BILL ANALYSIS Ó SB 712 SENATE COMMITTEE ON ENVIRONMENTAL QUALITY Senator Jerry Hill, Chair 2013-2014 Regular Session BILL NO: SB 712 AUTHOR: Lara AMENDED: January 6, 2014 FISCAL: Yes HEARING DATE: January 15, 2014 URGENCY: No CONSULTANT: Rachel Machi Wagoner SUBJECT : HAZARDOUS WASTE FACILITY: PERMITTING: INTERIM STATUS SUMMARY : Existing law : 1) Under the federal Resource Conservation and Recovery Act (RCRA) of 1976, governs the disposal hazardous waste: a) Through regulation, sets standards for the treatment, storage, transport, tracking and disposal of hazardous waste in the United States. b) Authorizes states to carry out many of the functions of the federal law through their own hazardous waste laws if such programs have been approved by the United States Environmental Protection Agency (US EPA). 2) Under the California Hazardous Waste Control Act (HWCA) of 1972: a) Establishes the Hazardous Waste Control program. b) Regulates the appropriate handling, processing and disposal of hazardous and extremely hazardous waste to protect the public, livestock, and wildlife from hazards SB 712 Page 2 to health and safety. c) Implements federal tracking requirements for the handling and transportation of hazardous waste from the point of waste generation to the point of ultimate disposition. d) Establishes a system of fees to cover the costs of operating the hazardous waste management program. e) Authorizes the Department of Toxic Substances Control (DTSC) to enforce federal law and regulations under RCRA. f) Requires DTSC to grant and review permits and enforce HWCA requirements for hazardous waste treatment, storage and disposal facilities. This bill : 1) Makes various findings and declarations stating that the Legislature intends to identify and protect overburdened communities that suffer from asthma, cancers and other illnesses born from heavy industrial pollution and ensure increased public participation from affected communities in governmental decision making processes. 2) Requires DTSC to take final action prior to July 1, 2015 on an application for a hazardous waste facilities permit by any facility operating under interim permit status issued prior to January 1, 1986. 3) Provides that interim status granted for a hazardous waste facility after January 1, 1986 but prior to January 1, 2015 shall terminate on January 1, 2020. 4) Provides that any interim status granted for a hazardous waste facility shall terminate five years from the date on which the status was granted. COMMENTS : 1) Purpose of Bill . According to the author, the Exide SB 712 Page 3 Technologies battery recycling facility in Vernon, CA recycles lead from used automotive batteries and has a long history of hazardous waste law violations. The author states that in April, 2013, the facility was ordered to close immediately by DTSC due to "an imminent and substantial danger to public health, safety, and the environment" after testing showed unsafe levels of arsenic in air emissions and degraded underground pipelines were found to be leaking dangerous levels of lead into the ground. The author further states that Exide is currently operating under an interim permit that was issued in 1981, and has never been issued a final permit by DTSC and it is the only facility, out of 117 facilities permitted by DTSC subject to RCRA, which still has an interim status permit. According to the author, this bill will require hazardous waste facilities that have been operating under an interim permit from DTSC for an extended period of time to achieve compliance with federal and state hazardous waste laws and for DTSC to render a final permit decision by July 1, 2015, and will also limit the amount of time a facility can continue to operate under an interim permit to five years. 2) Exide Technologies . Exide Technologies is an American manufacturer of lead-acid batteries, including automotive batteries and industrial batteries. Its four global business groups (Transportation Americas, Transportation Europe and Rest of World, Industrial Power Americas, and Industrial Power Europe and Rest of World) provide stored electrical energy products and services. Exide's global headquarters are located in Milton, Georgia. It has both manufacturing and recycling plants. Equipment used in the battery recycling process includes machines to break batteries apart and separate different materials, furnaces and kettles to melt metals, and miscellaneous equipment including storage tanks, conveying equipment, and engines. Exide operates numerous pieces of control equipment to reduce pollution including baghouses, SB 712 Page 4 dust collectors, and filters for reducing dust and metals; and scrubbers, mist eliminators, and an afterburner, which remove pollution from gases. Exide has five "secondary lead" smelters or recyclers, only two of which - Forest City, Missouri, and Muncie, Indiana - are operating. However, at the Muncie, Indiana plant, Exide settled a notice of violation and signed an agreed order with the Indiana Department of Environmental Management that calls for fines if it does not meet specified cleanup conditions involving brown-colored, lead contaminated water along a storage area and rail spur near a ditch leading to a stormwater outfall. Exide closed its smelter in Frisco, Texas, in 2012 after a lengthy battle by the city and residents over lead and arsenic pollution coming from the site. The plant ceased operations November 30, 2012, as part of an agreement with the city. The agreement calls for the City of Frisco to purchase about 170 acres of buffer land from Exide for $45 million. Exide will keep the 90 acres used for its operations. The deal is contingent on complete cleanup. Preliminary estimates peg cleanup costs at anywhere from $15 million to more than $130 million. However, over a year after the plant closed, Exide has not fully characterized the extent of the contamination or cleanup. An article by the Dallas Morning News, states that "efforts the past year have been complicated by Exide's bankruptcy filing in June." 3) Exide, Vernon, California . The Exide facility in Vernon, California is one of two secondary lead smelting facilities in California which recovers lead from recycled automotive batteries. It has over 100 employees. It recycles 23,000 to 41,000 batteries daily and has an average production of 100,000 to 120,000 tons of lead per year. This is equivalent to recycling approximately 11 million car batteries, which is about the same number of used batteries generated in California annually. Battery recycling recycles 97% of the battery lead to be SB 712 Page 5 recycled. Exide also recovers lead from lead bearing plant scrap and secondary materials, primarily from lead-acid battery manufacturers. This facility is regulated by various local and state regulatory agencies. DTSC regulates companies that handle hazardous waste under federal and state hazardous waste laws. DTSC permits and inspects facilities, issues violations of hazardous waste rules, and monitors corrective action at sites. The South Coast Air Quality Management District (SCAQMD) regulates Exide's air emissions, in part with what is called a Title V permit, which allows the company to release pollutants into the air up to certain levels. The Los Angeles Regional Water Quality Control Board (LARWQCB) is responsible for protecting water quality. Exide has wastewater treatment systems, and a stormwater system that includes a retention basin. LARWQCB with the State Water Resources Control Board set and enforce standards for water that flows away from Exide's property into the sewer. The City of Vernon issues health and other permits to Exide. 4) The History of the Exide Hazardous Waste Permit . The facility in Vernon has been operating with an interim hazardous waste facility permit since 1981. However, it has had several owners prior to Exide Technologies. The facility has been used for a variety of metal fabrication and metal recovery operations since 1922. Previous owners have included Morris P. Kirk & Sons, Inc., NL Industries, Gould Inc., and GNB Inc. Gould Inc. filed a RCRA Part A notification on November 19, 1980, as a treatment and storage facility. This Part A identified storage of spent lead-acid batteries and other SB 712 Page 6 lead-bearing material prior to treatment and recycling, and a wastewater treatment system. Gould Inc. was issued an Interim Status Document (ISD) by the State of California Department of Health Services (DHS), DTSC's predecessor agency, on December 18, 1981. The US EPA rescinded the facility's Treatment and Storage Facility classification by returning Gould Inc.'s original RCRA Part A application, after Gould Inc. eliminated its waste pile, claimed that the smelters do not require a permit, and requested reclassification to generator status. The Interim Status Document was subsequently rescinded by DHS in 1982. GNB, Inc. purchased the facility and filed a revised Part A application on July 5, 1985. On September 3, 1986, DHS determined that a hazardous waste facilities permit was necessary. GNB, Inc. submitted the first RCRA Part B application on November 8, 1988. On December 13, 1999, DTSC approved a Class 2 Interim Status modification for Supplemental Environmental Projects (SEPs) as a result of an enforcement case settlement. On June 30, 2000, DTSC approved a Class 2 Interim Status modification, for replacement of the Waste Water Treatment Plant and to provide secondary containment. On January 5, 2001, DTSC approved a Class 1 Interim Status modification, for change of ownership and operational control to Exide Corporation. On November 16, 2001, DTSC approved a Class 1 Interim Status modification, for a name change from Exide Corporation to Exide Technologies. In 2006, Exide submitted a completed application and DTSC SB 712 Page 7 circulated for public hearing, a draft permit for the Vernon Exide facility. In mid-2006, DTSC received significant comments from the SCAQMD and the public in regards to three specific areas: 1) the risk assessment prepared by the contractor used proprietary software, which was not accessible by the public to verify parameters and assumptions used in the risk assessment model. The risk assessment model for the air emissions model was not an approved model by SCAQMD; 2) the environmental impact report (EIR) lacked significant alternative analysis to mitigate the environmental impacts; and 3) the Part B application had not adequately assessed the secondary containment, tank systems, and closure of former tank systems. As a result DTSC took the following actions: 1) worked closely with SCAQMD to require Exide to prepare a risk assessment (AQMD required risk assessment for air emissions); 2) prepared a revised EIR; and 3) required Exide to submit a revised Part B application addressing comments received during comment period. In 2010, the risk assessment indicated high arsenic emissions prompting Exide to petition SCAQMD to redo the source testing (data required for the risk assessment) in order to prepare a revised risk assessment. [Note: source testing is an expensive process that can cost up to $1 million). In January 2013, Exide provided DTSC and SCAQMD with a revised risk assessment. The risk assessment showed high risks to potential receptors (workers and residents). In April 2013, DTSC issued an administrative suspension order because it was concerned about the releases of hazardous waste (leaking stormwater pipes) and air emissions into the environment. In May 2013, Exide requested a hearing with the Office of Administrative Hearings (OAH). A hearing was held in June 2013 by OAH. SB 712 Page 8 In June 2013, the Los Angeles Superior Court granted Exide's ex parte application and issued a temporary restraining order which stayed the Order for Temporary Suspension and prevented DTSC from enforcing it until the hearing and determination on the order to show cause regarding the preliminary injunction was concluded. In October 2013, DTSC and Exide signed a Stipulation and Order. The Stipulation and Order resolves the administrative suspension order that DTSC issued against Exide in April 2013 and resolves a legal action that Exide filed against DTSC in June 2013. The Stipulation and Order sets out conditions that Exide must meet and timelines for completing them. There are automatic penalties in place if the timelines are not met as specified in the Stipulation and Order. October 2013 - Present: Exide is in the process of implementing the requirements set forth in the Stipulation and Order. 5) History of Environmental Impact and Enforcement at Vernon Exide Facility . 1999-2000 DTSC found lead at levels of 40 percent in the sediment at the bottom of the stormwater retention pond and required Exide to clean it up. 2003 DTSC fined Exide $40,000 for improper storage of used lead-acid batteries. Exide delayed payment because of the company's Chapter 11 bankruptcy filing. 2004 DTSC took emergency measures in 2004 and again in 2008 to require Exide to clean up a lead-contaminated drainage channel, and public areas like sidewalks, streets, and neighboring roofs. SB 712 Page 9 SCAQMD fined Exide and Exide paid $3,000 to settle two air quality violations with regulators. 2006 DTSC fines Exide $39,000 for failing to minimize the possibility of hazardous releases. 2007 A study prepared by e2 Environmental for Exide at the request of the LARWQCB, and shared with DTSC officials, said modeling of the dispersion of heavy metals from the site "suggest that in the last three years, Exide has contributed through deposition approximately 424 lbs. of lead in both 2004 and 2005, and 712 lbs. of lead in 2006 to the watershed." 2008 Exide paid $5,000 to settle an air quality violation with SCAQMD. 2009 During an annual compliance evaluation inspection, DTSC officials find lead sludge in the stormwater retention basin. Exide tells regulators it cleans out the basin once a year. That discovery leads to an enforcement order in 2010. In May, Exide paid $7,500 to settle an air quality violation with regulators. In July, Exide paid $150,000 to settle 14 air quality violations with SCAQMD. In addition, Exide paid $250,000 to partially reimburse air regulators investigation and enforcement costs. 2010 DTSC fined Exide more than $100,000 for lead releases into the environment. SCAQMD adopted Rule 1420.1 - Emissions Standards for Lead from Large Lead-Acid Battery Recycling Facilities. The rule imposed on Exide more stringent monitoring, operating and reporting requirements in SB 712 Page 10 order to meet the new lowered federal emissions standards for lead. Rule 1420.1 requires total facility enclosure, additional air monitoring and sampling, annual source testing, and additional housekeeping measures. 2011 Exide told SCAQMD that it exceeded ambient concentrations of lead that had been defined the previous November. By the beginning of 2012, the company lowered its air emissions of lead with additional measures, thereby complying with the law. 2012 SCAQMD approved a settlement with Exide of $119,000 to settle 7 air quality violations. 2013 March A Health Risk Assessment by Exide indicated the facility poses a maximum individual cancer risk (MICR) of 156 in one million for an offsite worker receptor about 300 meters northeast of the facility (primarily arsenic). Air regulators also asserted that the facility poses a maximum chronic hazard index (HI) of 63 for the respiratory system at the same offsite worker receptor identified in Section 16.1 (from arsenic). In a report by Exide, breaches were detected in underground pipelines which were used to convey the lead contaminated stormwater to a hazardous waste treatment tank system. They were found to be in poor conditions from an accumulation of semi-solid sludge materials (also known in the industry as mud) generally throughout the piping system that contained elevated levels of hazardous waste, specifically metals (e.g., lead, arsenic and cadmium). SCAQMD ordered Exide to submit a risk reduction plan for air emissions, and ordered the company to hold public meetings, after a report completed in SB 712 Page 11 January showed cancer risks of 156 in a million mostly from arsenic in areas immediately surrounding the plant. April DTSC director Debbie Raphael ordered Exide to be closed, finding that "an imminent and substantial danger to the public health, safety and the environment" exists. The finding was based on a "recent report" submitted by Exide showing that underground storm sewer pipelines are releasing toxic material to the environment, and on a report submitted by Exide to SCAQMD showing that toxic emissions pose a risk to the surrounding community. May Exide Technologies contested the shutdown and called for a hearing before an administrative law judge. "The DTSC has known of the issues raised in the Order and Accusation for an extended period of time, and has consented to Exide's continued operation," wrote the Los Angeles firm of Sheppard, Mullin, Richter & Hampton, in the notice of defense Exide submitted. June Exide Technologies filed for Chapter 11 bankruptcy protection. Exide Technologies reported $1.9 billion in assets and $1.1 billion in liabilities as of the end of last quarter. By entering Chapter 11, the company is likely to avoid paying off maturing bonds and payments for debt interest. Judge Luis Lavin issued a temporary restraining order against DTSC, writing that Exide would be irreparably harmed by a slow administrative hearing, and that the public interest will not suffer by allowing the lead recycler to get the Vernon plant back to work. July Judge Luis Lavin finalized his restraining order SB 712 Page 12 against DTSC, enabling Exide to open for business while waiting for the administrative hearing. Fire at an Exide baghouse temporarily shut down operations. Baghouses reduce emissions from furnace feed rooms and other places within the Vernon plant. Exide reported "excessive heat" damage in one of those baghouses, then restarted operations. SCAQMD inspectors issued a notice of violation for that, since both baghouses must be working when the plant is working. The incident stopped Exide operations until July 15th. Emissions limits drove the plant's operators to take two furnaces offline. The reverberatory furnace and the blast furnace are steps in the smelting process for lead. Creating heat to apply to recyclable material produces carbon monoxide, a toxic gas that is colorless, and can create dizziness, fatigue, disorientation and nausea. Air regulators limit the amount of carbon monoxide a source can emit over a 30-day period; to stay within the limits, plant regulators turned off the furnaces. Air regulators reported that Exide began reheating the furnaces for active use in early August. August Exide gave regulators a plan to reduce hazards posed by air emissions that include toxic chemicals. September The Los Angeles County Department of Public Health said it would offer blood testing for lead to members of the community. October DTSC announced that it reached a stipulation order with Exide that would allow the plant to stay open. The order required Exide to clean up leaky stormwater pipes and control toxic substances in air emissions and additionally identify potential impacts the facility may have had on surrounding communities. SB 712 Page 13 Also, Exide agreed to pay up to $7.7 million for cleanup of those violations and to cover the cost of blood tests for lead for people living and working around the facility, and other environmental tests. Lawyers for the SCAQMD appealed to the district's hearing board to shut Exide down for "failing to adequately capture and control gaseous emissions from its blast and reverberatory furnaces, including arsenic." December DTSC issued an emergency order directing a Vernon battery recycler to clean up lead and other metals that had been deposited near the Exide Technologies plant. Dust and soil samples with metals in concentrations at or near hazardous waste levels have been found near the facility and must be cleaned up by January 31, 2014. The order is urgent, the agency wrote, because winter rains could wash the metals into the Los Angeles River. 1) Permitting timeline . Pursuant the Stipulation and Order with DTSC, Exide has committed to complete the permitting process by the end of 2015. The committee may wish to amend the bill to be consistent with the agreed upon timeline. 2) What is the incentive for facility owners to be diligent about completing the permit process ? There appear to be no repercussions for a facility that does not have a current and up-to-date permit in place. In fact there seem to be advantages to the facility by having the process continued for as long as possible under an interim or previous permit because a new permit is likely to require more stringent conditions and/or mitigation measures. It is business as usual until a new permit is issued. In the case of the Exide facility in Vernon, operations have been allowed to continue for many years even with a history of emission violations, mishandling of waste, and findings of degradation within the facility. This presents an apparent disconnect. SB 712 Page 14 When a facility violates the law and puts the public at risk, should that facility be allowed to continue to operate without a finalized permit? The author may wish to add an amendment to this measure to authorize DTSC to issue a suspension order for operations at any permitted facility operating under an interim or continued permit where a significant violation is found that presents harm or risk of harm to human health or the environment. The threat of possible operation suspension will create an incentive for facilities to work diligently on the completion of the permit and would also prevent those operating without a current permit from continuing to operate if they have put human health or the environment at risk. 3) Duplicative provisions . Both SB 812 (de León) and SB 712 (Lara) provide that interim status for hazardous waste permits terminates after 5 years. Is it necessary to have this provision in two bills? 4) California Hazardous Waste Facilities . Battery recyclers provide an important service in recovering lead and reusing the metal rather than disposing of it in a hazardous waste landfill and mining new metals. However, these facilities must operate in a manner that does not jeopardize public health and the environment. SOURCE : Author SUPPORT : Bell Mayor Violeta Alvarez Bell Vice Mayor Ana Maria Quintana Bell Councilmember Alicia Romero Bell Councilmember Nestor Enrique Valencia Florence Firestone Merchants Association Lynwood Mayor Aide Castro Lynwood Councilmember José Luis Solache OPPOSITION : None on file SB 712 Page 15