Sustainable Fee Structure

1. Sustainable Fee Structure David Ceccarrelli John Weir June 13, 2019 | ELAP Fees Stakeholder Meeting

2. Welcome and Introductions Part I: FY 2019-20 Fees • Environmental Laboratory Improvement Fund Condition • Discussion of Proposed Fees Part II: Proposed Regulations Effective FY 2020-21 - ELAP Regulations that impact Fee Structure Part III: Proposed Fee Structure for FY 2020-21 • New Fee Structure Relating to Regulations • Open Discussion Agenda

3. Sustainable • Generates revenue to support whole Program • Works within legislative budgetary authority Goals for the Fee Regulations

4. Annually review Program expenditure and revenue estimates • Review each iteration of the budget • Determine if Fee Schedule needs adjustment • Stakeholder Meeting(s) • Proposed changes to the Fee Schedule taken to the Board for approval • Implemented via Emergency Rulemaking process Fee Setting Process

5. ELIF Condition

6. Base Fee: Increase from $1,890 to $2,268 • Per FOT Fee: Increase from $851 to $1,021 Proposed Fee Increase Utilizing Existing Fee Structure

7. Part I – Emergency Regulations Proposal to Increase ELAP Fees

8. Questions? Part I: FY 2019-20 Fees

9. Sustainable Fee Structure Christine Sotelo Jacob Oaxaca Andrew Hamilton June 13, 2019 | ELAP Fees Stakeholder Meeting

10. Welcome and Introductions Part I: FY 2019-20 Fees • Environmental Laboratory Improvement Fund Condition • Discussion of Proposed Fees Part II: Proposed Regulations Effective FY 2020-21 - ELAP Regulations that impact Fee Structure Part III: Proposed Fee Structure for FY 2020-21 • New Fee Structure Relating to Regulations • Open Discussion Agenda

11. ELAP Accreditation required for regulatory purposes • Regulatory Agencies rely upon accreditation for their programs • Health & Safety Code requires: • Fee supported program • Fees are adopted by Emergency Regulation Statute & Current Regulations

12. To be accredited in California: • Acceptable Proficiency Testing Reports • Successful On-Site Assessment • Complete application (submitted on time) • Pay appropriate fees • Final accreditation decision delegated to Program Chief from the State Water Board Accreditation Process

13. Activities that are required in statute and/or necessary for a complete regulatory program: • Annual review of Proficiency Testing reports • Assessment of laboratories • Thorough review of application packages • Program Research & Development initiatives • Program Quality Assurance • Enforcement Complete Regulatory Program

14. Almost all ELAP employees were laboratory assessors and program was ineffective No staff dedicated to core programmatic functions: • Administrative concerns • Proficiency Testing review • Program Research and Development • Quality Assurance reviews and audits • Enforcement Organizational Structure was Insufficient

15. In 2015, ELAP reorganized to form a complete regulatory program • Dedicated Administration staff • Assessment staff • Created the Proficiency Testing Unit & Program Development, Research, and Enforcement Unit • Quality Assurance Officer Current ELAP Organizational Structure

16. ELAP assessors lack knowledge of specific scientific disciplines • ELAP is unable to attract and retain qualified staff • ELAP lacks in-house assessor staffing needs Not Enough Qualified Assessors

17. Expert Review Panel and US EPA audits determined: • ELAP lacks the capacity and expertise to conduct all required assessments for the state • Unable to conduct assessments of laboratories that go beyond the central regulatory agency requirements Not Enough Qualified Assessors

18. ELAP is projected to conduct approximately 370 assessments in 2019 including backlog from previous years: ~225 renewal applications ~100 of amendment applications (new methods) ~5-10 new laboratory applications ~30 change in laboratory location (2018) 2019 Assessment Projections

19. Despite efforts by ELAP’s assessment unit: • ELAP continues to have an assessment backlog • Processing times of 3 months to a year (allowed in statue) Impacting ELAP-Accredited Community & Businesses

20. Use third-party assessor bodies (TPAs) to conduct on-site assessments. • Aimed at offsetting programmatic costs and redistributing staff responsibilities  • Considerations when utilizing TPAs: • Requires an auditable standard • Use of existing, recognized TPAs • A national consensus standard creates a more favorable market for TPA’s to operate in CA New Approach to Assessments

21. Use of TPAs is allowed in statute (H&SC 100837) • US EPA supports the use of TPAs • Expert Review Panel urged the use of TPAs • TPAs used by other states accreditation programs • Addresses the backlog of assessments • Success stories from CA and other states Third-Party Assessor Bodies

22. Which laboratories will TPA assess? • Laboratories accredited in Field(s) of Accreditation that uses Sophisticated Technology • Defined in proposed regulations • 40%-50% of current ELAP-accredited laboratories • Assessments from TPAs for other accreditation programs are accepted • Which laboratories will ELAP assess? • Laboratories accredited in Field(s) of Accreditation that do not use Sophisticated Technology • 50-60% of ELAP-accredited laboratories • ` Third-Party Assessor Bodies

23. Pathway to a New Fee Structure

24. Welcome and Introductions Part I: FY 2019-20 Fees • Environmental Laboratory Improvement Fund Condition • Discussion of Proposed Fees Part II: Proposed Regulations Effective FY 2020-21 - ELAP Regulations that impact Fee Structure Part III: New Fee Structure for FY 2020-21 • New Fee Structure Relating to Regulations • Open Discussion Agenda

25. Met several times in 2017 • Models and recommendations were considered • Thank you for your time, dialogue & proposals contributed by the workgroup Acknowledge ELAP Fee Workgroup

26. DAS & ELAP will incorporate in their respective Regulations: • Use of third-party assessors • Fees for laboratories located inside and outside California • Fee Categories • Base • Per Field of Accreditation • Assessment • Reciprocity • Amendment • Late New Proposed Fee Structure

27. New Proposed Fee Structure(subject to change)

28. New Proposed Fee Structure(subject to change) NOTE: Late Fees are detailed in Section 64808.05 of Proposed Regulations

29. Lab with 15 FOAs (4 FOTs) w/ELAP Assessment • Current: $1,890 Base + 4*$851 = $5,294 Annual • Proposed: $1,500 Base + $1,000 FOA = $2,500 Annual + $4,000 Assessment Fee every other year • Lab with 150 FOAs (8 FOTs) w/TPA Assessment • Current: $1,890 Base + 8*$851 = $8,698 Annual • Proposed: $1,500 Base + $5,000 FOA = $6,500 Annual + TPA Assessment Fee every other year • Lab with 300 FOAs (12 FOTs) w/TPA Assessment • Current: $1,890 Base + 12*$851 = $12,102 Annual • Proposed: $1,500 Base + $9,000 FOA = $10,500 Annual + TPA Assessment Fee every other year Example Fees using New Proposed Structure(subject to change)

30. Part III will be implemented using the same process as Part I • No increase in total amount, just structured differently New Proposed Structure

31. Part II & III – Parallel Regulations Timeline State Water Board Adoption Meeting for Regular and Emergency Regulations Effective Date of both regulations (dates subject to change)

32. Open Discussion