BILL ANALYSIS                                                                                                                                                                                                    Ó



          SENATE COMMITTEE ON ENVIRONMENTAL QUALITY
                              Senator Wieckowski, Chair
                                2015 - 2016  Regular 
           
          Bill No:            AB 1205
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          |Author:    |Gomez                                                |
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          |-----------+-----------------------+-------------+----------------|
          |Version:   |6/20/2016              |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 permitting.

            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)    Requires DTSC to hold a public meeting for specified  
                purposes in or near the community in which a new hazardous  
                waste facilities permit has been applied for. 

             i)    Prohibits DTSC from issuing or renewing a permit to  
                operate a hazardous waste facility unless the owner or  
                operator of the facility establishes and maintains  
                financial assurances. 

          This bill:  

          1) 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.

          2) 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  








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             facility and would require the owner or operator to update and  
             adopt adequate financial assurances within 90 days. 

          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.  

             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.









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             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.

                       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  








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             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.  

                       The study found that the second primary reason for  
                  permitting delays is poor management practices. Between  
                  December 2009 and June 2013, the Office of Permitting 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  








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                  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. 

             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. 









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             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.
           
          2) Independent Review Panel (IRP).  The IRP was created within  
             DTSC by SB 83 (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  
             accountability. 



          Comments

          1) Purpose of Bill.  According to the author, years of systemic  
             issues and programmatic deficiencies have affected DTSC's  
             ability to adequately protect public health and the  
             environment, particularly in disadvantaged communities that  
             suffer from multiple pollution burdens and vulnerabilities.  
             Over the past few years, legislative oversight, community  








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             advocacy, and internal reform efforts have slowly begun to  
             turn the ship around. Much work still remains to be done,  
             however. 

             The author asserts that AB 1205 is another step in the right  
             direction.  AB 1205 requires DTSC to review financial  
             assurances required to operate a hazardous waste facility at  
             least once every five years. The author believes that this  
             will ensure that facilities have the financial capacity to  
             restore the public resources they degrade, pay for any  
             necessary cleanup or closure, and protect the state and  
             taxpayers from financial liability. The author states that his  
             bill also requires early public engagement upon submittal of a  
             permit renewal application so that communities have the  
             opportunity to understand and participate in the  
             decision-making process and learn about the facility's  
             enforcement history. Low-income communities and communities of  
             color have historically lacked the resources, capacity and  
             expertise to understand the complex permitting process as well  
             as engage with regulators and industry. It is critical for the  
             public to be aware of and involved in decisions that will  
             impact their communities, and this engagement should occur  
             well before a draft permit is prepared.
               


          2) Or what? AB 1205 requires DTSC to review the financial  
             assurances required to operate a hazardous waste facility at  
             least once every 5 years. If DTSC's review finds the financial  
             assurances for a facility to be inadequate, the bill would  
             require DTSC 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.  What happens  
             after 90 days if the owner or operator doesn't adopt adequate  
             financial assurances? 

           3)  A band aid on a hemorrhage?  The author correctly points out  
             that 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,  








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             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.

             

          Related/Prior Legislation

          AB 1102 (Santiago, 2016) requires DTSC to inspect a permitted  
          hazardous waste land disposal facility no less than once per  
          month, inspect a permitted and operating hazardous waste facility  
          no less than 4 times per calendar year, and inspect a permitted  
          hazardous waste facility no less than 2 times per calendar year.   


          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,  








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          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 the DTSC's  
          permitting process and public participation requirements for  
          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 
          Center on Race, Poverty & The Environment
          Clean Water Action/ Clean Water Fund
          Communities for a Better Environment 
          Environmental Health Coalition 
          Environmental Working Group 
 







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          Natural Resources Defense Council
          OPPOSITION:    

          CalChamber
          Waste Management

          These lists are 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  
          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  








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          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."

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