ILLINOIS POLLUTION CONTROL
BOARD
June 3,
1993
SHELL OIL COMPANY,
)
Petitioner,
)
V.
)
PCB 92—154
(UST Fund)
ILLINOIS ENVIRONMENTAL
PROTECTION AGENCY,
)
)
Respondent.
S.
L. HARRIS OF MID CONTINENT REAL ESTATE,
F.
T. KATIC,
HEALTH,
SAFETY
AND
ENVIRONMENTAL REPRESENTATIVE OF THE CHICAGO SOUTH
DISTRICT,
AND
L.
L. ALLEN,
ENVIRONMENTAL ENGINEER, APPEARED ON
BEHALF OF PETITIONER;
J.
G. RICHARDSON APPEARED ON BEHALF OF RESPONDENT.
OPINION
AND
ORDER OF THE
BOARD
(by G.
T. Girard):
This matter is before the Board on an October 19,
1992,
appeal pursuant to Section 22.i.8b(g)
of the Illinois
Environmental Protection Act
(Act)
by Shell Oil Company (Shell
Oil)
of an Underground Storage Tank
(liST)
Fund reimbursement
denial rendered by the Illinois Environmental Protection Agency
(Agency) on September 11,
1992.
Hearing was held in Chicago,
Cook County, Illinois on December 22,
1992,
at which no member of
the public attended.
A waiver of deadline for final Board action
until June 6,
1993, was filed by Shell Oil pursuant to section
101.105 of the Act on January
6,
1993.
Shell Oil filed its brief
on January 29,
1993.
The Agency filed its brief on May 10,
1993,
and Shell Oil filed a reply brief on May 14,
1993.
For the reasons given below,
the Board finds that Shell Oil
is eligible for reimbursement for corrective action costs from
the UST Fund.
The Agency’s determination is therefore reversed.
The case is remanded to the Agency to determine applicable
deductible and reasonableness of costs.
FACTS
The tanks in question are located at a service station at
701 Burlington Road, Western Springs, Cook County, Illinois
(Rec.
U
L~3-QQL1.5
2
at 12)’.
At hearing, the parties agreed to stipulate the factual
basis of the Agency record
(Tr. at 5-6), and the Agency repeated
that the statement of facts presented by Shell Oil is acceptable.
(Res.
Br. at 1.)
The following facts from the record are not
disputed:
1.
Shell Oil owned three underground storage tanks which
stored gasoline at the Western Springs location and
registered those tanks with the Office of State Fire
Marshal
(OSFM) on April 25,
1986
(Rec. at 12—13).
2.
A hydrogeological site assessment was initiated by
Shell
in 1987 pursuant to selling the service station
site to the existing dealer, James Benak.
(Rec.
at
58.)
3.
During the site assessment,
4 inches of free product
was discovered in ground water at the site and was
reported to the Illinois Emergency Service and Disaster
Agency on October 29,
1987, by
S.
C.
Lewis,
Shell
Project Engineer, as Incident Number 871760.
Remediation activities commenced by Shell immediately.
(Rec.
at
58.)2
4.
Shell Oil sold the service station property to the
dealer, James Benak, on March 18,
1988
(Rec.
at 58).
5.
Shell transferred ownership of the three underground
storage tanks to Mr. Benak on January 9,
1989
(Rec.
at
58), and OSFM was notified of Mr. Benak’s ownership on
January
9,
1989
(Rec.
at 14).
6.
On July 24,
1992, Shell Oil filed its application for
reimbursement with the Agency
(Rec.
at 1-8).
7.
By letter dated September 11,
1992
(Rec.
at 55—56), the
Agency notified Shell Oil:
“You are ineligible for reimbursement from
the Fund for the following reason(s):
Shell
‘The Agency Record will be cited as “Rec. at
“.
The
hearing transcript will be cited as “Tr
at
“.
Petitioner’s
brief and Reply Brief will be cited as “Pet.
Br. at
“
and Pet.
Rep.
Br. at
“,
respectively.
Respondent’s Brief will be cited
as “Res.
Br. at
“.
2Shell Oil noted in Petitioner’s Brief filed January 29,
1993,
that corrective action began on November 11,
1987,
but this
was not specified in the Agency Record stipulated at hearing on
December 22,
1992.
01 ~3-O0L~.6
3
Oil is not the registered owner or operator
of the tanks.”
ISSUE
The sole issue in this case is whether or not Shell Oil
is
eligible for reimbursement from the UST Fund for corrective
action costs incurred even though the tanks in question were
transferred to new ownership on January
9,
1989, between the
notification of release on October 29,
1987,
and the application
to the Agency for reimbursement from the UST Fund on July 24,
1992.
Under Section 22.18b of the Act
(415 ILCS 5/22.l8b)
an
“owner” or “operator” satisfying certain specified requirements
is eligible to receive money from the UST Fund.
“Owner” and
“operator” are defined in Section 22.18(e) (1) (B) by cross—
reference to Subtitle I of the federal Hazardous and Solid Waste
Amendments of 1984.
The federal definitions appear in 42 USCS
(May 1992 Cum.
Supp.),
Section 6991
(3) and
(4).
For a UST in
use after November 8,
1984,
or brought into use after that date,
“owner” means any person who “owns” such liST.
“Operator” means
any person in control of or having responsibility for the daily
operation of the
liST.
The Board finds that when the release from the tanks was
reported on October 29,
1987, Shell Oil was the owner of the
tanks.
Further, the Board finds that Shell Oil was the owner of
the tanks when corrective action commenced in November 1987.
According to Section 22.l8b,
Shell Oil would clearly meet the
ownership eligibility requirements to receive reimbursement for
the corrective actions taken if the tanks
in question had been
owned by Shell on July 24,
1992, when application for
reimbursement was filed with the Agency.
Shell Oil transferred ownership of the tanks to James Benak
on January 9,
1989.
Mr. Benak has performed no corrective action
and spent no money on corrective action, while Shell Oil has
performed all the corrective action and has spent all the money
that has been spent on such corrective action.
(Pet.
Br. at 11.)
Furthermore, according to Petitioner’s Brief, Shell Oil “is
obligated to continue, has continued, and is continuing to
perform corrective action even though the tanks are now owned by
Mr.
Benak”.
(Pet.
Br. at 4.)
The Agency has not disputed Shell
Oil’s claims that Mr. Benak has not paid for any of the
corrective action costs.
The Agency’s denial was based solely on the fact that Shell
Oil was not the owner of the tanks when the application for liST
Fund reimbursement was filed with the Agency on July 24,
1992.
The Agency argues that “to be eligible for reimbursement from the
p
L~U~J~4
4
fund,
Shell must justify expansion of the traditional owner and
operator classes to include former owners”.
(Res.
Br. at 1.)
The Agency submits that the federal language in Section 6991
(3)
and
(4) used the present tense to focus on the current or present
owner or operator of an underground storage tank.
The Agency
opines that the wording of these sections limits the definition
of an owner or operator by. their relationship to a UST at a given
point in time.
(Res.
Br. at 2.)
To avoid the eligibility
problems of the instant case, the Agency suggests that Shell Oil
could have chosen:
to delay the transfer of ownership of this site and
these liST’s or to make legal arrangements with the
current owner whereby eligibility under the current
owner and operator definitions could have been
obtained.
Instead,
Shell asks that the eligibility
schemes be changed to accommodate one site.
(Res.
Br.
at 3.)
Shell Oil argues that the Agency’s restriction of
eligibility for reimbursement from the liST Fund to persons who
are owners or operators at the time the application for
reimbursement is filed
is contrary to the language of the statute
and the intent of the legislature.
(Pet.
Br.
at 6.)
Shell Oil
notes that nowhere in Section 22.18b of the Act is there an
explicit provision that only the current owner or operator is
eligible to receive money from the UST Fund.
The only statutory
provision which ties the date of the Agency’s receipt of an
application to an Agency determination is Section
22.18b(d)(3)(G).
This requires the Agency to determine the
applicable deductible under Section 22.18b(d) (3) “based on the
date that a complete application for eligibility determination
is received by the Agency”.
Furthermore, Section 22.18b
gives a very specific and detailed list of requirements for
reimbursement from the UST Fund; however, there is no specific
“owner at the time of Agency receipt of application” requirement.
(Pet.
Br. at 9.)
Shell Oil further argues that the probable key to the
Agency’s position in this case is what could be termed “policy”
considerations against finding Shell eligible for reimbursement.
(Pet. Rep. Br.
at 1.)
Shell Oil states:
The first
(and only)
full paragraph on the third page
of Respondent’s Brief seems to supply the key to the
Agency’s position,
and this is what it comes to:
“That
is how the Agency has always done it and to change
it
now will be too much trouble.”
Specifically,
the
Agency says that:
1.
It perceives Shell as asking for the Agency’s
“eligibility scheme” to be “changed to
fl~
4~..i
uu4
5
accommodate one site”.
2.
Numerous sites have received no reimbursement
or just partial reimbursement “because the
requirements of the
Agency’s)
system could
not be met”.
3.
There will be “problems”
if the Agency is
required to expand its definition of “owner
and operator”.
4.
The Agency will encounter “difficulty in re—
crafting the definitions”.
5.
These points all “greatly outweigh the
benefits of finding Shell eligible for
reimbursement at this one site”.
The Agency overlooks that Shell is not asking the Board
to create new policy; Shell just asks that the Agency
be made to comply with the Act.
The Agency has not
challenged Shell’s statutory construction and
legislative history arguments,
all demonstrating that a
former owner in Shell’s position is eligible for
reimbursement from the UST Fund.
What the Agency in
effect now says is that the Board should simply ignore
all that and base its decision on “policy”
considerations which amount to:
(i)
The possibility of inconvenience to the
Agency.
(ii)
The Agency’s apparent belief that it was
unwise of the legislature to make a slightly
wider group of persons eligible for
reimbursement from the UST Fund than the
Agency’s current definitions provide for.
The obvious answer to this is that the legislature has
spoken and hence these considerations have no place
here.
The Agency must follow the Act; Shell
respectfully submits that the Board should insist that
the Agency do so despite the Agency’s evident
reluctance....
A further comment should be made on the Agency’s
“legislative wisdom” argument of unspecified “problems
caused by expanding the
Agency’s)
definition of owner
and operator”.
The “expansion” which a correct reading
of the Act requires is really very limited
-—
eligibility of former owners for corrective action for
releases which occurred during their ownership and for
which they are responsible.
(In the present case,
there is the further factor that the corrective action
actually began while Shell was still the owner.)
(Pet. Rep. Br. at 2,3.)
01
L~.3-Q0L~9
6
The Board notes that this
is not the first time it has been
asked to interpret the definition of “owner” adopted in Section
22.lB(e)(1)(B).
As stated
in A.K.A.
Land.
Inc. v. IEPA
(120 PCB
35, PCB 90-177, March 14,
1991)
(A.K.A), the issue of whether the
petitioner
is an owner “suggest consequences that go well beyond
the issue of who has access to the State Fund; only owners or
operators fall within the jurisdictional purview of the whole
federal RCRA and State liST regulatory program”.
(A.K.A.,
at 10.)
The Board is certain that if the Agency were seeking to enforce
provisions of the UST corrective action requirements, the Agency
would not argue that Shell Oil does not have to comply because it
is not an “owner”.
The Board
is persuaded that the legislature did not intend
to limit access to the fund to the extent that the Agency is
arguing in this case.
To prohibit an entity from reimbursement
that clearly would be eligible for reimbursement but for the name
on the current OSFM registration would be an absurd result in the
instant case.
The Agency suggests that it would have no
objection to allowing Mr.
Benak access to the fund.
(Ag.
Br. at
4.)
However, Mr. Benak was not the owner when the leak occurred,
Shell Oil was.
To adopt the interpretation of the statute sought
by the Agency could result in indefinite delays of property
transfers,
even when the party responsible for the contamination
is willing to accept the responsibility and clean—up the site.
This is clearly against the best interest of Illinois citizens
and the environment, and not what the legislature intended when
crafting the liST statutes.
Therefore, the Board finds that in
the circumstance of the instant case,
Shell Oil meets the
definition of “owner” under Section 22.18b of the Act.
CONCLUSION
Clearly, Shell Oil was the owner of the tanks when the leak
was reported to OSFN on October 27,
1987.
Shell Oil commenced
corrective action in November 1987.
Although ownership of the
tanks was transferred to James Benak on January
9, 1989,
Shell
Oil
is still obligated to complete the corrective actions.
Shell
Oil has established that it was the owner of the tanks when the
leak was reported, and has paid for all of the corrective action
costs.
Therefore, the Board reverses the Agency’s denial of
eligibility and finds that Shell Oil is eligible for
reimbursement from the
liST Fund.
Since the Agency did not rule on the applicable deductible
and the reasonableness of corrective action costs incurred by
Shell Oil pursuant to Section 22.18b the Board hereby remands
this case to the Agency for its determination.
This docket
is
closed.
Petitioner is free to seek Board review of the Agency’s
final determination of the appropriate deductible and the
reasonableness of costs under a separate docket.
7
This constitutes the Board’s findings of fact and
conclusions of law in this matter.
ORDER
The Board reverses the Agency decision of September 11,
1992,
denying reimbursement for corrective action costs for three
liST’s at 701 Burlington, Western Springs, Cook County,
Illinois.
The case is remanded to the Agency to determine the applicable
deductible and the reasonableness of costs.
This docket is
closed.
IT IS SO ORDERED.
Section 41 of the Environmental Protection Act (415 ILCS
5/41
(1992)) provides for the appeal of final orders of the Board
within 35 days.
The Rules of the Supreme Court of Illinois
establish filing requirements.
(See also 35 Ill. Adm. Code
101.246, Motion for Reconsideration.)
I, Dorothy M.
Gunn, Clerk of the Illinois Pollution Control
Board, hereby certify that the,~boveopinion and order was
adopted on the
~4-~&
day of~1~-’—~tJ~._,
1993,
by a vote of
/L-~-’
Dorothy N. ç~nn,Clerk
Illinois PQ3lution Control Board
u14JU~J