study uses little recycling, resulting in
contributed by the owner/operator of economic theory to describe how inefficiencies. In this case, increasing
the facility, either voluntarily or under various market incentives can influence the rate of recycling (for example, via
some form of consent agreement. In at a firm’s decision making process when today’s proposed changes) would realize
least two of these cases, it appears that the recycling of hazardous secondary additional net benefits. However, sub-

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optimal outcomes can also result from firms in particular, the acceptance fee is one potential indicator of risky
too much of an activity. For hazardous likely to be a much more prevalent behavior.
secondary material recycling, this factor in the firm’s revenue structure As mentioned earlier, using economic
situation occurs when firms accumulate when the recycled product has a low theory to interpret recycling behavior
more hazardous secondary material than value. If the value of the recycled should be done with extreme caution.
can be recycled in a reasonable product is low, the firm may have more An individual firm’s decision-making
timeframe, or operate their recycling of an incentive to focus on accepting process is based on many factors, and
process in a way that imposes excessive hazardous secondary material than attempting to extrapolate a firm’s likely
costs on society (such as excess properly recycling it and selling a low- behavior from a few factors, particularly
pollution or mishandling of hazardous value recycled product. based on theoretical considerations,
secondary material) and that can result Price stability is another potential could lead to erroneous conclusions.
in the material being discarded. indicator of hazardous secondary However, when used in conjunction
The market incentive study uses material recycling markets that produce with other pieces of information, the
economic theory to provide information optimal outcomes, particularly for economic theory can be quite
on how certain characteristics can commercial recyclers. When prices are illuminating. For example, because the
influence three different recycling stable, firms can more easily adjust their industrial intra- and inter-company
models to encourage or discourage an production in response to the price recyclers have more flexibility (e.g.,
optimal outcome. The three recycling signals they receive from the market. during price fluctuations, these
models examined are: (1) Commercial They are thus less subject to sudden companies can more easily switch from
recycling, where the primary business of upsets to their revenue streams or costs recycling to disposal or from recycled
the firms is recycling hazardous which could force them to operate at a inputs to virgin inputs), they would be
secondary materials, which are accepted short or long-term loss. Unstable less likely to have environmental
for recycling from offsite industrial markets can contribute to sub-optimal problems from over-accumulated
sources (which usually pay a fee); (2) outcomes, due to an unexpected fall in materials. This outcome appears to be
industrial intra-company recycling, revenues or rise in costs, such that the supported by the results of the
where firms generate hazardous firm is no longer able to cover the costs assessment of environmental problems
secondary materials as byproducts of incurred to make the product. This study (see section VIII.B.2 of today’s
their main production processes and could encourage the stockpiling of supplemental proposal).
recycle the hazardous secondary hazardous secondary material by the On the other hand, certain specific
materials for sale or for their own reuse
firm in order to continue collecting the types of commercial recycling, where
in production; and (3) industrial inter-
acceptance fee. A commercial firm’s the product has low value, the prices are
company recycling, where firms whose
choice to shut down can also contribute unstable, and/or the firm has a low net
primary business is not recycling, but
to sub-optimal recycling outcomes if worth, could indicate that it is more
use or recycle hazardous secondary
this involves the abandonment of likely for environmental problems to
materials obtained from other firms with
hazardous secondary material that the occur from over-accumulation of
the objective of reducing the cost of
firm was stockpiling on-site. Since recycled materials, compared to
their production inputs.
For each of these recycling models, industrial intra- and inter-company recycling by a well-capitalized firm that
the report looks at how they are recyclers are also recycling to produce yields a product with high value. Again,
potentially affected by three market a marketable product, they are subject to this outcome appears to be supported by
characteristics: (1) Value of the recycled similar forces as commercial firms. They the results of the assessment of
product; (2) price stability of recycling are less constrained in their responses to environmental problems study (see
output or inputs; and (3) net worth of these forces, however, since recycling is section VIII.B.2 of today’s supplemental
the firm. not their primary business operation, proposal).
For all three models of hazardous and are able to switch from recycling to However, as shown by the study of
secondary material recycling, a recycled disposal, or from using recycled successful recycling practices,
product with a high value appears to materials to raw materials, if market generators who might otherwise bear a
contribute to an optimal outcome for conditions shift. large liability from poorly managed
hazardous secondary material recycling. For all three recycling models, firms recycling at other companies have
For commercial and industrial inter- that have a higher net worth have more addressed this issue by carefully
company firms, the value of the product to lose from liability issues and thus examining the recyclers to which they
can serve as a strong incentive for the have a greater incentive to invest in safe send their hazardous secondary
firm to recycle the product with care hazardous secondary material materials to ensure the recyclers are
and bring it to the market. Recycling by management and recycling practices. technically and financially capable of
these firms would thus be driven These firms would have more incentive performing the recycling (see section
primarily by the potential revenues from to practice recycling in an VIII.B.1 of today’s supplemental
the recycled product, and not by other environmentally safe manner and also proposal). In addition, we have seen
factors such as an acceptance fee. For to insure against possible liability risks that successful recyclers (both
industrial intra-company recyclers, the that would jeopardize their investments. commercial and industrial) have often
value of the recycled product would Firms that have a relatively low worth taken advantage of mechanisms such as
contribute to optimal recycling behavior and do not have an established history tolling contracts to help stabilize price
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even if the firm is reusing the product in the market could be potentially more fluctuations, allowing recyclers to plan
in its own production process instead of likely to face incentives that could cause their operations better.
selling it to outside firms. Conversely, them to engage in recycling practices For further discussion of this study,
for all three models of hazardous that impose few controls or cut corners please see A Study of Potential Effects
secondary material recycling, a recycled in order to boost revenues. While we of Market Forces on the Management of
product with a low value could be a recognize that it should not be assumed Hazardous Secondary Materials in the
potential indicator of sub-optimal that all low-value firms would engage in docket for today’s supplemental
recycling outcomes. For commercial such practices, this can be viewed as proposal.

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IX. Exclusion for Hazardous Secondary This option would also have required include record-keeping and reporting
Materials That Are Legitimately the same notification and speculative requirements, along with safeguards on
Reclaimed Under the Control of the accumulation provisions proposed for storage or handling. Although the
Generator: Proposed 40 CFR 260.0, the proposed option. This exclusion Agency solicited comment on additional
261.2(a)(1), 261.2(a)(2), 261.2(c)(3), would be based on the premise that conditions, the discussion in the
261.4(a)(23) materials recycled on-site in a preamble of this approach was brief and
continuous process are unlikely to be may not have provided sufficient
A. Purpose of the Exclusion
discarded because they would be information to commenters. Like the
In the October 2003 proposal, EPA closely managed and monitored by a other exclusions discussed in the
proposed to exclude from the definition single entity who is intimately familiar October 28, 2003 proposal, hazardous
of solid waste hazardous secondary with both the generation and secondary materials used in a manner
materials generated and reclaimed in a reclamation of the material. In addition, constituting disposal, burned for energy
continuous industrial process within no off-site transport of the hazardous recovery, or materials that were
the same industry. ‘‘Same industry’’ was secondary material (with its attendant inherently waste-like would not be
defined as industries sharing the same risks) would occur, and there would be eligible. The Agency solicited comment
four-digit North American Industry few questions about potential liability in on the increased recycling and reuse
Classification System (NAICS) code. We the event of mismanagement or mishap. that would result from broadening the
also co-proposed a second option, under An example of such recycling given in rule in this way, as well as comment on
which such materials would not be the proposal was a facility that produces the potential effects to human health
eligible for the exclusion if the petrochemicals, as well as and the environment.
reclamation took place at a facility that pharmaceuticals. Under the four-digit EPA received many comments on the
also recycled regulated hazardous NAICS-based proposal, such NAICS ‘‘same industry’’ scheme from
wastes generated in a different industry. reclamation would not have been various stakeholders. Many commenters
EPA chose the NAICS system as a way excluded even if both establishments did not agree that NAICS was an
to define ‘‘same industry’’ because the were located at the same site and appropriate way to define ‘‘same
system is already widely used to classify operated by the same company. Another industry’’; more importantly, most
different industries. We recognized that example might be a situation where a commenters did not agree that
the system was developed for statistical generator contracts with a different excluding recycling within the same
rather than regulatory purposes. company to reclaim material at the industry was justified on legal or
However, the NAICS scheme employs a generator’s facility, possibly through a pragmatic grounds. These commenters
production-oriented concept, grouping mobile treatment unit. generally stated that EPA’s proposed
together industries that have similar or The second alternative was an exclusion did not accurately reflect
identical production processes. In exclusion for certain situations within Congressional intent or court mandates
addition, the regulated community is the chemical manufacturing industry concerning EPA’s authority over
generally familiar with the NAICS that might present unique recycling legitimate recycling. They reiterated that
system. For these reasons, the Agency situations. Specifically, within the EPA’s RCRA authority extends only to
proposed this system to define ‘‘same chemical manufacturing industry, the materials that are truly discarded (i.e.,
industry’’. first manufacturer will contract out disposed of, thrown away, or
EPA chose the four-digit NAICS level production of certain chemicals to abandoned) and that have not yet
(rather than the three or five-digit level) another manufacturer (referred to as become part of the waste disposal
because that level appeared to be an batch or tolling operations). The second problem. Many of these commenters
appropriate compromise between being manufacturer may generate hazardous interpreted the relevant court decisions
too broad or too restrictive. The Agency secondary materials that could be to mean that any legitimately reclaimed
evaluated the potential recycling returned to the larger chemical material (whether recycled within the
opportunities available through defining manufacturer for reclamation. In the same industry or between industries) is
‘‘same industry’’ at the three, four, and proposal, we inquired whether some not ‘‘discarded’’ and thus cannot be
five-digit levels. We performed the recycling could be precluded as a result regulated as a solid waste. Some of these
analysis for the chemical manufacturing of uncertain application of the NAICS commenters cited the ‘‘Safe Foods’’
sector, which contains many RCRA classification approach due to decision (Safe Food and Fertilizer, et al.,
hazardous waste generators and served frequently changing product slates, or v. EPA, 350 F.3d 1263, DC Cir. 2003) as
as a surrogate for other manufacturing different products being produced from support for their contention that
sectors. In general, we found that the same equipment at different times. materials recycled in different
classification at the three-digit level led The third alternative would have industries were not discarded.
to grouping facilities that did not have provided a broader conditional Other commenters said that they
similar production processes. regulatory exclusion from RCRA would not benefit from the proposed
Classification at the five-digit level, on regulation for essentially all hazardous exclusion because so many recycling
the other hand, led to grouping similar secondary materials that are legitimately opportunities occur among different
processes, but greatly reduced recycled by reclamation. The purpose of industries. These commenters included
opportunities for recycling. this broader exclusion would be to companies in the metals recycling
In the same notice, EPA also solicited encourage recycling and lower costs, industry, mining and mineral
comment on several different while still protecting human health and processors, specialty batch chemical
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alternatives to the proposed exclusion. the environment. The Agency suggested manufacturers, some solvent recyclers,
The first alternative was whether to that additional requirements or the paint and coatings industry, spent
exclude from the definition of solid conditions might be appropriate to pickle liquor generators, and small
waste those hazardous secondary protect human health and the businesses.
materials that are generated and environment for this exclusion, Still other commenters argued that the
reclaimed in a continuous process on- compared to the same-industry Agency had read the court decisions too
site (as defined in 40 CFR 260.10), even exclusion that we proposed. Examples broadly rather than too narrowly, but
if different industries were involved. of such additional conditions could some of these commenters also said that

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EPA had failed to present a reasoned circumstances, we believe that discard between a tolling contractor and a batch
analysis of the indicia of discard. One has generally not occurred. For manufacturer, and if the contract
commenter stated that EPA did not example, of the 208 recycling cases that specifies that the tolling contractor
analyze potential environmental harm caused environmental damage, only retains ownership of, and responsibility
from the proposed rule. thirteen (approximately six percent) for, the hazardous secondary materials,
Many commenters, on the other hand, occurred as a result of on-site recycling. there is a strong incentive to avoid any
responded positively to the Agency’s We also agree with those commenters mismanagement or release.
solicitation of comment about excluding who said that most of this rationale In today’s supplemental notice, EPA
on-site recycling from the definition of would apply just as reasonably to has described three general situations
solid waste. These commenters agreed reclamation taking place within the where we believe that discard has not
with EPA’s suggestion that generators same company. In the case of same- taken place and where the potential for
who recycle materials on-site (even if company recycling, both the generating environmental releases is therefore low.
the reclamation takes place in a facility and the reclamation facility (if The three situations involve
different NAICS code) are likely to be they are different) would be familiar circumstances under which hazardous
familiar with the material and more with the hazardous secondary materials secondary materials are generated and
likely to maintain responsibility for the and the parent company would be reclaimed within the United States or its
materials. Some commenters wanted ultimately liable for any territories. They are either generated
any exclusion confined to on-site mismanagement of the hazardous and reclaimed at the generating facility,
recycling, but other commenters secondary materials. Under these at a different facility, but within the
suggested that EPA expand any on-site circumstances, the incentive to avoid same company, or through a tolling
exclusion to include recycling such mismanagement would be so arrangement. Because the facility owner
(including off-site recycling) conducted strong that mismanagement also would in these situations still finds value in
within the same company. These be very unlikely. the hazardous secondary materials, has
commenters believed that the principal retained control over them, and intends
Concerning tolling arrangements, we
reasoning applied to on-site recycling to use them, EPA is proposing to
also believe that the type of tolling
would also apply to same-company exclude these materials from being a
contract common in the specialty batch
recycling—i.e., that the same entity solid waste and thus from regulation
chemical industry does not constitute
would be familiar with the material and under Subtitle C of RCRA, if the
discard as long as the recycling is
would remain responsible for it. recycling is legitimate (see 40 CFR
Concerning our solicitation of legitimate and the hazardous secondary
material is not speculatively 261.4(g)), and if the hazardous
comments on tolling arrangements, secondary materials are not
some stakeholders commented that the accumulated. Under a typical type of
arrangement, one company (the tolling speculatively accumulated. We are
specialty batch chemical industry, in proposing slightly different exclusions,
particular, might present unique contractor) contracts with a second
(often smaller) company (the batch depending on whether or not the
situations regarding appropriate excluded hazardous secondary materials
exclusions, principally due to the manufacturer) to produce a specialty
chemical (sometimes because of a are stored in land-based units prior to
varying nature of production and hence reclamation or as part of the reclamation
of potential hazardous secondary temporary lack of capacity, or because
the batch manufacturer has specialized process. The scope and applicability of
materials available for recycling. the exclusions are described below.
Because of these circumstances, equipment or expertise). The batch
stakeholders believed that exclusions manufacturer produces the chemical B. Scope and Applicability
targeted to the types of tolling and the production process generates a
hazardous secondary material (such as a 1. Hazardous Secondary Materials
arrangements common in this industry
solvent) which is routinely reclaimed at Managed Under the Control of the
would be easier to implement.
After evaluating the comments, the the tolling contractor’s facility through Generator in Non-Land-Based Units
Agency has concluded that its proposed an exempt closed-loop recycling process As stated above, the Agency generally
approach to ‘‘same industry recycling’’ when it has the capacity to manufacture believes that discard has not occurred if
does not accurately delineate EPA’s the chemical in question at its own hazardous secondary materials are
RCRA jurisdiction over hazardous facility. However, if the batch legitimately recycled under the control
secondary materials. We agree with the manufacturer transports the hazardous of the generator, provided they are not
many commenters who said that secondary material back to the tolling speculatively accumulated, and
whether materials are recycled within contractor for reclamation, the tolling provided they are reclaimed within the
the same NAICS code is not an contractor would be deemed under United States or its territories. We are
appropriate indication of whether they existing regulations to be reclaiming a therefore proposing an exclusion for
are discarded. NAICS designations are spent material, and an RCRA storage these hazardous secondary materials
designed to be consistent only with permit would generally be required. The under § 261.2(a)(2)(ii), except if such
product lines, so that the effect of our typical contract in the specialty batch materials are managed in a land-based
October 2003 proposal would be that chemical industry contains detailed unit prior to reclamation or as part of
materials generated and reclaimed specifications about the product to be the reclamation process. See section B.2
under the control of the generator would manufactured, including management of below for discussion of management in
not be excluded, even though the any hazardous secondary materials that land-based units. Examples of non-land-
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generator has not abandoned the are produced and returned to the tolling based units include, but are not limited
material and has every opportunity and contractor for reclamation. Under this to, tanks, containers, and containment
incentive to maintain oversight of, and scenario, the hazardous secondary buildings.
responsibility for, the material that is material continues to be managed as a The definition of ‘‘hazardous
reclaimed (see ABR, 208 F.2d at 1051 valuable product, so discard has not secondary material generated and
(noting that discard has not taken place occurred. Moreover, if hazardous reclaimed under the control of the
where the producer saves and reuses secondary materials are generated and generator’’ is proposed in 40 CFR 260.10
secondary materials)). Under these reclaimed pursuant to a written contract and consists of three parts. The first part

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of the definition would apply to retain ownership of, and responsibility are proposing a slightly different
hazardous secondary materials for, the hazardous secondary materials exclusion at 40 CFR 261.4(a)(23).
generated and reclaimed at the that are generated during the course of The Agency is proposing to place this
generating facility. This definition the manufacture. For purposes of this exclusion in 40 CFR 261.4(a)(23)
would include situations where a exclusion, tolling contractor means a because while we recognize that raw
generator contracts with a different person who arranges for the production materials and hazardous secondary
company to reclaim hazardous of a product made from raw materials materials can be and are stored in land-
secondary materials at the generator’s through a written contract with the based units (such as mineral processing
facility, either temporarily or batch manufacturer. Batch manufacturer residues or pulping liquors), we also
permanently. For purposes of this means a person who produces a product recognize that such management clearly
exclusion, ‘‘generating facility’’ means made from raw materials pursuant to a presents a greater potential for releases
all contiguous property owned by the written contract with a tolling to the environment than management in
generator. We are proposing to exclude contractor. As stated above, this type of non-land-based units. Therefore, we are
hazardous secondary material that is contract appears to be common within proposing an additional requirement
reclaimed ‘‘at the generating facility’’ the specialty batch chemical which provides that if hazardous
rather than ‘‘on-site’’ as defined in 40 manufacturing industry. secondary materials are managed in
CFR 260.10 (as we proposed in October EPA notes that in order to be eligible land-based units, such materials must
2003) because the latter definition may for this exclusion, it is not a be contained in the units. We are not
encompass facilities not under the requirement that the contractual proposing that the units meet any
control of the generator. For example, an arrangement in question refer particular design requirement or that the
industrial park meets the definition of specifically to ‘‘tolling’’ or ‘‘batch hazardous secondary materials in the
‘‘on-site,’’ even though facilities manufacturing,’’ as long as the person unit be managed in a particular way.
operating at an industrial park may be commissioning the manufacture of the Rather, we are only proposing that the
completely separate and under separate hazardous secondary material in the
product retains ownership of, and
ownership. However, EPA solicits unit be ‘‘contained’’ and not released
responsibility for, the hazardous
comment on whether facilities under into the environment. The definition of
secondary materials that are generated
separate ownership, but located at the land-based unit is proposed in § 260.10,
during the course of the manufacture.
same site, should be included within and is taken from section 3004(k) of
The Agency also solicits comment on
this proposed exclusion. Additionally, RCRA (i.e., landfill, surface
other types of contractual arrangements
EPA solicits comment on other impoundment, waste pile, injection
under which discard is unlikely to
definitions which might be equally well, land treatment facility, salt dome
happen and which could appropriately
compatible with generator control as the formation, salt bed formation, or
be covered by an exclusion for
definition proposed in today’s notice. underground mine or cave). Examples of
‘‘generator-controlled’’ hazardous
The second part of the definition of surface impoundments include ditches
hazardous secondary materials secondary material. For example, one and sumps.
generated and reclaimed under the company may enter into a contractual Whether the hazardous secondary
control of the generator would apply to arrangement for a second company to material is ‘‘contained’’ in the land-
hazardous secondary materials reclaim and reuse (or return for reuse) based unit will necessarily be
generated and reclaimed by the same the first company’s hazardous determined on a case-by-case basis.
company (i.e., by the same ‘‘person’’ as secondary material. The first company Generally, however, recyclable material
defined in § 260.10). The generator must could create a contractual instrument is ‘‘contained’’ if it is placed in a unit
certify that the hazardous secondary that exhibits the same degree of control that controls the movement of the
materials will be sent to a company over how the second company manages hazardous secondary material out of the
under the same ownership as the the hazardous secondary material as is unit. Hazardous secondary material that
generator, and that the owner found in a tolling agreement. EPA remains contained in a land-based unit
corporation has acknowledged full solicits comment on whether hazardous that experiences a release would still
responsibility for the safe management secondary materials recycled under meet the terms of the exclusion in
of the hazardous secondary materials. such contracts also should be included 261.4(a)(23), unless the hazardous
Because of existing complexities in within the scope of the exclusion. secondary material is not managed as a
corporate ownership and liability, we 2. Hazardous Secondary Materials valuable product and as a result, a
are proposing to require the generator to Managed Under the Control of the significant release from the unit occurs.
certify regarding ownership and Generator in Land-Based Units In this situation, the hazardous
responsibility for the recyclable secondary material in the land-based
hazardous secondary materials. EPA As stated above in section B.1 of this unit would be considered discarded. In
solicits comment on any other preamble, the exclusion proposed today determining whether hazardous
certification language that might at 40 CFR 261.2(a)(2)(ii) would apply to secondary materials in a land-based unit
accomplish the same end, and we also materials generated and reclaimed are contained, a facility should consider
seek comment on other definitions of within the United States or its territories the circumstances under which the
‘‘same-company.’’ that are under the control of the materials are stored. For example,
The third part of the definition of generator and that are stored in non- materials that are stored in direct
hazardous secondary materials land-based units. However, some contact with the soil in a natural or
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generated and reclaimed under the hazardous secondary materials that are man-made impoundment may be more
control of the generator would apply to generated and reclaimed within the likely to leak. However, the local
hazardous secondary materials that are United States or its territories under the geological and meteorological
generated pursuant to a written contract control of the generator (i.e., at the conditions can greatly influence
between a tolling contractor and batch generating facility, within the same whether such materials would be
manufacturer and reclaimed by the company, or through a tolling contained. These local conditions, along
tolling contractor. Under today’s arrangement) are managed in units that with specific measures that a facility
proposal, the tolling contractor must are land-based. For these materials, we employs, such as liners, leak detection

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measures, inventory control and materials that are generated and 3007 allows it to gather information
tracking, control of releases, or reclaimed under the control of the with regard to any material when the
monitoring and inspection during generator. If commenters believe such Agency has reason to believe that the
construction and operation of the unit, additional requirements are appropriate, material may be a solid waste and
may be used in determining whether the they should specify the technical possibly a hazardous waste within the
hazardous secondary material is rationale for each requirement meaning of RCRA section 1004(5).
contained in the land-based unit. suggested, and why the requirement is Section 2002 also gives EPA authority to
necessary if the hazardous secondary issue regulations necessary to carry out
3. Hazardous Secondary Materials
material remains under the control of the purposes of RCRA.
Managed Under the Control of the We also note that after EPA
the generator.
Generator: General Provisions We are also proposing that generators promulgates regulations listing a
Hazardous secondary materials (and reclaimers, where the generator material as a hazardous waste or
released from any storage unit, whether and reclaimer are located at different identifying it by its characteristics,
land-based or non-land based, are facilities) of hazardous secondary section 3010 of RCRA requires
discarded and if such materials upon materials recycled under the control of generators of such materials to submit a
discard would be either a listed the generator, whether managed in a notification to EPA within 90 days.
hazardous waste or exhibit a hazardous land-based or non-land based unit, Since the changes proposed today could
waste characteristic, the hazardous would be required to submit a one-time substantially affect this universe of
secondary materials would be part of notice to the EPA Regional facilities in the Subtitle C system, we
the waste disposal problem and would Administrator or, in an authorized state, believe the notifications are appropriate
be subject to the hazardous waste to the state Director. The notice would and useful.
regulations, unless they are immediately need to identify the name, address, and EPA notes that the information
cleaned up. EPA ID number (if it has one) of the discussed above can be difficult for
We also note that hazardous generator or reclaimer, the name and regulatory authorities to retrieve and use
secondary materials excluded from the phone number of a contact person, the if it is not placed into a data
definition of solid waste generally type of hazardous secondary material management system. Similarly, using
become wastes when they are that would be managed according to the different notification procedures and
speculatively accumulated, because at exclusion, and when the hazardous data management systems for different
that point they are considered to be secondary materials would begin to be regulated materials can be confusing
discarded. For this reason, all hazardous managed in accordance with the and time-consuming for the regulated
secondary materials excluded under exclusion. A revised notice would be community. For these reasons, the
proposed 40 CFR 261.2(a)(2)(ii) or required to be submitted in the event of Agency requests comment on whether
261.4(a)(23) would be subject to the a change to the name, address, or EPA the Subtitle C Site Identification Form
speculative accumulation provisions of ID number of the generator or reclaimer (EPA Form 8700–12) or the comparable
40 CFR 261.1(c)(8). In addition, as with or a change in the type of hazardous state form should be used to provide the
other excluded recycling operations, secondary material being recycled. information required in this
residuals from the recycling process are The intent of this proposed supplemental proposal. This form is
considered to be newly generated solid notification requirement is to provide used to enter data into the RCRAInfo
wastes, which can also be hazardous basic information to regulatory agencies data management system managed by
wastes if they exhibit a hazardous about who will be managing hazardous the states and EPA. To implement use
characteristic under Subpart C of Part secondary materials under the of this form for the notification
261 or if they are specifically listed exclusion, and the types of hazardous requirements proposed today, we would
under Subpart D of Part 261. secondary materials that would be revise the form to include a section for
The Agency is soliciting comment on recycled. For hazardous secondary materials covered by this exclusion,
whether additional requirements might materials that would be excluded under with spaces for the appropriate data
be necessary to demonstrate absence of 40 CFR 261.2(a)(2)(ii), this proposed elements.
discard when hazardous secondary notification requirement would be In addition, we are considering
materials are recycled under proposed specified in 40 CFR 260.42 (i.e., separate including additional information in the
40 CFR 261.2(a)(2)(ii) or 261.4(a)(23). from 40 CFR 261.2). For hazardous notification in order to measure the
Our analysis has led us to conclude that secondary materials that would be impact of the proposed rulemaking.
discard has not occurred and releases excluded under 40 CFR 261.4(a)(23), More data would assist EPA in targeting
are highly unlikely when hazardous this proposed notification requirement future resources and activities to further
secondary materials are generated and is included in the exclusion. We note increase recycling and to report to the
reclaimed under these circumstances, that in both cases, the requirement to public the impacts of the proposed
except possibly when such materials are provide this notification would not be a rulemaking. The additional data
managed in land-based units. condition of the exclusion. Thus, failure elements for which we are requesting
Nevertheless, we are requesting to comply with the requirement would comment are discussed in section XIV
comment on other points of view. An constitute a violation of RCRA, but of today’s notice.
example of such conditions would be would not affect the excluded status of We note that this exclusion applies
recordkeeping requirements, such as the waste. only to hazardous secondary materials
those proposed today in 40 CFR We believe our authority to request generated and reclaimed within the
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261.4(a)(24)). Another example would such information is inherent in our United States or its territories, because
be appropriate limitations on storage, authority to determine whether a most of our information about recycling
such as performance-based standards material is discarded, and we consider comes from these geographical areas.
designed to address releases to the this to be the minimum information We do not have sufficient information
environment. The Agency solicits needed to enable credible evaluation of about most recycling activities outside
comment on whether additional the status of a hazardous secondary of the United States to decide whether
management requirements are material under section 3007 of RCRA. discard is likely or unlikely. However,
appropriate for hazardous secondary EPA further believes that RCRA section we are soliciting comment on whether

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EPA should promulgate a conditional that conforms to these conditions would costs to industry, while maintaining
exclusion for exported material not involve discard and therefore the protection of human health and the
otherwise meeting the criteria for this recyclable materials would not be environment. We believe that this
exclusion. regulated as solid waste. Such excluded proposed conditional exclusion is a
hazardous secondary materials would workable, common sense approach to
C. Enforcement
also need to be recycled legitimately, as meeting these objectives, is well
Under today’s proposal, hazardous determined according to the provisions supported by the record for this
secondary materials generated and of 40 CFR 261.2(g), which also are being rulemaking, including the recent
reclaimed within the United States proposed today, and could not be recycling studies that EPA has
under the control of the generator would speculatively accumulated, as defined conducted, and in important ways
be excluded from RCRA Subtitle C in 40 CFR 261.1(c)(8). reflects current good industry practices
regulation, but would be subject to The conditions that EPA is proposing that are used by certain generators for
certain restrictions, principally today are based on our understanding of recycling of hazardous secondary
speculative accumulation. Persons that how successful third-party recycling materials.
handle these hazardous secondary currently operates (and, conversely,
materials would be responsible for how unsuccessful recycling practices B. Scope and Applicability
maintaining the exclusion by ensuring can result in recyclable hazardous The conditional exclusion for
that these restrictions are met. If the secondary materials being discarded), transferred materials would potentially
hazardous secondary materials were not and are supported by the information apply to materials that are currently
managed pursuant to these restrictions, included in the recycling studies that regulated as hazardous wastes because
they would not be excluded. They are described in section VIII of this their recycling involves reclamation—
would then be considered solid and preamble. For example, the study of specifically, spent materials, and listed
hazardous wastes if they were listed or current good recycling practices sludges and listed by-products.
they exhibited a hazardous waste indicates that many generators examine This is the same universe of materials
characteristic for Subtitle C purposes the recycler’s technical capabilities, that would have potentially been
from the time they were generated. business viability, environmental track eligible for the exclusion proposed in
Persons operating under the exclusion record, and other relevant questions October, 2003, except that that proposed
would also be required to notify EPA or before sending hazardous secondary exclusion would have applied only to
the authorized state. materials for recycling. These recycler these types of hazardous secondary
Persons taking advantage of today’s audits, which can be thought of as a materials that were recycled within the
proposed exclusion that fail to meet the form of environmental ‘‘due diligence,’’ ‘‘same industry.’’ It would not be
requirements may be subject to are in essence a precaution to minimize available for recycled materials that are
enforcement action and the materials the prospect of incurring CERCLA regulated as hazardous wastes for other
could be considered hazardous waste liability in the event that the recycling, reasons, such as ‘‘inherently waste-like
from the point of their generation. EPA or lack thereof, results in discard of the materials,’’ materials that are ‘‘used in a
could choose to bring an enforcement material. The fact that these companies manner constituting disposal,’’ or
action under RCRA section 3008(a) for are willing to incur the expense of ‘‘materials burned for energy recovery.’’
all violations of the hazardous waste auditing recyclers as a business practice The exclusion proposed today also
requirements occurring from the time is of itself a marketplace affirmation that would not address materials that are
they are generated through the time they sending hazardous secondary materials currently excluded from the definition
are ultimately disposed or reclaimed. to other companies for recycling of solid waste according to other,
The Agency believes that this approach involves some degree of risk. Although existing provisions of 40 CFR part 261.
provides generators with an incentive to these risks may be small when the For example, the wood preserving
handle (or in the case of tolling or other recycler is a well established, successful exclusion in 40 CFR 261.4(a)(9) includes
contractual arrangements, ensure that enterprise with a good record of conditions for managing materials on
their contractors handle) the hazardous environmental stewardship, it also is drip pads. Today’s proposed exclusion,
secondary materials pursuant to the apparent that not all recyclers fit this if finalized, would not supersede or
requirements. It also encourages each profile, as evidenced in the study of otherwise affect this conditional
person to take appropriate steps to environmental problems associated with exclusion; such hazardous secondary
ensure that such materials are safely hazardous secondary material recycling. materials would need to continue being
handled and legitimately recycled by Thus, we believe that there is sufficient managed in accordance with that
others in the management chain. If there reason for the Agency to place certain existing exclusion.
is a release of the hazardous secondary conditions on this proposed exclusion Today’s proposed exclusion specifies
materials into the environment, they are for the generator to determine that the three restrictions, in addition to
considered discarded and subject to all material is not discarded, particularly conditions for both generators and the
applicable hazardous waste regulations. since we expect that this rulemaking, if reclaimers to whom excluded materials
implemented, could encourage some would be transferred. One restriction is
X. Conditional Exclusion for Hazardous that materials that are speculatively
number of companies that may be
Secondary Materials That Are accumulated would not be eligible for
unfamiliar with recycling to enter the
Transferred for the Purpose of the exclusion. Restrictions on
hazardous secondary material recycling
Reclamation: Proposed 40 CFR speculative accumulation (see 40 CFR
261.2(c)(3), 261.4(a)(24), 261.4(a)(25)
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261.1(c)(8)) have been an important

EPA is today proposing an exclusion A. What Is the Intent of Today’s element of the RCRA recycling
from the definition of solid waste for Proposed Conditional Exclusion? regulations since they were promulgated
hazardous secondary materials that are In proposing this conditional on January 4, 1985. According to this
generated and subsequently transferred exclusion, EPA’s objectives are to regulatory provision, a hazardous
to another company or person for the encourage recycling of hazardous secondary material is accumulated
purpose of reclamation, provided that secondary materials, and reduce speculatively if the person accumulating
certain conditions are met. Recycling unnecessary regulatory compliance it cannot show that the material is

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potentially recyclable; further, the smelting). In this example, the two consider this to be the minimum
person accumulating the hazardous different reclamation processes might be information needed to enable credible
secondary material must show that conducted by different companies and/ evaluation of the status of a material
during a calendar year (beginning or at different facilities. The Agency under section 3007 of RCRA. We also
January 1) the amount of such material sees no reason to discourage this kind note after EPA promulgates regulations
that is recycled, or transferred to a of recycling, and we are thus proposing listing a material as a hazardous waste
different site for recycling, must equal at that today’s transfer-based exclusion or identifying it by its characteristics,
least 75% by weight or volume of the would be available for materials that are section 3010 of RCRA requires
amount of that material at the beginning recycled by means of one or more generators of such materials to submit a
of the period. This provision already reclamation processes. Note, however, notification to EPA within 90 days.
applies to hazardous secondary that the condition for generators to make Since the changes proposed today could
materials that are not otherwise ‘‘reasonable efforts’’ under the terms of substantially affect this universe of
considered to be wastes when recycled, this exclusion would apply in the same facilities in the Subtitle C system, we
such as materials used as ingredients or way, regardless of how many believe the notifications are appropriate
commercial product substitutes, reclamation steps were involved with and useful.
materials that are recycled in a closed- recycling of an excluded material. In The Agency requests comment on
loop production process, or unlisted other words, if the excluded hazardous alternative notification requirements for
sludges and byproducts being secondary material were reclaimed by this exclusion. One such alternative
reclaimed. more than one facility or company, the would be to require that more detailed
A second restriction or pre-condition generator of such material would need information be provided in the notice,
specified in the proposed exclusion is to make ‘‘reasonable efforts’’ to examine such as identification of the reclamation
that excluded hazardous secondary each facility or company in order to facility to which it will be shipped, how
materials would need to be transferred ensure that the hazardous secondary it will be stored at the generator’s
directly from the generator to the materials will be safely and legitimately facility, and/or a detailed
reclaimer, and not be handled by recycled. We believe that this is a characterization of the hazardous
anyone else other than a transporter. consistent application of the idea of secondary material and of the recycling
Thus, a generator who wished to requiring ‘‘reasonable efforts’’ as a process.
maintain the excluded status of his condition of this proposed exclusion; Another option being considered with
hazardous secondary materials would where recycling of a hazardous regard to notification would be a
not be able to ship those materials to a secondary material involves more than requirement that it be signed by an
‘‘middleman,’’ such as a broker. This one reclamation step at more than one authorized representative. In addition,
restriction is consistent with a premise facility, generators should nevertheless we are considering the option of
underlying this proposed exclusion— be well informed as to how the requiring persons using this exclusion
that is, in order to ensure that materials will be reclaimed, and by to submit periodic (e.g., annual) reports
unregulated materials will not be whom, throughout the recycling detailing their recycling activities, to
discarded, generators should have a process. provide information on the types of
reasonable understanding of who will The third specified pre-condition is volumes of hazardous secondary
be reclaiming the materials and how that, for all hazardous secondary materials recycled, to whom the
they will be managed and reclaimed, materials that would be excluded under materials were sent for reclamation, the
and a reasonable assurance that the 40 CFR 261.4(a)(24), generators and types of products that were produced
recycling practice is safe and legitimate reclaimers that are currently subject to from the reclamation processes, or other
(see the following discussion of the the hazardous waste regulations would relevant information. We are also
proposed condition for ‘‘reasonable need to submit a one-time notice to EPA considering (and soliciting comment on)
efforts’’). A generator who ships or the authorized state. The notice the option of requiring the information
materials to a middleman such as a would need to identify the name, to be submitted in a particular format,
broker typically does not know who will address, and EPA ID number (if or submitted electronically, and
ultimately manage and reclaim them, or applicable) of the generator or reclaimer, whether, in lieu of sending it to the
how they will be reclaimed. Thus, we the name and phone number of a implementing agency, it should be
believe that this restriction helps ensure contact person, the type of hazardous maintained at the facility.
that materials that become unregulated secondary material that would be EPA notes that the information
under the terms of this conditional managed according to the exclusion, discussed above can be difficult for
exclusion will not be discarded by the and when the hazardous secondary regulatory authorities to retrieve and use
generator. The Agency requests materials would begin to be managed in if it is not placed into a data
comment on this aspect of the proposed accordance with the exclusion. A management system. Similarly, using
exclusion. revised notice would be required to be different notification procedures and
The Agency recognizes that, in some submitted in the event of a change to the data management systems for different
cases, recycling of an excluded name, address, or EPA ID number of the regulated materials can be confusing
hazardous secondary material may generator or reclaimer or a change in the and time-consuming for the regulated
involve more than one reclamation step. type of material recycled. community. For these reasons, the
For example, a recyclable hazardous The intent of this proposed Agency requests comment on whether
secondary material such as an notification requirement is to provide the Subtitle C Site Identification Form
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electroplating waste might have a basic information to regulatory agencies (EPA Form 8700–12) or the comparable
relatively high moisture content, and a about who would be managing state form should be used to provide the
somewhat variable chemical hazardous secondary materials under information required in this
composition. Such materials might thus the exclusion, and the types of materials supplemental proposal. This form is
need to be dried and blended to a that would be recycled. We believe our used to enter data into the RCRAInfo
suitable, consistent specification before authority to request such information is data management system managed by
they are amenable to a ‘‘final’’ inherent in our authority to determine the states and EPA. To implement use
reclamation process (e.g., metals whether a material is discarded, and we of this form for the notification

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requirements proposed today, we would condition is also very similar to the manage process residuals in an
revise the form to include a section for recordkeeping condition that currently environmentally sound manner within
materials covered by this exclusion, applies to excluded hazardous its borders. EPA believes that sections
with spaces for the appropriate data secondary materials used to make zinc 2002, 3002, 3007, and 3017 of RCRA
elements. fertilizer (see 40 CFR 261.4(a)(20)(ii)(D)). provide authority to impose this
We are also requesting comment on condition because such notice and
C. Conditions
whether to require the generator to consent help determine that the
Today’s proposed conditional maintain a copy of a confirmation of the materials are not discarded.
exclusion for transferred materials receipt of the hazardous secondary Under today’s supplemental proposal,
specifies conditions for generators, as material by the reclaimer. Based on our hazardous secondary materials that are
well as the reclaimers to whom conversations with commercial exported from the United States and
generators transfer their hazardous recycling facilities, they routinely issue recycled at a reclamation facility located
secondary materials. receipt confirmations or ‘‘recycling in a foreign country are not solid wastes,
1. Conditions for Generators certificates’’ as a way of helping the provided that the exporter complies
generator verify that the hazardous with the requirements of 40 CFR
In addition to the three pre-conditions secondary material reached its intended 261.4(a)(24)(i)–(iv) and notifies EPA and
described above, EPA is proposing that destination. The Agency solicits obtains a subsequent written consent
generators who wish to avail themselves comment on this proposed condition for forwarded by EPA from the receiving
of the exclusion for transferred materials recordkeeping, including whether country. The provisions that we are
must satisfy two basic conditions: retention of confirmation of receipt is a proposing today in 40 CFR 261.4(a)(25)
record keeping, which includes export normal business practice. require exporters to notify EPA of an
notification, and ‘‘reasonable efforts,’’ We considered additional record intended export 60 days before the
which in effect would require the keeping conditions for generators who initial shipment is intended to be
generator to make an assessment of the would operate under this proposed shipped off-site. The notification may
reclaimer so as to ensure that the exclusion, but are not proposing them cover export activities extending over a
hazardous secondary materials he or she today, primarily because we are 12 month or shorter period. The
generates will be recycled legitimately committed to limiting such conditions notification must include contact
and would allow the Agency to to those we believe are essential to information about the exporter and the
determine that the materials are not allowing proper oversight of hazardous recycler, including any alternate
discarded. secondary materials that are managed recycler. The notification must include
Recordkeeping. In order to allow for outside of the existing RCRA hazardous a description of the manner in which
adequate oversight of generators who waste regulatory system. Examples of the hazardous secondary materials will
manage hazardous secondary materials such additional conditions would be recycled. It must also include the
in accordance with this exclusion, we include more thorough characterization frequency and rate at which they will be
are proposing that such generators of the materials that are transferred for exported, the period of time over which
maintain for a period of three years reclamation, the types of units in which they will be exported, the means of
certain records that document they were accumulated at the generating transport, the estimated total quantity of
shipments (i.e., transfers) of excluded facility, how they were transported (e.g., hazardous secondary materials to be
hazardous secondary materials to by truck), whether or not the hazardous exported, and information about transit
reclamation facilities. Specifically, the secondary materials were transported as countries through which such materials
generator would need to maintain, for a DOT hazardous material, the date the will pass. Notifications must be sent to
each shipment of excluded material, hazardous secondary materials were EPA’s Office of Enforcement and
documentation of when the shipment generated, the quantity of hazardous Compliance Assurance, which will
occurred, who the transporter was, the secondary materials generated, and notify the receiving country and any
name and address of the destination other similar conditions. We request transit countries. When the receiving
reclamation facility, and the type and comment on whether such additional country consents in writing to the
quantity of the hazardous secondary record keeping conditions or others not receipt of the hazardous secondary
material in the shipment. We are not mentioned here are warranted for materials, EPA will forward the written
proposing to prescribe any specific generators who would manage materials consent to the exporter. The exporter
template for these records, or require under this proposed exclusion. may proceed with shipment only after it
that they be maintained in a particular Similarly, under today’s supplemental has received a copy of the written
format (e.g., paper vs. electronic proposal, exporters of hazardous consent from EPA. If the receiving
records). secondary materials that are excluded country does not consent to receipt of
It is our understanding, supported by under 40 CFR 261.4(a)(24) would be the hazardous secondary materials or
the information in the study of current required to notify the receiving country withdraws a prior consent, EPA will
good recycling practices, that generators through EPA and obtain consent from notify the exporter in writing. EPA also
who are concerned about potential that country before shipment of the will notify the exporter of any responses
environmental liability maintain these hazardous secondary materials could from transit countries. Exporters must
types of records as a routine business take place (see 40 CFR 261.4(a)(25)). keep copies of notifications and
matter. Thus, we expect that this record- This requirement would serve as a consents for a period of three years
keeping condition will impose a notification to the receiving country so following receipt of the consent. These
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minimal additional paperwork burden that it can ensure that the hazardous procedures are similar to those required
for those facilities. We also believe that secondary materials are recycled rather for exports of hazardous waste under 40
this recordkeeping condition will help than disposed. As an additional benefit, CFR Subpart E, except for the use of the
to clarify what ‘‘appropriate the receiving country has the hazardous waste manifest.
documentation’’ the generator would opportunity to consent or not based on Reasonable Efforts. Today’s
need to provide in the event of some its analysis of whether the recycling supplemental proposal would require
type of RCRA enforcement action (see facility can properly recycle the generators to make ‘‘reasonable efforts’’
40 CFR 261.2(f)). This proposed hazardous secondary materials and to ensure that their materials are safely

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and legitimately recycled, before Today’s proposed condition that This proposed provision requiring
shipping or otherwise transferring them addresses ‘‘reasonable efforts’’ is reasonable efforts by generators would
to a reclamation facility. In effect, this intended to reflect and capture in a only apply to generators who send
would require the generator to perform regulatory context how many generators hazardous secondary materials to
a type of ‘‘environmental due diligence’’ currently inquire and make decisions recyclers that are not operating under
of the reclaimer in advance of about whom they should do business RCRA Part B permits or interim status
transferring the hazardous secondary with, and how they manage their standards. RCRA permitted facilities
materials. We believe that today’s potential liability and regulatory non- and interim status facilities are already
proposed condition for reasonable compliance risks. subject to stringent design and operating
efforts reflects, and would perhaps Currently, under 40 CFR 262, a standards, must demonstrate financial
reinforce, the methods, such as audits, generator must make a hazardous waste assurance, are subject to corrective
that many generators of hazardous determination and thus, already has an action requirements in the event of
secondary materials now use to obligation to determine whether the environmental problems, and are
maintain their commitment to sound waste is subject to regulation. EPA typically given more thorough oversight
environmental stewardship, and to believes that to make a parallel than facilities without RCRA Part B
minimize their potential regulatory and determination that hazardous secondary permits. Thus, the Agency believes that
liability exposures. materials are not solid wastes because permitted and interim status recycling
Some generators, particularly those they are destined for reclamation and facilities provide generators with
are not discarded, the generator must environmental assurances that would
who generate relatively large volumes of
make a reasonable effort to ensure that ensure the hazardous secondary
hazardous secondary materials, audit
the reclaimer intends to legitimately
recyclers before shipping such materials materials sent to such a facility are not
recycle the material pursuant to 40 CFR
to them. EPA’s study of good practices discarded. Not requiring reasonable
261.2(g) and not discard it, and that the
for recycling quotes one large recycling efforts for generators who ship
reclaimer will manage the material in a
and disposal vendor as stating that of its hazardous secondary materials to RCRA
manner that is protective of human
new customers, sixty percent of the permitted or interim status recycling
health and the environment.
large customers and thirty to fifty EPA is also proposing that the facilities would likely be of particular
percent of the smaller customers now generator can use any credible evidence benefit to relatively smaller volume
perform audits on them. Under current available in making his reasonable generators who may not have the
practices, such audits can involve a site efforts, including information gathered resources required to undertake
visit to the recycling facility, and an by the generator, provided by the ‘‘reasonable efforts.’’
examination of the company’s finances, reclaimer, and/or provided by a third EPA requests comment on whether to
technical capability, environmental party, in lieu of personally performing require generators to maintain at the
compliance record, and housekeeping an environmental audit. (In fact, in generating facility documentation
practices. (Note: Audits that are some cases, the generator may not be an showing the reasonable efforts made
currently conducted may or may not expert in different aspects of recycling, before transferring the hazardous
cover all of these areas.) According to and reliable third-party information or secondary materials to the reclamation
those interviewed as part of our judgment would play an important part facility. Such records would presumably
recycling study, auditing a recycler in the generator’s conclusion.) For include copies of audit reports, and/or
typically costs the generator from two to example, the generator might hire an other relevant information that was used
five thousand dollars, and in some cases independent auditor to review the as the basis for the generator’s
more, depending on how thorough the operations of a recycler. Also, the determination that the reclamation
audit is, and whether it is conducted by generator might rely on third-party facilities to which the hazardous
the generator’s own personnel, or by an certifying bodies to provide a reasonable secondary materials were sent would
outside consultant. The study also level of confidence that a recycler legitimately recycle the hazardous
identified at least one organization would safely manage his materials. secondary material in a protective
which conducts audits at several Trade associations might make available
hundred recycling and other waste manner. Requiring specific
to their members information on documentation would help EPA or the
handling facilities per year. This specific facilities that could be used to
organization audits overseas facilities, authorized state to determine whether
determine that the facility is safely and the generator did make reasonable
as well as domestic recyclers, and re- legitimately recycling the hazardous
audits facilities on a more or less efforts to ensure that his hazardous
secondary material. Likewise, a parent
ongoing basis. Membership in this and secondary material was not discarded.
corporation might perform an
similar organizations, by spreading the environmental audit of a recycler, and In addition, EPA requests comment
expense of conducting audits among a the audit could then be used by several on whether, as part of the
number of companies, gives a generator of the company’s facilities. In fact, EPA documentation, the generator should
a means of reducing the cost of this type believes that many reputable third party also be required to maintain at the
of ‘‘environmental due diligence’’ even auditors, and trade associations that generating facility a certification
further. Such auditing ‘‘consortiums’’ might make available to their members statement, signed and dated by an
also reduce costs for the facilities that information on specific facilities, authorized representative of the
are audited, since fewer audits need to already assemble the types of generator company, that for each
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be conducted by individual generators. information that would be needed for a reclamation facility to which the
Note, however, that third-party auditors generator to determine, based on generator transferred excluded
do not generally draw any conclusions credible evidence, that the hazardous hazardous secondary materials, that the
based on their audits or provide a secondary material is being legitimately generator made reasonable efforts that
‘‘certification’’ with respect to reclaimer recycled. EPA would encourage this the hazardous secondary material was
operations, so the generator would still type of pooling of information in order legitimately recycled. Such certification
be expected to decide if the reclaimer is to reduce the burden and take advantage statement could, for example, be
acceptable. of specialized technical expertise. worded as follows:

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‘‘I hereby certify in good faith and to the safely recycle the hazardous secondary protective of human health and the
best of my knowledge that, prior to arranging material? environment.
for transport of excluded hazardous (C) Are there any unresolved The second possible question (B)
secondary materials to [insert name of focuses on the technical capability of
significant violations of environmental
reclamation facility], reasonable efforts were the recycler, the most basic of
made to ensure that the hazardous secondary regulations at the reclamation facility, or
materials would be recycled legitimately, and any formal enforcement actions taken requirements for ensuring safe recycling
otherwise managed in a manner that is against the facility in the previous three of hazardous secondary material. If a
protective of human health and the years for violations of environmental reclamation facility were found to not
environment, and that such efforts were regulations? If yes, then the generator have adequate equipment or trained
based on current and accurate information.’’ must have credible evidence that the personnel, it raises serious questions as
Today’s proposed condition for reclaimer will manage the materials to whether the facility would be
safely. engaged in safe recycling.
reasonable efforts is in effect a general
(D) Does the material being recycled The third set of possible questions (C)
standard; we are not proposing specific
provide a useful component that will be focuses on the compliance history of the
questions that generators would need to recycler. Although compliance data are
assess in satisfying this condition of the reused in the product of the recycling
process or aid in the recycling process an imperfect tool for determining
exclusion. However, we acknowledge whether a recycler would safely manage
that specifying in more explicit terms itself?
(E) Is the product (or intermediate) of the hazardous secondary material, EPA
the questions that should be examined believes that they are a reasonable
in making such reasonable efforts could recycling at the reclamation facility a
starting point. Facility-specific
provide more certainty to generators, as generally traded commodity meeting
enforcement data on unresolved alleged
well as overseeing agencies. On the applicable specifications? If not, is there
significant violations and on formal
other hand, more explicit provisions for other available information, such as
enforcement actions (by both EPA and
defining reasonable efforts in this sales records or long-term contracts,
states) and specific case information for
context could also limit a generator’s demonstrating that there is a reliable
the formal enforcement actions are
flexibility. The Agency requests market for the product (or
readily available on EPA’s public Web
comment on whether more specific intermediate)? If not, then the generator
site at http://www.epa.gov/echo/. While
provisions to define reasonable efforts must have credible evidence that the
the presence of a violation does not
for the purpose of this exclusion should recycling at the reclamation facility will
automatically mean that the facility
be specified in the final rule. produce a valuable product or would not recycle the hazardous
If EPA were to specify in more intermediate. secondary material safely, it would raise
explicit terms how generators should (F) Does the reclamation facility have questions and would likely require
perform reasonable efforts with respect the permits required (if any) to manage additional information from the facility.
to this regulatory exclusion, one the residuals (if any) generated from If the generator provides reasonable
approach could be to identify specific reclamation of the excluded hazardous documentation that the enforcement
questions that generators would need to secondary material? If not, does the data are unrelated to the facility’s
address in satisfying this condition. reclaimer have a contract with an commitment to manage the hazardous
Such questions would be focused on appropriately permitted facility to secondary material safely or that the
ensuring that the hazardous secondary dispose of the residuals (if any) violation has been corrected and the
material will not be discarded. The generated from the reclamation of the facility is back in compliance, then that
following are examples of possible excluded hazardous secondary material? would satisfy this aspect of the
questions that EPA could specify in the If not, then the generator must have reasonable efforts determination.
final regulatory condition for credible evidence that the residuals The fourth possible question (D)
determining reasonable efforts, with an generated from the recycling of the focuses on the usefulness of the
explanation of how each question could excluded secondary hazardous material secondary material to the recycling
potentially assist in determining that the will be managed in a manner that is process. EPA’s study of the potential
hazardous secondary material is not protective of human health and the effect of market forces on the recycling
discarded. EPA then outlines two environment. of hazardous secondary materials shows
options for how to determine The first possible question (A) focuses that there is a particular incentive for
‘‘reasonable efforts;’’ the first option on whether the recycler has met two of materials to be recycled when it can be
would use the broader list of questions the requirements he must fulfill before done at a lower cost than disposing of
(A through F) and the second option accepting excluded hazardous the material. In some cases, however, a
would use a subset of questions (A and secondary materials for reclamation: hazardous secondary material with little
F) that some believe have a more bright- notification of the appropriate value can be put into a ‘‘recycling’’
line nature. EPA requests comment on regulatory authority that he plans to process, but not add anything of value
whether any or all of these questions reclaim excluded hazardous secondary either to the end product or to the
should be included in the regulation material (see Section X.B of today’s process itself. In such cases, the
(including the advantages and proposal), and establishment of hazardous secondary material is
disadvantages of the various questions, financial assurance to cover the costs of effectively being discarded rather than
as well as of the two options outlined managing any hazardous secondary recycled. A material being legitimately
below), and if there are other questions materials that remain if the facility recycled can contribute value to the
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that should be also be considered. closes (see Section X.C.2 of today’s process in two ways. The recycled
(A) Has the reclaimer notified the proposal). If a recycler were found to material can contain a constituent that
appropriate authorities pursuant to have failed to meet these requirements is being reused and which also appears
§ 261.4(a)(24)(iii) and does he have then he will have also failed to show a in the final product. Alternatively, the
financial assurance as required under good faith effort towards demonstrating material being recycled can aid in the
§ 261.4(a)(24)(v)(D)? that he intends to recycle the material process itself, such as by replacing a raw
(B) Does the reclamation facility have and not discard it, and will manage the material that would otherwise be
the equipment and trained personnel to material in a manner that is not needed. For example, a hazardous

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secondary material may act as an to be used as fill and driveway paving reclaimer has notified EPA or the
important catalyst or a carrier in a material, resulting in elevated levels of authorized state that he is engaged in
process, but not end up in the final lead at 96 of the 109 properties. In order recycling excluded hazardous secondary
product. To ensure that its hazardous to determine whether a reclamation material; whether the recycler complies
secondary material is being properly facility is legitimately recycling, the with the financial requirements of this
recycled, a generator would need to generator will need to check to make part; and whether the reclaimer has
ensure that his material contributes to sure that the recycling results in a obtained the appropriate permits for
the process in one of these ways. valuable product or intermediate. managing residuals onsite or,
The fifth set of possible questions (E) Although a typical audit of a recycling alternatively, ships the material offsite
focuses on the products of recycling. facility would include an examination under a contract with an appropriately
According to EPA’s study of the of the facility’s finances, EPA does not permitted facility. These requirements
potential effect of market forces on the have information on whether this would assure the generator that the
management of recyclable hazardous financial evaluation would include an reclaimer’s operations are known to the
secondary materials, there is a investigation as to whether the recycling regulatory authority and therefore can
relationship between the value of the process results in a valuable product. be inspected for compliance, that
product from recycling and the EPA requests comment on how residuals would be properly managed
likelihood of successful recycling. including such a question might affect (thus addressing the second most
Products with little or no value can the scope of a typical audit. common environmental problem in the
result in recyclable materials being over- The sixth set of possible questions (F) recycling case studies EPA has
accumulated and mismanaged. focuses on another major cause of analyzed), and that financial assurance
Mismanagement of recyclable materials environmental problems from would cover the cost of facility closure
was a major cause of environmental hazardous secondary material recycling: and other potential environmental
damage in forty percent of the cases that the management of the residuals. liabilities. While this list would not be
EPA has studied. To provide assurance Roughly one-third of the damage cases as comprehensive, this option of
that the products created from the that EPA documented were caused by focusing on a set of criteria that some
hazardous secondary materials are in mismanagement of the residuals from believe is of a more bright-line nature
fact valuable, the generator would need recycling. Because the residuals from could make it easier for the generator to
to determine if the products are general recycling can contain the hazardous determine whether the criteria have
commodities that meet applicable constituents that originated with the been met and thereby make, in good
standards, or that there is a reliable hazardous secondary materials, it is faith, a certification that would
market based on sales records or long- important that the generator demonstrate ‘‘reasonable efforts.’’
term contracts. understands how those residuals will be In addition, EPA requests comment
For most recycled products, this disposed. These residuals may or may on how difficult it would be for a
determination would be straightforward not be regulated hazardous wastes, but generator to address and certify in good
and the product specifications are well in either case, the generator would need faith the responses to questions B
known. Metals reclamation and to determine that they are managed in through E. In this regard, EPA requests
solvents, for example, results in the units that have the necessary permits comment on whether generators already
production of valuable products that are (either solid waste permits or hazardous possess, or would be able to acquire
readily traded on the open market. waste permits) or otherwise comply through reasonable efforts, the
Other products, however, may be with applicable environmental information and ability necessary to
unique or recycled in a different manner standards (whether federal or state), evaluate the relevant aspects of the
and may require a closer look to such that the material is being managed recycling industry, especially in
determine if they meet minimum in a manner that is protective of human situations where the generator does not
standards. For example, in one of the health and the environment. work in that industry or otherwise have
damage cases, the reclamation facility In drafting these possible questions to a reason to be familiar with it. For
used spent plastic blast media to make establish reasonable efforts, we have example, under question (B), to what
certain construction materials, which attempted to write them in as an extent do generators already posses, or
are a generally traded commodity with objective a manner as possible, but we would be able to acquire readily, the
rigorous standards. However, in this recognize that answering these information and ability needed to
case, the ‘‘recycling’’ process resulted in questions still requires a certain amount evaluate the adequacy of ‘‘the
cinder blocks that would crumble on of judgment. We understand that equipment and trained personnel’’ in a
contact, and concrete slabs that would generators might prefer more definitive different industry than the one in which
not support the weight of a person. In criteria. Therefore, we ask for the generator operates? Similarly, under
some cases, there may be no formal suggestions on how the possible question (E), to what extent do
standard for a product, but a reasonable efforts questions (if they are generators already possess, or would be
commonsense informal standard would included in the regulation) could be able to acquire readily, the required
still apply, particularly in regards to more objective, yet provide the knowledge of markets (in which they
toxic constituents. For example, in necessary information, or any other might not participate) for purposes of
another of the damage cases, children’s information that should be required for determining whether something
play sand was made from foundry sands making a reasonable efforts constitutes a ‘‘valuable product or
highly contaminated with lead, which, determination. intermediate’’?
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in this situation would not meet such a In particular, as noted at the EPA also requests comment on
commonsense standard. There are also beginning of this discussion, EPA whether, if the final regulation does
other instances in the damage cases of requests comment on the alternative include specific questions for the
recyclers marketing their product as option of focusing ‘‘reasonable efforts’’ generator to consider when making
appropriate for ‘‘fill’’ despite high levels only on questions A and F above. This reasonable efforts, (1) should all
of toxic constituents. In one case, a second of the two options would limit generators be required to answer those
battery recycler distributed material the generator’s reasonable efforts questions and document their responses
from old battery casings to a community requirement to determining whether the to each of them—that is, this

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documentation would be a condition of be discarded due to concerns about However, the Agency is also
the exclusion, or (2) should generators CERCLA liability (which is unaffected considering several other conditions for
have the option of choosing to answer by today’s proposal, see Section XIII.D. generators under this exclusion. One
and document their response to these of today’s proposal). option would be a condition addressing
sets of questions or not. Under the latter EPA also requests comment on the storage of accumulated recyclable
approach, if a generator chooses to meet relationship between the reasonable hazardous secondary materials by the
his burden of an objectively reasonable efforts questions and legitimacy generator prior to shipping them to a
belief that his materials would not be (discussed in more detail in section XI reclamation facility. For example, we
discarded and would be managed in a of today’s preamble). Two of the are proposing today a condition that
manner that is protective of human questions identified above, questions D specifies a general performance
health and the environment by and E, are related to the two factors that standard for storage of excluded
answering these sets of questions, then EPA is proposing today to be the ‘‘core’’ hazardous secondary materials at
the generator would have met his considerations for determining whether reclamation facilities. Arguably, the
obligation under the regulations. a recycling operation is legitimate, same or a similar standard could be
Alternatively, the generator under the rather than sham recycling (i.e., whether required for generators who take
latter approach could meet his burden the hazardous secondary material makes advantage of the exclusion. The Agency
of proof based on other considerations, a useful contribution, and whether the requests comment as to whether a
but without any assurance that a court, recycling process results in a valuable storage condition (beyond the
if the Agency were to undertake an product). EPA believes that it is requirement that material in land-based
enforcement action, would not later appropriate to include these concepts in units be contained) should be imposed
decide that the information he relied on ‘‘reasonable efforts,’’ thus allowing the on generators as part of this exclusion,
did not support an objectively generator to make only one and if so, what type of condition(s) it
reasonable belief that his materials determination before sending hazardous should be.
would not be discarded or would be secondary material for recycling. In
other words, if these reasonable efforts 2. Conditions for Reclaimers
managed in a manner that is protective
of human health and the environment. questions are codified in the EPA is proposing that reclaimers of
However, under both approaches, if a regulations, EPA is proposing that by conditionally excluded materials will
generator meets the burden of proof that satisfying reasonable efforts, the have to satisfy four general conditions,
his decision to send his materials to a generator would have also satisfied the which pertain to record keeping, storage
reclaimer was based on an objectively obligation to determine his hazardous of recyclable hazardous secondary
reasonable belief that the hazardous secondary material would be materials, management of the residuals
secondary materials would not be legitimately recycled per proposed 40 from reclamation processes, and
discarded and would be managed in a CFR 261.2(g). However, because EPA is financial assurance.
manner that is protective of human also requesting comment on Recordkeeping. Today’s supplemental
health and the environment, then the recordkeeping and certification proposal would require reclaimers who
Agency would consider that the requirements related to reasonable operate under this conditional exclusion
generator met his obligation under the efforts, incorporating questions D and E for transferred materials to maintain
regulations. could alter the implementation of the certain records, similar to the records
Note that codifying ‘‘reasonable legitimacy determination for materials we are proposing to require for
efforts’’ standards that the generator excluded under this provision. EPA generators. Specifically, such reclaimers
would certify have been met would requests comment on whether to keep would need to maintain for at least three
have the effect of placing on the the legitimacy determination an years records of each shipment of
generator the responsibility of assessing independent requirement for generators materials received at the reclamation
the recycler and ensuring that the who would claim today’s proposed facility that were excluded from
hazardous secondary materials would exclusion and not directly link it to regulation under the terms of this
not be discarded. EPA is seeking ‘‘reasonable efforts.’’ exclusion. Such records would need to
comment on this aspect of the proposal. Finally, EPA also solicits comment on document the name and address of the
Further, the Agency seeks comment on whether the frequency of periodic generator of the hazardous secondary
whether any or all of the questions are updates of the ‘‘reasonable efforts’’ materials, the name of the transporter
appropriate for the generator to answer should be identified in the regulations, and the date such materials were
in making reasonable efforts to ensure or whether that question should be left received, and the type and quantity of
that the reclaimer intends to to individual situations applying an hazardous secondary materials received.
legitimately recycle the material and objectively reasonable belief standard. The Agency believes that this
will not discard it pursuant to the Information on industry standards for information is the minimum needed to
criteria in 261.2(g), and that the facility audits of off-site activities, enable effective oversight of recycling
reclaimer will manage the material in a including how frequently they are activities that would no longer be
manner that is protective of human conducted, would be especially helpful. subject to the existing hazardous waste
health and the environment. Storage conditions. As with the regulations.
Of course, regardless of the type of proposed exclusion for hazardous In addition to these proposed record
information/questions EPA may include secondary materials reclaimed under keeping provisions, the Agency is
in the final rule, if any, the generator the control of the generator, if the considering additional records that
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could choose to seek additional generator manages the hazardous would more thoroughly document
information or ask additional questions, secondary material in a land-based unit excluded recycling activities by
and as shown in EPA’s study of good under the transfer-based exclusion, the reclaimers. Examples of such additional
recycling practices, many generators material must be contained. For further records would include more thorough
already do so. EPA anticipates discussion of how to determine if a characterization of the hazardous
generators may seek additional material in a land-based unit is secondary materials that are received for
information in determining that their contained, see section IX of today’s reclamation, the types of units in which
hazardous secondary materials will not preamble. they were stored at the reclamation

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facility, how they were transported (e.g., that this proposed condition for storage, The purpose of this condition is
by truck), whether or not the hazardous or some similar condition, is necessary primarily to clarify the regulatory status
secondary material was transported as a and appropriate for reclamation of these waste materials, and to
DOT hazardous material, and other facilities that take advantage of this emphasize in explicit terms that
similar conditions. We request comment exclusion, and will establish an recycling residuals must be managed
on whether such additional record expectation for the owner/operators of properly. The study of recent (i.e., post-
keeping conditions are warranted for such facilities; i.e., that they must CERCLA, post-RCRA) recycling-related
reclaimers. manage hazardous secondary materials environmental problems revealed that
Storage of Recyclable Hazardous in at least as protective a manner as they mismanagement of residuals was the
Secondary Materials. We are proposing would an analogous raw material, and cause of such problems in one third of
today a general performance standard in such a way that materials would not the incidents that were documented.
for storage of excluded hazardous be released into the environment. Some common examples of these
secondary materials at reclamation The Agency considered a number of mismanaged residuals were acids and
facilities that operate under this alternatives to this proposed storage casings from processing of lead-acid
proposed exclusion. Specifically, the condition, including specifying a much batteries, solvents and other liquids
hazardous secondary materials must be more rigorous set of conditions generated from cleaning drums at drum
managed in a manner that is at least as equivalent to current Subtitle C reconditioning facilities, and PCBs and
protective as that employed for regulatory requirements for storage (see, other oils generated from disassembled
analogous raw materials. An ‘‘analogous for example, the requirements for tanks transformers. In many of these damage
raw material’’ is a raw material for and containers, which are specified in incidents, the residuals were simply
which a hazardous secondary material subparts I and J of 40 CFR Part 264), or disposed in on-site landfills or piles,
is a substitute and serves the same to a similar, but less stringent set of with little apparent regard for the
function and has similar physical and storage conditions (e.g., requiring the environmental consequences of such
chemical properties as the hazardous hazardous secondary material to be mismanagement, or possible CERCLA
secondary material. A raw material that stored in an engineered unit). However, liabilities associated with cleanup of
has significantly different physical or we do not believe that an elaborate set these releases.
chemical properties would not be of conditions for storage are necessary One issue that the Agency considered
considered analogous even if it serves for the purpose of this exclusion. For with respect to this proposed condition
the same function. For example, a one thing, we are proposing today that was the regulatory status of wastes
metal-bearing ore might serve the same generators who wish to take advantage generated from the reclamation of
function as a metal-bearing air pollution of this exclusion must make ‘‘reasonable hazardous secondary materials that
control dust, but because the physical efforts’’ to evaluate the reclamation would be listed hazardous wastes if they
properties of the dust would make it facilities they ship materials to, to were not recycled. One argument could
more susceptible to wind dispersal, the ensure that the hazardous secondary be that these residuals should be
two would not be considered analogous. materials will be legitimately and safely regulated as listed hazardous wastes,
Similarly, a hazardous secondary recycled. In making such reasonable since they were derived from materials
material with high levels of toxic efforts, we expect that generators will that were physically and chemically
volatile chemicals would not be make an assessment of the reclamation identical to listed hazardous wastes, and
considered analogous to a raw material facilities’ material storage practices and could contain hazardous constituents
without these volatile chemicals. Where equipment. Thus, we believe generators that might pose significant threats to
there is no analogous raw material, or if will themselves evaluate the storage and human health and the environment if
the hazardous secondary material is handling practices of hazardous the residuals were mismanaged. A
managed in a land-based unit, the secondary materials at the reclamation different argument would be that such
material must be contained. For facilities they do business with. We a regulatory construct is unwarranted,
example, in the case of the metal- request comment on whether or not the since the recycled hazardous secondary
bearing air pollution control dust, dust condition should be written in more materials are not wastes, provided they
suppression measures would likely be specific terms, that is, in a way that meet the conditions of the exclusion,
needed to contain the hazardous would provide greater clarity with and therefore the ‘‘derived from’’
secondary materials. For the hazardous regard to how storage units should be concept as articulated in § 261.3(c)(2)
secondary material with high levels of designed and operated. should not be applied to these wastes.
toxic volatile chemicals, a closed tank or Management of recycling residuals. Further, such waste residuals from
container would probably be needed to We are today proposing a condition reclamation processes often do not
contain the volatile chemicals. For pertaining to management of residuals resemble the hazardous secondary
further discussion of how to determine that are generated from reclamation of materials that were reclaimed, and thus,
if a material is contained, see section IX hazardous secondary materials excluded the argument goes, it should not be
of today’s preamble. from regulation under this proposal. assumed that they would always need to
Storage conditions for reclamation The proposed condition specifies that be managed as hazardous wastes.
facilities that operate under today’s ‘‘any residuals that are generated from The Agency does not believe it is
proposed exclusion would allow the reclamation processes will be managed necessary to apply the ‘‘derived-from’’
Agency to determine that the recyclable in a manner that is protective of human principle to the residuals generated
materials are not discarded. The great health and the environment. If any from the reclamation of excluded
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majority of damages documented in the residuals exhibit a hazardous hazardous secondary materials. If the
study of recent recycling-related damage characteristic according to subpart C of residuals exhibited a hazardous
incidents occurred at commercial 40 CFR part 261, or themselves are characteristic, or they themselves were
reclamation facilities, and listed hazardous wastes, they are a listed hazardous waste, they would be
mismanagement of hazardous secondary hazardous wastes (if discarded) and considered hazardous wastes, and
materials was found to be a cause of must be managed according to the would have to be managed accordingly.
environmental problems in 35% of the applicable requirements of 40 CFR parts If they did not exhibit a hazardous
incidents. Accordingly, EPA believes 260 through 272.’’ characteristic, or were not themselves a

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listed hazardous waste, they would precaution for many generators. Today’s we should adopt the financial assurance
need to be managed in accordance with proposed condition for financial requirements that were promulgated as
applicable state or federal requirements assurance thus can be seen as a part of the standardized permit rule (see
for non-hazardous wastes. Thus, they regulatory precaution against the same 70 FR 53419, September 8, 2005), which
would be subject to the same regulatory concern, ensuring that the reclamation are EPA’s most recently issued RCRA
system that applies to wastes that are facility owner/operators who would financial assurance requirements.
not hazardous wastes. The Agency does operate under the terms of this proposed We are also interested in options that
not see a compelling reason to establish exclusion are financially sound. would involve tailoring the costing
as part of this rulemaking a different The need for some type of financial requirements associated with Subpart H
regulatory system based on the assurance for recyclers in this context requirements for today’s rulemaking.
‘‘derived-from’’ principle for also is supported by the study of For example, the Subpart H financial
reclamation residuals. We solicit recycling-related environmental obligations are tied in large part to the
comment on this aspect of today’s problems. The study indicates that estimated future cost of closing the
supplemental proposal. business failure is a primary causative hazardous waste facility. Closure costs
Financial Assurance. EPA is factor associated with these damage can be difficult to estimate, or subject to
proposing today the condition that incidents. For example, of the 208 disagreement, and failure to close might
owner/operators of reclamation facilities damage incidents that were not be the problem at a given facility.
that would operate under the terms of documented, at least 138 of the For example, closure cost estimates
this exclusion for transferred materials recyclers are no longer in business. might not address the kind of releases
demonstrate financial assurance, in While there may not be a clear cause- identified in the recycling study. Thus,
accordance with the current and-effect relationship in all of these a simpler alternative might be to set a
requirements of Subpart H of 40 CFR cases, we believe that this clearly standard, fixed amount of financial
Part 265. Under Part 265 Subpart H, suggests a correlation between the assurance that would need to be
owners and operators must demonstrate financial health of recycling companies demonstrated. For example, EPA’s study
that resources will be available to pay and the probability that their recycling of environmental problems associated
for closure, and post-closure care at activities will result in some form of with hazardous material recycling was
their facilities. They also must meet environmental damage. In our view, this able to identify actual or estimated
liability coverage requirements for further supports the need for some type cleanup costs associated with 89 of the
sudden and accidental occurrences at of financial assurance condition for this damage cases that were documented. Of
their facilities. The requirements found exclusion. these cases, 71 (80%) involved cleanup
in Subpart H of 40 CFR 265 also outline As proposed, reclaimers of excluded costs of $5 million or less, while 81
how owners and operators should hazardous secondary materials would cases (91%) cost $10 million or less. It
determine cost estimates, provide the need to have financial assurance in should be noted that there are important
acceptable mechanisms for accordance with the applicable financial uncertainties associated with these cost
demonstrating financial assurance, and assurance requirements for hazardous data, as explained in our study report.
set the minimum amounts of liability waste treatment storage and disposal With these uncertainties in mind, these
coverage required. facilities (cited above). We believe that findings might be used as the basis for
We believe that requiring financial these financial assurance requirements identifying a specific, minimum amount
assurance for these reclamation facilities are appropriate for reclamation facilities of financial assurance that reclamation
is necessary for the Agency to determine that would be managing excluded facility owner/operators would need to
that the materials managed at these hazardous secondary materials, since demonstrate. Such funds would thus be
facilities are not discarded, and is such management will typically involve available for any environmental damage
supported by the findings of the some type of storage, and reclamation, associated with the reclamation
recycling studies we conducted as part which is defined as ‘‘treatment’’ under operations at such facilities.
of this rulemaking effort. the existing RCRA regulations. If a This type of approach to establishing
For example, the study of current reclamation facility were to manage financial assurance requirements for
good recycling practices indicated that excluded materials in land-based units reclamation facilities would be less
one of the main reasons that generators (e.g., piles), it would be subject to the flexible than the current regulations, but
audit recyclers is to evaluate their additional Subpart H financial it would have the virtue of simplicity
financial health and resources to assurance requirements for land and transparency. Similarly, the
respond to accidents or other problems disposal facilities. regulatory language of individual
that could cause adverse environmental The Agency currently has underway a financial assurance mechanisms might
or human health consequences. This is review of the Subpart H financial need to be modified slightly, to make it
primarily because of the joint-and- assurance regulations now in effect for clear that funds would be available for
several liability provisions of CERCLA, hazardous waste treatment, storage and environmental damages beyond closure.
under which a generator can become a disposal facilities. The Agency does not The Agency solicits comment on such
‘‘responsible party’’ obligated to help intend to address general issues related alternative approaches to financial
pay for remediation expenses if (in this to the financial assurance mechanisms assurance requirements for reclamation
example) a recycler to whom he sent as a part of today’s rulemaking, since facilities that would operate under
recyclable hazardous secondary these issues are being addressed in the today’s proposed exclusion.
materials were to create contamination broader review. However, in the context Finally, the Agency anticipates that,
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problems, but lacked the resources to of this rulemaking, the Agency is when and if today’s proposed exclusion
pay for their cleanup. Because American interested in receiving comments as to for transferred materials is promulgated
manufacturers have considerable whether or not the existing Subpart H and becomes effective, there are likely
experience with these types of CERCLA requirements need to be modified in to be some generators of recyclable
liability issues, evaluating the financial some way specifically for reclamation hazardous wastes that will choose not to
health of the reclamation facility before facility owner/operators that would be use the exclusion, and thus will
shipping recyclable materials to them affected by today’s proposed exclusion. continue to manage their wastes under
has become a standard business EPA also solicits comment on whether the current hazardous waste regulatory

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system. These generators may legitimately and otherwise managed in hazardous secondary materials and
nevertheless wish to ship their a manner consistent with this recycling of regulated hazardous
hazardous waste to a reclamation regulation, the generator would not have secondary materials. The definition of
facility that is operating under this violated the terms of the exclusion. legitimate recycling is intended to apply
exclusion. In such situations, it is to all recycling of hazardous secondary
XI. Legitimacy: Proposed 40 CFR
possible that questions could arise as to materials, including:
the regulatory status of the hazardous 261.2(g) • Recyclable hazardous secondary
waste materials that are sent to such A. What Is the Purpose of Distinguishing materials that would be excluded from
reclamation facilities. Today’s proposed Legitimate Recycling From Sham Subtitle C regulation as wastes under
exclusion includes a provision Recycling? today’s proposed exclusion from the
(§ 261.4(a)(24)(vi)) that is intended to definition of solid waste.
Under the RCRA Subtitle C definition • Hazardous secondary materials that,
clarify that the reclamation facilities of solid waste, many existing hazardous
may still claim the exclusion in these because they are recycled, are excluded
secondary materials are not solid wastes or exempted from Subtitle C regulation
types of situations. The Agency requests
and thus, not subject to RCRA’s ‘‘cradle under other regulatory provisions (e.g.,
comment on this provision.
to grave’’ management system if they are see the exclusions in 40 CFR 261.2(e)
D. Enforcement recycled. The basic idea behind this and 261.4).
Under today’s proposal, hazardous construct is that recycling of such • Recyclable hazardous wastes that
secondary materials transferred for the materials often closely resembles are regulated under Subtitle C prior to
purpose of reclamation would be normal industrial manufacturing, rather recycling.
excluded from RCRA subtitle C than waste management. However, since Apart from the definition of solid
regulation, but would be subject to there can be significant economic waste implications, the concept of
certain conditions and restrictions. If a incentive to manage hazardous legitimate recycling also is used to
generator fails to meet any of the above- secondary materials outside the RCRA determine if a recycling unit is exempt
described conditions or restrictions on regulatory system, there is a clear from RCRA Subtitle C permitting
the management of hazardous secondary potential for some handlers to claim that (except for certain air emission
materials that are applicable to the they are recycling, when in fact they are standards) or a regulated waste
generator, then the materials would be conducting waste treatment and/or treatment or disposal unit, subject to
considered discarded by the generator disposal in the guise of recycling. To full RCRA Subtitle C permitting.
and would be subject to RCRA subtitle guard against this, EPA has long The concept of legitimate recycling is
C regulations from the point at which articulated the need to distinguish designed to be used in addition to and
the material was used and could not be between ‘‘legitimate’’ (i.e., true) in concert with more specific criteria or
reused without reclamation. If a recycling and ‘‘sham’’ recycling, requirements when they have been
reclaimer were to fail to meet any of the beginning with the preamble to the 1985 established in the regulations for
above-described pre-conditions or regulations that established the specific recycling activities or recycled
restrictions on the management of definition of solid waste (50 FR 638, hazardous secondary materials. Affected
hazardous secondary materials that are January 4, 1985) and continuing with parties should look to those regulatory
applicable to the reclaimer, then the the 2003 proposed codification of provisions, in addition to the definition
materials would be considered criteria for identifying legitimate of legitimate recycling, to ensure
discarded by the reclaimer and would recycling. compliance. For example, for a zinc
be subject to RCRA subtitle C regulation On October 28, 2003 (68 FR 61581– micronutrient fertilizer manufacturer
from the point at which the reclaimer 61588), EPA extensively discussed our who uses hazardous secondary
failed to meet a condition or restriction, position on the relevance of legitimate materials as a feedstock, the
thereby discarding the material. recycling to hazardous secondary consideration of hazardous constituents
Please note that the failure of the materials recycling in general and to the in the final product would involve an
reclaimer to meet conditions or redefinition of solid waste specifically. analysis of whether the operation is
restrictions does not mean the material We proposed to codify in the RCRA legitimate recycling and an analysis of
was considered waste when handled by hazardous waste regulations four whether the fertilizer meets the
the generator, as long as the generator general criteria to be used in contaminant limits specified in 40 CFR
can adequately demonstrate that he has determining whether recycling of 261.4(a)(21).
met his obligations, including the hazardous secondary materials is By ensuring that use of hazardous
obligation under proposed 40 CFR legitimate. In today’s action, we are secondary materials in an industrial
261.4(a)(24)(iv)(A) to make reasonable proposing two changes to the proposed process is legitimate recycling, the
efforts to ensure that the material will be legitimacy criteria and asking for public Agency seeks to ensure that when a
recycled legitimately and otherwise comment on those changes. The changes facility claims that it is recycling, the
managed in a manner that is protective are (1) a restructuring of the proposed hazardous secondary material is in fact
of human health and the environment. criteria, called factors in this proposal, being recycled and is contributing to a
A generator who met his reasonable to make two of them mandatory, while valuable product and is not being
efforts obligations could in good faith leaving the rest as factors to be treated or disposed of in the guise of
ship his excluded materials to a considered, and (2) additional guidance recycling.
reclamation facility where, due to on how the economics of the recycling
B. Definition of Legitimate Recycling in
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circumstances beyond his control, they activity should be considered in a

were released and caused legitimate recycling determination. the 2003 Proposal
environmental problems at that facility. As we explained in the 2003 proposal, In the 2003 proposed rule (68 FR
In such situations, and where the it is the Agency’s longstanding policy 61581–61588), EPA proposed codifying
generator’s decision to ship to that that, for activities to qualify as recycling specific regulatory provisions for
reclaimer is based on an objectively of hazardous secondary materials, they determining when hazardous secondary
reasonable belief that the hazardous must be legitimate. This principle materials are recycled legitimately.
secondary materials would be recycled applies to both recycling of excluded Previously, the criteria considered in

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14198 Federal Register / Vol. 72, No. 57 / Monday, March 26, 2007 / Proposed Rules

evaluating legitimate recycling have detailed analysis on how the definition formulation of EPA’s legitimacy factors,
been discussed extensively in preambles of legitimacy has evolved from earlier and therefore would limit future
to definition of solid waste rulemakings preamble and guidance statements, see evolution of them. Future changes to the
and, notably, in a 1989 memorandum the October 28, 2003 proposal (68 FR factors could become more difficult if
that laid out a single list of criteria to 61581–61588), where we provided a they have been codified. The Agency
be considered in evaluating legitimacy thorough explanation of how the believes there are many benefits to
(the ‘‘Lowrance Memo’’; OSWER proposed criteria related to existing codifying the legitimacy factors, as
directive 9441.1989(19), dated April 26, guidance. The Agency does not intend discussed in the 2003 proposal, but is
1989). to reiterate that analysis in today’s requesting comment on this issue.
The 2003 proposal consolidated the supplemental proposed rule, but will EPA is interested in comments about
criteria in that memorandum into four explain below the changes we are the benefits and drawbacks of codifying
criteria. EPA was clear in its expectation proposing to make from the 2003 legitimacy. In particular, EPA solicits
that most, if not all, legitimate recycling proposal. comments on current practices for
would conform with all four of the The 2003 proposal did result in assessing legitimacy, on any problems
criteria, but stated that the application comments on the Agency’s proposal to with current practices that may be
of those criteria would require some codify legitimacy and we are requesting alleviated by codifying the factors, and
subjective evaluation of the criteria in further comment on this issue. The on alternative means of addressing any
each specific situation to which they are Agency believes that there are many such problems.
being applied. In those cases where a benefits to codifying the legitimacy
legitimate recycling operation does not factors, as discussed in the 2003 C. Changes Proposed in This Action
meet all four criteria, the structure of the proposal. Many commenters, 1. New Structure of Legitimacy Factors
definition of legitimacy was designed to particularly the state regulatory
agencies, but some members of industry a. Design of the new structure. For the
be flexible enough to allow those
as well, agreed with EPA’s rationale for reasons discussed below, EPA is
situations to be deemed legitimate.
In general, the proposed regulatory codifying the legitimacy in part 261. proposing a new structure for the
language stated that legitimacy However, some commenters urged EPA definition of legitimate recycling. The
determinations must be made by to retain the existing legitimacy proposed design of the definition has
considering whether: guidance instead of codifying it in the two basic parts. The first part is
• The hazardous secondary material regulations. These commenters stated considered the core of legitimacy, which
to be recycled is managed as a valuable that the existing guidance provides a includes a requirement that the
commodity; more flexible way to assess whether an hazardous secondary material being
• The hazardous secondary material activity constitutes legitimate recycling recycled provides a useful contribution
provides a useful contribution to the and raised several concerns with the to the recycling process or to the
recycling process or to a product of the codification of legitimacy. The product of the recycling process and a
recycling process; commenters expressed concern that requirement that the product of the
• The recycling process yields a codification could alter the application recycling process is valuable. These two
valuable product or intermediate; of legitimacy. Although EPA intends to factors are fundamental to the definition
• The product of the recycling preserve current interpretations of of legitimacy and, therefore, an
process does not contain significant legitimacy, the commenters raised the industrial process that does not conform
amounts of hazardous constituents that concern that putting legitimacy in the to them would be considered sham
are not found in the analogous products regulations could eliminate the recycling (i.e., treatment or disposal in
or exhibit a hazardous characteristic not flexibility in the existing guidance for lieu of recycling).
exhibited by the analogous product. subjective evaluation and balancing of The second part of the proposed
The full proposed regulatory text can the factors when making a structure for legitimacy is a list of two
be found in the proposed rule (68 FR determination. EPA is requesting factors that must be considered, but not
61596). comment on this issue. necessarily met, when a recycler is
It is the Agency’s opinion that the In addition, the commenters raised making a legitimacy determination. EPA
concept of legitimate recycling proposed the concern that codification of believes that these factors are important
in the October 2003 proposal and in legitimacy would place too much in determining legitimacy, but has not
today’s supplemental proposal is not burden on the regulated entity to make proposed to make them mandatory
substantively different than our a showing that it is engaged in because the Agency believes that there
longstanding policy, as expressed in legitimate recycling. The Agency may be some situations in which a
earlier preamble and guidance believes that it has always been the legitimate recycling process does not
statements. As part of proposing responsibility of the regulated entity to conform to one of these factors.
regulatory provisions on the legitimacy ensure, and if requested, to show that its Therefore, EPA is proposing that the
of recycling, we are simply reorganizing, recycling is legitimate. EPA expects that management of the hazardous secondary
streamlining, and clarifying the existing regulated entities have evaluated and material and the presence of hazardous
legitimacy principles. We believe that will continue to evaluate their recycling constituents in the product of the
the regulatory definition of legitimate operations using these factors and will recycling activity be factors that must be
recycling, when applied to specific reach their conclusions about legitimacy considered in the overall legitimacy
recycling scenarios, will result in without prior approval by an overseeing determination, but not mandatory
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determinations that are consistent with agency. However, EPA is requesting requirements that must be met as part of
the earlier policy. Therefore, we comment on whether codifying the a definition of legitimacy. The full
generally do not see the need for the factors in today’s proposal would place proposed regulatory text for the
regulated community or overseeing increased burden on the regulated entity legitimacy portion of this supplemental
agencies to revisit previous and, if so, what the reasons are for such proposal is found in 40 CFR 261.2(g).
determinations and expect any written increased burden. Finally, the concern b. Why EPA is proposing this change.
determinations from these agencies to, has been expressed that codification In the 2003 proposed rule, the
in effect, be grandfathered. For a more would fix into place a specific regulatory text for legitimacy was made

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up of paragraph (g) of proposed section and (ii) to give more details on how the ‘‘virgin’’ solvent (‘‘Solvent X’’) as a
261.2, which stated that hazardous Agency defines these critical concepts. process ingredient, and generates a
secondary materials that are not EPA has determined that the other spent solvent that is identical to the
legitimately recycled are discarded and, criteria in the 2003 proposal, criterion 1 virgin solvent, except that it has become
therefore, solid wastes. Paragraphs (1) and criterion 4, are still important contaminated with a relatively small
through (4) then listed the four concepts in making legitimacy amount of a different solvent (‘‘Solvent
proposed legitimacy criteria after a determinations, but should not be Y’’). Solvents X and Y are assumed to
statement that legitimacy mandatory. Instead, today’s proposed have essentially the same toxicity and
determinations must be made by regulations state these two factors need solvent properties, and both chemicals
considering them. Proposed criteria 1 to be considered in making a would be considered ‘‘hazardous
and 2 focused on the hazardous determination as to the overall constituents’’ under RCRA for waste
secondary material being recycled and legitimacy, which are found in identification purposes. In this example,
criteria 3 and 4 focused on the product 261.2(g)(3). In stating these factors need the spent material (i.e., the mixture of
of the recycling process. to be considered, EPA expects that solvents ‘‘X’’ and ‘‘Y’’) is no longer
In the 2003 proposed rule, the anyone making a legitimacy useful to the generator in making
application of the four criteria to a determination will look carefully at how pharmaceuticals. It would potentially be
recycling process was proposed to their hazardous secondary materials are useful, however, to a manufacturer of
require some evaluation and balancing. managed as compared to analogous raw oil-based paints, as a substitute for
That is, although the Agency expected materials and at the hazardous virgin Solvent X. If the spent material
that most legitimate recycling practices constituents in their products. was used in this manner by the paint
would conform to all the pieces of However, these two factors would not manufacturer, the resulting paint
legitimacy, it was aware that there be mandatory because EPA and products could contain significant
would be some cases in which commenters were able to identify concentrations of a hazardous
legitimate recycling may not conform to situations in which a recycling scenario constituent (i.e., ‘‘Solvent Y’’) not found
appears to be legitimate, but one of in analogous products made from virgin
one or more of the criteria. As in the
these factors was not met in the way Solvent X. Thus, this recycling practice
Lowrance Memo, the structure of
EPA described because that factor is not could be determined as not meeting
legitimacy allowed circumstances in
applicable or relevant to the materials today’s proposed legitimacy factor that
which certain criteria weighed more
being recycled or to the particulars of addresses ‘‘toxics along for the ride.’’
heavily than others in the final
the recycling process. For example, it is Given that the paint products made
legitimacy determination.
possible that a solid, powdery from spent (i.e., secondary) materials
Analysis of public comment on the hazardous secondary material could be
2003 proposal shows that there was would essentially have the same solvent
shipped to a recycling facility in properties and potential environmental
general agreement from industry, states, flexible, woven ‘‘supersack’’ containers,
and other commenters that recycling hazards as paint made from virgin
where the supersacks are then stored at solvents, it might be reasonable to
cannot be legitimate if the hazardous the facility in a well-designed,
secondary material being recycled does determine that the overall recycling
designated indoor containment area and practice was legitimate. Again, because
not provide a useful contribution to the then legitimately recycled. If, however,
process or to the product and if the of situations like this, we believe that
an analogous raw material (i.e., with
recycling process does not yield a this factor is best expressed as a
similar physical and chemical
product or intermediate that is valuable consideration in making legitimacy
characteristics) was typically received
to someone. Certain commenters determinations, rather than as a
and stored at the same facility in sealed
requested that EPA provide more mandatory requirement.
steel drums, one could conclude that
information on how it defines the terms At the same time, it should be noted
the hazardous secondary material was
used in the regulation and there was that ‘‘toxics along for the ride’’ is an
not managed ‘‘in a manner consistent
some disagreement with the specifics important consideration when the toxic
with the analogous raw material.’’ In
laid out in the preamble. Some constituents affect either the
this case, therefore, a strict finding
commenters, particularly several states, performance of the product or cause
could be made that this factor was not
felt that all four criteria should be adverse environmental or health effects.
met, even though the differences in
mandatory requirements. However, For example, elevated levels of lead in
storage practices do not affect
almost all commenters agreed that foundry sand would not be a problem
protectiveness. In evaluating the
proposed criteria 2 and 3 should be met when the sand is re-used in the foundry
legitimacy of a recycling process in
in order for recycling to be considered situations like this, EPA does not molds, but it has been a significant
legitimate. believe that such a strict finding should problem when the sand was sold as
EPA agrees with the importance of necessarily be the determining factor. children’s play sand.4 In such a case, the
criteria 2 and 3 and, for this proposal, We are proposing that this factor not be high levels of lead would disqualify this
has decided that these two concepts are, mandatory in making legitimacy use from being considered legitimate
in fact, at the very core of what it means determinations in order to allow recycling.
to recycle legitimately. Therefore, flexibility for these types of situations. Under this proposed structure, if a
today’s proposed regulatory language For similar reasons, the Agency is also facility making a legitimacy
states in 40 CFR 261.2(g)(2) that proposing that the factor which determination decides that one of these
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‘‘Legitimate recycling must involve a addresses ‘‘toxics along for the ride’’ be 4 One of the profiles in the docket for today’s
hazardous secondary material that a consideration in making legitimacy proposal shows that from 1997–1998, a
provides a useful contribution to the determinations, rather than a mandatory horticultural nursery purchased approximately 375
recycling process or to a product of the requirement. One illustration as to why tons of foundry sand which contained lead above
recycling process and the recycling some flexibility may be needed in the regulatory limits, that was then bagged and sold
as play sand to approximately 40 different retailers.
process must produce a valuable assessing this proposed factor could be (U.S. EPA, An Assessment of Environmental
product or intermediate.’’ This a hypothetical situation in which a Problems Associated with Recycling of Hazardous
statement is followed by paragraphs (i) pharmaceutical manufacturer uses a Secondary Materials, Appendix 2).

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two factors to be considered is, in fact, and help determine whether the received, or whether it is likely that
not applicable to the recycling process, recycling operation is legitimate. significant amounts of unrecycled
we recommend that the facility Positive economic factors would be a material are likely to be accumulated
document why the recycling process is strong indication of legitimate recycling, and then abandoned when the facility
legitimate, even though it may not meet whereas negative economic factors closes.8 Any bona fide sources of
one or more of the factors to be would be an indication that a further revenues would be included in this
considered. look at the recycling operation may be consideration, such as payments by
EPA believes that the new structure warranted in assessing its legitimacy. generators to recyclers for accepting
for the definition of legitimacy will While not specifically addressed in the hazardous secondary materials and
clarify what the Agency believes are the proposed regulations, consideration of subsidies supporting recycling.
most important elements of legitimacy economics could be a factor in However, in order to have some level of
and requests comment on this structure informing whether the hazardous confidence that beneficial products are
for making legitimacy determinations secondary material input provides a or will be produced; we believe that at
related to hazardous secondary material useful contribution and whether the least some portion of the revenues
recycling. product of the recycling operation is of should be from product sales (or savings
2. Consideration of Economics in value. due to avoided purchases of products if
Consideration of the economics of a the hazardous secondary materials are
Legitimate Recycling
particular recycling operation can used directly by the recycler), consistent
EPA also notes that the economics of greatly assist in making legitimacy with the hazardous secondary material
the recycling activity may be relevant to determinations. Appropriate being recycled to make a useful product.
legitimate recycling determinations. information for this consideration could Two examples illustrate this concept.
Consideration of economics has long include an understanding of the major A recycling operation that generates
been a part of the Agency’s concept of costs, revenues, and economic flows for revenues from sales of recycled
legitimacy, as evident in the Lowrance a recycling operation. Information that products that greatly exceed the costs of
Memo and earlier preamble text (50 FR may be useful could include (1) the the operation is likely to quickly process
638, January 4, 1985 and 53 FR 522, amount paid or revenue generated by the hazardous secondary materials it
January 8, 1988) [see also American the recycler for recycling hazardous receives into useful products. A very
Petroleum Institute v. EPA (‘‘API II’’), secondary materials; (2) the revenue different example is an operation that
216 F.3d 50, 57–58 (DC Cir. 2000)]. In generated from the sale of recycled has, relative to its revenues, large
addition, in our October 2003 proposal, products; (3) the future cost of inventories of unsold product and large
EPA proposed that consideration of processing existing inventories of future liabilities in terms of stocks of
economics be part of the second hazardous secondary materials and (4) unprocessed hazardous secondary
legitimacy criterion (i.e., whether the other costs and revenues associated material. This operation would draw
hazardous secondary material provides with the recycling operation. The closer attention to determine whether it
a useful contribution). In their economics of the recycling transaction is engaged, in essence, in treatment and/
comments to the October 2003 proposal, may be more of an issue when or abandonment in the guise of
states and some other stakeholders hazardous secondary materials are sent
supported including a consideration of recycling.
to a third-party recycler, although where When the economics of a recycling
economics when making legitimacy the hazardous secondary material being operation is similar to that of
determinations, although they also recycled is under the control of the manufacturing using raw materials, the
expressed a need for clarification of how generator, the generator must still be Agency believes that such an operation
economics should inform legitimacy able to show that the hazardous
determinations. Today’s proposal, is likely to be legitimate. That is, the
secondary material is, at a minimum, recycler pays for hazardous secondary
unlike the October 2003 proposal, does providing a useful contribution and
not codify specific regulatory language materials as a manufacturer would pay
producing a valuable product. for raw materials, the recycler sells
on economics, but offers further The basic economic flows can suggest
guidance and clarification on how products from the recycling process as
whether the recycling operation will a manufacturer would sell products of
economics may be considered in making process inputs, including hazardous
legitimacy determinations. The Agency manufacturing, and revenues equal or
secondary materials, and produce exceed costs. In this scenario, hazardous
believes that we are clarifying how products over a reasonable period of
economics has traditionally been secondary materials are valuable (i.e.,
time, recognizing that there will be lean the recycler is willing to pay for them)
implemented via the Lowrance Memo and slow times.6 Thus, processing
guidance, and therefore, does not and make a useful contribution to a
inputs that produce legitimate products valuable recycled product (otherwise
believe the consideration of economics is a threshold for legitimate recycling. A
as explained below impacts existing the recycler would not be willing to pay
general accounting of the major costs, for them). In addition, the sale of the
legitimacy determinations.5 revenues, and economic flows for a
Specifically, EPA believes that products of recycling demonstrates their
recycling operation over a reasonable value.
consideration of the economics of a period of time 7 can provide information
recycling activity can be used to inform However, we also recognize that the
to consider whether recycling is likely economics of many legitimate recycling
to continue at a reasonable rate, operations that utilize hazardous
5 Today’s supplemental proposal would make the

‘‘useful contribution’’ factor a central, or

compared to the rate at which inputs are secondary materials differs from the
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mandatory, part of the definition of legitimacy economics of more traditional

6 As an example, metal prices fluctuate and at
(along with the ‘‘valuable product’’ factor). manufacturing operations. An
However, we do not believe that consideration of times are below the cost of processing. However,
economics should also be considered a mandatory recovery of metals is usually legitimate recycling. understanding of the economics of these
factor. Nevertheless, the economics of a recycling 7 Where the hazardous secondary material being

activity is a consideration because it can assist in reclaimed is under the control of the generator, the 8 In general, overaccumulation of hazardous

informing the useful contribution and valuable recycling operation is generally part of an overall secondary materials is subject to the speculative
product factors of the definition of legitimate manufacturing operation, which would be part of accumulation provisions, as defined in 40 CFR
recycling. the evaluation. 261.1(c) (8).

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operations can be useful in evaluating by the inputs, including hazardous recycler has acquired a large stock of
the legitimacy of a recycling operation. secondary materials. In this situation, hazardous secondary material because
For example, many recyclers are paid by recyclers may also have an increased the price was unusually low or perhaps
generators to accept hazardous economic incentive to over-accumulate the material is generated episodically
secondary materials. Generators may be or overuse hazardous secondary and the recycler has few opportunities
willing to pay recyclers because they materials, or to manage them less to collect it.
can save money if the recycling is less carefully than one might manage more When recycling is conducted under
expensive than disposing of the valuable inputs. Additionally, if there is the control of the generator, the recycler
hazardous secondary materials in little competition in the recycling may not account formally for some of
landfills or incinerators. Another market, and/or if acceptance fees seem the costs and savings of the operation.
example is a scenario where recyclers to be set largely to compete with the Still, when deciding whether to
receive subsidies which may be relative costs of alternative disposal undertake or continue the recycling
designed to develop recycling options rather than to reflect the quality operation or to utilize alternative
infrastructure and markets, remove or usefulness of the input to the outside recycling or disposal options,
problematic materials from disposal, or recycling operation, this may also the recycler will evaluate basic
achieve other benefits of recycling. For suggest a closer look at ‘‘useful economic factors as a part of doing
example, the recycling of electronic contribution.’’ business. Also, the recycler would be
materials can be legitimate even though A relatively low proportion of likely to account for the costs of virgin
the recycler is often subsidized for revenues coming from sales of recycled materials avoided by using hazardous
processing the material. Both of these products compared to payments by secondary materials. Similarly, sales of
examples involve situations that are generators may suggest the need for recycled products under the control of
different from manufacturing using raw more consideration of the ‘‘valuable the generator that are sold to an external
materials, but as long as they are product’’ criterion. It is possible that it market may be used to evaluate the
appropriately considered, an analysis of is appropriate for product sales valuable product criterion. Thus, the
the economics of these operations can revenues to be dwarfed by acceptance recycler should have available the basic
assist in determining the legitimacy of fee revenues because markets for the information necessary to consider the
the recycling. particular products are highly economics of an on-site or internal
Any analysis of the economics of a competitive or because high alternative recycling operation for purposes of
recycling operation should recognize disposal costs allow for high acceptance making a legitimacy determination. We
that a recycler may be able to charge fees. However, relatively low sales recognize, however, that an evaluation
generators and still be a legitimate revenues could also point to a review of of the economic structure of a recycling
recycling operation properly excluded product sales prices to see whether they operation under the control of the
from regulation. In short, because these are lower than other comparable generator is likely to be less rigorous
hazardous secondary materials are products, products are being stockpiled than that of a typical offsite commercial
hazardous wastes if disposed of, rather than sold, or very little product recycling operation.
typically the generators’ other is being produced relative to the amount We request comment on how the
alternative management option already of inputs to the recycling operation. economics of the recycling activity
carries a cost that is based on the These could be possible indicators that should be considered in making overall
existing market for hazardous waste the recycled product may not be legitimate recycling determinations
transportation and disposal. Hence, valuable and, thus, sham recycling may consistent with prior legitimacy
unless there is strong competition in be occurring. determinations under the Lowrance
recycling markets or the hazardous A consideration of the future cost of Memo. We are specifically interested in
secondary materials are extremely processing or alternatively managing whether economics should simply be a
valuable, a recycler may be able to existing inventories of hazardous consideration that informs legitimacy
charge generators simply because secondary material inputs also can overall or whether the economics of
alternative disposal options cost more. inform the legitimacy determination. recycling should be a separate factor,
While the generator’s objective may be When hazardous secondary materials
including regulatory language, to
finding the least cost alternative for make a significant useful contribution to
consider. In addition, we are interested
getting rid of the hazardous secondary the recycling activity, a recycler will
in hearing from both the regulated
material, the recycling may well be a have an economic incentive to process
community and the States about other
legitimate recycling operation. input materials relatively quickly or
ways in which consideration of
Recognizing that such a dynamic efficiently, rather than to maintain large
economics can inform and support
exists can assist those making inventories. While recyclers often need
determinations of legitimate recycling
determinations in evaluating legitimacy to acquire a sufficient amount of a
for both on-site and offsite recycling.
of the recycling operation. For example, hazardous secondary material to make it
if a recycler is charging generators fees economically feasible to recycle, there XII. Petitions for Non-Waste
(or receiving subsidies from elsewhere) should be little economic incentive to Classification: Proposed 40 CFR
for taking hazardous secondary material over-accumulate such materials that 260.30(d), 260.30(e), 260.30(f), 260.34
and receives a far greater proportion of make a useful contribution. Overly large
its revenue from acceptance fees than accumulations of input materials may A. What Is the Intent of This Provision?
from the sale of its products, both the indicate that the input materials are not The intent of the non-waste
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useful contribution and the valuable providing a useful contribution or that determination petition process is to
product factors may warrant further the recycler is increasing its future costs provide petitioners with an
review, unless other information would of either processing or disposing of the administrative procedure for receiving a
indicate that such recycling is material, and hence may be faced with formal determination that their recycled
legitimate. Fees and subsidies could an unsound recycling operation in the hazardous secondary material is not
indicate that the economic situation future. Again, it is important to weigh discarded. This process would be
allows the recycler to charge high fees, this factor against other considerations. available in addition to the solid waste
regardless of the contribution provided For example, it is possible that the exclusions proposed today. Once a non-

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waste determination has been granted, approach. Instead, the Agency has recognizing that a specific hazardous
the hazardous secondary material would decided to link the rulemaking more secondary material is not a solid waste.
not be subject to the restrictions and explicitly to the concept of ‘‘discard’’ EPA is proposing four criteria for
conditions that the exclusions discussed which underlie those decisions. EPA making this ‘‘non-waste determination’’
elsewhere in today’s supplemental believes that today’s supplemental that a specific hazardous secondary
proposal would include (e.g., proposal excludes from the definition of material is reclaimed in a continuous
prohibition on speculative solid waste hazardous secondary industrial process. The first is the extent
accumulation, or, for the transfer-based materials recycled in a continuous that the management of the hazardous
exclusion, recordkeeping, reasonable industrial process by virtue of the secondary material is part of the
efforts, financial assurance, storage determination that such materials that continuous production process. At one
standard and export notice and are legitimately recycled under the end of the spectrum, if the material is
consent). control of the generating facility and not handled in a manner identical to virgin
The petition process would be speculatively accumulated are not feedstock, then it is fully integrated into
voluntary. Facilities may choose to the production process. At the other end
discarded and therefore not solid waste.
continue to self-implement any of the spectrum, materials indisputably
applicable waste exclusions and, for the However, production processes can discarded prior to being reclaimed are
vast majority of cases, where the vary widely from industry to industry. not a part of the continuous primary
regulatory status of the material is In the October 2003 proposal, we production process. (‘‘AMC II’’),
evident, self-implementation will still attempted to define ‘‘recycled in a 907 F. 2d 1179 (DC Cir. 1990) (listed
be the most appropriate approach. In continuous industrial process’’ using wastes managed in units that are part of
addition, facilities may continue to the NAICS codes. Based on the wastewater treatment units are
contact EPA or the authorized state comments we received, we determined discarded materials (and solid wastes),
asking for informal assistance in making that identifying which hazardous especially where it is not clear that the
these types of waste determinations. secondary materials are recycled within industry actually reuses the materials).
However, for cases where there is a continuous industrial process presents For cases that lie within the spectrum,
ambiguity about whether a hazardous difficulties as courts have, at least the petitioner would need to provide
secondary material is a solid waste, the implicitly, acknowledged.9 Even if EPA sufficient information about the
formal petition process will provide had more specific information on some production process to demonstrate that
regulatory certainty for both the facility hazardous secondary materials, it still the management of the hazardous
and the implementing Agency would be impossible to know if the secondary material is an integral part of
EPA anticipates that most generators Agency has addressed every possibility. the production process and is not waste
who recycle their hazardous secondary Thus to determine whether an treatment.
materials would use either the self- individual hazardous secondary The second criterion for making this
implementing exclusions proposed material is recycled in a continuous non-waste determination is the capacity
today or existing exclusions. We request industrial process, and therefore not a of the production process to use the
comment on how frequently the non- solid waste, EPA may need to evaluate hazardous secondary material in a
waste determination process is likely to case-specific fact patterns, which is best
reasonable timeframe and ensure that it
be used and how best to minimize the will not be abandoned (for example,
done through a case-by-case procedure.
burden to the authorized states and to based on past practices, market factors,
We are titling this procedure a ‘‘non-
the regulated community. the nature of the material, and any
The Agency is proposing three types waste determination’’ to acknowledge
contractual arrangements).
of non-waste determinations: (1) For that this procedure constitutes an
Abandonment of stockpiled recyclable
hazardous secondary materials recycled administrative process for formally hazardous secondary materials is one
in a continuous industrial process, (2) way that discard can occur at recycling
9 See, for example the ABR decision, where the
for hazardous secondary materials operations and is one of the major
Court acknowledged that the term, ‘‘discard,’’ could
indistinguishable in all relevant aspects be ‘‘ambiguous as applied to some situations, but causes of environmental problems. As
from a product or intermediate, (3) for not as applied to others,’’ and particularly cited the indicated in the recycling studies, 69 of
hazardous secondary materials that is difficulty in examining the details of the many the 208 incidents of environmental
recycled under the control of the processes in the mineral processing industry. 208 damage involve abandonment of the
F.3d at 1056. While the court overturned EPA’s
generator, such as through contracts regulations for casting too wide a net over hazardous secondary material as the
similar to the tolling arrangements continuous industrial processes, it acknowledged primary cause of damage. For today’s
proposed in section IX of today’s that there are large number of processes, some of proposed exclusions for hazardous
preamble. which may be continuous and some of which may secondary materials recycled under the
not. Determining what is a continuous process in
the mineral processing industry, according to the
control of the generating facility and
B. Non-Waste Determination for hazardous secondary materials
Court, would require examination of the details of
Hazardous Secondary Material Recycled the processes and does not lend itself, well, to transferred to another facility for
in a Continuous Industrial Process broad abstraction. Specifically, the court stated: recycling, EPA is proposing speculative
As discussed earlier in today’s Some mineral processing secondary materials
covered under the Phase IV Rule may not proceed
accumulation (as defined in 40 CFR
supplemental proposal, court decisions directly to an ongoing recycling process and may 261.1(a)(8)) as the method for
have made it clear that hazardous be analogous to the sludge in AMC II. The parties determining when a material is unlikely
secondary material that is recycled in a have presented this aspect of the case in broad to be recycled and therefore may end up
abstraction, providing little detail about the many
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continuous industrial process is not being discarded via abandonment. For

processes throughout the industry that generate
discarded and therefore, not a solid residual material of the sort EPA is attempting to the non-waste determination, the
waste. The October 2003 proposed rule regulate under RCRA, 208 F.3d at 1056. petitioner would not necessarily need to
attempted to parse the language of some In the case of today’s supplemental proposal, demonstrate that the material would not
of those decisions in order to identify which applies across industries, there are far larger be accumulated speculatively per 40
and more diverse processes. While the Agency
when material destined for recycling is believes it is proposing a reasonable set of
CFR 261.1(a)(8), but he must provide
clearly not a solid waste. As explained principles, they must still be applied to the details sufficient information about the material
earlier, we are not finalizing that of the industrial processes in question. and the process to demonstrate that the

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hazardous secondary material will in for recycling in another industry are not released to the air, land or water at
fact be reclaimed in a reasonable automatically discarded. In the Safe significantly higher concentrations from
timeframe and will not be abandoned. Foods case, the Court stated ‘‘Nobody either a statistical or from a health and
EPA is not proposing an explicit questions that virgin * * * feedstocks environmental risk perspective than
definition of ‘‘reasonable timeframe’’ are products rather than wastes. Once would otherwise be released by the
because such a timeframe would vary one accepts that premise, it seems production process. The Agency
according to the material and industry eminently reasonable to treat [recycled] believes that to the extent that the
involved, and therefore determining this materials that are indistinguishable in hazardous constituents are a
timeframe should be made on a case- the relevant respects as products as continuation of the original hazardous
specific basis. However, an applicant well.’’ 350 F.3d at 1269. In most cases, secondary material, their release to the
may still choose to use the speculative hazardous secondary materials that are environment is a possible indicator of
accumulation timeframe as a default if indistinguishable from products are discard. The Agency recognizes that
it wishes. unambiguously excluded from solid normal production processes also result
The third criterion for this non-waste waste regulation under 40 CFR 261.2(e). in a certain level of releases and, in
determination is whether the hazardous However, there may be some instances evaluating this criteria, would not deny
constituents in the hazardous secondary which would benefit from a non-waste a petition if the increase in releases is
material are recycled rather than determination similar to that proposed not significant from either a statistical or
released to the air, land or water at today for hazardous secondary materials a health and environmental risk
significantly higher concentrations from reclaimed in a continuous industrial perspective. However, when high
either a statistical or from a health and process. EPA is proposing four criteria concentrations of the constituents that
environmental risk perspective than for making a non-waste determination make the hazardous secondary material
would otherwise be released by the for hazardous secondary materials of regulatory concern are released to the
primary production process. To the indistinguishable in all relevant aspects environment rather than reclaimed, then
extent that the hazardous constituents from a product or intermediate. that material (or at least the portion of
are a continuation of the original The first criterion for this non-waste the material that is of most concern) is
hazardous secondary material, their determination is consideration of likely not being handled as a commercial
release to the environment is an markets for the hazardous secondary product or intermediate.
indicator of discard. The Agency material (for example, based on the As with the non-waste determination
recognizes that normal production current positive value of the material, for hazardous secondary materials
processes also result in a certain level of stability of demand, and any contractual reclaimed in a continuous industrial
releases and, in evaluating this criteria, arrangements). This evaluation of process, the fourth and final criterion
would not deny a petition if the increase market participation is a key element for for this non-waste determination
in releases is not significantly different determining whether companies view includes any other relevant factors that
from either a statistical or risk and handle these hazardous secondary demonstrate the material is not
perspective. However, when materials like products rather than like discarded. This ‘‘catch-all’’ criterion is
unacceptably high levels of the negatively-valued wastes. EPA’s report intended to allow the applicant to
constituents that make the hazardous on how market incentives affect the provide any case-specific information it
secondary material of regulatory management of hazardous secondary deems important in making the case that
concern are released to the environment materials indicates that both high value its material is not discarded.
rather than recycled, then that material and stable markets are strong incentives EPA requests comment on these
(or at least the portion of the material to refrain from over-accumulating criteria, as well as any other criteria that
that is of most concern) is not in fact recyclable materials, thus maximizing may be relevant for making this non-
being ‘‘reused within an ongoing the likelihood that the hazardous waste determination.
industrial process.’’ secondary materials will be recycled D. Non-Waste Determination for
The fourth and final criterion for this and not abandoned. Hazardous Secondary Material
non-waste determination includes any The second criterion for this non-
Reclaimed Under the Control of the
other relevant factors that demonstrate waste determination is the chemical and
Generator Via a Tolling Arrangement or
the hazardous secondary material is not physical identity of the hazardous
Similar Contractual Arrangement
discarded. This ‘‘catch-all’’ criterion is secondary material and whether it is
intended to allow the applicant to comparable to commercial products or As discussed earlier in today’s
provide any case-specific information it intermediates. This ‘‘identity principle’’ preamble, EPA is proposing that
deems important in making the case that is a second key factor that the Court in hazardous secondary materials recycled
its material is not discarded and Safe Food found useful in determining via a specific type of tolling (or
therefore not a solid waste. whether a material is indistinguishable contractual) arrangement are not
EPA requests comment on these from a product. It is important to note discarded and therefore are not solid
criteria, as well as any other criteria that that the identity of a material can be waste, and is requesting comment if
may be relevant for making this non- ‘‘comparable’’ to a product without other types of tolling arrangements
waste determination. being identical. However, to qualify for would also not involve discard. Because
a non-waste determination, any the generator maintains control over the
C. Non-Waste Determination for differences between the hazardous recycled hazardous secondary material
Hazardous Secondary Material secondary material in question and and it is legitimately recycled, the
Indistinguishable in All Relevant
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commercial products or intermediates hazardous secondary material would

Aspects From a Product or Intermediate must be insignificant from either a not be considered discarded. By
Although the courts have made clear statistical or from a health and maintaining control over, and potential
that hazardous secondary materials environmental risk perspective. liability for, the recycling process, the
recycled within a continuous industrial The third criterion for this non-waste generator ensures that the materials are
process are not discarded and therefore determination is whether the hazardous not discarded. See ABR 208 F.3d at
not solid waste, they have also said that constituents in the hazardous secondary 1051 (‘‘Rather than throwing these
hazardous secondary materials destined materials are recycled rather than materials [destined for recycling] away,

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14204 Federal Register / Vol. 72, No. 57 / Monday, March 26, 2007 / Proposed Rules

the producers saves them; rather than deems important in making the case that decision for 30 days, and also may hold
abandoning them, the producer reuses its material is not discarded. a public hearing. The Administrator
them.’’). EPA requests comment on these would issue a final decision after receipt
However, the large variety of criteria, as well as any other criteria that of comments and after the hearing (if
contractual arrangements may preclude may be relevant for making this non- any). If the application is denied, the
EPA from identifying all possible waste determination. facility may still pursue a solid waste
arrangements that clearly do not involve variance or exclusion (for example, one
E. Scope and Eligibility
discard. For this reason, the Agency also of the solid waste variances under 40
is proposing that generators may seek a As with any solid waste CFR 260.31 or solid waste exclusions
non-waste determination for tolling or determination that involves recycling, under 40 CFR 261.4). EPA also may
other contractual arrangements not hazardous secondary materials choose to specify the Regional
covered by the proposed exclusion presented for a non-waste determination Administrator as the appropriate level
discussed in section IX of today’s must be legitimately recycled. In other of review for this process.
preamble. words, the hazardous secondary As discussed in more detail in section
The first criterion for this non-waste material must provide a useful XV of today’s supplemental proposal,
determination would be whether the contribution to the recycling process or under section 3006 of RCRA, EPA
generator retains ownership and to a product of the recycling process, would authorize states to administer the
responsibility via a contract or other and the recycling process must produce non-waste determinations as part of
mechanism for the hazardous secondary a valuable product or intermediate. For their base RCRA program. Because
materials and the residuals that result further discussion of legitimacy and the states are not required to implement
from their recycling. Assumption of factors to be considered, see section XI Federal requirements that are less
responsibility of both the hazardous of today’s preamble. stringent or narrower in scope than
secondary materials and the residuals In addition, non-waste determinations current requirements, authorized states
that would result from their recycling is are limited to reclamation activities and are not required to adopt the non-waste
a key indication that the generator is not would not apply to recycling of determination process, and ordinarily
abandoning the hazardous constituents ‘‘inherently waste-like’’ materials (40 the proposed provision could not go
that would have caused the hazardous CFR 261.2(d)), recycling of materials into effect in an authorized state until it
secondary materials to have been that are ‘‘used in a manner constituting does choose to adopt it. However,
hazardous waste had they been disposal,’’ or ‘‘used to produce products because the non-waste determination
discarded. that are applied to or placed on the process is a formalization of
The second criterion for this non- land,’’ (40 CFR 261.2(c)(1)) and determinations that states may already
waste determination is whether the ‘‘burning of materials for energy perform on an ad hoc basis, EPA is
hazardous constituents in the hazardous recovery’’ or ‘‘used to produce a fuel or proposing to allow states that have not
secondary materials are recycled rather otherwise contained in fuels’’ (40 CFR yet formally adopted the proposed
than released to the air, land or water at 261.2(c)(2)). Today’s supplemental regulation in 40 CFR 260.34 to
significantly higher concentrations from proposal is not intended to affect how participate in non-waste determinations
either a statistical or from a health and these recycling practices are regulated. if the following conditions are met: (1)
environmental risk perspective than However, we request comment on The state determines that the hazardous
would otherwise be released by the whether such practices should be secondary material meets the criteria in
production process. The Agency eligible for the case-specific non-waste either paragraph (b), (c) or (d) of
believes that to the extent that the determinations. proposed section 40 CFR 260.34; (2) the
hazardous constituents are a state requests EPA to review its
F. Petition Process
continuation of the original hazardous determination; and (3) EPA approves
secondary material, their release to the The petition process for the non-waste the state determination.
environment is a possible indicator of determination would be the same as that
discard. The Agency recognizes that for the solid waste variances found in 40 G. Enforcement
normal production processes also result CFR 260.31. In order to obtain a non- If a regulatory authority determines
in a certain level of releases and, in waste determination, a facility that that a hazardous secondary material is
evaluating this criteria, would not deny manages a hazardous secondary not a solid waste via the proposed
a petition if the increase in releases is material that would otherwise be petition process, the material is not
not significant from either a statistical or regulated under 40 CFR 261 as either a subject to Subtitle C hazardous waste
a health and environmental risk solid waste, or as a conditionally regulations. However, as part of this
perspective. However, when high excluded waste, must apply to the process, the applicant has an obligation
concentrations of the constituents that Administrator or the authorized state to submit, to the best of its ability,
make the hazardous secondary material per the procedures described in 40 CFR complete and accurate information. If
of regulatory concern are released to the 260.33. EPA proposes to amend section the information in the application is
environment rather than reclaimed, then 260.33 to apply to non-waste found to be incomplete or inaccurate
that material (or at least the portion of determinations also. The application and, as a result, the hazardous
the material that is of most concern) is must address the relevant criteria secondary material does not meet the
not being recycled under the control of (discussed in further detail above). The criteria for a non-waste determination,
the generator. Administrator would evaluate the then the material may be subject to
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As with the other types of non-waste petition and issue a draft notice RCRA Subtitle C regulation and EPA or
determinations, the final criterion for tentatively granting or denying the the authorized state could choose to
this non-waste determination includes application. Notification of this bring an enforcement action under
any other relevant factors that tentative decision will be provided by RCRA section 3008(a). Moreover, if the
demonstrate the material is not newspaper advertisement or radio petitioner is found to have knowingly
discarded. This ‘‘catch-all’’ criterion is broadcast in the locality where the submitted false information, then it also
intended to allow the applicant to facility is located. The Administrator may be subject to criminal penalties
provide any case-specific information it would accept comment on the tentative under RCRA section 3008(d).

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A special situation occurs when a exclusion could apply and, if so, effective until the owner or operator
material meets all the criteria at the time whether that entity should be required received written approval by the
the determination is made, but, as to document the choice made. implementing agency. The
circumstances change, ceases to meet implementing agency would approve
B. Permitted Facilities
the criteria. In particular, proposed the permit modification so long as the
criteria 40 CFR 260.34(b)(2) and 40 CFR Facilities that currently have RCRA owner or operator complied with the
260.34(c)(1) depend at least in part on permits or interim status, and are procedural requirements of section
market conditions, which can change managing hazardous wastes that would 270.42(a), that the operations met the
over time. EPA requests comments on become excluded under this rule, could conditions of the exclusion, and
whether there should be as part of the be affected by today’s supplemental adequately demonstrated that the unit
petition process an obligation for the proposal in a number of ways. Under did not manage non-excluded
petitioner to inform the Agency when one scenario, a facility that manages a hazardous wastes. EPA believes that
circumstances change, and whether variety of hazardous waste materials, Class 1 permit modifications with
there should be a formal mechanism for including some hazardous secondary approval are appropriate in this case
the Agency to revoke a determination if materials that would become excluded even though the proposal would
the change in circumstances results in under this rule, would be affected only establish a self-implementing exclusion,
the hazardous secondary material no to the extent that certain units or which does not require a regulatory
longer meeting the criteria for a non- processes at the facility would no longer agency’s approval. In this case, the unit
waste determination. be subject to hazardous waste in question has been through a formal
regulations. A somewhat different permit process, and the Agency believes
XIII. Effect of This Proposal on Other scenario could involve a facility whose it appropriate that the regulatory agency
Programs hazardous secondary materials would have the opportunity for a brief review
A. Other Exclusions all become excluded from regulation before the permit conditions it imposed
when this rule takes effect (i.e., the are removed. For example, the unit
In the October 2003 proposal, EPA facility is no longer a hazardous waste
proposed a number of specific might be intimately tied into other
management facility). waste management operations at the
‘‘conforming changes’’ to existing For permitted facilities that would be
exclusions (68 FR 61578–61580). The facility, or perhaps the regulatory
managing hazardous secondary
purpose of these conforming changes agency imposed special provisions
materials excluded under this rule in
was to simplify and clarify the under the omnibus provision, which it
addition to regulated hazardous wastes,
regulations. EPA did not intend to make would want to consider. EPA seeks
changes to the facility’s permit would be
any substantive changes as to how comment on this approach.
necessary. These facilities would need
currently excluded materials would to maintain their permits, but the units A permitted facility that would no
need to be managed or regulated. used solely to manage hazardous longer be considered a hazardous waste
However, comments to the proposed secondary materials would no longer be management facility under the
changes were overwhelming in favor of regulated solid waste management units exclusion (e.g., a facility managing only
retaining the existing exclusions. These subject to permit requirements. (Of hazardous secondary materials that
existing exclusions are familiar to both course, to the extent that the exclusion become excluded under today’s
the States and the regulated community, were conditional, the owner/operator of supplemental proposal) would no
and making wholesale adjustments the facility would need to comply with longer need a hazardous waste operating
appears to have had unintended the applicable conditions to maintain permit nor need to comply with the
consequences in many cases. the exclusion.) In such cases, the facility existing hazardous waste regulations
Thus in today’s supplemental owner/operator could seek a permit governing permitted facilities. (Again, to
proposal, EPA is proposing to retain the modification from EPA or more the extent that the exclusion is
existing exclusions (for example, the typically the authorized state agency to conditional, the owner/operator of the
scrap metal exclusion in 40 CFR remove the formerly subject unit(s) from facility would need to comply with the
261.4(a)(13)) exactly as written. the permit. applicable conditions to maintain the
However, we request comment on The Agency believes that owners and exclusion.) Owners or operators of such
whether any specific regulatory operators modifying their permits to facilities could, therefore, apply to the
exclusion would need revision in order remove units managing only wastes overseeing agency to terminate the
to avoid confusion or contradictions. excluded by this rule should comply permit by modifying the permit term.
EPA also is proposing that hazardous with the requirements of section The Agency believes that owners or
secondary materials that are currently 270.42(a) for Class 1 permit operators seeking to terminate the
excluded with specific requirements or modifications, with prior Agency facility’s permit by modifying the
conditions should be required to approval. Under this approach, owners permit term should comply with the
continue to meet those requirements and operators would be required to requirements of section 270.42(a) for
(e.g., the drip pad requirements for the submit notification of the permit Class 1 modifications with prior Agency
wood preserving exclusion in 40 CFR modification to the implementing approval, as described above. To
261.4(a) (9)). In addition, recycling of agency, along with documentation support a request for permit termination
such materials at new facilities, or at demonstrating that the operations at the by modifying the permit term, the
existing facilities that are not currently unit meet the conditions of the owner or operator would have to
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operating under the terms of an existing exclusion, and that the unit is used demonstrate that the operations meet
exclusion, would also be subject to the solely to manage excluded hazardous the conditions of the exclusion, and that
existing applicable regulatory exclusion, secondary materials. In addition, the the facility does not manage non-
rather than today’s proposed exclusions. owner or operator would be required to excluded hazardous wastes. Further, as
We request comment on the option of comply with the requirements of section discussed below, the owner or operator
allowing a regulated entity to choose 270.42(a)(ii) for public notification. would have to demonstrate that
which exclusion the person is subject to Under section 270.42(a)(2), the permit corrective action obligations at the
in those cases where more than one modification would not become facility have been addressed, or, where

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corrective action obligations remain, corrective action obligations should in Part 264 and 265 Subpart H, which
that continuation of the permit is not refer to the Agency’s February 25, 2003 apply at these units prior to the
necessary to assure that they will be guidance entitled ‘‘Final Guidance on exclusion taking effect, provide for
addressed (e.g., where the facilities Completion of Corrective Action release of financial assurance upon
cleanup obligations will be addressed Activities at RCRA Facilities,’’ (68 FR certification by the owner or operator
under an alternative federal or state 8757) for a detailed discussion of that closure has been completed in
enforcement mechanism, or other corrective action completion. accordance with the approved closure
federal or state cleanup authority). The In addition to the above described plan, and Agency verification of that
Agency seeks comment on this issues relating to permits and corrective certification (see 264.143(i) and
approach. action, today’s supplemental proposal 265.143(h)). Similar provisions at
As was explained in the October 2003 also may have implications with regard sections 264.145(i) and 265.145(h)
proposal (68 FR 61580), where a to closure of hazardous waste storage provide for release of financial
permitted facility has not yet completed units at affected facilities. In cases assurance for post-closure care.
facility-wide corrective action, but where hazardous waste storage units Under the approach to closure
manages only hazardous secondary would only be managing excluded discussed above, owners and operators
materials that would become excluded hazardous secondary material pursuant of units that manage only wastes that
under this proposed rule (see 40 CFR to today’s supplemental proposal, the would be excluded under this
264.101), the obligation to address current regulations could be read as supplemental proposal would not be
facility-wide corrective action would triggering the closure requirements for subject to closure requirements and,
remain in effect. those units, since owners/operators of therefore, would not submit a
At some facilities, corrective action non-land-based hazardous waste units certification of closure, and thus would
obligations will likely continue to be (e.g., tanks, containers, containment not trigger release of financial
addressed through the corrective action buildings) must begin closure within 90 assurance. As discussed in section X.C.2
provisions of the permit. In these cases, days of receiving a unit’s final volume of today’s preamble, reclaimers who
maintenance of the permit would ensure of hazardous wastes. See 40 CFR receive hazardous secondary materials
that facility-wide corrective action will 264.113(a) and 265.113(a). that have been excluded under the
be addressed. Thus, in these cases, the In the October, 2003 proposal (68 FR proposed 40 CFR 261.4(a)(24) would
permit would not be terminated by 61580–61581), EPA expressed the view still be required to meet Subpart H
modifying the permit term, but would that requiring closure of units in these financial assurance requirements as a
be modified to remove the provisions situations would serve little condition of the exclusion. In this case,
that applied to the now-excluded environmental purpose, since after the financial assurance provided for
hazardous secondary material. The closure the unit would be immediately closure would satisfy that requirement
facility’s permit would, thereafter, only reopened and used to store the same (perhaps with some modification).
address corrective action. (now excluded) hazardous secondary However, persons who recycle
In other cases, however, EPA or an material. In that notice, the Agency materials under the proposed exclusions
authorized state may have available an proposed that closure of storage units for materials recycled under the control
alternative federal or state enforcement would not be required when the wastes of the generator (40 CFR 261.2(a)(2)(ii)
mechanism, or other federal or state in such units were excluded under the and 40 CFR 261.4(a)(23)) would not be
cleanup authority, through which it proposal. required to meet Subpart H financial
could choose to address the facility’s In response to that proposal, several assurance requirements as a condition
cleanup obligations, rather than commenters stated that one of the main of the exclusion. The Agency believes
continue to pursue corrective action purposes of the RCRA subtitle C closure that those owners and operators should
under a permit. In these cases, where requirements is to identify and be released from financial assurance
the alternate authority would ensure remediate any releases originating from requirements upon demonstrating that
that facility-wide corrective action will the units. The Agency notes that no releases from the unit remain to be
be addressed, maintenance of the permit releases from these units are discarded addressed. In complex facilities, that
would not be necessary. and solid and hazardous wastes, and demonstration might be difficult, or it
A facility that is operating under agrees with commenter’s concern that might be inconsistent with broader
interim status would be affected by such releases should be addressed. The corrective action strategy (for example,
promulgation of today’s supplemental Agency does not agree, however, that if historical releases from the unit were
proposal in much the same way as the specific subtitle C closure mingled with other general facility
would a permitted facility, and the issue requirements are most appropriate to contamination). Where such a situation
of corrective action would be addressed address cleanup of releases from these exists, the Agency believes that
in a similar manner. At an interim status units, if any have occurred. Rather, the financial assurances obtained for
facility managing only hazardous Agency believes that a better approach closure and/or post-closure should be
secondary materials that become would be to address potential releases redirected to address the corrective
excluded under today’s supplemental from these units as part of corrective action needs at the unit. (In general,
proposal, the Part 265 interim status action for all releases at the facility. This however, EPA believes that these
standards that applied to the hazardous approach would achieve the same situations will be the exception rather
waste management units at the facility, environmental results, and would than the rule, since the overwhelming
as well as the general facility standards provide the owner or operator the majority of units in question would
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in Part 265, would no longer apply. At option of integrating the cleanup more have upgraded to current subtitle C
the same time, the owner or operator closely into the broader facility standards, e.g., secondary containment
would retain responsibility for response. for tanks, etc.). The Agency requests
unaddressed corrective action When considering the issue of comment on modifying the regulations
obligations at the solid waste addressing releases from these units, the to allow financial assurances obtained
management units. question arises about what happens to for closure and/or post-closure to be
Owners and operators of permitted the funds that provide financial redirected to address the corrective
and interim status facilities with assurance for closure. The requirements action needs at units that manage only

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wastes that would be excluded by this E. National Partnership for Reorganization and Program
proposal. Environmental Priorities Performance Improvement Act (http://
If today’s proposed changes to the www.whitehouse.gov/omb/legislative/
C. Imports and Exports
RCRA definition of solid waste are grppi_act_2005.pdf), as well as by the
The proposed exclusion for hazardous 2002 President’s Management Agenda
promulgated, the Agency expects that
secondary materials recycled under the (http://www.whitehouse.gov/omb/
affected companies will take advantage
control of the generating facility is budget/fy2002/mgmt.pdf), and by the
of this new regulatory framework by
limited to recycling performed in the Office of Management and Budget
exploring new opportunities to recycle
United States or its territories. However, according to the annual Program
their hazardous secondary materials. We
the transfer-based recycling exclusion Assessment Rating Tool (http://
believe that these regulatory changes are
and non-waste determinations included www.whitehouse.gov/omb/part)
consistent with EPA’s efforts to
in today’s supplemental proposal do not initiated in 2003. In particular,
encourage and promote sustainable
place any geographic restrictions on measurement of the performance
methods and practices by manufacturers
movements of such hazardous outcomes for this supplemental
and other businesses. In this context,
secondary materials, provided they meet proposal will enable EPA to evaluate the
‘‘sustainability’’ is defined as economic
the description of the exclusion. It is actual effectiveness with regard to
development that meets the needs of the
therefore possible that in some cases encouraging industrial recycling,
present without compromising the
excluded hazardous secondary materials affecting future industrial recycling
ability of future generations to meet
could be generated in the United States trends, and targeting possible future
their own needs.
or its territories and subsequently The National Partnership for regulatory and non-regulatory initiatives
exported for reclamation to a facility in Environmental Priorities (NPEP) is a directed at furthering safe and beneficial
a foreign country. Under today’s voluntary program administered by EPA industrial recycling practices. As
supplemental proposal, the exclusion that fosters the establishment of a new discussed elsewhere in today’s
would be effective while the hazardous corporate/federal partnership in which preamble, we expect that the regulatory
secondary material is within the United both work collaboratively towards changes being proposed will have the
States or its territories. However, such voluntary reductions in the use of effect of reducing regulatory
excluded hazardous secondary materials certain chemicals. Recycling is one disincentives to industrial recycling,
may be subject to regulation as means of achieving such reductions in thereby encouraging new recycling
hazardous wastes in the receiving chemical use. The NPEP can provide initiatives by the regulated community.
country, even if they are excluded from technical assistance and expertise to To measure performance outcomes,
the definition of solid waste assist companies in successfully the Agency is interested in being able to
domestically (i.e., under RCRA). If this achieving these goals, while at the same measure the numbers of existing and
is the case, the U.S. exporter of the time saving money or increasing new industrial facilities that actually
hazardous secondary material will need production. NPEP members’ successes take advantage of these regulatory
to comply with any applicable are voluntarily reported to EPA, and changes, as well as the quantities and
requirements of the importing country. members are publicly recognized and types of hazardous secondary materials
(For further discussion, see section rewarded for their accomplishments. that are affected, and the specific types
X.C.1 of today’s preamble regarding
For further information on the NPEP of industries that are affected. We also
specific export/import conditions for
program, visit the NPEP Web site at are interested in measuring the extent to
hazardous secondary materials excluded
Http://www.epa.gov/epaoswer/ which industrial recycling that is
under this proposal.)
hazwaste/minimize/partnership.htm. affected by today’s supplemental
D. Superfund proposal occurs onsite or offsite, and the
XIV. Measurement of the Performance
A primary purpose of today’s extent to which small quantity and large
Outcomes of This Supplemental
supplemental proposal is to encourage quantity hazardous waste generators
the safe, beneficial recycling of (i.e., SQGs and LQGs) are able to take
hazardous secondary materials. In 1999, A. Need for Performance Measurement advantage of an exclusion. Such
Congress enacted the Superfund Since today’s supplemental proposal, information on the actual outcomes of
Recycling Equity Act (SREA), explicitly if finalized, would make important these regulatory changes could enable
defining those hazardous substance changes to the Agency’s current RCRA the Agency to measure, rather than
recycling activities that potentially may regulatory framework for industrial estimate, the actual cost savings benefits
be exempted from liability under the recycling of hazardous secondary to industries affected by the regulatory
Comprehensive Environmental materials, and is designed to encourage changes, as well as to measure
Response, Compensation and Liability industrial recycling of such materials, environmental benefits (e.g., annual
Act (CERCLA). CERCLA section 127. the Agency has a strong interest in being quantities of specific materials
Today’s supplemental proposal does not able to measure the performance conserved, avoided raw material inputs,
change the universe of recycling outcomes that these regulatory changes reduced pressure on landfill capacity,
activities that could be exempted from may have on the regulated community. water and energy conserved).
CERCLA liability pursuant to CERCLA In general, it is important for the Agency B. Approaches to Performance
section 127. Today’s supplemental to be able to quantify, monitor, and Measurement
proposal only changes the definition of report to the public the actual
1. Use of the Proposed Notification
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solid waste for purposes of RCRA performance outcomes of this

subtitle C requirements. The supplemental proposal. In general, Requirements
supplemental proposal also does not performance measurement of federal Today’s supplemental proposal
limit or otherwise affect EPA’s ability to programs is expected of by Congress includes a requirement that facilities
pursue potentially responsible persons according to the 1993 Government (both generators and recyclers) taking
under section 107 of CERCLA for Performance and Results Act (http:// advantage of an exclusion provide
releases or threatened releases of www.whitehouse.gov/omb/mgmt-gpra) regulatory authorities with certain basic
hazardous substances. and the 2005 Government items of information through a one-time

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14208 Federal Register / Vol. 72, No. 57 / Monday, March 26, 2007 / Proposed Rules

notification. This information would utility for the purpose of measuring stakeholder industry and trade
allow EPA to track the number of future performance outcomes of today’s associations, many of which also may
facilities and the types of hazardous supplemental proposal, because the TRI have a vested interest in assessing their
secondary materials affected by the is not limited to hazardous waste and success, or lack thereof. We are aware
proposed rulemaking, but would not not limited to LQGs, but includes that some trade associations may
allow us to estimate the amount of annual reporting on industrial materials maintain data on the recycling activities
material affected. We request comment manufactured, imported, processed, of their member companies; such
on whether additional data elements otherwise used, transferred offsite, associations might be willing to share
could be added that would help inform treated or disposed as waste, or recycled some of that existing information with
EPA and the public about the effect of by certain industries. Consequently, by the Agency. Another option could be to
the proposed exclusions without its design and relatively broader scope, partner with certain trade associations
imposing a significant additional the TRI (Form R; http://www.epa.gov/ that may be willing on a voluntary basis
burden on the regulated community. tri) contains limited information on to gather relevant information from their
RCRA hazardous wastes (as well as members.
2. Use of Existing EPA Data Systems
more information about other types of
There are two existing data systems industrial materials such as secondary 5. NPEP Voluntary Program
which may be of limited utility to EPA by-products) and it is probably more on- As discussed in the preceding section
for measuring the performance point for the Agency to attempt to use of this preamble, EPA’s National
outcomes of this supplemental proposal. for measuring future outcomes of Partnership for Environmental Priorities
(a) RCRA Biennial Report. Under 40 today’s supplemental proposal. (NPEP) is a voluntary program that
CFR 262.41, large quantity hazardous In combination, both the BR and TRI encourages companies and federal
waste generators and hazardous waste data systems may provide a skeletal but
treatment, storage, recycling and facilities to reduce priority chemicals
complementary framework for through waste minimization, reuse,
disposal facilities (TSDRFs) are required measuring future performance
to prepare and submit Biennial Reports recycling, and reclamation, and to
outcomes. report achievements in reductions.
to RCRA-authorized states on the types
and quantities of hazardous wastes 3. Surveys Companies that choose to change their
generated and managed during the Another option, either as a stand- materials management practices from
reporting year (http://www.epa.gov/ alone option or used in combination disposal to recycling as a result of
epaoswer/hazwaste/data/ with the BR/TRI option above, could be today’s supplemental proposal could be
biennialreport). In the past, the Agency to conduct a mail or phone survey of eligible for membership in NPEP.
has used data from the Biennial Report affected facilities. The main advantage Companies that join NPEP could
(BR) for analytic purposes such as of a survey would be the ability to identify voluntary goal(s) to initiate new
establishing baselines for estimating the collect data on targeted performance recycling or to increase current
potential economic impacts on measures that would not be available recycling at their facility of priority
industries and facilities potentially through either the BR or TRI. Moreover, chemicals. Upon completion of their
affected by RCRA rulemaking a survey mechanism could potentially goal(s), the partners can submit a
initiatives. While the BR has provided serve a dual purpose as a form of success story of their accomplishments.
the Agency with considerable valuable communications outreach to industrial In turn, these partners will receive EPA
data regarding the types and quantities facilities that are not recycling or are support and assistance for reducing
of hazardous wastes that are generated, unaware of today’s supplemental priority chemicals and award
and where and how they are treated, proposal, which would assist EPA in recognition for their success. Thus,
stored or disposed, this system has a better understanding why some information from NPEP partners might
number of limitations, particularly with generators are unable or unwilling to also be of assistance to EPA in
regard to: (i) How small quantity recycle their hazardous secondary evaluating the impacts of today’s
generators are not required to report to materials. Such a survey could be proposed rule.
the BR and (ii) how generation and voluntary or mandatory, and could C. Request for Comment on Performance
management of hazardous secondary involve a statistically-valid sample of Measurement Approaches
materials that are not regulated as industrial facilities, or could focus on
hazardous wastes are not covered in the particular industries or affected The Agency requests comment on the
BR. Under today’s supplemental materials. It could be conducted as a alternative performance measurement
proposal, these limitations may be one-time effort or periodically (e.g., approaches described above for enabling
exacerbated, since current RCRA- once every four years) to capture the Agency to measure the actual
regulated hazardous wastes subject to recycling trends over time. To minimize performance outcomes of today’s
BR reporting will become excluded as burden, it could also be conducted supplemental proposal. In addition to
recycled hazardous secondary materials. electronically over the internet. It satisfying federal performance
As a result, in the future we expect the should be noted, however, that with measurement requirements, we are also
BR will provide less data relevant to some exceptions (e.g., surveys of fewer interested in stakeholder views as to the
measuring hazardous secondary than 10 respondents), conducting a potential utility of measuring the
materials recycling trends, and thus will survey of this nature would need OMB effectiveness of today’s proposed
be inadequate for measuring the future approval in accordance with the exclusions in achieving their intended
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outcomes and success of this provisions of the Paperwork Reduction induced new recycling and industry
supplemental proposal. Therefore, we Act. cost-savings objectives, and how such
request comment on modifying the BRS information might benefit stakeholders
to require or continue to require that 4. Voluntary Partnerships With Affected and the regulated community. Finally,
such information be submitted to EPA. Industries we also solicit comment on other
(b) Toxic Release Inventory. Measuring the impact of today’s performance measurement approaches
Compared to the BR, the Toxic Release supplemental proposal might also be than those described above, that may be
Inventory (TRI) may provide greater done with the voluntary assistance of more effective in enabling EPA to

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measure the actual future outcomes of regulations, both HSWA and non- determination, EPA evaluates the state
today’s supplemental proposal. HSWA, that are considered less requirements to ensure they are no less
stringent than previous federal stringent than the federal requirements.
XV. How Would These Proposed
regulations. Because today’s rule would eliminate
Regulatory Changes Be Administered
specific requirements for hazardous
and Enforced in the States? B. Effect on State Authorization
secondary materials that are currently
A. Applicability of Rules in Authorized Today’s proposed rule would managed as hazardous waste, state
States eliminate specific requirements that programs would no longer need to
apply to materials currently managed as include those specific requirements in
Under section 3006 of RCRA, EPA hazardous waste, and is being proposed,
may authorize qualified states to order to be consistent with EPA’s
at least in part, in response to recent regulations, when and if today’s rule is
administer the RCRA Subtitle C court decisions on the definition of finalized.
hazardous waste program within the solid waste. Specifically, in several However, under RCRA section 3009, a
state. Following authorization, EPA decisions, courts have held that EPA’s state may adopt standards that are more
retains Subtitle C enforcement current definition of solid waste at 40 stringent than the federal program.
authority, although authorized states CFR 261.2 is overly broad and would Thus, a state is not required to adopt
have primary enforcement lead to the regulation of some hazardous today’s proposal, or a state may choose
responsibility. EPA retains authority secondary materials that are not to adopt only part of today’s proposal.
under sections 3007, 3008, 3013, 3017 discarded and, therefore, are not solid Some states incorporate the federal
and 7003. The standards and wastes. In this rulemaking, the regulations by reference or have specific
requirements for state authorization are exclusion for materials reclaimed under state statutory requirements that their
found at 40 CFR part 271. the control of the generator (proposed state program can be no more stringent
Prior to enactment of the Hazardous 40 CFR 261.2(a)(2)(ii)) identifies those than the federal regulations. In those
and Solid Waste Amendments of 1984 hazardous secondary materials that are cases, EPA anticipates that the
(HSWA), a state with final RCRA not discarded and, therefore, are not exclusions in today’s proposal, when
authorization administered its solid wastes under RCRA. EPA also and if finalized, would be adopted by
hazardous waste program entirely in recognizes that there may be some these states, consistent with state laws
lieu of EPA administering the federal hazardous secondary materials that are and state administrative procedures,
program in that state. The federal not recycled under the control of the unless they take explicit action as
requirements no longer applied in the generator, but are not solid wastes specified by their respective state laws
authorized state, and EPA could not because they are reclaimed in a to decline the proposed revisions. We
issue permits for any facilities in that continuous industrial process. Because note that if states choose not to adopt
state, since only the state was it was not possible to identify all of the the provisions of today’s proposal
authorized to issue RCRA permits. continuous industrial process recycling concerning exports, the provisions of 40
When new, more stringent federal fact patterns, EPA has proposed a CFR 262 Subparts E or H would apply
requirements were promulgated, the petition process for non-waste to hazardous secondary materials that
state was obligated to enact equivalent determinations at proposed 40 CFR are exported.
authorities within specified time frames. 260.30 (see Section VII above).
However, the new federal requirements EPA believes that the proposed rule C. Interstate Transport
did not take effect in an authorized state describes the appropriate scope of the Because some states may choose not
until the state adopted the federal federal program under RCRA. Thus, to seek authorization for today’s
requirements as state law. reclamation under the control of the supplemental proposal, there will
In contrast, under RCRA section generator and recycling in a continuous probably be cases where the hazardous
3006(g) (42 U.S.C. 6926(g)), which was process, as described herein, are not secondary materials in question will be
added by HSWA, new requirements and activities associated with discarded transported through states with different
prohibitions imposed under HSWA materials and would not be subject to regulations governing them.
authority take effect in authorized states RCRA. In addition, today’s proposal also First, a hazardous secondary material
at the same time that they take effect in conditionally excludes from the which is subject to an exclusion from
unauthorized states. EPA is directed by definition of solid waste reclaimed the definition of solid waste regulations
the statute to implement these materials that are not under the control may be sent to a state, or through a state,
requirements and prohibitions in of the generator and are not recycled in where it is subject to the hazardous
authorized states, including the a continuous industrial process. EPA waste regulations. In this scenario, for
issuance of permits, until the state is believes that these exclusions will the portion of the trip through the
granted authorization to do so. While encourage recycling and that they are originating state, and any other states
states must still adopt HSWA related consistent with RCRA’s statutory where the hazardous secondary material
provisions as state law to retain final objective of conserving valuable is excluded, neither a hazardous waste
authorization, EPA implements the material and energy resources. transporter with an EPA identification
HSWA provisions in authorized states EPA would strongly encourage states number per 40 CFR 263.11 nor a
until the states do so. to adopt the regulations being proposed manifest would be required. However,
Authorized states are required to today. When EPA authorizes a state to for the portion of the trip through the
modify their programs only when EPA implement the RCRA hazardous waste receiving state, and any other states that
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enacts federal requirements that are program, EPA determines whether the do not consider the hazardous
more stringent or broader in scope than state program is consistent with the secondary material to be excluded, the
existing federal requirements. RCRA federal program, and whether it is no transporter must have a manifest, and
section 3009 allows the states to impose less stringent. This process, codified in must move the hazardous secondary
standards more stringent than those in 40 CFR 271, ensures national material in compliance with 40 CFR
the federal program (see also 40 CFR consistency and minimum standards, part 263. In order for the final
271.1). Therefore, authorized states may, while providing flexibility to states in transporter and the receiving facility to
but are not required to, adopt federal implementing rules. In making this fulfill the requirements concerning the

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14210 Federal Register / Vol. 72, No. 57 / Monday, March 26, 2007 / Proposed Rules

manifest (40 CFR 263.20, 263.21, material’s EPA manifest and DOT briefly summarized below. If the
263.22, 264.71, 264.72, 264.76 or hazmat status, EPA believes that today’s exclusions are promulgated as proposed
265.71, 265.72, and 265.76), the supplemental proposal is likely to result today, (i.e., the two generator controlled
initiating facility should complete a in a net reduction in annual exclusions involving land- and non-land
manifest and forward it to the first transportation accident risks during based units, plus the offsite transfer
transporter to travel in a state where the transport of affected materials, due to exclusion, plus the case-by-case petition
hazardous secondary material is not the expected net reduction in annual process) and are adopted by all state
excluded. The receiving facility must miles transported, as a result of the governments, EPA expects this action to
then sign the manifest and send a copy companies which would choose to result in a net effect of $107 million in
to the initiating facility. switch from current offsite hazardous average annual net cost savings to about
Second, a hazardous secondary waste management to recycling at either 4,600 facilities in 530 industries, and is
material generated in a state that does on-site or closer facilities to the expected to remove from RCRA
not provide an exclusion for the generating facility.10 regulation 0.65 million tons per year of
hazardous secondary material may be hazardous secondary materials currently
sent to a state where it is excluded. In XVI. How Has EPA Fulfilled the
Administrative Requirements for This managed as RCRA hazardous waste.
this scenario, the hazardous secondary These materials consist of 0.59 million
material must be moved by a hazardous Rulemaking?
tons (91%) that are currently recycled as
waste transporter while the hazardous A. Executive Order 12866: Regulatory RCRA hazardous waste, and 0.06
secondary material is in the generator’s Planning and Review million tons (9%) of hazardous waste
state or any other states where it is not Under section 3(f)(1) of Executive that is currently disposed (i.e.,
excluded. The initiating facility would Order (EO) 12866 (58 FR 51735, October landfilled, or incinerated), which EPA
complete a manifest and give copies to 4, 1993), this action is an ‘‘economically expects may switch from disposal to
the transporter as required under 40 significant regulatory action’’ because recycling as a result of this action, if
CFR 262.23(a). Transportation within the annual effect on the economy of this promulgated. With respect to each of the
the receiving state and any other states proposed action is expected to be proposed exclusions, the $107 million
that exclude the hazardous secondary greater than $100 million, and the per year best estimate net cost savings
material would not require a manifest effect consists of additive components:
proposed action contains novel policy
and need not be transported by a (a) $87 million per year for hazardous
issues. Accordingly, EPA submitted this
hazardous waste transporter. However, secondary materials recycled under the
action to the Office of Management and
it is the initiating facility’s control of the generating facility in
Budget (OMB) for review under EO
responsibility to ensure that the either land or non-land based units
12866 and any changes made in
manifest is forwarded to the receiving (which includes the onsite, within
response to OMB recommendations
facility by any non-hazardous waste same-company, and tolling arrangement
have been documented in the docket for
transporter and sent back to the exclusions), plus (b) $19 million cost
this action.
initiating facility by the receiving savings for conditional exclusion of
EPA prepared an analysis of the
facility (see 40 CFR 262.23 and 262.42). other offsite transfers, plus (c) $1
potential national economic costs and
One final point is that RCRA-
benefits associated with this proposed million per year cost savings for case-
regulated hazardous wastes, when
action. The analysis is contained in our by-case non-waste determinations.
transported, require an EPA hazardous
waste manifest, and are incorporated by ‘‘Economics Background Document: These impact estimates are EPA’s best
reference in Department of Regulatory Impact Analysis (RIA) for estimates within the economic impact
Transportation (DOT) regulations in the EPA’s 2007 Supplemental Proposed estimation uncertainty range of $93
DOT definition of hazardous material Revisions to the Industrial Recycling million to $205 million in annual
(49 CFR 171.8). Under today’s Exclusions of the RCRA Definition of materials management cost savings, and
supplemental proposal, a hazardous Solid Waste’’ (January 22, 2007, 284 0.33 to 1.70 million tons per year in
secondary material that is not a solid pages) which is available for public affected hazardous secondary materials,
waste would no longer need an EPA review and comment in the EPA Docket respectively, for the net effect of the
manifest when transported off-site for (http://www.regulations.gov) and is proposed regulatory exclusions. The
recycling, and therefore would not purpose of these impact ranges is to
10 As explained in the ‘‘Economics Background
automatically be considered a DOT reveal two major sources of uncertainty
Document,’’ in the docket for today’s rule, EPA
hazardous material (hazmat). However, expects that as a result of this rule, transportation
at the launch of our RIA prior to the
if the material contains a chemical or distances for hazardous secondary materials that are final draft of this proposal: (1) Our RIA
falls into a class of substances that DOT affected by today’s rule are expected to be reduced assigned eight implementation
has determined to pose an unacceptable from averages of about 340 miles for disposal at conditions to the best estimate impact
hazardous waste landfills and between 400 to 520
hazard during transportation, it would miles for offsite hazardous waste recycling to 0
for the proposed exclusions from a list
still be regulated as a DOT hazardous miles for on-site recycling (for about 9% of the of 18 possible conditions formulated at
material (a table at 49 CFR 172.101 lists affected facilities) and an average of about 50 miles the launch of the RIA. In comparison,
materials considered ‘‘hazardous’’ by for non-hazardous waste recycling (for about 91% today’s notice proposes nine conditions
of the affected facilities). Because, on an annual
DOT, according to 23 DOT hazard nationwide basis, 91% of RCRA hazardous waste is
which differ by five conditions and
classes). If it does not, then it would not transported by truck, transportation risk is standards (i.e., recycling legitimacy
be so regulated by DOT. EPA believes predominantly roadway crash risks involving criteria, reasonable effort by generators,
property damage crashes, personal injury crashes,
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this is appropriate, since when sent to onsite recordkeeping, land placement,

or fatal crashes. Because of the fact that
recycling rather than disposal, these transportation accident risks positively correlate
and offsite shipment tracking); the
hazardous secondary materials pose no with travel distances, EPA expects a minimum 85% impact uncertainty range lower and
greater risk than similar types of non- to 90% reduction in baseline annual transport upper bounds reflect inclusion of two
waste materials already in accident risk for affected materials, as a rough conditions and of 17 conditions,
estimate, regardless of DOT regulatory status (i.e.,
transportation for commerce under non- 340 to 520 miles average transport distance
respectively; and (2) the main
hazmat DOT status. Moreover, baseline, compared to 0 to 50 miles hypothetical underlying data in the RIA is the RCRA
regardless of a hazardous secondary average post-promulgation distance). Biennial Report database about RCRA

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hazardous waste activity, which recycled industrial secondary materials alternative approaches for recycling
includes numerical outliers; to address are large enough to absorb a potential exclusions: On-site-only exclusion,
these statistical outliers, the impact increase in supply of recycled materials. intra-industry offsite exclusion, and
uncertainty ranges reflect inclusion of Market conditions for recycled broad inter-industry transfer exclusion
99% and 100% of the data, respectively, secondary materials can vary with few conditions, as discussed in
whereas our best estimate includes considerably over time. Demand for EPA’s October 2003 proposed rule. Our
99.5% of the data (i.e., 0.5% of the recycled solvents, for example, is largely best estimates of the potential net cost
largest hazardous waste streams dependent on the petroleum market: savings for these three other approaches
removed from the impact estimate). because virgin solvents are made from are $63 million, $72 million, and $129
In addition to these uncertainty petroleum products, high petroleum million per year, associated with 0.35
factors which the RIA attempted to prices encourage solvent recycling. million tons, 0.38 million tons, and 0.67
address directly in the impact Similarly, high metals prices obviously million tons per year secondary
computations, there are five other favor the recycling of metal-bearing materials potentially affected,
sources of impact uncertainty that our secondary materials. In addition, there respectively. Accounting for estimation
RIA describes as sensitivity analyses are four physical factors that suggest uncertainty factors, net cost savings and
and provides estimates of potential U.S. industries may be near their potentially affected materials for these
overall magnitude: (1) Based on current technical and economic limits three options could range between $45
extrapolating the adverse comments by for recycling RCRA hazardous wastes: million to $147 million per year and
some state governments on exclusion (1) The recent hazardous waste 0.24 million to 0.91 million tons per
options described in the October 2003 generation trend shows a 25% decline year for the on-site option, between $56
proposal, the economic impacts could between 1999 and 2003; (2) the recent million to $156 million per year and
be 4% to 46% less than estimated in the hazardous waste recycling trend shows 0.27 million to 0.98 million tons per
RIA from state non-adoption of this rule a 73% increase in baseline recycling year for the intra-industry option, and
if promulgated; (2) the RIA is based on between 1999 and 2003 accounting in between $114 million to $206 million
a single year 2003 snapshot of RCRA aggregate for metals recycling plus per year and 0.46 million to 1.57 million
hazardous waste data, but recent (1997– solvents recycling plus other materials tons per year for the broad inter-
2003) trend data show ¥17% to +38% recycling (e.g., acid regeneration, non- industry transfer option. In comparison
fluctuation about mean in annual waste solvent liquid recycling); (3) recycling of to these three options, and taking
tonnages recycled and disposed, and RCRA hazardous wastes and secondary account of impact uncertainty factors,
¥54% to +54% fluctuation in annual industrial materials is technically the proposed approach is expected to
count of hazardous waste facilities; difficult in some cases because of result in approximately the same range
consequently, future annual impacts numerous chemical co-contaminates in in annual cost savings as the highest
could fluctuate rather widely relative to the materials; for example, based on a impact broad inter-industry transfer
the average annual impact estimates of national survey of large RCRA option of these three alternatives,
our RIA based on 2003 data; (3) our RIA hazardous waste TSDRFs, 90% of because it consists of four components:
is based on hazardous waste tonnages facilities reported between 10 and 60 a broad transfer option with certain
reported as managed in 2003 rather than hazardous chemical constituents in conditions plus the two generator
reported as generated; however, recent wastes, with 287 constituents reported controlled options plus the case-by-case
trend (1997–2003) data show ¥34% to for a single wastestream, and a total of petition option, but is expected to affect
+39% annual fluctuations between 724 different chemical constituents slightly more waste quantities annually
management and generation quantities; reported in surveyed wastes; this survey from addition of the case-by-case
(4) to a large degree macro economic suggests that most LQGs must address a exclusion.
conditions determine the quantity of relatively high number of hazardous
hazardous waste and secondary chemical constituents in evaluating the In selecting the options for today’s
industrial materials generated and feasibility of their waste management proposal, EPA considered both the cost
managed in any given year; for example, options such as recycling; and (4) some and benefits of the different options and
although our RIA is built upon a single RCRA hazardous wastes have relatively the potential for each option to result in
year 2003 snapshot, one of the top-5 low (e.g., less than 1%) assay values for materials being discarded and then
industries generating such materials is constituents with market value. resulting in remediation or
NAICS 3241 petroleum refining which EPA requests comment on the environmental damages. The proposed
is expected to grow almost 6% annually regulatory impact analysis, including combination option of excluding
through 2010, which could increase both the estimates of additional materials recycled under the control of
future impacts; and (5) our RIA is recycling and the cost savings that may the generator, hazardous secondary
founded on the ‘‘large quantity result from this proposed rule, and materials transferred for recycling with
generator’’ (LQG) and the ‘‘treatment, welcomes data from the public about certain conditions, and a case-by-case
storage, disposal, recycler facility’’ the possible impacts of the uncertainty non-waste determination results in the
(TSDRF) data from the RCRA Biennial factors. For example, EPA is seeking second highest estimated cost savings,
Report, and therefore to some degree if comments about whether the number of entities affected and amount
not double-counted in the TSDRF data, codification of the legitimacy criteria, of material expected to be induced to
excludes from the impact estimates the while not intended to impose any new recycling. EPA chose not to pursue
RCRA regulatory class of ‘‘small additional requirements as compared to the option with the highest estimated
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quantity generators’’ (SQGs), which may the current practice, may result in annual cost savings ($129 million versus
represent a 2% to 3% impact additional costs or benefits that are not $107 million per year for today’s
underestimation. included in the RIA, and, if so, what proposed approach) because the lack of
Furthermore, our RIA estimate of those additional costs or benefits would conditions for materials transferred to a
potential new induced recycling as a be. third-party recycler may result in
result of this proposal if promulgated, In addition to estimating the potential material being discarded and increase
does not include an evaluation of impact of this proposal, EPA’s economic the likelihood of new cleanup sites that
whether the U.S. or global markets for analysis also examined three other would need to be funded by public

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14212 Federal Register / Vol. 72, No. 57 / Monday, March 26, 2007 / Proposed Rules

funds. See our ‘‘Economics Background estimated to be 1,257 hours per year, will not result in an adverse economic
Document,’’ which is in the docket for representing an annual cost of $49,891. impact effect on affected small entities.
today’s supplemental proposal, for a Burden means the total time, effort, or Consequently, I hereby certify that this
more detailed discussion regarding the financial resources expended by persons supplemental proposal will not have a
estimated impacts of the proposed to generate, maintain, retain, or disclose significant economic impact on a
approach, as well as the impact or provide information to or for a substantial number of small entities. In
uncertainties, and exclusion option Federal agency. This includes the time determining whether a rule has a
alternatives that we evaluated. needed to review instructions; develop, significant economic impact on a
acquire, install, and utilize technology substantial number of small entities, the
B. Paperwork Reduction Act (ICR) and systems for the purposes of impact of concern is any significant
The information collection collecting, validating, and verifying adverse economic impact on small
requirements in this supplemental information, processing and entities, since the primary purpose of
proposal have been submitted for maintaining information, and disclosing the regulatory flexibility analyses is to
approval to the Office of Management and providing information; adjust identify and address regulatory
and Budget (OMB) under the Paperwork existing systems to comply with any alternatives which minimize any
Reduction Act, 44 U.S.C. 3501 et seq. previously applicable instructions and significant economic impact of the
An Information Collection Request (ICR) requirements; train personnel to be able proposed rule on small entities (5 U.S.C.
document prepared by EPA has been to respond to a collection of Sections 603 and 604). Thus, an agency
assigned EPA ICR number 1189.19. information; search data sources; may certify that a rule will not have a
The information requirements complete and review the collection of significant economic impact on a
established for this action, and information; and transmit or otherwise substantial number of small entities if
identified in the ICR supporting today’s disclose the information. the rule relieves regulatory burden, or
supplemental proposal, are largely self- An Agency may not conduct or otherwise has a positive economic effect
implementing, except for notice and sponsor, and a person is not required to on small entities subject to the rule. For
consent requirements for hazardous respond to, a collection of information more information regarding the
unless it displays a currently valid OMB economic impact of this supplemental
secondary materials exported for
control number. The OMB control proposal, please refer to the ‘‘Economics
recycling. This process will ensure that
numbers for EPA’s regulations are listed Background Document’’ available from
(1) Regulated entities are held
in 40 CFR Part 9. the EPA Docket (http://
accountable to the applicable To comment on the Agency’s need for
requirements; (2) state inspectors can www.regulations.gov).
this information, the accuracy of the EPA therefore concludes that today’s
verify compliance when needed; and (3) provided burden estimates, and any
hazardous secondary materials exported supplemental proposal will relieve
suggested methods for minimizing regulatory burden for all size entities,
for recycling are actually handled as respondent burden, including the use of including small entities. The Agency
commodities abroad. automated collection techniques, EPA continues to be interested in the
EPA has carefully considered the has established a public docket for this potential impacts of the proposed rule
burden that would be imposed upon the rule, which includes this ICR, under on small entities and welcomes
regulated community by the regulations. Docket ID No. EPA–HQ–RCRA–2002– comments on issues related to such
EPA is confident that those activities 0031. Submit any comments related to impacts.
required of respondents are necessary, the ICR for this proposed rule to EPA
and, to the extent possible, has and OMB. See the ADDRESSES section at D. Unfunded Mandates Reform Act
attempted to minimize the burden the beginning of this notice for where to Title II of the Unfunded Mandates
imposed. EPA believes that if the submit comments to EPA. Send Reform Act of 1995 (UMRA), Public
minimum requirements specified under comments to OMB at the Office of Law 104–4, establishes requirements for
the proposed requirements are not met, Information and Regulatory Affairs, Federal Agencies to assess the effects of
neither the facilities nor EPA can ensure Office of Management and Budget, Attn: their regulatory actions on State, local,
that hazardous secondary materials sent Desk Officer for EPA, 725 17th Street, and tribal governments and the private
for recycling are being managed in a NW., Washington, DC 20503. sector. Under section 202 of the UMRA,
manner protective of human health and EPA must prepare a written analysis,
the environment. C. Regulatory Flexibility Act including a cost-benefit analysis, for
For the recordkeeping and reporting The Regulatory Flexibility Act (RFA), proposed and final rules with Federal
requirements applicable to hazardous as amended by the Small Business mandates that may result in
secondary materials sent for recycling, Regulatory Enforcement Fairness Act of expenditures to State, local, and tribal
the aggregate annual burden to 1996 (SBREFA), 5 U.S.C. 601 et. seq., governments, in the aggregate, or to the
respondents over the three-year period generally requires an agency to prepare private sector, of $100 million or more
covered by this ICR is estimated to be a regulatory flexibility analysis of any in any one year. Before promulgating an
11,552 hours, with a cost to affected rule subject to notice and comment EPA rule for which a written statement
entities (i.e., industrial facilities) of rulemaking requirements under the is needed, section 205 of the UMRA
$1,417,242. However, this represents an Administrative Procedure Act or any requires EPA to identify and consider a
annual reduction in burden to other statute, unless the agency certifies reasonable number of regulatory
respondents of 52,050 hours, that the rule will not have a significant alternatives and adopt the least costly,
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representing a cost reduction of economic impact on a substantial most cost-effective, or least burdensome
$3,474,035 per year. The estimated number of small entities. Small entities alternative that achieves the objectives
annual operation and maintenance costs include small businesses, small of the rule. The provisions of section
to affected entities are $739,469 per organizations, and small governmental 205 do not apply when they are
year, primarily for purchasing audit jurisdictions. Because this action is inconsistent with applicable law.
reports. There are no startup costs and designed to lower the cost of waste Moreover, section 205 allows EPA to
no costs for purchases of services. management for industries subject to the adopt an alternative other than the least
Administrative costs to the Agency are supplemental proposal, this proposal costly, most cost effective or least

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Federal Register / Vol. 72, No. 57 / Monday, March 26, 2007 / Proposed Rules 14213

burdensome alternative if the one year. Thus, the requirements of H. Executive Order 13211: Actions that
Administrator publishes with the final Section 6 of the Executive Order do not Significantly Affect Energy Supply,
rule an explanation why that alternative apply to this supplemental proposal. In Distribution, or Use
was not adopted. addition, because this rule is less This supplemental proposal is not a
Before EPA establishes any regulatory stringent than the current federal ‘‘significant energy action’’ as defined in
requirements that may significantly or program, states are not required to adopt Executive Order 13211, ‘‘Actions
uniquely affect small governments, it. Concerning Regulations That
including tribal governments, it must
In the spirit of Executive Order 13132, Significantly Affect Energy Supply,
have developed under section 203 of the
UMRA a small government agency plan. and consistent with EPA policy to Distribution, or Use’’ (66 FR 28355, May
The plan must provide for notifying promote communications between EPA 22, 2001) because it is not likely to have
potentially affected small governments, and State and local governments, EPA a significant adverse effect on the
enabling officials to have meaningful specifically solicits comment on this supply, distribution, or use of energy.
and timely input in the development of supplemental proposal from State and This supplemental proposal reduces
regulatory proposals, and informing, local officials. regulatory burden and as explained in
educating, and advising small our Economics Background Document,
governments on compliance with the F. Executive Order 13175: Consultation may possibly induce fuel efficiency and
regulatory requirements. and Coordination With Indian Tribal energy savings from voluntary shifting
EPA has determined that this rule Governments of some types of secondary industrial
does not include a Federal mandate that materials, where cost-effective for firms
Executive Order 13175, entitled to do so, from current landfill and
may result in expenditures of $100
million or more for State, local, or tribal Consultation and Coordination with incineration disposal, to industrial
governments, in the aggregate, or the Indian Tribal Governments (65 FR recycling. It therefore should not
private sector in any one year. This is 67249, November 9, 2000), requires EPA adversely affect energy supply,
because this supplemental proposal to develop an accountable process to distribution, or use.
imposes no enforceable duty on any ensure a meaningful and timely input
I. National Technology Transfer and
State, local, or tribal governments. EPA by tribal officials in the development of
Advancement Act of 1995
also has determined that this rule regulatory policies that have tribal
contains no regulatory requirements that implications. This supplemental Section 12(d) of the National
might significantly or uniquely affect proposal does not have tribal Technology Transfer and Advancement
small governments. In addition, as implications, as specified in Executive Act of 1995 (ANTTAA), Public Law
discussed above, the private sector is Order 13175. It does not significantly or 104–113, section 12(d) (15 U.S.C. 272
not expected to incur costs exceeding uniquely affect the communities of note) directs EPA to use voluntary
$100 million. Therefore, today’s Indian tribal governments, nor would it consensus standards in its regulatory
supplemental proposal is not subject to impose substantial direct compliance activities, unless to do so would be
the requirements of sections 202 and inconsistent with applicable law or
costs on them. Thus, Executive Order
205 of UMRA. otherwise impractical. Voluntary
13175 does not apply to this
consensus standards are technical
E. Executive Order 13132: Federalism supplemental proposal.
standards e.g., materials specifications,
Executive Order 13132, entitled G. Executive Order 13045: Protection of test methods, sampling procedures, and
Federalism (64 FR 43255, August 10, Children From Environmental Health business practices) that are developed or
1999), requires EPA to develop an Risks and Safety Risks adopted by voluntary consensus
accountable process to ensure a standards bodies. The NTTAA directs
meaningful and timely input by State The Executive Order 13045, entitled EPA to provide Congress, through OMB,
and local officials in the development of Protection of Children from explanations when the Agency decides
regulatory policies that have federalism Environmental Health Risks and Safety not to use available and applicable
implications. Policies that have Risks (62 FR 19885, April 23, 1997) voluntary consensus standards. Today’s
federalism implications are defined in applies to any rule that EPA determines supplemental proposal does not contain
the Executive Order to include (1) is economically significant as technical standards and therefore the
regulations that have substantial direct defined under Executive Order 12866, NTTAA is not applicable.
effects on the States, on the relationship and (2) the environmental health or J. Executive Order 12898:
between the national government and safety risk addressed by the rule has a Environmental Justice
the States, or on the distribution of disproportionate effect on children. If
power and responsibilities among the the regulatory action meets both criteria, Executive Order 12898, Federal
various levels of government. the Agency must evaluate the Actions to Address Environmental
This supplemental proposal does not environmental health or safety effects of Justice in Minority Populations and
have federalism implications. It will not the planned rule on children; and Low-Income Populations (February 11,
have substantial direct effects on the explain why the planned regulation is 1994), is designed to address the
States, on the relationship between the preferable to other potentially effective environmental and human health
national government and the States, or conditions of minority and low-income
and reasonably feasible alternatives
on the distribution of power and populations. EPA is committed to
considered by the Agency.
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responsibilities among the various addressing environmental justice

levels of government, as specified in This supplemental proposal is not concerns and has assumed a leadership
Executive Order 13132. There are no subject to the Executive Order because role in environmental justice initiatives
State and local government bodies that the Agency does not have reason to to enhance environmental quality for all
incur direct compliance costs by this believe the environmental health or citizens of the United States. The
rulemaking. State and local government safety risks addressed by this proposed Agency’s goals are to ensure that no
implementation expenditures are rule present a disproportionate risk to segment of the population, regardless of
expected to be less than $500,000 in any children. race, color, national origin, income, or

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14214 Federal Register / Vol. 72, No. 57 / Monday, March 26, 2007 / Proposed Rules

net worth bears disproportionately high Subpart B—Definitions § 260.30 Non-waste determinations and
and adverse human health and variances from classification as a solid
environmental impacts as a result of 2. Section 260.10 is amended by waste.
EPA’s policies, programs, and activities. adding in alphabetical order the * * * * *
Our goal is to ensure that all citizens definitions of ‘‘Land-based unit’’ and (b) Materials that are reclaimed and
live in clean and sustainable ‘‘Hazardous secondary materials then reused within the original
communities. In response to Executive generated and reclaimed under the production process in which they were
Order 12898, and to concerns voiced by control of the generator’’ to read as generated;
many groups outside the Agency, EPA’s follows: * * * * *
Office of Solid Waste and Emergency (d) Materials that are reclaimed in a
§ 260.10 Definitions.
Response (OSWER) formed an continuous industrial process;
Environmental Justice Task Force to * * * * * (e) Materials that are
analyze the array of environmental Hazardous secondary material indistinguishable in all relevant aspects
justice issues specific to waste programs generated and reclaimed under the from a product or intermediate; and
and to develop an overall strategy to control of the generator means: (f) Materials that are reclaimed under
identify and address these issues (1) That such material is generated the control of the generator, including
(OSWER Directive No. 9200.3–17). and reclaimed at the generating facility control through contracts, such as
This supplemental proposal would (for purposes of this paragraph, tolling arrangements.
streamline hazardous waste generating facility means all contiguous 4. Section 260.33 is amended by
management requirements for certain property owned by the generator); or revising the section heading, the
hazardous secondary materials sent for (2) That such material is generated introductory text, and paragraph (a) to
recycling. Facilities that would be and reclaimed by the same ‘‘person’’ as read as follows:
affected by today’s proposal include defined in § 260.10, if the generator § 260.33 Procedures for variances from
those generating hazardous secondary certifies the following: ‘‘on behalf of classification as a solid waste, for variances
materials, as well as facilities which [insert company name] I certify that the to be classified as a boiler, or for non-waste
recycle such materials. Disposal indicated hazardous recyclable material determinations.
facilities would not be affected by this will be sent to [insert company name], The Administrator will use the
proposal. The wide distribution of that the two companies are under the following procedures in evaluating
affected facilities throughout the United same ownership, and that the owner applications for variances from
States does not suggest any corporation [insert company name] has classification as a solid waste,
distributional pattern around acknowledged full responsibility for the applications to classify particular
communities of concern. Specific safe management of the hazardous enclosed controlled flame combustion
impacts on low income or minority recyclable material,’’ or devices as boilers, or applications for
communities, therefore, are (3) That such material is generated non-waste determinations.
undetermined. Overall, no pursuant to a written contract between (a) The applicant must apply to the
disproportionate impacts to minorities a tolling contractor and a batch Administrator for the variance or non-
or low income communities are manufacturer and are reclaimed by the waste determination. The application
expected. tolling contractor, if the tolling must address the relevant criteria
List of Subjects contractor retains ownership of, and contained in § 260.31, § 260.32, or
responsibility for, the recyclable § 260.34 as applicable.
40 CFR Part 260 material that is generated during the * * * * *
course of the production of the product. 5. Section 260.34 is added to Subpart
Environmental protection, For purposes of this paragraph, tolling C to read as follows:
Administrative practice and procedure, contractor means a person who arranges
Confidential business information, for the production of a product made § 260.34 Standards and criteria for non-
Hazardous waste, Reporting and from raw materials through a written waste determinations.
recordkeeping requirements. contract with a batch manufacturer. (a) An applicant may apply to the
40 CFR Part 261 Batch manufacturer means a person Administrator for a formal
who produces a product made from raw determination that a material is clearly
Environmental protection, Hazardous materials pursuant to a written contract not discarded and therefore not a solid
waste, Recycling, Reporting and with a tolling contractor. waste. The determinations will be based
recordkeeping requirements. * * * * * on the criteria contained in paragraphs
Dated: March 15, 2007. (b), (c), or (d) of this section as
Land-based unit means a landfill, applicable. If an application is denied,
Stephen L. Johnson, surface impoundment, waste pile, the material might still be eligible for a
Administrator. injection well, land treatment facility, solid waste variance or exclusion (for
For the reasons stated in the salt dome formation, salt bed formation, example, one of the solid waste
preamble, title 40, Chapter I of the Code or underground mine or cave. variances under § 260.31 or solid waste
of Federal Regulations is proposed to be * * * * * exclusions under § 261.4).
amended as follows: Determinations may also be granted by
Subpart C—[Amended]
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the State if the State is either authorized

PART 260—HAZARDOUS WASTE for this provision or if the following
MANAGEMENT SYSTEM: GENERAL 3. Section 260.30 is amended as
follows: conditions are met:
(1) The State determines the material
1. The authority citation for part 260 a. By revising the section heading. meets the criteria in paragraphs (b), (c),
continues to read as follows: b. By revising paragraph (b). or (d) of this section;
Authority: 42 U.S.C. 6905, 6912(a), 6921– c. By adding paragraphs (d), (e), and (2) The State requests that EPA review
6927, 6930, 6935, 6937, 6938, 6939 and 6974. (f). its determination; and

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(3) EPA approves the State the generator, including control through facility, or a change in the type of
determination. contracts such as tolling arrangements, material reclaimed.
(b) The Administrator may grant a if the applicant demonstrates that the
non-waste determination for material generator retains control of the PART 261—IDENTIFICATION AND
which is reclaimed in a continuous production and the residuals, and that LISTING OF HAZARDOUS WASTE
industrial process if the applicant the material is not discarded. The 7. The authority citation for part 261
demonstrates that the material is a part determination will be based on the continues to read as follows:
of the production process and is not following criteria:
discarded. The determination will be (1) Whether the generator retains Authority: 42 U.S.C. 6905, 6912(a), 6921,
based on the following criteria: ownership and liability via a contract or 6922, 6924(y), and 6938.
(1) The extent that the management of other mechanism for the material and Subpart A—[Amended]
the material is part of the continuous the residuals resulting from its
primary production process and is not recycling. 8. Section 261.2 is amended as
waste treatment; (2) Whether the hazardous follows:
(2) Whether the capacity of the constituents in the material are a. By revising paragraph (a)(1).
production process would use the reclaimed rather than discarded to the b. By revising paragraph (a)(2).
material in a reasonable timeframe and air, water or land at significantly higher c. By revising paragraph (c)(3).
ensure that the material will not be levels from either a statistical or from a d. By revising Table 1 in paragraph
abandoned (for example, based on past health and environmental risk (c)(4).
practices, market factors, the nature of perspective than would otherwise be e. By adding paragraph (g).
the material, and any contractual released by a production process.
arrangements); (3) Other relevant factors that § 261.2 Definition of solid waste.
(3) Whether the hazardous demonstrate the material is not * * * * *
constituents in the secondary material discarded. (a)(1) A solid waste is any discarded
are reclaimed rather than discarded to 6. Section 260.42 is added to Subpart material that is not excluded under
the air, water or land at significantly C read as follows: § 261.4(a) or that is not excluded by a
higher levels from either a statistical or variance granted under §§ 260.30 and
from a health and environmental risk § 260.42 Notification requirement for 260.31 or that is not excluded by a non-
perspective than would otherwise be generators of hazardous secondary waste determination under §§ 260.30
released by the primary production materials generated and reclaimed under
the control of the generator.
and 260.34.
process; and * * * * *
(4) Other relevant factors that Generators of hazardous secondary
material that has previously been (2)(i) A discarded material is any
demonstrate the material is not material which is:
discarded. subject to regulation as hazardous
wastes, but which will be excluded from (A) Abandoned, as explained in
(c) The Administrator may grant a paragraph (b) of this section; or
non-waste determination for material regulation under § 261.2(a)(2)(ii) must
send a one-time notification to the (B) Recycled, as explained in
which is indistinguishable in all paragraph (c) of this section; or
relevant aspects from a product or Regional Administrator. Such notices
must identify the name, address, and (C) Considered inherently waste-like,
intermediate if the applicant as explained in paragraph (d) of this
demonstrates that the material is EPA ID number of the generator (if
applicable); the name and phone section; or
comparable to a product or intermediate (D) A military munition identified as
and is not discarded. The determination number of a contact person; the type of
material that will be managed according a solid waste in 40 CFR 266.202.
will be based on the following criteria: (ii) A hazardous secondary material is
(1) Whether market participants treat to this exclusion; and when the material
will begin to be managed in accordance not discarded if it is generated and
the material as a product rather than a reclaimed within the United States or its
waste (for example, based on the current with this exclusion. A revised notice
must be sent to the Regional territories, provided that the material is
positive value of the material, stability only handled in non-land-based units, it
of demand, and any contractual Administrator in the event of a change
to the name, address or EPA ID number is a hazardous secondary material
arrangements); generated and reclaimed under the
(2) Whether the chemical and of the generator, or a change in the type
of material generated. If reclamation control of the generator as defined in
physical identity of the material is
takes place at a facility other than the § 260.10, and it is not speculatively
comparable to commercial products or
generating facility, the reclaimer must accumulated as defined in § 261.1(c)(8).
also send a one-time notification to the (See also § 260.42)
(3) Whether the hazardous
constituents in the material are Regional Administrator. Such notices * * * * *
reclaimed rather than discarded to the must identify the name, address, and (c) * * *
air, water or land at significantly higher EPA ID number of the reclamation (3) Reclaimed. Materials noted with a
levels from either a statistical or from a facility (if applicable); the name and ‘‘—’’ in column 3 of Table 1 are not
health and environmental risk phone number of a contact person; the solid wastes when reclaimed. Materials
perspective than would otherwise be type of material that will be managed noted with an ‘‘*’’ in column 3 of Table
released by the production process. according to the exclusion; and when 1 are solid wastes when reclaimed
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(4) Other relevant factors that the material will begin to be managed in unless they meet the requirements of
demonstrate the material is not accordance with this conditional §§ 261.2(a)(2)(ii), or 261.4(a)(17), or
discarded. exclusion. A revised notice must be sent 261.4(a)(23), or 261.4(a)(24) and
(d) The Administrator may grant a to the Regional Administrator in the 261.4(a)(25).
non-waste determination for material event of a change to the name, address * * * * *
which is reclaimed under the control of or EPA ID number of the reclamation (4) * * *

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14216 Federal Register / Vol. 72, No. 57 / Monday, March 26, 2007 / Proposed Rules

except as pro-
Use constituting Energy recov- vided in Speculative ac-
disposal ery/fuel §§ 261.4(a)(17), cumulation
(§ 261.2(c)(1)) (§ 261.2(c)(2)) 261.4(a)(23) or (§ 261.2(c)(4))

1 2 3 4

Spent Materials ........................................................................................ (*) (*) (*) (*)

Sludges (listed in 40 CFR Part 261.31 or 261.32 ................................... (*) (*) (*) (*)
Sludges exhibiting a characteristic of hazardous waste ......................... (*) (*) — (*)
By-products (listed in 40 CFR 261.31 or 261.32) ................................... (*) (*) (*) (*)
By-products exhibiting a characteristic of hazardous waste ................... (*) (*) — (*)
Commercial chemical products listed in 40 CFR 261.33 ........................ (*) (*) — —
Scrap metal other than excluded scrap metal (see 261.1(c)(9)) ............ (*) (*) (*) (*)
Note: The terms ‘‘spent materials,’’ ‘‘sludges,’’ ‘‘by-products,’’ and ‘‘scrap metal’’ and ‘‘processed scrap metal’’ are defined in 261.1.

* * * * * met, then this fact may be an indication United States or its territories is not a
(g) Legitimate Recycling. that the material is not legitimately solid waste provided that:
(1) Hazardous secondary material that recycled: (i) If it is managed in a land-based
is not legitimately recycled is discarded (i) How the hazardous secondary unit as defined in § 260.10, the material
material and is a solid waste. Persons material to be recycled is managed. The must be contained; and
who recycle such material, as well as generator and the recycler should (ii) It is a hazardous secondary
persons claiming to be excluded from manage such material as a valuable material generated and reclaimed under
hazardous waste regulation under commodity. Where there is an the control of the generator as defined
§ 260.31, § 260.34, § 261.2 or § 261.4 analogous raw material, the hazardous in § 260.10; and
because they are engaged in recycling, secondary material should be managed, (iii) It is not speculatively
must be able to demonstrate that the at a minimum, in a manner consistent accumulated, as defined in § 261.1(c)(8);
recycling is legitimate. Moreover, with the management of the raw and
hazardous secondary material must be material. Where there is no analogous (iv) Generators of hazardous
legitimately recycled to qualify for raw material, the hazardous secondary secondary material that has previously
special management standards under material should be contained. Materials been subject to regulation as hazardous
§ 261.6 and 40 CFR Part 266. that are released to the environment and wastes, but which will be excluded from
(2) Legitimate recycling must involve are not recovered in a timely manner are regulation under this paragraph (a)(23)
a hazardous secondary material that discarded. If the material is not must send a one-time notification to the
provides a useful contribution to the managed as a valuable commodity, that Regional Administrator. Such notices
recycling process or to a product of the fact may be an indication that the must identify the name, address, and
recycling process, and the recycling material is not legitimately recycled. EPA ID number of the generator (if
process must produce a valuable (ii) Whether the product of the applicable); the name and phone
product or intermediate. recycling process: number of a contact person; the type of
(i) The hazardous secondary material (A) Contains significant material that will be managed according
provides a useful contribution if it: concentrations of any Appendix VIII of to this exclusion, and when the material
(A) Contributes valuable ingredients Part 261 hazardous constituents that are will begin to be managed in accordance
to a product or intermediate; or not found in analogous products; or with this exclusion. A revised notice
(B) Replaces a catalyst or carrier in the (B) Contains concentrations of any must be sent to the Regional
recycling process; or Appendix VIII of Part 261 hazardous Administrator in the event of a change
(C) Is the source of a valuable constituents at levels that are to the name, address or EPA ID number
constituent recovered in the recycling significantly elevated from those found of the generator, or a change in the type
in analogous products; or of material generated. If reclamation
process; or
(C) Exhibits a hazardous characteristic
(D) Is recovered or regenerated by the takes place at a facility other than the
(as defined in Part 261 subpart C) that
recycling process; or generating facility, the reclaimer must
analogous products do not exhibit. If a
(E) Is used as an effective substitute send a one-time notification to the
product contains any of these
for a commercial product. Regional Administrator. Such notices
concentrations or exhibits a hazardous
(ii) The product or intermediate is must identify the name, address, and
characteristic, that fact may be an
valuable if it is: EPA ID number of the reclamation
indication that the material is not
(A) Sold to a third party; or facility (if applicable); the name and
legitimately recycled.
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(B) Used by the recycler or the 9. Section 261.4 is amended by phone number of a contact person; the
generator as an effective substitute for a adding new paragraphs (a)(23), (24), and type of material that will be managed
commercial product or as an ingredient (25) to read as follows: according to the exclusion, and when
or intermediate in an industrial process. the material will begin to be managed in
(3) The following factors need to be § 261.4 Exclusions. accordance with this conditional
considered in making a determination (a) * * * exclusion. A revised notice must be sent
as to the overall legitimacy of a specific (23) Hazardous secondary material to the Regional Administrator in the
recycling activity. If these factors are not generated and reclaimed within the event of a change to the name, address

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Federal Register / Vol. 72, No. 57 / Monday, March 26, 2007 / Proposed Rules 14217

or EPA ID number of the reclamation (2) Name and address of the complies with the requirements
facility, or a change in the type of reclamation facility to which it was specified in § 261.4(a)(24)(i), (ii), (iii)
material reclaimed. sent, and and (v).
(24) Hazardous secondary material (3) The type and quantity of excluded (25) Exports. Hazardous secondary
that is generated and then transferred to material in the shipment. material that is exported from the
another person for the purpose of (C) If it is managed in a land-based United States and recycled at a
reclamation is not a solid waste, unit as defined in § 260.10, the material reclamation facility located in a foreign
provided that: must be contained. country, provided that the exporter
(v) Reclaimers of hazardous secondary complies with the requirements of
(i) The material is not speculatively
material excluded from regulation under § 261.4(a)(24)(i)–(iv) and also with the
accumulated, as defined in § 261.1(c)(8);
this exclusion must satisfy the following following requirements:
conditions: (i) Notify EPA of an intended export
(ii) The material is not handled by any (A) The reclaimer must maintain at before the hazardous secondary material
person or facility other than the the reclamation facility for no less than is scheduled to leave the United States.
generator, the transporter, or a three years records of all shipments of A complete notification must be
reclaimer; and excluded material that were received at submitted at least sixty (60) days before
(iii) The generator and each reclaimer the facility. For each shipment, these the initial shipment is intended to be
of hazardous secondary material that records must at a minimum contain the shipped off-site. This notification may
has previously been subject to following information: cover export activities extending over a
regulation as hazardous wastes, but (1) Name of the transporter and date twelve (12) month or lesser period. The
which will be excluded from regulation the shipment was received; notification must be in writing, signed
under this paragraph, must send a one- (2) Name and address of the by the exporter, and include the
time notification to the Regional generating facility from which it was following information:
Administrator. Such notices must sent; and (A) Name, mailing address, telephone
identify the name, address, and EPA ID (3) The type and quantity of excluded number and EPA ID number (if
number of the generator or reclaimer (if material in the shipment. applicable) of the exporter.
applicable); the name and phone (B) The reclaimer must manage the (B) The estimated frequency or rate at
number of a contact person; the type of hazardous secondary material in a which the materials is to be exported
material that will be managed according manner that is at least as protective as and the period of time over which it is
to the exclusion, and when the materials that employed for analogous raw to be exported.
will begin to be managed in accordance material or is otherwise contained. An (C) The estimated total quantity of
with this conditional exclusion. A ‘‘analogous raw material’’ is a raw material specified in kilograms.
revised notice must be sent to the material for which a hazardous (D) All points of entry to and
Regional Administrator in the event of secondary material is a substitute and departure from each foreign country
a change to the name, address or EPA serves the same function and has similar through which the material will pass.
ID number of the generator, or a change physical and chemical properties as the (E) A description of the means by
in the type of material generated, and hazardous secondary material. Where which each shipment of the material
(iv) Generators of hazardous there is no analogous raw material, or if will be transported (e.g., mode of
secondary materials that are eligible for the secondary hazardous material is transportation vehicle (air, highway,
this exclusion must satisfy the following managed in a land-based unit as defined rail, water, etc.), type(s) of container
conditions: in defined in § 260.10, the material must (drums, boxes, tanks, etc.)).
be contained. (F) The name and address of the
(A) Prior to arranging for transport of (C) Any residuals that are generated reclaimer and any alternate reclaimer.
excluded material to a reclamation from reclamation processes will be (G) A description of the manner in
facility that is not operating under a managed in a manner that is protective which the material will be recycled in
RCRA Part B permit or interim status of human health and the environment. the foreign country that will be
standards, the generator must make If any residuals exhibit a hazardous receiving it.
reasonable efforts to ensure that the characteristic according to subpart C of (H) The name of any transit country
reclaimer intends to legitimately recycle 40 CFR part 261, or if they themselves through which the material will be sent
the material and not discard it pursuant are specifically listed in subpart D of 40 and a description of the approximate
to the criteria in § 261.2(g), and that the CFR part 261, such residuals are length of time it will remain in such
reclaimer will manage the material in a hazardous wastes and must be managed country and the nature of its handling
manner that is protective of human according to the applicable while there.
health and the environment. In making requirements of 40 CFR parts 260 (ii) Notifications submitted by mail
these reasonable efforts, the generator through 272. should be sent to the following mailing
may use any credible evidence (D) The reclaimer must comply with address: Office of Enforcement and
available, including information the financial requirements of 40 CFR Compliance Assurance, Office of
gathered by the generator, provided by part 264, subpart H. Federal Activities, International
the reclaimer, and/or provided by a (vi) A reclamation facility at which Compliance Assurance Division, (Mail
third party. hazardous secondary materials are Code 2254A), Environmental Protection
(B) The generator must maintain at managed in accordance with the Agency, 1200 Pennsylvania Ave., NW.,
the generating facility for no less than
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provisions of this exclusion may also Washington, DC 20460. Hand-delivered

three years records of all off-site accept and manage fully regulated notifications should be sent to: Office of
shipments of excluded material. For hazardous wastes from generators who Enforcement and Compliance
each shipment, these records must at a do not use this exclusion. Such Assurance, Office of Federal Activities,
minimum contain the following materials are not solid wastes, and the International Compliance Assurance
information: RCRA regulatory status of the Division, (Mail Code 2254A),
(1) Name of the transporter and date reclamation facility will not be affected, Environmental Protection Agency, Ariel
of the shipment; provided that the reclamation facility Rios Bldg., Room 6144, 1200

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14218 Federal Register / Vol. 72, No. 57 / Monday, March 26, 2007 / Proposed Rules

Pennsylvania Ave., NW., Washington, consents to the intended export. When of this section) and the exporter receives
DC. In both cases, the following shall be the receiving country consents in from EPA a copy of the
prominently displayed on the front of writing to the receipt of the material, Acknowledgment of Consent to Export
the envelope: ‘‘Attention: Notification of EPA will forward an Acknowledgment reflecting the receiving country’s
Intent to Export.’’ of Consent to the exporter. Where the consent to the changes.
(iii) Upon request by EPA, the receiving country objects to receipt of (vii) A copy of the Acknowledgment
exporter shall furnish to EPA any the material or withdraws a prior of Consent to Export must accompany
additional information which a consent, EPA will notify the exporter in the shipment. The shipment must
receiving country requests in order to writing. EPA will also notify the conform to the terms of the
respond to a notification. exporter of any responses from transit Acknowledgment.
(iv) EPA will provide a complete countries. (viii) If a shipment cannot be
notification to the receiving country and delivered for any reason to the recycler
any transit countries. A notification is (vi) When the conditions specified on
the original notification change, the or the alternate recycler, the exporter
complete when EPA receives a must renotify EPA of a change in the
notification which EPA determines exporter must provide EPA with a
written renotification of the change, conditions of the original notification to
satisfies the requirements of paragraph allow shipment to a new recycler in
(a) (5) (i) of this section. Where a claim except for changes to the telephone
accordance with paragraph (a)(5)(vi) of
of confidentiality is asserted with number in paragraph (a)(5)(i)(A) of this
this section and obtain another
respect to any notification information section and decreases in the quantity
Acknowledgment of Consent to Export.
required by paragraph (a)(5)(i) of this indicated pursuant to paragraph
(ix) Exporters must keep copies of
section, EPA may find the notification (a)(5)(i)(C) of this section. The shipment
notifications and Acknowledgments of
not complete until any such claim is cannot take place until consent of the
Consent to Export for a period of three
resolved in accordance with 40 CFR receiving country to the changes has
years following receipt of the
260.2. been obtained (except for changes to
(v) The export of hazardous secondary information about points of entry and
material under this paragraph is departure and transit countries pursuant [FR Doc. E7–5159 Filed 3–23–07; 8:45 am]
prohibited unless the receiving country to paragraphs (a)(5)(i)(D) and (a)(5)(i)(H) BILLING CODE 6560–50–P
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