BILL ANALYSIS                                                                                                                                                                                                    Ó




                   Senate Appropriations Committee Fiscal Summary
                            Senator Kevin de León, Chair


          SB 812 (de León) - Hazardous waste: facilities permitting.
          
          Amended: January 16, 2014       Policy Vote: EQ 6-2
          Urgency: No                     Mandate: No
          Hearing Date: January 21, 2014                    Consultant:  
          Marie Liu     
          
          This bill meets the criteria for referral to the Suspense File.
          
          
          Bill Summary: SB 812 would establish deadlines for the  
          submission of applications for hazardous waste facility permits  
          as well as deadlines for the processing of such applications. 

          Fiscal Impact: 
           Approximately $1M from Hazardous Waste Control Account  
            (special) in 2014-15, 2015-16, and 2016-7 for six additional  
            positions at the Department of Toxic Substances Control (DTSC)  
            for the processing of continued permits.
           Unknown, but likely insignificant, costs from the Hazardous  
            Waste Control Account (special), for permitting facilities on  
            an interim status grant in the long-term future.

          Background: Under the California Hazardous Waste Control Act,  
          facilities that treat, store, handle, and/or dispose of  
          hazardous waste are required to be permitted by the DTSC. The  
          hazardous waste facility permit specifies specific requirements  
          for the facility to ensure safe operation. There are currently  
          117 facilities permitted by DTSC. While these permits expire  
          after 10-years, the facility is allowed to continue to operate  
          past this date while DTSC considers their permit renewal  
          application. There are currently 24 facilities operating under  
          these so-called "continued permits." 

          One permit of the 117 is an interim permit for a facility owned  
          by Exide Technologies in Vernon, California. The interim permit  
          was first issued in 1981. Over the next 30 years, while there  
          have been some steps taken to get the facility under a regular  
          permit, regular permit has not yet been issued. There are no  
          other facilities in California that are currently operating  
          under an interim permit.









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          Proposed Law: This bill would require that applications for  
          hazardous waste facility permits be submitted at least two years  
          prior to the expiration date of the permit.

          This bill would also require that DTSC approve or deny permit  
          renewal applications within three years of the expiration of the  
          permit, otherwise the application is deemed denied. DTSC would  
          have until January 1, 2018 to take final action on applications  
          for facilities whose permits expired on or before January 1,  
          2015.

          This bill would also limit the operation of a facility under an  
          interim status grant to five years for grants issued on or after  
          January 1, 2015. 

          Related Legislation: SB 712 (Lara) would establish deadlines for  
          DTSC to take final action on permit applications from hazardous  
          waste facilities operating under an interim status grant. SB 712  
          is to be heard by this committee on January 21, 2014.

          Staff Comments: DTSC has a BCP in the Governor's 2014-15 budget  
          for eight positions for two years to improve the permitting  
          process for hazardous waste facilities. As outlined in the BCP,  
          six of these positions would be to deal with 17 of the 24  
          continued permits over the next two years. At this rate, DTSC  
          could eliminate the backlog of continued permits in three years,  
          consistent with the deadlines established in this bill. Thus,  
          staff estimates that this bill would require 6PYs (3 hazardous  
          substances engineer, 1 supervising hazardous substances  
          engineer, 1 senior environmental planner, and 1 staff attorney)  
          as proposed in the BCP, but for three years at an approximate  
          cost of $1M annually.

          Under the provisions of the bill, for future permit renewal  
          applications, DTSC would have up to five years to take final  
          action on the application- at least two years before the permit  
          expires and up to three years after the expiration. Presumably  
          this five year window would generally well accommodate DTSC's  
          publically stated goal taking action on permit renewal  
          applications within two years. However, DTSC notes that between  
          2016 and 2019, DTSC will have a surge in the number of permit  
          renewal applications as a large number of facilities expire in  
          this period (12 to 18 per year vs 6 in 2020). In addition to the  
          large number of changes to the permitting program both underway  








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          and anticipated in the near future, staff believes that there is  
          a fair amount of uncertainty on DTSC's long-term staffing needs  
          for their permitting branch.  Therefore, the long-term impacts  
          of the time limits under this bill are unknown. 

          Hazardous waste facilities are required to pay fees with their  
          applications. However, applicants may pay a flat fee, which is  
          established in statute, that only covers a small portion of DTSC  
          regulatory costs. If the statute was amended to better cover  
          DTSC's regulatory costs, it is unclear whether such a change  
          could be retroactively applied to the facilities that have  
          renewal applications pending. Thus, a change to the fee  
          structure would not eliminate the costs associated with dealing  
          with the backlog of applications, but could allow greater  
          recovery of DTSC's permitting costs for future applications. 

          DTSC does not anticipate issuing any future interim status  
          grants. In the past, broad expansions of the hazardous waste  
          laws prompted the use of interim status grants as it allowed the  
          agency to better understand the newly regulated industries and  
          fine tune permit conditions before they were finalized. Should  
          there be another broad expansion of the hazardous waste laws in  
          the future, there is a small possibility that interim status  
          grants could be used again. Staff notes that even in the event  
          that interim status grants were to be used again, the cost  
          impacts of this bill would be mixed with the impacts of a large  
          number of changes underway and anticipated to DTSC's permitting  
          process. Compared to the other changes to the permitting  
          process, staff believes the cost impact of a three-year limit on  
          interim status grants would be minimal.