ILLINOIS POLLUTION CONTROL BOARD
November 16, 1995
KELLEY—WILLIAMSON COMPANY,
Petitioner,
v.
)
PCB 95—116
(UST-Fund)
ILLINOIS ENVIRONMENTAL
)
PROTECTION AGENCY,
)
)
Respondent.
JOHN
W.
FRANCE,
WILLIAMS
&
MCCARTHY, APPEARED ON BEHALF OF
KELLEY-WILLIAMSON
COMPANY.
MELANIE
A.
JARVIS
APPEARED
ON BEHALF OF THE RESPONDENT.
OPINION
AND
ORDER
OF
THE
BOARD
(J.
Theodore
Meyer):
This matter comes before the Board on a March 29,
1995
petition for review filed by Kelley-Williainson Company
(KWC)
pursuant to sections 40 and 22.18(g)
of the Illinois
Environmental Protection Act
(Act) (415 ILCS 5/40 and
57.7(c)(4)(D)(iv)(1994).)
KWC
seeks review of particular costs
for which the Environmental Protection Agency (Agency) denied
eligibility for reimbursement from the Underground Storage Tank
Fund (UST Fund).
Hearing was held on August 25,
1995
in
Belvidere,
Boone County, Illinois before Hearing Officer Juhe
Edvenson.
No members of the public attended the hearing.
KWC
filed its post-hearing brief on September 22,
1995,
requesting
oral argument before the Board.
The Agency filed its post-
hearing brief on October
4,
1995,
and KWC filed its post-hearing
reply on October 23,
1995.1
As a preliminary matter, the Board denies KWC’s request for
oral argument.
Although
35
Ill. Adm. Code 103.140(d) provides
for oral argument on a motion, the Board believes that the issues
of eligibility for reimbursement presented here can be decided
based on the documents before it and that oral argument will
serve no useful purpose in this instance.
BACKGROUND
‘Hereinafter,
KWc’s
amended
petition for review shall be referred as
(Pet.
at
_.);
the record shall be referred to as (Rec.
at
_.);
and the
transcript shall be referred to as
(Tr.
at
_.).
KWC’s post—hearing brief
shall be referred to as
(PH Br.at
.);
the Agencyt s post—hearing brief shall
be referred to as (Agency Br.
at
.);
and,
KWc’s post—hearing reply shall be
referred to as
(Reply
at
.).
—
2
KWC
owned a gas station on Logan Avenue in Belvidere,
Illinois where eight underground storage tanks
(USTs) were
located.
(PH Br. at 1.)
In 1993 KWC hired Pyramid Petroleum
Equipment (Pyramid) to remove all eight tanks.
(~~)
Removal
began on November 1,
1993, at which time a release from each of
the tanks was discovered.
(~~)
Jim Karplanes of Pyramid and Jim
Drager of the Office of the State Fire Marshal
(OSFM) were
present at the removal site, observed the release and reported it
to KWC, who in turn reported it to the Illinois Emergency
Management Agency
(IEMA).
(Tr. at 25,
27,
97.)
After removal of
the tanks, Pyramid took soil samples from the site, placed the
excavated fill material back into the holes,
and added road stone
to bring the soil level up to grade.
(Tr. at 23, 24.)
KWC
subsequently hired Environmental Technical Assistance
Company
(ETAC)
to prepare a 45-day report which was submitted to
the Agency in March,
1994,
over three months
late.
(PH Br.
at
1,
R.
at 253.)
The report indicated that all USTs and piping had
been removed to prevent further contamination.
(R.
at 269.)
In
addition, the report stated that all residual product was removed
from the tanks and that the excavation completely backfilled and
brought up to grade to prevent fire, explosion and vapor hazards.
(~)
In the spring of 1994, KWC replaced ETAC with Environmental
Consultants of Illinois (Ed).
(R.
at 55.)
ECI conducted soil
samples to confirm the reported release,
and to prepare for the
removal of the contaminated soil.
(PH Br.
at 1-2.)
On August
31,
1994, nine months after removal of the UST5,
ECI removed the
fill material that had been left at the site.
Jim Drager of the
OSFM was present, observed the soil removal and asked ECI
representative,
Matt Warneke,
if he was aware
of the “four—foot
rule”.
(Tr. at
94~)2
Since both had questions about the rule,
Jim Drager contacted Virginia Duffy of the Agency, who met them
at the site and explained the rule.
(Tr. at 117.)
In November 1994, ECI submitted an application for
reimbursement on behalf of KWC.
(PH Br. at 2.)
The application
chronicled the tank excavation,
testing and soil removal
activities conducted on behalf of KWC and requested reimbursement
of costs totaling $60,810.02.
~
Tr. at 90—92.)
In its
February 27,
1995 letter, the Agency stated that the tank removal
costs of $2,947.50 were reimbursable,
subject to the UST fund’s
$15,000 deductible.
(Pet.
at Attachment A.)
The Agency denied
KWC
all costs incurred after the filing of the 45-day report,
which totalled $57,862.52.
(~~)
The Agency cited the following
reasons for denial:
1.
Early action had been completed at the time the 45-day
2See 415
ILCS 5//57.6(a) (1) (B) as set
forth
infra,
p.3.
3
report was submitted;
2.
The minimum requirements had been exceeded in that
native soil had been removed; and
3.
Petitioner’s activities constituted remediation rather
than early action.
(~!)
Thereafter,
KWC
submitted its petition for review of the
Agency’s decision regarding reimbursement.
APPLICABLE LAW
In its letter to KWC denying eligibility for reimbursement,
the Agency cited two reasons for denial:
(1) the costs incurred
after submittal of the 45-day report did not constitute early
action, and
(2) the costs exceeded the minimum requirements for
corrective action.
Following is an outline of the applicable law
in this matter.
To be eligible for reimbursement from the UST Fund,
costs
must be reasonable and related to corrective action.
(Platolene
500,
Inc. v
IEPA (May 7,
1992)
PCB 92—9,
133 PCB 259.)
The
burden of proving that challenged costs are reasonable and
related to corrective action rests solely on the applicant for
reimbursement.
(Id. at 266.)
At the time of the release in this case,
section 57.2 of the
Act defined corrective action cost as “activities associated with
compliance with the provisions of 57.6 early
action
and
compliance with the provisions of 57.7
investigation
and
remediation
of this Title.”
(415 ILCS 5/57.2
(1992).)
In
November 1993,
early action was defined in Section 57.6(b)
as:
Notwithstanding any other corrective action taken,
an
owner or operator may, at a minimum, and prior to
submission of any plans to the Agency, remove the tank
system,
or repair or abandon the underground storage
tank
in place,
in accordance with the regulations
promulgated by the Office of the State Fire Marshal~.
The owner or operator may also remove visibly
contaminated fill material and any groundwater in the
excavation which exhibits a sheen.
(415 ILCS
5/57.6(b).)
Fill material was defined as “non-native
or disturbed materials used to bed and backfill around an
underground storage tank.”
(415 ILCS 5/57.2.)
With regards to
removing fill material from the site, the Act requires that:
...for purposes of payment for early action costs,
fill
material shall not be removed in an amount in excess of
4
4 feet from the outside dimensions of the tank.3
(415 ILCS 5/57.6(a)(1)(B).)
In addition, the Act requires that
an owner/operator comply with the provisions of Title XVI,
Petroleum Underground Storage Tanks,
in order to be reimbursed,
and specifically states:
i)n
no event will an owner or operator be reimbursed
for any costs which exceed the minimum requirements
necessary to comply with this Title.
(415 ILCS 5/57.5(a).)
Finally, although the Agency relied
heavily upon 35 Ill. Adm. Code 731.161-163 and 732.300(b), these
regulations were not promulgated until after the events took
place in this matter; therefore, they are not applicable.
ARGUMENTS
KWC
asserts that the activities conducted on its behalf to
remove fill material from its UST site constitute early action.
Pointing to the language in the Act, KWC argues that there is no
time limit for when early action can take place,
as long as it is
completed prior to submission of any plans to the Agency.
(PH
Br. at 3.)
KWC
contends that the 45-day report submitted in
March 1994
is not a “plan”, and that no rule prohibits early
action activities after its submittal.
(PH Br.
at 3,
Tr. at
145.)
The Agency argued that it denied the costs incurred after
KWC
filed its 45-day report because KWC exceeded the minimum
requirements of early action and corrective action.
First, the
Agency asserts that the 45—day report is a requirement of early
action intended to inform the Agency of the status of activities
at a given site.
(Agency PH Br. at
9.)
In its
45-day report,
KWC
informed the Agency that it had completed all required early
action measures, but failed to mention that early action
activities remained.
~
at 10-12,
R. at 269.)
Having received
no further communication from
KWC
regarding the site,
the Agency
argues that early action ended when the 45-day report was filed
because its contents indicated that all statutorily-mandated
early action events had been completed,
and did not state that
further work at the site was necessary.
(Agency PH Br.
at 15.)
As a result, the Agency maintains that the work completed in June
and August 1994 exceeded the minimum requirements necessary to
comply with early action.
(~~)
The Agency also contends that KWC should not be reimbursed
for removing soil as “early action” activities because KWC did
3This
is known as the “four—foot rule’
and
is referred to as such
in the
record and in this opinion and order.
5
not meet its burden of proving that it complied with the “four
foot rule”
in Section 57.7(a) (1) (B)
of the Act.
The Agency
points to the fact that KWC’s consultant could not distinguish
between fill material and native soil,
and that Virginia Duffy of
the Agency witnessed native soils being removed from the site in
August 1994.
(Agency PH Br. at 17, Tr.
at 120,
163.)
The Agency additionally argues that
KWC
actually performed
corrective action activities when it conducted soil sampling and
testing before and after the soil removal in August 1994.
(Id.
at 21.)
In conducting soil remediation,
KWC
did not do so in
accordance with the minimum standards of Title
XVI
of the Act.
(415 ILCS 5/57.7(a).)
Therefore,
the Agency asserts, the costs
incurred are not reimbursable as “corrective action” costs.
Though it is difficult to discern, at hearing and in its
post—hearing brief, KWC argues that its “corrective action”
activities complied with the Act and met the minimum standards
for performing remediation.
They argue that remediation in the
form of hauling away contaminated soil was necessary to remediate
the site.
(See generally,
PH Br.
at 5-6.)
KWC also objected to
the Agency’s use of a “general rule of thumb” to determine that
soil sampling and soil removal is not corrective action.
(~
at
5.)
DISCUSSION
In September 1993,
the legislature enacted a new statute
which substantially revised the UST program in the State of
Illinois, and changed the methods by which an eligible owner or
operator could obtain reimbursement.
P.A.
88—496 established for
the first time a “pre—approval” requirement in which an owner or
operator first submits site classification and corrective action
plans and receives Agency approval prior to performing corrective
action.
(415 ILCS 5/57.7.)
Once the Agency has approved
corrective action, via the corrective action plan,
the owner or
operator is entitled to reimbursement for the amount pre—approved
by the Agency.
(415 ILCS 5/57.8.)
Specifically, with regard to early action, the Act provides
that early action now may be performed prior to submitting any
site classification plan or corrective action plan,
and the owner
or operator may receive reimbursement
(beyond the appropriate
deductible level), as long as the early action activities are
consistent with the minimum standards of the Act.
(See ~
415
ILCS 57.5(a).)
The statute specifically states that under no
circumstances will the Agency reimburse early action activities
where the owner or operator removed native soil in “an amount in
excess of four feet from the outside dimensions of the tank”.
(415 ILCS 5/57.7(a) (1) (B).)
6
In this case, the first issue
is whether the events
conducted between March and August 1994 are early action
activities and therefore eligible for reimbursement under the
early action provisions of the Act.
Early action usually begins
with the completion of the following three federally mandated
requirements:
reporting the release to the EMA;
removing all
sources of contamination, including tanks and piping;
and,
mitigating potential fire, explosion and vapor hazards.
(415
ILCS 5/57.6(a),
and 35 Ill.
Adm. Code 731.161,
731.162,
731.163.)
In addition, the owner or operator has the option of removing
visibly contaminated fill material and any groundwater in the
excavation which exhibits a sheen.
(415 ILCS 5/57.6(b).)
These
options are considered emergency measures,
like the three
federally mandated requirements, and are to be conducted within
the same time frame.
Indeed, the Board’s regulations envision
that these measures would be completed before the 20—day report,
and well before submittal of the 45-day report.
(See
35 ILCS
731.162(b),
731.163(b).)
In March 1994,
over 4 months after removal of its USTs,
KWC
submitted its 45-day report which outlined all actions taken at
the site.
The report indicated that in November 1993 all tanks
and piping, the sources of contamination, had been removed, and
that fire,
explosion and vapor hazards had been mitigated.
(Tr.
at 162—63.)
In addition, the release found at the site was
immediately reported to the IEMA.
(R.
at 269.)
These actions
fulfill the federally mandated early action requirements
contained in 35
Ill. Adm. Code 731.161, 731.162 and 731.163.
KWC’s 45—day report did not, however,
state that further early
action remained.
(Agency PH Br.
at 9-10.)
KWC
claims that this omission is not pertinent to the issue
because the Act does not pose a deadline for early action
activities.
(PH Br. at 3.)
However, the 45-day report is an
affirmative
statement by the owner/operator that required early
action
activities
have
been completed.
Based on KWC’s failure to
communicate that further early action activities remained, we
find it reasonable for the Agency to have relied upon the 45-day
report in assuming that early action activities were complete at
KWC’s site,
and that no further action would occur unless and
until a corrective action plan was submitted.
After submitting its 45-day report in March 1994,
KWC
hired
environmental consultants who performed soil sampling and testing
in June and soil removal in August.
KWC claims that these
activities are also early action.
We disagree.
These events
were neither reported to nor pre—approved by the Agency.
In our
opinion, soil sampling and testing are actions associated with
determining the levels of contamination for the purpose of
assessing soil and groundwater classification and conducting
corrective action.
Finally, there is evidence on the record that
native soil was encountered, and that the “four-foot rule” was
7
exceeded.
Therefore, the Agency was correct in this instance in
denying reimbursement for those actions which are not early
action and for those activities which exceeded the “four—foot
rule”.
A second issue in this matter is whether the soil removal in
August 1994 could be considered corrective action, and thus
reimbursable under the Act.
The Agency denied $57,862.52
in
costs incurred at the site on the basis that,
even if considered
corrective action, the costs exceeded the minimum standards
allowed under the Act.
Specifically, the Act establishes a
scheme of determining the type of site at issue and pre—approval
from the Agency for a corrective action plan suitable for that
site,
as determined by the owner or operator’s Licensed
Professional Engineer.
(415 ILCS 5f57•7.)4
In this case,
it is uncontested that KWC failed to submit
any of the plans required by the Act.
Importantly, KWC’s failure
to submit a corrective action plan limits its ability to apply
for and obtain reimbursement for any activities beyond the
minimum requirements of the Act.
Section 57.5(a)
states that
“in
no event will an owner or operator be reimbursed for any
costs which exceed the minimum requirements necessary to comply
with this Title.”
Since KWC did not adhere to the requirements
of the Act by submitting the necessary plans for pre-approval of
corrective action, the Agency can only reimburse those costs
which are minimally required and are corrective action.
(415
ILCS57.5(a)
and 57.9(a)(6).)
Determining whether costs fall under corrective action is a
two—part inquiry:
(1) are the costs incurred as a result of
action to “stop, minimize, eliminate or clean up a release of
petroleum”,
and
(2) are the costs “the result of activities such
as tank removal, soil remediation, and free product removal
(Clarendon Hills Bridal Center v. IEPA (February 16,
1995)
PCB
93-55;
EnteriDrise Leasing Company v. IEPA (April
19,
1992)
PCB
91—174,
134 PCB 41.)
4For example, Section 57.7(a)(l)(A) requires that:
“Prior to conducting any physical soil classification and
groundwater investigation activities required by statute or
regulation, the owner or operator shall prepare and submit to the
Agency for the Agency’s approval or modification:
A.
a physical soil classification and groundwater investigation
plan designed to determine site classification,
in
accordance with subsection
(b) of the Section,
as High
Priority, Low Priority,
or No Further Action.”
Additionally,
if the site is a Low Priority or High Priority Site as
defined in Section 57.7(b), the owner or operator must submit
a
corrective action plan as set forward
in Section 57.7(c).
8
Removing contaminated soil may be an action to stop,
minimize, eliminate or clean up a release, and may be an activity
which falls under soil remediation, thus satisfying the two-prong
test for corrective action.
However, KWC conducted this activity
nine months after the 45-day report was submitted, without filing
a site classification,
a corrective action plan or any other
evidence that the costs satisfied the minimum requirements of the
Act.
The Agency had no information for it to accurately classify
the site as “No Further Action”,
“Low Priority” or “High
Priority”, and thereby properly identify the minimum requirements
for corrective action needed at the site.
Therefore, we find that KWC failed to seek and gain pre-
approval of its corrective action measures, and further failed to
submit sufficient information to prove that KWC did not exceed
the minimum requirements of the Act for corrective action.
As a
result,
KWC
cannot be reimbursed for costs as being related to
corrective action.
This opinion and order constitutes the Board’s findings of
fact and conclusions of law in this matter.
ORDER
The Board finds that
KWC
did not meet its burden of proof in
arguing that the challenged costs were related to early action or
did not exceed the minimum requirements for corrective action.
Therefore, the Board affirms the Agency’s denial of
reimbursement.
IT IS SO ORDERED.
Section 41 of the Environmental Protection Act
(415 ILCS
5/41
(1994)) provides for the appeal of final Board orders within
35 days of the date of service of this order.
The Rule of the
Supreme Court of Illinois establish filing requirements.
(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 ak&ove opinion and order was
adopted on the
/~1~~-
day of
~
,
1995, by a vote
of
7-a.
Dorothy M/,~unn,Clerk
Illinois ~llution
Control Board
