Existing law, as part of the hazardous waste control law, requires a facility handling hazardous waste to apply for and obtain a hazardous waste facilities permit from the Department of Toxic Substances Control. Existing law requires that a hazardous waste facilities permit be for a fixed term not to exceed 10 years for certain facilities. Existing law requires the owner or operator of a facility intending to extend the facilitys permit to submit a complete Part A application for a permit renewal before the fixed term of the permit expires, and, at any time following the submittal of the Part A application, to submit a complete Part B application, or any portion of that application, and other relevant information, if requested by the department. Existing law provides that when a complete Part A renewal application and any other requested information has been submitted before the end of the permits fixed term, the permit is deemed extended until the application is approved or denied and the owner has exhausted all applicable rights of appeal.

This bill would require, for a hazardous waste facilities permit that will expire on or before July 1, 2021, the owner or operator of a facility intending to extend the term of that permit to submit a Part A and Part B application for a permit renewal at least 6 months before the fixed term of the permit expires. The bill would require, for a hazardous waste facilities permit that will expire after July 1, 2021, the owner or operator to submit a Part A and Part B application for a permit renewal at least 2 years before the fixed term of the permit expires. The bill would provide that, if a Part A and Part B renewal application and any other requested information has been submitted in accord with these requirements, the permit is deemed extended until the application is approved or denied and the owner has exhausted all applicable rights of appeal. The bill would also require the department, no later than 90 days after receiving an application for a hazardous waste facilities permit, to post on its Internet Web site a timeline with the estimated dates of key milestones in the application review process, to note on its Internet Web site that these dates are estimates, and to update the dates as needed.

SENATE COMMITTEE ON ENVIRONMENTAL QUALITY

Senator Wieckowski, Chair

2017 - 2018 Regular

Bill No: AB 2345

SUBJECT: Hazardous waste: facilities: permits

ANALYSIS:

Existing law:

1. Under the federal Resource Conservation and Recovery Act (RCRA) of 1976, governs the disposal of hazardous waste: 
2. Through regulation, sets standards for the treatment, storage, transport, tracking and disposal of hazardous waste in the United States.
3. 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).
4. Sets, by regulation, the penalties for hazardous waste management violations at $70,000.
5. 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. Authorizes the Department of Toxic Substances Control (DTSC) to issue hazardous waste facilities permits for the use and operation of one or more hazardous waste management units at a facility that meets the standards adopted pursuant to the Hazardous Waste Control Law.
   4. Requires a hazardous waste facilities permit issued by DTSC to be for a fixed term, not to exceed 10 years.
   5. Requires an owner or operator of a hazardous waste facility who intends to extend the term of the permit, before the fixed term expires, to submit a complete Part A application.
   6. States that when a complete Part A renewal application has been submitted before the end of the permit’s fixed term, the permit is deemed extended until the renewal application is approved or denied and the owner or operator has exhausted all applicable rights of appeal.
      1. Requires, by regulation, an owner or operator of a permitted hazardous waste facility to submit an application for permit renewal at least 180 days before the expiration date of the permit.
         

This bill:

1. Requires an owner or operator of a permitted hazardous waste facility who plans to submit a renewal application for a hazardous waste facility permit (permit), that expires prior to July 1, 2021, to submit a complete Part A and Part B application six months before the permit expires.
2. Requires an owner or operator of a permitted hazardous waste facility who plans to submit a renewal application for a permit, that expires after July 1, 2021, to submit a complete Part A and Part B application at least two years before the permit expires.
3. Requires the Department of Toxic Substances Control (DTSC), within 90 days of receiving a complete application for a permit, to post on its internet website an estimated timeline, including key milestones, for DTSC's review process of the application for the permit.

Background

1. DTSC Hazardous Waste Management. DTSC is responsible for protecting public health and the environment by overseeing the state’s response to releases of hazardous substances and disposal of hazardous waste. DTSC investigates, removes and remediates contamination as part of that mission. The Hazardous Waste Management Program is one of DTSC’s four major divisions.

This program is responsible for issuing permit decisions for proposed new hazardous waste facilities and the approximately 120 existing hazardous waste facilities in California that treat, store, and dispose of hazardous waste. The program’s staff conducts inspections and takes enforcement actions to ensure compliance with hazardous waste laws and regulations. This program oversees the hazardous waste generator program. In addition, it provides hazardous waste management-related policy support, regulatory and statutory interpretation, financial assurance, and data management support for internal and external stakeholders. The program also provides emergency response support for hazardous materials-related emergencies throughout California.

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.

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. 

1. DTSC Hazardous Waste Management Performance. There has been significant dissatisfaction with the performance of DTSC’s 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 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 FY 2003, improved to a 3.2 year average for the period from FY 2003 to FY 2007, before again increasing to 4.3 years in the most recent time period (from FY 2008 through part of FY 2013). 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 FY 2007 to just 24.6 personnel years utilized in FY 2009. 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 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 re‐assigned 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, there was a four‐year 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 2007‐2009 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 DTSC, 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 DTSC.

1. DTSC Internal Improvement Initiative: In early 2012, DTSC 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.

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.

1. Legislative Oversight. Specific incidents across California have exposed and continue to expose glaring failings in DTSC’s implementation of its core programs as well as its support programs.
   
   The mishandling of the hazardous waste facility permitting and enforcement of first the Exide and now the Quemetco battery recycling facilities; neglected cost-recovery efforts for cleanups across the state leading to an accumulation of 1,661 projects totaling almost $194 million in uncollected cleanup costs dating back 26 years; a growing backlog of applications to renew hazardous waste permits; delayed site remediation; failed public participation and transparency activities; and personnel issues have all led to decreased stakeholder confidence and public trust in DTSC’s ability to meet its mandate to protect public health and the environment.
   
   Over the last five years, the Legislature has conducted numerous hearings on DTSC’s internal controls, its business practices, and its basic statutory obligations. In those hearings, the budget and policy committees have evaluated the following four main areas: (1) reviewing and monitoring the department’s strategic plan and reorganization; (2) auditing cost recovery at the department; (3) providing staffing to improve permit backlogs and business operations; and, (4) improving enforcement at the department.
   
   Numerous statutory changes have been made to clarify and strengthen the statute to help DTSC better achieve its mandates, and budget augmentations have been made to give DTSC the resources to reduce backlogs and address outstanding programmatic failings. However, many of the underlying concerns about transparency, accountability, and long-term stability of DTSC programs remain.
   
2. The Independent Review Panel. With the aim of identifying and addressing the

continued failings of DTSC to meet its public health and environmental protection mandates, SB 83 (Committee on Budget and Fiscal Review, Chapter 24, Statutes of 2015) established an Independent Review Panel (IRP) to review and make recommendations regarding improvements to DTSC’s permitting, enforcement, public outreach, and fiscal management with the goal of resolving the outstanding operational problems within DTSC and creating strong statutory mandates and accountability in the long term.

The IRP was comprised of three individuals: an appointee of the Speaker of the Assembly with scientific experience related to toxic materials, an appointee of the Senate Rules Committee who is a community representative, and an appointee of the Governor who is a local government management expert.

The IRP additionally advised DTSC on issues related to its reporting obligations, making recommendations for improving DTSC’s programs, and advises DTSC, along with the other California Environmental Protection Agency boards and departments, to “institute quality government programs to achieve increased levels of environmental protection and the public’s satisfaction through improving the quality, efficiency, and cost-effectiveness of the state programs” and “submit a biennial report to the Governor and Legislature, no later than December 1 with respect to the previous two fiscal years, reporting on the extent to which these state agencies have attained their performance objectives, and on their continuous quality improvement efforts.”

The IRP is required to report to the Governor and the Legislature every 90 days on DTSC’s progress in reducing permitting and enforcement backlogs, improving public outreach, and improving fiscal management. In addition, the IRP must submit recommendations at the time of the submission of the Governor’s annual budget to the Legislature.

Pursuant to SB 83, the IRP was authorized until January 1, 2018.

To date the IRP has conducted nearly two dozen public meetings and released a dozen reports on its work. In December, 2016, the IRP released a thorough list of recommendations compiled from the meetings and reports conducted in the IRP’s first 11 months. That report contained a compendium of the recommendations that the IRP made in its quarterly reports during 2016. The compendium shows that of a total of 23 IRP recommendations made, 7 have been adopted by DTSC and 16 have not yet been implemented.

In February, 2017, IRP Chair Kracov, testified before the Senate Committee on Environmental Quality that the IRP continues its work evaluating and making recommendations for administrative, structural and statutory changes for improvements to DTSC. His testimony revealed that less than a third of those recommendations have been implemented and that the IRP shares stakeholder concern and frustration with the lack of implementation of those recommendations. Additionally, Chair Kracov stated that the IRP believes that one of the key improvements needed at DTSC is a transparent and accountable process by which stakeholders can participate in a public way, in the deliberative processes around permits and cleanup orders.

Stakeholders also testified during that hearing and during the IRP hearings supporting changes that would bring greater transparency and accountability to DTSC.

In January, 2018, IRP Chair Kracov, presented to a joint hearing of the Senate Committee on Environmental Quality and the Assembly Committee on Environmental Safety and Toxic Materials on the final work and report of the IRP. In summation Chair Kracov stated that DTSC has made progress but that many of the recommendations remain to be addressed and that major statutory, institutional and cultural changes are necessary in order for DTSC to become a functional department.

1. Legislative Analyst Office – DTSC Review. On April 4, 2017, LAO released its web post entitled, “Department of Toxic Substances Control: Performance Improvement Initiatives Merit Oversight.” LAO discusses DTSC progress to date in addressing its deficiencies, focusing on those programs that have received additional funding and personnel resources, including (1) Hazardous Waste Management Program, (2) Exide Facilities Contamination Cleanup Program, (3) Site Mitigation and Brownfields Reuse Program, and (4) Office of Strategic Planning and Development.
   
   1. Hazardous Waste Management Program—Facility Permitting Backlog. The Hazardous Waste Management Program issues permits to facilities that manage waste that is toxic, corrosive, reactive, or ignitable. DTSC issues hazardous waste permits with a 10-year term, and each permit establishes specific conditions that a facility must meet in order to operate.
      
      California has 118 permitted facilities that manage hazardous waste with a total of 127 permits (some facilities have more than one permit). Given the number of permits and permit term, DTSC must process an average of about 13 permit renewal decisions per year in order to prevent a backlog of permit renewal applications from developing. If a facility submits a renewal application on time, the law allows the facility to continue operation under its expired permit (referred to as a continued permit). Facilities operating under a continued permit are held to the standards established in the original permit. They are not required to implement the most recent technologies, practices, and safeguards to prevent releases of hazardous waste into the environment that have been developed since the original permit was approved.
      
      In the spring of 2016, DTSC had 30 permitted facilities—roughly one-quarter—operating under “continued permits” with pending permit renewal applications. Some of these permits had been continued for more than five years.
      
      To address the backlog of continued permits, the Legislature approved in the 2016-17 budget plan $3.6 million to convert eight previously approved limited-term positions to permanent status and to provide 15 additional permanent positions.
      
   2. Hazardous Waste Management Program—Enforcement Enhancement Initiatives. The Hazardous Waste Management Program is also responsible for administering DTSC’s enforcement program through its Enforcement and Emergency Response Division (EERD) and the Office of Criminal Investigations (OCI). EERD has regulatory authority to enforce hazardous waste laws through administrative and civil enforcement. EERD staff conducts inspections of hazardous waste generators and transporters, as well as of treatment, storage, and disposal facilities. EERD staff also provides technical training and support to local agencies (under the Certified Unified Program Agency system) that perform hazardous waste regulatory functions on behalf of the state. In conjunction with DTSC’s Public Participation Branch, EERD coordinates with community action and environmental justice groups throughout California on hazardous waste issues. Working in collaboration with EERD, OCI investigates complaints of illegal handling of hazardous waste and participates in environmental initiatives focused on high-priority illegal activities.
      
      The 2015-16 budget included two proposals related to improving DTSC’s hazardous waste enforcement activities. First, the Legislature approved $1.4 million in two-year funding and 11 positions to conduct a review of the department’s hazardous waste management enforcement program. Second, the 2015-16 spending plan included $2.1 million and 11 positons for three years to evaluate and implement approaches to address hazardous waste violations in vulnerable communities.
      
      DTSC released the statewide assessment report related to its public engagement efforts in January 2017. The report completed by UC Davis researchers recommended that DTSC (1) establish a more direct and visible connection between public input and decisions made to increase transparency and accountability; (2) engage in earlier, more systematic and sustained interaction with impacted communities; (3) build greater capacity for effective public engagement for both DTSC and stakeholders; and (4) increase access to data and information relevant to decision making.
      
   3. Exide Facilities Contamination Cleanup Program—Lead Contamination Cleanup. In 2000, Exide Technologies (Exide) purchased a lead-acid battery recycling facility in the City of Vernon that had been operating since 1922. The facility ceased operations in 2014 when DTSC notified Exide that its application for a new permit would be denied. Testing indicated that releases of lead dust from the facility contaminated areas up to 1.7 miles from the facility and impacted thousands of properties including private residences, parks, and schools.
      
      In 2015-16, the Legislature approved increases in spending for the cleanup of properties contaminated by Exide. In August 2015, the Legislature approved $7 million of emergency funding from the Toxic Substances Control Account (TSCA) to (1) test approximately 1,000 properties in the community surrounding Exide, (2) develop a comprehensive cleanup plan, and (3) begin cleanup of the highest priority sites. In addition, SB 93 (de León and Lara, Chapter 9, Statutes of 2016) authorizes a loan of up to $177 million from the General Fund to TSCA to use for activities related to the lead contamination in the communities surrounding the Exide facility. The Governor’s 2017-18 budget assumes that about $96 million of that loan will be spent by the end of the budget year. (To the extent that DTSC recovers costs for the investigation and cleanup from the parties responsible for the contamination, these funds will be used to repay the loan from the General Fund.) The Legislature has expressed its preference that the local community be consulted in the cleanup process.
      
      DTSC estimates that it will investigate 8,500 properties for lead contamination from the Exide facility, and 2,500 properties will be remediated by October of 2019.
      
   4. Site Mitigation and Brownfields Reuse Program—Cost Recovery Backlog. Under the Site Mitigation and Brownfields Reuse Program, when DTSC incurs costs for the investigation and remediation of contaminated sites, the department is authorized by law to recover its costs from potentially responsible parties (PRPs). In 2013, DTSC identified that its cost recovery efforts had been impeded by various factors, including a lack of statutory authority to require PRPs to provide financial information and a lack of resources to perform cost recovery activities. The Bureau of State Audits (BSA) released a report in August 2014 that made 11 recommendations, including that the Legislature give DTSC the authority to require financial information from PRPs. According to BSA, the lack of such information hindered DTSC’s ability to make an informed decision whether to pursue a PRP for response costs, which impacted DTSC’s ability to ultimately recover these costs. AB 276 (Committee on Environmental Safety and Toxic Materials, Chapter 459, Statutes of 2015) allowed DTSC to require a PRP to provide information regarding its ability to pay for a response action at a hazardous waste site.
      

As part of the 2014-15 budget plan, the Legislature approved $1.6 million and 14 positions to recover costs from them. At the time, DTSC estimated that the cost recovery backlog included around $26 million in unbilled or uncollected costs that were recoverable. As part of the 2016-17 budget plan, the Legislature approved $180,000 and two positions to implement AB 276.

As a result of AB 276, DTSC estimated the number of completed ability to pay cases would increase by 25 annually.

Strategic Development Team Established to Create a Culture of Change, Accountability, and Transparency. In recent years, the Legislature has held numerous hearings to discuss deficiencies in DTSC’s programs. During these hearings, the department acknowledged a need to address the issues raised at the hearings.

In 2016-17, the Legislature approved a request for the conversion of five limited-term positions to permanent positions and $747,000 in ongoing funding to establish an Office of Strategic Planning, Performance, and Analysis within DTSC.

LAO concluded that, “over the past few years, the Legislature has approved funding and personnel resources to address specific deficiencies in DTSC’s programs. Even with these new resources, DTSC’s own projections show that for some programs it will be years before the deficiencies are fully remedied. Therefore, it will be important for the Legislature to continue to oversee DTSC’s progress and hold DTSC accountable for producing results over the next several years … In cases where the department is not achieving its performance goals, the Legislature may wish to consider further oversight measures. These could include holding hearings to determine the reason for the lack of progress and whether funding and personnel continue to be justified. It could also include having an independent entity—such as the Bureau of State Audits—conduct program reviews to better understand why the program continues to underperform. In our view, such continued oversight is necessary to ensure that the department continues to improve its performance in several key programs.”

Comments

Purpose of Bill. According to the author, "DTSC has a long standing failure to protect California's disadvantaged communities through its lack of enforcement and oversight of its hazardous waste facilities permitting process. The current process has created a class of facilities who continue operation without adequate review of the facilities operation. The 2015-2016 Budget Act created a three-person Independent Review Panel (IRP) to oversee DTSC's permitting, enforcement, and fiscal management. The IRP is tasked to report every 90-days for a defined period of time on DTSC's performance, specifically related to permitting, enforcement, backlog reductions, and meeting legislative mandates. The IRP released multiple reports in 2016, and provided various recommendations on the aforementioned categories. Included in these recommendations to require applicants to submit application information on a timely basis, and establish accountability mechanisms."

Related/Prior Legislation

AB 248 (Reyes, Cristina Garcia, Gomez, and Santiago, 2107) would have required: 1) an owner or operator of a permitted hazardous waste facility who plans to submit a renewal application for a hazardous waste facility permit (permit), for permits that expire prior to July 1, 2020, to submit a Part A and Part B application six months before the permit expires, in order for the department to begin its administrative review of the Part A and Part B application. 2) an owner or operator of a permitted hazardous waste facility who plans to submit a renewal application for a hazardous waste facility permit, for permits that expire after July 1, 2020, to submit a Part A and Part B application at least two years before the permit expires, in order for the department to begin its administrative review of the Part A and Part B application, 3) DTSC, within 90 days of receiving a complete application for a hazardous waste facility permit, to post on its Internet Web site an estimated timeline, including key milestones, for DTSC's review process of the application. AB 248 was vetoed by Governor Brown.

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:

None received

OPPOSITION:

None received

-- END --

ASSEMBLY THIRD READING

ATR Bill Id:AB 2345

Author:(Reyes)

As Introduced Ver:February 13, 2018

Majority vote

SUMMARY: Makes statutory changes to improve the permitting process for hazardous waste facilities. Specifically, this bill:

1. Requires an owner or operator of a permitted hazardous waste facility who plans to submit a renewal application for a hazardous waste facility permit (permit), that expires prior to July 1, 2021, to submit a complete Part A and Part B application six months before the permit expires.
2. Requires an owner or operator of a permitted hazardous waste facility who plans to submit a renewal application for a permit, that expires after July 1, 2021, to submit a complete Part A and Part B application at least two years before the permit expires.
3. Requires the Department of Toxic Substances Control (DTSC), within 90 days of receiving a complete application for a permit, to post on its internet website an estimated timeline, including key milestones, for DTSC's review process of the application for the permit.

EXISTING LAW:

1. Authorizes DTSC to issue permits for the use and operation of one or more hazardous waste management units at a facility that meets the standards adopted pursuant to the Hazardous Waste Control Law (HWCL).
2. Requires a permit issued by DTSC to be for a fixed term, not to exceed 10 years.
3. States that when a complete Part A renewal application has been submitted before the end of the permit's fixed term, the permit is deemed extended until the renewal application is approved or denied and the owner or operator has exhausted all applicable rights of appeal.
4. Requires an owner or operator of a permitted hazardous waste facility to submit an application for permit renewal at least 180 days before the expiration date of the permit.

FISCAL EFFECT: According to the Assembly Appropriations Committee, enactment of this bill would lead to absorbable costs by DTSC or costs supported by permit fee revenue.

COMMENTS:

Need for the bill: According to the author, "DTSC has a long standing failure to protect California's disadvantaged communities through its lack of enforcement and oversight of its hazardous waste facilities permitting process. The current process has created a class of facilities who continue operation without adequate review of the facilities operation. The 2015-2016 Budget Act created a three-person Independent Review Panel (IRP) to oversee DTSC's permitting, enforcement, and fiscal management. The IRP is tasked to report every 90-days for a defined period of time on DTSC's performance, specifically related to permitting, enforcement, backlog reductions, and meeting legislative mandates. The IRP released multiple reports in 2016, and provided various recommendations on the aforementioned categories. Included in these recommendations to require applicants to submit application information on a timely basis, and establish accountability mechanisms."

DTSC's hazardous waste management permitting program: DTSC is responsible for administering the hazardous waste facility permitting program established under the California HWCL and the federal Resource Conservation and Recovery Act (RCRA). The core activities of the permitting program include: review of RCRA and non-RCRA hazardous waste permit applications to ensure safe design and operation; issuance and denial of operating permits; issuance of post-closure permits; approval and denial of permit modifications; issuance and denial of emergency permits; review and approval of closure plans; oversight of approved closure plans; and, providing public involvement on issues related to permitted facilities. In general, DTSC issues permits for complex and large facilities, such as Class I landfills, large treatment facilities, and facilities managing RCRA hazardous waste.

A hazardous waste facility permit granted by DTSC authorizes a facility to transfer, treat, store, or dispose of hazardous waste. Presently there are 118 permitted hazardous waste facilities in California. Federal and state law allows facilities with expired permits to continue to operate if the facility has submitted an application for renewal that is administratively complete in advance of the permit expiration date. These types of permits (i.e., expired permits for a facility that has submitted an administratively complete application for a permit renewal) are referred to as "continued permits."

Over the past decade or so, DTSC had received complaints from the public about its permitting program and held meetings with the public, the regulated community, and stakeholders to identify and understand concerns about its permitting program.

DTSC Independent Review Panel (IRP): In 2015, the Legislature passed and the Governor signed, SB 83 (Budget Committee, Chapter 24, Statutes of 2015) which established within DTSC a three-member IRP to review and make recommendations regarding improvements to DTSC's permitting, enforcement, public outreach, and fiscal management. The IRP was required to submit quarterly reports to the Governor and Legislature. Within its December 2016 report to the Governor and Legislature, the IRP made several recommendations that would require a change in statute. One of those recommendations, requiring that permit applicants submit their applications two years prior to their permit expiring, is contained in this bill.

Pursuant to SB 83, the IRP was authorized until January 1, 2018. Over the course of its term, the IRP conducted 24 public meetings and released 11 progress and annual reports. On January 8, 2018 the IRP released its final report and recommendations concluding, "The Department has implemented, or is working on, most of the IRP's recommendations and has achieved, or partially achieved, many of the IRP's suggested performance metrics. However, there is more work to be done."

Permit processing time: Ensuring that hazardous waste facilities are managed safely begins with proper and timely permitting by DTSC. These facilities handle dangerous substances and involve complex processes, making the review of permit applications challenging, yet extremely important. Before DTSC embarked upon improving the permitting program, the average time it took to process an application was 4.4 years, with some applications continuing 10-20 years past the expiration of their permit. Given the dangerous nature of substances at these facilities, it is very important that the public be kept informed about these facilities, including the siting, permit process, and enforcement actions taken at these facilities. Currently, the only time the public is involved in the permit process is when there is a draft permit decision released by DTSC. If a permit application takes 10 years to review, that means it could have been 20 years since the public has been provided information about the hazardous waste facility in their backyard.

DTSC's permit improvements have a stated goal of being able to process 90% of the permit applications within two years; however, under current law, this means that even if DTSC achieves this goal, all of these permits will exceed their expiration by a year and a half. This bill rectifies this situation by requiring the permit applicant to submit their application two years in advance of their permit expiring, thereby creating a situation where the vast majority of these permits are processed before they reach their expiration date.

Transparency: The DTSC IRP held numerous meetings during its two year existence and heard frequently from community members that live near these hazardous waste facilities. One of the biggest criticisms of DTSC has been a lack of transparency, meaning the community members feel that information goes into DTSC and years later a decision is announced. This bill adds transparency to DTSC's permitting process by requiring DTSC to post an estimated timeline of the permit review process on their website. This will provide all stakeholders, including the community that lives near the facility, as well as the permitted facility, with an ability to see the permit review process unfold. This transparency will also allow stakeholders to hold DTSC accountable if the permit review process begins to drag on without a permit decision.

Analysis Prepared by: Josh Tooker / E.S. & T.M. / (916) 319-3965 FN: 0002671

Date of Hearing: April 4, 2018

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez Fletcher, Chair

ABPCA Bill Id:AB 2345

Author:(Reyes) – As Introduced Ver:February 13, 2018

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill modifies the process for the permitting of hazardous waste facilities. Specifically, this bill:

1. Requires an owner or operator of a permitted hazardous waste facility (HWF) who plans to submit a renewal application for an HWF permit that expires prior to July 1, 2020, to submit a Part A and Part B application six months before the fixed term of the permit expires.
2. Requires an owner or operator of a permitted HWF who plans to submit a renewal application for a HWF permit that expires after July 1, 2020, to submit a Part A and Part B application at least two years before the fixed term of the permit expires.
3. Requires the Department of Toxic Substances Control (DTSC) to post an estimated timeline, including key milestones in the application review process, on its internet website within 90 days of receiving an application for an HWF permit. Key milestones include but are not limited to dates of public meetings and the date for the issuance of a draft decision.

FISCAL EFFECT:

Any additional DTSC costs are absorbable or supported by permit fee revenue.

COMMENTS:

1. Rationale. The 2015-16 Budget Act created a three-person Independent Review Panel (IRP) to oversee DTSC's permitting, enforcement, public outreach, and fiscal management. The IRP released multiple reports in 2016 and provided various recommendations on the aforementioned categories. The IRP was authorized until January 1, 2018. Over the course of its term, the IRP conducted 24 public meetings and released 11 progress and annual reports. On January 8, 2018, the IRP released its final report and recommendations concluding: "The Department has implemented, or is working on, most of the IRP’s recommendations and has achieved, or partially achieved, many of the IRP’s suggested performance metrics. However, there is more work to be done."

The recommendations included requiring permit applicants to submit their applications two years prior to the permit expiring. This bill is consistent with the IRP recommendation.

According to the author, DTSC has a long-standing failure to protect California’s disadvantaged communities through its lack of enforcement and oversight of its hazardous waste facilities permitting process. The current process has created a class of facilities who continue operation without adequate review of the facilities operation. By requiring facilities operators to apply before their permits expire, this bill provides more time for DTSC review.

1. Background. DTSC is responsible for administering the hazardous waste facility permitting program established under the California Hazardous Waste Control Law and the federal Resource Conservation and Recovery Act (RCRA). In general, DTSC issues permits for complex and large facilities, such as Class I landfills, large treatment facilities, and for facilities managing RCRA hazardous waste. Presently there are 119 permitted hazardous waste facilities in California.
2. Previous Legislation. AB 248 (Reyes) would have modified the permitting process for hazardous waste facilities. AB 248 passed the Legislature but was vetoed by Governor Brown. In his veto message, Governor Brown stated:

There is no question that comprehensive reform of the Department's operations is needed and the Administration is committed to working with the Legislature on that task. When it comes to protecting the public health of our communities, government cannot afford to make promises it cannot keep.

Adding new responsibilities to the Department must be undertaken holistically while considering the resources and funding available. Doing anything less robs the community of a real solution and sets government up for failure.

Addressing the structural problems at the Department, both fiscal and administrative, will not be an easy task, but one that is achievable if the Administration and the Legislature work together. I look forward to the partnership.

1. Similar Legislation. AB 2094 (Kalra) establishes frequencies for hazardous waste facility inspections. This bill will be heard today in this committee

Analysis Prepared by: Jennifer Galehouse / APPR. / (916) 319-2081

Date of Hearing: March 20, 2018

ASSEMBLY COMMITTEE ON ENVIRONMENTAL SAFETY AND TOXIC MATERIALS

Bill Quirk, Chair

ABPCA Bill Id:AB 2345 (

Author:Reyes) – As Introduced Ver:February 13, 2018

SUBJECT: Hazardous waste: facilities: permits

SUMMARY: Makes statutory changes to improve the permitting process for the permitting of hazardous waste facilities. Specifically, this bill:

1) Requires an owner or operator of a permitted hazardous waste facility who plans to submit a renewal application for a hazardous waste facility permit (permit), that expires prior to July 1, 2021 to submit a complete Part A and Part B application six months before the permit expires.

2) Requires an owner or operator of a permitted hazardous waste facility who plans to submit a renewal application for a permit, that expires after July 1, 2021 to submit a complete Part A and Part B application at least two years before the permit expires.

3) Requires the Department of Toxic Substances Control (DTSC), within 90 days of receiving a complete application for a permit, to post on its internet website an estimated timeline, including key milestones, for DTSC’s review process of the application for the permit.

EXISTING LAW:

1) Authorizes DTSC to issue permits for the use and operation of one or more hazardous waste management units at a facility that meets the standards adopted pursuant to the Hazardous Waste Control Law. (Health and Safety Code (HSC) § 25200 (a))

2) Requires DTSC to impose conditions on each permit specifying the types of hazardous wastes that may be accepted for transfer, storage, treatment, or disposal. (HSC § 25200 (a))

3) Requires a permit issued by DTSC to be for a fixed term, not to exceed ten years. (HSC § 25200 (c) (1)(A))

4) Requires an owner or operator of a hazardous waste facility who intends to extend the term of the permit, before the fixed term expires, to submit a complete Part A application. (HSC § 25200 (c) (1)(B))

5) States that when a complete Part A renewal application has been submitted before the end of the permit’s fixed term, the permit is deemed extended until the renewal application is approved or denied and the owner or operator has exhausted all applicable rights of appeal. (HSC § 25200 (c)(1)(B))

6) Requires an owner or operator of a permitted hazardous waste facility to submit an application for permit renewal at least 180 days before the expiration date of the permit. (22 CCR § 66270.10)

FISCAL EFFECT: Unknown.

COMMENTS:

Need for the bill: According to the author, "DTSC has a long standing failure to protect California’s disadvantaged communities through its lack of enforcement and oversight of its hazardous waste facilities permitting process. The current process has created a class of facilities who continue operation without adequate review of the facilities operation. The 2015-2016 Budget Act created a three-person Independent Review Panel (IRP) to oversee DTSC’s permitting, enforcement, and fiscal management. The IRP is tasked to report every 90-days for a defined period of time on DTSC’s performance, specifically related to permitting, enforcement, backlog reductions, and meeting legislative mandates. The IRP released multiple reports in 2016, and provided various recommendations on the aforementioned categories. Included in these recommendations to 'require applicants to submit application information on a timely basis, and establish accountability mechanisms.'"

DTSC’s hazardous waste management permitting program: DTSC is responsible for administering the hazardous waste facility permitting program established under the California Hazardous Waste Control Law and the federal Resource Conservation and Recovery Act (RCRA). The core activities of the permitting program include: review of RCRA and non-RCRA hazardous waste permit applications to ensure safe design and operation; issuance and denial of operating permits; issuance of post-closure permits; approval and denial of permit modifications; issuance and denial of emergency permits; review and approval of closure plans; oversight of approved closure plans; and providing public involvement on issues related to permitted facilities. In general, DTSC issues permits for complex and large facilities, such as Class I landfills, large treatment facilities, and facilities managing RCRA hazardous waste.

A hazardous waste facility permit granted by DTSC authorizes a facility to transfer, treat, store, or dispose of hazardous waste. Presently there are 119 permitted hazardous waste facilities in California. In order for a facility to gain authorization to treat, store, transfer, or dispose of hazardous waste, its permit application must include a detailed description of the facility’s activities, units, equipment, operation plans, recordkeeping system, procedures for response to accidental release of toxic substances or other emergencies, and training. The application will also contain engineering and structural specifications, closure plans, closure cost estimates, and the mechanism for financial assurance in the event of closure. Ultimately, the applicant must demonstrate the ability to manage the waste in a protective manner. DTSC permit applications must also address requirements beyond hazardous waste laws and regulations. For example, the permit process must adhere to the California Environmental Quality Act (CEQA) requirements, which involves a comprehensive review of impacts of the facility on public health and the environment.

At any point in the permit application review process, if DTSC finds that the facility does not meet applicable standards, it can deny the permit application. Either an approval or denial by DTSC is considered a permit decision. Federal and state law allows facilities with expired permits to continue to operate if the facility has submitted an application for renewal that is administratively complete in advance of the permit expiration date. These types of permits (i.e., expired permits for a facility that has submitted an administratively complete application for a permit renewal) are referred to as "continued permits."

Over the past decade or so, DTSC had received complaints from the public about its permitting program and held meetings with the public, the regulated community, and stakeholders to identify and understand concerns about its permitting program.

In 2012, DTSC commissioned CPS HR Consulting, a non‐profit corporation established under the California Joint Powers Authority, to conduct an external review of the permitting program. The review found that permitting decisions were not timely, taking upwards of four years to complete on average and that the permitting program restructuring from Fiscal Year 08‐09 had resulted in a lack of management structure. The review found that the lack of management structure was a factor in the poor performance of the program; lacked consistent processes for making permitting decisions; resulted in deficient training of staff; lead to a lack of clarity around when to deny or revoke a permit; and, resulted in a lack of performance metrics.

In early 2014, DTSC developed a Permitting Enhancement Work Plan (Work Plan) to significantly upgrade and strengthen DTSC’s permitting program and to ensure that the problems of the past would not resurface in the future. The Work Plan serves as a comprehensive roadmap to guide DTSC’s efforts to improve the permitting program’s ability to issue protective, timely, and enforceable permits using more transparent standards and consistent procedures. In addition, DTSC mapped, for the first time, the entire permitting process and memorialized it in the form of a baseline flow chart that staff can work from and incorporate future improvements.

Beginning in Fiscal Year 15‐16, DTSC’s permitting program established a performance management approach similar to that used by the DTSC cleanup program. One of the essential elements to the implementation of this performance management approach is the development of an annual work plan. The annual work plan specifies due dates for major milestones in the permitting process on permitting projects, tracks completion of permitting activities, increases communication between staff and management on permit progress, and measures planned versus completed milestones as a performance measure of the permitting program.

DTSC Independent Review Panel (IRP): In 2015, the Legislature passed and the Governor signed, SB 83 (Budget Committee, Chapter 24, Statutes of 2015) which establishes within DTSC a three-member IRP to review and make recommendations regarding improvements to DTSC's permitting, enforcement, public outreach, and fiscal management. The statute stipulates that IRP membership shall be comprised of a community representative, a person with scientific experience related to toxic materials, and a local government management expert. The following individuals subsequently received appointments to serve on the IRP: Gideon Kracov, J.D. (community representative and appointee of the Senate Committee on Rules), Dr. Arezoo Campbell (panelist with scientific experience related to toxic materials and appointee of the Speaker of the Assembly), and Mike Vizzier (local government management expert and appointee of the Governor).

The IRP is required to submit recommendations to the Governor and Legislature at the time of each submission of the Governor’s budget, 90 days after the IRP was initially appointed and every 90 days thereafter on DTSC's progress in reducing permitting and enforcement backlogs, improving public outreach, and improving fiscal management. The IRP remains in effect until January 1, 2018.

Beginning with the IRP’s first meeting on November 18, 2015, and including its most recent meeting on December 9, 2016, the Panel has convened 20 public meetings to discuss its work and hear testimony from stakeholders, subject matter experts, elected officials, and representatives of DTSC, and the California Environmental Protection Agency (Cal/EPA).

Also, within its December 2016 report to the Governor and Legislature, the IRP made several recommendations that would require a change in statute. One of those recommendations, requiring that permit applicants submit their applications two years prior to their permit expiring, is contained in AB 2345.

Permit processing time: Ensuring that hazardous waste facilities are managed safely begins with proper and timely permitting by DTSC. These facilities handle dangerous substances and involve complex processes, making the review of permit applications challenging, yet extremely important. Before DTSC embarked upon improving the permitting program, the average time it took to process an application was 4.4 years, with some applications continuing 10-20 years past the expiration of their permit. Given the dangerous nature of substances at these facilities, it is very important that the public be kept informed about these facilities, including the siting, permit process, and enforcement actions taken at these facilities. Currently the only time the public is involved in the permit process is when there is a draft permit decision released by DTSC. If a permit application takes 10 years to review, that means it could have been 20 years since the public has been provided information about the hazardous waste facility in their backyard. DTSC’s permit improvements have a stated goal of being able to process 90% of the permit applications within 2 years, however under current law; this means that even if DTSC achieves this goal, all of these permits will exceed their expiration by a year and a half. AB 2345 rectifies that situation by requiring the permit applicant to submit their application two years in advance of their permit expiring, thereby creating a situation where the vast majority of these permits are processed before they reach their expiration date.

Transparency: The DTSC IRP held numerous meetings during its two year existence and heard frequently from community members that live near these hazardous waste facilities. One of the biggest criticisms of DTSC has been a lack of transparency, meaning the community members feel that information goes into DTSC and years later a decision is announced. AB 2345 adds transparency to DTSC’s permitting process by requiring DTSC to post an estimated timeline of the permit review process on their website. This will provide all stakeholders, including the community that lives near the facility, as well as the permitted facility, with an ability to see the permit review process unfold. This transparency will also allow stakeholders to hold DTSC accountable if the permit review process begins to drag on without a permit decision.

IRP concludes: Pursuant to SB 83, the IRP was authorized until January 1, 2018. Over the course of its term, the IRP conducted 24 public meetings and released 11 progress and annual reports. On January 8, 2018 the IRP released its final report and recommendations concluding: "The Department has implemented, or is working on, most of the IRP’s recommendations and has achieved, or partially achieved, many of the IRP’s suggested performance metrics. However, there is more work to be done."

Similar legislation to AB 2345: AB 248 (Reyes) which set up a similar two year application submittal process as envisioned in AB 2345, was passed by the Legislature in 2017 and was vetoed by the Governor. Here is the Governor's veto message:

"This bill would require the owner or operator of a hazardous waste facility to submit an application for a permit renewal either six months or two years prior to expiration, depending on the expiration date of the permit.

There is no question that comprehensive reform of the Department's operation is needed and the Administration is committed to working with the Legislature on that task. When it comes to protecting the public health of our communities, government cannot afford to make promises it cannot keep.

Adding new responsibilities to the Department must be undertaken holistically while considering the resources and funding available. Doing anything less robs the community of a real solution and sets government up for failure.

Addressing the structural problems at the Department, both fiscal and administrative, will not be an easy task, but one that is achievable if the Administration and the Legislature work together. I look forward to the partnership."

The Governor makes a good point, and with a partnership between the Administration and the Legislature, policy changes recommended by the IRP, such as those contained in AB 2345, could move forward.

Related legislation:

1) AB 2094 (Kalra). Establishes frequencies for DTSC to adhere to when inspecting permitted hazardous waste facilities. This bill is set for hearing in the Assembly Environmental Safety and Toxic Materials Committee on March 20, 2018.

2) AB 2130 (Brough). Requires an entity that is responsible for paying the hazardous waste disposal fee, hazardous waste facility fee, or hazardous waste generator fee, to remit that fee to the Department of Tax and Fee Administration within 45 days of the fee being assessed. This bill is pending referral by the Assembly Rules Committee.

3) AB 2606 (Fong). Deems a hazardous waste facility permit renewal application approved within 90 days of submittal by the applicant if DTSC has not taken action on the application. Caps the amount DTSC can be reimbursed for processing a hazardous waste permit application at an unspecified amount. Amends the same section of law as AB 2345. This bill was referred to the Assembly Environmental Safety and Toxic Materials Committee on March 8, 2018.

4) AB 245 (Quirk, Chapter 499, Statutes of 2017). Increased the maximum penalties for hazardous waste violations to make them equivalent to the federal penalties for the same violations.

5) AB 248 (Reyes, 2017). Would have required an applicant for a hazardous waste facilities permit to submit their application two years before their permit expires. This bill was vetoed by the Governor.

6) AB 1179 (Kalra, 2017). Would have established frequencies for DTSC to adhere to when inspecting permitted hazardous waste facilities. This bill was vetoed by the Governor.

7) SB 774 (Leyva). Creates the California Toxic Substances Board (Board) within DTSC to provide effective, reliable, transparent, and accountable oversight of California's hazardous waste management and of the remediation of contaminated sites. This bill is on the inactive file on the Assembly Floor.

REGISTERED SUPPORT / OPPOSITION:

Support

Asian Pacific Environmental Network (APEN)

AZUL

Breast Cancer Prevention Partners

California Environmental Justice Alliance

California League of Conservation Voters

Center for Environmental Health

Center on Race, Poverty and the Environment

Clean Water Action

Environmental Working Group

Friends Committee on Legislation of California

Friends of the Earth

Natural Resources Defense Council

Sierra Club California

The Trust For Public Lands

Opposition

Clean Harbors Environmental Services, Inc.

Safety-Kleen, Inc.

Analysis Prepared by: Josh Tooker / E.S. & T.M. /