BILL ANALYSIS �
SB 964
SENATE COMMITTEE ON ENVIRONMENTAL QUALITY
Senator S. Joseph Simitian, Chairman
2011-2012 Regular Session
BILL NO: SB 964
AUTHOR: Wright
AMENDED: April 9, 2012
FISCAL: Yes HEARING DATE: April 23, 2012
URGENCY: No CONSULTANT: Rachel Wagoner
SUBJECT : ADMINISTRATIVE PROCEDURE ACT: STATE WATER RESOURCES
CONTROL BOARD AND REGIONAL WATER QUALITY CONTROL
BOARDS
SUMMARY :
Existing law :
1) Under the federal Clean Water Act (CWA):
a) Establishes the structure for regulating discharges of
pollutants into the waters of the United States and
regulating quality standards for surface waters.
b) Makes it unlawful to discharge any pollutant from a
point source into navigable waters, unless a permit was
obtained that complied with the terms of limitations and
restrictions contained in discharge permits. United
States Environmental Protection Agency's (U.S. EPA)
National Pollutant Discharge Elimination System (NPDES)
permit program controls discharges. Industrial,
municipal, and other facilities must obtain permits if
their discharges go directly to surface waters.
c) Prescribes procedures and standards for the adoption
of NPDES permits and conditional waivers from NPDES
permits.
2) Under the California Porter-Cologne Water Quality
Control Act (Porter-Cologne):
a) The State Water Resources Control Board (SWRCB) has
authority over state water rights and water quality
policy. Porter-Cologne also establishes nine Regional
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Water Quality Control Boards (regional boards) to oversee
water quality at the local/regional level. Under the
auspices of the U.S. EPA, the State Board and nine
regional boards also have responsibility for granting
NPDES permits, for certain point-source discharges.
b) States that "No discharge of waste into the waters of
the state, whether or not the discharge is made pursuant
to waste discharge requirements, shall create a vested
right to continue the discharge. All discharges of waste
into waters of the state are privileges, not rights."
(Water Code �13263 (g)).
3) Under the Administrative Procedure Act (APA) (Government
Code �11340 et seq.), establishes rulemaking procedures and
standards for state agencies. State regulations must also
be adopted in compliance with regulations adopted by the
Office of Administrative Law (OAL).
4) Makes explicit that the issuance, denial or revocation of
waste discharge requirements and permits pursuant to Water
Code ��13263 and 13377 and waivers issued pursuant to Water
Code �13269 are not subject to the APA.
This bill creates an exception from the above-noted exemption
from the APA for any general permits or waivers issued under
state law, or NPDES pursuant to Section 402(p) of the federal
Clean Water Act, thereby requiring specified permits and
waivers to comply with the regulation adoption requirements of
the APA.
COMMENTS :
1) Purpose of Bill . The author states that no other regulatory
agency within CalEPA is exempt from the laws governing
adoption of regulations by state agencies - only SWRCB.
The author believes that the public interest is best served
by limiting the APA exemption for SWRCB, particularly given
the fact that SB 964 is not a wholesale repeal of the
special exemptions. The author notes that SB 964 merely
requires SWRCB to adopt regulations using the procedural
requirements of the APA when it acts on a general permit or
waiver issued pursuant to state law or to the municipal and
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industrial stormwater discharge permitting provisions of the
CWA's NPDES program.
2) Arguments in support . Supporters state that existing law
authorizes the water boards to adopt regulations, but grants
the water boards various exemptions to the procedural rules
and requirements of the APA, the law governing the adoption
of regulations by state agencies. Supporters argue that the
water boards' exemption was afforded to them decades ago
because the issuance of permits to individuals and business
entities was not intended to be viewed as a formal
regulatory action. Supporters believe, however, the water
boards do issue general permits that apply on a statewide,
region-wide, or industry-wide basis, permits that would
otherwise be regarded as "regulations" because of their
general application to a significant number of persons or
entities. Supporters argue that because of their exemption,
the boards are not required to evaluate the cost impacts to
those affected by the permits, discuss alternatives to the
regulatory action or comply with other procedural safeguards
contained in the rulemaking procedures of the APA.
Supporters state, the water boards' exemptions to APA made
sense decades ago when written, however these exemptions now
hinder the water boards and local government from finding
cost-effective solutions to significant water quality
issues.
Supporters believe that SB 964 would close this loophole and
limit the circumstances under which the water boards are
exempt from the APA. Supporters state, this bill would
require the water boards to be subject to the same rules and
regulations as other state agencies when developing
regulations when it issues, denies or revokes general
permits or waivers issued under state law or the federal
NPDES. Supporters believe that SB 964 will result in a
greater opportunity for the water boards to interact with
agencies and practitioners that have first-hand knowledge of
the systems and science, resulting in better outcomes for
water quality in California.
3) Arguments in opposition . Opponents note that SB 964 would
subject the water boards' issuance of general stormwater
permits to an extremely costly and lengthy procedural
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process, beyond that currently undertaken pursuant to the
federal CWA and Porter-Cologne. Opponents further note that
the bill would remove the existing exemption to APA
rulemaking procedures for water board issuance of general
stormwater permits and would require the board to perform an
economic analysis of the permits. Opponents argue that this
would significantly delay the issuance and implementation of
general permits, many of which are already many years
overdue. Opponents cite as one example, the Industrial
Statewide Stormwater Permit is over 14 years old and is in
desperate need of an update. Opponents believe that it is
improper to require the water boards to consider cost when
developing permits. Opponents note that in 2006, the
California Court of Appeals expressly rejected arguments
that the Los Angeles stormwater permit was too costly or
impractical.
4) The AB 3359 (Sher) Chapter 1112, Statutes of 1992 (AB 3359)
exemption . AB 3359 specifically exempted the water boards'
permitting and conditional waiver processes from the APA
regulation process for 2 reasons: a) in enacting AB 3359,
the Legislature and Governor recognized the differences
between the processes for drafting and granting permits and
that of drafting and adopting regulations; and b) the CWA
provides a prescriptive process for the drafting of permits
that thoroughly includes stakeholder participation and in
many ways includes many similar requirements as the APA but
is specific to the CWA permitting requirements and
procedures. Requiring the APA process in addition to the
CWA process would be redundant in some requirements and
contradictory to the CWA requirements for others.
5) Permits are not regulations . There are multiple reasons
that permits are statutorily treated differently than
regulations under both federal and state law:
a) General waste discharge requirements and waivers
implement existing laws and existing regulations. No
other state nor U.S. EPA treats NPDES discharge permits
as regulations because permits provide an authorization
for specified persons or classes of persons to discharge
waste. Federal NPDES permits cover more facilities than
California's general permits and are not treated as
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regulations. Permits implement both the laws passed by
the Legislature and the regulations adopted by
administrative agencies. Permits are quasi-judicial and
are directly enforceable by the agency. In contrast
regulations are quasi-legislative in that they interpret
laws adopted by the Legislature.
b) Like legislation, regulations can be amended from
time-to-time whenever the agency feels necessary.
Regulations remain in effect unless the agency amends or
rescinds them. General discharge permits, in contrast
remain in effect for a term of five years and can only be
amended in very limited circumstances.
c) General permits are very detailed documents that take
years to develop and have to be re-issued every five
years. In order to conform to the APA rulemaking
procedures, there would have to be a new multi-hundred
page regulation package sent to OAL every five years.
6) CWA compared to APA . The following illustrates the
similarities and differences between the current CWA and the
APA requirements that would be imposed by SB 964:
-----------------------------------------------------------------------
|Requirement |APA |US EPA CWA General Permit |
| |Requirement |Requirement |
|---------------------+---------------+---------------------------------|
|Public Notice |Regulatory |Publication in newspaper, mailed |
| |Notice |to those who requested and |
| |Register |posted on website (pursuant to |
| |mailed to |California law) |
| |those who | |
| |requested it | |
| |and posted on | |
| |website | |
|---------------------+---------------+---------------------------------|
|Hearing |If requested |Required |
|---------------------+---------------+---------------------------------|
|Draft |Required |Required |
|---------------------+---------------+---------------------------------|
|Fact Sheet (legal, | |Required |
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|scientific basis for | | |
|permit) | | |
|---------------------+---------------+---------------------------------|
|Initial statement of |Required | |
|Reasons | | |
|---------------------+---------------+---------------------------------|
|Public Comment |45 days |30 days (however, as a rule the |
| | |water boards provide more than |
| | |45 days) |
|---------------------+---------------+---------------------------------|
|Response to Comments |Required |Required |
|---------------------+---------------+---------------------------------|
|Minor Amendment |Must be |Permitted so long as it |
| |re-noticed for |satisfies federal courts' |
| |15 days unless |logical outgrowth test, |
| |not |otherwise must be re-noticed for |
| |substantive |30 days |
|---------------------+---------------+---------------------------------|
|Sufficiently Related |Requires a new |Permitted so long as it |
|Amendment |15-day notice |satisfies federal courts' |
| | |logical outgrowth test, |
| | |otherwise must be re-noticed for |
| | |30 days |
|---------------------+---------------+---------------------------------|
|Final Action within |Required | |
|1 year | | |
|---------------------+---------------+---------------------------------|
|Statement of |Required | |
|reasonable | | |
|alternatives | | |
|---------------------+---------------+---------------------------------|
|Economic Analysis |Required | |
-----------------------------------------------------------------------
It is possible that some APA and CWA requirements could be
harmonized as far as timelines and noticing requirements by
utilizing the more conservative requirements. However,
there are several requirements that would create a potential
conflict between state and federal requirements.
a) Statement of Reasons/Fact Sheet . The APA requires an
initial Statement of Reasons containing a number of
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enumerated requirements. In contrast, U.S. EPA
regulations require a Fact Sheet, which requires some of
the same information, but includes additional and
differing requirements. The water boards are likely to
have to complete the two separate documents to satisfy
both requirements, which may result in additional time
and cost to the process.
b) Final action within one year . The APA notice requires
final action within one year or the agency must re-start
the entire regulatory process. Many permits require more
than one year to adopt given the significant level of
public involvement and the complexity of the issue.
Requiring the general permitting process to conform to
the APA may result in the water boards rushing through
the process to meet the one-year deadline thereby cutting
off some of the public workshops and other public
participation inherent in the current permit process.
c) Statement of reasonable alternative . Pursuant to
Government Code �11342.528(5)(A) the APA process requires
the agency to evaluate alternatives to the proposed
regulation stating, "A description of reasonable
alternatives to the regulation and the agency's reasons
for rejecting those alternatives. Reasonable alternatives
to be considered include, but are not limited to,
alternatives that are proposed as less burdensome and
equally effective in achieving the purposes of the
regulation in a manner that ensures full compliance with
the authorizing statute or other law being implemented or
made specific by the proposed regulation." Because
permits are the only option under the CWA for allowing
discharging into public waters as specified by the CWA,
the only alternative to the permit is to not discharge.
d) Economic analysis . Pursuant to Government Code
�11346.9(a)(2), the APA process requires an economic
analysis of the proposed document stating the agency
"shall consider the proposal's impact on business, with
consideration of industries affected including the
ability of California businesses to compete with
businesses in other states. For purposes of evaluating
the impact on the ability of California businesses to
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compete with businesses in other states, an agency shall
consider, but not be limited to, information supplied by
interested parties."
This is not an appropriate standard for discharge permits
that are required to meet water quality standards. This
does not speak to the economic impacts of not meeting the
clean water standards, the costs associated with
remediating contaminated water or the health impacts and
healthcare costs and economic impacts of those costs to
those who are exposed to the water either through drinking
or food intake or the long-term impact of allowing ongoing
pollution of public water ways. In a recent report issued
by the University of California at Davis concerning the
nitrate contamination in the Salinas Valley and Tulare
Basin groundwater, the authors note that the cost to
mitigate the contamination through prevention of further
contamination through source reduction has significant
cost but that the long-term costs of cleaning up the
contamination and treating drinking water will be billions
of dollars over several decades.
The CWA requires most stormwater discharges to include
requirements to implement water quality standards. That
has to be done without regard to cost under CWA
�301(b)(1)(C). (33 U.S.C. �1311(b)(1)(C)) for the very
reasons exemplified above. The California Supreme Court
has confirmed that interpretation and the inability to
relax those requirements based on cost. (City of Burbank
v. State Water Resources Control Bd. (2005) 35 Cal.4th
613).
In addition, when the CWA allows the consideration of
costs, the Porter-Cologne Act enumerates multiple
provisions that require the water boards to look at
"economic considerations," which includes the cost of
compliance (Water Code, �13241 �as incorporated into
permitting actions by Water Code �13263]). In addition,
when the CWA allows it, water board monitoring
requirements must be developed so there is a reasonable
relationship between the need for the data and the cost of
providing it (Water Code �13267).
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The economic analysis now required pursuant to the APA
cannot supersede the state's obligation to meet the
federal CWA water standards or permit requirements.
7) Implications of requiring APA conformity for NPDES permits .
a) Increased expense . Because most rulemakings take
place once with occasional amendments the expense
associated with adoption is a onetime cost. General
NPDES permits and conditional waivers are required by the
CWA and Porter-Cologne to be re-issued every five years.
The expense of developing the permit and complying with
all of the APA requirements (e.g. an economic analysis
and an evaluation of alternatives) in addition to the CWA
requirements will be significant.
b) Delay in permit re-issuance . The water boards are
already significantly delayed in meeting the five-year
re-issuance requirement. Adding additional analyses will
add many additional months' delay in the process.
c) Contradiction in treatment . For the purposes of the
Government Code, permits would be treated as regulations.
However, for the standard for judicial review under the
Water Code and the Code Civil Procedure they would be
treated as permits, quasi-adjudicative proceedings.
8) Legislature addresses Administrative Procedure Act issues in
2011 . SB 617 (Calderon and Pavley) Chapter 496, Statutes of
2011, made several revisions to the Administrative Procedure
Act relating to reasonable alternatives to regulations,
economic impact assessments, standardized regulatory impact
analysis for a major regulation which must be reviewed by
the Department of Finance, enumeration of anticipated
benefits, determination of more cost effective alternatives,
and various other matters.
9) Amendments needed . If the committee believes SB 964 is
necessary, it is unclear from the language of the bill what
types of permits the author wishes to affect in this
legislation. An amendment is needed to clarify what type of
permits in which the legislation is meant to apply. The
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current version of SB 964 makes the following confusing
references:
a) "general permits" rather than the technically correct
term "general waste discharge requirements";
b) "waivers issued under state law" which is unclear
whether it applies to all waivers or "general waivers";
c) permits issued "?pursuant to Section 402(p) of the
federal Clean Water Act" - this would apply the APA to
all NPDES stormwater permits, including permits issued to
a single facility, but the author's statement appears to
suggest that the bill applies to general waste discharge
permits.
SOURCE : Senator Wright
SUPPORT : Arroyo Grande Manager Steven Adams, Artesia
Mayor John P. Lyon, Atlas Pacific Corporation,
Auburn Director of Public Works, Bazz Houston
Company, Bellflower Mayor Scott A. Larsen, Buddy
Bar Casting, California Association of
Sanitation Agencies, California Building
Industry Association, California Cement
Manufacturers Environmental Coalition,
California Contract Cities Association,
California Grocers Association, California
League of Food Processors, California
Manufacturers & Technology Association,
California Metals Coalition, California
Municipal Utilities Association, California
State Association of Counties, Carmel-by-the-Sea
City Administrator Jason Stilwell, CASTCO Cast
Aluminum Corporation, Ceres City Engineer Toby
Wells, Chemical Industry Council of California,
Coalition for Adequate School Housing, Commerce
Mayor Joe Aguilar, Covina City Manager Daryl
Parrish, Department of Defense Regional
Environmental Coordinator Region 9, Golden State
Builders Exchanges, Goleta Mayor Edward Easton,
Institute of Scrap Recycling Industries
California Chapters, Kingsburg Mayor Bruce
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Blayney, Lakewood Mayor Diane DuBois, League of
California Cities, LKQ Corporation, Lodi Iron
Works, Inc., Lumber Association of California &
Nevada, Magnesium Alloy Products Company, Inc.,
Monterey Mayor Chuck Della Sala, National
Federation of Independent Business, Orange
County Board of Supervisors, Pacific Alloy
Casting Company, Inc., Pacific Grove Mayor
Carmelita Garcia, Pacific Merchant Shipping
Association, Peace Officers Research Association
of California, Pismo Beach Mayor Dwayne Chisam,
Placerville City Manager Cleve Morris, Rangers
Die Casting Company,
Redding Mayor Dick Dickerson, Regional Council
of Rural Counties, Rio Tinto Minerals, Rocklin
Mayor Brett Storey, Roseville Mayor Pauline
Roccucci, Roseville Police Officers Association,
Sacramento Stormwater Quality Partnership,
San Gabriel Valley Council of Governments, San
Juan Water District, Santa Maria Mayor Larry
Lavagnino, Signal Hill Mayor Larry Forester,
Solano Economic Development Corporation, SSA
Marine, Standard Metals Recycling,
State of California Auto Dismantlers
Association, Thorock Metals, Inc., TST, Inc.,
United Contractors, Vacaville Mayor Steve Hardy,
Ventura Mayor Mike Tracy, Vernon Administrator
Mark Whitworth, Watsonville Mayor Eduardo
Montesino, Western Growers Association, Western
Wood Preservers Institute, Yreka Mayor David
Simmen
OPPOSITION : California Coastkeeper Alliance, Clean Water
Action, Environment California, Seventh
Generation Advisors, Sierra Club California