BOARD MEETING DATE: January 8, 1999 AGENDA NO. 40
PROPOSAL:
Response to Request by Adams Broadwell & Joseph, and Communities for a Better Environment for Governing Board to set a hearing pursuant to Regulation XII regarding the restart of the Powerine Refinery purchased by CENCO.
SYNOPSIS:
Adams Broadwell & Joseph, and Communities for a Better Environment, have by separate petition requested that the Board set a hearing pursuant to Regulation XII and Health and Safety Code Section 40509. This item is the Executive Officer’s response to these petitions.
COMMITTEE:
Not Applicable.
RECOMMENDED ACTION:
That the Governing Board exercise its discretion to deny petitioners’ request for a hearing.
Barry R. Wallerstein, D.Env.
Executive Officer
Rule 1201 and Health and Safety Code Section 40509 provide that a party may petition the Governing Board to set and hold a hearing on a permit application. The Governing Board has discretion to decide whether or not to set a public hearing.
Adams Broadwell & Joseph, representing the United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry Local 250, and Communities for a Better Environment have petitioned the Governing Board to hold a public hearing on (1) the reinstatement of expired operating permits to Powerine Refining Company ("Powerine") pertaining to its Santa Fe Springs crude oil refinery, and (2) the application of CENCO Refining Company ("CENCO") for a Change of Operator to allow it to operate the crude oil refining facility it purchased from Powerine.
Powerine suspended operations at the refinery in July 1995 and in August 1998 sold the facility to CENCO. During the shutdown period, Powerine’s operating permits expired due to the nonpayment of annual operating fees. However, Powerine has paid all fees, including reinstatement fees and, pursuant to Regulation III, is entitled to reinstatement of its operating permits. These permits were reinstated on December 29, 1998. Due to staff’s concern that the restart of the refinery could result in air quality violations, staff requested a stipulated Order for Abatement from the AQMD Hearing Board that imposes appropriate conditions to ensure that such violations will not occur (see Amended Stipulated Order for Abatement and Findings and Decision of the Hearing Board, attached as Exhibit A). Action on CENCO’s application for a Change of Operator has been held pending the Governing Board’s determination of this matter.
Petitioners state that the reinstatement of Powerine’s expired permits violates Rule 301(g)(2) because altered or modified permit units were reinstated, and that it violates RECLAIM Rule 2006 because the reinstatement involved a RECLAIM facility permit. They also state that the reinstatement failed to comply with CEQA. They also state that Rules 209 and 1313 do not allow a transfer of Powerine’s permit to operate to CENCO. In reviewing this matter, however, District Counsel has determined that any facility, whether RECLAIM or otherwise, is entitled to a reinstatement of its permits if late fees are timely paid. Staff has excluded from reinstatement any permit units that were altered. Further, the District’s action in reinstating such permits is purely ministerial – that is, an action without any discretion – and as such is exempt from CEQA. Additionally, District Counsel believes that the application for Change of Operator should be granted as requested because Health and Safety Code Section 42301(f) prohibits the imposition of more stringent controls or operating conditions merely on the basis of a change of operator.
Section 40509 and Regulation XII
Health and Safety Code Section 40509 states:
"Any person may petition the south coast
district board to hold a public hearing on
any application to issue or renew a permit."
The District has adopted Regulation XII to implement this section. Rule 1201 provides that the Governing Board will decide whether or not to set a hearing on a Regulation XII petition. [ According to District records, since the adoption of Regulation XII on April 7, 1978, there have been only eight petitions filed pursuant to Health and Safety Code Section 40509. Of these, six were taken off calendar before the Governing Board addressed the issue of whether a public hearing should be held. The other two cases, both involving petitions filed by parties other than the permit applicants, were granted public hearings. Those cases involved a hazardous waste incinerator and the laying of pipeline through the basin.] Other than the requirement that the matter involve a permit application, the rule does not set any criteria for determining whether or not to set a hearing. The Board thus has full discretion in this matter. If a hearing is scheduled, it may be before the District Board, one or more of its members, or a hearing officer designated by the Board. Such a hearing is "quasi-judicial" in nature, with numerous procedural requirements set forth in District rules.
Procedural Issues
The request for a hearing on the Powerine permit reinstatement fails to meet the basic procedural requirement of Regulation XII that an application is pending before the District. Rule 301(g) does not require an application for reinstatement; rather, it provides that a Permit to Operate which has expired due to nonpayment of fees may be reinstated by submitting a request for reinstatement of the Permit to Operate accompanied by all required fees. Thus, there is no "application" on which to hold a public hearing. Moreover, Rule 301(g) does not provide any discretion for withholding or revising a permit once such a request is timely made and accompanied by all required fees. As more fully set forth in the attached Answer and Opposition to Petitions, Powerine submitted such a timely request with required fees and, accordingly, the facility permit was duly reinstated. As to the change of operator, an "application" is pending before staff, but there is no need for the Governing Board to take over staff’s function in ruling on the application. Through the Order for Abatement issued by the Hearing Board, the public can be assured that operation of the refinery will not commence without District staff and Hearing Board determination that operations will be in compliance with all rules and laws.
Legal Issues
As more fully set forth in the attached Answer and Opposition to Petitions, a reinstatement of operating permits to Powerine and the issuance of a Change of Operator permit to CENCO fully comply with all applicable legal requirements.
As set forth in the attached Answer and Opposition to Petitions, staff made a concerted effort to provide public notice and consultation to interested parties and the affected community, even though not legally obligated to do so. Special notice was given of the intent to reinstate the Powerine permit, and a written response was made to each comment letter. Upon petitioning the AQMD Hearing Board for a stipulated Order for Abatement, staff sent – via Federal Express -- the complete hearing board package to each individual who earlier submitted comments. To accommodate the public, the hearing was held in the evening and CENCO provided free coach service to and from the hearing for members of the community. Both petitioners were present at the hearing and provided detailed testimony.
The order issued by the board prohibits CENCO from restarting the refinery until a comprehensive compliance demonstration to both the Executive Officer and the hearing board is made. The requirements for these demonstrations address all of the concerns raised by staff with respect to the ability of the refinery to operate in compliance with all applicable rules and regulations. The decision by the hearing board to allow the refinery to resume full operation will made at a public hearing expected in the fall of 1999 where interested parties and the affected community will again have the opportunity to testify about the matter.
Staff recommends that the Governing Board exercise its discretion to deny the petitioners’ request for a hearing because the Powerine permit has been reinstated as required by Rule 301(g), and the Order for Abatement issued by the AQMD Hearing Board ensures that the facility will operate in compliance with all applicable rules and regulations, or simply not operate. Of course, under CEQA and other provisions of state law, Petitioners may pursue their challenge in the appropriate superior court action. Regardless, the Hearing Board will retain jurisdiction of this matter until full compliance with its order is achieved.
| Attachments | CBE Petition for Hearing |
| Pipefitters Petition for Hearing | |
| SCAQMD Response |
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