# Definition of Solid Waste > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/fr%3A2011-17031 ## Record - **Collection:** Federal Register - **Document type:** Proposed Rule - **Published:** July 22, 2011 - **Citation:** 76 FR 44094 ## Text ENVIRONMENTAL PROTECTION AGENCY 40 CFR Parts 260, 261 and 266 [EPA-HQ-RCRA-2010-0742; FRL-9431-4] RIN 2050-AG62 Definition of Solid Waste AGENCY: Environmental Protection Agency. ACTION: Proposed rule. SUMMARY: The Environmental Protection Agency (EPA or the Agency) is proposing to revise certain exclusions from the definition of solid waste for hazardous secondary materials intended for reclamation that would otherwise be regulated under Subtitle C of the Resource Conservation and Recovery Act (RCRA). The purpose of these proposed revisions is to ensure that the recycling regulations, as implemented, encourage reclamation in a way that does not result in increased risk to human health and the environment from discarded hazardous secondary material. DATES: Comments must be received on or before September 20, 2011. ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ-RCRA-2010-0742 by one of the following methods: • http://www.regulations.gov: Follow the on-line instructions for submitting comments. • E-mail: Comments may be sent by electronic mail (e-mail) to RCRA-docket@epa.gov , Attention Docket ID No. EPA-HQ-RCRA-2010-0742. • Fax: Fax comments to: 202-566-9744, Attention Docket ID No. EPA-HQ-RCRA-2010-0742. • Mail: Send comments to: OSWER Docket, EPA Docket Center, Mail Code 28221T, Environmental Protection Agency, 1200 Pennsylvania Avenue, NW., Washington DC 20460, Attention Docket ID No. EPA-HQ-RCRA-2010-0742. Please include two copies of your comments. In addition, please mail a copy of your comments on the information collection provisions to the Office of Information and Regulatory Affairs, Office of Management and Budget (OMB), Attn: Desk Officer for EPA, 725 17th St., Washington DC 20503. • Hand delivery: Deliver two copies of your comments to: Environmental Protection Agency, EPA Docket Center, Room 3334, 1301 Constitution Avenue, NW., Washington DC, Attention Docket ID No. EPA-HQ-RCRA-2010-0742. Such deliveries are only accepted during the docket's normal hours of operation and special arrangements should be made for deliveries of boxed information. Instructions: Direct your comments to Docket ID Number EPA-HQ-RCRA-2010-0742. EPA's policy is that all comments received will be included in the public docket without change and may be made available online at http://www.regulations.gov, including any personal information provided, unless the comment includes information claimed to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. Do not submit information that you consider to be CBI or otherwise protected through http://www.regulations.gov or e-mail. The http://www.regulations.gov Web site is an “anonymous access” system, which means EPA will not know your identity or contact information unless you provide it in the body of your comment. If you send an e-mail comment directly to EPA without going through http://www.regulations.gov, your e-mail address will be automatically captured and included as part of the comment that is placed in the public docket and made available on the Internet. If you submit an electronic comment, EPA recommends that you include your name and other contact information in the body of your comment and with any disk or CD-ROM you submit. If EPA cannot read your comment due to technical difficulties and cannot contact you for clarification, EPA may not be able to consider your comment. Electronic files should avoid the use of special characters, any form of encryption, and be free of any defects or viruses. Docket: All documents in the docket are listed in the http://www.regulations.gov index. Although listed in the index, some information is not publicly available, such as CBI or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, will be publicly available only in hard copy. Publicly available docket materials are available either electronically at http://www.regulations.gov or in hard copy at the OSWER Docket, EPA/DC, EPA West, Room 3334, 1301 Constitution Ave., NW., Washington, DC. The Public Reading Room is open from 8:30 a.m. to 4:30 p.m. Monday through Friday, excluding legal holidays. The telephone number for the Public Reading Room and the OSWER Docket is (202) 566-1744. FOR FURTHER INFORMATION CONTACT: For more detailed information on specific aspects of this rulemaking, contact Marilyn Goode, Office of Resource Conservation and Recovery, Materials Recovery and Waste Management Division, MC 5304P, Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460, (703) 308-8800, ( goode.marilyn@epa.gov ) or Tracy Atagi, Office of Resource Conservation and Recovery, Materials Recovery and Waste Management Division, MC 5304P, Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460, at (703) 308-8672 ( atagi.tracy@epa.gov ). For information on future public meetings on this proposal, contact Amanda Geldard, Office of Resource Conservation and Recovery, Materials Recovery and Waste Management Division, MC 5304P, Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460, at 703-347-8975 ( geldard.amanda@epa.gov. ) Information regarding these public meetings will also be posted at EPA's Web site at: http://www.epa.gov/epawaste/hazard/dsw/rulemaking.htm. SUPPLEMENTARY INFORMATION: A. Does this action apply to me? Entities potentially affected by today's action include between 6,500 to 9,100 industrial facilities (depending on the regulatory option(s) selected) in upwards of 622 industries that generate or recycle hazardous secondary materials that are (1) Currently regulated as RCRA Subtitle C hazardous wastes, (2) hazardous secondary materials currently excluded under the 2008 DSW final rule (three exclusions), or (3) hazardous secondary materials currently excluded from RCRA Subtitle C under other recycling exclusions (32 exclusions). Most of the 622 industries have relatively few counts of potentially affected entities and are not listed here. There are 27 industries with the largest counts of potentially affected entities which EPA evaluated in detail in its “Regulatory Impact Analysis” (RIA) for today's action. These industries in ascending code order by 6-digit NAICS codes are: (1) 323110 Commercial Lithographic Printing; (2) 324110 Petroleum Refineries; (3) 325188 All Other Basic Inorganic Chemical Manufacturing; (4) 325199 All Other Basic Organic Chemical Manufacturing; (5) 325211 Plastics Material and Resin Manufacturing; (6) 325412 Pharmaceutical Preparation Manufacturing; (7) 325510 Paint and Coating Manufacturing; (8) 325998 All Other Miscellaneous Chemical Product and Preparation Manufacturing; (9) 326199 All Other Plastics Product Manufacturing; (10) 331111 Iron and Steel Mills; (11) 331492 Secondary Smelting, Refining & Alloying of Nonferrous Metal (except Copper, Aluminum); (12) 332312 Fabricated Structural Metal Manufacturing; (13) 332812 Metal Coating, Engraving (except Jewelry and Silverware) and Allied Services to Manufacturers; (14) 332813 Electroplating, Plating, Polishing, Anodizing and Coloring; (15) 332999 All Other Miscellaneous Fabricated Metal Product Manufacturing; (16) 333415 Air Conditioning, Warm Air Heating Equipment, and Commercial and Industrial Refrigeration Equipment Manufacturing, (17) 334412 Bare Printed Circuit Board Manufacturing; (18) 334413 Semiconductor and Related Device Manufacturing; (19) 334418 Printed Circuit Assembly, (20) 336399 All Other Motor Vehicle Parts Manufacturing; (21) 336412 Bare Printed Circuit Board Manufacturing; (22) 336413 Other Aircraft Part and Auxiliary Equipment Manufacturing; (23) 541710 Research & Development in the Physical, Engineering, and Life Sciences; (24) 562211 Hazardous Waste Treatment and Disposal; (25) 611310 Colleges, Universities and Professional Schools; (26) 622110 General Medical and Surgical Hospitals; and (27) 928110 National Security. In aggregate, the RIA estimates the future average annualized costs to industry to comply with the seven proposed revisions at between $7.2 million to $13.1 million per year under a lower-bound state adoption scenario, which results in 13% of recycling facilities implementing the revisions, and between $7.4 million to $47.5 million per year under an upper-bound state adoption scenario, which results in 74% of recycling facilities implementing the revisions. This range reflects uncertainty about the ultimate number of states which may voluntarily adopt the proposed revisions. More information on the potentially affected entities, industries, and industrial materials, as well as the economic impacts of this proposed rule, is presented in Section XVII.A of this preamble and in the Regulatory Impact Analysis available in the docket for this final rule. B. What To Consider When Preparing Comments for EPA 1. Submitting CBI. Do not submit this information to EPA through http://www.regulations.gov or e-mail. Clearly mark all information that you claim to be CBI. For CBI information in a disk or CD-ROM that you mail to EPA, mark the outside of the disk or CD-ROM as CBI and then identify electronically within the disk or CD-ROM the specific information that is claimed as CBI. In addition to one complete version of the comment that includes information claimed as CBI, a copy of the comment that does not contain the information claimed as CBI must be submitted for inclusion in the public docket. Information so marked will not be disclosed, except in accordance with procedures set forth in 40 CFR part 2. 2. Tips for Preparing Your Comments. When submitting comments, remember to: • Identify the rulemaking by docket number and other identifying information (subject heading, Federal Register date and page number). • Follow directions. The Agency may ask for commenters to respond to specific questions or organize comments by referencing a Code of Federal Regulations (CFR) part or section number. • Explain why you agree or disagree; suggest alternatives and substitute language for your requested changes. • Describe any assumptions and provide any technical information and/or data that you used. • If estimating burden or costs, explain methods used to arrive at the estimate in sufficient detail to allow for it to be reproduced. • Provide specific examples to illustrate any concerns and suggest alternatives. • Make sure to submit comments by the comment period deadline identified above. Preamble Outline I. Statutory Authority II. List of abbreviations and acronyms III. What is the intent of this proposal? IV. What is the scope of this proposal? V. History of the Definition of Solid Waste VI. Definition of Solid Waste Environmental Justice Analysis VII. Exclusion for Hazardous Secondary Materials That Are Transferred for the Purpose of Legitimate Reclamation VIII. Alternative Subtitle C Regulation for Hazardous Recyclable Materials IX. Revisions to the Exclusion for Hazardous Secondary Materials That Are Legitimately Reclaimed Under the Control of the Generator X. Revisions to the Definition of Legitimacy XI. Revisions to Solid Waste Variances and Non-Waste Determinations XII. Request for Comment on Re-Manufacturing Exclusion XIII. Request for Comment on Revisions to Other Recycling Exclusions and Exemptions XIV. Effect of This Proposal on Other Programs XV. Implementation Issues With 2008 DSW Final Rule XVI. State Authorization XVII. Administrative Requirements for This Rulemaking I. Statutory Authority These regulations are proposed under the authority of sections 2002, 3001, 3002, 3003, 3004, 3007, 3010, and 3017 of the Solid Waste Disposal Act of 1970, as amended by the Resource Conservation and Recovery Act of 1976 (RCRA), as amended by the Hazardous and Solid Waste Amendments of 1984 (HSWA), 42 U.S.C. 6921, 6922, 6923, and 6924. This statute is commonly referred to as “RCRA.” II. List of Abbreviations and Acronyms CERCLA—Comprehensive Environmental Response, Compensation, and Liability Act. CFR—Code of Federal Regulations. DOT—Department of Transportation. DSW—Definition of Solid Waste. EPA—Environmental Protection Agency. HSWA—Hazardous and Solid Waste Amendments of 1984. LDR—Land Disposal Restrictions. NAICS—North American Industry Classification System. NPL—National Priority List. RCRA—Resource Conservation and Recovery Act of 1976. RIA—Regulatory Impact Analysis. III. What is the intent of this proposal? Today's proposal would revise and clarify the RCRA definition of solid waste (DSW) for certain types of hazardous secondary materials that are currently conditionally excluded from the definition of solid waste. These exclusions were promulgated in October 2008 (73 FR 64688, October 30, 2008) and were intended to encourage the recovery and reuse of valuable resources as an alternative to land disposal or incineration, while at the same time maintaining protection of human health and the environment. In response to concerns raised by stakeholders about potential increases in risks to human health and the environment from hazardous secondary materials, EPA is proposing to revise the 2008 DSW final rule in order to ensure that the rule, as implemented, encourages reclamation in a way that protects human health and the environment from the mismanagement of hazardous secondary materials. IV. What is the scope of this proposal? In today's notice, EPA is proposing to revise the definition of solid waste regulations that were promulgated in October 2008 and that deal with the regulatory status of certain types of hazardous secondary materials sent for reclamation. The 2008 DSW final rule does not apply to recycling of “inherently waste-like” materials (40 CFR 261.2(d)); recycling of hazardous secondary materials that are “used in a manner constituting disposal,” or “used to produce products that are applied to or placed on the land”(40 CFR 261.2(c)(1)); or for “burning of hazardous secondary materials for energy recovery” or “used to produce a fuel or otherwise contained in fuels” (40 CFR 261.2(c)(2)). The regulatory changes being proposed today are summarized below. The intent of this summary is to give a brief overview of the proposed changes. More detailed discussions, including the Agency's rationale for the changes, are discussed in later sections. In addition, to aid commenters in their review, EPA has also included in the docket for today's proposal an informational redline/strikeout version of the proposed revised regulations as compared to the current Code of Federal Regulations. A. Exclusion for Hazardous Secondary Materials That Are Transferred for the Purpose of Reclamation EPA is proposing to replace the exclusion at 40 CFR 261.4(a)(24) and (25) for hazardous secondary materials that are transferred from the generator to other persons for the purpose of reclamation with an alternative Subtitle C regulation for hazardous recyclable materials. 1 (See Section VIII for a detailed discussion of the alternative regulatory approach.) EPA's new analyses of potential hazards posed by the 2008 DSW final rule indicate that, when implemented, the transfer-based exclusion may pose significant risk to human health and the environment from hazardous secondary material that may become discarded. While the transfer of materials is inherent in ordinary commerce and does not automatically indicate discard has occurred, in the case of hazardous secondary materials transferred for reclamation, EPA has determined that only a specific set of hazardous secondary materials and reclamation practices clearly do not involve discard. Based on new EPA analyses, EPA believes that in most cases, hazardous secondary materials transferred to another party for reclamation are discarded and are best regulated under RCRA Subtitle C. Further discussion of this proposed withdrawal can be found in Section VII of this preamble. 1 A hazardous secondary material is a secondary material ( e.g., spent material, by-product, or sludge) that, when discarded, would be identified as hazardous waste under 40 CFR part 261. A hazardous recyclable material is a hazardous wastes that is recycled. Unlike hazardous secondary materials, hazardous recyclable materials have clearly been discarded and therefore are always solid wastes. B. Alternative Subtitle C Regulation for Hazardous Recyclable Materials EPA is proposing to replace the transfer-based exclusion with an alternative Subtitle C regulation in 40 CFR 266.30 for hazardous recyclable materials, with the intention of promoting the safe and sustainable reclamation of these materials. Under these alternative requirements, the hazardous recyclable materials must be managed according to the current RCRA Subtitle C requirements, including manifesting and hazardous waste permits for storage, except that generators may accumulate hazardous recyclable materials for up to a year without a RCRA permit if the generator makes advance arrangements for legitimate reclamation and documents those arrangements in a reclamation plan. EPA also requests comment on setting an upper limit on the amount of hazardous recyclable material accumulated at the generator at any one time. Further discussion of these proposed alternative standards can be found in Section VIII of this preamble. C. Revisions to the Exclusion for Hazardous Secondary Materials Reclaimed Under the Control of the Generator EPA is proposing to retain the exclusion for hazardous secondary materials reclaimed under the control of the generator with certain revisions, including (1) adding a regulatory definition of “contained” to 40 CFR 260.10; (2) making notification a condition of the exclusion; (3) adding a recordkeeping requirement for speculative accumulation in 40 CFR 261.1(c)(8); and (4) adding a recordkeeping requirement for reclamation under toll manufacturing agreements in 40 CFR 261.4(a)(23)(i)(C). EPA is also requesting comment on whether to withdraw the toll manufacturing provision of the exclusion. Further discussion of these proposed revisions can be found in Section IX of this preamble. D. Legitimacy EPA is also proposing revisions to the definition of legitimacy in 40 CFR 260.43, including (1) applying the codified definition to all recycling activities regulated under 40 CFR 260-266; (2) making all legitimacy factors mandatory, with a petition process for instances where a factor is not met, but the recycling is still legitimate; and (3) requiring documentation of legitimacy. Further discussion of these proposed revisions can be found in Section X of this preamble. E. Revisions to Solid Waste Variances and Non-Waste Determinations EPA is also proposing revisions to the solid waste variances and non-waste determinations found in 40 CFR 260.30-260.34 in order to foster greater consistency on the part of implementing agencies and help ensure the protectiveness of the implementation of the solid waste variances and non-waste determinations. Proposed revisions include (1) requiring facilities to re-apply for a variance in the event of a change in circumstances that affects how a material meets the criteria upon which a solid waste variance has been based; (2) requiring facilities to re-notify every two years with updated information; (3) revising the criteria for the partial reclamation variance to more clearly explain when the variance applies and to require, among other things, that the criteria for this variance must be reviewed and evaluated collectively; (4) revising the criteria for the non-waste determination in 40 CFR 260.34 and requiring that petitioners demonstrate why the existing solid waste exclusions would not apply to their hazardous secondary materials; and (5) designating the Regional Administrator as the EPA recipient of petitions for variances and non-waste determinations. Further discussion of these proposed revisions can be found in Section XI of this preamble. F. Request for Comment on Re-Manufacturing Exclusion EPA is also requesting comment on an exclusion from the definition of solid waste for specific types of higher-value hazardous secondary materials sent for re-manufacturing into similar products and on a petition process for higher-value hazardous secondary materials that are not included within this exclusion, but that are destined to be re-manufactured into similar products. This exclusion would help promote sustainable materials management by extending the productive use of these materials and thus minimizing the amount of raw materials used overall and all the associated environmental impacts of production. Further discussion of this possible exclusion can be found in Section XII of this preamble. G. Request for Comment on Revisions to Other Recycling Exclusions and Exemptions EPA is also requesting comment on revisions that would affect other definition of solid waste exclusions and hazardous waste exemptions for recyclable materials. These possible revisions include (1) recordkeeping for speculative accumulation in all cases; (2) requiring facilities to re-notify every two years with updated information on their operating status under the various exclusions and exemptions; and (3) containment standards for excluded hazardous secondary material. Further discussion of these possible revisions can be found in Section XIII of this preamble. V. History of the Definition of Solid Waste A. Background RCRA gives EPA the authority to regulate hazardous wastes (see, e.g., RCRA sections 3001-3004). The original statutory designation of the subtitle for the hazardous waste program was Subtitle C and the national hazardous waste program is referred to as the RCRA Subtitle C program. Subtitle C is codified at 42 USC 6921 through 6939f. “Subtitle C” regulations are found at 40 CFR parts 260 through 279. “Hazardous wastes” are those that, because of their quantity, concentration, or physical, chemical, or infectious characteristics, may (1) cause, or significantly contribute to an increase in mortality or an increase in serious irreversible or incapacitating reversible illness, or (2) pose a substantial present or potential hazard to human health or the environment when improperly treated, stored, transported, or disposed of, or otherwise managed (see RCRA section 1004(5)). Hazardous wastes are a subset of solid wastes. Materials that are not solid wastes are not subject to regulation as hazardous wastes under RCRA Subtitle C. Thus, the definition of “solid waste” plays a key role in defining the scope of EPA's authorities under Subtitle C of RCRA. The statute defines “solid waste” as “* * * any garbage, refuse, sludge from a waste treatment plant, water supply treatment plant, or air pollution control facility and other discarded material * * * resulting from industrial, commercial, mining, and agricultural operations, and from community activities * * *” (RCRA Section 1004 (27) (emphasis added)). Since 1980, EPA has interpreted “solid waste” under its Subtitle C regulations to encompass both materials that are destined for final, permanent treatment and placement in disposal units, as well as certain materials that are destined for recycling (see 45 FR 33090-95, May 19, 1980; 50 FR 604-656, January 4, 1985 (see in particular pages 616-618)). EPA has offered three arguments in support of this: • The statute and the legislative history suggest that Congress expected EPA to regulate certain materials that are destined for recycling as solid and hazardous wastes (see 45 FR 33091, citing numerous sections of the statute and U.S. Brewers' Association v. EPA, 600 F. 2d 974 (DC Cir. 1979); 48 FR 14502-04, April 3, 1983; and 50 FR 616-618, January 4, 1985). • Hazardous secondary materials stored or transported prior to recycling have the potential to present the same types of threats to human health and the environment as hazardous wastes stored or transported prior to disposal. In fact, EPA has found that recycling operations have accounted for a number of significant damage incidents. For example, hazardous secondary materials destined for recycling were involved in one-third of the first 60 filings under RCRA's imminent and substantial endangerment authority and in 20 of the initial 160 sites listed under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) (48 FR 14474, April 4, 1983). Congress also cited some damage cases which involve recycling (H.R. Rep. 94-1491, 94th Cong., 2d Sess., at 17, 18, 22). More recent data ( i.e., information on damage incidents occurring after 1982) included in the rulemaking docket for today's proposed rule corroborate the fact that recycling operations can and have resulted in significant damage incidents. • Excluding all hazardous secondary materials destined for recycling would allow materials to move in and out of the hazardous waste management system depending on what any person handling the hazardous secondary materials intended to do with them, which is inconsistent with the RCRA mandate to track hazardous wastes and control them from “cradle to grave.” Hence, RCRA confers on EPA the authority to regulate discarded hazardous secondary materials even if they are destined for recycling and may be beneficially reused. The Agency has therefore developed in part 261 of 40 CFR a definition of “solid waste” for Subtitle C regulatory purposes. ( Note: This definition is narrower than the definition of “solid waste” for RCRA endangerment and information-gathering authorities. (See 40 CFR 261.1(b). Also Connecticut Coastal Fishermen's Association v. Remington Arms Co., 989 F.2d 1305, 1315 (2d Cir.1993) holds that EPA's use of a narrower and more specific definition of solid waste for Subtitle C purposes is a reasonable interpretation of the statute. See also Military Toxics Project v. EPA, 146 F.3d 948 (DC Cir. 1998).) EPA has consistently asserted that hazardous secondary materials are not excluded from regulation as solid wastes merely because of a claim that they will be recycled. EPA has consistently considered hazardous secondary materials intended for “sham recycling” ( i.e., disposal performed in the guise of recycling) to be discarded and, hence, to be solid wastes for Subtitle C purposes (see 45 FR 33093, May 19, 1980; 50 FR 638-639, January 4, 1985). The U.S. Court of Appeals for the DC Circuit has agreed that materials undergoing sham recycling are discarded and, consequently, are solid wastes under RCRA (see American Petroleum Institute v. EPA, 216 F.3d 50, 58-59 (DC Cir. 2000)). B. A Series of DC Circuit Court Decisions on the Definition of Solid Waste Because the interpretation of what constitutes a solid waste is the foundation of the hazardous waste regulatory program, there has been quite a bit of litigation over the meaning of “solid waste” under Subtitle C of RCRA. Specifically, industries representing mining and oil refining interests challenged EPA's January 1985 regulatory definition of solid waste. In 1987, the DC Circuit held that EPA exceeded its authority “in seeking to bring materials that are not discarded or otherwise disposed of within the compass of `waste' ” ( American Mining Congress v. EPA (“ AMC I ”), 824 F.2d 1177, 1178 (DC Cir. 1987)). The Court held that certain of the materials EPA was seeking to regulate were not “discarded materials” under RCRA section 1004(27). The Court also held that Congress used the term “discarded” in its ordinary sense, to mean “disposed of” or “abandoned” (824 F.2d at 1188-89). The Court further held that the term “discarded materials” could not include materials “ * * * destined for beneficial reuse or recycling in a continuous process by the generating industry itself (because they) are not yet part of the waste disposal problem” (824 F.2d at 1190). The Court held that Congress had directly spoken to this issue, so that EPA's definition was not entitled to deference under Chevron U.S.A., Inc. v. NRDC, 467 U.S. 837 (1984) (824 F.2d at 1183, 1189-90, 1193). At the same time, the Court held that recycled materials could be regulated as discarded materials. The Court mentioned at least two examples of recycled materials that may be regulated as wastes, noting that used oil can be considered a solid waste (824 F.3d at 1187 (fn 14)). Also, the Court suggested that materials disposed of and recycled as part of a waste management program may be regulated as solid wastes (824 F. 2d at 1179). Subsequent decisions by the DC Circuit also indicate that some materials destined for recycling may be considered “discarded.” In particular, the Court held that emission control dust from steelmaking operations listed as hazardous waste “K061” is a solid waste, even when sent to a metals reclamation facility, at least where that is the treatment method required under EPA's land disposal restrictions program ( American Petroleum Institute v. EPA (“ API I ”), 906 F.2d 729 (DC Cir. 1990)). In addition, the Court held that it is reasonable for EPA to consider as discarded (and solid wastes) listed wastes managed in units that are in part wastewater treatment units, especially where it is not clear that the industry actually reuses the materials ( AMC II, 907 F. 2d 1179 (DC Cir. 1990)). It also is worth noting that two other Circuits also have held that EPA may regulate at least some materials destined for reclamation rather than final discard. The U.S. Court of Appeals for the Eleventh Circuit found that “[i]t is unnecessary to read into the term `discarded' a congressional intent that the waste in question must finally and forever be discarded” ( U.S. v. ILCO, 996 F.2d 1126, 1132 (Eleventh Cir. 1993) (finding that used lead batteries sent to a reclaimer have been “discarded once” by the entity that sent the battery to the reclaimer)). In addition, the Fourth Circuit found that slag held on the ground untouched for six months before sale for use as road bed could be a solid waste ( Owen Electric Steel Co. v. EPA, 37 F.3d 146, 150 (4th Cir. 1994)). In 1998, EPA promulgated a rule in which EPA regulated under Subtitle C hazardous secondary materials recycled by reclamation within the mineral processing industry, the “LDR Phase IV rule” (63 FR 28556, May 26, 1998). In that rule, EPA promulgated a conditional exclusion for all types of mineral processing hazardous secondary materials destined for reclamation. As a condition of the exclusion, EPA prohibited the land-based storage of these mineral processing secondary materials prior to reclamation because it considered hazardous secondary materials from the mineral processing industry that were stored on the land to be solid wastes (63 FR 28581, May 26, 1998). The conditional exclusion decreased regulation over spent materials stored prior to reclamation, but increased regulation over by-products and sludges that exhibit a hazardous characteristic and that are stored prior to reclamation. EPA noted that the statute does not authorize it to regulate “materials that are destined for immediate reuse in another phase of the industry's ongoing production process.” EPA, however, took the position that hazardous secondary materials that are removed from a production process for storage are not “immediately reused,” and therefore are “discarded” (63 FR 28580, May 26, 1998). The mining industry challenged the rule, and the DC Circuit vacated the provisions that expanded EPA regulation over characteristic by-products and sludges destined for reclamation ( Association of Battery Recyclers v. EPA (“ ABR ”), 208 F.3d 1047 (DC Cir. 2000)). The Court held that it had already resolved the issue presented in ABR in its opinion in AMC I, where it found that “* * * Congress unambiguously expressed its intent that `solid waste' (and therefore EPA's regulatory authority) be limited to materials that are `discarded' by virtue of being disposed of, abandoned, or thrown away” (208 F.2d at 1051). It repeated that materials reused within an ongoing industrial process are neither disposed of nor abandoned (208 F.3d at 1051-52). It explained that the intervening API I and AMC II decisions had not narrowed the holding in AMC I (208 F.3d at 1054-1056). Notably, the Court did not hold that storage before reclamation automatically makes materials “discarded.” Rather, it held that “* * * at least some of the secondary material EPA seeks to regulate as solid waste (in the mineral processing rule) is destined for reuse as part of a continuous industrial process and thus is not abandoned or thrown away” (208 F.3d at 1056). In its most recent opinion dealing with the definition of solid waste, Safe Food and Fertilizer v. EPA (“ Safe Food ”), 350 F.3d 1263 (DC Cir. 2003), the DC Circuit upheld an EPA rule that excludes from the definition of solid waste hazardous secondary materials used to make zinc fertilizers, and the fertilizers themselves, as long as the recycled materials meet certain handling, storage, and reporting conditions and the resulting fertilizers have concentration levels for lead, arsenic, mercury, cadmium, chromium, and dioxins that fall below specified thresholds (Final Rule, “Zinc Fertilizers Made From Recycled Hazardous Secondary Materials” (“Fertilizer Rule”), 67 FR 48393, July 24, 2002). EPA determined that if these conditions are met, the hazardous secondary materials used to make the fertilizer have not been discarded. The conditions also apply to a number of recycled materials not produced in the fertilizer production industry, including certain zinc-bearing hazardous secondary materials, such as brass foundry dusts. EPA's reasoning was that market participants, consistent with the EPA-required conditions in the rule, would treat the exempted materials more like valuable products than like negatively-valued wastes and, thus, would manage them in ways inconsistent with discard. In addition, the fertilizers derived from these recycled feedstocks are chemically indistinguishable from analogous commercial products made from raw materials (350 F.3d at 1269). The Court upheld the rule based on EPA's explanation that market participants manage materials in ways inconsistent with discard, and the fact that the levels of contaminants in the recycled fertilizers were “identical” to the fertilizers made with virgin raw materials (also called “the identity principle”). The Court held that this interpretation of “discard” was reasonable and consistent with the statutory purpose. The Court noted that the identity principle was defensible because the differences in health and environmental risks between the two types of fertilizers are so slight as to be substantively meaningless. The Court also stated that it “need not consider whether a material could be classified as a non-discard exclusively on the basis of the market-participation theory” (350 F.3d at 1269). The Court only determined that the combination of market participants' treatment of the materials, EPA-required management standards, and the “identity principle” constitutes a reasonable set of tools to establish that the recycled hazardous secondary materials and fertilizers are not discarded. C. October 2003 Proposal To Revise the Definition of Solid Waste Prompted by concerns articulated in various Court opinions decided up to that point, in October 2003, EPA proposed a rule which defined those circumstances under which hazardous secondary materials would be excluded from RCRA's hazardous waste regulations because they are generated and reclaimed in a continuous process within the same industry. In addition, the Agency also clarified in a regulatory context the concept of “legitimate recycling,” which has been a key component of RCRA's regulatory program for hazardous material recycling, but which up to that point, had been implemented without specific regulatory criteria (68 FR 61558, October 28, 2003). In response to the October 2003 DSW proposal, a number of commenters criticized the Agency for not having conducted a study of the potential impacts of the proposed regulatory changes. These commenters expressed the general concern that deregulating hazardous secondary materials that are reclaimed in the manner proposed could result in the mismanagement of these materials, and could create new cases of environmental damage that would require remedial action under Federal or state authorities. Some of the commenters further cited a number of examples of environmental damage that were attributed to hazardous secondary material recycling, including sites listed on the Superfund National Priorities List (NPL). Other commenters to the 2003 DSW proposal expressed the view that the great majority of these cases of recycling-related environmental problems occurred before RCRA, CERCLA, or other environmental programs were established in the early 1980s. These commenters argued that these environmental programs—most notably, RCRA's hazardous waste regulations and the liability provisions of CERCLA—have created strong incentives for proper management of recyclable hazardous secondary materials and recycling residuals. Several commenters further noted that, because of these developments, industrial recycling practices have changed substantially since the early 1980s and present day generators and recyclers are much better environmental stewards than in the pre-RCRA/-CERCLA era. Thus, they argued that cases of “historical” recycling-related environmental damage are not particularly relevant when modifying the current RCRA hazardous waste regulations for hazardous secondary materials recycling. D. Recycling Studies In light of these comments on the 2003 DSW proposal, and in deliberating on how to proceed with the rulemaking effort, the Agency decided that additional information on hazardous secondary material recycling would benefit its regulatory decision-making, and would provide stakeholders with a clearer picture of the hazardous secondary material recycling industry in this country. Accordingly, the Agency examined three issues that we believed were of particular importance to revising the definition of solid waste: • How do responsible generators and recyclers of hazardous secondary materials ensure that recycling is done in an environmentally safe manner? • To what extent have hazardous secondary material recycling practices resulted in environmental problems since enactment of major waste management statutes, and why? • Are there certain economic forces or incentives specific to hazardous secondary material recycling that can explain why environmental problems can sometimes originate from such recycling activities? Reports documenting these studies are available in the docket for the 2008 DSW final rule under the following titles: • An Assessment of Good Current Practices for Recycling of Hazardous Secondary Materials (EPA-HQ-RCRA-2002-0031-0354) (“study of successful recycling”). • An Assessment of Environmental Problems Associated With Recycling of Hazardous Secondary Materials (EPA-HQ-RCRA-2002-0031-0355) (“environmental problems study”). • A Study of Potential Effects of Market Forces on the Management of Hazardous Secondary Materials Intended for Recycling (EPA-HQ-RCRA-2002-0031-0358) (“market forces study”). In the study of successful recycling, EPA found that responsible recycling practices used by generators and recyclers to manage hazardous secondary materials fall into two general categories. The first category includes the audit activities and inquiries performed by a generator of a hazardous secondary material to determine whether the entity to which it is sending such material is equipped to manage it responsibly without the risk of releases or other environmental damage. These recycling and waste audits of other companies' facilities are common to those generators that responsibly recycle in the hazardous secondary materials market. The second category of responsible recycling practices consists of the control practices that ensure responsible management of any given shipment of hazardous secondary material, such as the contracts under which the transaction takes place and the tracking systems that can inform a generator that its hazardous secondary material has been properly managed. The goal of the environmental problems study was to identify and characterize environmental problems that have been attributed to some types of hazardous secondary material recycling that are relevant for the purpose of this rulemaking effort. To address commenters' concerns that historic damages are irrelevant to current practices because environmental programs (post-RCRA and -CERCLA implementation) have created strong incentives for proper management of recyclable hazardous secondary materials, EPA only included cases where damages occurred after 1982. The study identifies 208 cases in which environmental damages of some kind occurred from some type of recycling activity and that otherwise fit the scope of the study. 2 The Agency believes that the occurrence of certain types of environmental problems associated with post-1982 recycling practices shows that discard has occurred. In particular, instances where hazardous secondary materials were abandoned ( e.g., in warehouses) and which required removal overseen by a government agency and the expenditure of public funds clearly demonstrate that the hazardous secondary material was discarded. Of the 208 damage cases, 69 cases (33%) involve abandoned materials. The relatively high incidence of abandoned materials likely reflects the fact that bankruptcies or other types of business failures were associated with 138 (66%) of the cases. 2 EPA initially identified over 800 potential damage cases, most of which were not included in the analysis because (1) the damages occurred before 1982, (2) the damages were not caused by recycling, or (3) there was not enough information to determine when the damages occurred or whether recycling contributed to the damages. The cases EPA considered, but did not include, were listed in an appendix to the report to allow the public to comment on whether additional cases should be included in the analysis. As a result of public comment, EPA identified one new damage case and updated two existing damage case profiles with more information about environmental problems, as detailed in Addendum: An Assessment of Environmental Problems Associated with Recycling of Hazardous Secondary Materials (EPA-HQ-RCRA-2002-0031-0601). EPA determined that the new damage case and supplemental information were consistent with the damage cases previously cited in the study. In addition, the pattern of environmental damages that resulted from the mismanagement of recyclable materials (including contamination of soils, groundwater, surface water and air) is a strong indication that the hazardous secondary materials were generally not managed as valuable commodities and were discarded. Of the 208 damage cases, 81 cases (40%) primarily resulted from the mismanagement of recyclable hazardous secondary materials, while mismanagement of recycling residuals was the primary cause in 71 cases (34%). Often, in the case of mismanagement of recycling residuals, reclamation processes generated residuals in which the toxic components of the recycled materials were separated from the non-toxic components, and these portions of the hazardous secondary material were then mismanaged and discarded. Examples of this include a number of drum reconditioning facilities, where large numbers of used drums were cleaned out to remove small amounts of remaining product, such as solvent, and these wastes were then improperly stored or disposed, while the drums were reused or recycled. The market forces study used accepted economic theory to describe how various market incentives can influence a firm's decision-making process when recycling hazardous secondary materials. This study helps explain some of the possible fundamental economic drivers of both the successful and unsuccessful recycling practices. As pointed out by some commenters to the 2003 DSW proposed rule, the economic forces shaping the behavior of firms that recycle hazardous secondary materials are often different from those at play in manufacturing processes using virgin materials. The market forces study used economic theory to provide information on how certain characteristics can influence three different recycling models to encourage or discourage an optimal outcome. The three recycling models examined were (1) commercial recycling, where the primary business of the firm is the recycling of hazardous secondary materials that are accepted from off-site industrial sources (which usually pay a fee); (2) industrial intra-company recycling, where firms generate hazardous secondary materials as by-products of their main production processes and recycle the hazardous secondary materials for sale or for their own reuse in production; and (3) industrial inter-company recycling, where firms either use or recycle hazardous secondary materials obtained from other firms, with the objective of reducing the cost of their production inputs. The report looked at how the outcome from each model is potentially affected by three market characteristics: (1) The value of the recycled product, (2) the price stability of recycling output or inputs, and (3) the net worth of the firm. An individual firm's decision-making is based on many factors and extrapolating a firm's likely behavior from a few factors could be an over-simplification. However, when used in conjunction with other information, the economic theory can be quite illuminating. For example, according to the market forces study, industrial intra- and inter-company recyclers have more flexibility in adjusting to unstable recycling markets ( e.g., during price fluctuations, these companies can more easily switch from recycling to disposal or from recycled inputs to virgin inputs). Therefore, they would be expected to be less likely to have environmental problems from over-accumulated materials. On the other hand, in certain types of commercial recycling, the product has low value, the prices are unstable, and/or the firm has a low net worth. Facilities in these situations can be more susceptible to environmental problems from the over-accumulation or mishandling of hazardous secondary materials, especially when compared to recycling by a well-capitalized firm that yields a product with high value. These predicted outcomes appear to be supported by the results of the environmental problems study, which showed the majority of environmental damages occur at off-site commercial recyclers. However, as shown by the study of successful recycling, generators who might otherwise bear a large liability from poorly-managed recycling at other companies have addressed this issue by carefully examining the recyclers to which they send their hazardous secondary materials to ensure that they are technically and financially capable of performing the recycling. In addition, we have seen that successful recyclers (both commercial and industrial) have often taken advantage of mechanisms, such as long-term contracts to help stabilize price fluctuations, allowing recyclers to plan their operations more effectively. Further discussion of the recycling studies, including the methodology and limitations of the studies, can be found in the March 2007 supplemental proposal (72 FR 14178-83), and the October 2008 DSW final rule (73 FR 64673-74) and the studies themselves can be found in the docket for the 2008 DSW final rule (EPA-HQ-RCRA-2002-0031-0355). E. March 2007 Supplemental Proposal To Revise the Definition of Solid Waste In March 2007, EPA published a supplemental proposal that provided the public the opportunity to comment on these studies. The Agency also re-structured the proposed rule and proposed (1) two exclusions for hazardous secondary materials recycled under the control of the generator (one exclusion would apply to hazardous secondary materials managed in non-land-based units, and the other exclusion would apply to hazardous secondary materials managed in land-based units) and (2) an exclusion for hazardous secondary materials transferred to another party for reclamation. The Agency also proposed a non-waste determination petition process, and re-proposed the legitimacy criteria, with certain modifications (72 FR 14172, March 26, 2007). For the exclusions of hazardous secondary materials reclaimed under the control of the generator, EPA described three circumstances under which we believed that discard does not take place and where the potential for environmental releases is low. The three situations involve hazardous secondary materials that are generated and legitimately reclaimed at the generating facility, legitimately reclaimed at a different facility within the same company, or legitimately reclaimed through a tolling arrangement. Under all three circumstances, the hazardous secondary materials must be generated and reclaimed within the United States or its territories. Because the hazardous secondary material generator in these situations still finds value in the hazardous secondary materials, has retained control over them, and intends to use them, EPA proposed to exclude these materials from the definition of solid waste and, thus, from regulation under Subtitle C of RCRA, provided the reclamation is legitimate and the hazardous secondary materials are contained and not speculatively accumulated. In addition, EPA proposed that facilities generating and reclaiming hazardous secondary materials under the control of the generator must submit notification to their regulatory authority. For the exclusion of hazardous secondary materials transferred to another party for reclamation (referred to as the transfer-based exclusion), the Agency proposed conditions that, when met, would indicate that these hazardous secondary materials were not discarded. For example, one of the conditions would require the generator to make reasonable efforts, a form of due diligence, to determine that its hazardous secondary materials would be properly and legitimately recycled (and that the hazardous secondary material would not be discarded). Another condition would require the reclamation facility to have adequate financial assurance (thus demonstrating that the hazardous secondary material would not be abandoned). In addition, EPA proposed that both the generator and reclaimer would be required to maintain shipping records (to demonstrate that the hazardous secondary material was sent for reclamation and was received by the reclaimer). Furthermore, the reclaimer would be subject to additional storage and residual management standards (to address the instances of discard observed at off-site reclamation facilities in the damage cases). Finally, facilities operating under the transfer-based exclusion must also submit notification to their regulatory authority. In addition, the 2007 DSW supplemental proposal included a case-by-case non-waste determination petition process that would allow applicants to receive a formal determination from EPA that their hazardous secondary materials were not discarded and therefore were not solid wastes. The case-by-case petition process would allow EPA or the authorized state to take into account the particular fact pattern of the recycling and to determine that the hazardous secondary materials in question were not solid wastes. The petition process for the non-waste determination was the same as that for the variances from the definition of solid waste found at 40 CFR 260.31. EPA also proposed a definition of legitimate recycling that restructured the legitimacy factors originally proposed in October 2003. The proposed legitimacy factors would be used to determine that the recycling of hazardous secondary materials is not a “sham” and is not waste treatment. F. October 2008 Final Rule To Revise the Definition of Solid Waste In October 2008, EPA promulgated a final rule largely as proposed in March 2007, with some revisions and clarifications, including (1) clarifying that hazardous secondary materials held at a transfer facility for less than 10 days are considered to be in transport (and therefore such transfer facilities are not considered to be storing the hazardous secondary materials for the purpose of the DSW exclusion), (2) allowing the use of intermediate facilities that store hazardous secondary materials for more than 10 days under the transfer-based exclusion, provided the facilities comply with the same conditions applicable to reclamation facilities, (3) requiring facilities operating under the generator-controlled and/or the transfer-based exclusion to notify their regulatory authority prior to operating under the exclusion and every other year thereafter, and (4) making legitimacy a condition of the exclusions and the non-waste determinations in that rule, but not finalizing the legitimacy language for all recycling activities. G. Section 7004 Petition Submitted by the Sierra Club and Industry Response On January 29, 2009, the Sierra Club submitted an administrative petition under RCRA section 7004(a), 42 U.S.C. 6974(a), to the Administrator of EPA requesting that the Agency repeal the October 2008 revisions to the definition of solid waste rule and stay the implementation of the rule. The administrative petition was submitted at the same time that the American Petroleum Institute (API) and Sierra Club filed judicial Petitions for Review under RCRA section 7006(a), 42 U.S.C. 6976(a) challenging the rule in the United States Court of Appeals for the District of Columbia Circuit (DC Circuit). These cases, designated as Docket Nos. 09-1038 and 1041, respectively, are currently before the DC Circuit. The petition argued that the revised regulations are unlawful and that they increase threats to public health and the environment without producing compensatory benefits and, therefore, should be repealed. Among other things, the petition singled out the lack of regulatory definitions for key conditions of the rule and disagreed with the Agency's findings that the rule would have no adverse environmental impacts, including the finding there would be no adverse impact to environmental justice communities or children's health. On March 6, 2009, a coalition of industry associations (“industry coalition”) submitted a letter to the Administrator of EPA in response to the Sierra Club petition. This letter requested that EPA deny Sierra Club's petition on the grounds that the 2008 DSW final rule comports with court cases construing the scope of the definition of solid waste under RCRA, and that the 2008 DSW final rule achieves significant economic and conservation benefits, while imposing significant controls on the hazardous secondary material recycling industry that are fully protective of the environment. The letter also responds to each of the specific points raised by Sierra Club in its petition. H. June 2009 Public Meeting and the Draft DSW Environmental Justice Analysis Methodology In response to Sierra Club's administrative petition and the industry coalitions letter to the Administrator, EPA issued a May 27, 2009, Federal Register notice (74 FR 25200) describing possible actions and optional paths forward, as well as announcing a public meeting on June 30, 2009, to allow the public and interested stakeholders the opportunity to provide input to the decision-making process. In the May 27, 2009, Federal Register notice announcing the public meeting, EPA described the scope of possible action, which is governed by the concept of “discard.” As stated in RCRA section 1004(27), “solid waste” is defined as “* * * any garbage, refuse, sludge from a waste treatment plant, water supply treatment plant, or air pollution control facility and other discarded material * * * resulting from industrial, commercial, mining and agricultural activities.” The May 2009 public meeting notice said that “[b]ecause the final revisions to the definition of solid waste are closely tied to EPA's interpretation of “discard,” EPA does not expect to completely repeal the rule or stay its implementation, because such an action could result in hazardous secondary materials that are not discarded being regulated as hazardous waste. In particular, EPA said that it does not expect to repeal either the exclusion for hazardous secondary materials reclaimed under the control of the generator or the non-waste determination petition process. However, the Agency stated that it could revise other parts of the definition of solid waste rule, such as the definition of legitimacy and the transfer-based exclusion, in ways that could increase environmental protection, while still appropriately defining when a hazardous secondary material being reclaimed is a solid waste” (74 FR 25203). Thirty-three people spoke at the public meeting, and approximately 4,000 written comments were received, of which the majority were from private citizens who wrote in via a mass e-mail campaign to repeal the rule. The remaining comments came from state and local governments (17), the generating industry (28), the waste management/recycling industry (15), environmental, public health and community organizations (12), and academics (2). Industry comments were uniformly in favor of denying the Sierra Club petition to repeal the rule, citing legal issues and the protectiveness of the rule's conditions. Environmental and community organizations, on the other hand, were uniformly in favor of repealing the rule, expressing concerns over the protectiveness, enforceability and environmental justice and children's health impacts of the rule. Waste management/recycling industry comments were split, with hazardous waste recyclers generally advocating that EPA retain and improve the rule with more stringent standards. Other waste management industry comments, particularly those from companies representing landfills and incinerators, were in favor of repealing the rule. State comments expressed concerns about implementing the rule, particularly given the economic climate, and generally were in favor of repealing or significantly revising the transfer-based exclusion. EPA appreciates all the comments that were provided and has carefully considered them in deciding to revisit the definition of solid waste in today's proposal. A copy of the public meeting transcript and the comments submitted in response to the public meeting notice are available in the docket for the public meeting (Docket ID number EPA-HQ-RCRA-2009-0315). Many commenters (including those at the public meeting and those who responded with written comments) expressed strong concerns that the Agency did not adequately address environmental justice in the rulemaking. In response to the concerns over the environmental justice analysis, EPA committed to perform a more rigorous and thorough analysis of the environmental justice impacts of the 2008 DSW final rule. On January 15, 2010, EPA released for public input a draft methodology for conducting the DSW Environmental Justice Analysis. The draft methodology was presented to the National Environmental Justice Advisory Committee (NEJAC) and discussed at three public roundtable meetings. I. Settlement Agreement With the Sierra Club 1. Overview of Settlement Agreement On September 7, 2010, EPA signed a settlement agreement with the Sierra Club under which the Sierra Club agreed to withdraw their administrative petition and EPA agreed to prepare a notice of proposed rulemaking to be signed no later than June 30, 2011, which would address, at a minimum, the issues raised in the Sierra Club's administrative petition, including the four issues discussed in the May 27, 2009, public meeting Federal Register notice (74 FR 25200). The settlement agreement did not specify the outcome of the final rule or specifically what regulatory changes EPA would propose. A notice taking final administrative action concerning the notice of proposed rulemaking is to be signed no later than December 31, 2012. The settlement agreement was approved by the court on January 11, 2011. Today's proposal represents EPA's fulfillment of the portion of the settlement agreement concerning the proposed rule. The four issues in the settlement agreement are (1) the definition of “contained” (which includes the issue of defining “significant releases”) (addressed in Section IX.B.1 of this preamble), (2) notification before operating under the exclusion (addressed in Section IX.B.2 of this preamble), (3) the definition of “legitimacy” (addressed in Section X of this preamble) and (4) the transfer-based exclusion (addressed in Section VII of this preamble). Other issues presented in the administrative petition are discussed below. 2. Request to Immediately Stay the Implementation of and Revoke the 2008 DSW Rule The Sierra Club's administrative petition included a request to immediately stay and revoke the 2008 DSW final rule. To support this request, the petition asserted that the damage case study demonstrates that hazardous waste recycling has caused substantial harm to health and the environment and that the 2008 DSW final rule increases the likelihood of greater future harm. The petition also asserted that the 2008 DSW final rule does not account for the possibility that unstable recycling markets or financial conditions increase the risk of hazardous waste abandonment. In addition, the petition asserted that the 2008 DSW final rule will not substantially increase recycling and that the economic benefits are few and will only accrue to deregulated industries. Additionally, the petition claimed that there would be job losses in the hazardous waste treatment industry and increased worker health problems as a result of the rule. EPA addressed Sierra Club's request to revoke the 2008 DSW final rule in whole and stay its implementation in the May 27, 2009, public meeting notice, which continues to reflect EPA's current thinking. In that notice, EPA stated at 74 FR 25202: The scope of possible changes to the definition of solid waste is governed by the concept of “discard.” As discussed in the preamble to the DSW final rule, EPA used the concept of discard as the central organizing idea behind the October 2008 revisions to the definition of solid waste. As stated in RCRA section 1004(27), “solid waste” is defined as “* * * any garbage, refuse, sludge from a waste treatment plant, water supply treatment plant, or air pollution control facility and other discarded material * * * resulting from industrial, commercial, mining and agricultural activities” (emphasis added). Therefore, in the context of the DSW final rule, a key issue relates to the circumstances under which a hazardous secondary material that is recycled by reclamation is or is not discarded (73 FR 64675). In exercising its discretion in the DSW final rule to define what constitutes “discard” for hazardous secondary materials reclamation, EPA included an explanation of how each provision of the final rule relates to discard (73 FR 64676-64679). For example, in the DSW final rule, EPA determined that if the generator maintains control over the recycled hazardous secondary material and if the material is legitimately recycled under the standards established in the final rule and not speculatively accumulated within the meaning of EPA's regulations, then the hazardous secondary material is not discarded. This is because the hazardous secondary material is being treated as a valuable commodity rather than as a waste. By maintaining control over, and potential liability for, the reclamation process, the generator ensures that the hazardous secondary materials are not discarded. (See 73 FR 64676.) Because the final revisions to the definition of solid waste are closely tied to EPA's interpretation of the concept of “discard,” EPA does not plan to repeal the rule in whole or stay its implementation. Such an action could result in hazardous secondary materials that are not discarded being regulated as hazardous wastes. In particular, EPA does not expect to repeal either the exclusion for hazardous secondary materials reclaimed under the control of the generator or the non-waste determination petition process. However, EPA believes that there may be opportunities to revise or clarify the definition of solid waste rule, particularly with respect to the definition of legitimacy and the transfer-based exclusion, in ways that could improve implementation and enforcement of the provisions, thus increasing environmental protection, while still appropriately defining when a hazardous secondary material being reclaimed is a solid waste and subject to hazardous waste regulation. Today's proposal includes a discussion of several potential changes to the generator-controlled exclusion and to the non-waste determination petition process, but, for the reasons stated above, EPA did not stay the rule and is not proposing to withdraw either provision. 3. Adequacy of EPA's Analyses Finally, the Sierra Club petition asserted that EPA's conclusion that the 2008 DSW final rule would have no adverse environmental impacts, and therefore would have no disproportional adverse impacts to minority and low-income communities, is unsupported by the administrative record. In response to these comments and similar comments by other stakeholders at the 2009 public meeting, EPA committed to producing an expanded analysis of the potential disproportionate impacts of the 2008 DSW final rule. A draft methodology for the analysis was shared with the public in January 2010, and three public roundtable discussions were held to discuss the draft methodology. 3 EPA considered the comments raised in those discussions and conducted an analysis. The analysis has undergone peer review, the results of which are included in the docket for today's proposed rule. The environmental justice analysis is discussed in detail in the next section (Section VI) below. 3 U.S. EPA. Draft Environmental Justice Methodology for the Definition of Solid Waste Rule, January 2010, http://www.epa.gov/epawaste/hazard/dsw/ej.htm. J. Commitment to Sustainable Materials Management In addition to addressing the environmental and public health concerns raised by the Sierra Club and other commenters, EPA also envisions today's proposal as an opportunity to discuss focused approaches to revising the hazardous waste recycling regulations to promote sustainable materials management, while ensuring protection of human health and the environment. Sustainable materials management is an approach to serving human needs by using/reusing resources most productively and sustainably throughout their life cycles, generally minimizing the amount of materials involved and all the associated environmental impacts. Sustainable materials management is a core element of RCRA's resource conservation objectives. The shift to sustainable materials management by taking a life-cycle approach to managing materials is articulated in EPA's 2020 Vision Report: Sustainable Materials Management: The Road Ahead, 4 which was endorsed by both the Environmental Council of the States (ECOS) and the Association of State and Territorial Solid Waste Management Officials (ASTSWMO). 5 Sustainable materials management, as articulated in the “2020 Vision Report,” is aligned also with the vision and efforts of the World Business Council for Sustainable Development. 6 4 http://www.epa.gov/waste/inforesources/pubs/vision.htm. 5 Environmental Council of the States Resolution 10-1 on National Sustainable Materials Management, approved March 23, 2010, and Letter from Gary Baughman, president, ASTSWMO, to Matt Hale, Director, Office of Solid Waste, U.S. EPA, February 3, 2010. 6 http://www.wbcsd.org/web/projects/BZrole/Vision2050-FullReport_Final.pdf. Sustainable materials management helps identify opportunities to reduce environmental impacts, including greenhouse gas reductions, and societal impacts across the life cycle of materials from how they are extracted, manufactured, distributed, used, reused, recycled, and disposed. It works to ensure unintended consequences are avoided. Efficiencies gained in a sustainable materials management approach, especially with respect to non-renewable materials, can result in less energy used, more efficient use of materials, more efficient movement of goods and services, conservation of water, and reduced volume and toxicity of waste. By considering system-wide impacts, sustainable materials management casts a far broader net than traditional waste and chemicals management approaches and represents a change in how we think about environmental protection. Hazardous waste regulations can only influence a small part of the picture, but to the extent that the Agency can use today's proposal to help advance these goals, while ensuring protection of human health and the environment, EPA believes that it makes sense to do so. VI. Definition of Solid Waste Environmental Justice Analysis To achieve the goals of Executive Order 12898, Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations, EPA must consider environmental justice when developing a regulation. Because decisions involving a regulation must be informed by a consideration of a number of different issues, an environmental justice analysis is one of several analyses the Agency uses when developing regulations. The environmental justice analysis may be qualitative and/or quantitative and is designed to provide the appropriate information on disproportionately high and adverse impacts to minority and/or low-income populations to decision-makers. To the extent an environmental justice analysis reveals potential disproportionately high adverse impacts on minority and/or low-income populations, this result can affect how EPA uses its policy discretion under applicable authorities to pursue specific regulatory options or provide opportunities to involve the public in the implementation of regulations. The purpose of the DSW environmental justice analysis is two-fold. First, the analysis represents a systematic examination of the potential for an increase in adverse impacts under the 2008 DSW final rule (considered independently from which communities might be impacted). Second, the analysis includes a demographic analysis characterizing the extent any potential adverse impacts are likely to affect minority and/or low-income communities. The results of this analysis have informed EPA's decision-making on which regulatory options to pursue, within scope of the Agency's authority to regulate hazardous waste. The methodology for the DSW environmental justice analysis consists of six steps: Step 1: Hazard characterization Includes two phases: (1) Identifying potential hazards that could pose risks to human health and the environment from recycling of hazardous secondary materials, including accidental releases of hazardous constituents and (2) analyzing the likelihood of such hazards occurring under the requirements of the 2008 DSW exclusions as compared to the pre-2008 DSW hazardous waste regulations. Step 2: Identification of potentially affected communities Modeling the locations of facilities (including potential new facilities) that are likely to choose to take advantage of the 2008 DSW final rule. Step 3: Demographics of potentially affected communities Mapping the location of the facilities modeled in Step 2 and identifying the demographics ( e.g., minority population and income level) of the surrounding communities. Step 4: Identifying other factors that affect vulnerability in potentially affected communities Identifying important vulnerability factors. These include factors that may increase the likelihood of “damages,” the likelihood that a facility is sited within a community, or the likelihood of health risks in the event of releases. Examples include the presence of other pollution sources and any information about the public health of the surrounding population. Step 5: Information synthesis: assessment of disproportional impact Synthesizing all the information to characterize whether the 2008 DSW rule will facilitate the occurrence of any adverse impacts and whether some population groups ( e.g., minority or low income populations) would be overrepresented in the impacted communities. Step 6: Identification of potential preventive and mitigation strategies Identifying potential strategies to prevent non-compliance and releases to the environment and also strategies to mitigate any impacts identified under step 5. A brief description of the six steps is presented below. A. Step 1—Hazard Characterization The first step of the methodology is hazard characterization, which includes both identifying the potential hazards that hazardous secondary materials recycling could pose to human health and the environment, and evaluating the likelihood of such hazards resulting in increased risk under the 2008 DSW final rule. In conducting this analysis, EPA, assessed a number of different scenarios, which reflect how such hazardous secondary materials may be managed. With respect to the first part of the analysis, because hazardous secondary materials sent to recycling are physically and chemically similar, if not identical to many of the hazardous wastes sent for treatment and disposal, the potential risks from their management are similar, if not the same, as from hazardous wastes sent for treatment and disposal. The most commonly recycled hazardous secondary materials are spent solvents and electric arc furnace dust (which is recycled to reclaim metals). Spent solvents present particular management challenges in that recycling them involves the storage of liquids containing volatile organic chemicals and includes both halogenated and non-halogenated organic chemicals, which represent a broad range of chemicals and associated hazards. Electric arc furnace dust, which is usually in a solid state, presents different management challenges, including that the dust contains high concentrations of toxic metals, the storage of the dust is typically in waste piles, and the potential for the dust to become wind-blown, or otherwise released, and the potential for toxic metals contained in this waste to leach into the ground water. These two classes of hazardous secondary materials (as well as other hazardous secondary materials that are recycled) can pose risks via a wide variety of exposure routes and include a range of potential adverse health effects, both carcinogenic and non-carcinogenic, as well as a potential for acute impacts, such as fires and explosions. The second part of the hazard characterization step—determining whether these hazards could result in increased risk to human health and the environment—is a complex issue because of the interactions between how the regulations are written and how they are actually implemented. Under the 2008 DSW final rule, EPA believed that the conditions of the rule, which were designed to determine when a hazardous secondary material is not discarded, would also prevent any increase in risk. For example, the condition that the hazardous secondary materials be “contained” was intended to address this issue. If the material is not released to the environment, there would be no increased exposure or associated risk. However, what the 2008 analysis failed to take into account was whether the conditions of the rule—such as the “contained” standard—would operate as effectively in the real world as the more prescriptive requirements of the RCRA hazardous waste regulations. One of the most common criticisms of the January 2010 draft environmental justice methodology was that it did not include consideration of the potential for adverse impact from removing some of the important protections of the hazardous waste regulations, particularly the public participation requirements, which were also not considered by the Agency when developing the 2008 DSW final rule. A more detailed comparative analysis of the regulatory requirements under the 2008 DSW final rule with the hazardous waste regulations reveals potentially significant gaps in environmental protection under the 2008 DSW final rule, particularly the incentives to accumulate larger volumes of hazardous secondary materials, the reduction in oversight resulting from eliminating the permit requirement for storage, and the reduction in the public's access to information and the opportunity for public participation. The specific gaps vary depending on the baseline scenario and the post-DSW scenario being considered, 7 and in some cases, there is also a potential for increased benefits, primarily from resource conservation and from reduced transportation distances. 8 7 The specific scenarios evaluated were (1) generator continues current recycling practices; (2) generator switches from off-site disposal to on-site reclamation; (3) generator switches from off-site disposal to off-site recycling under the control of the generator; (4) generator switches from off-site disposal to off-site recycling at a RCRA-permitted facility; (5) generator switches from off-site disposal to off-site recycling at a U.S. facility without a RCRA permit; (6) generator switches from off-site disposal to exporting for recycling; (7) generator switches from off-site recycling at a facility without a permit to another type of recycling under the 2008 DSW final rule; and (8) generator switches from off-site recycling at a RCRA-permitted facility or exporting waste for recycling to another type of recycling under the 2008 DSW final rule. 8 By reporting the potential for increased benefits under certain scenarios, EPA does not intend to imply that such benefits could justify increased risk to human health and the environment from discarded hazardous secondary material. Promoting resource conservation and recovery is a major goal of RCRA, but this goal does not supersede the mandate to assure that hazardous waste management practices are protective of human health and the environment. B. Step 2—Identification of Potentially Affected Communities The second step of the methodology identified those potential facilities that can represent the facilities that are likely to take advantage of the 2008 DSW final rule. These facilities are grouped into four different categories: (1) Facilities that have already notified under the 2008 DSW final rule (“Notification Facilities”), (2) facilities from the environmental problems study (many of which operated under various exclusions or reduced regulations) which have documented environmental damages from recycling activities (“Damage Case Facilities”), (3) hazardous waste facilities that are likely to recycle under the rule (including hazardous waste generators producing more than a truckload (25 tons) of recyclable hazardous secondary materials annually, and hazardous waste recyclers) (“Hazardous Waste Facilities”), and (4) facilities currently recycling non-hazardous industrial waste ( e.g., antifreeze) that could most easily switch or expand to recycling under the 2008 DSW final rule (“Non-Hazardous Industrial Waste Facilities”). C. Step 3—Demographics of Potentially Affected Communities The third step characterized the demographics of the communities within a three-kilometer radius around these facilities and determined whether they had a larger proportion of minority and/or low-income individuals as compared to the nation as a whole, and as compared to the population in the state. 9 The comparison was done at both at the community and at the population level. 9 EPA chose a three-kilometer radius as an approximation of the potential area that could be affected by an acute release scenario (such as a fire or explosion) at a reclamation facility. EPA focused on the acute scenario because such a scenario posed the most immediate harm to public health. For the community-level analysis, the question is whether the communities around a facility had a higher or lower percentage of minority and/or low-income population as compared to the comparison population ( i.e., national or state population). In general, some communities will have a higher percentage than the comparison population, while some communities will have a lower percentage. As long at these differences have a regular, or uniform, distribution, they generally would not indicate potential for disproportionate adverse impact. However, if the number of communities with a higher percentage of minority and/or low-income population is greater than that of the comparison populations, then there is a potential for disproportionate adverse impact. The higher the average differences between the potentially affected communities and the comparison group, the greater the potential for a disproportionate adverse impact. In the chart below, the category that consistently demonstrates the potential for disproportionate adverse impact are the damage case facilities, which is the third category of facilities identified in Step 2, although a few other categories indicates the potential for disproportionate adverse impact in a few instances. 10 For both the national and the state comparison populations, more than 50 percent of the damage case facilities are located in communities with minority and low-income populations that have a higher representation than the comparison populations. In addition, the average difference in these cases ( i.e., the average amount that these facilities have a higher-than-average percentage of minorities or low-income populations) ranges from 6-8 percent. 10 For the damage cases, EPA notes that demographic data is not necessarily matched to the temporal period associated with the beginning of the damage case. For example, if the damage case began in 1990, EPA did not examine demographics from 1990, but rather the demographics were from 2000. Community-Level Analysis of Potential Disproportionate Adverse Impacts of 2008 DSW Final Rule to Minority and Low-Income Communities [Values greater than 50% indicate potential disproportionate impact] National comparison % communities with higher minority representation (average difference) National comparison % communities with higher low-income representation (average difference) State comparison % communities with higher minority representation (average difference) State comparison % communities with higher low- income representation (average difference) Facilities that Have Notified (40 total) 7.5% (−20.7%) 32.5% (−2.0%) 50.0% (IA) (3.1%) 20.0% (NJ) (−11.0%) 31.3% (PA) (−2.3%) 64.0% (IA) (1.7%) 0% (NJ) (−3.7%) 50% (PA) (2.6%) Damage Case Facilities (217 total) 53% (8.2%) 65% (5.9%) 55.8% (8.2%) 69% (6.7%) Hazardous Waste Facilities (2,677 total) 42% (0.9%) 48% (1.5%) 47.9% (4.0%) 50.6% (1.8%) Non-Hazardous Industrial Waste Facilities (25 total) 36% (−5.0%) 40% (−0.5%) 36% (−2.55%) 44% (−0.3%) The population-level analysis examines the demographics of the total potentially affected population 11 as compared to the total comparison population to determine (1) whether there is a substantially greater probability of members in a population group of concern (minority or low-income) being present as compared to members of the comparison population, and (2) whether members of the population group of concern comprised a substantially greater proportion of the potentially affected population than the comparison populations. These two comparisons are referred to as (1) the Affected Population Ratio, and (2) the Demographic Ratio. In both cases, if the ratio is greater than 1.0, then there is a potential for disproportionate adverse impact to the population of concern, and the larger the ratio, the greater the disproportionality. 11 The total affected population is the sum of each of the populations around all the facilities in a category. Population-Level Analysis of Potential Disproportionate Impacts of 2008 DSW Rule to Minority and Low-Income Communities [Ratios greater than 1.0 indicate potential disproportionate impact to population of concern all results statistically significant (p-value <0.05)] National comparison minority population affected population ratio demographic ratio National comparison low-income population affected population ratio demographic ratio State comparison minority population affected population ratio demographic ratio State comparison low-income population affected population ratio demographic ratio Notification Facilities (40 total) 0.70 0.76 1.05 1.04 1.80 (IA) 1.76 (IA) 1.34 (IA) 1.32 (IA) 1.02 (NJ) 1.01 (NJ) 0.64 (NJ) 0.65 (NJ) 1.46 (PA) 1.47 (PA) 1.74 (PA) 1.63 (PA) Damage Case Facilities (217 total) 2.87 1.86 1.98 1.80 2.59 1.64 2.04 1.90 Hazardous Waste Facilities (2,677 total) 1.90 1.80 1.39 1.50 1.94 2.04 1.47 1.83 Non-Hazardous Industrial Waste Facilities (25 total) 1.19 1.12 1.16 1.14 1.34 1.20 1.17 1.15 The chart above shows that the population level analysis has a greater incidence of potential disproportionate adverse impact to minority and low-income populations than the community-level analysis. For the population-level analysis, the potential for disproportionate impact ( i.e., ratios greater than one) occurs under all categories, while the community-level analysis exhibits the potential for disproportionate impact primarily in the damage case facility category. This difference can occur when the populations of those communities that do have a greater percentage of minority or low-income individuals also have a significantly higher total population than those communities that do not. In other words, for the categories of facilities, except the damage case facilities, the facilities of concern generally do not appear to be disproportionately located in minority or low-income communities. The facilities that are located in minority and low-income communities have the potential to adverse impact much larger populations than those which are not, resulting in an overall potential disproportionate adverse impact to minority and low-income populations as a whole. D. Step 4—Other Factors That Affect Vulnerability in Potentially Affected Communities In addition to considering the potential for the 2008 DSW final rule to result in adverse impacts that disproportionately affect minority and low-income communities, the DSW environmental justice analysis also considers other factors that could affect the impacts of the rule, based on categories from EPA's interim guidance on incorporating environmental justice into rulemaking. 12 Two of these factors are of particular concern to the 2008 DSW final rule: Ability to participate in the decision-making process, and multiple and cumulative effects. 13 12 U.S. EPA Interim Guidance on Considering Environmental Justice During the Development of an Action July 2010. http://www.epa.gov/environmentaljustice/resources/policy/considering-ej-in-rulemaking-guide-07-2010.pdf. 13 The other factors are (1) susceptible populations, (2) unique exposure pathways, and (3) physical infrastructure. Because of the wide variety of locations of the facilities and the many different hazardous secondary materials involved, any one of these factors could be present at a site, but EPA does not have specific information on these factors being particularly associated with the 2008 DSW final rule. 1. Ability To Participate in the Decision-Making Process A key element of environmental justice is ensuring that all people have an opportunity for meaningful involvement in decision-making which may impact them. Certain groups may not have historically participated in decision-making because of economic ( e.g., income), social ( e.g., language barriers, education levels, distrust of government), and infrastructural reasons ( e.g., access to public transportation). A critical concern is whether, and the extent to which, communities have the ability to influence the types and number of regulated activities taking place in their community, as well as the requirements, conditions, and parameters under which such activities must operate ( e.g., permit conditions). Under the 2008 DSW final rule, facilities claiming an exclusion must submit an initial and biennial notification to EPA or the state, providing general facility information and describing hazardous secondary material types and activities under the exclusion. However, under the 2008 DSW final rule, this information is not made directly available to potentially affected communities, and facilities and regulators are not required to solicit or consider community input into the decision-making process as is the case with RCRA-permitted facilities. 14 Thus, by removing the RCRA permitting requirement for facilities that manage excluded hazardous secondary materials, the 2008 DSW final rule also removed one of the key provisions for allowing communities to participate in the regulatory process (at least as it concerns the management of the hazardous secondary materials excluded under the rule). Communities with lower participation levels may experience greater adverse impacts from environmental decision-making because their input has not been considered fully, particularly if competing interests are set forth more effectively. This effect is most likely to occur in communities that have traditionally been excluded from the decision-making process. 14 Although not required, EPA has posted on the Internet a list of facilities that have notified under the DSW exemption. The most recent list can be found at http://www.epa.gov/epawaste/hazard/dsw/notify-sum.pdf. 2. Multiple and Cumulative Effects Minority, low-income, and indigenous communities that have been affected by multiple pollution sources may be at risk for increased health consequences. Potential sources of pollution can include, for example, industrial facilities, landfills, transportation-related air emissions, poor housing conditions ( e.g., lead-based paint), leaking underground storage tanks, pesticides, and incompatible land uses. An analysis of the cumulative effects from multiple stressors can provide a more complete evaluation of a population's health risks from pollutants. For example, an analysis of discrete stressors and effects on a population might conclude that nearby pollution sources are within regulatory limits; however, an analysis of cumulative effects might determine that a person's collective exposure to a contaminant from multiple sources exceeds a health-based limit. An examination of the facilities that have already notified under the 2008 DSW final rule shows that multiple environmental hazards are a potential concern for communities around these facilities. 15 All have multiple facilities reporting to EPA, either under RCRA, the Clean Air Act (CAA), or the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA—also known as Superfund), within a three-kilometer radius of the facility. 15 See U.S. EPA Environmental Justice Analysis of the Definition of Solid Waste Rule, Section 5.2, Table 5.1. E. Step 5—Assessment of Disproportionate Impact As discussed under Step 1 in Section VI.A. of this preamble, the environmental justice analysis demonstrates that hazardous secondary material recycling can pose significant potential hazards to human health and the environment, and that it is reasonable to conclude that the potential for hazards from hazardous secondary materials recycling adversely impacting human health and the environment has increased under the 2008 DSW final rule. Of particular concern are (1) the absence of required measures ( e.g., weekly inspections, training, contingency plans, etc. ) at hazardous secondary materials reclaimers to prevent problems ( e.g., spills, fires, explosions, etc. ), (2) the incentives to accumulate larger volumes of hazardous secondary materials due to longer storage time limits and (3) the reduction in access to information and opportunity for public participation. Moreover, as discussed under Step 3 in Section VI.C. of this preamble, some of the communities potentially impacted by this increase in risk of adverse impacts are minority and low-income communities, and in most cases the populations potentially impacted are disproportionately minority and/or low income. In particular, the population-level analysis shows a potential disproportionate impact to minority and low-income populations, with the damage case facilities, the hazardous waste facilities and the non-hazardous waste facilities all consistently showing potential statistically significant disproportionate representation in potentially affected communities. In addition, as discussed under Step 4 in Section VI.D. of this preamble, underlying vulnerabilities traditionally associated with minority and low-income communities can pose the potential to exacerbate potential adverse impacts of the 2008 DSW final rule. The ability of communities to participate in the decision-making process and potential for multiple and cumulative effects are of particular concern. F. Step 6—Identification of Potential Strategies To Mitigate Adverse Impacts Potential strategies to mitigate adverse impacts of the 2008 DSW final rule, including the disproportionate impacts to minority and low-income communities, include both possible regulatory changes and implementation strategies. 1. Regulatory Changes Regulatory changes to the 2008 DSW final rule were made according to EPA's authority under RCRA to regulate discarded material. As discussed in the preamble to the 2008 DSW final rule, EPA used the concept of discard as the central organizing idea behind the October 2008 revisions to the definition of solid waste. As stated in RCRA section 1004(27), “solid waste” is defined as “* * * any garbage, refuse, sludge from a waste treatment plant, water supply treatment plant, or air pollution control facility and other discarded material * * * resulting from industrial, commercial, mining and agricultural activities.” In exercising its discretion in the 2008 DSW final rule to define what constitutes “discard” for hazardous secondary materials reclamation in the 2008 DSW final rule, EPA included an explanation of how each provision of the final rule relates to discard (73 FR 64676-64679). While the concept of discard also is the central organizing principle in this proposed rule since EPA only has authority under RCRA to regulate materials that have been discarded, the Federal Register notice announcing the June 2009 public meeting identified areas or opportunities to revise the 2008 DSW final rule in ways that could increase environmental protection, including in environmental justice communities, while still appropriately defining when a hazardous secondary material being reclaimed is a solid waste and subject to hazardous waste regulation (74 FR 25202). The purpose of today's proposal is to provide notice and the opportunity to comment on potential regulatory revisions to address the potential for adverse impacts to human health and the environment from discarded material, including disproportionate impacts to minority and low income communities. In particular, the proposed withdrawal of the transfer-based exclusion and its replacement with an alternative Subtitle C standard could be one way of addressing the concerns regarding third-party recyclers, including the impact of longer accumulation times, the lack of preventative measures under the containment standard, the lack of public participation requirements, the lack of RCRA air standards, and concerns regarding certain transportation issues. In addition, the proposed codification of the “contained” standard could be one way of addressing the lack of preventative measures and the lack of RCRA air standards under the generator-controlled exclusion. The proposed additional recordkeeping requirements for speculative accumulation and legitimacy could be one way of helping ensure that hazardous secondary material is being legitimately recycled and not simply discarded through over-accumulation and abandonment, and recordkeeping under the tolling and same-company provisions will help ensure that the hazardous secondary materials meet their intended destinations. Each of these proposed changes are discussed in more detail in Sections VII-X of this preamble. EPA requests comment on whether there are additional or alternate regulatory approaches for addressing the potential adverse impacts of the 2008 DSW final rule. 2. Implementation Measures In addition to considering regulatory changes to address potential adverse impacts of the 2008 DSW final rule, EPA can take steps in implementing the 2008 DSW final rule that would help mitigate any potential adverse impacts. These steps include closely monitoring the facilities notifying under the 2008 DSW final rule, making information about the DSW facilities available to the public, and working with the states and EPA Regions to ensure they have the information they need to ensure compliance with the provisions of the rule, and making available to the public information about the facilities that have notified. EPA has begun this process for the states and territories currently operating under the 2008 DSW final rule and plans to continue these efforts in order to help prevent potential adverse impacts at the same time that revisions to the rule are under consideration. VII. Exclusion for Hazardous Secondary Materials That Are Transferred for the Purpose of Legitimate Reclamation EPA is proposing to replace the exclusion for hazardous secondary materials that are transferred for the purpose of legitimate reclamation with an alternative Subtitle C standard. EPA believes that such a standard would be more appropriate for hazardous secondary material because (1) the Agency reasonably believes (as explained in detail in the 2008 DSW final rule) that, absent specific conditions, transfers of hazardous secondary materials to third-party reclaimers generally involve discard, and (2) the conditions of the 2008 DSW final rule have serious gaps, particularly the incentives to accumulate larger volumes of hazardous secondary materials, the reduction in oversight resulting from eliminating the permit requirement for storage, and the reduction in the public's access to information and the opportunity for public participation, that could create a potentially unacceptable likelihood of adverse effects to human health and the environment from such discarded material. A. Summary of Transfer-Based Exclusion The exclusion for hazardous secondary materials that are transferred for the purpose of legitimate reclamation, 40 CFR 261.4(a)(24) and (25), 16 applies to hazardous secondary materials ( i.e., spent materials, listed sludges, and listed by-products) that are generated and subsequently transferred to a different person or company for the purpose of reclamation. As long as the conditions and restrictions to the exclusion are satisfied, the hazardous secondary materials would not be subject to the Subtitle C hazardous waste regulations. 16 40 CFR 261.4(a)(24) is the primary transfer-based exclusion and 40 CFR 261.4(a)(25) contains the export requirements for the transfer-based exclusion. General requirements under this exclusion include that: • Hazardous secondary material generators, reclaimers, and intermediate facilities ( i.e., facilities that would not reclaim the hazardous secondary material, but would store them for more than 10 days) must submit a notification prior to operating under the exclusion and by March 1 of each even-numbered year thereafter to the EPA Regional Administrator or, in an authorized state, to the State Director (see 40 CFR 260.42), reporting volumes and types of hazardous secondary materials being reclaimed and • Hazardous secondary materials managed at such facilities must not be speculatively accumulated as defined in § 261.1(c)(8) and must be legitimately reclaimed as specified in § 260.43. Conditions applicable to generators of hazardous secondary materials are found at 40 CFR 261.4(a)(24)(v) and include: • Containment of such hazardous secondary materials, • Reasonable efforts, a form of due diligence, to ensure that the intermediate facility or reclaimer intends to manage or recycle the hazardous secondary material properly and legitimately, and • Retention of records of off-site shipments for three years. Conditions applicable to intermediate facilities and reclaimers of hazardous secondary materials are found at 40 CFR 261.4(a)(24)(vi) and include: • Containment of such materials, • Transmittal of confirmations of receipt to generators, • Retention of records for hazardous secondary materials received and sent off-site, • Financial assurance equivalent to that required of hazardous waste facilities, and • (For reclaimers) proper management of any residuals generated from the reclamation activities. In addition, if any of the hazardous secondary materials excluded under 40 CFR 261.4(a)(24) are generated and then exported to another country for reclamation, the exporter must notify and obtain consent from the receiving country and file an annual report. This export requirement is codified in 40 CFR 261.4(a)(25). B. EPA's Rationale for Replacing the Transfer-Based Exclusion The first part of the Agency's rationale for replacing the transfer-based exclusion is based on the fact that EPA has already determined that, absent specific conditions, it is reasonable to conclude that transfers of hazardous secondary materials to third-party recyclers generally involve discard except for instances where EPA has promulgated a case-specific exclusion that a hazardous secondary material is not a solid waste. This determination is unchanged from the 2008 DSW final rule. As noted in the preamble to the 2008 DSW final rule, generators of hazardous secondary materials who do not reclaim these materials themselves often ship these materials to a commercial facility or another manufacturer for reclamation in order to avoid the costs of disposing of the material. Because of the low commercial value and the high potential liability associated with most types of hazardous secondary materials ( i.e., spent materials and listed hazardous waste by-products and sludges), generators will typically pay the reclamation facility to accept these hazardous secondary materials or receive a salvage fee that only partially offsets the cost of transporting and managing them. In such situations, the generator has relinquished control of the hazardous secondary materials and the entity receiving such materials may not have the same incentives to manage them as a useful product (73 FR 64675). This behavior of hazardous secondary materials not being managed as a useful product is evidenced by the results of the environmental problems study, found in the docket of the 2008 DSW final rule. Of the 208 damage cases discussed in the 2008 DSW final rule, 195 (or approximately 94%) were from reclamation activities of off-site third-party recyclers, with clear instances of discard resulting in risk to human health and the environment, including cases of large-scale soil and ground water contamination with remediation costs in some instances in the tens of millions of dollars (73 FR 64673). In addition, the market forces study in the docket for the 2008 DSW final rule supports the conclusion that the pattern of discard at off-site, third-party reclaimers is a result of inherent differences between commercial recycling and normal manufacturing. As opposed to manufacturing, where the cost of raw materials or intermediates (or inputs) is greater than zero and revenue is generated primarily from the sale of the output, hazardous secondary materials recycling can involve generating revenue primarily from the receipt of the hazardous secondary materials. Recyclers of hazardous secondary materials in this situation may thus respond differently from traditional manufacturers to economic forces and incentives, accumulating more inputs (hazardous secondary materials) than can be processed (reclaimed). In addition, commercial recyclers have less flexibility than in-house recyclers in changing how they manage their hazardous secondary materials ( e.g., during price fluctuations, in-house recyclers can more easily switch from recycling to disposal or from recycled inputs to virgin inputs, while commercial recyclers cannot switch to disposal without obtaining a RCRA permit) (73 FR 64674). The 2008 DSW final rule attempted to address this pattern of adverse impacts to human health and the environment from hazardous secondary materials transferred to a third party for recycling by setting conditions for the transfer-based exclusion. The intent of these conditions was to define when transfers to third-party recyclers would not result in discard. The link between each of the conditions and their ability to prevent discard is discussed in detail in the 2008 DSW final rule preamble at 73 FR 64675-79. However, EPA failed to take into account how the conditions of the 2008 transfer-based exclusion would work when actually implemented. EPA's analysis of the 2008 DSW final rule assumed that DSW conditions would operate with the same level of oversight as the Subtitle C hazardous waste regulations. Which leads to the second part of EPA's rationale for replacing the transfer-based exclusion. Before excluding materials that have already been determined to be hazardous wastes, the Agency needs adequate assurance that the conditional exclusion will not result in discarded hazardous materials posing significant risks to human health and the environment ( e.g, fires/explosion, soil and water contamination, air emissions, and abandoned hazardous secondary materials). Because EPA has already evaluated these hazardous secondary materials (for example, during a hazardous waste listing determination) and determined them to be solid and hazardous wastes, a conditional exclusion must be reasonably expected not to result in the excluded hazardous secondary material being discarded. As discussed in more detail in Section XIII of this preamble, over the years EPA has developed many such conditional exclusions (found in 40 CFR 261.4(a)). In each of these cases, EPA did so by examining the specific hazardous secondary material, or the specific recycling practice, or both, before making a determination that they are not solid waste. However, unlike these types of specific transfer-based exclusions from the definition of solid waste (found in 40 CFR 261.4(a)), the 2008 transfer-based exclusion in 40 CFR 261.4(a)(24) and (25) did not focus on the chemical or physical properties of any particular type of hazardous secondary material, or on how it is typically managed. Instead, the transfer-based exclusion is broadly applicable to a wide range of hazardous spent materials and listed by-products and sludges. Thus, while other solid waste exclusions were developed based on EPA's knowledge of the specific hazardous secondary materials, the industries generating them, or the current recycling management practice for those hazardous secondary materials, the 2008 DSW transfer-based exclusion relied entirely on the conditions that were developed by EPA operating as the Agency anticipates they should. The conditions themselves were developed in a reasoned manner, 17 but without specific evidence that they would work as intended ( i.e., would not result in significant risk to human health and the environment from discarded materials). 17 See Chapter 11, Regulatory Impact Analysis: EPA's 2008 Final Rule Amendments to the Industrial Recycling Exclusions of the RCRA Definition of Solid Waste, EPA-HQ-RCRA-2002-0031-0602. However, the conditions for the transfer-based exclusion in the 2008 DSW final rule lack several important implementation provisions that the Subtitle C requirements for treatment, storage, and disposal facilities provide. These provisions ensure a greater level of oversight of the Subtitle C requirements, thereby increasing the likelihood of compliance and decreasing the potential for risk to human health and the environment from discarded hazardous secondary material. Most important of these is the permit requirement under RCRA section 3005, which ensures that EPA or the state has reviewed a facility's planned operations before waste management begins and which allows public participation in the environmental decision-making process under RCRA section 7004. Subtitle C requirements for treatment, storage, and disposal facilities also include a statutory provision that such facilities be inspected every two years under RCRA section 3008(e). Finally, the detailed regulatory standards for hazardous waste management help ensure that both the regulatory authority and the regulated community have the specific information they need to comply in such a way that meets EPA's expectations when the rule was promulgated. EPA has performed a detailed regulatory comparison of the 2008 DSW final rule with the hazardous waste regulations, identifying significant differences that could lead to the potential for an increased likelihood of environmental and public health hazards, including fires/explosion, soil and water contamination, air emissions, and abandoned hazardous secondary materials. 18 18 See Chapter 2 and Attachment A of EPA's Environmental Justice Analysis of the Definition of Solid Waste Rule, available in the docket for today's proposal. EPA has also carefully monitored the implementation of the 2008 DSW final rule since it came into effect in December 2008. A total of 27 facilities are operating under the transfer-based exclusion, 23 of which are generators transferring off-site and 4 which are reclamation facilities. 19 All four reclamation facilities are RCRA permitted. (There are no unpermitted reclaimers currently operating under the transfer-based exclusion.) Of the 23 generators operating under the transfer-based exclusion, 6 generators appear to have either started or substantially increased their recycling as a result of the 2008 DSW exclusions. These six generators had previously reported in their 2007 or 2009 biennial report that they sent their solvents offsite for fuel blending, and then in 2009 or 2010 notified that they are sending their spent solvents for reclamation under the 2008 DSW final rule. 20 To date, no environmental problems have been reported at facilities claiming the DSW exclusions. However, because all reclaimers operating under the transfer-based exclusion also have RCRA hazardous waste permits, most of the novel conditions of the transfer-based exclusion ( e.g., reasonable efforts audits and financial assurance for reclamation facilities without a RCRA permit) have not been tested. 19 Some of these facilities are also managing hazardous secondary materials under the generator-controlled exclusion. 20 U.S. EPA, EPA's Evaluation of Data Collected from Notifications Submitted under the 2008 Definition of Solid Waste Exclusions, June 30, 2011. Based on this reconsideration of the DSW transfer-based exclusion conditions, EPA is now proposing that hazardous secondary materials transferred for the purpose of legitimate reclamation are most appropriately regulated under Subtitle C of RCRA. The evidence of past damage cases leading to significant risk to human health and the environment from hazardous secondary materials originally intended for recycling and the underlying perverse incentives of the recycling market to over-accumulate such hazardous secondary materials intended for recycling, resulting in discard of the material, indicate the need to regulate these hazardous secondary materials as hazardous waste, unless there is specific information about a hazardous secondary material or reclamation practice that indicates discard is not occurring. EPA is therefore proposing to withdraw the transfer-based exclusion found in 40 CFR 261.4(a)(24) and (25). EPA requests comment on this withdrawal, and is particularly interested in any information commenters can provide about alternative approaches that would address the concerns regarding ensuring that a transfer-based exclusion does not result in significant risk to human health and the environmental from discarded hazardous secondary material ( e.g., by adding more conditions, such as requiring the reclamation facility be inspected every five years, or by requiring the reclamation facility certify annually that there have been no releases). At the same time, EPA acknowledges that some specific types of hazardous secondary materials are more like valuable commodities than solid wastes, and the act of transferring them to a third-party does not automatically involve discard. Many of the other exclusions in 40 CFR 261.4(a) are for these types of materials, and the non-waste determination process under 40 CFR 260.34(c) provides an administrative process for determining that additional hazardous secondary materials are indistinguishable from products and therefore are not waste. In addition, in Section XII of this preamble, EPA is requesting comment on a possible re-manufacturing exclusion from the definition of solid waste for certain higher-value hazardous secondary materials whose management is more like manufacturing than waste management. EPA also requests comment if there are other specific hazardous waste streams or recycling practices, that, similarly to those found in 40 CFR 261.4(a)(6)-(21), would be most appropriately addressed through a conditional exclusion due to their physical or chemical properties and/or current management practices. VIII. Alternative Subtitle C Regulation for Hazardous Recyclable Materials A. Purpose of the Alternative Subtitle C Regulatory Standards for Hazardous Recyclable Materials As discussed above, after examining the potential adverse impacts to human health and the environment from discarded hazardous secondary materials transferred to another party for reclamation, EPA is proposing to replace the transfer-based exclusion with an alternative regulatory scheme for hazardous recyclable materials transferred from the generator to other persons for the purpose of reclamation. EPA recognizes the environmental benefits of safe recycling and how recycling can contribute to the goal of sustainable materials management, and acknowledges that in some cases the additional costs of Subtitle C regulation can be an economic disincentive to such recycling. However, as discussed in Section VII above, because (1) the Agency reasonably believes that, absent specific conditions, transfers of hazardous secondary materials to third-party reclaimers generally involve discard, and (2) the conditions of the 2008 DSW final rule have serious gaps that could create a potentially unacceptable likelihood of adverse effects to human health and the environment from such discarded material, the Agency has decided to replace the transferred based exclusion with an alternative hazardous waste standard. Specifically, EPA is proposing alternative hazardous waste standards under 40 CFR part 266 subpart D for generators of hazardous recyclable materials sent for reclamation. “Hazardous recyclable materials” would be defined as hazardous waste being reclaimed. EPA is proposing to use this term to be consistent with other standards for the management of specific hazardous wastes in 40 CFR part 266, and to distinguish them from the “hazardous secondary materials” reclaimed under the control of the generator and excluded under 40 CFR 261.4(a)(23). These proposed alternative standards are designed to be as protective as the current hazardous waste standards, but tailored to the specific circumstances faced by generators of hazardous waste who would want to send their materials to a reclaimer, but are not able to do so because they cannot accumulate enough hazardous waste during the generator accumulation time limits to make such recycling economically viable. Under these alternative standards, the hazardous recyclable material would, for the most part, be subject to all hazardous waste regulations ( i.e., accumulated in Subtitle C storage units, transported under a hazardous waste manifest, sent to a RCRA-permitted facility or a facility operating under 40 CFR 261.6(c)(2)). However, in order to allow generators time to accumulate enough hazardous recyclable material to make reclamation more economical, EPA is proposing alternative regulatory standards that would allow hazardous recyclable materials to be accumulated up to one year without a permit or interim status (although the hazardous waste generator standards would continue to apply). To guard against the risks of over-accumulation and possible abandonment of hazardous recyclable materials, EPA is proposing that before operating under the alternative standard and by March 1 of each even-numbered year thereafter, a generator must notify the EPA Regional Administrator (or the State Director, if the state is authorized). In addition, before operating under the alternative standard, the generator must develop a reclamation plan that provides details of where the hazardous recyclable material will be sent for reclamation, a short description of the recycling process, and the estimated volume of materials in each shipment. Also, the generator must contact the reclaimer in advance and make arrangements for the recycling. In addition, EPA is requesting comment on setting an upper limit on the amount of hazardous recyclable material a generator may accumulate at any one time, limiting it to no more than two shipments worth of hazardous secondary materials (as documented in the reclamation plan) at any point in time. Finally, as discussed below, EPA is requesting comment on allowing an alternative manifest system for hazardous recyclable materials regulated under this provision by replacing the hazardous waste manifest with a “hazardous recyclable materials manifest.” B. Proposed Part 266 Standards for the Management of Hazardous Recyclable Material Under the proposed part 266 subpart D Hazardous Recyclable Materials standards, large quantity generators and small quantity generators of hazardous recyclable materials would need to meet the alternative requirements described below. 1. Notification Under the proposed alternative standards, generators would be required to submit a notification prior to operating under this standard and by March 1 of each even-numbered year thereafter to the EPA Regional Administrator using EPA Form 8700-12. 21 In states authorized by EPA to administer the RCRA Subtitle C hazardous waste program, notifications may be sent to the state director. The notice must include: 21 These notification requirements are the same as those currently found in 40 CFR 260.42. • The name, address and EPA ID number of the facility; • The name and telephone number of a contact person; • The NAICS (North American Industry Classification System) code of the facility; • The regulatory citation under which the hazardous recyclable materials will be managed ( i.e., 40 CFR part 266 subpart D). • When the facility expects to begin managing the hazardous recyclable materials in accordance with the alternative standard; • A list of haza [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A2011-17031. Public record. Not legal advice.