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ILLINOIS POLLUTION CONTROL BOARD

December 1, 2005

Proposed Rule. Second Notice.

OPINION AND ORDER OF THE BOARD (by G.T. Girard):

 On January 13, 2004, the Illinois Environmental Protection Agency (Agency) filed two proposals for rulemaking. On January 22, 2004, the Board accepted and consolidated the proposals for hearing. The Board held numerous hearings and received substantial comment before proceeding to first notice on February 17, 2005, pursuant to the Illinois Administrative Procedure Act (IAPA) (5 ILCS 100/5-5 et. seq. (2004). After an additional hearing and numerous comments, the Board today adopts a second-notice proposal and opens a subdocket B in this rulemaking, to address ongoing issues involving scope of work and reimbursement for professional consulting services.

 The Board’s authority in rulemaking proceedings stems from Section 5(b) of the Environmental Protection Act (Act) (415 ILCS 5/5 (2004)), which provides that the Board “shall determine, define and implement the environmental control standards applicable in the State of Illinois and may adopt rules and regulations in accordance with Title VII of the Act.” 415 ILCS 5/5(b) (2004). Title VII of the Act sets forth the statutory parameters for rulemaking by the Board. 415 ILCS 5/26-29 (2004). The Board may adopt a rule after hearing and determination of the economic reasonableness and technical feasibility of the rule. See 415 ILCS 5/27 (2004). The Board’s decision is based on the record before the Board including all testimony and comments filed with the Board. 35 Ill. Adm. Code 102.418.

SUMMARY OF TODAY’S ACTION

 The Board today adopts the proposal for second notice pursuant to the IAPA (5 ILCS 100/5-5 et. seq. (2004). Due to the comments received after the first notice began and in consideration of the prior comments in this rulemaking, the second notice differs from the first notice proposal in one major aspect. That difference is in the reimbursement of professional consulting services, which the Board will propose for second notice to be reimbursed on a time and materials basis.

 The Board also in this opinion opens a subdocket B for the purpose of developing scopes of work to be used in reimbursing professional consulting services in the remediation of underground storage tank (UST) sites in Illinois. Subdocket B will also examine issues surrounding the hourly payment amounts and hours of work for professional services. The Board will, at a future meeting, propose language for consideration on each of these issues. The Board will hold at least one additional hearing on the language before proceeding to first notice with an appropriate rule.

 In addition to opening a subdocket, the Board today makes several changes to the proposed rule in response to the comments. Some of the more significant changes include allowing for reimbursement of handling charges for a subcontractor if the primary contractor has a financial interest in the subcontractor and removing professional services from eligibility for bidding. The Board also determines that some changes requested by the participants are not necessary or supported by the record, such as adding mobilization charges for drill rigs and adjusting maximum payment amounts for abandonment and removal of tanks.

 The Board finds that the rule, as proposed for second notice, is economically reasonable and technically feasible. The Board further finds that any negative economic impact has been minimized by removal of the professional service lump sum payments to subdocket B. Finally, the Board finds that the record supports the Board’s decision to proceed to second notice with the remainder of the rule language.

BACKGROUND

 On January 13, 2004, the Illinois Environmental Protection Agency (Agency) filed two proposals for rulemaking. The proposal docketed as R04-22 amends Part 732 of the Board’s leaking underground storage tank rules (UST rules). 35 Ill. Adm. Code 732. The proposal docketed as R04-23 is a new Part 734 of the Board’s UST rules. On January 22, 2004, the Board accepted and consolidated the proposals for hearing.

 On February 18, 2004, the Board requested, pursuant to Section 27(b) of the Act (415 ILCS 5/27(b) (2004)), that the Department of Commerce and Economic Opportunity (DCEO) conduct a study of the economic impact of the proposed rules. On April 2, 2004, DCEO notified that Board that based on a review of the proposed rules and continued fiscal constraints DCEO would not be performing an economic impact study. The response by DCEO was entered into the Board’s record on that date.

 Five groups of hearings were held before Board Hearing Officer Marie Tipsord. The purpose of each set of hearings was to hear testimony and gather information concerning the technical merits and economic impacts of the proposed rules. The first hearing was held on March 15, 2004, in Chicago (Tr.1). The second group of hearings was held on May 25, 2004, in Bloomington (Tr.2) and May 26, 2004, in Springfield (Tr.3). The third group of hearings was an additional two days held on June 21, 2004 (Tr.4) and June 22, 2004, (Tr.5) in Springfield. The fourth and fifth groups were single days of hearing in Springfield on July 6, 2004 (Tr.6) and August 9, 2004 (Tr.7). During those hearings the Board heard testimony from over 15 witnesses. In addition, the Board received nine public comments in this proceeding before proceeding to first notice.

 On February 17, 2005, the Board proceeded to first notice with a rule that differed from the Agency’s proposal in some aspects, while adopting the Agency’s proposal in total in other aspects. Proposed Amendments to Leaking Underground Storage Tanks (35 Ill. Adm. Code 732, 734), R04-22, 23 (Feb. 17, 2005). The proposal was published in the Illinois Register on

March 11, 2005 (29 Ill. Reg. 3538 (Part 732) and 3705 (Part 734)).

 In the first-notice opinion, the Board asked for input from the public as to whether another hearing was necessary in this rulemaking. R04-22, 23 (Feb. 17, 2005) at 83. The Board received several requests for an additional hearing and the Board held the sixth group of hearings on July 27, 2005, (Tr.8) in Carbondale. On July 27, 2005, the Board heard testimony from the Agency, CSD Environmental Services, Inc. (CSD), CW³M Company (CW³M) and United Science Industries (USI). At the close of hearing, the date for final comments to be filed was established as September 23, 2005. Tr. 8 at 212.

 After publication of the first notice, the Board received 63 additional public comments. A list of all the public comments follows. The Board has received over 70 public comments since the inception of this rulemaking. The following is merely a list of the comments. Later in this opinion, the Board will summarize the comments received by the Board after the proposal was adopted for first notice, which address the substance of the proposal.

SUMMARY OF TESTIMONY AND COMMENTS

 This section of today’s opinion will summarize the testimony from the Board’s July 27, 2005 hearing, held in Carbondale, Illinois. Also in this section, the Board will summarize the comments filed post-hearing by the testifiers at the July 27, 2005 hearing.

Illinois Environmental Protection Agency Testimony

 Prior to the July 27, 2005 hearing in this proceeding, the hearing officer directed the participants to prefile questions for the Agency. Several participants prefiled questions for the Agency including Mr. Dan King (Exh. 95) and Mr. Jay Koch (Exh. 96) from USI, Ms. Cindy S. Davis and Mr. Joseph W. Truesdale from CSD (Exh. 97), and CW³M (Exh. 94). The Agency prefiled the answers to those questions (Exh. 98). Rather than summarize the answers to those questions here, the answers will be discussed in connection with follow-up comments where relevant. The Agency’s public comment (PC 62) will be summarized infra at 41.

Cindy S. Davis and Joseph W. Truesdale

 Ms. Davis and Mr. Truesdale presented prefiled testimony jointly (Exh. 99) on behalf of CSD, which will be referenced as CSD’s testimony. Ms. Davis and Mr. Truesdale both amended the prefiled testimony (Exh. 100 and Exh. 101) at hearing and those will be referenced individually. In addition, CSD filed a final public comment concerning this rulemaking (PC 64). The following discussion will summarize the joint prefiled testimony and then the amended testimony of Ms. Davis and Mr. Truesdale. Finally, the public comment will be summarized.

Joint Testimony (Exh. 99)

 Handling Charges. CSD owns Heartland Drilling (HDR) and has been denied handling charges due to the direct financial interest of CSD. Exh. 99 at 1. CSD states the problem is that HDR does not own the landfill, backfill, trucking or supply companies used and HDR only provides labor and equipment. Id. CSD indicates that if HDR included charges from the other companies on invoice for HDR services, the Agency denies handling charges for HDR. Id. CSD points out that the definition of handling charges include administrative, insurance, interest costs, and a reasonable profit for procurement, oversight and payment of subcontracts and field purchases. Id. CSD concedes that when hiring HDR “much of the cost of procurement for HDR provided labor and equipment” is eliminated; however, the costs for administrative, insurance, interest costs and reasonable profit for oversight and payment of subcontractors and field purchases is not eliminated. Id.

 CSD asserts that the professional liability insurance premium paid by CSD is based on total sales of the company, which includes the costs of the subcontractors. Exh. 99 at 1. CSD’s insurance company informed CSD that the costs of subcontractors are included because the insurance company assumes a risk for those subcontractors under the professional policy. Exh. 99 at 1-2.

 CSD maintains that any prime contractor should be entitled to a handling charge for any subcontractor costs for which the prime contractor is responsible for administrative, insurance, interest costs, and a reasonable profit for oversight and payment of subcontractors regardless of whether there is a direct financial interest in the subcontractor. Exh. 99 at 2. CSD argues that CSD is responsible for paying all subcontractors hired for the job. Id. CSD states that large sums of money are borrowed to complete the job and pay subcontractors. If CSD provides the Agency with proof that the subcontractor is paid, CSD should be entitled to “recoup” costs for administrative, insurance, interest costs. Id.

 Financing. CSD also comments on the issue of financing of cleanups and indicated that the Board should be aware that many consultants provide financing to their clients for cleanups. Exh. 99 at 2. CSD testifies that many sites would not be remediated or even be going through the remediation process if consultants did not offer this service. Id. According to CSD, many of the clients are small businesses that lack the capital to pay for the services of consultants without reimbursement from the leaking UST Fund. Id. CSD states that the financing arrangements are simple and generally the consultant will wait for payment until reimbursement from the leaking UST Fund is received and the consultant will not charge the owner/owners for costs which are not reimbursed from the leaking UST Fund. ¹   Id. CSD indicates that in some cases, subcontractors also agree to wait for reimbursement before being paid, while in other cases, the consultant may pay the subcontractor. Id. To keep costs down, CSD notes that time is of the essence concerning reimbursement. Id. CSD states that the longer the consultant must wait for payment the more the consultant must borrow on the consultant’s line of credit to make payroll. Id.

 CSD states that the implementation of maximum lump sum payments as proposed at first notice will cut profit margins for many consultants to such an extent that consultants will no longer be able to provide upfront financing. Exh. 99 at 2. CSD opines that if upfront financing is eliminated, noncompliance will increase among small businesses and those with limited financial means. Id. CSD testifies that this will result in more properties being subject to the Brownfield’s initiative with additional encumbrances on that program. Id.

 Threshold value. CSD understands the need to control costs and CSD does not oppose maximum lump sum payments that are fair and equitable, and if consultants know exactly what is required to be submitted to achieve compliance. Exh. 99 at 2. CSD suggests that the Board adopt the proposed maximum lump sum payments as threshold values. Exh. 99 at 3. CSD recommends that budgets and reimbursement requests that are at or below these threshold values would then be approved by the Agency without significant review. Id. CSD would still require the owner/operator to submit actual costs for Agency review and approval. Id.

 CSD notes that the Agency would use the information on actual costs submitted in a triennial review to determine if threshold values need to be adjusted. Exh. 99 at 2. CSD opines that the threshold values will provide incentive to the owner/operator and consultant because if the project is completed at or below the threshold value, the costs will be more expeditiously approved and reimbursed. Id. CSD suggests that if an owner/operator’s costs exceed the threshold value, the owner/operator would be required to submit additional information to support the increased costs and would be subject to a longer more detailed review by the Agency. Id.

 Scope of Work. The Board’s rules at Section 732.110(a)/734.135(a) require that “[a]ll plans, budgets, and reports must be submitted to the Agency on forms prescribed and provided by the Agency.” CSD asks that the Board require the Agency to revise the forms to provide a comprehensive list on each form of the tasks to be completed, including the expected minimum number of maps, cross sections, etc. to be included in each report. Exh. 99 at 3. CSD also requests that at anytime the Agency modifies the form, Subpart H maximum payments be adjusted accordingly. Id.

 In regards to Section 732.845/734.845, CSD notes that the Agency, throughout the responses to the prefiled questions, indicted that tasks were included in Section 732.845/734.845. Exh. 99 at 6. CSD asserts that the tasks have never been presented during this rulemaking process in their entirety. Id. CSD opines that one of the goals of this rulemaking should be to develop a fair system, transparent and open to the public, in an effort to streamline the leaking UST program. Id. CSD suggests that the Board require the Agency to provide any and all task lists, unit costs and quantity estimates used by the Agency to develop the maximum lump sum prices proposed in Subpart H. Id.

 Bidding for Professional Services. CSD notes that professional services are not normally bid and owners/operators of many gasoline stations do not employ environmental professionals to help comply with regulations. Exh. 99 at 3. CSD states that smaller owner/operators hire consultants and engineers to assist with the regulations. Id. CSD opines that the bidding process for professional services does not seem feasible and should be reserved for UST compliance costs other than professional services. Id.

 Abandonment Slurry. CSD believes that the costs for abandonment slurry (flowable fill) as required by Office of State Fire Marshal (OSFM) regulations concerning abandonment of USTs should be further evaluated. Exh. 99 at 3. CSD offers that the labor costs for abandonment of a UST is similar to labor costs for removal. Id. CSD notes that a current project being undertaken would require a cost of $5,035 for the flowable fill alone and pursuant to Subpart H the total reimbursement costs would be $9,450. Exh. 99 at 4. CSD recommends revising Section 732.810/734.810 using the RS Means Environmental Costs Handling Options and Solutions (RS Means) published costs for UST closure and the localization factor for Illinois. Exh. 99 at Attach. A. Specifically CSD suggests Section 732.810/734.810 be amended as follows:

 Task List. Ms Davis testifies that she was a member of the American Consulting Engineers Council of Illinois (ACECI) ad hoc group 2 that worked with the Agency prior to the Agency proposing these amendments. Exh. 101 at 2. Ms. Davis states that the ad hoc group provided to the Agency a list of reports that could be considered for lump sum payments. Id. Ms. Davis indicated that the list of reports included a list of tasks for each report and an estimate of the number of hours required to complete the tasks. Id. Ms. Davis notes that Mr. Chappel’s testimony acknowledges that the Agency relied on the information provided by the ad hoc group. Id.

 Ms. Davis argues that the Agency did not rely on the Agency’s own experience to establish some of the maximum payment amounts for professional services. Exh. 101 at 2. Rather, Ms. Davis testifies, the Agency relied on the ad hoc group’s recommendations about the hours necessary to complete the tasks, while ignoring the task lists provided by the ad hoc group. Id. Ms. Davis asserts that when the Agency “disregarded a critical part” of the ad hoc group’s recommendation, the proposal was rendered invalid. Id. Ms. Davis maintains that the purpose of the task list was to provide a detailed listing of the work that needed to be accomplished for each report and to account for the hours needed to accomplish each task. Exh. 101 at 2-3.

 Ms. Davis points to certain recommendations made by the ad hoc group to support her position. Exh. 101 at 3. Specifically, Ms. Davis notes that the ad hoc group estimated that preparation of a conventional high priority corrective action plan would take 64 hours, as would the preparation of a corrective action completion report. Id. Ms. Davis states that the ad hoc group estimated the completion of a reimbursement request would require an additional 32 hours. Id. However, Ms. Davis maintains that the Agency’s proposal, estimating 64 hours, includes the reimbursement request. Id. Ms. Davis argues that for this reason the ad hoc group never intended that the Agency should use the estimated hours without the task list. Id.

 Ms. Davis’s amended testimony ( Exh. 101 at 3.) asks that the Board:

 Agency Experience. Ms. Davis’s amended testimony includes a list of maximum rates which she states are based on the Agency’s “experience” and not on consultation with ACECI. Exh. 101 at 4; Attach. C. Ms Davis states that she has “no knowledge” of any employee in the UST section, other than Mr. Chappel, who has ever been employed as an environmental consultant to perform UST work in Illinois. Exh. 101 at 4. Ms. Davis questions the Agency’s basis for establishing the maximum rates, and she notes that it is the owner/operator and the environmental consultant that will suffer if the maximum rates are incorrect. Id. Ms. Davis urges the DCEO to evaluate the financial impact of this rulemaking. Id.

 Ms. Davis’s amended testimony asks that the Board require the Agency to provide the task list used by the Agency in estimating the costs to conduct the work items listed in Attachment C of Ms. Davis’ testimony. Exh. 101 at 5.

 Other States. Mr. Truesdale offers testimony challenging conclusions made by Mr. Harry Chappel regarding states that Mr. Chappel indicated had similar programs to Illinois. Exh. 100 at 1. Mr. Truesdale agrees that the six states discussed (Texas, Arizona, Oklahoma, South Carolina, Indiana, and Colorado) do have “some type of ‘fund’ based reimbursement schedules somehow memorialized in regulations or other guidance within each respective program.” Id. Mr. Truesdale testifies that scopes of work or task lists are included in at least two of the states, Texas and South Carolina. Exh. 100 at 2.

Public Comment

 CSD filed a final comment with the Board addressing the alternatives proposed by CW³M and USI. PC 64. CSD stated that both proposals are excellent and superior to the Board’s first-notice proposal. PC 64 at 1. CSD offered specific comments in several specific areas which will be discussed below. In addition, CSD offered general comments concerning this rulemaking process and those will also be discussed below.

 Expedited Threshold Values vs. Agency’s Proposed Maximum Payments. CSD notes that USI’s statistical analysis concluded that the Agency’s proposed maximum payment amounts were significantly lower that the amounts historically reimbursed by the Agency. PC 64 at 1. CSD points out that they too testified that the maximums were 50% below what had been historically reimbursed. PC 64 at 1-2. CSD also notes that the Agency’s testimony indicated the maximums were averages in some cases. PC 64 at 2. CSD states that using average numbers, as the maximum payment amount is inappropriate. Id.

 CSD supports the concept, discussed at the July 27, 2005 hearing, of using the proposed amounts as expedited or threshold amounts. PC 64 at 2. CSD believes that such a system provides an incentive to consultants and contractors to try and complete the work at that expedited or threshold level. Id. In return, CSD comments that the consultant or contractor is rewarded with a quicker turn around for review and payment. Id. CSD does not believe that actual numbers should be placed in regulations to allow for more flexibility. Id. However, the method for developing the numbers should be in the rules according to CSD. Id. CSD supports the wording proposed by CW³M for determining expedited and maximum payment amounts. Id.

 Scope of Work/Typical Site. CSD comments that at the July 27, 2005 hearing, the consulting community presented many different site scenarios to the Agency. PC 64 at 3. CSD indicates that this was done in an attempt to demonstrate that without a definition of typical, consultants will be unable to determine if circumstances are unusual or extraordinary for purposes of Section 734.860. Id. CSD asks that this rulemaking establish a procedure to determine what is typical. Id. CSD suggests that the Board combine the suggestions of USI and CW³M and provide for a generic task list. Id. CSD then suggests that the scope of work be outlined in regulations to be developed by the LUST Advisory Committee, and posted on the Agency’s web site. Id  

 LUST Advisory Committee. As proposed, CSD points out that the LUST Advisory Committee is made up of ten members, and CSD believes the number should be an odd one. PC 64 at 3. CSD recommends adding two seats for members of PIPE to the Advisory Committee. Id. CSD also suggests that the Advisory Committee be responsible for developing standardized forms for submittals, guidance documents, and evaluation of expedited and maximum rates to ensure the rates reflect prevailing market rates. PC 64 at 4. CSD opines that giving such responsibility to the Advisory Committee will force the Agency and consultants to repair the strained relationship resulting from this rulemaking. Id.

 Due Process. CSD opines that the regulations as proposed at first notice do not provide due process for owner/operators who cannot afford to appeal an Agency decision to the Board. PC 64 at 4. CSD notes that in one instance alone, the cost of the appeal to the Board was over $45,000 and most owner/operators cannot afford to spend this sum to appeal to the Board. Id. CSD recommends that the Board adopt an alternative formal procedure for decision regarding reimbursement other than filing an appeal with the Board. Id. CSD suggests that if the Board does not include such alternative in the rule, legislative action may be necessary. Id.

 Costs Incurred After Issuance of a No Further Remediation Letter (NFR). CSD supports addition of four items to Section 734.630(gg) as proposed by CW³M. PC 64 at 4. These four items include incremented costs incurred by a highway authority, costs associated with a previously unknown migration pathway, costs of contamination beyond previously defined contamination plumes, and costs associated with properties where access was previously denied. PC 64 at 45.

 Mobilization Charges for Drill Rigs. CSD does not believe the maximum payment amount proposed in Section 734.820 is adequate to allow for mobilization of two pieces of equipment. PC 64 at 5. CSD notes that both CW³M and USI proposals add mobilization as a separate item to the drilling charge, and CSD supports this change. Id.

 Proof of Payment. CSD reiterates concerns regarding the proof of payment to a subcontractor. PC 64 at 5. CSD states that a subcontractor will often wait for payment if a consultant is financing the remediation until reimbursement. Id. If proof of payment is required, a consultant may have to borrow money to complete remediation. Id.

 General Comments. CSD comments that they have spent numerous hours in hearings, testifying and preparing comments in this rulemaking and yet CSD feels that the time has been to no avail. PC 64 at 5. CSD feels that the rulemaking proceeding has been frustrating considering the testimony presented challenging the Agency’s proposal. Id. CSD does not understand how such a rule can proceed to second notice when there is no support for the rule in the regulated community. Id. CSD states that if the Board adopts the rule, CSD will have no choice but to seek help from the legislature and file any and all appeals necessary. PC 64 at 6.

CW³M Company

 CW³M prefiled testimony and appeared at the July 27, 2005 hearing to present that testimony. On behalf of CW³M, Mr. Vince Smith, Ms. Carol Rowe, and Jeffrey Weinhoff appeared to respond to any questions (Tr.8 at 101). CW³M also filed a final public comment concerning this rulemaking (PC 63). In the following paragraphs, the Board will first summarize the testimony and then the final comment. The summary will begin with a general discussion of CW³M’s testimony and then a more detailed account of the suggested changes to the proposed rule will follow.

General Testimony

 CW³M testified generally in six areas. First, CW³M expressed disappointment that the Board’s first notice proposal did not reflect more of the comments from industry including members of PIPE and CW³M. Second, CW³M takes issue with the Agency’s stated intent to produce savings using the proposed rule, especially absent a defined scope of work in the rules. Third, CW³M believes that the proposed rules will result in a poorly designed system. Fourth, CW³M takes issue with the Agency’s statements that lengthy reviews are generally the fault of incomplete applications. Fifth, CW³M continues to maintain that the OSHA requirements are applicable to work performed at a UST site. Sixth, CW³M points to apparent contradictions in the Agency’s answers to prefiled questions concerning information to be filed with a reimbursement request for a lump sum payment. The Board will summarize each of these six issues in turn.

 Board’s First Notice. CW³M testifies that the company has expended considerable amounts of time researching environmental cost data from numerous sources in preparing testimony for this proceeding. Exh. 106 at 2. CW³M intended, with its prior submissions in this proceeding, to provide “credible supported data to illustrate flaws in the rates initially proposed by the Agency and subsequently published by the Board” for first notice. Id. CW³M states: “[i]t is most disturbing to us that the data presented by CW³M, PIPE and other experienced consultants representing hundreds of years of experience was largely ignored in favor of adopting the Agency’s proposal that was recognized as based only on the Agency’s experience in reviewing reports.” Id.

 CW³M notes that the Agency admitted that Mr. Chappel was the only employee involved with the UST program who had worked in the private sector and he only worked for six years in the private sector. Exh. 106 at 2. CW³M is even more disturbed by the Board publishing rates which are not “based on any scientifically or statistically recognized methods” especially after the Agency testimony “was proven to be incorrect” asserts CW³M. Id. CW³M alleges that because the Agency and the regulated community did not approach this proceeding in unison, the Board “felt it had no choice but to defer” to the Agency. Id.

 CW³M concedes that the Agency does have “some experience” in reviewing budgets and payment requests. Exh. 106 at 2. However, CW³M asserts that the Agency does not have experience in the business of conducting or costing the planned work or anticipating and resolving problems in the field. Id. CW³M argues that the collective experience of PIPE, ACECI and the other participants should be taken into consideration for “good government” to prevail in this proceeding. Id.

 CW³M also argues that there is a major inconsistency within the testimony and the proposed rates that has not been resolved. Exh. 106 at 2. That inconsistency, according to CW³M, is the notion that the proposed rates are consistent with rates historically or currently deemed reasonable by the Agency. Id. CW³M notes that the Agency’s testimony indicated that the proposed rates would be inclusive of ninety percent of the costs of sites remediated in Illinois. Id. However, CW³M asserts that the Agency has provided no “scientifically valid data to support this assertion” and the Agency did not use a statistically unbiased, randomly selected data as a basis for the proposed rates. Exh. 106 at 2-3. In contrast, CW³M offers a list of contracts awarded by the Illinois Department of Transportation (IDOT) for corrective action at leaking UST sites. Exh. 106 at 3; App.C. CW³M indicates that the contracts were awarded after competitive bidding, and using the proposed rates in this rulemaking only 11 out of 39 projects would be deemed reasonable. Exh. 106 at 3.

 CW³M also points out that numerous professional service providers have testified that the Agency’s proposed rates are substantially less than the rates that have historically been deemed reasonable and reimbursed. Id. CW³M asserts that if the proposed rates were reflective of the current market and were consistent with historically reimbursed rates, these proceedings would have been less controversial. Id.

 Cost Savings/Scope of Work. Another contradiction according to CW³M in this proceeding is the Agency’s statements that the proposal is necessary to protect the UST Fund. Exh. 106 at 3. CW³M asks that if the rates are consistent with current or historically approved payment amounts, where is the savings? Id. CW³M also asks how the average rates or median costs become maximum payment amounts? Id. CW³M opines that the Agency wants to save costs by forcing industry to accept substantially less than prevailing market rates for work at a UST site. Id. CW³M also opines that the Agency is forcing the industry to comply with “secret or undefined” scopes of work. Id.

 CW³M argues that now that the rate structure has been proposed, without a defined scope of work, the Agency will attempt to force fit additional tasks into lump sum rates. Exh. 106 at 3. To support this argument, CW³M points to the Agency’s response to prefiled questions for the July 27, 2005 hearing. CW³M asserts that the Agency “has refused to disclose” what tasks were included when the rates were developed. Id. Further, CW³M opines that either the Agency lacks the experience necessary to develop a scope of work or the Agency intends that any task that may come up will be included in the lump sum payment. Id.

 CW³M characterizes the general theme of the Agency’s responses to questions regarding the addition of a defined scope of work as “that any additional task should automatically be assumed to be included.” Exh. 106 at 8. CW³M asserts that during earlier hearings, the Agency’s summaries of 45-Day report fees did not include the cost for preparing early action reimbursement claims in the lump sum payment. Id. CW³M asserts that now the reimbursement process is a part of the lump sum payment. Id. CW³M maintains that the list of tasks continues to grow. Id.

 CW³M strongly urges the Board to develop scopes of work for identified tasks or to adopt procedures which will standardize the Agency’s review. Exh. 106 at 7. CW³M testifies that throughout this proceeding PIPE and others have argued for inclusion of a defined scope of work, because without such definition the rules would be vague. Exh. 106 at 6. CW³M states that there is nothing in the rule to prevent an Agency reviewer from requiring more detail or information beyond the items required for each report. Id. CW³M testifies that based on CW³M’s experience the identical types of content or level of detail are not treated the same by each Agency reviewer. Id. CW³M states that submittals are often tailored to the individual reviewer. Id.

 Design of the System. CW³M believes that a poorly designed system of determining maximum rates can have a serious impact on owners/operators and consultants with little impact on how the Agency does business. Exh. 106 at 4. CW³M interprets the Board’s first-notice opinion as the Board relying on the use of bidding and the unusual and extraordinary circumstances provisions in the rule to adjust for flawed rates. Id. However, CW³M argues that the Agency has testified that there will be very few reasons to accept or approve unusual or extraordinary circumstances. Id.

 CW³M argues that the futures of the businesses participating in this rulemaking are at stake. Exh. 106 at 4. CW³M notes that the Agency compared the UST reimbursement program with the problems facing the health care industry; however, CW³M believes the Agency’s rates will create the same problems facing health care. Id. CW³M argues that there will be insufficient insurance to cover costs of cleanup and service providers will be driven out of Illinois. Id. CW³M believes that sites might not be cleaned up because the cost of cleanup not covered by the UST Fund will be so great that owner/operators will not be able to pay for cleanup. Id. Furthermore, CW³M believes the Agency’s intent with these proposed rules is to interrupt free enterprise and force owner/operators to choose the closest consultant. Exh. 106 at 10.

 CW³M asserts that a review of the record indicates that the Agency’s rate structure is not supported because there are too many holes in the data used to develop the rates. Exh. 106 at 4-5. CW³M maintains that “good government” implies that changes impacting businesses should be carefully and properly evaluated. Exh. 106 at 4. These proposed rules include rates based on pulling a “few non-representative files” and conducting a “subjective” review, according to CW³M. Id.

 Length of Review. CW³M takes issue with the Agency’s assertion that review time is largely based upon the quality of the submittal. Exh. 106 at 7, citing R04-22, 23 (Feb. 17, 2005) at 17. Based on CW³M’s experience, the time a review takes is dependant on the Agency reviewer. Exh. 106 at 7. CW³M states that certain Agency reviewers complete their review quickly while others typically use the entire review time. Id. CW³M also claims that there have been numerous denials based on missing information that was actually included in the application. Id. The application must then be resubmitted or the location of the information brought to the attention of the Agency reviewer. This increases CW³M’s costs through no fault of CW³M and the rules for lump sum payments do not address this situation. Id.

 CW³M refers to the Agency’s response to prefiled questions that the maximum payment amounts will encourage submission of complete plans and reports. Exh. 106 at 8. CW³M asserts that they and others who do UST work have being doing so for years and the consultants know full well what constitutes a complete report. Id. However, CW³M feels the approval rate of applications is largely based on whom the Agency reviewer may be. Id. CW³M offers statistics to support this proposition and notes that the persons with the lowest approval rates are the individuals who helped to develop this proposal. Exh. 106 at 8; App. E.

 OSHA Requirements. CW³M insists that under the requirements of OSHA, two consulting personnel are required on-site for field tasks and all the proposed rates must be adjusted to reflect the OSHA requirements. Exh. 106 at 10. CW³M argues that under 29 C.F.R. §1910.120, a “buddy system” is required for hazardous waste operations. Exh. 106 at 9. CW³M agrees that under CERCLA, petroleum products are not considered a hazardous substance. Id. However, CW³M argues that petroleum products are a hazardous waste under the provisions of OSHA. Id, citing 29 C.F.R. §1910.120.

 Information in Reimbursement Requests. CW³M expresses confusion over potentially conflicting statements by the Agency in response to prefiled questions. Exh. 106 at 10. For lump sum payments, the Agency responded to a prefiled question by CSD that for a lump sum payment for soil removal and disposal, consultants will be required to submit invoices that identify the work performed, parties that conducted the work and dates the work was performed. Exh. 98 at 30. According to CW³M this contradicts a statement from the August 9, 2004 hearing wherein the Agency indicated that only an invoice stating the task completed is required. Exh. 106 at 10, citing Tr.8 at 109-10. CW³M asserts that any reimbursement request requiring a greater level of detail should be reimbursed on a time and material basis rather than a lump sum payment. Id.

Suggestions for Specific Rule Changes

 In addition to the comments from CW³M generally discussing provisions of the proposed rules, CW³M offered specific suggestions for changes to the proposed rule. The following paragraphs will describe those proposed changes and the reasons for CW³M suggesting the changes.

 Section 734.100. CW³M suggests clarifying amendments to subsection (a) and the addition of subsection (d). Exh. 106 at 11. CW³M included subsection (d) to clarify that the proposed rules should not be used as final rules until the rules are adopted pursuant to the Act and the IAPA. Id.

 Section 734.135. CW³M proposed language to allow for documentation of reports delivered by hand or private delivery service to the Agency. Exh. 106 at 12.

 Section 734.320(b)(2)(A) and 734.330(a)(1). CW³M suggests adding the word “projected” before the phrase “post-remediation use of the property” in both sections. Exh. 106 at 12. CW³M “objects to the need to characterize the post-remediation uses of the site and the surrounding properties.” Id. CW³M believes that only in limited instances will the owner of the site know the future uses of the property. Id. If the site is an active fuel station and the owner/operator plans to continue to use the site for fuel sales, the future use is definable. Id. However, if the site is closed or about to be closed and the owner plans to sell the site, future use is not definable. Id. CW³M also believes that defining the use of surrounding properties would be difficult. Id.

 CW³M argues that the decision to conduct remediation or rely upon land use or institutional controls should be decisions left to the owner and not the Agency. Exh. 106 at 12. CW³M asserts that property owners should not be “discriminated against” or disallowed remediation by the Agency based solely on potential future use of the property. Id.

 Section 734.340(b). CW³M suggests changes to “reflect that more than one alternative technology may not always be available.” Exh. 106 at 13. CW³M notes that depending on site characteristics two additional alternative technologies may not be available to be implemented. Id. CW³M argues that if there are not additional alternative technologies available, the available alternatives should be cost compared. Id. CW³M opines that a list of alternatives considered could be provided along with explanations as to why the alternatives were eliminated from consideration. Id.

 Section 734.505. CW³M suggests adding language “to attempt to eliminate the standard response of the Agency” that something “exceeds the minimum requirements of the Act” in denials. Exh. 106 at 13. CW³M asserts that such language does not provide an owner/operator with an explanation of the Agency’s decision and limits the owner/operator’s ability to respond. Id. CW³M argues that with a more specific Agency response, the owner/operator should be able to provide a more focused response and reduce the number of additional submittals. Id.

 Section 734.510. CW³M suggests changes to this section to ensure that the Agency documents and maintains records of the Agency’s technical and fiscal review. Exh. 106 at 14. CW³M’s suggested language further seeks to ensure that those records are a part of the record of the site. Id.

 Section 734.605. CW³M suggests that proof of payment of a subcontractor when requesting handling charges be eliminated. Exh. 106 at 14. CW³M maintains that requiring proof of payment is unduly burdensome because of the number of projects, subcontractors, and payments managed by CW³M. Id. Further, CW³M asserts that the requirement will increase the costs necessary to perform the work. Id. CW³M argues that the owner/operator or the prime contractor is responsible for defining terms of payment, not the Agency. Id.

 CW³M opines that a proof of payment requirement could also increase the number of reimbursement preparations and submittals to the Agency. Exh. 106 at 14. CW³M notes that particularly with larger projects during the corrective action phase of the site remediation, reimbursement requests are made almost immediately for some or all of the work to minimize financing costs. Id. CW³M asserts that obtaining proof of payment prior to such immediate submittals would be difficult and result in additional submittals for handling charges. Id.

 Section 734.605(j). CW³M recommends revisions to subsection (j) to allow for submissions for reimbursement requests later than one year after an NFR letter has been issued. CW³M asserts these changes are proposed to accommodate owners/operators experiencing uncontrollable situations creating delays and the Agency’s need to archive files and maintain an accounting of future liabilities. Exh. 106 at 14. CW³M opines that the proposed language will accomplish the intent of the Agency’s proposal while allowing exceptions for rare circumstances. Exh. 106 at 15.

 CW³M argues that the proposed one-year submittal limitation may cause “severe hardship” for owners/operators or their beneficiaries. Exh. 106 at 15. CW³M indicated that in CW³M’s experience appeals to the Board may be pending and settlement negotiations in progress and final disposition of a case may take more than a year. Id. CW³M asserts that in such cases the owner/operator would be prevented from submitting claims until the appeal is settled or a decision by the Board is reached. Id. Another instance where a delay in submittals may occur, according to CW³M, is if an owner/operator is incapacitated, has an illness, bankruptcy, or even a death. Id.

 Section 734.625. CW³M suggests adding additional eligible costs. Exh. 106 at 16. Specifically, CW³M suggests that governmental fees are often unavoidable and as such should be reimbursable. Id. CW³M further suggests that compaction costs should be added as an eligible cost for reimbursement because compaction during the backfill process can return the site to one with a stable foundation suitable for redevelopment. Id. Finally, CW³M suggests adding a specific provision for payment of handling charges incurred for field and other direct expenses. Id.

 Section 734.630. CW³M offers several suggestions to this section. The Board will address each in turn below.

 Subsection (gg). CW³M recommends including costs incurred: (1) by a Highway Authority Agreement after issuance of an NFR letter; (2) because of corrective action after closure necessitated by discovery of unknown contaminants, migratory pathways, or access to property previously denied; (3) for remediation needed to reinstate an NFR letter after a prior NFR letter was voided by the Agency due to no fault of the property owner. Exh. 106 at 17. CW³M believes that reimbursement from the UST Fund should be allowed, even though an NFR letter was issued, in each of the above-mentioned circumstances. Id. As to the Highway Authority Agreement, CW³M indicates that the owner could be in a no win situation because remediation beneath a roadway might not have been allowed. Id. However, if the highway authority incurs corrective action costs after closure and issuance of an NFR, the owner is expected to reimburse the highway authority. Id.

 CW³M also believes that access to the UST Fund should be allowed if necessitated by discovery of unknown contaminants or migratory pathways. Exh. 106 at 17. CW³M argues that modeling may fail and contamination left in place could require additional remediation. Id.

 CW³M lists two situations where an NFR letter might become void through no fault of the property owner. Exh. 106 at 17-18. First, if there is a subsequent discovery of contaminants. Exh. 106 at 18. Second, an Agency approved plan to leave contaminants in place failed and the contamination becomes a threat to human health. Id.

 Subsection (oo). CW³M recommends that this subsection be deleted and payment for handling charges for subcontractors be allowed where the primary contract has a financial interest be allowed. Exh. 106 at 18. CW³M asserts that there are “handling charges” incurred by a prime contractor who has a financial interest in the subcontractor. Id. CW³M indicates that banks do not discount interest rates because of a financial interest in a subcontractor and insurance companies do not give a discount. Id. Administrative and oversight costs also do not change when the prime contractor has a financial interest in a subcontractor, according to CW³M. Id. CW³M notes that the definition of financial interest is so broad that the ownership of the subcontractor by the prime contractor could even be a minority interest. Id.

 Subsection (ccc). CW³M suggests deleting the provision requiring the use of a groundwater ordinance if one is in place. Exh. 106 at 19. CW³M asserts that the Agency did not consider the effect on property values if the Agency “forces” an owner/operator to leave contamination in place and not reimburse for groundwater remediation. Id. CW³M opines that this could have a major effect on a property owner and an owner/operator should have the option to remediate the contamination and be reimbursed for the costs. Id.

 Section 734.665. CW³M offers language changes to the auditing provision. Exh. 106 at 19. These changes are offered, according to CW³M, to assure that the Agency’s audits do not exceed the Agency’s statutory authority and to assure that the audits are consistent with audits performed in other Agency programs. Id. CW³M agrees that the Agency has the authority to perform audits under the Act. Id. However, CW³M believes that authority is limited to reviewing portions of the plans and reports submitted to the Agency. Id.

 Subpart H. CW³M offers language changes in Subpart H, which CW³M believes more accurately reflect the testimony, regarding how the Agency intends to apply Subpart H. Exh. 106 at 20. CW³M asserts that the costs proposed by CW³M are based on costs actually experienced by PIPE members, and the aggregate experience of hundreds of person years, IDOT competitively bid projects, and RS Means or the National Construction Estimator. Exh. 106 at 21. CW³M offers several suggestions to this Subpart. The Board will address each in turn below.

 Section 734.810. CW³M argues that the costs provided by the Agency foe the removal and abandonment of tanks are outdated considering 2003 revisions to OSFM rules. Exh. 106 at 21. Among the new requirements in the OSFM rules are additional safety equipment and the removal of all product piping as part of the tank removal. Id. CW³M also believes the Agency collected data on tank removal regardless of whether or not there had been a release. Id. CW³M asserts that cost for removal of a tank without release is lower than removal of a tank with a release. Id.

 Section 734.820. CW³M suggests that a drilling contractor should be allowed travel expenses similar to professional consulting personnel. Exh. 106 at 21. CW³M argues that larger equipment is less economical to move than passenger vehicles. Id.

 Section 734.825. CW³M offers an alternative rates for soil removal and disposal. Exh. 106 at 22. These rates, according to CW³M, are based on rates paid for excavation and disposal at sites where IDOT bid the project. Id. CW³M argues that the bids were given competitively and were presumably the lowest bid. Exh. 106 at 23.

 Section 734.830. CW³M suggests adding the word non-hazardous to clarify instances where the costs for drum disposal would be appropriate. Exh. 106. at 25. CW³M also recommends adding a mobilization fee or “stop fee” for a drum disposal contractor in this section. Id.

 Section 734.840. CW³M asserts that the testimony provided by CW³M prior to the Board adopting the first-notice proposal demonstrates the numerous flaws with the proposed rates in this section. Exh. 106 at 25. CW³M offers rates which CW³M claims are “consistent with prevailing rates, and include all work and oversight necessary to complete the task.” Id.

 Section 734.845. CW³M proposes rates using the same total number of hours to prepare reports as the Agency used; however, CW³M further broke down the hours into “a more realistic distribution of the type of personnel who work on the project.” Exh. 106 at 25. CW³M used the same hourly rates as the Agency used as well. Id. CW³M asserts that the rates contained in the proposal more accurately reflect the costs and distribution of work to complete the reports. Id.

 CW³M notes that the rates reflect the presence of two consulting professionals as required by OSHA and travel rates have been revised to reflect distance further from the site. Exh. 106 at 26. CW³M has added rates for determining the rate of movement of groundwater at a site. Id. CW³M also suggests lowering the excavated rate to 200 cubic yards per half day because the half-day was reduced from five hours to four hours. Id.

Public Comment

 CW³M’s final comment reiterates many of the arguments made in CW³M’s prefiled testimony for the July 27, 2005 hearing. PC 63. In addition CW³M offers comments on the proposal filed by USI. Id. The following paragraphs summarize CW³M’s comment.

 CW³M has modified the alternative rulemaking language submitted for the July 27, 2005 hearing in response to the testimony offered at that hearing; however, CW³M was not able to file a joint proposal with the other participants. PC 63 at 1-2. CW³M states that a joint proposal could violate antitrust laws and therefore, the consultants have filed separate final comments. PC 63 at 2. CW³M believes that the July 27, 2005 hearing demonstrates that all the consultants are aligned regarding the first-notice proposal’s problems and the solutions to those problems. Id. CW³M notes that the consultants have differing approaches as to how the regulations should be developed to correct rate deficiencies. Id.

 CW³M has modified the alternative rulemaking language to allow the proceedings to move forward while providing for long-term rate establishment by the UST program that is fair and reasonable. PC 63 at 3. Further, CW³M believes that the modified language will protect the ongoing remediation of UST sites in Illinois. Id. CW³M concedes that neither USI nor CW³M has developed the perfect rule; however, CW³M opines that both proposals are closer to a fair and equitable rule than the Agency’s proposal. Id. CW³M notes that the alternative rulemaking language needs some polishing and re-crafting to enable the language to work within the entire framework of the regulations. Id. CW³M believes that the concept of threshold or expedited and maximum rate development needs additional thought and input from the Board and Agency to convert the concept into rules. Id. CW³M also believes however that the solution can satisfy the needs of the parties and the needs of the program. Id.

 CW³M comments that a “carrot” to entice consultants into attempting to perform a task at the “threshold” rate would be the speeding up of the review process. PC 63 at 4. CW³M opines that speeding up the review process would allow reimbursement to move at a quicker pace. Id. CW³M presents language that will allow the Agency to develop an expedited review process for budget requests that meet the threshold or expedited values. Id. CW³M offers that initially the Agency’s proposed rates be used as interim threshold or expedited values until a process is in place to collect and evaluate program cost data. Id. CW³M maintains that the Agency’s rates are seriously flawed and do not represent true costs and CW³M is not endorsing the rates. PC 63 at 4-5. However, CW³M believes that Agency’s rates can be used on an interim basis. PC 63 at 5.

 CW³M comments that the phase totals presented by USI at the July 27, 2005 hearing indicate a deficit exceeding 60% for consultant services over the life of a project. PC 63 at 5. CW³M opines that USI’s data “invalidates the credibility of the entire Agency rate structure” and the Agency’s experience in the UST program. Id. CW³M asserts that every entity, including CW³M, who have offered opinions on Subpart H throughout this proceeding have tried to make this point. Id. CW³M points out that the Agency’s experience was questioned concerning the issue of OSHA regulations, which CW³M reiterated in the testimony for the July 27, 2005 hearing. PC 63 at 5-6. Also,  CW³M agrees that while bidding may be an option in some cases, bidding adds unnecessary time delays and expense to the UST program through the bid procedure. PC 63 at 6. CW³M believes that bidding for consulting services is not practical, nor is bidding for turnkey consultants who can do the work themselves. Id.

 CW³M opines that if the rates were reflective of the market and consistent with rates previously deemed reasonable by the Agency, these proceedings would not have been as controversial. PC 63 at 6. CW³M comments that the Agency may even have secured the support of the industry. Id. CW³M maintains that to move these proceedings forward and lessen the animosity between industry and the Agency, the rates that are developed must be real and reasonable rates. Id.

 CW³M points out that the Act requires that all reasonable costs be reimbursed. PC 63 at 6. CW³M opines that developing lump sum payments may be in violation of the Act. Id. CW³M believes that payment requests, particularly for personnel costs, should be submitted on time and material basis. CW³M notes that if consultants are required to cap submittals at the maximum payment amount, but have incurred costs more than that amount, the consultant will clearly be on the losing side of lump sum payments. PC 63 at 6-7. Alternatively, CW³M argues that if a lump sum maximum payment is reimbursed where the costs incurred are not actually at the maximum payment amount, the reimbursement may be more than the reasonable cost. PC 63 at 7.

 CW³M opines that the Agency wants to realize a cost savings in the UST Fund by forcing industry to accept substantially less reimbursement than prevailing market rates or even rate previously deemed reasonable. PC 63 at 7. CW³M maintains that the impetus to include rates in a rulemaking was the invalidation of the Agency’s rate sheets. Id. CW³M asserts that now that the rate structure has been invalidated, without a defined scope of work, the Agency will attempt to force fit additional tasks into the lump sum rates. Id. CW³M asserts that the Agency has refused to disclose what tasks were included when developing the rates or what should be included. Id. CW³M argues that either the Agency lacks the experience to define the scope of work or the Agency intends that any task that may come up will be deemed a part of the lump sum payment. Id.

 CW³M has included in the alternative rulemaking language task lists and scopes of work. PC 63 at 8. However, CW³M believes that final task lists and scopes of work would best be developed jointly by the Agency and the LUST Advisory Committee. Id. CW³M further believes that the task lists and scopes of work should be published periodically by the Agency outside the confines of the rules to allow modification without a rulemaking proceeding. Id. CW³M also believes the rate structure should be managed in the same way. Id. CW³M asserts that this would allow for a rate structure that can reflect temporary costs increases. Id.

 CW³M interprets the Board’s first-notice opinion to mean that with bidding and the unusual and extraordinary circumstances provisions the rates can be adjusted to market conditions. PC 63 at 8. CW³M concedes that this could be plausible; however, the Agency has testified that there will be few reasons for them to accept or approve unusual or extraordinary circumstances. Id. CW³M reiterates that bidding is not practical. PC 63 at 8-9. For these reasons CW³M argues alternative rates need to be provided. PC 63 at 9.

 CW³M asserts that a failure to adopt adequate rates will not impact how the Agency does business, but can have a serious impact on owners/operators and consultants. PC 63 at 9. CW³M maintains that the future of CW³M’s business is at stake. Id. CW³M comments that the UST Fund was established to protect the environment and assist owners/operators. Id. CW³M argues that the UST Fund was not created to establish a “bureaucratic regime” in Illinois. Id.

 Agency’s Proposed Rates. CW³M interprets the Board’s first-notice adoption of the Agency’s rates, not as an endorsement of the rates but as the only alternative available. PC 63 at 10. CW³M notes that significant testimony was presented, prior to the adoption of the first-notice opinion, indicating that only limited input from industry was used for developing rates for professional consulting services. Id. Further, CW³M asserts the testimony establishes that the information was misused by the Agency. Id. CW³M had hoped to provide alternative rates; however, CW³M does not believe enough data exists to quantify personnel costs on a per task basis. Id.

 CW³M argues that the testimony presented by USI at the July 27, 2005 hearing confirms that the Agency’s proposed rates are inadequate and severely flawed. PC 63 at 10. CW³M maintains that the data relied upon by the Agency cannot be converted into rates and defended by any acceptable statistical analysis. PC 63 at 10-11. CW³M notes that USI was able to successfully extract relevant and defensible data for the phases of UST remediation; however, CW³M was unable to use the data prepared by USI to develop the normal technical situation to correspond to each phase of UST remediation. Id. Thus, CW³M argues the importance of a scope of work in developing rates. Id.

 CW³M’s Proposal. CW³M believes that the alternative rulemaking language proposed by CW³M utilizes the basic framework proposed by the Agency. PC 63 at 11. However, CW³M believes that the alternative rulemaking language offers an opportunity to create a rule that meets the requirements of the Act, allows owners/operators to be fairly reimbursed, and establishes a forum for the Agency and affected parties to work together to refine the process. Id. CW³M argues that the gap between the Agency and the owners/operators and consultants has been apparent at every stage of this proceeding and the gap represents payment of reasonable costs. Id. CW³M argues that the Agency’s rates will force many consultants out of business because consultants cannot operate at a loss and owners/operators cannot or will not assume the financial liability for costs when the Act guarantees reimbursement. PC 63 at 11-12.

 USI’s Proposal. CW³M comments that CW³M could accept USI’s proposal or a melding of the two proposals by the Board. PC 63 at 13. CW³M proposed using the Agency’s rates as expedited interim rates; however, CW³M believes that USI’s rates are much closer to real world and actual market conditions. Id. Further, CW³M believes that USI’s rates reflect unit rates historically and currently deemed reasonable by the Agency. Id.

 Summary. CW³M feels that the rule as proposed is not ready for second notice. PC 63 at 14. CW³M maintains that there has been no support of the Agency’s proposal or the Board’s first-notice proposal. Id. CW³M argues that the Board needs to be more responsive to the numerous public comments and testimony. Id. CW³M opines that the Board has the authority to “direct the Agency to re-evaluate” the proposed rates and the alternative rate structure. Id. CW³M asserts that the record confirms the Agency’s rates are flawed and without proper evaluation of the real UST data, maximum rates should not be established. PC 63 at 14-15. CW³M argues that in the time that has passed since the first hearing, the data could have been collected and analyzed. P 63 at 15.

 CW³M asserts that if the Board fails to respond to the testimony and the record, owner/operators and consultants will seek legislative intervention to correct the flaws in the proposed rule. PC 63 at 15. CW³M argues that the Board should:

United Science Industries, Inc.

 Mr. Jay Koch, President and CEO of USI, presented the bulk of the testimony on behalf of USI. In addition to Mr. Koch, Mr. John Hundley, Mr. Duane Doty, Mr. Barry Sink, Mr. Dan Ruark, Mr. Dan King, Mr. Ross Bunton, Mr. Cory Eversgerd, and Mr. Steve Rigdon appeared and helped in development of the prefiled testimony and exhibits presented at hearing. Tr.8 at 116-17. The following will summarize the testimony by topic with references to the relevant testifier where appropriate. In addition, USI responded in writing to questions posed by the Agency after the July 27, 2005 hearing (PC 59). The answers to those questions as well as USI’s final comments will be included under the appropriate topics. Finally, any new issues raised in response to the Agency’s questions or in the final comments will be discussed.

General Comments

 Mr. Koch testifies that he is speaking not only on behalf of USI and USI’s clients but also “for a class of underground storage tank owner/operator” that have been absent from this proceeding. Exh. 109 at 2. Mr. Koch claims that this “class” of UST owners/operators consist of “small business person, the retiree, the estate, the widow, the school district, the church, the agricultural cooperative, etc.” that have one or two incidents to remediate. Id. Mr. Koch states that this group owns 88% of all leaking USTs in the State with nearly 62% of those yet to be remediated. Id. Mr. Koch opines that these citizens and small businesses are typically not well capitalized or well represented. Id.

 Mr. Koch states that the small owner/operator has several special needs, but there are three things which are most immediate. Exh. 109 at 3. First, the small owner/operator needs to have the record “set straight” in this proceeding. Id. Second, the small owner/operator needs the Board to listen closely to the testimony challenging the Agency’s position. Id. Third, the small owner/operator, who is the real beneficiary of this rule, wants the Board to understand and to act. Exh. 109 at 4.

 Mr. Koch states that USI and its employees “are with the small owner/operator” and always have been. Exh. 109 at 5. Mr. Koch claims that inherent in USI’s mission is the protection of the small owner/operator’s well-being, property values, and peace of mind. Id. Mr. Koch testifies that over 100 owners/operators from throughout the State have signed a petition expressing a desire for a fair and objective rule. Id. In addition to having signed a petition, more than 80 owners/operators signed and sent to USI “Requests for Representation” that are attached to USI’s testimony. Exh. 109 at 5; Attach. 4.

 The Agency questioned USI concerning the petitions and requests for representation attached to USI’s testimony. PC 59 at 11. USI states that each owner/operator individually reviewed the petition and signed of their own accord. Id. USI did not inquire nor does USI believe it to be their responsibility to inquire, how each owner/operator decided to sign the petitions. Id. USI points out that the Board concluded that the proposed rates were not developed based on a statistically defensible method and the Agency admits that the some maximum payment amounts are averages. Id. As to the parties that signed the request for representation, USI notes that the parties reviewed most of the testimony although some portions of the testimony were amended at the last moment. PC 59 at 12.

Small Owner/Operator

 USI provides testimony “to quantify and highlight the critical importance and unique characteristics” of the small owner/operator. Exh. 109 at 7. USI testifies that they will present evidence to validate the importance and need: (1) for reducing overall leaking UST liabilities in the State for the small owner/operator; (2) for promulgating UST regulations that address the specialized needs of the small owner/operator; and (3) for the unique role of consultants in managing small owner/operator sites. Id.

 Breakdown of Small Owner/Operator. USI testifies that the Agency’s database lists a total of 8,566 open incidents with a potentially responsible party (PRP) listed and 895 open incidents without a PRP. Exh. 109 at 8. The database, according to USI, indicates that 5,620 PRPs are responsible for one or more incidents and there is a total of 4,991 small owners/operators responsible for 5,342 open incidents. Id. Based on these figures, USI asserts that small owners/operators are the largest single group of PRPs remaining in the program and are responsible for the majority of all remaining leaking UST environmental liabilities in the State. Id.

 Unique Characteristics of Small Owner/Operator. USI opines that the small owner/operator has numerous distinctive characteristics. Exh. 109 at 8. For example, USI notes that over 19% of the small owners/operators discussed above are listed as individuals; while a majority, 67% are small to medium sized businesses. Exh. 109 at 9. The remainder of the group consists of school districts, government, church, and small to medium sized communities. Id. Based on USI’s experience, additional key characteristics of the small owner/operator include: 1) limited financial resources, and management and technical resources; 2) the property is considered a valuable asset; and, 3) they want to address their environmental liabilities. Id.

 USI asserts that small owners/operators are highly dependent on the financial resources of the UST Fund as compared to larger PRP groups. Exh. 109 at 11. USI maintains that this dependence includes both the need for 100% reimbursement of approved items and the need for timely payment. Id. Furthermore, USI argues that the site property is an important asset and the small owner/operator and the regulations must allow for the preservation of that asset. Id.

 Unique Role of Consultants. USI states that, based on the Agency’s database, USI is the consultant on 328 open incidents and 204 of those are owned or operated by the small owner/operator group. Exh. 109 at 12. USI has “operated successfully” in the leaking UST market for over 15 years and USI states that they have “a deep understanding” of the leaking UST market. Id. USI argues that the role of consultant for a small owner/operator is “significantly different” than for a larger PRP. Id.

 USI asserts that the key components of the unique relationship between the small owner/operator and the consultant include that the consultant is often the “sole source” for the duration of the project. Exh. 109 at 13. USI maintains that the consultant typically manages all aspects of the work and discussions with the Agency. Id. USI testifies that the consultant will discuss optional approaches, but implements approaches which protect property values. Id. USI asserts that the consultants “very carefully schedule and manage” all activities to achieve 100% reimbursement due to the financial hardships experienced by small owner/operators. Id. Finally, according to USI, consultants wait on payment from the leaking UST Fund to pay the ongoing cost of cleanup. Id.

 USI asserts that the small owner/operator is highly dependant on their consultant when compared to larger PRPs. Exh. 109 at 14. The relationship is often trust based with the small owner/operator and the consultant is relied upon to ensure that regulatory requirements are met. Id. USI argues that the regulatory process must recognize the unique needs of the small owner/operator. Id.

Reasons for Rulemaking

 According to USI, the Agency’s “most notable” reason for this rulemaking is a need to reform the budgeting and reimbursement procedures. Exh. 109 at 22, citing R04-22, 23 (Feb. 17, 2005) at 15, 22, 24. USI asserts that the Agency’s statement raises the questions of what is the need and what reforms are needed. Exh. 109 at 22. USI asserts that the Agency has convinced the Board that these reforms are needed for nine reasons. Exh. 109 at 22-23. Those reasons are:

 USI concedes that each of these nine reasons seem reasonable on the surface; however USI believes a closer examination is warranted. Exh. 109 at 23. USI notes that the reasons numbered one, three, six, seven, and eight above, all express a goal of streamlining, creating efficiency, expediting or reducing processing time. Id. USI argues that the Agency’s motives are questionable, because the Agency has rejected proposals from industry that would also achieve the goal of streamlining, creating efficiency, expediting or reducing processing time. Exh. 109 at 23-24. USI points to three examples of the Agency’s rejection of proposals which would assist in streamlining, creating efficiency, expediting or reducing processing time. Exh. 109 at 24. Those examples are all three suggestions from PIPE and include developing a database, reducing review time to less than 120 days, and issuing a “draft denial letter” to an applicant. Id.

 USI believes that the addition of a bidding process in the Agency’s third errata sheet demonstrates that the Agency’s real motive is not streamlining and expediting. Exh. 109 at 24. USI asserts that anyone with knowledge or experience in bid preparation knows that the introduction of competitive bidding will add “levels of complexity and administration” to the reimbursement process. Exh. 109 at 25. USI also believes that the “blasé approach” that the Agency used to develop the rates proposed in Subpart H belies the Agency’s stated goals. Id. USI argues that the leaking UST section is scientifically orientated and such an approach does not reflect the scientific orientation of the UST section. Id.

 USI questions the Agency’s stated “motives” numbered two and five above, relating to cost effectiveness and control, when the Agency has not performed an analysis of the anticipated cost savings. Exh. 109 at 25. USI asserts that if there is a genuine desire for cost savings, one would want to analyze and forecast the savings if only for one’s own curiosity. Id. USI opines that “it also seems reasonable that if one was genuinely concerned about cost reduction or the control of cleanup expenses” one would want to be in a position to defend the proposal. Id. USI argues that the Agency’s failure to analyze cost savings or use a statistically reliable means to develop maximum payments belies the Agency’s goal of cost effectiveness and control. Id.

 USI maintains that while the Agency’s failure to analyze cost savings or use a statistically reliable means to develop maximum payments “calls into question” whether the Agency’s “true objective” is cost reduction, the Agency’s “outright rejection” of requests to define a scope of work, in the context of the provisions for bidding, “is an absolute formula for financial disaster for the” UST program. Exh. 109 at 26. USI argues that increasing levels of risk will increase the costs of products and services and it is only logical to assume that the Agency’s refusal to define a scope of work increases the level of uncertainty and risk in the bidding process. Id. USI asserts that this will drive bid prices higher and escalate total costs for the UST Fund. Exh. 109 at 26-27. Furthermore, USI asserts that without the scope of work defined, each consultant will prepare bid specifications uniquely and the cost of Agency review will also increase. Exh. 109 at 27. USI asserts that the Agency’s refusal to define a scope of work along with the addition of a provision for bidding is not only inconsistent with the Agency’s stated goals, but also counter-productive. Id.

 USI goes on to argue that the Agency’s refusal to define a scope of work is inconsistent with the Agency’s stated goal of achieving consistency in Agency decisions. Exh. 109 at 27. USI ponders how straightforward review of a bidding specification by the Agency will proceed without a defined scope of work. Id. USI asserts that the only consistency in a system so poorly designed will be consistent chaos and appeals. Id. USI asserts that as long as the Agency maintains that a defined scope of work is not needed for each task, the Agency cannot “claim” a desire for consistency. Id.

 USI states that having refuted eight of the Agency’s “motives” for this rulemaking proposal, USI next considers the Agency’s concerns about the perceived abuses of the system (number nine above). Exh. 109 at 28. USI finds this concern, voiced by Mr. King, a “baffling comment” to be made by someone of Mr. King’s stature because the Agency has been given the responsibility to oversee the UST program and determine the reasonableness of reimbursement requests. Exh. 109 at 28. USI states that considering the program requires pre-approvals of budgets and work plans before reimbursement claims can be processed and the Agency has the authority to audit all data, reports, plans, documents, and budgets, USI finds “it almost impossible to conclude” that the Agency cannot already stop abuses of the system. Id.

 Given the Agency’s actions and testimony during this proceeding, USI opines that rationalizing the Agency’s motives is difficult if not impossible. Exh. 109 at 29. Furthermore, USI offers one additional Agency “motive” for the rulemaking and that is the UST Fund deficit of approximately $25 million a year. Id. USI notes that all the parties to this proceeding are aware of transfers from the UST Fund in recent years, so USI asserts the Agency’s testimony regarding the transfers should not be “weighted too heavily” in this proceeding. Id. And if there were truly a funding crisis, USI asks why the Agency has not notified owner/operators as required by 35 Ill. Adm. Code 732.503(h)? Id.

 USI states that, within industry circles, other motives for this rulemaking have been discussed. Exh. 109 at 29. One motive, suggests USI, is that the Agency has been asked to reduce expenditures so the UST Fund monies can be siphoned off to other state programs. Id. Another motive recited by USI is that “regulators view the UST Fund as their ‘cash cow’” and want to protect the fund to protect the regulators’ jobs. Id. USI also suggests that one of the Agency employees “is driving these changes as means of settling a vendetta against former competitors.” Id. Perhaps the Agency is opposed to business practices of some consultants and the Agency wants to use this rule to diminish those consultants, suggests USI. Exh. 109 at 29-30. Whatever the true “motives” for this rulemaking, USI argues that the Agency must keep the needs of the small owner/operator at the forefront. Exh. 109 at 30.

 The Agency asks USI to explain whether USI believes that any of these motives are true and if so to provide evidence to support the USI’s belief. PC 59 at 5. USI states that the “fundamentally flawed” portions of the Agency’s proposal are “highly irrational and without merit.” Id. USI opines that the Agency’s defense of the proposal in light of facts disclosed at the July 27, 2005 hearing is “highly peculiar” and if the Agency continues to rigidly defend the proposal “such unfounded obstinacy would certainly support the theories that are circulating” within the industry. Id.

Historical Administration of UST Fund

 USI opines that a close examination of the Board’s first-notice opinion and order “leaves little doubt” that absent competitive bidding and unusual and extraordinary circumstances provisions, the Board would have been reluctant to accept the maximum payment amounts offered by the Agency. Exh. 109 at 31. USI points to the Board’s language concerning reimbursement for bid preparation on a time and material basis and asserts that the Board indirectly acknowledges the potential insufficiency of the maximum payment amounts by adopting the bidding process. Id. USI maintains that the Board’s decision to reject the Agency’s proposed lump sum for bid preparation and review “speaks volumes” concerning the entire rate structure. Exh. 109 at 32.

 USI points out that in the Board’s first-notice opinion and order, the Board indicated a willingness to consider alternative rates if they had been presented. Exh. 109 at 32. USI states that USI and other members of PIPE were “cautioned prior to the 2004 hearings to not discuss rates amongst one another for legal reasons.” Id. Therefore, USI and other members of PIPE refrained from discussion alternative rates and instead used other solutions such as RS Means. Id. USI, however, agrees with the Board that rates should be based on actual experience in the UST program in Illinois and RS Means and other sources “do not specifically track costs” associated with the UST program in Illinois. Id.

 The Agency further questioned USI’s statements regarding the decision by PIPE not to provide alternative rates prior to the July 27, 2005 hearing. PC 59 at 7. USI stated that legal counsel advised against discussing prices and rates as a group and PIPE decided to follow that advice. PC 59 at 8-9. USI states that individual competitors can address price issues and USI has submitted and will continue to submit USI’s own views on pricing. PC 59 at 9.

 USI notes that the Agency’s testimony indicated that the rates proposed by the Agency were developed using the Agency’s experience as a basis and the Agency believes the rates will be inclusive of over 90% of the sites in Illinois. Exh. 109 at 32. USI states that: “USI is not objectionable to most of the rates provided in [Sections] 734.810 through 734.840.” Id. As to the rates USI does not object to, USI states that USI’s experience in UST work in Illinois indicates that the billing methods, units of measure and prices are “not highly inconsistent with those prevailing in the market today.” Exh. 109 at 32-33. USI goes on to state that to the extent the maximum rates are inconsistent with prevailing market rates or insufficient, the scope of work for these activities is defined to accommodate the competitive bidding provisions and the unusual or extraordinary circumstances provisions in Section 734.855 and 734.860. Exh. 109 at 33.

 USI does take issue with the maximum rates in Section 734.845 and argues that the record “is significantly in error” as the record pertains to the consistency of maximum payment amounts in that section. Exh. 109 at 33. USI opines that the Agency’s experience in administering the UST program is of little value for developing maximum rates, except for the labor rates proposed in Appendix E. Id.

 USI’s experience in UST work is significant and from 2002 through 2004, USI submitted, on behalf of clients, over 14% of all reimbursement claims to the Agency. Exh. 109 at 33. USI notes that historically, USI’s reimbursement rate is well above the statewide average. Id. USI claims that USI’s fee schedule items are “routinely and consistently” approved by the Agency in budget proposals and reimbursement requests. Id. Because of this experience, USI has observed numerous examples where the maximum payment amounts proposed by the Agency deviate from the rates currently and historically approved by the Agency. Id. USI included in their testimony a fee schedule for rates currently being reimbursed. Exh. 109 at 33-34; Attach. 9. According to USI, this fee schedule included charges for professional instrumentation, equipment and materials, and supplies; items that have been omitted from the Agency’s proposed maximum payment amounts. Exh. 109 at 34. USI suggests adding payment amounts for instrumentation, equipment and materials, and supplies that are routinely used by professionals. Id.

 USI performed a review of the professional costs associated with 69 randomly selected sites to evaluate the current and historical reimbursement practices of the Agency on projects other than those performed by USI. Exh. 109 at 34. USI obtained records for the sites using the Freedom of Information Act (5 ILCS 140/1 et. seq. (2004)). Id. USI selected sites which had received NFR letters after January 1, 2003. Exh. 109 at 296. USI asserts that the results of this survey “prove that the maximum payment amounts for professional services” proposed by the Agency are “not even close to being consistent with the costs that the Agency currently approves.” Exh. 109 at 34. USI maintains that the maximum payment amounts in Subpart H would dramatically reduce the number of professional service hours and the costs that the Agency currently considers reasonable and necessary. Exh. 109 at 34-35.

 In preparing the data from the survey, USI reports the data by total professional service hours and charge per phase of the project. Exh. 109 at 35. USI presents the data in this fashion because a task-by-task analysis would be meaningless. Id. USI maintains that the Agency has never implemented a standardized task structure against which costs must be reported and historically consultants have grouped varying work activities into tasks. Id. According to USI, there is no conformity in the Agency’s files for this grouping and in fact, USI found 145 “task conventions” associated with early action, 382 “task conventions” associated with the site classification phase, and 516 “task conventions” associated with corrective action in the survey. Id. USI argues that as a result of this lack of standardization the only “accurate means of assessing professional service cost” is to assess on a project level or phase-by-phase. Id.

 USI notes that Subpart H created 28 “tasks” for professional services while USI uses 98 distinct tasks in the current billing procedures for UST Fund projects. Exh. 109 at 35-36. Further, USI points out that in the 69 projects reviewed by USI, there were 900 unique task conventions associated with professional services alone. Exh. 109 at 36. USI concedes that consolidation and standardization of tasks may have merit; however, the Agency’s approach was flawed, inaccurate, and inconsistent with current Agency practices. Id.

 USI asserts that the Agency has attempted to establish that the tasks associated with the maximum payment amounts requires a similar level of effort from one project to the next and this is simply not the case. Exh. 109 at 36. USI has provided documentation from two separate incidents that were remediated using conventional techniques. Exh. 109 at 36; Attach X. The level of required correspondence, documentation and professional consulting effort and the amount reimbursed by the Agency are substantially different due to the variance in the scope of work for the two projects. Id.

 USI argues that the Agency has also attempted to establish that the Agency’s review is uniform and consistent. Exh. 109 at 36. USI does not agree. Exh. 109 at 37. USI provides information that the reviewers are erratic and can be impacted by unit managers. Exh. 109 at 37; Attach. 16.

Specific Non-Objectionable Provisions

 USI reviewed the maximum payment amounts set forth in the proposed rule in Sections 734.810-734.840 to determine if USI had any objection to the payment amounts. Exh. 109 at 37. USI applied several “tests” to the maximum payment amounts in order to establish that the amounts are acceptable. Id. The first test was whether the “unit of measure” assigned to the work activity was appropriate to the work being performed. Exh. 109 at 37-38. The second test was whether the regulations provided sufficient detail to allow a scope of work to be authored for a bid specification to allow for competitive bidding. Exh. 109 at 38-39. The third test was whether USI believes the price accurately reflects prevailing market prices and the whether the price includes conditions likely to be encountered at most sites in Illinois. Exh. 109 at 39.

 USI notes that there are 109 maximum payment amounts in Sections 734.810-734.840 and USI performed the three tests on each of those amounts. Exh. 109 at 40. USI states that with the exception of omitting a maximum payment amount for mobilization for the drilling activities in Section 734.820, USI has found the maximum payment amounts acceptable. Id. USI believes that the amounts are appropriate and workable, and USI has no objection to implementation of these amounts. Id.

 The Agency notes that USI has completely rewritten Section 734.810-734.840 in the draft rule (PC 55). PC 59 at 17. The Agency asks if USI has no objection to these sections why USI has rewritten them. Id. USI states that USI does not object to the “concept” behind the Agency language; however USI believes the concept behind the rule can be rewritten so that the rule is simpler and does not require the body of the rule to be rewritten if a rate change is warranted. Id. USI has suggested placing rates in an Appendix rather than the body of the rule. USI envisions that the rate in the appendix would be an expedited rate and an unpublished maximum rate could be calculated for each of these sections. PC 59 at 31-41. USI also envisions a “bid unit rate” and unusual and extraordinary circumstances to be included in the range of rates reasonable for these sections. Id.

Specific Objectionable Provisions

 USI asserts that key portions of Subpart H are based upon conjecture and not fact, are poorly crafted, and will lead to arbitrary results by Agency personnel. Exh. 109 at 41. USI argues that key portions of Subpart H as published at first notice are so poorly conceived and conceptually flawed that the “mere passage is likely to have immediate, deleterious or ruinous impact” on UST owners/operators in Illinois. Id. USI opines that there are five concepts associated with Subpart H that must be addressed before proceeding to second notice. The following sections will discuss each of the five concepts USI has raised.

 Lack of Standards and Definitions. USI concedes that consolidating work activities into “tasks” is a good concept and necessary for accurate and administratively efficient long term cost containment. Exh. 109 at 42. However, USI maintains that Subpart H attempts to group “costs” into “tasks” and then to maximum payment amounts for each “task” and this is confusing absent standards and definitions. Id.

 USI points to the language in Section 734.800 as proof of the confusion. Exh. 109 at 43. USI notes that in subsection (a), the rule states that “all costs” are grouped into “tasks” set forth in Sections 734.810-734.850 and the maximum payment amount for each task is set forth in those sections. Id. Next in subsection (b), USI notes the language of the rule indicates that the “costs listed under each task” in Sections 734.810-734.850 “identify only some of the costs associated with each task” and are not an exclusive list. Id. Finally in subsection (c), USI notes that language indicates that Subpart H sets forth the only methods that can be used to determine the maximum amounts that can be paid for eligible corrective action costs and whether a costs is eligible is determined by 35 Ill. Adm. Code 734.Subpart F. Id.

 USI argues that after reading Section 734.800, one is not certain whether the maximum payment amounts in Subpart H are for “costs” or “tasks” or some combination of the two. Exh. 109 at 43. Also, the language of subsection (c) would appear to directly contradict the “all costs” language in subsection (a). Id. USI opines that one interpretation of subsection (c) also would allow for payments in excess of the maximum payment amounts if the costs are “eligible corrective action costs” pursuant to 35 Ill. Adm. Code 734.Subpart F. Exh. 109 at 43-44. USI asserts:

This is the case since it is obvious that the maximum payment amounts in Subpart H “identify only some of the costs associated with each task” and do not provide an “exclusive list of all costs associated with each task” ([Section] 734.800(b)). Exh. 109 at 44.

 USI opines that the Agency might argue that payments in excess of the maximum payment are precluded by Section 734.630(aaa). Exh. 109 at 44. However, USI asserts that since the Agency has omitted many professional consulting tasks that are necessary to complete corrective action and has failed to provide a scope of work, it will be impossible for the Agency to demonstrate that costs are ineligible pursuant to Section 734.630(aaa). Id. USI states that as part of the prefiled questions to the Agency before the last hearing, at least 21 questions were posed to the Agency regarding scope of work. Id. USI indicates that the questions all sought a definition or disclosure from the Agency as to where certain costs are accounted for in Subpart H. Id. USI asserts that the Agency failed or refused to identify specific “tasks” where “costs” are allocated in most instances and in other instances the answers demonstrate how confusing the rule will be to administer. Exh. 109 at 44-45.

 USI allows that the literal interpretation discussed above is not the one espoused by the Agency. Exh. 109 at 45. USI points to additional areas of confusion such as the fact that the word “task” is used only in Subpart H but no where else in the rule. Id. Also USI notes that the word “activities” is being deleted from Section 732.601 and 734.605 while “activities” are referenced in Section 734.850(b). Id.

 Use of ACECI Estimated Personnel Hours. USI notes that the Agency based the maximum payment amounts in Section 734.845 on the number of professional consulting hours estimated by ACECI and provided to the Agency. Exh. 109 at 46. However, USI argues that the Agency used those estimates without including the specific, definable, and objective scope of work the estimates were predicated upon. Id. USI asserts that the practitioners participating in the ad hoc group from ACECI qualified the number of hours that were provided to the Agency for each task developed. Exh. 109 at 50. USI states that the ad hoc group recognized the importance of a scope of work for any professional service so the group qualified the number of hours provided to the Agency by specifying a scope of work for each task. Id. USI further states that the group informed the Agency that the quantity of hours needed for each task would change if the scope of work was other than the one specified by the group. Id.

 USI asserts that after the Agency received the information from the ad hoc group, the Agency changed the scope of work by modifying and/or consolidating several tasks. Exh. 109 at 51. Furthermore, USI asserts the Agency omitted the scope of work that the group had listed for each task. Id. USI argues that the scope of work for each task was the “very foundation” for ACECI’s determination of what number of hours was appropriate to complete a task. Id.

 USI testifies that the Agency has testified that the “rates” in Subpart H are generally consistent with the rates currently reimbursed. Exh. 109 at 46. USI opines that “generally” is a broad characterization and in the case of professional consulting services, “rates” are only one component of costs. Id. USI states that costs are determined by multiplying the rates per unit of measure by the quantity of units required to complete the service. Id.

 USI states that in the 15 plus years that the Agency has administered the UST Fund, the Agency has never issued a standardized list of “tasks” to be used. Exh. 109 at 47. As a result, USI testifies that consultants have been forced to arbitrarily group professional service work activities into arbitrary tasks. Id. USI asserts that this has led to an unidentified and potentially infinite number of unique tasks reported to the Agency. Id. Thus, USI asserts the Agency has no valid, accurate or scientifically defensible means of determining what quantity of professional service hours are normal for the various tasks. Id.

 No Defined Scope of Work. USI asserts that the failure to include a defined scope of work for professional service tasks listed in Section 734.845 is the most serious conceptual flaw of the proposed rulemaking. Exh. 109 at 53. USI claims this is particularly so when considering there are only two methods for establishing alternative payment amounts. Id. Those two alternatives are competitive bidding and the extraordinary provisions, neither of which will work for professional service tasks. Exh. 109 at 54, 57-58.

 Competitive Bidding. USI asserts that there are fundamental impediments in using competitive bidding for professional services without a scope of work. Exh. 109 at 54. One problem is that bid specifications that cover all costs that are included in the maximum payment amount cannot be prepared. Id. Second, bids that truly cover all costs will be difficult to obtain. Id. Third, demonstrating that the bid covers all costs will be difficult. Id.

 USI maintains that the concept of competitive bidding for professional services should not be included in this rule. Exh. 109 at 54. USI argues that the Agency personnel reviewing bids for professional services will have no guidance, absent a scope of work, and thus the review will be arbitrary. Exh. 109 at 55. The result of the arbitrary review, according to USI, is that the Agency will either end up defending the decisions before the Board or courts or the Agency will develop internal standards. Exh. 109 at 55. As a result USI insists the Agency will be developing a scope of work through these two courses. Exh. 109 at 55-56.

 USI argues that the prefiled questions by Mr. King to the Agency included 21 questions “primarily designed to assist in assessing the Agency’s ability to adequately and objectively administer” maximum payment amounts from Section 734.845 and the competitive bidding provisions of Section 734.855. Exh. 109 at 56. USI asserts that 16 of the Agency’s answers failed to provide enough detail to determine how professional service costs should be allocated. Exh. 109 at 56-57, Attach 18.

 Unusual and Extraordinary Circumstances. USI argues that the lack of a defined scope of work effectively precludes the use of this provision for professional consulting services. Exh. 109 at 57. USI asserts that determining what cost and corresponding Section 734.845 maximum payment amount are to be considered for comparison when determining whether to use the unusual or extraordinary circumstances provision is impossible. Exh. 109 at 57-58. Further, USI maintains if what is ordinary is not defined; owner/operators and consultants will be unable to define extraordinary. Exh. 109 at 58.

 Conversion of Professional Service Payment. USI believes that another conceptual flaw in this proposed rulemaking is the attempt to immediately convert payments for professional services for a time and material basis to a lump sum basis. Exh. 109 at 59. USI notes that since the inception of the UST program, the Agency has reimbursed professional service on a time and materials basis. Id. USI states that this is how consultants and engineers bill their services. Id. USI asserts that time and materials is a reasonable and logical approach because a task can have various scopes of work or even an inherently unpredictable scope of work. Exh. 109 at 59-60. Further, USI argues that professional consulting services are intellectual in nature and time and materials billing is appropriate. Exh. 109 at 60.

 USI notes that as discussed above, determining that the maximum payment amounts are reasonable absent a defined scope of work is difficult because the proposed rule has attempted to aggregate costs into tasks. Exh. 109 at 60. USI opines that even if a scope of work had been provided, the best anyone could do would be to estimate the time for each task. Id. USI asserts that immediately converting from time and materials to lump sum based on a flawed system will hamper the cleanup of the environment and threaten small businesses. Exh. 109 at 61.

 USI believes that with the inclusion of a defined scope of work, some professional consulting services can be converted to lump sum payments in time. Exh. 109 at 61-62. USI opines that this should be done in phases and at the onset of this proposed rule, professional services should be billed and reimbursed on a time and materials basis. Exh. 109 at 62.

 Use of Averages as Maximums. USI notes that the Agency has proposed the adoption of average historical costs as the maximum in many instances. Exh. 109 at 62. USI asserts that this is inherently problematic. Exh. 109 at 63. USI opines that the Agency may have proposed the average because if a higher number were published consultants would raise their prices to the higher price. Id. USI further opines that this would drain the UST Fund and using the average would not have the same effect. Id. However, USI argues that using the average is just as problematic for several reasons. Id.

 USI asserts that using the historical averages will create an artificially low price and cause havoc for the owners/operators. Exh. 109 at 63-64. USI argues that if the averages are adopted, many consultants costs will be higher than the maximum payment amounts and consultants will either no longer provide services or the owner/operator will be required to pay the difference. Exh. 109 at 64. USI states that in either case the owner/operator loses. Id.

 A second problem, according to USI, is that requiring an owner/operator to seek only the maximum payment amount will skew the Agency’s data and eliminate the Agency’s ability to review prevailing market rates. Exh. 109 at 64. USI also believes that using an average as a maximum will result in “administrative upheaval and a flood of appeals” neither of which will streamline the process. Id. Finally, USI opines that due to varying conditions throughout the state, using the average could result in a complete reimbursement at one site but not at another site. Id.

Solutions

 USI provided draft regulations addressing the flaws discussed above. USI states that the draft regulations have been prepared with the goals of streamlining the preparation and review of budgets and payment applications, improving consistency of review, and creating a cost-containment program based on real market statistics from Illinois in mind. Exh. 109 at 65. The following paragraphs will give a brief overview of USI’s suggested changes offered by USI.

 Lack of Standards and Definitions. USI proposes that key terms be clearly defined and adds definitions for words and phrases such as expedited unit rate, extended cost, extraordinary unit rate, maximum unit rate, reasonable quantity, and standard products and services. Exh. 109 at 66; Attach 20; PC 55. USI also provided detailed descriptions of fieldwork. Id.

 ACECI Hours and Defined Scope of Work. USI proposes implementing a cost-containment rule using time and materials billing for professional services. Exh. 109 at 67. USI also proposes adoption of a defined scope of work. Id.

 Conversion of Professional Services Payments. USI recommends using the standardized system of tasks discussed above to develop a database to support conversion of from time and materials to lump sum payments for professional services. Exh. 109 at 67.

 Use of Averages as Maximums. USI proposes adopting the unit pricing rates as a level that will be presumed acceptable and not be subject to further review or reduction. Exh. 109 at 68. USI suggests that a second level of pricing that will be higher than the published rates may be adopted which are in fact the maximum rates. Id. USI suggests that these rates remain unpublished and known only to the Agency and be set by a statistically sound method. Id.

 USI asserts that a key component of the draft regulations is the allowance for collection of real market pricing data and adjustment of unit pricing based on such data. Exh. 109 at 69. USI notes that the Agency has expressed concerns that if consultants know that pricing data is being collected and attempt to manipulate the data may be made. Id. USI asserts that four key facets of the draft regulations will minimize potential for manipulation. Id. Those four facets are:

 Concern about Professional Consulting Services Cost Levels. USI states that there is real concern that absent historical standardization of tasks, appropriate total pricing levels cannot be set for professional services which vary in effort. Exh. 109 at 70. USI proposes using time and material billing status under the draft regulations initially to allow for collection of data. Id. USI is recommending an approach that addresses control of costs at the unit price level. Id. USI cautions however that another component to total cost is the quantity of units being performed. Id. USI has used the data on the total number of professional personnel hours typically used in the past per phase of work to quantify units being performed. Id.

 USI recommends that the LUST Advisory Committee or similar committee establish a certain quantity of hours per project phase as an appropriate quantity for the performance of all professional services required by that phase. Exh. 109 at 70. USI’s draft regulations would have the Agency use this quantity of hours as a “barometer to monitor reasonableness” of professional services costs proposed or incurred throughout the phase of the project. Exh. 109 at 71. USI suggests this as an interim measure until data can be collected. Id.

 To ensure the collection of data, USI’s proposal would have all costs proposed and or incurred reported to the Agency using the standardized tasks and scope of work suggested above. Exh. 109 at 71. After data has been collected, USI proposes establishing lump sum expedited rates based on the data. Id. USI notes that as an alternative to tracking data at the phase level, data could be tracked at the task level, which would be a more accurate means of analyzing data. Id. However, according to USI, there are more than 900 task name conventions used by various consultants in recent years so there is no historical task data. Id.

 Database Solution. USI asserts that the suggested changes discussed above, “lends itself to automation” in the UST program. Exh. 109 at 72. USI proposes the use of Automated Budget and Reimbursement Approach (ABRA). Id. USI asserts that the new budget proposals and payment applications are highly automated and a user will simply need to open a web browser. Id. USI argues that the data will be reliable because the system will use Agency approved unit rates against consultants’ proposed pricing. Id. Upon receipt of data from the consultant, the system would perform a series of validations to determine which if any unit prices exceed the standard fee schedule. Exh. 109 at 72. USI argues that ABRA establishes that a database is not just feasible and workable, but an absolute requirement for effectively managed UST program. Id.

 Legal Challenges. As a part of USI’s testimony, USI submitted a legal memorandum from Mr. Hundley concerning the proposed regulations. Exh. 109 at 74, Attach 23. Mr. Hundley addresses three issues in the legal memorandum. The first addresses the maximum reimbursable prices. Id. The second addresses the proposed regulations and the use of TACO. Id. The third issue is the auditing and record retention provisions of the proposed rule. All three issue will be discussed below.

 Reimbursable Amounts. Mr. Hundley’s memorandum echoes many of USI’s concerns regarding the use of the unusual or extraordinary circumstances and competitive bidding provisions of the proposed rule. Exh. 109, Attach. 23 at 1-4. Mr. Hundley’s memorandum than asserts that there is “drastic lack of statutory basis” for Agency’s approach to maximum payment amounts. Exh. 109, Attach. 23 at 4. Mr. Hundley maintains that the approach is unlawful. Exh. 109, Attach. 23 at 5. Mr. Hundley states that the legislature intended that persons who undertake cleanup under the UST program be able to seek payment for “any costs associated with physical soil classification, groundwater investigation, site classification and corrective action.” Exh. 109, Attach. 23 at 5, citing 415 ILCS 5/57 (2004). Mr. Hundley asks why the legislature would say “any costs” if the legislature intended “average costs” were to be reimbursed. Id. Mr. Hundley states that the legislature when adopting P.A. 92-554 specifically required an applicant to study certain site-specific criteria and set forth and accounting of all costs. Exh. 109, Attach. 23 at 5. Mr. Hundley also points to language adopted by the legislature in P.A. 92-574 which requires the applicant to submit an accounting of all costs. Id. Likewise, according to Mr. Hundley, Section 57.7(c)(3) of the Act provides that “the costs associated with the plan are reasonable.” Id, citing 415 ILCS 5/57.7(c)(3) (2004).

 Mr. Hundley opines that the regulations are being proposed not to meet statutory obligations but rather to cut the reimbursements down to perceived available funds. Exh. 109, Attach. 23 at 6. Mr. Hundley states that the Agency admits “as much” in the Agency’s testimony in this proceeding. Id. Mr. Hundley concedes that the Agency’s budget concerns may be valid; however, the legislature has considered shortages in the UST Fund and reacted differently. Exh. 109, Attach. 23 at 7. Specifically, Mr. Hundley states that the legislature has adopted language which directs the Agency to notify claimants if finds are insufficient and to create a priority list for reimbursement. Id, citing 415 ILCS 5/57.8 (2004). Further, Mr. Hundley argues that the legislature requires the Agency to make payment determinations within 120 days whether there are available funds or not. Id. Mr. Hundley argues that the Agency does not have the authority to overrule the legislature and the Board and the Agency must carry out the legislature’s intent. Exh. 109, Attach. 23 at 8.

 TACO. Mr. Hundley argues that limiting reimbursement to Tier 2 TACO levels and the requirement to use groundwater ordinances are inappropriate. Exh. 109, Attach. 23 at 10. Mr. Hundley asserts that there is no statutory basis for these proposals. Id. Mr. Hundley notes that the legislature has acknowledged the use of TACO; however, the legislature did not limit the use of TACO to Tier 2 objectives. Id. Furthermore, Mr. Hundley asserts that the legislature had directed an owner/operator to design the plan to mitigate any threat to human health, human safety, or the environment resulting from a leaking UST. Id. Mr. Hundley maintains that had the legislature intended to limit the cleanup of a site, the legislature would not have use the phrase “any threat” in the statute. Exh. 109, Attach. 23 at 11.

 Mr. Hundley asserts that cleanup to Tier 1 versus Tier 2 will indisputably affect the future property use, value and salability. Exh. 109, Attach. 23 at 11. Also, Mr. Hundley maintains that TACO focuses on risk to human health, while the UST program requires cleanup if there is a threat to human health, safety or the environment. Exh. 109, Attach. 23 at 12. Mr. Hundley argues that the Agency cannot ignore the language of the statute. Id.

 The Agency questioned USI further regarding the statements made in the legal memorandum and USI responded. PC 59 at 19-21. USI states that the memorandum does not suggest that all remediation under Tier 2 of TACO fails to provide protection for human health. PC 59 at 19. However, USI contends that remediation under Tier 2 of TACO does not provide as much protection as Tier 1 of TACO. Id.

 Audit and Record Retention. Mr. Hundley argues that Section 734.665 is beyond the Agency’s statutory authority and Mr. Hundley takes issue with the Board’s decision to the contrary at first notice. Exh. 109, Attach. 23 at 13. Mr. Hundley argues that the statute gives the Agency only the authority to audit “data, reports, plans, documents and budgets submitted” pursuant to the Act. Id. Mr. Hundley asserts that audit is defined by the Act and the definition of audit does not extend the audit provisions to all documents. Id. Mr. Hundley argue that the legislature has made clear that he Board and the Agency are given authority consistent with the provisions of the Act and requiring the regulated entity to maintain copies of not only what was submitted to the Agency but also all documents pertinent to the submission to the Agency is beyond the requirements of the Act. Exh. 109, Attach. 23 at 14-15.

Response to Agency Questions

 In response to the Agency’s 36 questions, USI expressed a desire to address two “suggestive subtleties” in the Agency’s questions. PC 59 at 1. The remaining responses to the Agency’s questions have been incorporated above where appropriate. The following paragraphs address the two general issues USI addressed.

 Implication that USI Takes Exception to Board Publishing Rule at First Notice. USI asserts that the Agency’s questions imply that USI takes exception to the Board publishing the rule for first notice. PC 59 at 1. USI clarifies that USI is not at odds with the Board and in fact empathizes with the position the Board was placed in at first notice. Id. USI recognizes that the rulemaking process is an open and public process and first notice is merely a milestone in that process. PC 59 at 2. USI argues that first notice is not the conclusion of the process and the Board may make substantive changes to the proposed rule in response to public comment prior to proceeding to second notice. PC 59 at 2, citing 35 Ill. Adm. Code 102.606.

 USI empathizes with the Board because at the time the Board moved to first notice the Board was faced with a “highly controversial, confusing and incomplete record.” PC 59 at 2. USI asserts that the Board’s adoption of a first notice proposal similar to the Agency’s original proposal was not an adoption by the Board of the Agency’s proposal. Id. Rather, USI argues, the Board’s publication of a first-notice rule was a means of moving forward and forcing the participants to identify and focus upon critical portions of the proposed rule. Id. USI states that for these reasons, USI focused primarily on the issues the USI believes are the largest remaining issues in the rulemaking. Id.

 USI argues that for the Agency to imply that the rule as proposed at first notice is the Board’s proposal or even the Board’s final position with regard to Subpart H is inappropriate. PC 59 at 3. USI believes that the post first-notice rulemaking process is a substantive process involving continued receipt of information by an impartial decisionmaker. Id. USI does not believe that the post first-notice rulemaking process is “window dressing” as USI asserts the Agency would like the participants to believe. Id.

 USI’s Business Operations. USI notes that a number of the Agency’s questions concern USI’s business operations and financial performance. PC 59 at 3. USI argues that these questions are not relevant to the testimony offered by USI on July 27, 2005, or to this rulemaking. Id. USI asserts that it is but one consultant performing UST work in Illinois and the subject matter of USI’s testimony was much broader in scope than USI’s business alone. Id. USI provided testimony based on a “statistically reliable survey of information in the Agency’s own files” that provided a range of professional consulting hours, rates, and costs that the Agency has historically reimbursed. Id.

 USI also provided a national survey of profitability of environmental engineering and consulting firms from across the nation. PC 59 at 3. USI asserts that considering that this rulemaking is an industry wide and statewide rulemaking with national costs data in the record, USI business operations and financial performance are not important. PC 59 at 4.

Public Comments

 USI filed numerous public comments in this proceeding. Three of the comments (PC 55, PC 60, and PC 67) were documents reflecting the suggested rule changes and the draft rule discussed as a part of USI’s testimony. PC 59, discussed above, was USI’s responses to Agency questions. Numerous documents titled “Statement of Support” or “Request for Delay” were signed by various companies and individuals and filed as PC 66. USI filed a sample budget and billing form that was docketed as PC 68. USI also submitted copies of letters and documents from Illinois State Senators and those are discussed infra at 50 (PC 69). PC 72 is a CD of USI’s final comments. USI’s comments filed as PC 61 and 71 will be discussed here.

 USI’s states that the random sampling and analysis performed by USI focused on professional consulting costs that the Agency has historically reimbursed. PC 61 at 1. Specifically, USI examined the historical costs reimbursed for professional consulting services typically rendered during each phase of a UST remediation. Id. USI argues that the data gathered by USI demonstrates that the maximum payment amounts proposed for professional consulting services will cut UST Fund benefits to owner/operators by 50%. Id.

 In contrast, USI opines that the Agency’s testimony was designed to lead one to believe that the maximum payment amounts for professional consulting service were not distinctly different from the historical reimbursement amounts. PC 61 at 2. USI reexamined the data used by the Agency and found striking contrasts between the actual case files and the testimony concerning the data developed by the Agency. PC 61 at 2-4. USI points out these contrasts and suggests that the conclusions drawn by the Agency based on the Agency’s data were incorrect. Id.

 USI also filed a response to the Agency’s comment in this proceeding (PC 71). USI defends its positions noting that the expedited unit rates and services suggested by USI is not “elaborate” or “difficult to decipher” in anyway. PC 71 at 1. USI believes that the creation of a database is essential and that a database will not complicate or lengthen the reimbursement process. Id.

Illinois Environmental Protection Agency’s Public Comment

 The Agency states that “time does not permit” the Agency to provide detailed comment on all suggestions and issues that have been raised and to do so would “diminish by its length” the usefulness of the Agency’s final comment. PC 62 at 1. The Agency states that absence of a comment on any testimony or public comment should not be construed as the Agency’s acquiescence in or support for the testimony or comment. PC 62 at 2.

 The Agency’s final comment is divided into three sections. The first section contains comments on testimony from the July 27, 2005 hearing and is divided by the Sections of the rule. The second section contains comments addresses public comments submitted to the Board in response to the Board’s first-notice proposal. The third section suggests a few non-substantive changes to the rule. The following section will follow the Agency’s organization and summarize the comment.

Comments on Testimony 

 The Agency supports the rules as proposed by the Board at first notice and requests that the Board proceed with adopting the rules. PC 62 at 2. The Agency believes that as a whole the proposed rules will allow for reimbursement of reasonable remediation costs from the UST Fund. Id. The Agency also believes that the proposal establishes reasonable and appropriate rules for implementation of statutory changes in the leaking UST program enacted in 2002. Id. The Agency comments specifically on some requested amendments to the proposal on a section-by-section basis. The following paragraphs will summarize the Agency’s comments.

 Section 734.100. In response to CW³M’s suggestion that the Board further amend the applicability section of the rule “to clarify that the proposed rules should not be used as final rules before the rulemaking process has been completed,” the Agency comments that no additional change is necessary. PC 62 at 2. The Agency notes that the suggested changes will not take effect until the rule is adopted and therefore the stated purpose could not be accomplished. PC 62 at 2-3. The Agency further notes that CW³M also suggests changing the word “applies” to “is intended” but such a change would convert this applicability section to an intent section. PC 62 at 3. CW³M also suggests limiting the scope of Part 734 to changes implementing the statutory amendments in P.A. 92-0554 and P.A. 92-735; however, the Agency asserts that the proposed amendments do not implement only those two public acts. Id. The Agency maintains that the proposed rules implement the rest of the UST program’s statutory provisions including two other public acts enacted in 2002. Id. Lastly, the Agency comments on CW³M’s suggestion that a new subsection (d) be added to address payment for work already approved prior to the effective date of the rules. The Agency believes that Section 734.100(a)(2) already addresses that issue. Id.

 The Agency points out that the Board examined the language in Section 734.100 in the first-notice opinion and the Board made revisions to ensure that the rule would not have a retroactive effect. PC 62 at 3. The Agency does not believe that the additional language changes suggested by CW³M are necessary, nor did CW³M provide adequate justification for changing the rules. PC 62 at 3-4.

 Section 734.340(b). The Agency responds to CW³M’s suggestion that the rule reflect that only available alternatives should be cost compared. PC 62 at 4. The Agency feels this change is unnecessary as the language in Section 734.340(b) already states that if an owner/operator is seeking to use an alternative technology the owner/operator must demonstrate that the costs “is not substantially higher than other available alternative technologies.” Id. The Agency states that if a particular technology is not available, no cost comparison is required; and the Agency would not require comparison to an alternative technology that cannot be used. Id.

 Section 734.505. The Agency does not believe that the rule needs to include language requiring more specific reasons for Agency’s decisions. PC 62 at 4. The Agency points out that the proposed rule already includes the statutory requirements that any rejection or modification of a plan, budget, or report by the Agency must include “[a] statement of specific reasons why” the Act or regulations may be violated if the plan, budget, or report is approved. PC 62 at 4-5.

 Section 734.510. The Agency takes issue with CW³M’s suggested changes to Section 734.510(b). PC 62 at 5. The Agency states that CW³M’s suggestion deletes standards the Agency has long been required to use when conducting financial reviews and replaces the standards with a requirement that the Agency determine that the costs are consistent with Part 734. Id. The Agency asserts that this change is inappropriate because by statute the Agency must determine if the costs are reasonable, are incurred in performance of site investigation or corrective action, are not for activities in excess of those required to meet the Act. Id, citing 415 ILCS 5/57.7(c)(3) (2004). The Agency comments that the standards in Section 734.510(b) repeat the long existing standards in Section 734.505(c), and those standards mirror the statutory requirements for reviewing costs. Id. The Agency argues that the standards should stay in the rule. Id.

 Section 734.605. The Agency disagrees with suggestions by CW³M that rule be changed concerning the proof of payment of subcontractors, before handling charges will be reimbursed. PC 62 at 5-6. The Agency concedes that a businesses’ workload increases as the number and complexity of projects increase; however increased workload should not excuse proper documentation of costs. PC 62 at 6. The Agency notes that the Board took notice of the fact that the existing rules for UST reimbursement already prohibit payment of handling charges if the primary contractor has not paid the subcontractor. Id. Further, the Agency notes that the Board already considered deleting the proof of payment requirement and rejected the request. Id. However, the Board did provide additional language to clarify that proof of payment can be met in many ways, points out the Agency. Id. The Agency believes the Board’s proposed language is appropriate and the changes suggested by CW³M are not necessary. PC 62 at 7.

 The Agency also takes issue with CW³M’s suggested changes to the one-year deadline for submittal of reimbursement applications after an NFR letter has issued. PC 62 at 7. The Agency believes that the suggested change nullifies the one-year deadline for submitting reimbursement applications because the deadline can be extended for any reason. Id.

 Section 734.625. In response to suggestions by CW³M that additional items be added to the list of eligible costs, the Agency comments that the list is not an exclusive list. PC 62 at 7. The Agency states that Section 734.625(a) merely contains examples of costs that may be eligible and eligibility of a certain cost is not dependant upon listing in this section. Id. The Agency states that adding the costs suggested by CW³M will not make those costs any more eligible. Id. The Agency comments that attempting to identify in the rules every cost that is eligible would create a massive list in the rules. Id.

 Section 734.630. The Agency responds to several suggested changes to this section. The Board will summarize each of those responses below.

 Section 734.630(w). The Agency does not believe that deletion of the word “compaction” from this subsection, as suggested by CW³M, is appropriate. PC 62 at 8. The Agency asserts that costs associated with compaction of backfill have long been ineligible for reimbursement and sufficient justification for a change has not been offered. Id. The Agency further argues that returning the subsurface of a site to pre-excavation condition that is suitable for redevelopment is not required as a part of corrective action and thus exceeds the minimum requirements of the Act. PC 62 at 8, citing e.g., McDonald’s Corporation v. IEPA, PCB 04-14 (Jan. 22, 2004). Furthermore, the Agency comments that the Board in this proceeding has already addressed the issue of compaction costs. PC 62 at 9, citing R04-22, 23 (Feb. 17, 2005) at 82.

 Section 734.630(gg). The Agency notes that currently costs incurred after issuance of an NFR letter are generally ineligible for reimbursement. PC 62 at 9. The exceptions to this ineligibility are specified in the rule. Id. The Agency points out that at first notice the Board proposed three new exclusions to the prohibition against reimbursement. PC 62 at 9. CW³M has suggested additional exclusions, all of which the Agency believes are inappropriate. PC 62 at 9-11.

 First, the Agency argues that reimbursement for incremental costs incurred by a highway authority would be inappropriate. PC 62 at 10. The Agency asserts that the Board determined in a prior rulemaking that costs incurred pursuant to highway authority agreements are not eligible for reimbursement. PC 62 at 10, citing Regulation of Petroleum Leaking Underground Storage Tanks: Amendments to 35 Ill. Adm. Code 732, R01-26 (Feb. 21, 2002). Thus, the Agency argues reimbursement is improper. Id.

 Second, the remaining exclusions suggested by CW³M are also not appropriate, argues the Agency. PC 62 at. 11. The Agency states that the Agency agrees with the Board’s statement in a R01-26 that “absent special circumstances such as MTBE contamination, the UST Fund should not be used to pay for remediation costs once the Agency issues an NFR letter.” PC 62 at 11, citing R01-26. The Agency points out that the Board further noted that “an NFR letter does not absolve a UST owner or operator from liability for cleaning up off-site releases, even where an NFR letter has been issued.” Id. The Agency states that the Board has already acknowledged in previous rulemakings that while an owner/operator may be liable for remediation after issuance of an NFR letter, remediation conducted after the issuance of the NFR letter is not eligible for reimbursement from the UST Fund. PC 62 at 11.

 The Agency argues that the changes suggested by CW³M are not consistent with the exclusions added by the Board. PC 62 at 12. The Agency asserts that the changes suggested by CW³M do not address activities related to corrective action conducted prior to the issuance of an NFR letter, nor do they address activities conducted pursuant to the Board’s UST rules or Board or court order. Id. The Agency does not believe the changes are appropriate or that CW³M has provided sufficient justification to warrant a change in the proposal. Id.

 Section 734.630(oo). The Agency states that CW³M and CSD suggest a change to allow the payment of handling charges when the prime contractor and subcontractor are related entities. PC 62 at 12. The Agency characterizes CW³M and CSD’s arguments as centering on the fact that the prime contractor incurs costs for administration, insurance, and interest costs, and a reasonable profit for procurement, oversight, and payment of the subcontract. Id. The Agency asserts that unlike where a third party is the subcontractor, the primary contractor does not incur many of these costs when a related entity is subcontracted. PC 62 at 13. Further the Agency argues that “where such costs are incurred for related subcontractors they are the result of the prime contractor’s or its owner’s decision to conduct business through multiple entities instead of a single entity.” Id. The Agency states that there are many reasons for conducting business through several entities; but one result is an increase in the cost of conducting business. Id. The Agency does not believe the UST Fund should be used to cover such additional costs. Id.

 Section 734.630(aaa). The Agency does not believe the deletion of the word “maximum” in the phrase “maximum payment amount” is appropriate. PC 62 at 13. The Agency states that the change was suggested by CW³M; however no supporting testimony was offered, according to the Agency. Id. The Agency states that the Board considered and declined to change the phrase “maximum payment amount” in the first-notice opinion and the Agency agrees with the Board’s decision. Id.

 Section 734.630(ccc). The Agency does not believe that the deletion of this subsection as suggested by CW³M is necessary. PC 62 at 14. The Agency states that the proposed rule does not require the reclassification of groundwater by an adjusted standard so CW³M’s reliance on 35 Ill. Adm. Code 620.260 has not been adequately explained, according to the Agency. Id. In response to CW³M’s claim that this subsection has a negative effect on property values, the Agency asserts that the effect of remediation on property values is not a factor in UST Fund reimbursement. Id. The Agency asserts that reimbursement for the UST Fund is limited to costs necessary to meet the requirements of the Act and use of a groundwater ordinance as an institutional control meets the minimum requirements. Id.

 Section 734.665. The Agency is opposed to changes in auditing language proposed by CW³M. PC 62 at 15. The Agency argues that although the owner/operator is the individual charged with providing the plans, reports, budgets, and applications to the Agency, those documents are often submitted directly by the consultant. Id. The Agency maintains that in many cases the owner/operator’s only involvement is signing the documents and as a result the owner/operator is unlikely to have additional information about the documents. Id. The Agency asserts that limiting the Agency’s review to information maintained by the owner/operator would limit the review to the document the Agency already has, in most instances. Id. The Agency asserts that the Agency needs to review information maintained by the owner/operator’s consultant in order to conduct a complete and proper review of the information for the owner/operator. Id.

 The Agency further states that providing a list of documents required during an inspection is impossible because the Agency cannot know what information is in the possession of the consultant or owner/operator until the Agency conducts the review. PC 62 at 15. The Agency does not believe that the suggested changes are necessary or that CW³M has provided sufficient justification to warrant a change. PC 62 at 15-16.

 Section 734.800. The Agency argues that the changes suggested by CW³M and CSD would entirely alter the intent and effect of Subpart H. PC 62 at 17. The Agency states that the rates in Subpart H are maximum payment amounts, not “speed bumps” for reimbursement. Id. The Agency asserts that allowing reimbursement above the maximum payment amounts outside of the bidding and unusual or extraordinary circumstances provisions would render those provisions superfluous. The Agency also believes that the changes suggested by CW³M would result in frequent attempts to exceed the “threshold” amounts in the rules rather than routine requests at or below those rates. Id.

 As to the suggested change to allow for tasks not specifically listed under a maximum payment amount to be reimbursed separately, the Agency believes that such a change will eventually result in Subpart H becoming a reimbursement on time and materials basis for every item not specifically identified in the rules. PC 62 at 18. The Agency states that developing an all-inclusive list of costs associated with each task identified in Subpart H would be impossible. Id.

 The Agency summarizes CW³M’s next suggested change as amending the proposal to eliminate the submission of cost breakdowns and invoices for costs paid by lump sum or unit of productions and to allow for payment in excess of maximum payment amounts if the applicant justifies the reasonableness on a time and materials basis. PC 62 at 19. The Agency asserts that CW³M does not provide any additional testimony to support these changes. Id. As to the first change, the Agency states a description of the supporting documentation the Agency believes is necessary in a reimbursement application is already in the record of this proceeding, but one item would be an invoice with minimum information to document the costs requested for reimbursement. Id. In response to the second change, the Agency notes that the Board’s proposal allows for exceeding the maximum payment amounts via bidding and the unusual or extraordinary circumstances provisions. Id.

 The next suggested change the Agency comments on is CW³M’s suggestion that a new subsection (d) be added to allow for reimbursement for emergency activities on a time and material basis. PC 62 at 19. The Agency argues that the record contains nothing to demonstrate that emergency activities need to be reimbursed differently than non-emergency activities. Id. The Agency states that under the proposal emergency activities will be reimbursed to the same extent and in the same manner as non-emergency activities and the Agency does not believe the suggested change is necessary. Id.

 Section 734.810. The Agency opposes CW³M’s suggestion to exclude several costs from the maximum payment amounts allowed for UST removal and abandonment and instead to reimburse on a time and materials basis. PC 62 at 20. The Agency states that CW³M does not provide any reasoning for excluding the costs, nor does CW³M explain how the maximum rates suggested by CW³M were calculated. Id.

 CW³M suggests changing the maximum payment amounts for UST removal and abandonment. PC 62 at 20. The Agency states that CSD also suggests changing the amounts and bases the payment amounts on RS Means calculations. Id. CW³M and CSD have suggested different payment amounts, according to the Agency. Id. The Agency notes that PIPE had previously suggested alternative amounts based on the RS Means calculations and the Board rejected those suggestions in the first-notice opinion. PC 62 at 21, citing R04-22, 23 (Feb. 17, 2005) at 81.

 The Agency argues that CSD and CW³M have not provided sufficient testimony to show why the Board should adopt their suggested rates over those proposed. PC 62 at 21. The Agency further argues that CSD and CW³M have not provided sufficient testimony as to why the bidding and unusual or extraordinary circumstances provisions will not allow for reasonable reimbursement in excess of the maximum payment amounts when required. Id.

 Section 734.820. According to the Agency, CW³M recommends that a provision be added to make the maximum payment amounts for travel associated with professional consulting services also applicable to drilling costs to cover drilling contractors’ mobilization charges. PC 62 at 22, citing Exh. 106 at 21. USI also takes issue with the omission of a maximum payment amount for mobilization. PC 62 at 22, citing Exh.109 at 40. The Agency does not believe the suggested changes are necessary. PC 62 at 22.

 The Agency states that the Agency provided testimony that mobilization costs were include in the drilling rates proposed by the Agency. PC 62 at 22, citing Tr.3 at 46-47. Further, the Agency states the Board’s proposal includes mobilization charges in the maximum payment amounts for drilling. PC 62 at 22. The Agency counters that the rates proposed by CW³M to be made applicable to drilling were developed and intended to be used with professional consulting services. Id. The Agency asserts that neither CW³M or USI have provided sufficient additional testimony to support their suggested changes and the Agency does not believe the changes are necessary. Id.

 Section 734.825. The Agency summarizes CW³M’s suggested changes as: (1) basing maximum payment amounts upon amounts approved by IDOT; (2) changing the “swell factor” and “weight/volume” conversion factor to 1.2 tons per cubic yard; and (3) adding $14.25 per cubic yard for “additional expenses” associated with the transportation of soil that is temporarily stockpiled on-site or off-site. PC 62 at 23. The Agency opposes all of these changes. PC 62 at 23-25.

 Concerning the amounts approved by IDOT, the Agency reiterates that Exhibit 89 was presented by the Agency at hearing. PC 62 at 23. Exhibit 89 is a letter from IDOT which states that costs in IDOT’s contracts should not be used to justify or compare with costs proposed by the Agency in this rulemaking. Id. The Agency notes that the Board considered testimony by CW³M on this issue and the Board declined to make a change. Id. The Agency asserts that CW³M has not provided sufficient additional testimony to support this change. Id.

 The Agency points out that CW³M previously suggested a “swell factor” and “weight/volume” conversion factor of 1.68 tons per cubic yard. PC 62 at 24. The Agency continues on to note that the Board received a great deal of comment and testimony prior to first notice regarding “swell factor” and “weight/volume” conversion, and the Board proposed a 1.5 per cubic ton conversion factor. Id. The Agency asserts that CW³M does not provide any testimony regarding how the suggested “swell factor” and “weight/volume” conversion factor of 1.2 was calculated or why the conversion factor should now be 1.2 instead of 1.68. Id.

 The Agency states that CW³M does not provide testimony sufficient to establish why the Board should adopt a rate of $14.25 for additional expenses. PC 62 at 24. Rather, the Agency argues that CW³M merely suggest arbitrarily increasing the maximum amount by a sum roughly equal to the transportation charge for hauling contaminated soil to a landfill even in cases where the soil is stockpiled on-site. PC 62 at 24-25. The Agency does not believe this change is necessary.

 Section 734.830. The Agency opposes CW³M suggestion that a mobilization fee or “stop fee” be included for drum disposal in this section. PC 62 at 25. The Agency states that the proposed rule’s maximum payment amount already includes a “stop fee” or other travel fees associated with drum disposal. Id. Further, the Agency argues that the fees in Section 734.845(e) were developed and intended to be used for travel costs associated with professional consulting service, not drum disposal. Id. The Agency asserts that CW³M has not provided any additional testimony to show why a “stop fee” must be added to the maximum payment amounts proposed by the Board. Id.

 Section 734.840. The Agency disagrees with CW³M’s suggestion to change the maximum payment amounts associated with concrete, asphalt, and paving. PC 62 at 26. The Agency notes that CW³M supports the suggested change by referencing testimony offered prior to the Board’s adoption of the first-notice proposal and CW³M states that the suggested rates are consistent with prevailing rates. PC 62 at 26, citing Exh. 106 at 25. The Agency argues that the Board has already considered CW³M’s prior testimony and declined to make changes. PC 62 at 26. Further, the Agency asserts that CW³M has not provided additional testimony to show why the Board should adopt the suggested change. Id.

 Section 734.845. The following discussion will be divided into two sections as the Agency’s comment responds first to suggestion by CW³M and then to comments by USI.

 CW³M. The Agency characterizes CW³M’s suggestion as “changing the maximum payment amounts for professional consulting services into absolute payment amounts.” PC 62 at 27. The Agency asserts that with such changes, the rules would mandate that the Agency reimburse the full maximum payment amount for a task regardless of the actual cost or charge for the task. Id. The Agency does not believe that an owner/operator should be reimbursed for the full maximum payment amount if the owner/operator is charged less than that amount. Id. The Agency asserts that amounts exceeding the total charged to the owner/operator would not be reasonable, would not have been incurred in the performance of corrective action or site investigation, and would be in excess of costs necessary to meet the minimum requirements of the Act. Id. The Agency asserts that the amounts would therefore be ineligible for reimbursement. Id.

 The Agency also opposes CW³M’s suggested changes to the maximum payment amounts throughout the section. PC 62 at 27. The Agency argues that the changes are not supported by additional testimony from CW³M and are unnecessary. Id.

 USI. The Agency states that “[a]lthough USI believes the maximum payment amounts set forth” in other sections of Subpart H “are appropriate” and USI has no “objection” to those rates, USI suggests wholesale changes to Section 734.845. PC 62 at 28. The Agency characterizes USI’s suggestion as “an elaborate and difficult to decipher system for calculating a series of different payment amounts” the Agency must use in reviewing reimbursement requests for professional consulting services. Id. The Agency notes that some payment amounts developed will be published while others would remain unpublished and known only to the Agency. Id. Further, the Agency notes that the changes include a database software to assist in the gathering of data for future development of rates. PC 62 at 28-29.

 The Agency’s response to USI’s wholesale changes, is that USI submitted significant information “at the last hour” regarding a “concept” for reimbursement of professional consulting services. PC 62 at 30. The Agency asserts that USI has not provided sufficient testimony to show why the Board should abandon the maximum payment amounts proposed and begin developing rules for a reimbursement system similar to the concept submitted by USI. Id.

 More specific criticism by the Agency is that the database software is complicated, confusing to understand, and cumbersome to use. PC 62 at 29. The database software requires breakdown of costs into minute detail with little to no quality control, according to the Agency. Id. The Agency also does not believe that the large majority of consulting firms would embrace the use of the database software. Id. Finally, the Agency feels implementation and maintenance of such a database would require significant resources the Agency does not have. Id.

 As to the concept proposed by USI, the Agency states that the use of rates not adopted in rules or otherwise made public is inappropriate. PC 62 at 29. The Agency points out that litigation resulted in the past from the Agency’s use of reimbursement rates not adopted by rule. Id. The Agency opines that setting up a system of generally applicable rates not adopted in rules only invites additional litigation. Id.

 The Agency argues that whether USI’s concept will result in reimbursement of reasonable remediation costs is not clear. PC 62 at 30. The Agency asserts that USI could not provide the amount or range of amounts an owner/operator would be reimbursed under USI’s concept. Id. However, the Agency maintains that based on USI’s data the amounts could be high. Id.

Response to Comments

 The Agency next commented on six points from the public comments received by the Board during the first-notice period. The following paragraphs summarize those comments.

 Cost Associated with Preparing and Submitting Applications. Concerning prefiled testimony from CSD regarding the costs of preparing and submitting reimbursement applications, the Agency states such costs are included in the amounts proposed for professional consulting services in Section 734.845. PC 62 at 31. The Agency believes the proposed amounts are sufficient to cover reasonable costs associated with the preparation and submission of reimbursement applications. Id. The Agency states that the frequency with which an owner/operator submits an application is left to the owner/operator. Id.

 Groundwater Ordinance. The Agency states that in PC 39, the premise of the comment is that defining the extent of groundwater contamination is unnecessary if there is a local ordinance as an institutional control. PC 62 at 31-32. The comment indicates that the such investigation is unnecessary due to “preexisting” groundwater institutional controls. Id. The Agency responds that there are no “preexisting” groundwater ordinance institutional controls. PC 62 at 32.

 The Agency maintains that to use a groundwater ordinance as an institutional control, the owner/operator must demonstrate that the TACO requirements for using an institutional control have been satisfied. PC 62 at 32. The Agency states that a part of the TACO requirements includes delineation of groundwater contamination. Id. The Agency argues that use of a groundwater ordinance as an institutional control does not meant that the ordinance will be approved for another site in the same municipality. Id.

 Bidding. In response to ACECI’s comment that federal and state governments are required to use “Qualification Based Selection” rather than bidding, the Agency states that the laws cited by ACECI are inapplicable. PC 62 at 34. The Agency asserts that professional service costs being reimbursed from the UST Fund are for services procured by the owner/operator, not the Agency. Id.

 Letters from USI. The Agency opines that based on a letter from USI, the Board is sure to receive additional form letters and petitions concerning the proposed rules. PC 62 at 35. The Agency concedes that they have every right to register their opinion; but the Agency “suspects” the opinions are based on USI’s characterization of the rulemaking and not a careful review of the record. Id.

Suggested Non-Substantive Changes to the Proposal

 The Agency suggested several non-substantive changes to the rule, which correct scrivener’s errors, as well as minor grammatical changes.

COMMENTS

 In addition to the participants above who offered both testimony and comments, the Board received comments from groups, individuals, and businesses, who did not testify. In all after first notice, the Board received over 60 comments, more than 20 comments were filed asking for an additional hearing in Southern Illinois. The Board responded to those comments and held the July 27, 2005 hearing in Carbondale. The following discussion will summarize the remaining comments.

Comments from Senators

 Senator John Sullivan filed a comment with the Board noting that several constituents had contacted him concerning the proposed rule. PC 65. Senator Sullivan asked that the Board carefully review all proposed changes and the impacts on small businesses and municipalities. Id.

 The Board received a comment from Senator Chris Lauzen asking that a ruling be delayed until a more suitable solution can be developed. PC 69 ³ . Senator Lauzen expresses concerns that the rules as proposed are not justifiable and will potentially reduce property values while imposing improperly calculated maximum payment rates. Id.

 The Board received a comment from Senator Gary Dahl, who has concerns that the proposed rules are inequitable and lack a rational basis. PC 69. Senator Dahl believes that the changes as proposed would not be in the best interest of property owners, municipalities, taxpayers, and Illinois. Id. Senator Dahl asks why the rules are being changed at this time and for the justification for the rules. Id.

 Senator Arthur Wilhelmi signed a request for delay of this rulemaking, while Senator John Jones signed a statement of support for USI’s revisions. PC 69. Senator Frank Watson signed both a statement of support and a request for delay. Id. Senator David Luechtefeld also signed both a statement of support and a request for delay. Id.

Professionals of Illinois for the Protection of the Environment (PIPE)

 PIPE comments that the Board’s sole concern with the UST Fund should be the broad purpose of the leaking UST regulations. PC 70 at 2. PIPE asserts that the broad purpose is “to provide assurance” that the UST program meets the goal for which the program was established, the remediation of Illinois leaking UST sites that are eligible for reimbursement through the UST Fund. Id. PIPE argues that before moving to second notice the Board should be convinced that the adoption of this proposed rule will result in the remediation of more sites and not less. Id.

 PIPE asserts that the rule is very controversial without supporters except the Agency and perhaps the Board. PC 70 at 2. PIPE notes that the most vocal opponents are members of PIPE who are small Illinois companies that remediate a substantial percentage of the UST sites for downstate owners outside of urban markets. PC 70 at 3.

 PIPE argues that the evidence in this proceeding establishes that owners/operators will be required to pay out of pocket a large percentage of the actual cost of remediation. PC 70 at 3. PIPE states that where this is not possible there will likely be no remediation. Id. PIPE opines that given the evidence, how can the Agency’s proposed rates be considered reasonable reimbursement? Id.

 PIPE also comments that the rule is fatally flawed because the rule does not include a scope of work for the tasks and thus fails to identify what actual work the Agency will consider reimbursable. PC 70 at 4. Further, the Agency has refused to design a process that allows for cost disputes to be effectively resolved and if the rule is adopted, there will be a “virtual vacuum of review.” Id.

 PIPE argues that they and other participants have presented information and evidence in this rulemaking and the Act does not require participants to provide a viable rule as alternatives. PC 70 at 4. The Board is acting in a quasi-legislative capacity, and this is a fact-find proceeding, according to PIPE. Id. PIPE asserts that without substantial changes, the Agency’s proposal is not ready for review by JCAR at second notice. PC 70 at 5. PIPE asks the Board to substantially amend the rule, even if the rule must return to first notice. Id. Alternatively, PIPE asks the Board to write an opinion that analyzes the approach submitted by PIPE members and directs the Agency to work with participants to develop a new first-notice proposal. Id.

American Council of Engineering Companies of Illinois (ACECI)

 ACECI comments that there are two issues ACECI has with this proposal. First, ACECI takes issue with price bidding instead of “Qualification Based Selection” of professional services. PC 58 at 1. Second, ACECI takes issue with the lack of a clearly defined scope of work. Id.

 “Qualification Based Selection” vs. Bidding. ACECI asserts that the bidding process in Section 734.855 for professional services is not consistent with federal and state policy. PC 58 at 1. ACECI states that federal agencies are required to use “Qualification Based Selection” when procuring professional services and Illinois has a similar law which also requires “Qualification Based Selection” for professional services. Id. ACECI believes that for the Agency to require bidding by private tank owners when bidding goes against public policy for government agencies is unreasonable. Id. ACECI recommends that professional services be exempt from the bidding process. Id.

 Scope of Work. ACECI has a continuing concern with the lack of a clear delineation of the scope of work for professional services. PC 58 at 2. ACECI asks that the Board add scopes of work to the appendix using the information provided by Mr. Daniel Goodwin in his testimony for the May 11, 2004 hearing. Id. ACECI also believes that the maximum rates are too low for some tasks based on the estimated hours in Mr. Goodwin’s testimony. Id. Also ACECI notes that there are tasks necessary for site investigation which is not included in Section 734.845. Id.

Concerns of Small Businesses

 The Board received comments from eight different individuals or businesses that expressed the same basic sentiment. Those comments were:

PC 41 Michael R. Oltman of Nokomis Tire & Auto Repair

PC 42 Wilma Schleifer of Schleifer Petroleum Co., Inc.

PC 43 Chris A. Barnes, President, Spectrulite Consortium, Inc.

PC 44 Kent and Hal Devore, former owners of Devore Marina, Inc

PC 45 Bob Foerster, President, Bob's Service Center

PC 49 Tom Mueller

PC 51 Greg Courson of Advanced Environmental Drilling & Contracting, Inc.

PC 53 John Komocar

In essence, each of these commenters indicated a lack of support for revisions which would result in an increased cost to them as owners/operators of USTs. The commenters expressed their reliance on environmental professionals and the UST Fund to cleanup their sites. The commenters urged the Board not to adopt a rule that was not thoroughly supported by scientific or statistical data.

 Ms. Becky Canty, Superintendent of Elverado Unit #196 Schools in Elkville, Illinois, submitted PC 54. Superintendent Canty indicated that Elverado Unit 196 is involved in a single incident cleanup and based on her observations she presents these comments. PC 54 at 1. Superintendent Canty states that trying to make specifications from generalizations is never a good process, as one size does not fit all. Id. Superintendent Canty notes that the UST Fund tremendously assists owners/operators who are forced to function within stretched and strained budgets. PC 54 at 2. The process is incredibly complicated and reliance on the consultants is critical to the effectiveness of a proper cleanup. Id. Superintendent Canty insists that owners/operators should not be held hostage to an inflexible system. Id.

 Kevin Majors with R.L Hoener Company commented that his company does not support the maximum payment amount for tank removal. PC 50. Mr. Majors states that there are too many factors in pulling or abandoning tanks and setting a price is difficult. Id.

 HDC Engineering filed a comment that includes petitions signed by clients of HDC Engineering. PC 52. The petitions are identical to those submitted by USI and CDS discussed above.

Specific Issues Concerning the Proposed Rule

 Midwest Petroleum filed a comment regarding the proposal’s limitation for reimbursement to Tier 2 TACO and the inability to access the UST Fund after issuance of an NFR. PC 57. Midwest Petroleum recounted a situation where, at the urging of an Agency project manager, an environmental land use control (ELUC) and groundwater restrictions were applied. Id. According to Midwest Petroleum both the adjoining property owner and IDOT will hold Midwest Petroleum liable if contamination is found at a later date. Id. Midwest Petroleum expresses concern that if the Board adopts the rule, Midwest Petroleum will be unable to access the UST Fund for cleanup at those sites. Id.

 Clayton Group Services comments that many of the amounts are substantially lower that competitive prices for the Chicago area. PC 56. Clayton Group Services also takes issue with the bidding process noting that the bidding process is cumbersome and questioning whether costs associated with preparing the bids would be eligible for reimbursement. Id. Clayton Group Services states that it would not bid a project if payment were based on the maximum payment amounts or be subject to the bidding process. Id.

 Mr. Raymond T. Reott of Reott Law Offices LLC offered specific language changes to the proposed rule. PC 39 at 1-2. Mr. Reott comments that an ambiguity exists in the language in several places where investigation of a site is required if the most stringent Tier 1 remediation objectives have not been met. PC 39 at 1. Mr. Reott notes that such investigation is not warranted if the only migration pathway has been severed by a preexisting institutional control. Id. Specifically, Mr. Reott states that in Chicago a groundwater ordinance exists as an institutional control and requiring investigation of a site where the only migration would be a groundwater pathway is not warranted. Id. Mr. Reott also suggest that clarifying language be added in Section 734.630(ccc) to include soil remediation in situations like those in Chicago. PC 39 at 2.

UST FUND PROGRAM AND REIMBURSMENT

 Section 57 of the Act states that the intent and purpose of the leaking UST program is:

“Corrective Action” is defined as activities associated with compliances with the provisions of Section 57.6 and 57.7 of the Act. 415 ILCS 5/57.2 (2004). “Site investigation” is defined as activities associated with compliances with the provisions of subsection (a) of Section 57.7 of the Act. Id.

 Section 57.7(c)(3) of the Act provides:

In approving any plan submitted pursuant to subsection (a) or (b) of the Section, the Agency shall determine, by a procedure promulgated by the Board under Section 57.14, that the costs associated with the plan are reasonable, will be incurred in the performance of site investigation or corrective action, and will not be used for site investigation or corrective action activities in excess of those required to meet the minimum requirements of this Title. 415 ILCS 5/57.7(c)(3) (2004).

This language is repeated in Section 57.7(4)(C) of the Act, as amended by P.A. 92-574. Thus, the Act requires reimbursement for activities necessary to “meet the minimum requirements” of the Act.

 The Board has long held that costs that are not corrective action will not be reimbursed. See McDonald’s Corporation v. IEPA PCB 04-14 (Jan. 22, 2004); Rosman Enterprise Leasing Company v. IEPA, PCB 91-174 (Apr. 9, 1992); and Platolene 500 v. IEPA, PCB 92-9 (May 7, 1992). The Board has found that items such as compaction of backfill, concrete replacement, and pumping and disposal of water are not eligible for reimbursement, if not corrective action. See McDonald’s Corporation v. IEPA PCB 04-14 (Jan. 22, 2004); Richard and Wilma Sayer v. IEPA, PCB 98-156 (Jan. 21, 1999); Clarendon Hills Bridal Center v. IEPA, PCB 93-55 (Feb. 16, 1995).

SUMMARY OF FIRST-NOTICE ACTION BY THE BOARD

 The Board’s first-notice opinion examined 20 issues and determined that many changes were necessary to proceed with the proposal. The Board amended the language of the applicability section to clarify that the rules could not be applied retroactively, in response to comments from PIPE. R04-22, 23 (Feb. 17, 2005) at 63. The Board amended the language concerning the removal of free product. R04-22, 23 (Feb. 17, 2005) at 64. The first-notice proposal also clarified that only available alternative technologies should be compared to one another and conventional technologies. R04-22, 23 (Feb. 17, 2005) at 65. The Board added a procedure to allow for bidding of tasks when the maximum payment amounts are too low. R04-22, 23 (Feb. 17, 2005) at 67. The Board amended the language to allow for additional mechanisms to prove payment to subcontractors. R04-22, 23 (Feb. 17, 2005) at 72. The Board decided not to declare permit and government fees as ineligible costs. R04-22, 23 (Feb. 17, 2005) at 74. The Board also allowed for Stage 3 site investigation plans to be reimbursed based on time and materials. R04-22, 23 (Feb. 17, 2005) at 80. The Board did not make substantive changes to the remainder of Subpart H, nor did the Board adopt scopes of work. However, the Board requested additional comment on those issues as well as many others.

 Contrary to the charges of several commenters after proceeding to first notice, the Board did not “ignore” other suggestions from industry. In fact some of the changes made were changes suggested by participants other than the Agency. Where the Board decided not to adopt suggestions from groups such as PIPE, CSD, or CW³M, the Board explained those decisions. For example in deciding not to adopt PIPE’s proposed alternative rates the Board stated:

The Board is not convinced that basing rates on RS Means in and of itself is appropriate. Although as indicated above, the Agency’s method for developing the maximum payment amounts had statistical limitations, the Agency’s rates were based on real data from actual sites in Illinois. Therefore, the Board rejects alternative rates, such as RS Means, and the Board will propose the rates as developed by the Agency for first notice. R04-22, 23 (Feb. 17, 2005) at 81.

Thus, the Board examined the rates proposed and determined that the data from actual sites in Illinois was the appropriate data to consider when writing the Board’s first-notice opinion.

 The Board regrets that some of the participants believe their comments have not been heard, but the Board disagrees. A comprehensive reading of the Board’s first-notice opinion demonstrates the Board’s careful consideration of all points of view in developing the first-notice proposal. The Board will continue to consider all the comments in developing the second-notice proposal.

SECOND-NOTICE ISSUES

 The Board has dissected the following list of issues to be discussed in the second-notice opinion.

DISCUSSION

 The Board’s discussion will follow the list of issues outlined above. The Board will first discuss certain general concepts and then proceed to more substantive issues. Finally, the Board will discuss miscellaneous comments from the participants and list any additional changes to the proposal.

1. General

 Before discussing the specific issues of this proceeding the Board would like to address some of the general comments and issues raised. The first comments in this category are the comments from Senator John Sullivan, Senator Chris Lauzen, Senator Gary Dahl, Senator Arthur Wilhelmi, Senator John Jones, Senator Frank Watson, and Senator David Luechtefeld. PC 65; PC 69. The Senators each expressed concerns about the economic impact of the rules and some asked that the rulemaking be delayed. In response to each of their concerns, the Board notes that we have carefully reviewed the testimony, comments and vast amount of information in this proceeding. As is reflected by today’s opinion, the Board takes the concerns of industry very seriously and the Board has attempted to address the concerns raised by the participants.

 Second, the Board wishes to address the testimony from USI regarding the indefensibility of the proposed rates in Subpart H of the rule. USI’s testimony, concerning the 69 sites reviewed, refers to the rates for professional consulting services. The post-hearing comments of both CSD and CW³M could be read to imply that USI’s statistical data is applicable to all the rates in Subpart H. However, USI clearly states in the final comment that the data being challenged concerns professional consulting services. Exh. 109 at 37-38.

 A third area of comments the Board will address here are the comments from PIPE, CSD, and CW³M suggesting that legislative action may be taken, if the Board does not address certain issues. Some of those issues will be discussed in more detail below. However, while the Board understands the position of industry in this rulemaking, some of the changes that PIPE, CSD, and CW³M are seeking are not within the Board’s authority to grant. As discussed below, allowing development of a standard of general applicability outside the rulemaking process would surely be in violation of the Act and the IAPA. Likewise, as discussed infra 54, the Board made changes to the rule in response to industry concerns prior to proceeding to first notice and the Board will make additional changes here today.

2. Professional Consulting Services (Section 732.845/734.845)

 As noted in the summary of first-notice testimony and comments, the proposed maximum payment costs associated with professional consulting services set forth at Section 732.845/734.845 continues to be a major issue of contention between the Agency and the regulated community. The participants, including PIPE, CSD, ACECI, USI and CW³M express serious concerns regarding the provisions of Section 732.845/734.845. The participants contend that the proposed maximum payment amounts for professional services are flawed since the proposal does not define the “scope of work” associated with the payments amounts. PIPE, CSD, ACECI, USI and CW³M also question the Agency’s methodology used in developing the hourly payment cost for professional consulting services.

 The participants argue that the rules do not provide any feasible options for establishing alternate maximum payment costs for professional consulting services. In this regard, the participants argue that the proposed bidding process is inappropriate for establishing alternative maximum payment costs, and the provisions for “extraordinary and unusual circumstances” is not a workable option without a defined scope of work. The participants also maintain that the hourly payment cost for professional services is significantly lower than the actual cost incurred by the consultants.

 The Agency supports the rules as proposed by the Board at first notice. The Agency maintains that the proposed payments costs are reasonable, and reflect activities that must be performed to meet the regulatory requirements. In the following sections, the Board provides a brief background on the proposed payment provisions, and a discussion of the issues concerning the scope of work and maximum payment costs for professional consulting services.

Background

 Briefly, the Board’s first notice regulations pertaining to payment for professional consulting services is based on the Agency’s initial proposal with one substantive change regarding the payment for Stage 3 site investigation under Part 734. The proposed provisions at first notice in Section 732.845/734.845 include the following maximum payment costs for professional consulting services:

In addition, the proposed regulations require payment of costs associated with a number of activities on either a daily charge basis or on a time and material basis. While the regulations specify maximum payment amounts for various tasks, they do not prescribe a detailed scope of work associated with each task. The methodology used by the Agency in developing maximum payment costs is described in the Board first-notice opinion. See R04-22, 23 (Feb. 17, 2005) at 25.

 Although, the regulated community voiced concern regarding the lack of definition of “scope of work” in the Agency’s proposal, the Board declined, at first notice, to define the “scope of work” associated with the lump sum payments mainly because of the inclusion of a bidding process for establishing alternative maximum payment costs, and the provision for addressing “extraordinary and unusual circumstances” in the proposed rule. Additionally, the Board relied on the Agency’s experience and testimony that the maximum payments account for variability from site to site.

Participants’ Concerns

 The regulated community has submitted extensive testimony and comments on the issue of scope of work and the maximum payment amounts in Section 732.845/734.845 since the adoption of the first-notice proposal. The testimony and comments express continuing concerns about the lack of a scope of work as well as the time and rates proposed at first notice. The following is a brief summary of some of the concerns.

 USI asserts that the failure to define the scope of work is a serious conceptual flaw of the proposed rules. Exh. 109 at 53. The participants state that the inclusion of a competitive bidding process for establishing alternative maximum payment fails to address their concern regarding the lack of definition of scope of work. First, USI and ACECI assert the concept of competitive bidding for professional services should be removed from the rules. Exh. 109 at 54; PC 63 at 9; PC 58. In this regard, ACECI states that bidding for professional services is inconsistent with the federal and state policy of procuring professional services on the basis of qualifications. USI maintains that even if the Board decides to retain competitive bidding for professional services, the proposed provisions would be impractical without a defined scope of work. Exh. 109 at 54-55. USI argues that it will be impossible for the Agency reviewers to make determinations on alternate bids without guidance on specific costs to be included in each maximum payment. Id.

 The participants also state that they will be unable to use the “extraordinary and unusual circumstances” provision at Section 732.860/734.860 to establish alternative payment cost without a defined scope of work. USI states that it will impossible to determine if a situation is “extraordinary or unusual” in the absence of standardized scope of work defining the “ordinary” situation. Exh. 109 at 58. Further, CW³M states that the “extraordinary or unusual circumstances” provision may not be available for developing alternative costs because of the Agency’s position that there will be very few reasons to accept or approve unusual or extraordinary circumstances. PC 63 at 8.

 Additionally, USI argues that the exclusion of a specific “scope of work” from the regulations and inclusion of “include, but limited to” language in the rules creates a very broad and undefined level of service. Exh. 109 at 52. USI asserts that while the Agency used the scope of work and time (hours) requirements developed by the ad hoc work group to determine the proposed maximum payment costs, the Agency changed or modified the ad hoc work group’s “scope of work” and did not include the “scope of work” for each “task” in Section 732.845/734.845. Exh. 109 at 51. USI maintains that the number of hours for performing various tasks presented by the ad hoc work group was very specific to the associated “scope of work” and were never intended to be used in the “include, but not limited to” framework proposed by the Agency in Section 732.845/734.845. Exh. 109 at 52. In this regard, CW³M notes that failure to include scope of work would result in additional tasks not considered in the development of the payment costs being included in the lump sum payments. PC 63 at 7. ACECI, PIPE, USI, and CW³M have submitted alternate proposals addressing the inclusion of “scope of work” for professional consulting services. Exh. 74, Attach. B; PC. 6; Exh. 109; PC 63.

 Regarding the maximum payment rates proposed for Section 732.845/734.845, USI performed a review of 69 randomly selected sites to evaluate current and historical reimbursements for professional services. Exh. 109 at 34. As a result of this review, USI and CW³M argue that the rates proposed in Section 732.845/734.845 are not consistent with the rates historically reimbursed by the Agency. Exh. 109 at 34; PC 63 at 5-6. Further, CW³M asserts that the maximum payment rates are inconsistent with OSHA requirements, which must be met at UST sites. PC 63 at 5-6. USI also argues that the Agency proposed the use of average costs for maximum payment amounts and this will cause havoc for owners/operators. Exh. 109 at 64. PIPE and CW³M both argue that if the rates proposed were more closely related to current reimbursement rates, this rulemaking would not have been as controversial and industry may have even supported the rule. PC 63 at 6; PC 70 at 2.

Discussion and Findings

 Upon a review of the testimony and comments, the Board agrees with the participants that a well-defined scope of work will be helpful in addressing concerns regarding payment for professional services. The Board’s adoption of the first notice provisions at Section 732.845/734.845 was premised on the belief that the alternative bidding process, and the “unusual or extraordinary circumstances” provision would provide alternative means of establishing maximum payment costs. However, as discussed in more detail below, the Board finds that the bidding process is not appropriate for choosing professional services. Supra at 74. Further, given the Agency’s position that the “unusual or extraordinary circumstances” provision is not meant for addressing alternative maximum payment costs on a routine basis, the Board agrees with the participants that Section 732.860/734.860 do not provide for an alternative means for establishing alternate payment costs for professional consulting services. Moreover, the Board agrees with the participants that it would be difficult for a consultant to demonstrate that the costs above the maximum payment costs are due to extraordinary or unusual circumstances without a defined scope of work.

 The Board also agrees that the maximum payment rates for professional services in Section 732.845/734.845 should be examined more closely. In particular, given the evidence provided by USI’s review of 69 randomly selected sites, the Board is convinced that the rates need to be adjusted to reflect the actual scope of work and current market rates.

 In light of the above, the Board finds that the proposed framework for maximum payment costs for professional services needs to be revised. Specifically, the rule must include a scope of work for the tasks for which the rules specify lump sum payment amounts and lump sum rates which more accurately reflect current and historical reimbursement rates. The rules must also allow for payments based on time and materials for any work performed beyond the specified scope of work that is required to meet the applicable regulatory requirements. Further, the Board agrees with PIPE and CW³M that it is prudent to allow all participants and the Agency to provide further input on the revisions to Section 732.845/734.845. In view of this, the Board will propose changes to Section 732.845/734.845 in a rulemaking subdocket for further consideration. The Board will discuss the alternate proposals submitted by the participants and the proposed revisions to Section 732.845/734.845 in Subdocket B of this rulemaking.

3. Maximum Payment Amounts

 In this section, the Board will generally address the issue of maximum payment amounts. Later in the opinion the Board will discuss specific rates and how the Board will address the concerns about those rates.

 The issue of whether the maximum payment amounts proposed in Subpart H are sufficient is an ongoing source of disagreement not just between the Agency and industry, but also within the industry. Industry has provided alternative proposals since the Board adopted the first notice. Generally, those alternative proposals would have the Board establish rates that are “threshold” or “expedited” amounts, which would be approved by the Agency without a lengthy review. See Exh. 99 at 2-3; PC 63 at 3; and Exh. 109 at 68. The alternative proposals also suggest a system where either rates or scopes of work are developed outside the rulemaking process. See Exh. 109 at 68; PC 64 at 3.

 In addition to the alternative proposals, the comments and testimony received since first notice challenge the Agency’s experience relied upon in developing the maximum rates as well as the use of historical averages as a maximum rate. See Exh. 101 at 4; PC 64 at 1-2; PC 63 at 5; Exh. 109 at 63-64. The statutory authority for adoption of maximum rates was also challenged. PC 109, Attach 23.

Alternative Proposals

 The Board greatly appreciates the time and effort expended in developing alternative proposals in this proceeding. The Board will adopt some of the suggestions contained in those proposals as discussed later in this opinion. However at this time, the Board is not prepared to adopt the use of “threshold” or “expedited” amounts in place of the maximum payment amounts in Subpart H. The reasons for this are two-fold. First, the Board believes that the mere adoption of these rates will expedite the review process for remediation at UST sites in Illinois. As one of the concerns from the participants is that the review of applications takes too much time, this should alleviate some of the time necessary to review the reasonableness of the reimbursement request.

 Second, CW³M’s alternative proposal and USI’s alternative proposal include provisions that would have rates and/or scopes of work developed outside the rulemaking process and published outside the rulemaking process. CSD also supports this type of development. USI’s proposal even suggests that the Agency develop maximum rates that are not published. Obviously the Agency opposes this concept, as does the Board. The Board cannot adopt a procedure that allows for development of a standard of general applicability outside the procedures of the Act and the IAPA, because that procedure would be a violation of both statutes. Thus, the Board finds that adopting the concepts proposed by CW³M’s and USI’s alternative proposal would result in a process that violates the Act and the IAPA. Therefore, the Board will not adopt the concept.

Sufficiency of Rates

 The Board notes that USI stated that in general the rates proposed in Subpart H are acceptable with the use of both the bidding process and the unusual and extraordinary circumstance provisions. In making this determination, USI employed three tests. The first test was whether the “unit of measure” assigned to the work activity was appropriate to the work being performed. Exh. 109 at 37-38. The second test was whether the regulations provided sufficient detail to allow a scope of work to be authored for a bid specification to allow for competitive bidding. Exh. 109 at 38-39. The third test was whether USI believes the price accurately reflects prevailing market prices and the whether the price includes conditions likely to be encountered at most sites in Illinois. Exh. 109 at 39. However, USI does challenge the maximum rates for professional consulting services.

 CW³M’s alternative proposal would use the Agency’s proposed rates as interim rates until a process is in place to develop a database to be used in developing rates. PC 63 at 4. CW³M specifically states that CW³M does not endorse the rates as proposed. Id.

 In proceeding to first notice with the proposal the Board stated:

The Board will not discuss each and every proposed lump sum maximum payment amount; however, the Board has carefully reviewed all the rates proposed by the Agency. Other than the rates discussed in more detail in this opinion, the Board finds the rates are reasonable and supported by the record. R04-22, 23 (Feb. 17, 2005) at 79.

Given the acceptance by USI, and even CW³M, of many of the maximum payment amounts listed in Subpart H, the Board finds that the maximum payment amounts, except as discussed below, are reasonable and supported by the record. The Board, as discussed above, further finds that absent a defined scope of work, the record does not support the rates for professional services in Section 732.845/734.845. The Board will amend the rule to allow for professional services to be reimbursed based on time and materials basis.

Statutory Authority

 As discussed above and in the Board’s first-notice opinion, Section 57.7(b)(2) of the Act allows reimbursement for corrective action that mitigates “any threat to human health, human safety, or the environment resulting from the underground storage tank release.” 415 ILCS 5/57.7(b)(2) (2004). Section 57.7(c) of the Act (415 ILCS 5/57.7(c) (2004)) requires the Agency to determine that costs associated with any plan “are reasonable, will be incurred in the performance of site investigation or corrective action, and will not be used for site investigation of corrective action activities in excess of those required to meet the minimum requirements of this Title.” 415 ILCS 5/57.7(c) (2004). The Board has examined a substantial and detailed record in this proceeding and based on that examination, the Board has found the maximum payment rates to be “reasonable” and not in “excess” of activities necessary to meet the “minimum” requirements of the Act. For this reason, employing maximum payment rates is consistent with the Act and therefore appropriate for the Board to adopt.

4. An Agency Database

 An ongoing issue in this proceeding has been the quality of the data available to develop rates. Participants asked prior to first notice and again after first notice that the Board require the Agency to develop a database sufficient to support rates. More specifically, both USI and CW³M, in their alternative proposals, suggest that additional data be developed concerning the maximum payment amounts in Subpart H. USI offered testimony concerning the use of Automated Budget and Reimbursement Approach (ABRA) to collect data concerning both rates and scope of work. Exh. 109 at 72. The Agency is concerned that the database software presented by USI is complicated, confusing to understand, and cumbersome to use. PC 62 at 29. The Agency also does not believe that the large majority of consulting firms would embrace the use of the database software. Id. Finally, the Agency feels implementation and maintenance of such a database would require significant resources the Agency does not have. Id.

 The Board addressed the issue of requiring the Agency to develop and maintain a database concerning reimbursement rates and scopes of work at in the first-notice opinion. The Board stated:

The Board acknowledges that many participants have made meaningful comments about the value of an electronic database to track reimbursement rates. However, the Board will not require the Agency to develop an electronic database of reimbursement information. The Board is not convinced that an electronic database is necessary to administer either these specific rules or the UST program. R04-22, 23 (Feb. 17, 2005) at 68.

The Board appreciates the efforts of USI to seek out the development of a system that will allow for collection of data concerning reimbursement rates as well as the scope of work for tasks. However, the participants are in effect asking the Board to direct the Agency to maintain or developed a process to be used internally by the Agency. The Board is unwilling to direct the Agency to do so, especially given the financial consequences to the Agency for the development and maintenance of such a process. And as stated at first notice, the Board is not convinced that an electronic database is necessary to administer either these specific rules or the UST program. Therefore, the Board will not direct the Agency to either use the ARBA system or develop a system for collection of data concerning reimbursement rates.

5. Agency Review Process

 The issue of how the Agency performs reviews of materials submitted in the UST program and the length of time such reviews take has been discussed from the beginning of this rulemaking process. Most recently, CSD expresses concern that due process is not afforded to owners/operators who cannot afford to appeal an adverse Agency decision to the Board. PC 64 at 4. CSD demands that the Board provide an alternative to appeals to the Board in the rule or legislative action may be necessary. Id. CW³M takes issue with Agency suggestions that the length of time a review takes is because of the submissions by consultants. Exh. 106 at 7. CW³M argues and provides statistics to demonstrate that review times often are dependent on the Agency reviewer. Id. CW³M also asks that the Board require the Agency to include more detail in denial letters. Exh. 106 at 13.

 These same issues were raised prior to first notice, although worded somewhat differently. At hearing and in comments, PIPE sought issuance of a pre-denial letter, shortened review times, and alternative dispute resolution procedures. PC 6 at 21 and Tr.7 at 215-16. CSD, a member of PIPE, now maintains that “due process” is not afforded because some owners/operators cannot afford to appeal to the Board.

 The Board disagrees with CSD and finds that the review process under Section 57.7 of the Act (415 ILCS 5/57.7 (2004)) provides applicants with due process. Specifically, Section 57.7 (415 ILCS 5/57.7 (2004)) allows an applicant to appeal an adverse decision of the Agency to the Board pursuant to Section 40 of the Act (415 ILCS 5/40 (2004)). If a party appeals a decision to the Board under the UST program and prevails, attorney fees are reimbursable. See 415 ILCS 5/57.8(l) (2004). Further, the legislature has adopted a provision that allows a 90-day extension of the appeal period (see 415 ILCS 5/40(a)(1) (2004)) to provide for an opportunity for ongoing dialogue between applicants and the Agency. Thus, the statutory language currently addresses the inability to “afford” an appeal and the concept of responding to denial reasons before an appeal, so there is no need for additional language.

 The level of detail in the denial letter is also addressed in statutory language. As the Board noted in the first-notice opinion:

As to the concerns that the Agency’s denial letters lack specificity, the Board is cognizant of that concern. However, Section 57.7(c)(4) (or (c)(4)(D)) (415 ILCS 5/57.7(c)(4) (or (c)(4)(D)) (2002)) ⁴ sets forth the requirements for the Agency’s denial letter. Section 57.7(c)(4) of the Act (415 ILCS 5/57.7(c)(4) (2002)) provides that any Agency action to disapprove or modify a plan submitted pursuant to this Title shall be accompanied by:

The Board notes that the language of Section 57.7(c)(4) (415 ILCS 5/57.7(c)(4) (2002)) clearly outlines the required content of a plan disapproval or modification by the Agency. The Board is not convinced that additional language is necessary to effectuate the legislative intent of Section 57.7(c)(4) (415 ILCS 5/57.7(c)(4) (2002)). R04-22, 23 (Feb. 17, 2005) at 70.

Nothing in the additional comments from CW³M convinces the Board that additional language in the rule will be more effective than the plain language of the statute. Therefore, the Board declines to make the changes suggested.

6. Applicability Section (732.100/734.100)

 Participants have expressed concerns that the rule may have a retroactive effect and that the applicability of the rule should be clarified. CW³M suggests several changes in the applicability section of the rule. CW³M’s proposed changes add language referencing the P.A. 92-0554 and P.A. 92-735 and specify that the rules do not apply retroactively. Prior to first notice, PIPE made suggestions to this same section because of concerns that the rule may be applied retroactively. The Board made minor changes prior to first notice to address PIPE’s concerns. R04-22, 23 (Feb. 17, 2005) at 63. The Agency opposes the changes suggested by CW³M because the Agency believes that the references to the public acts would limit the scope of the rule. The Agency is also concerned that the CW³M’s proposed changes would convert an applicability section into an intent section. Finally, the Agency believes the rule already reflects that the rule will not be applied retroactively.

 The Board agrees with the Agency’s concern that the language proposed by CW³M referencing the public acts could limit the scope of the rules. Also, the Board believes that the language is clear that the rule does not have a retroactive application. In any event, a rule is not effective until filed with the Secretary of State pursuant to Section 5-40 of the IAPA (5 ILCS 100/5-40 (2004)). The Board therefore declines the suggestions made by CW³M to reference the public acts and to add language regarding retroactive application of the rule. However, CW³M has suggested a change in the second sentence that the Board will accept. CW³M suggests changing “[i]t does” to “[t]hese amendments do” and the Board will make that change.

7. Alternative Technology (Section 732.407/734.340)

 During the first-notice period, the comments and testimony raised issues concerning alternative technology. CSD questions whether the Agency had considered allowing for submission of alternative technology in phases, which would allow the Agency the opportunity at early stages to evaluate the technology proposed. Exh. 99 at 5. CW³M offered language that CW³M believes reflects that there may not always be more than one available alternative technology. Exh. 106 at 13. The Agency did not respond to CSD’s comment and does not believe that CW³M’s suggested change is warranted. PC 62 at 4.

 The Board appreciates the concerns about alternative technology raised by CSD and the Board is disappointed that the Agency did not address CSD’s concern either at hearing or in public comment. Unfortunately, the record does not provide the Board with sufficient information on how to implement a procedure allowing submission of alternative technologies in phases. Therefore, the Board must decline to make this change, as the record does not provide enough support for the Board to make the change.

 CW³M has again asked the Board to specify that only available alternative technologies should be considered; specifically, CW³M would add, “if other alternative technologies are available which are capable of being implemented.” PC 63 at 51. The Board addressed this issue at first notice and indicated that the language would be amended to clarify that only available technologies needed to be considered. See R04-22, 23 (Feb. 17, 2005) at 65. The Board added the phrase “if other alternative technologies are available and are technically feasible” to subsection (b). Id. The Board invited additional comment on this issue. A review of the Board’s first-notice order indicates that the language was placed in Section 732.407, but not Section 734.340. The Board will correct that error at second notice. The Board’s language added at first-notice is nearly identical to the language proposed by CW³M. Therefore, the Board finds that additional language changes are not necessary in this section beyond adding language to Section 734.340.

8. Tier 2 TACO Cleanup Objectives and Groundwater Ordinances (Sections 732.408/734.410 and 732.606(fff)/734.630(ccc))

 In the Board’s first-notice opinion the Board invited additional comment on the issue of limiting reimbursement to Tier 2 TACO standards and the participants responded to that request. In addition, the Board received additional comment on the use of groundwater ordinances as institutional controls when remediating UST sites.

 CW³M argues that the required use of a groundwater ordinance should be deleted because the Agency did not consider the effect on property values if the owner/operator is “forced” to leave contamination in place. Exh. 106 at 19. The Agency does not believe that deletion of this subsection is necessary. PC 62 at 14. The Agency asserts that the effect of remediation on property values is not a factor in UST Fund reimbursement. Id. The Agency maintains that reimbursement is limited to costs necessary to meet the minimum requirements of the Act and use of a groundwater ordinance as an institutional control meets the minimum requirements of the Act. Id.

 Mr. Reott offered specific language to clarify that if there is a preexisting groundwater ordinance, certain investigative steps would not be needed. PC 39 at 1-2. The Agency disagrees with Mr. Reott’s suggestion because the Agency maintains that there are no preexisting groundwater ordinances as institutional controls. PC 62 at 31-32. The Agency states that to use a groundwater ordinance as an institutional control, the owner/operator must demonstrate that TACO requirements have been met to allow use of an institutional control. PC 62 at 32.

 Mr. Hundley, on behalf of USI, argues that the limitation of reimbursement for cleanup to Tier 2 TACO levels and the requirement that the groundwater ordinance be used are inappropriate. Exh. 109, Attach 23 at 10. Mr. Hundley asserts that there is no statutory basis for these proposals and although the legislature has acknowledged TACO, the legislature has not limited reimbursement to Tier 2 TACO levels. Id. Mr. Hundley notes that the statutory language of the Act requires an owner/operator to design a plan to mitigate any threat to human health, human safety, or the environment resulting from a leaking UST. Id. Mr. Hundley also argues that cleanup to Tier 2 rather than Tier 1 will indisputably affect future property use, value, and salability. Exh. 109, Attach 23 at 11. Mr. Hundley notes that TACO focuses on risks to human health while the UST program requires cleanup if there is a threat to human health, human safety, or the environment. Id.

 Midwest Petroleum also filed a comment expressing concerns with allowing reimbursement to Tier 2 TACO values. PC 57. Midwest Petroleum discussed a situation where an ELUC was used but Midwest Petroleum still had contractual liability for any future failure of the ELUC. Id.

 Concerning the use of Tier 2 TACO cleanup objectives, the Board stated at first notice:

The Board has reviewed the comments of the participants and the Agency on the issue of limiting reimbursement to Tier 2 cleanup objectives. The Board is convinced that limiting cleanup cost reimbursement to Tier 2 TACO objectives is appropriate. As noted above, Tier 2 objectives are derived by using site-specific data rather than the conservative default values used in determining Tier 1 objectives. Thus, in most cases cleanup to Tier 2 objectives would be less expensive, but equally protective of human health and the environment as cleanup to Tier 1 objectives. The UST Fund is designed to reimburse reasonable costs for remediation that mitigates “any threat to human health, human safety, or the environment resulting from the underground storage tank release.” 415 ILCS 5/57.7(b)(2) and (c)(3) (2002). Furthermore, the Board does not find a contradiction between the regulatory language and this limitation. The Agency’s proposed language is consistent with existing language and does not create inconsistencies with the existing regulatory language or language proposed in this proceeding. R04-22, 23 (Feb. 17, 2005) at 76.

The Board finds nothing in the additional comments that convinces the Board to alter our position. The Board respectfully disagrees with Mr. Hundley that the use of Tier 2 objectives is inappropriate. As the Board stated at first notice, the Act authorizes reimbursement for reasonable costs to mitigate “any threat to human health, human safety, or the environment resulting from the underground storage tank release.” 415 ILCS 5/57.7(b)(2) and (c)(3) (2004). The statutory language does not require reimbursement for cleanup beyond that standard and the Tier 2 objectives meet the statutory requirements.

 On the issue of a groundwater ordinance as an institutional control, the Board found such an institutional control was appropriate at first notice. The concerns about future property values are not persuasive. The purpose of the UST program includes the establishment of requirements for eligible owners/operators of USTs to seek payment for any costs associated with physical soil classification, groundwater investigation, site classification and corrective action from the UST Fund. 415 ILCS 5/57 (2004). In determining if reimbursement is appropriate the Agency shall determine that:

the costs associated with the plan are reasonable, will be incurred in the performance of site investigation or corrective action, and will not be used for site investigation or corrective action activities in excess of those required to meet the minimum requirements. 415 ILCS 5/57.7(c)(3) (2004).

Nothing in the statute requires that costs necessary to increase salability, value or future use are reimbursable. Therefore, the Board finds that use of Tier 2 TACO and groundwater ordinances as institutional controls are consistent with the provisions of the Act and the suggested changes are not warranted.

9. Eligibility of Costs Incurred after the Issuance of an NFR Letter (Sections 732.601(j)/734.605(j) and 723.606(kk)/734.630(gg))

 On the proposed language requiring that applications for reimbursement be filed within one year of the issuance of an NFR letter, the Board asked for additional comment in the first-notice opinion. R04-22, 23 (Feb. 17, 2005) at 66. CW³M has suggested adding an exception to allow for application for reimbursement more than one year after issuance of an NFR letter. CW³M also recommends adding exceptions or exclusions to the prohibition against any reimbursement after issuance of an NFR letter. CSD supports the addition of these exceptions. The Agency opposes the suggested changes to both sections.

 Regarding CW³M’s proposed exception to the one-year deadline, the Board addressed this issue at first notice and invited additional comment, particularly regarding Part 731 sites and other potential exceptions. R04-22, 23 (Feb. 17, 2005) at 66. A review of the Board’s first-notice opinion and the record in this proceeding indicates that CW³M’s comments during first notice are very similar to the comments offered prior to first notice. That being the case, CW³M has not offered additional comment that convinces the Board to alter the first-notice proposal concerning the one-year limitation.

 As to the additional exceptions to reimbursement after issuance of an NFR, the Board is also unconvinced. As the Agency points out, the Board has previously addressed some of these issues in prior rulemakings and decided not to include the exceptions. Also as noted in the Board’s first-notice opinion:

The Board is not convinced that owners or operators should be allowed back into the UST Fund after a NFR letter has been issued for a site. The NFR letter concept is predicated on finality. R04-22, 23 (Feb. 17, 2005) at 76.

CW³M and CSD have not provided sufficient justification for the Board to revisit this issue and alter the Board’s positions. Therefore, the Board declines to make this change.

10. Handling Charges (Section 732.606(ss)/734.630(oo) and Section 732.601(b)(10)/734.605(b)(10))?

 The participants have filed additional comments on two issues involving handling charges. One is whether a primary contractor with a financial interest in a subcontractor should be reimbursed for handling charges incurred when dealing with that subcontractor. The second is the issue of requiring proof of payment to a subcontractor before allowing reimbursement of handling charges.

 In the Board’s first-notice opinion, the Board proposed the Agency’s language, which excludes handling charges for subcontractors where the primary contractor has a financial interest in the subcontractor. However, the Board invited comment on this issue and stated that “if sufficient information is added to the record, the Board will revisit this issue during the first-notice period.” R04-22, 23 (Feb. 17, 2005) at 71. Both CSD and CW³M commented further on this issue. CSD conceded that much of the cost for procurement is eliminated when using a subcontractor in which CSD has an interest; however, costs for administrative, insurance, interest costs, and a reasonable profit for oversight and field purchases is not eliminated. PC99 at 1. CW³M agrees that administrative and oversight costs do not change when the primary contractor has a financial interest. PC 106 at 18. Further, CW³M indicates that the definition of financial interest is so broad, that the primary contractor could hold only a minority interest. Id. The Agency asserts that when the prime contractor has a financial interest in the subcontractor, many of the costs associated with hiring a subcontractor are not incurred. PC 62 at 12.

 Based on this additional testimony and comment, the Board is convinced that there will be times when a primary contractor with a financial interest in a subcontractor should be able to recoup administrative and oversight costs. This would be true especially if the primary contractor holds only a minority interest in the subcontractor’s operation. Therefore, the Board will delete this provision from the list of costs ineligible for reimbursement. This will allow the Agency to determine on a case-by-case basis if costs are incurred and handling charges are appropriate.

 On the issue of requiring proof of payment to a subcontractor, the Board at first notice proposed a rule that requires proof of payment. R04-22, 23 (Feb. 17, 2005) at 72. However, the Board did amend the Agency’s proposal to allow for additional mechanisms to establish proof of payment and the Board invited additional comment. Id. CW³M argues that requiring proof of payment is unduly burdensome and will add to the cost of remediation. PC 106 at 14. CW³M also argues that obtaining proofs of payment will be difficult. Id. The Agency opposes this change. PC 62 at 6.

 In the Board’s first-notice opinion the Board stated:

The existing language in Section 732.606(ll) includes as an ineligible cost “Handling charges for subcontractor’s costs when the contractor has not paid the subcontractor.” The language proposed by the Agency is asking for proof that the contractor has paid the subcontractor before allowing reimbursement. The existing language provides that handling charges are only eligible reimbursement costs if the contractor paid the subcontractor. To the Board, it would appear that the Agency is merely requiring proof of a prerequisite which already exists. R04-22, 23 (Feb. 17, 2005) at 72.

The Board’s first-notice language allowed cancelled checks, lien waivers or affidavits from the subcontractor as proof of payment. The Board is not convinced by CW³M’s comments that proof of payment is unduly burdensome. Therefore, the Board declines to make this change.

11 Auditing Provisions (732.614/734.665)

 Issues were raised during the first-notice period concerning the Agency’s authority to perform audits and the extent of those audits. CW³M and USI both took issue with the auditing provisions. CW³M offers language changes to the auditing provision, which delete the engineers and geologist from the section. Exh. 106 at 19. CW³M agrees that the Agency has the authority to perform audits under the Act. Id. However, CW³M believes that authority is limited to reviewing portions of the plans and reports submitted to the Agency. Id.

 Mr. Hundley, testifying on behalf of USI, argues that Section 734.665 is beyond the Agency’s statutory authority and Mr. Hundley takes issue with the Board’s decision to the contrary at first notice. Exh. 109, Attach. 23 at 13. Mr. Hundley argues that the statute gives the Agency only the authority to audit “data, reports, plans, documents and budgets submitted” pursuant to the Act. Id. Mr. Hundley does not believe that the audit provisions extend to all documents. Further, Mr. Hundley argues that the regulated entity should not be required to retain all documents pertinent to the submissions, as well as copies of submissions to the Agency. Id.

 The Agency opposes the suggested change by CW³M because the Agency feels that in many cases the only documents the owner/operator has are the same documents submitted to the Agency. PC 62 at 15. The Agency maintains that the documents are often submitted directly by the consultant and the owner/operator merely signs the documents. Id. Deleting the engineers and geologist from this section would limit the Agency, in many cases, to reviewing only the documents submitted to the Agency. Id.

 As the Board stated at first notice, the Agency’s authority to: “‘audit’ is defined as ‘a systematic inspection or examination of plans, reports, records, or documents to determine the completeness and accuracy of the data and conclusions contained therein.’ 415 ILCS 5/57.2 (2004). Pursuant to Section 57.15 of the Act (415 ILCS 5/57.15 (2004)), the Agency has the authority to ‘audit all data, reports, plans, documents and budgets submitted pursuant to this Title [emphasis added].’ 415 ILCS 5/57.15 (2004).” R04-22, 23 (Feb. 17, 2005) at 66. The Board is unconvinced by the arguments that the plain language of the statute limits the Agency’s review to only the documents submitted to the Agency. Therefore, the Board finds no basis to alter the Board’s first-notice determination concerning the Agency’s ability to audit data, reports, plans, and budgets.

 On the second area of concern raised by CW³M, that the consultants should not be required to maintain records for the Agency inspection, the Board finds merit in this point. The owner/operator is the individual who will be reimbursed and ultimately the owner/operator should bear the responsibility for recordkeeping. The Board is unconvinced by the Agency’s concern that the owner/operator might not have supporting documentation. If an audit is performed and sufficient information to support the data, reports, plans, and budgets is not in the owner/operator’s possession, the Agency can deny reimbursement. Therefore, the Board will delete the requirement that the engineer or geologist maintain records that must be available for Agency audit.

12. Maximum Payment Amount for Abandonment and Removal of Tanks (Section 732.810/734.810)?

 Comments and testimony in reaction to the Board’s first-notice proposal raised again the issue of the maximum payment amount for the abandonment and removal of tanks. CSD expresses concerns that the maximum payment amount for abandonment of a UST is insufficient to cover actual cost of abandonment. Exh. 99 at 3. CSD asserts that the cost for flowable fill alone would be $5,035. Id. CSD recommends that the maximum payment amounts be amended using RS Means published costs for UST closure. Exh. 99 at 4. CW³M argues that the maximum payment amounts are outdated since the amendment of OSFM regulations concerning tank removal and CW³M advocates a minimum removal amount of $6,300. Exh. 106 at 21. The Agency argues that CSD and CW³M have not provided sufficient justification for a change and have in fact suggested different rates. PC 62 at 20.

 In the Board’s first-notice opinion, the Board addressed this issue in response to comments from PIPE and stated:

PIPE proposed alternative rates for UST removal and abandonment. PC 6 at 11. PIPE based the alternative rates on the 2004 RS Means Environmental Cost Handling Options and Solutions (RS Means). Id. PIPE believes that the alternative rates are “eminently more justifiable as ‘reasonable’” rates than those proposed by the Agency. Id.

The Board is not convinced that basing rates on RS Means in and of itself is appropriate. Although as indicated above, the Agency’s method for developing the maximum payment amounts had statistical limitations, the Agency’s rates were based on real data from actual sites in Illinois. Therefore, the Board rejects alternative rates, such as RS Means, and the Board will propose the rates as developed by the Agency for first notice. R04-22, 23 (Feb. 17, 2005) at 81.

After careful review of the testimony provided by CSD, CW³M, and USI since first notice, the Board is convinced that the rates as proposed at first notice are sufficient for abandonment and removal of tanks. This is especially true given both CW³M’s and USI’s willingness to accept the maximum rates as proposed at least as interim rates. See infra at 61. Further, the provisions allowing for bidding will help to address any shortfalls with this maximum payment rate.

13. Mobilization Charges for Drill Rigs (Section 732.820/734.820)

 Participants have raised an issue concerning the maximum rate for drilling and well installation. CW³M and USI both propose adding mobilization charges as a separate payment item. Exh. 106 at 21 and Exh. 109 at 40. CSD does not believe that the maximum payment amount is sufficient to pay for the mobilization of more than one drill rig and CSD supports CW³M’s and USI’s changes. PC 64 at 5. The Agency maintains that the maximum payment amounts already include the cost for mobilization and the suggested use of the amounts in Section 732.845/734.845 are not appropriate. PC 62 at 22. Specifically the Agency states that the rates in Section 732.845/734.845 are for professional consulting services not drill rig mobilization. Id.

 The Board is cognizant of the concerns by CSD, CW³M, and USI. However, the Board is equally cognizant of the fact that the rates proposed for mobilization by CW³M, and USI are rates developed for travel by professional consultants. CSD, CW³M, and USI have not presented evidence that the rates are equivalent and the Board cannot make that leap. Further, the Agency offered testimony prior to first notice that the rate included mobilization and also the rule language states that the maximum payment amount includes mobilization/demobilization. Therefore, the Board finds the record does not support a change to the rule.

14. Soil Removal and Disposal (Section 732.825/734.825)

 The issue of soil removal and disposal was discussed extensively prior to the Board proceeding to first notice. CW³M again asks that the Board adopt rates for soil removal and disposal based on rates from IDOT projects where the projects were bid. Exh. 106 at 22-23. CW³M also proposes the use of a conversion factor of 1.05. Id. The Agency responds to CW³M by summarizing the proposed changes to this section as: 1) basing maximum payment amounts on amounts approved by IDOT; 2) changing the “swell factor” and “weight/volume” conversion factor to 1.2 tons per cubic yard; and 3) adding $14.25 per cubic yard for “additional expenses” associated with the transportation of soil that is temporarily stockpiled on-site or off-site. PC 62 at 23. The Agency opposes all of these changes. PC 62 at 23-25.

 The Agency notes that IDOT provided a letter stating that the costs in IDOT’s contracts should not be used to justify or compare costs in this rulemaking. PC 62 at 23, citing Exh. 89. Further, the Agency notes that prior to first notice, CW³M proposed a conversion factor of 1.68. PC 62 at 24. Finally, the Agency maintains that CW³M provided no justification for the additional $14.25 per cubic yard that CW³M suggests adding. Id.

 Prior to proposing this rulemaking for first notice, the Board examined the issue of what conversion factor was appropriate. The Board stated:

First, the Board does not see a significant disparity between the Agency’s proposed swell factor and the swell factor recommended by the other participants. The Board is convinced that a swell factor of five percent applied to the total for ETD is equivalent to a twenty percent swell factor and twenty percent is appropriate. Regarding the conversion factor, the Board recognizes that the factor ranges from one to two tons per cubic yard for different types of geologic material. The conversion factor proposed by the Agency takes into consideration various types of geologic material that occur at Illinois UST sites and the Board finds that the record supports a 1.5 tons per cubic yard conversion factor. The Board will proceed to first notice with the swell factor and conversion factor as proposed by the Agency. R04-22, 23 (Feb. 17, 2005) at 74.

15. Drum Disposal (Section 732.830/734.830)

 Concerning the maximum payment amount for drum disposal, CW³M suggests that the words “non-hazardous” be added to the language of the rule and suggests a “stop fee” in accordance with Section 734.845(e) be added. Exh. 106 at 25. The Agency opposes a “stop fee” for this section as the maximum payment amount already includes that cost. PC 62 at 25. The Agency also notes that the travel fees in Section 734.845 are for travel costs associated with professional consulting service, not drum disposal. Id.

 The Board is unconvinced that a “stop fee” is required for drum disposal as the lump sum payment amount includes “transportation” by the plain language of the rule. Further, the rates proposed for mobilization or “stop fees” by CW³M are rates developed for travel by professional consultants. CW³M has not presented evidence that the rates are equivalent to “stop fees” and the Board cannot make that leap. Therefore, the Board finds that the record does not support the addition of a “stop fee” for drum disposal and the Board will not make that change. The Board is also unconvinced that adding the phrase “non-hazardous” is necessary and declines to do so.

16. Concrete, Asphalt and Paving (Section 732.840/734.840)

 CW³M raises again the issue of maximum payment amounts for concrete, asphalt, and paving and suggests that testimony offered prior to the Board’s adoption of the first-notice proposal demonstrates that there are numerous flaws with the proposed rates. Exh. 106 at 25. CW³M offers alternative rates. Id. The Agency opposes the alternative rates suggested by CW³M. PC 62 at 26. The Agency notes that CW³M supports the alternative rates based on testimony given prior to the Board’s first-notice proposal and the Board has already considered that testimony and rejected the changes. Id. The Agency argues that CW³M has not offered any new information to support the alternative rates.

 The Board has reviewed the first-notice opinion and order and the testimony by CW³M. The Board finds nothing which convinces the Board that the alternative rates proposed by CW³M should be adopted. Further, given the support of USI for these rates as discussed infra at 61, the Board finds that the rates as proposed are reasonable.

17. Bidding for Professional Services (732.855/734.855)

 The Board received a great deal of comment and testimony concerning the concept of bidding for professional services under the rule. The Board added the concept of bidding in the first-notice opinion after the issue was raised during the hearing process. Some of the specific comments include that CSD notes that bidding for professional services is not normally done and many gasoline station owners/operators do not employ environmental professionals to assist with regulations. Exh. 99 at 3. CSD believes that the bidding process should be reserved for UST compliance costs other than professional consulting services. Id. CW³M agrees that bidding of professional consulting services is not practicable although bidding may be an option in other areas. PC 63 at 5. USI also believes that using competitive bidding for professional services is problematic, especially without a defined scope of work. Exh. 109 at 54. USI argues that the concept of bidding for professional services should not be included in this rule. Id. ACECI challenges the propriety of requiring an owner/operator to bid out professional services, when the State would be required to use qualification-based selection. PC 58 at 1.

 The Board has carefully reviewed the comments and testimony concerning bidding for professional consulting services. The Board is convinced that bidding for many of the lump sum payment rates in Subpart H is a feasible alternative. This conclusion is supported by USI’s comments concerning the acceptability of many of the rates in Subpart H. See infra 61. However, the Board is equally convinced that, especially absent defined scopes of work, bidding for professional consulting services is not a feasible alternative. For an owner/operator to prepare bid specifications and accept bids based on the rules as proposed for second notice without a consultant, places a massive burden on owners/operators, especially small businesses and municipalities. Therefore, the Board will exclude professional consulting services from the bidding provisions at this time. Further, the Board notes that in today’s opinion the Board has determined that professional consulting services will be reimbursed on time and materials and therefore bidding for professional services is not necessary.

18. Economic Impact of the Rulemaking

 A major concern of the participants in this rulemaking has been the economic impact of the rules on owners/operators of UST sites in Illinois that have not yet been remediated. CSD, CW³M, and USI all assert that the adoption of the proposed maximum payment amounts, particularly for professional consulting services, will have a negative impact on owners/operators and their consultants in Illinois. CSD states that adoption of lump sum payments will cut profit margins so much that consultants will not offer upfront financing. Exh. 99 at 2. CSD believes that without upfront financing, noncompliance will increase among many small businesses. Id. CW³M asserts that the failure to adopt adequate rates will have a serious impact on owners/operators and the future of CW³M’s business is at stake. PC 63 at 9.

USI comments that over 4,000 small owners/operators are responsible for sites yet to be issued NFR letters in Illinois. Exh. 109 at 8. USI asserts that small owners/operators are even more reliant on the UST Fund and need to be reimbursed for 100% of eligible costs. Exh. 109 at 11. USI specifically asked that the Board again request DCEO to perform an economic impact study of the effects of the rule. Exh. 96 at 3-4.

 The Board received comments from Senator Sullivan, Senator Lauzen, and Senator Dahl expressing concerns about the effect of these proposed rules on small businesses and municipalities in the State. PC 65 and PC 69. In addition PIPE states that the evidence in this proceeding establishes that owners/operators will be required to pay large sums out of pocket when remediating a UST site. PC 70 at 3.

 Prior to proceeding to first notice and even before holding our first hearing in this matter the Board asked DCEO, pursuant to Section 27(b) of the Act (415 ILCS 5/27(b) (2004)), to perform an economic impact study. DCEO responded in April 2004 before the Board’s second group of hearings. DCEO’s response indicated that due to financial constraints a study could not be performed at that time.

 The Board has proceeded with this rulemaking and gathered substantial testimony about the economic impact of the proposed rules. The comments indicate that the main area of negative economic impact concerns the professional consulting maximum payment rates without a defined scope of work. Given the Board’s action today to open a subdocket on the scope of work and maximum payments for professional consulting services, and in the meantime to allow professional consulting to be reimbursed on time and material basis, the negative impact of the rule has been substantially alleviated. Therefore, the Board finds that the rule as being proposed for second notice is economically reasonable and that any adverse economic effect has been minimized. However, the Board will again request an economic impact study from DCEO pursuant to Section 27(b) of the Act (415 ILCS 5/27(b) (2004)) on the subdocket.

19. Miscellaneous

 Throughout the comments and testimony the participants have addressed various miscellaneous issues which do not fall within the categories of issues above. Therefore the Board will address those remaining comments and testimony here.

Application for Reimbursement

 CSD raises an issue concerning the number of applications for reimbursement that can be submitted, the frequency of submission, and how the maximum payment amounts in Section 732.845/734.845 apply. Exh. 99 at 5. The issue is raised in response to the Agency’s answers to prefiled question, which CSD believes are contradictory. Id. CSD also questioned the maximum payment amounts for amending a plan for unforeseen circumstances under Section 734.845(f)/734.845(f). Exh. 99 at 6. The Agency responds to CSD’s concerns indicating that the maximum payment amounts include the costs of preparing and submitting applications and are sufficient to cover reasonable costs associated with the preparation. PC 62 at 31. The Agency states that the frequency of submissions is left to the owner/operator. Id.

 The Board understands the concerns raised by CSD on these issues surrounding the maximum payment amounts for professional services. As the Board has determined to proceed to second-notice with a rule that will allow for payment on a time and material basis and to examine the maximum payment amounts along with scopes of work in a subdocket, the Board need take no action on CSD’s concerns today. However, the Board invites CSD and other participants to raise these issues in subdocket B.

Triennial Review

 Under Section 732.875/734.875, the Agency will review the reimbursement amounts at least every three years. CSD asks that the Board require the Agency to develop written procedures for conducting the review and make those procedures available to the public. Exh. 99 at 4. The specific language of Section 732.875/734.875 is:

No less than every three years the Agency must review the amounts set forth in this Subpart H and submit a report to the Board on whether the amounts are consistent with the prevailing market rates. The report must identify amounts that are not consistent with the prevailing market rates and suggest changes needed to make the amounts consistent with the prevailing market rates.

The Board understands the concerns expressed by CSD; however, the rule language already requires that the Agency’s finding be reported to the Board. To ensure that the public is aware of the results of the Agency’s review, the Board will announce receipt of the report on the Board’s web page and in the Environmental Register. The Board will amend the rule language to reflect this decision.

LUST Advisory Committee

 CSD suggests that there should be an odd number on the Advisory Committee rather than the current committee size of ten members. PC 64 at 3. CSD also suggests that because of PIPE’s level of activity in this rulemaking, PIPE should be given two seats on the Advisory Committee. Id. CSD further suggests that the Advisory Committee be given additional responsibilities for things such as developing standardized forms and evaluation of maximum payment amounts. Id. CSD, CW³M and USI all recommend using the Advisory Committee to assist in the development of task lists or scopes of work.

 The Board agrees that the Advisory Committee would be better served by having an odd number of participants. The Board will therefore accept CSD’s suggestion and add a second member of PIPE to the Advisory Committee. As to the suggestions by CSD, CW³M and USI that the Advisory Committee assist in the development of task lists or scopes of work, in subdocket B, the Board will address the issue of task lists and scopes of work. The Board encourages the participants and the Advisory Committee to work with the Agency and the Board in subdocket B.

Information in Reimbursement Requests

 CW³M expressed confusion arising from responses by the Agency to prefiled questions. Exh. 106 at 10. Specifically, CW³M is confused over what information must be included in a reimbursement application for a lump sum payment. Id. CW³M maintains that at one point the Agency indicated simply an invoice would be sufficient, while a later response seem to indicate more substantial information would be required. Id. The Board does not share CW³M’s confusion. Section 57.8(a)(6) of the Act (415 ILCS 5/57.8(a)(6) (2004)) specifies what must be included in a complete application and the Agency’s answers are consistent with Section 57.8(a)(6) of the Act (415 ILCS 5/57.8(a)(6) (2004)). Therefore, the Board finds no change is necessary.

Sections 732.110/734.135 and 732.505/734.510

 CW³M suggests amending the language in both these sections. Specifically CW³M suggests that language be added to allow for documentation of reports delivered by hand or private delivery service to the Agency and language be added to ensure that the Agency maintains records of the Agency’s review. Exh. 106 at 12, 14. The Board agrees that private and hand delivery should be allowed and will therefore amend the language to reflect such delivery. The Board notes that the record before the Agency includes “any information the Agency relied upon in making its determination” (35 Ill. Adm. Code 105.410). The Board finds that the phrase is sufficiently inclusive and finds no merit in adding language concerning the content of the Agency’s record to the rule.

Sections 734.320(b)(2) and 734.330(a)(1)

 CW³M asks that the word “projected” be added before “post-remediation use of the property” because an owner/operator may not know for certain what the future use of the property may be. Exh. 106 a 12. The Board will accept the suggestion by CW³M and will add “projected” before “post-remediation use of the property” in the rule.

Section 732.605/734.625 and 734.630(w)

 CW³M suggests adding several items to the list of eligible costs in the rule. Exh. 106 at 16. In response, the Agency comments that the list is not an exclusive list and Section 732.605/734.625 merely contains examples of costs that may be eligible and eligibility of a certain cost is not dependant upon listing in this section. PC 62 at 7. The Board agrees with the Agency that the list of costs eligible for reimbursement in Section 732.605/734.625 is not an exhaustive list and is not meant to be one. The Board finds that the additions suggested by CW³M are not necessary and declines to make the changes.

 One specific suggestion by CW³M is that compaction of backfill be allowed as an eligible cost and that compaction be deleted from the language in Section 734.630(w). Exh. 106 at 16, 75. The Agency opposes these changes and notes that ineligibility of costs associated with compaction of backfill is a longstanding practice. PC 62 at 8. The Board agrees with the Agency and finds no merit in amending the rule to alter the longstanding practice that compaction of backfill is ineligible for reimbursement. See McDonald’s Corporation v. IEPA PCB 04-14 (Jan. 22, 2004).

“Must” to “Shall” and “But Not Limited To”

 Throughout the proposal, CW³M has suggested the Board change the word “must” to “shall” and delete the phrase “but not limited to” from the rule. The Board has been systematically replacing “shall” with “must” in all the Board’s rulemakings both for grammatical reasons and in response to comments from JCAR. Therefore, the use of the word “must” is grammatically correct and consistent with the Board’s practice. As to the phrase “but not limited to” this phrase is a standard inclusion in all rules where a non-exhaustive list is given. Therefore, removing the phrase “but not limited to” could be misinterpreted as limiting the eligible costs to only those costs specified. The Board finds that this limitation is not supported by the record and declines to remove the phrase.

Various Suggested Changes to the Proposed Rule

 The Board notes that in addition to the specific changes discussed herein, many participants and CW³M in particular, submitted suggested language changes throughout the rule. The Board has reviewed all those suggested changes and unless specifically discussed in the opinion or listed below, the Board did not accept the changes. The Board finds that those changes not accepted were not necessary or were unsupported by the record.

 The Board made several changes in response to comments from the Joint Committee on Administrative Rules (JCAR) during first notice. In addition, the following changes, not discussed previously, were made in response to comments:

The Board has identified the changes, other than those suggested by JCAR, in the proposal using double underling in today’s order.

CONCLUSION

 The Board adopts the proposal for second notice pursuant to the IAPA (5 ILCS 100/5-5 et. seq. (2004). Due to the comments received after the first notice began and in consideration of the prior comments in this rulemaking, the Board opens a subdocket B . The purpose of subdocket B is to develop scopes of work to be used in reimbursing professional consulting services with the hope of proceeding ultimately to lump sum payments for many tasks undertaken in the remediation of UST sites in Illinois. Subdocket B will also examine issues surrounding the hourly payment amounts and hours of work for professional consulting services. During the pendency of subdocket B, professional consulting services will continue to be reimbursed on a time and material basis.

 In addition to opening a subdocket, the Board makes several changes to the proposed rule in response to the comments. Some of the more significant changes include allowing for reimbursement of handling charges for a subcontractor if the primary contractor has a financial interest in the subcontractor and removing professional consulting services from eligibility for bidding. The Board also determines that some changes requested by the participants are not necessary or supported by the record. Some of those more significant suggestions include adding mobilization charges for drill rigs and adjusting maximum payment amounts for abandonment and removal of tanks.

 The Board finds that the rule, as proposed for second notice, is economically reasonable and technically feasible. The Board further finds that any negative economic impact has been minimized by removal of the professional service lump sum payments to subdocket B. Finally, the Board finds that the record supports the Board’s decision to proceed to second notice with the remainder of the rule language.

ORDER

 The Board directs that the following rule be submitted to the Joint Committee on Administrative Rules for second-notice.

SUBCHAPTER d: UNDERGROUND INJECTION CONTROL AND UNDERGROUND STORAGE TANK PROGRAMS

PART 732

PETROLEUM UNDERGROUND STORAGE TANKS

(RELEASES REPORTED SEPTEMBER 23, 1994, THROUGH JUNE 23, 2002)

732.112  Notification of Field Activities

732.114  LUST Advisory Committee

732.870  Increase in Maximum Payment Amounts

732.875  Agency Review of Payment Amounts