BILL ANALYSIS Ó SENATE COMMITTEE ON ENVIRONMENTAL QUALITY Senator Wieckowski, Chair 2015 - 2016 Regular Bill No: AB 1102 ----------------------------------------------------------------- |Author: |Santiago | ----------------------------------------------------------------- |-----------+-----------------------+-------------+----------------| |Version: |6/21/2016 |Hearing |6/29/2016 | | | |Date: | | |-----------+-----------------------+-------------+----------------| |Urgency: |No |Fiscal: |Yes | ------------------------------------------------------------------ ----------------------------------------------------------------- |Consultant:|Rachel Machi Wagoner | | | | ----------------------------------------------------------------- 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 AB 1102 (Santiago) Page 2 of ? 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. AB 1102 (Santiago) Page 3 of ? 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. AB 1102 (Santiago) Page 4 of ? 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. AB 1102 (Santiago) Page 5 of ? 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. AB 1102 (Santiago) Page 6 of ? 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. AB 1102 (Santiago) Page 7 of ? 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 AB 1102 (Santiago) Page 8 of ? 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 AB 1102 (Santiago) Page 9 of ? 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. AB 1102 (Santiago) Page 10 of ? 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 AB 1102 (Santiago) Page 11 of ? 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 AB 1102 (Santiago) Page 12 of ? 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 -- AB 1102 (Santiago) Page 13 of ?