The California Department of Toxic Substances Control (DTSC) has proposed a new governance structure, with the stated goals of alleviating budgetary gaps and implementing programmatic reform intended to bring transparency and consistency to processes related to cleaning up contaminated sites and managing hazardous waste.  

Tell me more about what initiated these proposed changes

DTSC is responsible for regulating the Hazardous Waste Control Act (HWCA), and California has several programs that fall under this regulatory umbrella. Fees charged to entities that manage waste under the HWCA were last amended in 1998 and DTSC asserts the fee structures do not accurately reflect the oversight needed to effectively meet statutory mandates. DTSC has identified a substantial funding gap and is introducing fundamental changes to its governance and fees to regulate toxic substances.

What are the three proposed areas of change and what is involved?

1. Establishing a Board of Environmental Safety (Board): DTSC is proposing a five-member Board, with members appointed by the governor. Members are intended to represent cross-functional areas to reflect varied stakeholder perspectives involved in hazardous waste management. However, the proposed Board structure does not require a representative with an industry perspective. The Board will be responsible for establishing fee rates, deciding on permitting appeals, setting long-term goals for DTSC, reviewing annual priorities, and providing public comment opportunities.
   
   
2. Fee Reform: To address the identified budgetary gap, DTSC proposes to increase permitting fees alongside other operational-related fee structure changes. The fee reform would eliminate certain long-standing fee exceptions, such as the generator fee exemptions for used oil and wastes generated out-of-state. Additionally, the fee reform would authorize the Board to revise fee rates annually to correspond with the amount of yearly appropriation from the HWCA. The timing of fee payments would also change. Where fees used to align with the calendar year (i.e., two equal installments in February and August), fees are proposed to align with DTSC’s fiscal calendar (i.e., two equal installments due on March 1 and December 1 of each year). Under the proposed reform, fee rate increases will vary depending on the type of permit (e.g., full facility permit, standardized permit, post-closure permit, etc.) and the size of the facility. Currently anticipated rate increases for facility permit fees relative to current fee rates are shown in the following table:
   
   

   Permit Type	Proposed 2022 Facility Fee Rate Increase Relative to Current Rates	Proposed Facility Fee Rate Cap Increase Relative to Current Rates
   Full Facility Permit	~160%	~421%
   Standardized Facility Permit	~371%	~843%
   Post Closure Facility Permit	~371%	~843%
   Permit by Rule Permit	~164%	~428%
   Conditional Authorization	~164%	~428%
   Conditional Exemption	~374%	~847%

   
   Generator and handling fee and environmental fee rate increase exemptions are currently proposed for small quantity generators and small businesses to reduce the economic impact of the COVID-19 pandemic.
   
   
3. Programmatic Reform: DTSC’s programmatic reform involves establishing requirements for maintaining up-to-date Hazardous Waste Management Plans, creating accountability requirements for DTSC’s permit renewal applications and review, and strengthening financial assurance mechanisms. The programmatic reform proposes modifications to the requirements for permit renewals by establishing timelines for permit renewal applications, reviews, and decisions. The programmatic reform also intends to clarify conditions for extending a permit beyond its fixed term. Currently, cost estimates and financial assurances are generally developed alongside permit renewals, which occur on 10-year cycles. The programmatic reform would require DTSC to review cost estimates and financial assurance mechanisms at least once every 5 years and would enable DTSC to require owners/operators to update those mechanisms if deemed inadequate. DTSC also plans to establish procedures for cost estimate and financial assurance development and review. Entities subject to the proposed process are advised to watch for procedure updates and understand the new procedure before their next permit submittal.

What’s next?

DTSC’s proposed changes are included in California Assembly Bill 1 (AB-1), which is currently routing through the legislative process. The next committee hearing date is scheduled for April 7, 2021.

Contact us

Trihydro has extensive experience with DTSC and is tracking regulatory changes closely. If you have questions on how the DTSC reform may impact your facility, contact us today.