2001 Legislative Package

AB 1259 (Wiggins)

Health and Safety Code
Permit Suspension/Revocation/Denial for Failure to Pay Fees
Sponsor: Department of Toxic Substances Control

Summary:

This bill would authorize the Department of Toxic Substances Control (DTSC) to suspend or revoke a hazardous waste facility’s authorization to operate for failure to pay fees or cost reimbursements, and would prohibit issuance of a permit to such a facility. The bill would require establishment of an administrative appeal process to ensure that adequate due process is afforded prior to suspending or revoking a facility’s permit.

Background:

The Hazardous Waste Control Law (HWCL) requires the operator of a hazardous waste facility that is applying for a hazardous waste facility permit or permit modification to pay an “activity” fee intended to cover the costs incurred by DTSC in reviewing and processing the permit application. Alternatively, the facility operator may enter into an agreement with DTSC under which the facility operator agrees to reimburse DTSC for the actual costs incurred by DTSC in reviewing and processing the application. Facility operators are also required to reimburse DTSC for costs incurred by DTSC in reviewing and overseeing any corrective action program that the facility is required to undertake. The HWCL also requires facilities to pay an annual “facility fee” intended to support various DTSC activities associated with implementation and enforcement of the HWCL. Activity fees and facility fees are collected by the Board of Equalization (BOE), whereas cost reimbursements are collected directly by DTSC.

Although BOE has the statutory “authority” to collect fees past due and DTSC has the “authority” to collect reimbursements due, often the facility either does not have sufficient assets upon which to effect collection or is able to shelter its assets. Since DTSC does not have clear authority under existing law to immediately deny or suspend/revoke a facility’s permit for non-payment of fees or cost reimbursements, in many instances, these facilities accrue additional fee obligations through continued operation.

Under current law, DTSC may deny or revoke a hazardous waste facility permit for a facility that has violated the HWCL, IF the violation shows a repeating or recurring pattern or may pose a threat to public health or safety or the environment. In some cases this basis for denial or revocation may not clearly apply to non-payment of fees or cost reimbursements. Even in those cases where this basis can be clearly applied, the facility operator is entitled to lengthy due process proceedings under DTSC procedures, and, in the case of fees, BOE procedures as well. This results in significant delays while the facility continues to operate at a competitive economic advantage and accrues additional fee obligations.

Problem:

A number of operating hazardous waste management facilities have not been paying legislatively-mandated fees and cost reimbursements that support DTSC. According to the BOE, there is a total of approximately $6.6 million in unpaid annual facility fees and activity fees owed to DTSC. This has resulted in a significant loss of funding for DTSC’s activities and is unfair to the other businesses that have been complying with the law. Moreover, nonpayment of fees and cost reimbursements is frequently an indication that a facility is experiencing significant financial difficulties and may not be able to continue to meet other financial obligations, including the funding of closure cost assurance or corrective action financial assurance.

Analysis:

This bill would: (i) require the Department of Toxic Substances Control (DTSC) to suspend a hazardous waste facility’s authorization to operate for failure to pay fees or cost reimbursements; (ii) specifically authorize DTSC to revoke a permit for failure to pay fees or cost reimbursements; and (iii) prohibit DTSC from issuing or renewing a permit for any facility that owes outstanding fees or cost reimbursements. These actions would first require completion of any administrative appeal proceeding initiated by the facility, and would be stayed pending the completion of any judicial appeal proceedings initiated by the facility. The bill would require DTSC to adopt regulations to establish an expedited administrative hearing process to ensure that a facility owner or operator is provided due process prior to taking a permit suspension, revocation or denial action.

Contact:

Alan Gordon, Legislative Director
Department of Toxic Substances Control
(916) 324-0912

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