BILL ANALYSIS                                                                                                                                                                                                    Ó




           ----------------------------------------------------------------- 
          |SENATE RULES COMMITTEE            |                        SB 673|
          |Office of Senate Floor Analyses   |                              |
          |(916) 651-1520    Fax: (916)      |                              |
          |327-4478                          |                              |
           ----------------------------------------------------------------- 


                                   THIRD READING 


          Bill No:  SB 673
          Author:   Lara (D)
          Amended:  5/5/15  
          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


          SOURCE:   Center on Race, Poverty & the Environment
          

          DIGEST:   This bill revises the Department of Toxic Substances  
          Control's (DTSC) permitting process and public participation  
          requirements for hazardous waste facilities.  


          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.








                                                                     SB 673  
                                                                     Page 2




          3)Implements federal tracking requirements for the handling and  
            transportation of hazardous waste from the point of waste  
            generation to the point of ultimate disposition.  

          4)Establishes a system of fees to cover the costs of operating  
            the hazardous waste management program.

          5)Authorizes the DTSC to enforce federal law and regulations  
            under RCRA.

          6)Requires the DTSC to grant and review permits and enforce HWCA  
            requirements for hazardous waste treatment, storage and  
            disposal facilities.

          7)Authorizes the 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. 

          This bill: 

          1)Establishes, until January 1, 2021, the DTSC California  
            Communities Committee within the DTSC and requires the  
            committee to make recommendations to the DTSC to increase  
            public participation in, and the transparency of, the DTSC's  
            decisionmaking. 

          2)Requires the DTSC, by July 1, 2018, to adopt additional  
            criteria, as specified, for use in determining whether to  
            issue a new hazardous waste facilities permit or a renewal of  
            a hazardous waste facilities permit, and to develop and  
            implement programmatic reforms designed to improve the  
            protectiveness, timeliness, legal defensibility, and  
            enforceability of the DTSC's permitting program.

          3)Requires a person to pay for oversight of any corrective  
            action required of the person with respect to hazardous waste.








                                                                     SB 673  
                                                                     Page 3




          

          Background
          
          DTSC Permitting Program Backlog.  The DTSC Office of Permitting  
          (Office) 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,  
          located in Sacramento, Berkeley, and Chatsworth.

          There has been significant dissatisfaction with the performance  
          of the 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:

          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;

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

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








                                                                     SB 673  
                                                                     Page 4




          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: 

          1)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.  

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








                                                                     SB 673  
                                                                     Page 5



            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 is in the individual professional knowledge of  
          the DTSC staff which is interpretive and not documented. More  
          importantly, a rereview 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.

          In 2014, the 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, the 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, the 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 in Vernon has been operating with an interim  








                                                                     SB 673  
                                                                     Page 6



          hazardous waste facility permit since 1981.  

          In recent years, the Exide facility has brought to light the  
          failings of the 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 the  
          DTSC to complete remediation activities as specified in the  
          stipulation and order issued by the DTSC.  

          This example of a failed process calls into question whether the  
          statutory authorizations, requirements and direction to the 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 "SB 673 establishes the  
          California Communities Committee within DTSC to make policy  
          recommendations to the department, and to serve as a liaison and  
          conduit between the department and communities that may be  
          impacted by permitting and enforcement actions for facilities  
          regulated by the department.  The bill also requires DTSC to  
          adopt additional permitting criteria, and evaluate past and  
          potential future community impacts, when determining whether to  
          issue or renew a hazardous waste facilities permit."

          The author states that "the bill creates important additional  
          criteria that DTSC must consider when issuing or renewing a  








                                                                     SB 673  
                                                                     Page 7



          permit for a hazardous waste facility.  The bill will ensure  
          that the department considers past violations of the facility,  
          vulnerability of surrounding communities, evidence of financial  
          responsibility and adequate financial assurances for closure and  
          cleanup.  The bill also establishes an opportunity for public  
          participation and input in DTSC actions, improving  
          accountability and transparency."

          The author asserts that "SB 673 will create a conduit between  
          DTSC and vulnerable communities across California that are  
          impacted by hazardous waste facilities that are regulated by the  
          department.  Many of those communities are low income  
          communities and communities of color that are already  
          disproportionally affected by pollution.  This bill provides  
          important accountability, transparency, and oversight measures  
          that will improve the relationship between DTSC and the  
          communities it is mandated to protect."
          
          FISCAL EFFECT:   Appropriation:    No          Fiscal  
          Com.:YesLocal:   No

          According to the Senate Appropriations Committee:

           Ongoing costs of $1.2 annually from the Hazardous Waste  
            Control Account (special) beginning in 2015-16 and continuing  
            through 2020-21to DTSC to administer and staff the DTSC  
            California Communities Committee.
           One-time costs of no more than $600,000 costs from the  
            Hazardous Waste Control Account (special) to develop  
            additional permit criteria regulations and financial assurance  
            regulations.


          SUPPORT:   (Verified5/28/15)


          Center on Race, Poverty & the Environment (source)
          California Environmental Justice Alliance
          Center for Community Action and Environmental Justice
          Clean Water Action
          Communities for a Better Environment
          Concerned Neighbors of Wildomar








                                                                     SB 673  
                                                                     Page 8



          Environmental Action Committee of West Marin
          Environmental Working Group
          Greater Pasadena Jews for Justice
          LA Human Right to Housing Collective
          Natural Resource Defense Council
          People's Senate and Leadership Institute
          Physicians for Social Responsibility, Los Angeles


          OPPOSITION:   (Verified5/28/15)


          Automotive Specialty Products Association
          California Building Industry Association
          California Business Properties Association
          California Chamber of Commerce
          California Cement Manufacturers Environmental Coalition
          California Manufacturers and Technology Association
          California Metals Coalition
          Chemical Industry Council of California
          Clean Harbors Environmental Services, Inc.
          Consumer Specialty Products Association
          Industrial Environmental Association
          Institute of Scrap Recycling Industries, Inc.
          Western States Petroleum Association
          Western Plant Health Association

          ARGUMENTS IN  
          SUPPORT:  
           According to the support, "residents impacted by hazardous waste  
                         sites across 
          California have identified a need for an effective forum to  
          develop community-led solutions to reduce the toxic threats they  
          face, as well as to improve communications, transparency and  
          agency responsiveness.  The committee is designed to do just  
          that and will provide a seat at the table for those most  
          impacted by DTSC decisions."

          The support continues by stating that, "the additional  
          permitting criteria will ensure that DTSC's permitting decisions  
          are more protective of neighborhoods near proposed hazardous  
          waste facilities by providing consistent and objective standards  








                                                                     SB 673  
                                                                     Page 9



          to evaluate an applicant's compliance history as well as the  
          neighborhoods' social and environmental vulnerabilities."

          ARGUMENTS IN  
          OPPOSITION:
          According to the opposition, "SB 673 is unnecessary, and at the  
          very least premature, as it fundamentally undermines DTSC's  
          recently proposed regulatory plan to improve the hazardous waste  
          permitting system by issuing protective, timely and enforceable  
          hazardous waste permits."  

          The opposition further states that the Permitting Enhancement  
          Work Plan "seeks to achieve similar goals as SB 673 on the  
          regulatory level."  

          The opposition asserts that while their organizations "do not  
          take a formal position on the Permitting Enhancement Work Plan,  
          but merely reference its existence and content to underscore  
          [their] position that substantive legislation to reform the  
          hazardous waste permitting system is unneeded at this time and  
          could further complicate and undermine DTSC's efforts to make  
          needed potentially effective improvements through the regulatory  
          process."  
           


          Prepared by:Rachel Machi Wagoner / E.Q. / (916) 651-4108
          5/31/15 12:53:57


                                   ****  END  ****