BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | SB 654| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: SB 654 Author: De León (D) Amended: 6/2/15 Vote: 21 SENATE ENVIRONMENTAL QUALITY COMMITTEE: 5-2, 4/29/15 AYES: Wieckowski, Hill, Jackson, Leno, Pavley NOES: Gaines, Bates SENATE APPROPRIATIONS COMMITTEE: 5-2, 5/28/15 AYES: Lara, Beall, Hill, Leyva, Mendoza NOES: Bates, Nielsen SUBJECT: Hazardous waste: facilities permitting SOURCE: Author DIGEST: This bill revises the Department of Toxic Substance Control's (DTSC) permitting process. ANALYSIS: Existing law, under the California Hazardous Waste Control Act (HWCA) of 1972: 1)Establishes the Hazardous Waste Control program. 2)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. 3)Establishes a system of fees to cover the costs of operating SB 654 Page 2 the hazardous waste management program. 4)Requires DTSC to grant and review permits and enforce HWCA requirements for hazardous waste treatment, storage and disposal facilities. This bill revises DTSC's permitting process requirements for hazardous waste facilities by: 1)Requiring that a complete renewal application, containing both Part A and Part B of the application, be submitted by the facility at least two years prior to the expiration of the permit. 2)Requiring DTSC to approve or deny the permit renewal application within 36 months. 3)Providing that applications to renew permits that expire in 2016 and 2017 are due by January 1, 2018. 4)Providing that DTSC has until January 1, 2019 to deal with applications for renewals that are received before January 1, 2016. Background DTSC permitting renewal process. Title 22, California Code of Regulations, Section 66270.10(h) requires "[a]ny hazardous waste management facility with an effective permit shall submit a new application at least 180 days before the expiration date of the effective permit, unless permission for a later date has been granted by the Department. The Department shall not grant permission for applications to be submitted later than the expiration date of the existing permit." To ensure completion of the permit renewal application at least 180 days before the expiration date of the effective permit, it is recommended that the renewal application be submitted at least one year before the expiration date of the permit. Current applicants who apply to renew the federal Resource Conservation and Recovery Act permits, where the renewal application contains significant changes in the facility's operation (equal to a Class 3 Permit modification), must hold an informal preapplication meeting. SB 654 Page 3 Permit renewals must meet all of the land use and permitting requirements for obtaining a new permit. DTSC permitting program backlog. 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 Office of Permitting, 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: 1)The need to create clear and objective criteria for making denial/revocation decisions that are based on valid standards of performance and risk; 2)A clear standard for violations that would lead to a denial or revocation; and 3)The need for DTSC 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 SB 654 Page 4 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: 1)There was a reduction in staffing in the office. Permitting staffing has been reduced significantly from 95.8 personnel years utilized in FY 2007 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. 2)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,3) 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. SB 654 Page 5 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 Permit 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. 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 eight limited-term positions and $1.2 million for reduction of backlogged permitting application review. As part of the 2015-16 Budget Act DTSC has requested an additional $1.632 million and 16 limited term positions for two years to address the permitting backlog. 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 SB 654 Page 6 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. Additionally, it calls into question whether there are other facilities that may currently be similarly causing harm to the communities in which they are located. Comments Purpose of bill. According to the author, "DTSC has a long-standing failure to protect California's disadvantaged communities through its lack of oversight and enforcement of its hazardous waste facilities permitting process." The author states that, "DTSC's consistent failure to complete the permitting renewal process prior to permit expiration has been a systemic problem with the program since its inception. DTSC's regulations require a submittal of a permit renewal application only six months prior to the permit expiration, yet the time it takes for DTSC to review and decide on that renewal is often two or more years. It doesn't make sense to have a timeline that assumes that the permit will expire and then allow facilities to continue to operate without a current permit under the assumption that the facility's permit renewal should or will be granted." The author further states, "that the drawn out process has SB 654 Page 7 created de facto permitted operation of hazardous waste facilities without adequate review of the facilities permit and operation." The author asserts "that this negligence in permitting review puts our most pollution vulnerable communities at risk." "SB 654 will correct this failure in permitting by requiring earlier submittal of permit renewal applications and states that if the process is not complete then the facility will be in violation with the HWCA." Related/Prior Legislation SB 673 (Lara, 2015) revises DTSC's permitting process and public participation requirements for hazardous waste facilities by creating the California Communities Committee and by revising the statutes related to permitting regulation. 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. FISCAL EFFECT: Appropriation: No Fiscal Com.:YesLocal: Yes According to the Senate Appropriations Committee: Ongoing costs of $1.466 million from the HWCA (special) to review hazardous waste facilities permits within three years of expiration. SB 654 Page 8 Unknown one-time costs, between minor and in the mid-hundreds of thousands, to process additional permits in 2016 and 2017. SUPPORT: (Verified 6/1/15) Center on Race, Poverty & the Environment OPPOSITION: (Verified6/1/15) Automotive Specialty Products Alliance California Business Properties Association California Cement Manufacturers Environmental Coalition California Chamber of Commerce California Manufacturers and Technology Association Chemical Industry Council of California Clean Harbors Environmental Services, Inc. Consumer Specialty Products Association Industrial Environmental Association Institute of Scrap Recycling Industries Metals Finishing Association of Northern California Metals Finishing Association of Southern California Simi Valley Chamber of Commerce Western Plant Health Association Western States Petroleum Association Prepared by:Rachel Machi Wagoner / E.Q. / (916) 651-4108 6/4/15 9:29:12 **** END ****