BILL ANALYSIS                                                                                                                                                                                                    Ó



          SENATE COMMITTEE ON ENVIRONMENTAL QUALITY
                              Senator Wieckowski, Chair
                                2015 - 2016  Regular 
           
          Bill No:            AB 1102
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          |Author:    |Santiago                                             |
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          |-----------+-----------------------+-------------+----------------|
          |Version:   |6/21/2016              |Hearing      |6/29/2016       |
          |           |                       |Date:        |                |
          |-----------+-----------------------+-------------+----------------|
          |Urgency:   |No                     |Fiscal:      |Yes             |
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          |Consultant:|Rachel Machi Wagoner                                 |
          |           |                                                     |
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          SUBJECT:  Hazardous waste facilities:  inspections.

            ANALYSIS:
          
          Existing law:
           
          1) Under the federal Resource Conservation and Recovery Act  
             (RCRA) of 1976, governs the disposal of 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).

          1)  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 to  
                health and safety.

             c)    Implements federal tracking requirements for the  
                handling and transportation of hazardous waste from the  







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                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.

             g)    Authorizes DTSC to issue an order under the hazardous  
                waste control laws requiring that a violation be corrected  
                and imposing a civil penalty to specified persons,  
                including a person who has violated various provisions  
                regulating hazardous waste or provisions concerning  
                removal and remedial actions for hazardous substance  
                releases. A person who is issued that order is required to  
                pay for oversight of the removal or remedial action.

             h)    Authorizes DTSC to conduct inspections of hazardous  
                waste facilities, (but not at any specified required  
                frequency).

          This bill:  

             1)   Sets minimum inspection frequencies for DTSC for  
               hazardous waste facilities. This bill requires DTSC to  
               inspect:

                  a)        A permitted hazardous waste landfill disposal  
                    facility no less than once per month.



                  b)        A permitted and operating hazardous waste  
                    facility that is not covered under paragraph 1 (i.e.  
                    operating facilities not including landfills) no less  
                    than four times per year.










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                  c)        A permitted hazardous waste facility not  
                    covered under paragraphs 1 or 2 (i.e. postclosure  
                    facilities) no less than twice a year.



             2)   Provides that if the department requires additional  
               staff to conduct inspections, the Legislature intends to  
               increase the facility fee to cover these regulatory costs.

          Background

          1) Exide Technologies, Vernon, California.  The Exide facility  
             in Vernon, California was one of two secondary lead smelting  
             facilities in California which recovered 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.  

             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. 

             The facility in Vernon has been operating with an interim  
             hazardous waste facility permit since 1981.  

             In recent years, the Exide facility has brought to light the  
             failings of DTSC's Permitting Program.  Over the 30 years  
             that the facility operated with an interim permit, there were  
             many violations of the permit as well as other regulatory  
             standards, such as those by the South Coast Air Quality  
             Management District, which caused environmental damage and  
             risk to public health.  

             In March, 2015 it was announced that an agreement was reached  
             between the United States Department of Justice and Exide  
             Technologies to permanently close the battery recycling  
             facility in Vernon, CA, and in order to avoid criminal  
             prosecution, Exide Technologies further agreed to a  
             stipulation and order with DTSC to complete remediation  
             activities as specified in the stipulation and order issued  
             by DTSC.  








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             This example of a failed process calls into question whether  
             the statutory authorizations, requirements and direction to  
             DTSC is adequate to ensure that the program runs correctly  
             and is appropriately protective of public health and the  
             environment, especially in the vulnerable communities where  
             there are permitted facilities.

             Additionally, it called into question whether there are other  
             facilities that may currently be similarly causing harm to  
             the communities in which they are located.

             The community crisis around Exide created significant concern  
             about DTSC's permitting statutory authorization and  
             implementation. 

             The DTSC Office of Permitting is authorized to issue  
             hazardous waste facilities permits, and to impose conditions  
             specifying the types of hazardous waste that may be accepted  
             for transfer, storage, treatment, or disposal in California.   
             Currently there are 117 permitted Operating Facilities,  
             including 28 Post Closure Facilities (closed and going  
             through final remediation) in the state, that provide for the  
             treatment, storage, or disposal of substances regulated as  
             hazardous waste under federal and state law.  A total of 1.82  
             billion pounds of California toxic waste were disposed of in  
             these facilities in 2012, with 62% treated to the point where  
             it no longer met toxic standards, and 38% placed in  
             landfills.  From a staffing standpoint, currently there are  
             29 authorized positions allocated to the Office of  
             Permitting, located in Sacramento, Berkeley, and Chatsworth.

             There has been significant dissatisfaction with the  
             performance of the Permitting Office, directed at the cost  
             and length of time in completing the permit process and a  
             perception that the Office does not deny or revoke permits as  
             often as it should to address community concerns. The  
             stakeholder interviews conducted as part of this study  
             identified the following major concerns:

                       The need to create clear and objective criteria  
                  for making denial/revocation decisions that are based on  
                  valid standards of performance and risk.









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                       A clear standard for violations that would lead to  
                  a denial or revocation.

                       The need for the Department to document and  
                  measure a "scorecard" of attributes that would be  
                  perceived as a "good result" for the permitting program.

             DTSC entered into a contract with CPS HR Consulting on  
             February 1, 2013, to conduct a Permitting Process Review and  
             Analysis. 

             CPS HR was asked to review the existing permitting program  
             and develop a recommended standardized process with clear  
             decision criteria and corresponding standards of performance.  
             CPS HR was also asked to document the changes in the  
             permitting process over the past five years based primarily  
             on the record obtained from past internal review, and to  
             obtain perspectives of designated subject matter experts,  
             including representatives from the environmentalist,  
             environmental justice, and industry communities.  This report  
             provides findings in each defined area.

             The study found that the overall average permitting process  
             time, which was 5.0 years prior to FY2003, improved to a 3.2  
             year average for the period from FY2003 to FY2007, before  
             again increasing to 4.3 years in the most recent time period  
             (from FY2008 through part of FY2013). So while there was an  
             improvement from the oldest period studied to the most  
             recent, the current trend is again towards longer processing  
             time.

             The study notes several key findings regarding the recent  
             increase in permit processing time which is attributed to at  
             least two major factors:  

                       There was a reduction in staffing in the office.  
                  Permitting staffing has been reduced significantly from  
                  95.8 personnel years utilized in FY2007 to just 24.6  
                  personnel years utilized in FY2009.  The initial change  
                  was a response to the economic recession in 2009, and  
                  its required state budget reductions.  However, less  
                  than 26.1 personnel years have been utilized in each  
                  year since that time.  









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                       The study found that the second primary reason for  
                  permitting delays is poor management practices. Between  
                  December 2009 and June 2013, the Permitting Program  
                  Office did not maintain consistent uniform management,  
                  supervisory structure or clear consistent organizational  
                  structure. This is demonstrated by the fact that program  
                  managers were either reassigned to other duties or  
                  vacant for a majority of the time period from July 2009  
                  through July 2013, while program supervisor positions  
                  for all personnel in the unit were either not authorized  
                  or vacant for more than half of this period. In other  
                  words,  there was a fouryear period in which direct  
                  supervision of personnel lapsed. 

             This study concludes that while many aspects of the work  
             process required for a permit renewal are well-defined and  
             well-known, most of the difficult or complex steps are not  
             clear or well-defined.  This is one of the most likely  
             reasons for prolonged delays, and for future process  
             improvement.

             The study further stated that much of the "process" knowledge  
             within the Office of Permitting is in the individual  
             professional knowledge of the DTSC staff which is  
             interpretive and not documented. More importantly, a  
             re-review of the Permit Renewal Team effort of 20072009 has  
             not found any structural changes or permanent process changes  
             that have been implemented that could cause significantly  
             improved permit renewals in the future. According to CPS HR  
             the lessons learned from the Renewal team effort appear to  
             have been misconstrued, and the actions taken after the team  
             experience were damaging to management and supervision in the  
             unit.

             According to the department, for several years, DTSC's  
             efforts to carry out this mission were compromised by  
             deficiencies in technical and administrative processes and  
             procedures, from a misaligned personnel system to  
             insufficient coordination between programs. These systemic  
             issues resulted in a structural budget deficit; $184.5  
             million in uncollected cleanup costs dating back 26 years; a  
             growing backlog of applications to renew hazardous waste  
             permits; and decreased stakeholder confidence and public  
             trust in the department. 








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             In early 2012, the department embarked on its "Fixing the  
             Foundation" initiative, which includes more than 30 different  
             activities intended to improve its operations and restore  
             public trust in the department. Activities include increasing  
             cost recovery from those responsible for hazardous waste  
             contamination, reducing permitting backlogs, strengthening  
             enforcement, and improving the financial sustainability of  
             its operating funds. This effort includes multiple goals at  
             every level of the organization, from staff engagement to  
             permitting backlogs and cost recovery. 

             In 2014, DTSC released its Permitting Enhancement Work Plan  
             as a comprehensive roadmap to guide efforts to improve DTSC's  
             ability to issue protective, timely and enforceable permits  
             using more transparent standards and consistent procedures.

             In the 2014-15 Budget Act, DTSC requested and was granted 8  
             limited-term positions and $1.2 million for reduction of  
             backlogged permitting application review.

             As part of the 2015-16 Budget Act, DTSC requested an  
             additional $1.632 million and 16 limited-term positions for  
             two years to address the permitting backlog.
           
          1) Independent Review Panel (IRP).  The IRP was created within  
             DTSC by SB 83 (Senate Committee on Budget and Fiscal Review,  
             Chapter 24, Statutes of 2015).  The IRP is comprised of three  
             members tasked with reviewing and making recommendations  
             regarding improvements to DTSC's permitting, enforcement,  
             public outreach, and fiscal management.  The IRP will issue  
             reports to the Governor and Legislature every 90 days  
             detailing updates on DTSC's performance and backlogs.  The  
             IRP reports will additionally include recommendations for  
             improving DTSC programs.  

             The IRP has submitted 2 reports thus far with a series of  
             observations, concerns and recommendations for improving  
             DTSC's permitting, cost recovery and site remediation  
             programs.  Much of the reports' focus is on budgetary  
             improvements that have been made or are being made.  In  
             addition the IRP makes several process improvement  
             recommendations around DTSC's permitting program with an  
             emphasis on increasing public participation and  








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             accountability. 

             Comments

          1) Purpose of Bill.  According to the author, in 2015, SB 83  
             established the IRP within DTSC.  The IRP is tasked with  
             reviewing and making recommendations regarding improvements  
             to DTSC's permitting, enforcement, public outreach, and  
             fiscal management.  At the recent IRP meeting on June 8,  
             2016, DTSC presented on their enforcement and inspection  
             operations. Currently, there are no statutory requirements  
             for inspection frequencies. 

             The author asserts that communities across the state have  
             expressed concerns regarding state regulation of hazardous  
             waste facilities. In particular, the situation at the Exide  
             lead-acid battery recycling facility is inexcusable, where  
             lax permitting and enforcement allowed the facility to  
             operate for over three decades on a temporary permit near  
             disadvantaged communities. More frequent inspections may have  
             addressed violations or even shut the plant down sooner.  
             While the plant has closed down, other communities should not  
             suffer the same fate. 

             The author states that hazardous waste facilities that are  
             not in compliance with state and federal laws and regulations  
             pose a risk to public health and the environment. It is vital  
             that permitted hazardous waste facilities be inspected on a  
             regular basis to ensure compliance with state and federal  
             laws. AB 1102 sets minimum inspection frequencies for DTSC  
             for hazardous waste facilities to ensure compliance with laws  
             and regulations.

          2) Or what? AB 1102 specifies a frequency at which hazardous  
             waste facilities must be inspected.

             DTSC has jurisdiction over about 120 facilities which store,  
             transport, or dispose of hazardous waste.   DTSC has 111  
             inspector positions.  

             At the last IRP hearing it was stated that 25% of the  
             criminal inspectors are missing.   The Office of Criminal  
             Enforcement has about 1/3 of the total inspectors and the  
             Office of Criminal Enforcement just wiped out over 200 cases  








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             that they failed to prosecute or had let the statutes of  
             limitations expire, or lost the chain of custody.  These were  
             200 cases where criminal wrong-doing was initially suspected  
             and charges were filed.

             Some of the part B facilities in Los Angeles County have not  
             been inspected in half a decade.   

             While statutorily requiring frequent inspections may help  
             increase enforcement, the problems are myriad and more  
             complicated.  

             DTSC could be conducting frequent inspections now, but it is  
             not - there are too few inspectors and additional factors  
             that influence DTSC's current situation.

             What are the consequences if DTSC does not meet this  
             statutory mandate - for whatever reason?

          3) A band aid on a hemorrhage?  The Legislature, the  
             Administration and stakeholders have all pointed to systemic  
             issues and programmatic deficiencies that have impacted  
             DTSC's ability to fulfill its public health and environmental  
             protection mandates.  The Legislature has had nearly 20  
             hearings on the department's deficiencies in the last 3 years  
             between policy and budget committees in both houses.  DTSC  
             and the Governor have initiated audits, panels, reports, and  
             their own initiatives to fix identified problems.  The  
             Legislature has passed several reform bills and significantly  
             augmented DTSC's budget and staff. 

             It is not clear that a suite of bills that make small "steps  
             in the right direction" at the 11th hour of the Legislature's  
             policy deadlines at the end of a two-year session is the  
             right direction at this point.  This lacks the opportunity to  
             do the thoughtful consideration necessary to review how these  
             reforms impact all stakeholders and may actually hinder  
             significant reform necessary to improve DTSC. 

             It is clear however, that all review to date has pointed to  
             systemic issues at DTSC.  At the heart of the criticisms  
             around DTSC's failings is a lack of accountability.  These  
             bills, while they may tighten the statute, do not help solve  
             the root problem of greater transparency and accountability.








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          Related/Prior Legislation

          AB 1205 (Gomez, 2015) Requires DTSC, within 90 days of receiving  
          a renewal application for a hazardous waste facilities permit,  
          to hold a public meeting for specified purposes in or near the  
          community in which the hazardous waste facility is located and  
          requires DTSC review the financial assurances required to  
          operate a hazardous waste facility at least once every 5 years.  
          If the department's review finds the financial assurances for a  
          facility to be inadequate, the bill would require the department  
          to notify the owner or operator of the facility and would  
          require the owner or operator to update and adopt adequate  
          financial assurances within 90 days. 

          AB 1400 (Santiago, 2016)  requires DTSC, as a condition for a  
          new hazardous waste facilities permit or a renewal of a  
          hazardous waste facilities permit, to require a facility  
          operator to install monitoring devices or other equipment at the  
          fence line of the facility to monitor for potential releases  
          from the facility into the surrounding community, except as  
          specified; requires DTSC to grant such a request from a member  
          of the public for a technical assistance grant for the purpose  
          of getting assistance relating to, and information about, a  
          pending hazardous waste facilities permit if DTSC receives the  
          request within one year of the submission of the applicable  
          hazardous waste facilities permit application, and would  
          authorize DTSC to, in its discretion, grant such a request  
          received more than one year from the submission of the  
          applicable permit application, requires the permit applicant to  
          fund the grants; requires DTSC, upon receipt of an application  
          for a new hazardous waste facilities permit or for a renewal of  
          a hazardous waste facilities permit, to post on its Internet Web  
          site that the application has been received, and to include with  
          this information a description of the process for applying for a  
          technical assistance grant. 
          
          SB 83 (Committee on Budget and Fiscal Review, Chapter 24,  
          Statutes of 2015) among other things, created the IRP to review  
          and make recommendations for improving DTSC programs, as  
          specified.
          
          SB 673 (Lara, Chapter 611, Statutes of 2015) revises DTSC's  
          permitting process and public participation requirements for  








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          hazardous waste facilities
           
          SB 712 (Lara, Chapter 833, Statutes of 2014) requires DTSC, on  
          or before December 31, 2015, to issue a final permit decision on  
          an application for a hazardous waste facilities permit that is  
          submitted by a facility operating under a grant of interim  
                                                                           status on or before January 1, 1986, by either issuing a final  
          permit or a final denial of the application.
           
          SB 812 (de León, 2014) would have required DTSC to adopt  
          regulations by January 1, 2017, to specify conditions for new  
          permits and the renewal of existing permits, as specified, and  
          establishes deadlines for the submission and processing of  
          facility applications, as specified.  SB 812 was vetoed by  
          Governor Brown.
           
          SOURCE:                  Author
           
          SUPPORT:  
           
          Asian Pacific Environmental Network 
          Breast Cancer Fund
          California Environmental Justice Alliance
          California League of Conservation Voters
          Center for Community Action and Environmental Justice 
          Clean Water Action/ Clean Water Fund
          Communities for a Better Environment 
          Environmental Health Coalition 
          Environmental Working Group 
          Natural Resources Defense Council
           
          OPPOSITION:    

          CalChamber
          Waste Management

          These lists is likely incomplete as the bill was gut and amended  
          on 6/20/16, not giving stakeholders a sufficient opportunity to  
          review.
          
          ARGUMENTS IN SUPPORT:   

          Supporters state that the DTSC reform package (AB 1102, AB 1205  
          and AB 1400) will improve DTSC's hazardous waste permit program  








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          by setting minimum inspection frequencies at hazardous waste  
          facilities, increasing public's ability to participate in the  
          permitting process, ensuring adequate monitoring to avoid  
          off-site migration of contaminants and requiring financial  
          assurances to cover hazardous waste facilities clean-up costs. 

          ARGUMENTS IN OPPOSITION: 

          According to Waste Management "the objection pertains to the  
          cumulative effect of these combined proposals, the costs of  
          which must all be borne by applicants or operators.  In brief,  
          the cumulative effect will be large, poorly-understood, and  
          clearly discourage the operation of DTSC-licensed facilities in  
          California.  Please note that legislation to eliminate the  
          flat-fee option for permit applicants is part of the budget and  
          trailer bills.  Additionally, legislation to create an Appeals  
          Hearing Board is being actively considered.  Can we reasonably  
          expect DTSC to implement the totality of these changes smoothly?  
           It is ill-advised to inundate DTSC with a myriad of lately  
          developed proposals.  

          These proposals should not be considered in isolation.   
          Important issues of public policy should be considered.  For  
          example, approximately 85% of material deposited at Kettleman  
          Hills is non-RCRA waste.  If transported to the border, non-RCRA  
          waste is subjected to dramatically less demanding regulatory  
          standards.   During Waste Management's recent permit  
          modification "ordeal", waste previously deposited at Kettleman  
          Hills went elsewhere (not in California).  No one has studied  
          where this waste went and the manner in which it was handled,  
          treated, etc.  Enactment of the three bills (and other matters)  
          identified above could result in the export of more waste and  
          related activity.  

          No one questions the need to reform DTSC.  But the rapid  
          adoption of multiple bills fails to prioritize reforms,  
          frustrates integration, and may impede reform.  Further delay  
          and frustration may result."

                                      -- END --












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