Oversight Costs - - CA Health And Safety

Section § 25269

This law emphasizes the need for an efficient and transparent process in managing state oversight of environmental cleanup efforts. It acknowledges that the state's costs and the disputed cleanup costs from businesses have been significant, impacting cooperation between the state and responsible parties. Also, disagreements over the state's oversight costs have complicated cost recovery and prolonged legal and negotiation processes. To enhance clarity and cooperation, the law suggests defining direct and indirect oversight costs, aiming to reduce disputes and support better environmental cleanup efforts while also considering the global competitiveness of California businesses.

The Legislature hereby finds and declares all of the following:

(a) To enhance cooperation between the department and the regulated community, and to reduce the state’s costs associated with the oversight of cleanup efforts, the costs of the associated cost recovery program and the corresponding costs to the responsible parties involved, the oversight program should be administered in an efficient, responsible, and accountable manner.

(b) According to information provided to the Legislature, the department has collected more than seventy-one million dollars ($71,000,000) since the cost recovery effort was begun in the early 1980s and there is approximately seventy million dollars ($70,000,000) to eighty million dollars ($80,000,000) in outstanding receivables for disputed site cleanup oversight costs. The information provided to the Legislature indicates that potentially responsible parties have complained that the department’s oversight costs have been unpredictable, unsubstantiated, and exceedingly high.

(c) Disputes with potentially responsible parties over the reasonableness of oversight costs have been a major factor in the difficulty that the department has experienced in conducting cost recovery. Disputes of that kind substantially increase the cost of state operations and the cost of doing business for the private sector, leading to extended negotiations and litigation. The redirection of resources by both parties in attempting to resolve those differences most likely inhibit cleanup efforts and affect the ability of the parties to work together cooperatively, thereby exacerbating the costs associated with the cleanups. Disputes would be reduced by clarifying current law by providing definitions of direct and indirect oversight costs. Further, these high costs affect the competitiveness of California businesses in national and global business environments.

environmental cleanup cost recovery state oversight oversight costs disputed costs cooperation with businesses cost disputes efficiency in oversight predictable costs clarification of costs business competitiveness resource redirection state-business cooperation legal disputes in cleanup oversight program administration

(Added by Stats. 1996, Ch. 576, Sec. 3. Effective January 1, 1997.)

Section § 25269.1

This section explains certain terms used in the chapter. 'Department' refers to the Department of Toxic Substances Control. 'Direct oversight costs' are costs directly related to the department's supervision of a cleanup. 'Indirect oversight costs' involve expenses for activities that benefit more than one project and can't be tied to a single task. Lastly, 'Pro rata' refers to general administrative costs distributed among state agencies according to services provided.

For purposes of this chapter, the following terms have the following meaning:

(a) “Department” means the Department of Toxic Substances Control.

(b) “Direct oversight costs” means the costs to the department of overseeing a cleanup action, pursuant to the authority specified in subdivision (a) of Section 25269.2, that can be specifically attributed to a particular cost objective, including, but not limited to, sites, facilities, and activities.

(c) “Indirect oversight costs” means the costs to the department of activity that is of a common or joint purpose benefiting more than one cost objective and not readily assignable to a single case objective.

(d) “Pro rata” means the general administrative costs expended by central service agencies to provide centralized services to state agencies, as defined in the State Administrative Manual.

Department of Toxic Substances Control direct oversight costs indirect oversight costs cleanup action costs cost objective pro rata State Administrative Manual centralized services state agency costs administrative costs toxic substance cleanup oversight costs definition cost distribution central service agencies environmental oversight

(Amended by Stats. 2014, Ch. 71, Sec. 91. (SB 1304) Effective January 1, 2015.)

Section § 25269.2

This section outlines how the department must recover costs related to oversight and cleanup actions for hazardous waste and other environmental issues. It requires the department to create a clear explanation of how they recover costs, including billing and resolving disputes. This explanation must be shared with all parties responsible for the cleanup or remedial actions.

(a) The department shall comply with this chapter when recovering oversight costs for corrective action pursuant to Chapter 6.5 (commencing with Section 25100), for removal or remedial action pursuant to Part 2 (commencing with Section 78000) of Division 45, and for response actions pursuant to Chapter 6.86 (commencing with Section 25396).

(b) The department shall develop a concise statement of its cost recovery policies and billing procedures, including dispute resolution procedures and availability of program guidance and policies, and distribute the statement to all responsible parties.

oversight costs corrective action removal action remedial action cost recovery billing procedures dispute resolution program guidance responsible parties environmental cleanup hazardous waste remediation efforts department policies cost recovery policies corrective measures

(Amended (as amended by Stats. 2022, Ch. 258, Sec. 71) by Stats. 2023, Ch. 131, Sec. 114. (AB 1754) Effective January 1, 2024.)

Section § 25269.3

This law requires the relevant department to manage and track indirect oversight costs efficiently. It must allocate these costs so they're proportionally shared among different departmental activities, based on who benefits. Operating expenses should be regularly included and allocated in a similar fair manner. Additionally, certain costs related to grant development, fee management, contracts, and inquiries should be left out of indirect oversight costs.

The department shall take the following actions with regard to the tracking of indirect oversight costs:

(a) Ensure that pro rata costs are allocated appropriately to all departmental activities, so that the department’s program will only bear these pro rata costs in proportion to the benefits received by potentially responsible parties.

(b) Routinely include operating expenses in the indirect oversight costs and allocate those expenses using processes that ensure that the department’s program only bears indirect oversight costs in proportion to the benefits received by potentially responsible parties.

(c) Exclude, from indirect oversight costs, the costs of grant development and administration, fee administration, contract development and administration, and public and governmental inquiries.

indirect oversight costs pro rata costs departmental activities operating expenses benefits allocation grant administration costs fee administration contract development costs public inquiries governmental inquiries cost allocation processes financial tracking oversight management department program costs

(Added by Stats. 1996, Ch. 576, Sec. 3. Effective January 1, 1997.)

Section § 25269.4

This law requires the department to set and update rates for indirect oversight costs for each program based on changes in grant amounts, department reorganizations, and other relevant factors. These updates must happen at least every six months using the last year's data, and any rate changes are applied moving forward, not backward.

Additionally, the department must review its cost recovery policies at least every two years to ensure they remain effective and current.

(a) The department shall establish rates for indirect oversight costs that are specific to each program and shall review and update the indirect cost rates based upon increases or decreases in the amounts of grants received by the department, department reorganizations, and other relevant factors, but not less than once every six months, based upon the previous 12 months of expenditure data. The department shall apply the indirect oversight cost rates prospectively and shall not make retroactive adjustments in those rates.

(b) The department shall review the department’s cost recovery policies at least once every two years.

indirect oversight costs program-specific rates grant adjustments department reorganizations expenditure data prospective application rate review frequency cost recovery policies grant impacts recurrent updates policy review intervals future rate changes biannual review cost update procedure expenditure analysis

(Added by Stats. 1996, Ch. 576, Sec. 3. Effective January 1, 1997.)

Section § 25269.5

This law requires the department to improve how they work with parties involved in investigating and cleaning up hazardous substance release sites or handling hazardous waste actions. They need to adopt better communication procedures to ensure transparency and financial planning by sharing cost estimates, schedules, and expectations for project phases. They must also clarify their cost recovery and billing policies and distribute these to responsible parties before starting the cleanup.

Additionally, the department should review and update cost recovery guidance documents and, if a project manager changes, make sure there's a status briefing to maintain continuity and understand ongoing agreements or disputes.

The department shall take the following actions with regard to the department’s relationship with the parties who are performing the investigation and cleanup of the hazardous substance release site or taking a hazardous waste corrective action or response action:

(a) Adopt procedures to improve communication, facilitate the exchange of ideas, eliminate surprises, and allow better financial planning by the department and potentially responsible parties, including a meet and confer process which includes, but is not limited to, all of the following:

(1) An estimate of the cost of site remediation by the department for the next phase of the site remediation activity, including a list of estimated personnel labor rates.

(2) An estimate of the total hours that the department expects the department staff to incur in the next phase of the site mitigation process, to the extent that the department can project its time and costs in advance. That estimate shall include the projected hours of the project manager, and the costs of public participation, legal counsel, and technical consultations.

(3) A discussion of the schedule for the remediation action, including a thorough review of the services that the department expects to provide, deliverables, timeframes, expectations of both parties, a process for status reporting by both parties, systematic billing at least once every three months by the department, and an agreement on how the work plan will be modified, and how the costs will be estimated.

(b) Develop a concise statement of its cost recovery policies and billing procedures, including dispute resolution procedures and the availability of program guidance and policies, which shall be distributed to all potentially responsible parties before any site remediation commences, as part of the meet and confer process.

(c) Review all informal guidance documents for the cost recovery program, including fee bulletins, management memos, policies, and procedures, and review and update those documents, as appropriate.

(d) Establish a procedure, when there is a change of project manager for a remediation action, to provide for a detailed status briefing to identify the highlights of past work and identify the current areas of agreement and disagreement among the parties.

hazardous substance release cleanup procedures cost estimates communication procedures financial planning meet and confer site remediation department personnel labor rates project manager briefing billing procedures cost recovery policies dispute resolution program guidance public participation costs technical consultations

(Added by Stats. 1996, Ch. 576, Sec. 3. Effective January 1, 1997.)

Section § 25269.6

This law requires the department to create a billing system for oversight costs meeting specific criteria. Invoices should usually be sent within 60 days and no less often than quarterly, encouraging prompt payment. The bills need to go to the correct person and include enough detail for parties to understand what they are paying for, with extra information available if needed. Any rate changes must be explained in detail, and invoices should be checked for accuracy by someone familiar with the cleanup actions. Charges should align with expectations from prior discussions unless significant new site information has emerged. Additionally, there must be a process to handle and settle any outstanding payments promptly.

The department shall adopt a billing system for oversight costs which meets all of the following criteria:

(a) Invoices shall be issued within 60 days to the extent practicable, with appropriate incentives for prompt payment. In no event shall invoices be issued less frequently than on a quarterly basis.

(b) Invoices shall be mailed to the correct person for the potentially responsible party.

(c) Sufficient detail shall be included with each invoice, so that the potentially responsible party can relate the items on the invoice to the benefits received, and additional details, including daily timesheet personnel data, shall be made readily available.

(d) Invoices shall be supplemented with statements of any changes in rates and a detailed justification for any such changes.

(e) Invoices shall be reviewed for accuracy and appropriateness by a member of the department staff who has direct knowledge of the remediation action.

(f) Invoices shall be reasonably consistent with expectations regarding costs, benefits, and outcomes developed during the meet and confer process specified in subdivision (a) of Section 25269.5, if the department’s knowledge of site conditions or other factors which may substantially impact the department’s costs associated with the site, have not changed significantly since the last conference.

(g) A process for the timely review and settlement of any outstanding accounts shall be developed and implemented.

billing system oversight costs invoicing frequency prompt payment invoice details rate changes accuracy review remediation action consistent expectations meet and confer process cost expectations site condition changes outstanding accounts settlement process potentially responsible party

(Added by Stats. 1996, Ch. 576, Sec. 3. Effective January 1, 1997.)

Section § 25269.8

This law requires the department to handle uncollectible accounts by reviewing and adjusting outstanding debts, based on what is realistically collectable. They can write off debts if appropriate. The department must also keep an analysis of these debts, considering hiring private collection agencies or using banks to manage long-term debts related to remediation responsibilities.

The department shall take all of the following actions with regard to uncollectible accounts:

(a) Review all current outstanding receivables and make an appropriate adjustment for estimated uncollectible amounts, consistent with current accounting practices and recognizing the present value of future collection. The department may, if warranted, write off or write down those receivable amounts.

(b) Maintain and report an analysis of outstanding receivables and other control analyses.

(c) Consider whether to enter into a contract with a private collection agency to collect substantially past-due accounts and, for longer term receivables, consider whether credit arrangements should be made with banks or other institutions willing to assist in financing a potentially responsible party’s obligation for remediation.

uncollectible accounts receivable adjustments debt management future collection value write off debts debt analysis private collection agency past-due accounts credit arrangements financing obligations remediation debts collections strategy financial control account write down receivables report

(Added by Stats. 1996, Ch. 576, Sec. 3. Effective January 1, 1997.)