BILL ANALYSIS                                                                                                                                                                                                    Ó






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          |SENATE RULES COMMITTEE            |                        SB 654|
          |Office of Senate Floor Analyses   |                              |
          |(916) 651-1520    Fax: (916)      |                              |
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                                    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  








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            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.   







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          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  







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          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.







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          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  







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          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  







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          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.








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           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
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