(b) For purposes of subdivision (a), a discarded material is any material that is any of the following:

1. (1) Relinquished by being any of the following:

   1. (A) Disposed of.
   2. (B) Burned or incinerated.
   3. (C) Accumulated, stored, or treated, but not recycled, before, or in lieu of, being relinquished by being disposed of, burned, or incinerated.
2. (2) Recycled, or accumulated, stored, or treated before recycling, except as provided in Section 25143.2.

3. (3) Poses a threat to public health or the environment and meets either, or both, of the following conditions:

   1. (A) It is mislabeled or not adequately labeled, unless the material is correctly labeled or adequately labeled within 10 days after the material is discovered to be mislabeled or inadequately labeled.
   2. (B) It is packaged in deteriorated or damaged containers, unless the material is contained in sound or undamaged containers within 96 hours after the containers are discovered to be deteriorated or damaged.
4. (4) Considered inherently wastelike, as specified in regulations adopted by the department.

(c) Notwithstanding subdivision (a), a material is not a discarded material if it is either of the following:

1. (1) An intermediate manufacturing process stream.

2. (2)

   1. (A) Except as specified in subparagraph (B) and to the extent consistent with the federal act, a coolant, lubricant, or cutting fluid necessary to the operation of manufacturing equipment, that is processed to extend the life of the material for continued use, and is processed in the same manufacturing equipment in which the material is used or in connected equipment that returns the material to the originating manufacturing equipment for continued use.

   2. (B) Subparagraph (A) does not apply to any of the following material:

      1. (i) Material that is processed in connected equipment that is not directly and permanently connected to the originating manufacturing equipment or that is constructed or operated in a manner that may allow the release of any material or constituent of the material into the environment.
      2. (ii) Material that is a hazardous waste prior to being introduced into the manufacturing equipment or connected equipment.
      3. (iii) Material that is removed from the manufacturing equipment or connected equipment for storage, treatment, disposal, or burning for energy recovery outside that equipment.
      4. (iv) Material that remains in the manufacturing equipment or connected equipment more than 90 days after that equipment ceases to be operated.
      5. (v) Material that is processed using methods other than physical procedures.