Finop4.PDF

ILLINOIS POLLUTION CONTROL BOARD

December 17, 1998

IN THE MATTER OF:

PROPORTIONATE SHARE LIABILITY:

35 ILL. ADM. CODE 741

)

R97-16

(Rulemaking - Land)

Adopted Rule. Final Order.

OPINION AND ORDER OF THE BOARD (by C.A. Manning

, K.M. Hennessey, and M.

McFawn)

In 1995, the Illinois General Assembly adopted legislation repealing joint and several liability

in actions involving environmental remediation and replaced it with proportionate share liability. See

Pub. Act 89-443, eff. July 1, 1996. This new proportionate share scheme is contained in Section

58.9 of the Environmental Protection Act (Act) (415 ILCS 5/58.9 (1996)). In the same piece of

legislation, the Board was charged with adopting rules and procedures to determine proportionate

share. These rules and procedures must be adopted before January 1, 1999. See Pub. Act 90-484,

eff. August 17, 1997 (Amended 415 ILCS 5/58.9(d) (1996)). The Board today adopts those

procedures for determining proportionate share.

In this final opinion and order, the Board adopts the rules proposed at second notice with

minor modification. The Board also discusses the procedural history of this rulemaking, including the

Board’s major findings at first and second notice, and a summary of rules adopted today. Readers

seeking a detailed discussion of the issues that the Board decided at first or second notice should

consult the Board’s opinions and orders at first and second notice. See

Proportionate Share Liability

(35 Ill. Adm. Code 741)

(September 3, 1998), R97-16;

Proportionate Share Liability

(December 3,

1998), R97-16.

PROCEDURAL HISTORY

On December 5, 1996, the Board on its own motion opened a docket to solicit public

comments and/or proposals to assist in the promulgation of rules and procedures implementing the

proportionate share provisions of Section 58.9 of the Act. See

Proportionate Share Liability

(December 5, 1996), R97-16. On February 2, 1998, the Illinois Environmental Protection Agency

(Agency) filed a rulemaking proposal with the Board to implement the provisions of Section 58.9.

The Agency’s proposal was the result of a coordinated effort between the Agency, the Illinois

Attorney General’s Office (AGO), and the Site Remediation Advisory Committee (SRAC).

February 5, 1998, the Board accepted this matter for hearing. See

Proportionate Share Liability

(February 5, 1998), R97-16. Prior to adopting rules for first notice, the Board held four public

The SRAC was established by Section 58.11 of the Act, adopted as part of the Site Remediation

Program legislation, to advise the Agency in developing regulatory proposals to implement Title XVII.

See 415 ILCS 5/58.11 (1996). The SRAC consists of one member from each of the following

organizations: the Illinois State Chamber of Commerce, the Illinois Manufacturers Association, the

Chemical Industry Council of Illinois (CICI), the Consulting Engineers Council of Illinois, the Illinois

Bankers Association, the Community Bankers Association of Illinois, and the National Solid Waste

Management Association. See 415 ILCS 5/58.11(a) (1996).

hearings.

Those hearings were held on May 4, 1998, in Springfield; May 12, 1998, in Chicago; and

May 27 and June 10, 1998, in Springfield.

At the May 4, 1998 hearing, Gary P. King, manager of the Division of Remediation

Management within the Agency’s Bureau of Land, and John S. Sherrill, an Agency employee in the

Remedial Project Management Section of the Division of Remediation Management within the

Agency’s Bureau of Land, testified and responded to prefiled questions. At the May 12, 1998

hearing, the Agency’s witnesses again testified, along with Matthew J. Dunn, Chief of the State-wide

Environmental Enforcement/Asbestos Litigation Division of the AGO. At the May 27, 1998 hearing,

the Agency’s witnesses again testified, along with several other witnesses: Sidney M. Marder,

Executive Director of the Illinois Environmental Regulatory Group (IERG); David L. Rieser, a partner

at Ross & Hardies, representing the Illinois Steel Group (ISG) and the CICI; David E. Howe, Senior

Attorney at Caterpillar, Inc.; and Laurel O’Sullivan, Staff Attorney for Business and Professional

People for the Public Interest (BPI). At the fourth hearing on June 10, 1998, Carey Rosemarin, an

attorney with Jenner & Block, testified on behalf of Commonwealth Edison (Com Ed), and the

Agency provided additional testimony in response to the other testimony presented at the hearings.

At the close of the fourth hearing, the hearing officer established a deadline for interested

persons to file public comments before the Board proceeded to first notice in this rulemaking.

Fifteen public comments were received before the Board adopted rules for first notice.

On September 3, 1998, the Board proposed rules for first notice. See

Proportionate Share

Liability

(September 3, 1998), R97-16. The proposal adopted was a modified version of the

Agency’s proposal. Specifically, at first notice, the Board adopted rules: (1) providing for limited

discovery before an action had been filed; (2) requiring that the Agency be notified of all actions

seeking allocations of proportionate share; (3) providing for the mandatory disclosure and discovery

of all documents pertaining to the release at a site; (4) listing allocation factors the Board could

consider in making an allocation determination; (5) providing for reallocation in certain circumstances

following a final determination; (6) governing how proportionate share could be raised as an

affirmative defense, rather than adopting rules governing which party had the burden to prove

proportionate share; and (7) governing voluntary allocation proceedings where all participants agree

to allocate 100% of the performance or costs of a response.

The Board also determined at first notice that the limitations contained in Section 58.1(a)(2)

of the Act did not apply to Section 58.9, and thus the proportionate share rules. The Board reached

this decision by looking primarily at the words in Section 58.9 “[n]otwithstanding any other provisions

of this Act to the contrary.” The Board additionally concluded at first notice that Section 58.9 applied

to private enforcement actions seeking cost recovery. In making this determination, the Board relied

again on the language of Section 58.9. Finally, the Board also concluded at first notice that rather

than assigning a particular party the burden to prove another’s proportionate share, the Board would

make that determination based on all evidence presented by the parties. See

Proportionate Share

Liability

(September 3, 1998), R97-16.

The first-notice rules were published in the

Illinois Register

on September 18, 1998. See 22

Ill. Reg. 16425-16440. They were also posted on the Board’s Web site and sent to the persons on

the notice list. Upon publication in the

Illinois Register

, a 45-day public comment period began.

A prehearing conference was also held on October 28, 1997, in Springfield, Illinois.

For a complete list of all the public comments filed with the Board and all exhibits entered

into the record in this proceeding, please refer to Attachments A and B, respectively.

During the first-notice period, the Board held two more publ

ic hearings on October 19 and

20, 1998, in Springfield. The purpose of those hearings was to allow the Board to receive testimony

from interested persons on the merits of the Board’s first-notice proposal. At the October hearings,

the following persons testified: Gary King of the Agency; Matthew Dunn and Elizabeth Wallace of

the AGO; David Rieser on behalf of the SRAC; and Whitney Rosen on behalf of the IERG. To

ensure that all public comments would be received and considered by the Board prior to second

notice, the Board established November 9, 1998, as the deadline for receiving public comments.

During this public comment period, the Board received six public comments.

Based on the testimony at the October hearings and the public comments received following

the adoption of the first-notice opinion and order, the Board made substantial revisions to the rules

adopted at first notice. To receive public input on these changes before they were officially adopted

for second notice, the Board adopted an opinion and order with proposed changes for second notice

and solicited public comment on the changes by extending the first-notice comment period to

November 23, 1998. The proposed second notice rules were sent to the persons on the notice list

and were also posted on the Board’s Web site. See

Proportionate Share Liability: 35 Ill. Adm. Code

741 (November 12, 1998), R97-16. During the extended first-notice period, the Board received

seven additional public comments.

On December 3, 1998, the Board adopt

ed proposed rules, with amendments based on the

comments received after first notice, for second notice. See

Proportionate Share Liability: 35 Ill.

Adm. Code 741 (December 3, 1998), R97-16. The two major changes the Board made concerned

the applicability of the proportionate share rules and the burden to prove a respondent’s

proportionate share. Regarding applicability, the Board reconsidered its position, taken at first

notice, on the applicability of the proportionate share rules. Upon reconsideration, the Board found,

at second notice, that Section 58.1(a)(2) was ambiguous as to whether the limits in Section

58.1(a)(2) applied to Section 58.9, and thus the proportionate share rules. Therefore, the Board

looked to the legislative history of the Act and other aids to determine the legislative intent of Section

58.1(a)(2). The Board found that the language of the Act as a whole, the purposes of the Act, and

the legislative history of the Act, supported a finding that the limits of Section 58.1(a)(2) applied to

Section 58.9 and thus the proportionate share rules. Based on this conclusion, the Board amended

the applicability section of the proportionate share rules at second notice to reflect the limitations on

the sites and persons subject to Title XVII in Section 58.1(a)(2). See

Proportionate Share Liability

(December 3, 1998), slip op. at 9-13.

Further, based on the comments received after first notice, the Board was persuaded that

Section 58.9 was a limitation on the remedy for an action seeking costs for a response or the

performance of a response. Therefore, the Board deleted the sections contained in the rules at first

notice concerning how proportionate share could be raised as an affirmative defense and replaced

those sections with provisions on the burden of proof and final orders. Specifically, the Board

determined that the burden to prove a respondent’s proportionate share should be placed on the

complainant,

i.e.

, the complainant must prove that the respondent proximately caused or contributed

to a release or substantial threat of a release and the degree to which the performance or costs of a

response resulted from the respondent’s proximate causation of or contribution to the release or

substantial threat of a release. The Board based this conclusion on the language of Section 58.9.

The Board also found that the arguments that the burden should be on the respondent were without

merit and that the burden to prove a respondent’s proportionate share should be on the complainant,

just as the remainder of the Act places the burden of proving any other violation of the Act on the

complainant. See

Proportionate Share Liability

(December 3, 1998), slip op. at 30-34.

Following the adoption of the rules for second notice, the Joint Committee on Administrative

Rules (JCAR)

requested a few minor changes to the rules proposed at second notice. These

changes are not substantive and do not merit discussion. With these minor modifications, JCAR

considered the proposed rules at its December 15, 1998 meeting and voted an objection to Section

741.105(f)(2) through (5) of the proposed rules. These subsections exclude from the proportionate

share rules sites involving federal cleanups or federal regulatory programs that Illinois implements.

These limitations are based on the limitations contained in Section 58.1(a)(2) of the Act, which is the

applicability section for Title XVII. Specifically, JCAR stated that it objected to Section 741.105(f)(2)

through (5) because “by creating exemptions from this Part, the rule contravenes Section 58.9(a)(1)

of the Environmental Protection Act that broadly applies the concept of proportionate share liability to

all remediation actions brought after the effective date of that Section.”

The Board respectfully disagrees with JCAR’s conclusion. As the Board explained at second

notice, Section 58.9(a)(1) is ambiguous as to whether the limitations contained in that section apply

to Section 58.9 and thus the proportionate share rules. However, after considering the legislative

history of Section 58.9 and the purposes of the Act, the Board concluded that the limitations in

Section 58.1(a)(2), which exclude sites involving federal cleanups or federal regulatory programs

that Illinois implements under Title XVII, applies to Section 58.9. Thus, the Board found at second

notice that Section 58.9 or proportionate share liability applies only to the remaining universe of sites.

See Proportionate Share Liability

(December 3, 1998), slip op. at 9-13.

The Board continues to b

elieve that this interpretation is correct and is consistent both with

the General Assembly’s intent and the language of the Act as a whole. The legislative debates on

Title XVII certainly show that the General Assembly intended the various federal sites listed in

Section 58.1(a)(2) to be excluded from the proportionate share scheme. For example, in response

to a question about proportionate share liability, Representative Persico, Chairman of the House

Energy and Environment Committee and the House sponsor of the underlying bill for Title XVII,

stated:

We exempt out of this particular Bill any federal or superfund site . . . . 89th Ill. Gen.

Assem., House Proceedings, May 19, 1995, at 47.

Similarly, Senator Mahar, Chairman of the Senate Environmental Committee and the Senate

sponsor of House Bill 544 stated:

[T]he legislation applies to all remedial activities, excluding specifically noted

activities governed by federal law . . . . 89th Ill. Gen. Assem., Senate Proceedings,

May 19, 1995, at 64.

The language of the Act as a whole also makes it clear that the General Assembly intended

Illinois to administer the federal solid waste, hazardous waste, and underground storage tank

JCAR is a legislative oversight committee that may “examine any proposed rule, amendment

to a rule, and repeal of a rule to determine whether the proposed rule, amendment to a rule, or

repeal of a rule is within the statutory authority upon which it is based; whether the rules,

amendment to a rule, or repeal of a rule is in proper form; and whether the notice was given

before its adoption, amendment, or repeal and was sufficient to give adequate notice of the

purpose and effect of the rule, amendment, or repeal. In addition, [JCAR] may consider

whether the agency has considered alternatives to the rule that are consistent with the stated

objectives of both the applicable statutes and regulations and whether the rules is designed to

minimize economic impact on small businesses.” 5 ILCS 100/5-110(a) (1996).

programs. See 415 ILCS 5/4, 20, 22.12, 57 (1996). The General Assembly did so because it

wanted to avoid duplicative, overlapping, or conflicting State and federal programs. But, if

proportionate share liability is applied to sites regulated under these programs, the United States

Environmental Protection Agency (USEPA) has stated that it may withdraw Illinois’ authority to

administer these programs. See Public Comments 11 and 23. Illinois also could lose federal

funding to implement these programs. The Board’s interpretation of proportionate share liability

therefore preserves Illinois’ authority to administer the federal programs. Finally, the Board’s

interpretation is good public policy. Under the Board’s approach, proportionate share liability will be

applied without jeopardizing Illinois’ regulatory programs.

Because the Board sees no reason to modify the provisions on applicability in the rules, the

Board today adopts the proposed rules without substantive change from second notice.

STATUTE IMPLEMENTED BY RULES

Section 58.9 of the Act provides that no action may be brought:

to require any person to conduct remedial action or to seek recovery of costs for

remedial activity . . . beyond the remediation of releases of regulated substances that

may be attributed to being proximately caused by such person’s act or omission or

beyond such person’s proportionate degree of responsibility for costs of the remedial

action of releases of regulated substances that were proximately caused or

contributed to by 2 or more persons. See 415 ILCS 5/58.9(a)(1) (1996).

Section 58.9 further exempts from performing remedial action any person who neither

caused nor contributed to, in any material respect, the release of regulated substances. See 415

ILCS 5/58.9(a)(2)(A) (1996). Section 58.9 also provides that if the State of Illinois seeks to require a

person to conduct remedial activities, the Agency must provide notice to such person. The notice

must include “the necessity to conduct remedial action pursuant to this Title and an opportunity for

the person to perform the remedial action.” 415 ILCS 5/58.9(b) (1998). If the Agency has issued the

statutorily-required notice, Section 58.9 provides that the Agency and person to whom such notice

was directed may attempt to determine the costs of conducting the remedial action that are

attributable to the releases to which such person or any other person caused or contributed. See

415 ILCS 5/58.9(c) (1996).

Nothing in Section 58.9, however, limits the authority of the Agency to provide notice under

Section 4(q) of the Act or to undertake investigative, preventive, or corrective action under any other

applicable provisions of the Act. Section 58.9 also does not apply to any cost recovery action

brought by the State under Section 22.2 of the Act (415 ILCS 5/22.2 (1996)) to recover costs incurred

by the State prior to July 1, 1996. See 415 ILCS 5/58.9(f) (1996).

In addition to establishing proportionate share in environmental actions, Section 58.9 also

directs the Board to adopt rules and procedures for determining proportionate share before January

Section 5-100(g) of the Illinois Administrative Procedure Act allows an agency to refuse to

modify or withdraw a proposed rule to remedy an objection by JCAR. The agency must

notify JCAR in writing of its refusal and submit a notice of refusal to the Secretary of State.

The notice must be published in the next available issue of the

Illinois Register

. If JCAR

decides to recommend legislative action in response to an agency refusal, then JCAR “shall

have drafted and introduced into either house of the General Assembly appropriate legislation

to implement the recommendations of the Joint Committee.” 5 ILCS 100/5-110(g) (1996).

1, 1999. See Pub. Act 90-484, eff. August 17, 1997 (amended 415 ILCS 5/58.9 (1996)). The

regulations adopted by the Board to implement Section 58.9 are to provide, at a minimum:

criteria for the determination of apportioned responsibility based upon the degree to

which a person directly caused or contributed to a release of regulated substances

on, in, or under the site identified and addressed in the remedial action; procedures to

establish how and when such persons may file a petition for determination of such

apportionment; and any other standards or procedures which the Board may adopt

pursuant to this Section. 415 ILCS 5/58.10(d) (1996).

The rules and procedures adopted by the Board today fulfill the statutory mandates of

Section 58.9.

SUMMARY OF THE PROPORTIONATE SHARE RULES

The rules adopted today contain procedures and conditions under which the Board will

allocate proportionate shares of the performance or cost of a response resulting from the release or

substantial threat of a release of regulated substances or pesticides on, in, under, or from a site.

See 415 ILCS 5/58.9(d) (1996).

The rules apply to two types of proceedings. First, the rules apply to enforcement actions in

which the State or a private party files a complaint with the Board that seeks to require another

person to perform, or seeks to recover the costs of, a response. Second, the rules apply to

proceedings in which two or more persons voluntarily seek to allocate 100% of the performance or

cost of a response between themselves. In either type of proceeding, however, Part 741 does not

apply to (a) actions to recover costs incurred by the State prior to July 1, 1996; (b) sites on the

National Priorities List; (c) sites where a federal court order or a USEPA order requires an

investigation or response; (d) the owner or operator of a site for which a permit has been issued or is

required under federal or State solid or hazardous waste laws, or that is subject to closure or

corrective action requirements under federal or State solid or hazardous waste laws; or (e) the owner

or operator of an underground storage tank system subject to federal or State underground storage

tank laws.

The corresponding applicability provisions, as well as definitions an

d other general

information and procedures, are set forth in Subpart A. Subpart A also provides for discovery before

an action is filed for the sole purpose of obtaining information necessary to identify persons who may

have proximately caused or contributed to a release or threatened release. A party seeking to

engage in such discovery must file a petition with the Board. The petitioner must support the petition

with an affidavit stating the petitioner’s basis for belief that there has been a release or substantial

threat of a release, that the respondent may have discoverable information, and that the petitioner

could not obtain the information by any other reasonable means. A respondent may oppose a

petition for prefiling discovery. Prefiling discovery may not be obtained against entities subject to the

Freedom of Information Act (5 ILCS 140/1

et seq.

(1996)) and cannot require the production of

privileged information.

Subpart B sets forth the burden and standard of proof and elements of final order

s allocating

proportionate shares where a complaint has been filed by any person under the Act or the

This is a general summary and broadly describes the rules. Not all aspects of the proposed

rules are addressed. For an in-depth analysis of the provisions in the rules and the issues

raised regarding each section of the rules, please refer to the Board’s first- and second-notice

opinions and orders.

Groundwater Protection Act (415 ILCS 55/1

et seq.

(1996)) to require another person to perform a

response or to recover the costs of a response. To establish a respondent’s proportionate share, the

complainant must prove that the respondent proximately caused or contributed to a release. The

complainant must also provide evidence of the degree to which the response was the result of the

respondent’s proximate causation of or contribution to a release of a regulated substance or

pesticide. At the conclusion of the action, the Board will enter a final order determining whether the

respondent proximately caused or contributed to a release. If so, the Board will also determine the

respondent’s share of the response and order the respondent to perform or pay for its proportionate

share of the response.

In the second type of proceeding, the rules contained in Subpart C govern. Two or more

persons who agree to accept 100% of liability to perform or pay for a response may initiate a

voluntary allocation proceeding before the Board by filing a joint petition. These voluntary allocation

procedures are available only if there is an Agency-approved Remedial Action Plan for the site or if

there is a written agreement with the Agency regarding the performance of a response at the site

following the issuance of a notice under Section 4(q) or Section 58.9(b) of the Act. At any time,

participants may suspend a Subpart C proceeding for up to 120 days to engage in mediation. If the

participants reach an agreement on allocation of proportionate shares, the participants can either file

a motion to dismiss the allocation proceeding before the Board or file a stipulated settlement

agreement with the Board. Absent an agreement, the Board will allocate liability among the

participants based on the evidence presented at a hearing and enter an order directing the

participants to perform the response or pay costs.

Parties may

obtain relief from final orders allocating proportionate shares, including

reallocation, based on newly discovered evidence that existed at the time of hearing and could not

have been discovered by due diligence. (Relief may also be obtained for fraud or a void order.)

“Due diligence” in this context means diligence in performing studies common and appropriate to

development of a remediation plan. A motion for relief must be filed within one year of entry of the

order, unless the response begins within that year, in which case the time for filing a motion for relief

is extended to three years. Either of these time periods may be extended by the Board for cause.

CONCLUSION

Based upon the record in this proceeding, the Board finds that adoption of the proposed

rules is warranted. The Board also finds that these rules will not have an adverse economic

impact on the people of the State of Illinois. See 415 ILCS 5/27(b) (1996).

ORDER

The Board hereby adopts the following rules as 35 Ill. Adm. Code 741. The Clerk of

the Board is directed to cause the following rules to be filed with the Secretary of State for

publication in the

Illinois Register

TITLE 35: ENVIRONMENTAL PROTECTION

SUBTITLE G: WASTE DISPOSAL

CHAPTER I: POLLUTION CONTROL BOARD

PART 741

PROPORTIONATE SHARE LIABILITY

SUBPART A: GENERAL

Section

741.100

Purpose

741.105

Applicability

741.110

Definitions

741.115

Discovery Before an Action is Filed

741.120

Section 58.9(b) Notice

741.125

Notice to Agency

741.130

Discovery After an Action is File

741.135

Allocation Factors

741.140

Relief from Final Orders

741.145

Severability

SUBPART B: ALLOCATION OF PROPORTIONATE SHARES WHEN A COMPLAINT HAS BEEN

FILED

741.200

General

741.205

Burden and Standard of Proof

741.210

Final Orders

SUBPART C: VOLUNTARY ALLOCATION PROCEEDINGS

741.300

General

741.305

Initiation of Voluntary Allocation Proceeding

741.310

Allocation Proposals and Hearing Requests

741.315

Settlements

741.320

Mediation

741.325

Settlement Through Mediation

741.330

Board Review and Final

Orders

AUTHORITY: Implementing Section 58.9 and authorized by Section 58.9(d) of the Environmental

Protection Act [415 ILCS 5/58.9]

SOURCE: Adopted in R97-16 at 22 Ill. Reg. _____, effective ________, 19___.

SUBPART A: GENERAL

Section 741.100

Purpose

The purpose of this Part is to establish procedures under which the Board will allocate proportionate

shares of the performance or costs of a response resulting from the release or substantial threat of a

release of regulated substances or pesticides on, in, under or from a site.

Section 741.105

Applicability

This Part applies to proceedings before the Board in which:

Any person seeks, under the Environmental Protection Act [415 ILCS 5] or

the Groundwater Protection Act [415 ILCS 55], to require another person to

perform, or to recover the costs of, a response that results from a release or

substantial threat of a release of regulated substances or pesticides on, in,

under or from a site; or

Two or more persons seek to allocate among themselves

100 percent of the

performance or costs of a response that results from a release or substantial

threat of a release of regulated substances or pesticides on, in, under or from

a site.

The Board’s procedural rules at 35 Ill. Adm. Code 101 and 103 apply to all

proceedings under this Part. However, in the event of a conflict between the rules of

35 Ill. Adm. Code 101 and 103 and this Part, this Part applies.

Subpart A of this Part also applies to all proceedings under this Part. However, in

the event of a conflict between the rules of Subpart A and subsequent Subparts of

this Part, the subsequent Subpart applies.

Subpart B of this Part applies when a complaint is filed with the Board that seeks,

under the Environmental Protection Act or the Groundwater Protection Act:

To require any person to perform a response that results from a release or

substantial threat of a release of regulated substances or pesticides; or

To recover the costs of a response that results from a release or substant

ial

threat of a release of regulated substances or pesticides.

Subpart C of this Part applies when a petition is filed with the Board under Section

741.305 of this Part to allocate among the participants 100 percent of the

performance or costs of a response that results from a release or substantial threat

of a release of regulated substances or pesticides. No person may file a petition

under Subpart C of this Part when a complaint has been filed in any forum that

addresses the same release or substantial threat of a release.

This Part does not apply to:

Any cost recovery action brought by the State under Section 22.2

of the Act

recover costs incurred by the State prior to July 1, 1996

(Section 58.9(f) of the

Act);

Sites on the National Priorities List (Appendix B of 40 CFR 300);

Sites where a federal court order or a United States Environmental Protection

Agency order requires an investigation or response;

The owner or operator of a treatment, storage or disposal site:

For whi

ch a current permit has been issued or is required under

federal or State solid or hazardous waste laws; or

That is subject to closure or corrective action requirements under

federal or State solid or hazardous waste laws;

The owner or operator of an underground storage tank system subject to

federal or State underground storage tank laws.

This Part applies to any person or site described in subsections (f)(2) through (f)(5) of

this Section to the extent allowed by federal law, federal authorization or other federal

approval.

Section 741.110

Definitions

Except as stated in this Section, or unless a different meaning of a word or term is clear from the

context, the definition of words or terms in this Part is the same as that applied to the same words or

terms in the Environmental Protection Act [415 ILCS 5].

“Act” means the Environmental Protection Act [415 ILCS 5].

“Agency” means the Illinois Environmental Protection Agency.

“Board” means the Pollution Control Board.

“

Person

”

means individual, trust, firm, joint stock company, joint venture, consortium,

commercial entity, corporation (including a government corporation), partnership,

association, state, municipality, commission, political subdivision of a state or any

interstate body including the United States government and each department, agency,

and instrumentality of the United States.

(Section 58.2 of the Act)

“

Pesticide

”

means any substance or mixture of substances intended for preventing,

destroying, repelling, or mitigating any pest or any substance or mixture of substances

intended for use as a plant regulator, defoliant or desiccant.

(Section 3.71 of the Act)

“Proportionate Share” means a person’s share of the performance or costs of a

response based on the degree to which the performance or costs result from the

person’s proximate causation of or contribution to the release or substantial threat of

a release.

“

Regulated Substance

”

means any hazardous substance as defined under Section

101(14) of the Comprehensive Environmental Response, Compensation, and Liability

Act of 1980 (P.L. 96-510) and petroleum products including crude oil or any fraction

thereof, natural gas, natural gas liquids, liquefied natural gas, or synthetic gas usable

for fuel (or mixtures of natural gas and such synthetic gas).

(Section 58.2 of the Act)

“

Release

”

means any spilling, leaking, pumping, pouring, emitting, emptying,

discharging, injecting, escaping, leaching, dumping, or disposing into the

environment, but excludes any release which results in exposure to persons solely

within a workplace, with respect to a claim which such persons may assert against the

employer of such persons; emissions from the engine exhaust of a motor vehicle,

rolling stock, aircraft, vessel, or pipeline pumping station engine; release of source,

byproduct, or special nuclear material from a nuclear incident, as those terms are

defined in the Atomic Energy Act of 1954, if such release is subject to requirements

with respect to financial protection established by the Nuclear Regulatory Commission

under Section 170 of such Act; and the normal application of fertilizer.

(Section 3.33

of the Act)

“

Remedial Action

”

means those actions consistent with permanent remedy taken

instead of or in addition to removal actions in the event of a release or threatened

release of a

regulated substance or pesticides

into the environment, to prevent or

minimize the release of

regulated substances or pesticides

so that they do not migrate

to cause substantial danger to present or future public health or welfare or the

environment. The term includes, but is not limited to, such actions at the location of

the release as storage, confinement, perimeter protection using dikes, trenches or

ditches, clay cover, neutralization, cleanup of released

regulated substances or

pesticides

or contaminated materials, recycling or reuse, diversion destruction,

segregation of reactive substances, dredging or excavations, repair or replacement of

leaking containers, collection of leachate and runoff, onsite treatment or incineration,

provision of alternative water supplies, and any monitoring reasonably required to

assure that such actions protect the public health and welfare and the environment.

The term includes the costs of permanent relocation of residents and businesses and

community facilities where the Governor and Director determine that, alone or in

combination with other measures, such relocation is more cost-effective than and

environmentally preferable to the transportation, storage, treatment, destruction, or

secure disposition offsite of

regulated substances or pesticides,

or may otherwise be

necessary to protect the public health or welfare. The term includes offsite transport

regulated substances or pesticides

, or the storage, treatment, destruction, or

secure disposition offsite of such

regulated substances or pesticides

or contaminated

materials. Remedial action

also includes

activities associated with compliance with

the provisions of Sections

58.6 and 58.7

of the Act, including, but not limited to, the

conduct of site investigations, preparations of work plans and reports, removal or

treatment of contaminants, construction and maintenance of engineered barriers,

and/or implementation of institutional controls. (Sections 3.34 and 58.2 of the Act)

“

Remove

”

“

Removal

”

means the cleanup or removal of released

regulated

substances or pesticides

from the environment, actions as may be necessary to take

in the event of the threat of release of

regulated substances or pesticides

into the

environment, actions as may be necessary to monitor, assess, and evaluate the

release or threat of release of

regulated substances or pesticides,

the disposal of

removed material, or the taking of other actions as may be necessary to prevent,

minimize, or mitigate damage to the public health or welfare of the environment, that

may otherwise result from a release or threat of release. The term includes, in

addition, without being limited to, security fencing or other measures to limit access,

provision of alternative water supplies, temporary evacuation and housing of

threatened individuals, and any emergency assistance that may be provided under

the Illinois Emergency Management Act or any other law.

(Section 3.35 of the Act)

“

Respond

”

“

Response

”

means remove, removal, remedy, and remedial action.

(Section 3.40 of the Act)

“

Site

”

means any single location, place, tract of land or parcel of property or portion

thereof, including contiguous property separated by a public right-of-way.

(Section

58.2 of the Act) This term also includes, but is not limited to, all buildings and

improvements present at that location, place or tract of land.

Section 741.115

Discovery Before an Action is Filed

Any person who wishes to engage in discovery before filing an action seeking

proportionate shares may file a petition with the Board for discovery for the sole

purpose of identifying persons who may have proximately caused or contributed to a

release or substantial threat of release of regulated substances or pesticides.

The petition, which must be supported by affidavits, must be brought in the name of

the petitioner and must name as respondents the person or persons from whom

discovery is sought. A brief or memorandum and other supporting documents may

be filed with the petition. The petition must include:

The name and address of the respondents;

The reason the proposed discovery is necessary, including why the petitioner

could not obtain the information sought by any other reasonable means;

A copy of th

e proposed discovery requests;

A statement of the petitioner’s basis for belief that there is a release or

substantial threat of a release and that the respondent has or may have the

information sought;

The petitioner’s proposed time for compliance with the order (not

less than 30 days from the date of issuance of the order);

A request that the Board enter an order authorizing petitioner to obtain such

discovery; and

A notice informing the respondent of the opportunity to respond to the

petition

within 30 days.

The petitioner must serve a notice of filing and a copy of the petition and any

supporting documents upon the persons to whom the order is to be directed who

must be designated the respondents.

Within 30 days from the date of service of the petition, the respondent may file a

response to the petition supported by affidavits as necessary. The respondent may

file a brief or memorandum and other supporting documents with the response. If no

response is filed, the respondent is deemed to have waived objection to the

discovery sought.

The petitioner may reply to the response within 7 days after the date of service of the

response.

Petitioner must serve and file the petition in accordance with 35 Ill. Adm. Code

101.Subpart C, except that petitioner must initially serve the petition personally, by

registered or certified mail, or by messenger service.

The Board will review the petition, response, affidavits, and any other supporting

documents on file and grant the petition if the Board finds that the requested

discovery, or a portion of the requested discovery that the Board specifies, is

necessary to identify persons who may have proximately caused or contributed to a

release or a substantial threat of a release of regulated substances or pesticides and

that the information could not be obtained by any other reasonable means. The order

will specify a reasonable time for compliance and the method of compliance.

Unless extended for cause shown, the Board’s order auto

matically expires 60 days

after issuance. If any respondent fails to comply with a discovery request authorized

under this Section, the petitioner may seek penalties under Section 42 of the Act.

The petitioner must bear the respondent’s reasonable expenses of providing the

discovery (excluding attorney fees).

Nothing in this Section limits the ability of any person to obtain information in any

other lawful manner.

No petition under this Section may be brought:

Against agencies subject to th

e Freedom of Information Act [5 ILCS 140]; or

For information privileged under 35 Ill. Adm. Code 101 and 103.

Section 741.120

Section 58.9(b) Notice

In the event the State of Illinois seeks to require a person who may be liable pursuant to the Act to

conduct

a response

for a release or threatened release of a regulated substance, the Agency shall

provide notice to such person

. S

uch notice shall include the necessity to conduct

a response

pursuant to Title XVII of the Act and an opportunity for the person to perform the

response. (Section

58.9(b) of the Act)

Section 741.125

Notice to Agency

A person seeking allocation of proportionate shares must serve a copy of the complaint, or the

petition under Subpart C of this Part, on the Agency within 30 days after the filing of the complaint or

petition. Such person must serve the Agency pursuant to 35 Ill. Adm. Code 101.141. The Agency

may file an application with the Board to intervene in the proceeding under 35 Ill. Adm. Code

103.142.

Section 741.130

Discovery After an Action is Filed

Within time limits set by the hearing officer, each party to a proceeding in which

allocation of proportionate shares is sought must compile any and all documents

within its possession or control pertaining to the release or threatened release and

the party’s proportionate share and shall make the records available for review and

copying by the parties. Documents protected from disclosure under 35 Ill. Adm.

Code 101 and 103 are not subject to this Section.

Discovery is governed by 35 Ill. Adm. Code 101 and 103, and all discovery devices

identified in 35 Ill. Adm. Code 101 and 103 are available to all parties in a proceeding

to allocate proportionate shares. Sanctions for failure to comply with procedural

rules, subpoenas, or order of the Board or hearing officer will be as set forth therein

and as otherwise available under the Act.

Section 741.135

Allocation Factors

In determining proportionate shares under this Part, the Board will consider any or all factors related

to the degree to which the performance or costs of a response result from a person’s proximate

causation of or contribution to the release or substantial threat of a release. These factors include

the following:

The volume of regulated substances or pesticides for which each person is

responsible;

Consistent with the provisions of 35 Ill. Adm. Code 742 and the remediation of the

site in a manner consistent with its current and reasonably foreseeable future use,

the degree of risk or hazard posed by the regulated substances or pesticides

contributed by each person;

The degree of each person’s involvement in any activity that proximately caused or

contributed to the release or substantial threat of a release of regulated substances

or pesticides; and

Any other factors relevant to a person’s proportionate share.

Section 741.140

Relief from Final Orders

On written motion by any party, the Board, for any of the reasons set forth in

35 Ill. Adm. Code 101.301(b), may provide relief from a final order in which

the Board allocated proportionate shares.

Relief under subsection (a) of this Section may include reallocation of proportionate

shares.

The Board may decline to reopen an allocation determination if the motion and any

supporting materials do not demonstrate that the reopening would result in significant

changes in proportionate shares.

A motion under subsection (a) of this Section must be filed with the Board within one

year after entry of the order, except that when the response begins during this one-

year period, a motion under subsection (a) of this Section must be filed with the

Board within three years after entry of the order. Upon written motion, the Board may

extend either of these periods for cause shown.

Any response to a motion under this Section must be filed within 30 days after the

filing of the motion.

Section 741.145

Severability

If any Section, subsection, sentence or clause of this Part is judged invalid, such adjudication does

not affect the validity of this Part as a whole or any Section, subsection, sentence or clause thereof

not judged invalid.

SUBPART B: ALLOCATION OF PROPORTIONATE SHARES WHEN

A COMPLAINT HAS BEEN FILED

Section 741.200

General

This Subpart sets forth the procedures that apply when a complaint is filed with the Board that seeks,

under the Act or the Groundwater Protection Act [415 ILCS 55], to require any person to perform a

response that results from a release or substantial threat of a release of regulated substances or

pesticides, or to recover the costs of a response. This Subpart also sets forth the burden and

standard of proof for such actions.

Section 741.205

Burden and Standard of Proof

To establish a respondent’s proportionate share, the complainant must prove the

following by a preponderance of the evidence:

That the respondent proximately caused or contributed to a release or

substantial threat of a release of regulated substances or pesticides on, in,

under or from a site; and

The degree to which the perfo

rmance or costs of a response result from the

respondent’s proximate causation of or contribution to the release or

substantial threat of a release as established under subsection (a)(1) of this

Section.

Liability to perform or pay for a response that results from the release or substantial

threat of a release of regulated substances or pesticides on, in, under or from a site

is subject to all defenses allowed by law, including the defenses set forth in Section

22.2(j) of the Act, and the limitations set forth in Section 58.9(a)(2) of the Act. The

respondent raising a defense set forth in Section 22.2(j) or a limitation set forth in

Section 58.9(a)(2) of the Act must prove the defense or limitation by a

preponderance of the evidence.

A complainant is not required to plead a specific alleged percentage of liability for the

performance or costs of a response in a complaint that seeks to require a respondent

to perform or pay for a response that results from a release or substantial threat of a

release of regulated substances or pesticides.

Section 741.210

Final Orders

Based on the evidence presented at hearing or in a stipulation, the Board will enter a

final order that determines whether a respondent proximately caused or contributed

to a release or substantial threat of a release.

If the Board determines, under subsection (a) of this Section, that a respondent

proximately caused or contributed to a release or substantial threat of a release, the

Board will, in its final order, order respondent to perform or pay for a response. The

Board will order the respondent to perform or pay for a response only to the degree

to which a preponderance of the evidence shows that the performance or costs of the

response result from the respondent’s proximate causation of or contribution to the

release or substantial threat of a release. In making this decision, the Board will

consider the allocation factors of Section 741.135 of this Part.

If any party fails to comply with the Board’s order under this

Section, any party may

seek penalties under Section 42 of the Act. The Board may order a party that fails to

comply with the Board’s order under this Section to pay penalties under Section 42 of

the Act.

SUBPART C: VOLUNTARY ALLOCATION PROCEEDINGS

Section 741.300

General

This Subpart sets forth the procedures that may apply when two or more persons seek to allocate

among themselves 100 percent of the performance or costs of a response that results from a

release or substantial threat of a release of regulated substances or pesticides on, in, under or from

a site. This Subpart also includes procedures for mediation and settlements and the requirements

and standards that the Board will use to issue final orders.

Section 741.305

Initiation of Voluntary Allocation Proceeding

Participants that agree to accept 100 percent of liability to perform or pay for a

response that results from a release or substantial threat of a release of regulated

substances or pesticides on, in, under or from a site, whether or not they stipulate to

specific shares of such liability, may initiate a voluntary allocation proceeding by filing

a petition with the Board if:

There is an Agency-approved Remedial Action Plan for the site under 35 Ill.

Adm. Code 740; or

There is a written agreement with the Agency regarding the performance of a

response at the site following the issuance of a notice under Section 4(q) or

Section 58.9(b) of the Act.

The petition under subsection (a) of this Section must include the following

information:

The location and identity of the site for which an allocation of proportionate

shares is requested;

The identity of all participants;

The stipulated shares of specific participants, if any;

Certification that the participants agree to allocate among themselves 100

percent of the performance or costs of the response under the Remedial

Action Plan or written agreement with the Agency; and

A statement that the participants choose to engage in either mediation under

Sections 741.320 and 741.325 of this Subpart or to proceed with the Board’s

allocation proceedings under Sections 741.310 and 741.315 of this Subpart.

Upon determination that the petition contains the required information, the Board will

issue an order accepting the petition and assigning a hearing officer as necessary.

The nature of any response agreed to as part of a Remedial Action Plan or written

agreement with the Agency cannot be contested during the allocation proceeding.

No person may file a pe

tition under Subpart C of this Part when a complaint has

been filed in any forum that addresses the same release or substantial threat of a

release. If the Agency, the State, or any person files a complaint in any forum that

involves the same release or substantial threat of a release, the Board may, upon

motion by any participant or at its discretion, stay the proceedings under this Subpart

pending the outcome of the other proceeding. The State, the Agency or any party to

the other proceeding also may appear specially to move the Board to stay the

proceedings under this Subpart.

Section 741.310

Allocation Proposals and Hearing Requests

Within 60 days following the close of discovery, the participants must submit a joint

proposal to the Board that must include either or both of the following, as applicable:

For any or all of the participants, an agreed allocation of proportionate

shares;

A request for hearing on all allocations of proportionate shares for which the

participants have not agreed.

If agreed allocations are reached for all participants, the allocated shares must total

100 percent of the performance or costs of the response under the Remedial Action

Plan or written agreement with the Agency.

If a hearing is requested as part of the joint proposal under subsection (a) of this

Section, the hearing officer will issue an order to schedule and conduct the hearing

and address any other matters as necessary. The order must require that, at least 30

days before the date of hearing, each participant submit a pre-hearing memorandum

setting forth the proportionate share that it accepts and the issues to be resolved at

the hearing.

Section 741.315

Settlements

Nothing in this Subpart prohibits the participants from at any time entering into a settlement for

Board review if the settlement allocates among the settling participants 100 percent of the

performance or costs of the response under the Remedial Action Plan or written agreement with the

Agency.

Section 741.320

Mediation

If the participants wish to engage in mediation, the participants may file a joint notice

of that intent with the Board designating a mediator whom the participants have

mutually selected.

While mediation is proceeding, the time period for the allocation proposal and

hearing request under Section 741.310 of this Subpart and all discovery proceedings

under this Part and 35 Ill. Adm. Code 101 and 103 are suspended.

Mediation must be completed within 120 days after the participants have filed notice

of their intent to mediate with the Board. Upon written motion, the Board may extend

this period for cause shown.

Section 741.325

Settlement Through Mediation

If the participants reach an agreement through mediation, it must be reduced to

writing and signed by the participants. Within 14 days after execution of the

agreement, the participants must file a joint motion to dismiss the Board action or a

motion to accept the stipulated settlement agreement.

If the participants do not reach an agreement, the participants must report the lack of

an agreement to the Board and file either:

A joint motion to dismiss the Board action; or

A joint motion to initiate or resume the Board allocation proceeding under

Sections 741.310 and 741.315 of this Subpart.

At any time, the participants may jointly file a motion to cease the mediation and

begin or resume the Board’s allocation proceedings under Sections 741.310 and

741.315 of this Subpart.

Section 741.330

Board Review and Final Orders

Based on the evidence pres

ented at hearing or in a stipulation, the Board will enter a

final order allocating a proportionate share to each participant.

The Board’s final order will allocate 100 percent of the performance or costs of the

response under the Remedial Action Plan or written agreement with the Agency. If

the total of the agreed allocations under Section 741.310(a)(1) of this Subpart and the

proportionate shares demonstrated during the hearing do not equal 100 percent of

the performance or costs of the response, the Board’s order will allocate the

remaining liability for performance or costs among all of the participants in the same

ratio as the shares that have been agreed upon or demonstrated during the hearing.

The Board’s final order will include an order to perform or pay for the response based

on the proportionate shares determined during the proceeding.

The Board may impose penalties under Section 42 of the Act if a participant fails to

comply with a Board order under this Section.

IT IS SO ORDERED.

Section 41 of the Environmental Protection Act (415 ILCS 5/41 (1996)) provides for

the appeal of final Board orders to the Illinois Appellate Court within 35 days of service of this

order. Illinois Supreme Court Rule 335 establishes such filing requirements. See 172 Ill. 2d

R. 335; see also 35 Ill. Adm. Code 101.246, Motions for Reconsideration.

I, Dorothy M. Gunn, Clerk of the Illinois Pollution Control Board, hereby certify that

the above opinion and order was adopted on the 17th

day of December 1998 by a vote of 6-0.

Dorothy M. Gunn, Clerk

Illinois Pollution Control Board

ATTACHMENT A - R97-16

PUBLIC COMMENTS (PC)

PC 1:

Comments of the IERG, submitted by Whitney Rosen (3/21/97).

PC 2:

Comments of the National Association of Independent Insurers, submitted by

Richard Hodyl, Jr., Insurance Services Counsel (3/28/97).

PC 3:

Supplemental comments of the IERG, submitted by Whitney Rosen (2/2/98).

PC 4:

Comments of Thomas A. Ryan on behalf of Browning-Ferris Industries of

Illinois, Inc. (BFI) (4/20/98).

PC 5: Comments of Laurel O’Sullivan on behalf of BPI (7/8/98).

PC 6: The Agency’s Posthearing Comments (7/14/98).

PC 7: The AGO’s Posthearing Comments (7/14/98).

PC 8: Comments of Karaganis & White, Ltd. (Karaganis & White) (7/14/98).

PC 9: Comments of the City of Chicago, Department of Environment (City)

(7/14/98).

PC 10: Comments of Carey Rosemarin on behalf of Com Ed (7/14/98).

PC 11: Comments of the USEPA (7/14/98).

PC 12: Public comments of Mohan, Alewelt, Prillaman & Adami (Mohan) (7/15/98).

PC 13: Posthearing comments of David Rieser on behalf of the SRAC, the ISG, and

the CICI (7/17/98).

PC 14: Posthearing comments of Randy A. Muller on behalf of the Illinois Banker’s

Association (7/21/98).

PC 15: Posthearing comments of Whitney Rosen on behalf of the IERG (7/23/98).

PC 16: Comments of the Community Bankers Association of Illinois (10/8/98).

PC 17: First-notice comments of the Agency (11/4/98).

PC 18: First-notice comments of the USEPA (11/4/98).

PC 19: First-notice comments of Karaganis & White (11/4/98).

PC 20: First-notice comments of the AGO (11/4/98).

PC 21: First-notice comments of the City (11/4/98).

PC 22: Proposed second-notice comments of the Agency (11/23/98).

PC 23: Proposed second-notice comments of the USEPA (11/23/98).

PC 24: Proposed second-notice comments of the AGO (11/23/98).

PC 25: Proposed second-notice comments of the SRAC, the ISG, and the CICI (11/23/98).

PC 26: Proposed second-notice comments of the IERG (11/23/98).

PC 27: Proposed second-notice comments of Michael Best & Friedrick (Illinois) (MBF)

(11/23/98).

PC 28: Proposed second-notice comments of Karaganis & White (11/24/98).

ATTACHMENT B - R97-16

EXHIBITS (Exh.)

Exh. 1: Photograph of the Steagall Landfill taken on November 6, 1985, by the

Agency.

Exh. 2: Photograph of the Steagall Landfill taken on November 6, 1985, by the

Agency.

Exh. 3: Enlarged photograph of open refuse at the Logan Landfill taken in August

1996 by the Agency before remedial action was conducted at the site.

Exh. 4: Enlarged photograph of the Logan Landfill taken in September 1997 by the

Agency after remedial action was conducted at the site.

Exh. 5: Prefiled testimony of Gary King of the Agency.

Exh. 6: Prefiled testimony of John Sherrill of the Agency.

Exh. 7: Agency’s document entitled “Allocation Scenarios Illustrating Approaches to

Apportionment for Liable Parties.”

Exh. 8: Agency’s document entitled “4(q) Notice Summary 1984 through 1997.”

Exh. 9: Prefiled testimony of Matthew Dunn of the AGO.

Exh. 10: Prefiled testimony of Sidney Marder of the IERG.

Exh. 11: Prefiled testimony of David Rieser on behalf of the ISG and CICI.

Exh. 12: Prefiled testimony of David Howe of Caterpillar, Inc.

Exh. 13: Testimony of Laurel O’Sullivan on behalf of BPI.

Exh. 14: Agency’s document entitled “Agency’s Errata Sheet Number 1.”

Exh. 15: Agency’s document entitled “Hazardous Waste Fund (HWF) Fiscal Years

1998 and 1999 Projections for Remedial Work.”

Exh. 16: Alternative language for Section 741.210(d) submitted by Carey Rosemarin

on behalf of Com Ed.

Exh. 17: Prefiled testimony of Gary King of the Agency.

Exh. 18: Prefiled testimony of Matthew Dunn of the AGO.

Exh. 19: Prefiled testimony of David Rieser on behalf of the SRAC.