PROPOSAL:

Response to Request by Catalina Furniture Company, Inc. for Board to Set a Hearing Pursuant to Regulation XII on Denial of Permit Applications.

SYNOPSIS:

Petition for Regulation XII Hearing on Catalina Furniture Company’s Applications for Permits for Eleven Spray Booths and Three Dip Tanks.

COMMITTEE:

Not Applicable

RECOMMENDED ACTION:

That the Governing Board exercise its discretion to deny petitioner’s request for a hearing.

Barry R. Wallerstein, D.Env.
Executive Officer

California Health and Safety Code Section 40509 authorizes the Governing Board to "hold a public hearing on any application to issue or renew a permit." Regulation XII establishes the procedures to be used in holding such a hearing. Only two Regulation XII hearings have been held to date.

The Governing Board has broad discretion in deciding whether or not to hold a Regulation XII hearing. However, the Governing Board should not hold a Regulation XII hearing after, as is the case here, the Executive Officer has acted on a permit application.

October 7, 1998, the District denied Catalina’s permit applications for 14 pieces of equipment used for wood furniture coatings. That denial was not made effective until October 21, 1998 and then again extended to October 27, 1998. These extensions were solely to allow the facility to remain operating during the period of time it would take Catalina to utilize the Hearing Board process.

The permit applications were denied because they did not meet BACT or LAER requirements, as specified by the United States E.P.A. and confirmed by District staff, requiring emission control equipment. The company has refused to install that equipment thus far.

Catalina sets forth in its petition (Attachment No. 1) the view that over a six year period while their applications were pending, the District (a) erroneously converted the original Class I applications to low priority Class III applications, (b) vacillated on permit processing decisions regarding NSR and CEQA requirements, and (c) reversed position by stating that emission controls are required and denying the applications on that basis.

Although this process has clearly taken too long, a significant portion of the delay and reevaluation of applicable requirements should be attributed to project modifications initiated by Catalina, including the unauthorized installation of equipment at the outset. Had staff not converted their applications to Class III status, Catalina would have been prevented from operating throughout this process – in effect, shutdown.

As set forth in the attached Answer and Opposition to Petition, Catalina had ample opportunity throughout this process to request a Regulation XII hearing while their Class III applications were pending and while the Governing Board still had jurisdiction to consider such a request.

This does not mean that Catalina is deprived of any remedy. Catalina is currently operating under variance protection authorized by the AQMD Hearing Board and has filed an appeal to that board seeking a review of the decision to deny the permits. The Hearing Board has the authority to remedy an improper permit denial and is the forum for the resolution of this matter.

The Governing Board should not hold a Regulation XII hearing as outlined in Attachment No. 2, prepared by the Prosecutor’s office, because:

1) The Petition was not timely (it was filed after the Executive Officer denied the permit applications).

2) Catalina has an adequate and appropriate remedy before the Hearing Board.

3) Catalina’s permit applications did not raise significant public issues as has been the case for previous Regulation XII hearings.

Attachments

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