ILLINOIS POLLUTION CONTROL BOARD
August 26,
1993
CHUCK AND DAN’S AUTO SERVICE,
)
Petitioner,
)
v.
)
PCB 92—203
(UST Fund)
ILLINOIS ENVIRONMENTAL
)
PROTECTION AGENCY,
)
Respondent.
GERALD A.
DRENDEL AND EDWARD F.
KELLY APPEARED ON BEHALF OF THE
PETITIONER; AND
TODD RETTIG APPEARED ON BEHALF OF THE RESPONDENT.
OPINION AND ORDER OF THE BOARD
(by C.A. Manning):
This matter is before the Board on a petition for review
filed December 14,
1992, by Chuck and Dan’s Auto Service
(petitioner)
pursuant to Section
22.18b(g)
of the Environmental
Protection Act (Act).
(415 ILCS 5/22.18b(g)
(1992).)
Petitioner
seeks review of the Illinois Environmental Protection Agency’s
(Agency) November 10,
1992, partial denial of reimbursement from
the Underground Storage Tank Fund
(Fund).
Petitioner appeals the
Agency’s denial of reimbursement for certain costs associated
with underground storage tank
(UST) removal and site remediation.
A public hearing was held, pursuant to Sections 22.18b(g) and
40(a) (1)
of the Act,
on February 10,
1993,
in Ottawa, LaSalle
County.
No members of the public participated
in the hearing.
In dispute are the following costs denied by the Agency in
the final determination letter:
(1)
$17,758.74 deduction for
handling charges in excess of 15~
(2)
$3152 deduction for
1Attachment A to the Agency’s final determination letter
indicates that $17,848.14 was disallowed for an adjustment in
tank removal costs.
(R.1 at 154.)
However,
at hearing, this
amount was reduced to $17,758.74 by stipulation of the parties.
(Pet.
Br. at
1.)
Handling charges were incurred in this case
when the general contractor,
P
& P Consultants,
(P&P)
added a 53
handling charge markup to a subcontractor charge of $45,361.66.
(Tr.
at
143 and Joint Exhibit #1.)
The total handling charges
requested for reimbursement by P
& P Consultants were $24,079.84,
which represents approximately 53
of the total subcontractor
charges.
(j~)
The Agency denied $3817 for the subcontractor
total
as ineligible tank removal costs
(R.1 at 154; Joint Exhibit
#1) and calculated
a 15
handling charge on the new total of
$41,544.66.
The Agency reimbursed $6231.70,
and disallowed
2
underground storage tank removal costs2
(3)
$355 deduction for
mileage charges;
(4)
$65 deduction for shipping charges;
and
(5)
$3000 deduction
in personnel costs associated with preparation of
the reimbursement application.
(Pet.
Br.
at 1-2.)
For the reasons stated below,
the Board affirms the Agency’s
denial of $17,758.74
in handling charges,
$355 in mileage
charges,
$65
in shipping fees,
and $3000
in personnel costs.
The
Board hereby reverses the Agency’s denial of $3152
in tank
removal costs.
BACKGROUND
Petitioner
owns
and
operates
a
service
station
(Chuck
and
Dan’s Auto Service) located at 713 East Main Street
in Streator,
Illinois.
Petitioner applied for and received from the Office of
State Fire Marshal
(OSFM),
a tank removal permit to remove six
underground storage tanks.
The tank removal permit was issued on
April
18,
1990
(R.2. at
8 and 74),
and on May 14,
1990, Feken
Excavating Company pulled three 1,000-gallon gasoline USTs, one
8,000—gallon gasoline UST, one 1,000—gallon heating oil UST, and
one 550—gallon waste oil UST.
(Tr.
at 13—14.)
The heating oil
tank was not registered and therefore the heating oil tank was
ineligible for reimbursement, and
is not the subject of this
appeal.
(R.l at 29.)
A representative from OSFM was on-site during the May 14th
tank removal.
(Tr.
at 14).
According to the hearing testimony
of Mr. Chuck Liebhart, co-owner of Chuck and Dan’s, OSFN Officer
Logan instructed Liebhart to call in an incident number to the
Illinois Emergency Disaster Relief Agency
(ESDA)
(now Illinois
Emergency Management Agency
(IEMA)).
(~~)
ESDA received
notification via
a completed Incident Report
(Incident Number
901287) transmitted by facsimile copy on May 14,
1990 at 2:06
p.m.
(R.2
at 2.)
The Incident Report indicated there had been a
leak or spill;
gasoline,
fuel oil and waste oil were the products
involved in the tank removal;
and the material was
in semi—solid
form.
(~~)
The record demonstrates that at least four of the
six
USTs
experienced
a
leak.
(R.1
at
30
and
Tr.
at
12—14.)
In
the
fall
of
1990,
petitioner hired P
& P Consultants
(P
&
P)
to
conduct
remediation.
(Pet.
Br.
at
3.)
P
&
P
obtained
soil
samples
from
the
UST
excavation
zone
and
determined
that
soil
in
$17,758.74.
2Attachment A to the Agency’s final determination letter
indicates that $3,817.00 was disallowed for an adjustment in tank
removal costs.
(R.1 at 154.)
However, at hearing, this amount
was reduced to $3152
by stipulation of the parties.
(Pet.
Br.
at
1.)
3
the UST tank farm area had BETX in excess of IEPA LUST clean—up
objectives.
(R.2
at
30.)
On
April
1 and
2,
1991,
P
&
P,
Feken
Excavators,
Azzereli Trucking Company and Tobey’s Construction
Company conducted on-site remedial excavation activities
involving:
(1)
attempting to establish
a clean zone;
(2)
field
screening with
a Photovac Micro-Tip
(PID); and
(3) excavating and
transporting contaminated soil for disposal at Livingston
Landfill in Pontiac, Illinois.
R.2 at
3.1.
P
& P collected
12
verification soil samples and laboratory analysis showed that all
samples were below IEPA LUST site cleanup objectives for BTEX
BETX.
(R.2 at 31.)
Petitioner submitted an application for reimbursement of
corrective action costs on February
5,
1992, requesting a total
reimbursement of $83,301.50.
(R.1 at
146.)
The Agency notified
petitioner on March 20,
1992 that Chuck and Dan’s Auto Service
was eligible to seek reimbursement and that
a deductible of
$10,000 would be applied to any reimbursement received. (Ri at
29.)
On July 2,
1992,
the Agency sent an information request to
petitioner regarding personnel charges associated with submission
of the reimbursement application, and personnel charges
accumulated after May 5,
1991.
(R.l at 148.)
On November 10,
1992, the Agency rendered
a final determination granting
reimbursement of $48,216.36, denying reimbursement for the five
cost items at issue herein.
(R.
at 152-54.)
Petitioner is
appealing the Agency’s partial denial of reimbursement.
SUMMARY OF RELEVANT TESTIMONY
A.
Handling Charges
The Agency denied reimbursement of handling charges totaling
53
which P
& P Consultants had applied to subcontractor costs.
The Agency reduced the handling charge to 15,
disallowing
$17,758.74.
At hearing, Carney Miller, operations manager for
P
&
P, testified on behalf of petitioner that 53
handling
charges were reasonable.
Though he testified 53
was
“customary”, he was unable to state that 53
handling charges
were reasonable relative to P
&
P.
He said,
“I guess we’re
dealing with the issue of reasonable here and that’s
a judgment
call.
Everybody has their own opinion of what’s reasonable.”
(Tr. at 90.)
Petitioner offered no explanation of how the 53
was derived,
or what expenses it covered.
Miller testified the
handling charge was “the difference between the actual amount
billed to P
& P versus the amount billed to the owner/operator,”
(Tr.
at 88-89.)
that the 53
was actually paid by petitioner to P
& P Consultants and the charge had been paid one year prior to
the petitioner seeking reimbursement from the Agency.
(Tr.
at
86—7 and R.l at 34,
36,
38 and 40.)
It was Miller’s testimony
that the handling charge amount
is whatever the “market will
bear.”
(Tr.
at
86—7.)
4
Greg
Thompson,
president
of
Ecology
Services,
Inc.,
also
testified on behalf of the petitioner.
Thompson was offered as
an expert in the field of environmental clean-up for his opinion
that the handling charge fees submitted by petitioner were
reasonable.
(Tr.
at 108-11.)
In his career, Thompson
submitted approximately 100 applications for reimbursement
(Tr.
at 108.) and reviewed fees from
a dozen consulting firms
(Tr.
at
110.)
In preparing
for the hearing, Thompson reviewed the
handling charge figures as submitted by P
& P; however, Thompson
did not review any of the underlying technical documentation.
It
was Thompson’s testimony that the handling charge
is “what the
market will bear”
(Tr.
at 125 and 131) and, the rate consists of
“personnel, overhead and profit.”
(Tr.
at 126).
And, that in
the instant case, the 53
submitted for reimbursement was
“reasonable and customary.”
(Tr. at 126.)
Douglas
E. Oakley, Agency Supervising Accountant, testified
on behalf of the Agency that prior to
1990
the Agency allowed
reimbursement of
a 5
handling charge,
based on the markup of its
regular state contracts.
(Tr.
at 163.)
After informal meetings
with various representatives of
industry,
owners
and
operators,
petroleum marketers and consultants, the Agency instituted a
practice of reimbursing up to a 15
handling charge.
Oakley
stated that after “seminars...where you just meet with,people,
you discuss things, and you get an idea of what’s going on in the
industry” he concluded that 15
was considered a fair handling
charge
in relation to the market place price and was considered
at or near industry standards.
(Tr. at 162-164.)
On cross
examination, Oakley admitted that they did not use computer
programs or mathematical models to determine the 15
figure
although they do use computer generated programs to determine
what is reasonable for other costs.
(175-176.)
On re—direct
Oakley stated
“I can’t honestly say if
it
the
15
figure
was an
industry standard.
I believe
it was at or near industry
standards.”
(Tr. at 179.)
Oakley testified that the 15
handling charge was arrived at for policy purposes, to “have some
sort of guideline as opposed to chaos.”
(Tr.
at 171.)
Oakley
testified that the Agency began to include the 15
handling
charge language on the reimbursement forms in the Winter or
Spring of
1991.
(Tr.
at 166.)
B.
Tank
Removal
The Agency denied $3152 for costs associated with tank
removal on the basis the tank removal was not corrective action.
At hearing, Victor Chuckwudebe,
an Agency accountant for the LUST
section, testified that the tank removal costs were denied
because the tank pull was not
in response to
a
leak, but was
instead
a “planned” tank removal.
(Tr.
at 154.)
Co-owner of Chuck and Dan’s,
Chuck Liebhart’s testimony
indicated there were several reasons for conducting tank removal.
5
Liebhart testified that on March
14,
1990,
a
“Mr.
Kirk” from the
OSFM
made
a
site
visit
to
Chuck
and Dan’s Auto Service.
While on
the premises,
Kirk performed a stick test to determine whether
the USTs contained water.
(Tr.
at 29—30.)
Kirk advised Liebhart
that at least one tank was taking on water and was probably
leaking.
It
was
Liebhart’s
testimony
that
Kirk
advised
him
to
pump the tanks that evening, and that he recommended the tanks be
removed.
Liebhart also testified that Henry Araujo,
the local
fire chief, visited the premises a few days later to see if the
tanks
had
been
pumped out or removed.
(Tr.
at 40.)
However on the application for tank removal submitted to the
OSFN,
petitioner indicated the reason for the tank pull was that
Chuck
and
Dan’s
did
“not
wish
to
update
with new leak protection
equipment”.
(R.2 at 74;
Tr.
at 34.)
The
Agency
also
received
correspondence
from
petitioner
in
response
to
the
Agency’s
Notice
of Release letter explaining,
“removal
was requested as we did
not wish to update with new leak protection equipment.
We were
not aware of leaking tanks at the time of request for removal.”
(R.2 at 7; Tr.
at
32.)
At
hearing,
Liebhart
explained,
that
at
the time the
application
for
a
tank
removal
permit
was
filed,
they
Chuck
and
Dan’s)
“didn’t feel” the tanks were leaking.
(Tr.
at 35.)
He
stated
they
only
had
Kirk’s
“word”
there
was
a
leak.
(Tr.
at
34.)
On cross—examination, when asked why petitioner followed
Kirk’s
suggestion
to
remove
the
tanks
when
he
did not believe
they were leaking, Liebhart testified tanks were moved because
Kirk indicated “he was going to follow-up and that we had to take
this course of action.”
(Tr.
at 34—36.)
C.
Mileage Charges
The Agency denied $1.00 per mile mileage costs requested by
petitioner for reimbursement, for a total
of $355,
reducing the
reimbursable amount to $.50 per mile.
At hearing, Chukwudebe
testified for the Agency that the Agency has determined a $.50
per mile rate
is the maximum reasonable charge.
Chukwudebe
indicated that in his experience he has never seen an approval
for more than $.50 per mile.
He testified that some people
request $.21,
$.25 or $.30 per mile,
and therefore the Agency
feels $.50 is reasonable.
(Tr.
at 155.)
On behalf of the petitioner,
Miller testified that $1.00 per
mile was a customary and usual charge in December of 1990 for the
environmental clean-up industry.
Also on behalf of petitioner,
Thompson testified that all costs as billed were reasonable,
but
he did not specifically address the mileage costs or
unequivocally state they were reasonable or customary.
(Tr. at
117.)
6
D.
Personnel Charges
The Agency denied $3,000
in personnel charges associated
with preparation of the reimbursement application.
Miller
unequivocally testified on behalf of petitioner the personnel
charges comprising the $3,000 were for personnel costs incurred
in preparing submittals to the Agency.
(Tr. at 59.)
For the Agency, Kyle Rominger, project manager for the
Agency’s LUST section, testified he reviewed the reimbursement
forms submitted by petitioner and made the $3,000 deduction.
He
stated that the Agency did not consider these costs to be
associated with corrective action.
(Tr. at 185-187.)
DISCUSSION
A.
Handling Charges
The petitioner asks this Board to decide whether 53
handling charge costs were “reasonable”
as submitted to the
Agency.
The Agency reduced from 53
to 15,
handling charges
which P
& P Consultants added to the subcontractor costs sought
for reimbursement, disallowing a total of $17,758.74.
The Agency
denied the handling charges in excess of 15
on the basis the
owner or operator failed to demonstrate the costs were reasonable
(R.1 at 154; Tr. at 140—44.) citing Section 22.18b(d) (4) (C)
of
the Act.
Section 22.lsb(d) (4) (C) provided on the date the
reimbursement application was submitted3:
(4)
Requests for partial or final payment of claims under
this Section shall be sent to the Agency and shall
satisfy all of the following:
(C)
The owner or operator provided an accounting of
all costs,
demonstrated the costs to be reasonable
and provided either proof of payment of such costs
or demonstrated the financial need of joint
payment to the owner or operator and the owner’s
or operator’s contractor in order to pay such
3The applicable law is the statute in effect on the date of
the filing of the application for reimbursement.
(First Buse~y
Trust
& Investment Co.
v.
IEPA (February 27,
1992), PCB 91-213,
130 PCB 287; Pulitzer Community Newspapers
v.
IEPA (December 20,
1990), PCB 90-142,
117 PCB 99.)
“However, where
a statutory
amendment involves prior activity or a certain course of conduct,
the law to be applied
is the provisions
in effect at the time
that the course of conduct occurred.”
(Galesburg Cottage
Hospital
v.
IEPA
(August
13,
1992)
PCB 92-62,
135 PCB 319.)
7
costs.
(Emphasis added.)
The Board has,
on at least three occasions,
addressed the
issue
of the Agency’s reduction of handling charges in excess of
15.
In all three cases the Board affirmed the Agency’s
reduction of handling charges to 15
of the total subcontractor
cost or field purchase.
In each case,
the Board weighed the
evidence offered by the petitioner during the UST appeal hearing
to determine whether the handling charges were “reasonable as
submitted,”4 and concluded the petitioner failed to demonstrate
that the requested handling charge was reasonable.
The Board
affirmed the Agency’s downward adjustment of three separate
handling charges of 46.4,
46
and 16,
to a flat 15
in State
Bank of Whittington v.
IEPA,
(June
3,
1993) PCB 92—152,
PCB
the Agency’s handling charge reduction from 58
to 15
in
Beverly Malkey
v.
IEPA,
(March 11,
1993), PCB 92—104,
PCB
,
and the Agency’s adjustment to 15,
disallowing $2821.76 in
handling charges,
in Platolene 500,
Inc.
v.
IEPA,
(May 7,
1992),
PCB 92—9,
133 PCB 259.
The Agency has taken the position, with which the Board is
inclined to agree, that at the time the petitioner incurred the
handling charges,
15
was a “reasonable” handling charge.
The
Agency argues that petitioner has done nothing to substantiate
the 53
handling charges as being reasonable other than offer the
testimony of two witnesses,
Carney Miller and Greg Thompson, who
agreed a handling charge is whatever the “market will bear”, but
who could not both agree the handling charge of 53
in this case
is reasonable.
(Agency Br.
at 7.)
The Agency has maintained throughout that 15
is an
appropriate amount,
and that this figure was arrived at through
an examination of the marketplace.
In Whittington, the Board
held,
“in
the absence of specificity in the Act or regulation
applicable to this proceeding,
the Board agrees that establishing
the 15
handling charge by basing it on market place practices is
a reasonable approach.”
(Whittington at 11.)
The Board relied
on Doug Oakley’s testimony which indicated that the “15
figure
was established as a standard handling charge only after Agency
meetings with many persons familiar with the market place.”
(~~)
Similarly,
in the instant case,
Oakley,
again testified on
‘
When reviewing UST petitions for review,
the Board
entertains evidence offered during hearing in addition to that in
the Agency record.
The Board’s willingness to go beyond the
Agency record is attributable to the fact that the Agency has
in
the past, declined to promulgate regulations identifying the type
of information necessary to complete a reimbursement application.
Sparkling Spring Mineral Water
Co.
v. IEPA
(May 9,
1991, PCB 91—9
at
3—4,
122 PCB 115 and Reichhold Chemicals,
Inc.
v.
IEPA
(December 17,
1992)
PCB 92—98,
at 10,
n.lO,
—
PCB
8
how a 15
handling charge was adopted:
Initially,
it
the
handling charge
was
5 percent, that’s
what we pay on our regular State contracts where we actually
hire a firm to go out and clean up a site...
.
By Winter or
Spring of 1991,
we had done some market samples,
we had some
meetings with contractors, the petroleum marketers,
and so
forth,
and we determined that 5 percent,
in our opinion, was
a bit low...
.
So we decided to go with 15 percent which
seemed to be a fair and reasonable markup.
.
..
We
had
seminars back at that time, and
I had lots of phone calls,
and
I had talked with various consultants, contractors,
petroleum markets, and the basic thing that I started
hearing was 15 percent seemed to be a fair and reasonable
handling charge.
(Pr. at 163—64.)
Further evidence that 15
is more likely to be in the
neighborhood of a “reasonable” handling charge than 53,
is the
adoption by the Illinois legislature of P.A. 87-1171.
Effective
September 18,
1992, P.A. 87—1171,
amended Section 22.18b(i)(2)
and created a sliding scale of the percent allowable for a
handling charge.
Subcontract or field purchases of $5,000 and
under will have handling charges reimbursed at a rate. of 12,
and
costs in excess of $5,000 will have handling charges reimbursed
at a percent which decreases as the costs increase.5
While new
Section 22.18b(i)
(2)
is not directly applicable to this case
because the effective date is seven months subsequent to the
petitioner filing the reimbursement application6, the Board is
5New Section 22.18b(i) provides:
i.1.
For purposes of this Section,
“handling charge” means
administrative,
insurance,
and interest costs and a
reasonable profit or procurement, oversight,
and
payment of subcontracts and field purchases.
2.
Handling charges are eligible for payment only if they
are equal to or less than the following amounts:
Subcontract or
Eligible Handling
Field Purchase
Charges as
a
Cost
Percentage of Cost
$1
—
$5000
12
$5,001
—
$15,000
$600+10
of amt.over $5,000
$15,001
—
$50,000
$1600+8
of amt.over $15,000
$50,001
—
$100,000
$4400+5
of amt.over $50,000
$100,001
—
$1,000,000
$6900+2
of amt.over $100,000.
6See infra at
6,
n.
3.
9
persuaded that new Section 22.18b(i) (2)
reflects a prevailing
belief, at least
in the legislature,
that handling charges within
the 12
and under range are more acceptable than handling charges
in the 50
range.
Petitioner in the instant case has not satisfied its burden
of proof
in demonstrating that the handling charge of 53
is
reasonable.
The petitioner offered the testimony of Greg
Thompson, the president of Ecology Services, as evidence that 53
is “reasonable and customary” for the industry; however, no
testimony or documentation was offered as to exact rates.
Neither Thompson nor Miller presented any testimony on how 53
is
determined individually for P
& P Consultants,
Inc.
Further,
Miller was unable to state with any degree of certainty that 53
is reasonable,
specifically for P
& P consultants.
In fact,
there is a distinct absence in the record of any proof to
illustrate 53
is other than,
simply, what the “market will
bear.”
The Board affirms the Agency’s denial of $17,758.74
in
handling charges in excess of 15.
B.
Tank Removal
Petitioner also asks that the Board review the Agency’s
denial of $3152 for costs associated with tank removal.7
The
Agency cited the following as a basis for denial in its final
determination letter:
The tanks were not removed in response to a release.
Therefore,
the associated costs are not corrective action
costs.
Corrective action does not include removal of an
underground storage tank if the tank was removed or
permitted for removal by the Office of the State Fire
Marshal prior to the owner or operator providing notice of a
release of petroleum in accordance with applicable notice
requirements.
(Section 22.18(e) (1) (C)
of the Illinois
Environmental Protection Act).
One of the eligibility
requirement for accessing the UST Fund
is that the costs
71t is unclear from the record whether this amount was
incurred for the removal of all six USTs,
the four nonleaking
USTs,
or for costs associated with the removal of the nonleaking
tanks.
The Agency does not distinguish this figure at hearing or
in its post-hearing brief,
and the record is unclear.
In Lynch
v.
IEPA (November 19,
1992)
PCB 92-81,
137 PCB 165,
the Board
recognized that although six tanks were removed, only one tank
was leaking.
The Board indicated it would have been willing to
deny tank removal costs for the nonleaking tanks, however the
Agency failed to raise the issue.
Therefore,
the Board reversed
the Agency’s denial of the full tank removal cost amount.
10
incurred were corrective action costs or indemnification
costs which were incurred by the owner or operator as a
result of
a release of petroleum,
but not including any
hazardous substance from an underground storage tank.
(Section 22.l8b(a)(3)
of the Illinois Environmental
Protection Act).
(R.1 at 154.)
(Emphasis added.)
The Agency basis for denial is a retroactive application of
a statute amended subsequent to the petitioner incurring tank
removal costs.
P.A.
87-323 amended Section 22.18(e) (1) (C) to
include the underscored portion in the Agency’s basis for denial,
effective September
6,
1991.
If this case were being decided
under new Section 22.18(e) (1) (C), petitioner would have no basis
to appeal
-
having obtained a removal permit prior to notifying
ESDA; however, the tank removal costs were incurred on May 14,
1990,
one year and four months prior to September 6,
1991,
the
effective date of P.A.
87-323.
The Board recognizes that the
reimbursement application was not submitted to the Agency until
February 4,
1992,
after the effective date of P.A. 87-323.
The
statutory amendment involves prior activity or a certain course
of conduct, therefore,
the applicable law is the statute in place
at the time of tank removal.
(Cottage Hospital at 4—5; Pulitzer
Community Newspapers,
Inc.
v.
Illinois Environmental Protection
Agency
(December 20,
1990),
PCB 90—142,
117 PCB 99.)
(See also
infra,
at
6,
n.
3..)
The Board finds the Agency’s denial of tank
removal costs in the amount of $3152 based on new Section
22.18(e) (1) (C)
is an unlawful retroactive application P.A. 87—
323.
(Cottage Hospital at 2
(September,
1990); Lynch at
2
(May
10,
1991).)
The Board must still determine whether the tank
removal constituted “corrective action” pursuant to the Act.
The Agency argues there are multiple reasons proffered by
petitioner for tank removal.
And that due to this variety of
reasons, this may be the appropriate case in which to extend the
“main intent” test recognized by this Board in Southern Food Park
v.
IEPA,
(December 18,
1992)
PCB 92—88,
—
PCB
—,
and find
that the tank removal was not corrective action.
Essentially,
the Agency argues that Southern Food Park stands for the
proposition that a fact-specific analysis requires examination of
the motive,
or “intention” driving the tank removal.
According
to the Agency,
if the action did not occur primarily for the
purpose of responding to a petroleum release,
the costs should
not be reimbursable.
The Agency suggests there are at least
three reasons which prompted tank removal,
and that the Board
should determine which one is the “main intent”:
(1)
the USTs
were no longer needed
(petitioner’s cited reason on the
reimbursement application
(R.l at 3—9));
(2) petitioner did not
want to update the USTs with new leak protection equipment
(petitioner’s response to an Agency Notice of Release asking
petitioner to explain why the tank removal permit was obtained
(R.2 at 6.));
or
(3)
a representative of the OSFM informed
petitioner the USTs should be removed because they were probably
11
leaking
(petitioner’s testimony at hearing
(Tr.
at 16—17.)).
(Agency Br.
at 8.).
The Agency’s position
is that because the
tank removal was planned, the main intent could not be for
corrective action.
Petitioner’s position
is that during tank removal,
a release
of petroleum occurred,
that this release was reported to ESDA,
and at a minimum, petitioner was responding to the visit of an
OSFM official who recommended the USTs be removed.
(~
generally Pet.
Br.
at 5-6.)
The gravamen of petitioner’s
argument,
is essentially, the tank removal costs could be nothing
but a response to a release of petroleum under the definition of
corrective action in the Act.
The Board disagrees that it
is appropriate to extend the
“main intent” test to a “planned” tank removal case.
In five
UST appeals, this Board has specifically addressed the issue of
reimbursing the costs associated with tank removal when the
original intent may not have been to “respond” to a release of
petroleum.
(Paul Rosman v.
IEPA,
(December 19,
1991)
PCB-91-80,
128 PCB 253; Enterprise Leasing Co.
v.
IEPA,
(April
9,
1992)
PCB
91—174,
132 PCB 79; Bernard Miller v.
IEPA,
(July 9,
1992) PCB
92-49,
135 PCB 53; Galesburg Cottage Hospital
v.
IEPA,
(August
13,
1992)
PCB 92—62,
135 PCB 319; and James Lynch v.
IEPA,
(November 19,
1992), PCB 92—81,
137 PCB 165.)
Of these five UST appeals, Rosman is the only case in which
the Board affirmed the Agency’s denial
of tank removal costs,
and
did so, not because the petitioner conducted a “planned” tank
removal,
but because the tank removal was not “corrective action”
under Section 22.18(e)(l)(C).
In fact,
in Rosman the Board held
“we
find today that the only way tank removal can be classified
as corrective action is
if that removal was undertaken in
response to a pre-identified release.”
(Rosman at 7.)
And,
concerned that the Rosman holding might be read too narrowly, the
Board held in Enterprise that inclusion of
a requirement that the
release be pre—identified was “erroneous.”
(Enterprise at 5.)
The Board stated,
“the Board does not believe that tank removal
must be a result of a pre—identified release in order to
constitute corrective action.
The proper inquiry is whether the
activity meets both parts of the statutory definition of
corrective action.”
(Enterprise at 5.)
Enterprise re—emphasized
that even in Rosman, the important issue was that the Board felt
the tank removal activities did not satisfy the corrective action
definition in Section 22.18(e) (1) (C).
In the instant case,
the Board is presented with analogous
circumstances to those
in the prior planned tank removal cases.
In Miller, Cottage Hospital and Lynch, tank removal was planned
or permitted for
a reason other than responding to a release of
petroleum.
In Miller
a tank removal permit was obtained to
comply with
a real estate contract.
(Miller at 3.)
In Cottage
12
Hospital the tanks were pulled based on
a business decision that
the gasoline lines at a service station had failed
a tightness
test,
and petitioner would cease leasing the property.
(Cottage
kJ~spitalat 1-2.)
In Lynch, the petitioner removed USTs which
had been taken out of service.
(Lynch at 1-2.)
Here, petitioner
conducted tank removal under
a removal permit and initiated the
removal
for a reason other than having “actual knowledge”
of a
pre-identified release of petroleum.
The Board finds that
it is
well—settled that the “planned” nature of the tank removal
is not
material and it
is irrelevant which reason for tank removal was
“primary”.
The relevant inquiry is whether the tank removal
constitutes “corrective action” as set out in the Act.
Section 22.18(e) (1) (C)
of the Act provided at the time the
tank removal costs were incurred that,
“corrective action” was:
an action to stop, minimize, eliminate,
or clean up a
release of petroleum or its effects as may be necessary or
appropriate to protect human health and the environment.
This includes,
but is not limited to release investigation,
mitigation of fire and safety hazards, tank removal, soil
remediation, hydrogeological investigations,
free product
removal, groundwater remediation and monitoring, exposure
assessments,
and temporary or permanent relocation of
residents and the provision of alternate water supplies.
From the definition,
the Board developed a two-part corrective
action inquiry for reviewing reimbursement decisions:
“Whether the costs are incurred as a result of action to
‘stop, minimize, eliminate,
or clean up a release of
petroleum’,
and
whether those costs are the result of activities such as
tank removal, soil remediation,
and free product removal.”
(Enterprise at
5; see also Rosman at 7_88.)
The Board finds in the instant
case, petitioner’s tank
removal costs were associated with corrective action.
At the
time of the tank removal the two—part corrective action test
specifically allowed for an activity such as “tank removal” and
the action here clearly was part of stopping, minimizing,
eliminating or cleaning up a petroleum release.
The
8The two-part corrective action inquiry was formerly adopted
in Enterprise
however, the Board introduced the test in Rosman
by recognizing that even though “tank removal” was provided for
in the corrective action definition,
a nexus was required between
the tank removal and a release of petroleum.
Rosman at
8.
The
tank removal must be an action to “stop, minimize, eliminate or
clean up
a release of petroleum.
..
.“
(~~)
13
reimbursement application,
inclusive of the incident report,
indicates that a petroleum release did in fact occur,
and that
remediation of the site ensued.
“Planned” tank removal has been
repeatedly addressed by this Board,
and in this instance, the
Board has been presented with no reason to depart from the Rosman
line of cases.
The Board finds that the tank removal satisfies
the two—part corrective action test.
The Agency’s denial of $3152
in tank removal costs
is hereby
reversed.
C.
Mileage
Charges
Petitioner asks that this Board reverse the Agency’s denial
of $1.00 per mile mileage charge.
The Agency reduced the
petitioner’s requested amount by $.50 per mile,
denying $355.00
in mileage charges.
The Board denied the reimbursement of $1.00
per mile in Malkey on the basis the petitioner failed to
demonstrate $1.00 per mile was reasonable.
(Malkey at 5-6.)
Similarly,
the testimony of petitioner here on the issue of
reasonableness is unpersuasive.
The Board affirms the Agency’s denial of $355 in mileage
charges.
D. Shipping Fees
The Agency determined that $65.00
in costs associated with
shipping fees were ineligible for reimbursement based on
petitioner’s failure to provide adequate documentation.
Petitioner did not brief this issue.
The Board finds that
petitioner has failed to meet its burden of proof and affirms the
Agency’s decision denying $65.00 in shipping fees.
E.
Personnel Fees
Finally,
the petitioner asks that the Board reverse the
Agency’s final determination denying $3000
in personnel costs
associated with preparation of the reimbursement application
submittal to the Agency.
This issue was before the Board
in
State Bank of Whittington.
In Whittington, the Board held:
14
The definition of corrective action does not encompass
the recovery of moneys from the Fund.
Costs
of
corrective action involve abating a release of
contamination.
Costs of applying for reimbursement
from the Fund involve who pays.
Whether or not the
Fund existed, corrective action would be required.
Seeking monies from the Fund is not required.
We find
nothing
in the definition of corrective action that
links those actions with actions taken to seek access
to the Fund.
We particularly reject the notion that
corrective action strategies can be dictated by whether
the costs are reimbursable from the Fund.
We also note
that the Board has previously found that the Agency’s
prior actions, if in error, are properly remedied by
correcting the error, not perpetuating it.
(Chemrex,
Incorporated v.
IEPA (February
4,
1993), PCB 92-123.)
(Whittinqton at 20.)
In light of State Bank of Whittington, the Board affirms the
Agency’s denial of $3000
in personnel costs attributable to
preparation of the reimbursement application.
This opinion constitutes the Board’s finding of fact and
conclusions of law in this matter.
ORDER
1.
The Board hereby affirms the Agency’s November 10,
1992
final determination to deny reimbursement to petitioner,
Chuck
&
Dan’s Auto Service for:
A.
$17,758.74 in handling charges in excess of 15.
B.
$355.00
in mileage costs not constituting corrective
action.
C.
$65.00
in shipping fees not constituting corrective
action.
D.
$3000.00 in personnel charges incurred in the
preparation of the reimbursement application submittal.
2.
The Board hereby reverses the Agency’s November 10,
1992
final determination to deny reimbursement to petitioner for:
A.
$3152.00 in tank removal costs.
IT IS SO ORDERED.
N.
Nardulli dissented.
15
Section 41 of the Environmental Protection Act,
(415 ILCS
5/41
(1992)), provides for appeal of final orders of the Board
within
35 days.
The Rules of the Supreme Court of Illinois
establish filing requirements.
(But See also 35
Ill. Adm. Code
101.246,
“Motions for Reconsideration”.)
I, Dorothy N. Gunn, Clerk of the Illinois Pollution Control
Board, hereby certify that the ~ove
opinion and order was
adopted on the~.~ day of
~
,
1993,
by a vote
of
.5~/
.
,,,~!
~h.
~
Dorothy M. ,Gunn,
Clerk
Illinois P6~lutionControl Board
