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. SB 812 (de Leon) Page 1 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 SB 812 (de Leon) Page 2 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.