ILLINOIS POLLUTION CONTROL BOARD

February 27,

1992

FIRST BUSEY TRUST

& INVESTMENT

)

CO..,

as Trustee of the

ANNE

)

LAYCOCK TRUST,

Petitioner,

v.

)

PCB 91—213

)

(Underground Storage

ILLINOIS’ ENVIRONMENTAL

)

Tank Reimbursement)

PROTECTION AGENCY,

)

)

Respondent.

E. PHILLIPS KNOX

AND

DARIUS PHEBUS, PHEBUS, TUMMELSON, BRYAN

&

KNOX APPEARED ON BEHALF OF PETITIONER

RONALD SCHALLAWITZ APPEARED ON BEHALF OF RESPONDENT

OPINION.

AND

ORDER OF THE BOARD

(by B.

Forcade):

This matter is before the Board on a petition for review

filed November 7,

1991, by petitioner First Busey Trust

&

Investment Co.

(First Busey),

as Trustee of the Anne Laycock

Trust, pursuant to IllRev. Stat.

1991,

ch.

111 1/2,

par.

1022.18b(g)

and 1040.

First Busey challenges the Environmental

Protection Agency’s

(Agency) determination that a $100,000

deductible applies to First Busey’s application for reimbursement

from the Underground Storage Tank (UST)

Fund for corrective

actions.

A hearing was held on January 15,

1992 in Urbana,

Illinois.

The Petitioner filed its closing argument and brief on

January 28,

1992.

The Agency filed its post hearing brief on

February 3,

1992.

FACTS

First Busey as Trustee for the Anne Laycock Trust was the

owner of a commercial site at 1209 E. University Ave.

in Urbana,

Illinois.

(Pet.

p.

1).

The property contains two underground

storage tanks.

The 600 gallon tank (T-1)

was originally used to

store tractor fuel and then to store waste oil from farm

equipment for pump out disposal.

The 1,700 gallon tank (T-2) was

originally used for heating oil and then converted to the storage

of waste oil from farm equipment for pump-out disposal.

The

tanks have not been used since prior to April,

1987.

(Tr.

12).

The property was leased to Massey—Ferguson,

Inc.

for

operation of a farm implement dealership from May of 1966 to

April

1,

1987 from First Busey’s predecessor.

On April

1,

1987

Heartland Power Co.

(Heartland) became the lessee and operator of

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2

the property.

Heartland employed aboveground storage tanks for

waste oil disposal and did not use the underground storage tanks.

(Tr.

12).

In fall of 1989, Heartland and First Busey began

negotiations for the sale of the property to Heartland.

(Tr.

24)

As part of the sale of the property, First Busey and

Heartland agreed that First Busey would remove T—1 and T—2 since

the tanks had not been used since April

1,

1987.

The tanks were

pulled on March 14 and 15,

1990 at which time a release of

petroleum was discovered.

ESDA was notified of the release on

March

15’,

1990.

(Ag. Rec. p.23).

The tanks were registered with

the Office of the State Fire Marshal

(OSFM)

on March

5 and April

5,

1990.

(Ag. Rec. pp.

24

& 25).

On May 3, 1991 First Busey submitted an Application for

Reimbursement from the Illinois Underground Storage Tank Fund.

(Pet.

Ex.

1, Ag. Rec. pp.

21—27).

The Agency received this

application on May 9,

1991.

(Pet.Ex.

3).

The Agency did an

initial review of the application on June 20,

1991.

•As a result

of this review the Agency sought confirmation of the tank

registration from the OSFM.

The necessary information was

received from the OSFM on July 26,

1991.

(Tr.

73).

After further

review of the application, the Agency, on August 14, sent First

Busey a letter requesting documentation that there was no prior

knowledge of the petroleum release that was discovered on March

14,

1990.

(Ag. Rec. p.44).

On September 12,

1990,

the Agency

received letters from Mike Murphy, trust officer at First Busey,

and James Strong of Strong Associates Ltd. stating there was no.

knowledge of the release of petroleum prior to July 28,

1989.

(Ag. Rec.

pp.

35-37).

Mr. Strong was hired by First Busey to

assist in the sale of the property and the removal of the tanks.

The Agency on October 4, 1991 informed First Busey that a

$100,000 deductible would apply to First Busey’s application for

reimbursement.

(Ag. Rec.

pp.

48,

49).

First Busey

is appealing

the Agency’s determination that a $100,000 deductible applies.

Whether the $100,000 deductible applies depends on which law

is applied to the application.

The relevant dates in determining

which law is to be applied in reviewing First Busey’s application

for reimbursement are:

May 9,

1991

—application received by the Agency,

July 26,

1991

-information received from the OSFN,

September 6,

1991

-effective date of new legislation

September 12,

1991

-Agency received letter from petitioner

concerning knowledge of release.

The status of Petitioner’s application on these dates will

determine which law is to be applied.

The issues in this case involve the applicable law to be

applied when reviewing an application for reimbursement, the

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3

interpretation of the phrase “in use on that date at that site”

in Section 22.l8b(d) (3) (B)

(i)

of the Environmental Protection Act

(Act) and when an application is considered filed.

ARGUMENT

The Agency concluded that the $100,000 deductible applied to

•First Busey’s reimbursement application under Section

22.18b(d) (3) (B) (i)

of the Environmental Protection Act

(Act)

as

amended on September

6,

1991.

The amended statute reads in part:

If prior to July 28,

1989 the owner or

operator had registered none of the

underground storage tanks at the site on that

date,

the deductible amount under

subparagraph

(A)

of paragraph

(3)

of this

subsection(d) shall be $100,000 rather than

$10,000.

(PA 87—323, HB 1741, effective

September 6,

1991)

The Agency states that it applied this section to the

Petitioner’s application because it was the applicable provision

of the Act in effect at the time that a complete application was

received from the Petitioner.

The Agency considered First

Busey’s application to be complete on September 12,

1991 when the

Agency received the letter from First Busey documenting there was

no knowledge of the release prior to July 28,

1989..

The Agency

determined that the $100,000 deductible applied because the tanks

were not registered prior to July 28,

1989.

The petitioner argues that the provision to be applied to

their application should be the statute in effect at the time

their original application was filed on May 9,

1991.

The

applicable provision of the Act (Section 22.18b(d)(3)(B)(i))

effective on this date reads

in part:

If prior to July 28,

1989 the owner or

operator had registered none of the

underground storage tanks in use on that date

at the site,

the deductible amount under

subparagraph

(A)

of paragraph

(3)

of this

subsection(d) shall be $100,000 rather than

$10,000.

(PA 86—958, effective December 5,

1989) (Emphasis added)

Petitioner further argues that the application was complete

upon receipt of the information from the OSFM.

The petitioner

argues that the application satisfied the reimbursement checklist

prepared by the Agency and therefore should be considered

complete.

The Petitioner concludes that if the application was

complete on July 26,

1991, the application should be reviewed

130—289

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4

under the statute as it read prior to it being amended on

September 6,

1991.

The amendment to the statute changed the phrase “in use on

that date at the site” to “on that date at the site.”

In A.K.A.

Land Inc. v. EPA, PCB 90—188

(March 14,

1991) the Board construed

“in use” as meaning that the UST5 are utilized in the active

sense.

If this provision is applied to First Busey’s

application, the $100,000 deductible would not apply since the

tanks were not being actively used on July 28, 1989.

The tanks

have not been used since prior to April

1,

1987 when Heartland

began to lease the property.

To determine which deductible applies to First Busey’s

application we must determine what is the applicable law and when

an application is “filed.”

APPLICABLE

LAW

The Board has held that the applicable law to be applied is

that which is in effect upon the date of the filing of the

application for reimbursement.

Pulitzer Community News~a~er,

Inc. v.IEPA, PCB 90—142

(December 5,

1989), Marjorie B.

Canrnbell

V;

IEPA, PCB 91—5

(June

6, 1991).

In Pulitzer, the Agency denied the applicant access to the

fund because at the time of the release, ESDA was not notified.

The statute requiring notification of ESDA became effective one

month after the release was discovered.

The Board held that

“Pulitzer cannot be required to comply with a regulation

requiring notification of a release which was not in effect at

the time of the discovery of the release.”

Pulitzer, PCB 90-

142,

p.4.

The Agency argues that the law that should be applied when

reviewing an application for reimbursement is the law that exists

when the decision is made.

The Agency further argues that

Gallatin National Co.

v. IEPA, PCB 90—183

(January 18,

1991)

supports this argument.

The Board notes that there are distinct

factual differences between Gallatin and this case.

Gallatin

involved applying current law to the issuance of a permit for a

landfill operation.

The most important distinction to be made

between the issuance of permits and underground storage tank

determinations is that permits govern actions that will occur in

the future while in UST cases the clean up of the’site has

already taken place and the only future action involves

accessibility to the fund.

The corrective actions at an

underground storage site are often performed with reimbursement

from the fund in mind.

The regulations require that permit

decisions be made within a specified time period after an

application is filed,

there is no similar time requirement for

reimbursement decisions.

Due to the difference between permits

130—290

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5

and underground storage tank reimbursements Gallatin is not~

applicable to the present case.

The Board finds no reason to go against the holding in

Pulitzer and Campbell.

The Board also sees potential problems in

applying the law in effect when the decision is made to UST

reimbursement determinations.

The applicant who submits an

application prior to a change in the statute would not know when

the decision is being made and therefore.would not know which

statute was applied until after the determination was made.

Since th’e Agency has complete control oi~-erwhen a determination

is made it could effectively control which law is to be applied

to an application.

The Agency makes a determination pertaining

to access to the fund, applicable deductible and eligibility of

costs.

These determinations can be made at different times by

the Agency.

If the law in effect at the time the decision is

made is applied,

it is conceivable that determinations on

accessibility and cost recovery would be made under two different.

statutes.

FILING OF A COMPLETE APPLICATION

The Agency argues that an application is not necessarily

filed when it is received by the Agency or date-stamped.

The

Agency contends that the application is not filed until all

documentation needed to review the application has been received

by the Agency.

The Board agrees with the Agency that an

application cannot be considered filed unless it is complete.

The Agency cannot proceed in making its determination if the

information required is not included in the application.

When

the Agency finds an application incomplete the applicant should

be notified in order to remedy the deficiencies.

An incomplete

application should either be rejected or the applicant given a

specified time period to supply the required information.

However, the question remains as to when an application can be.

considered complete.

The determination of when an application can be considered

complete and therefore filed is a factual determination.

Therefore, we look at the handling of First Busey’s application

to make this determination.

Petitioner’s application contains forms entitled

Notification for Underground Storage Tanks addressed to the .OSFM

along with copies of cancelled checks payable to OSFM.

(Pet.Ex.

1,

Ag.

Rec. pp.

1-5,

pp.

13-15).

Attached to the form included

under Tab Al Registration in the application

(Ag. Rec.

p.1)

is a

note stating:

Our request to the OSFM for Registration Date and

certification has been awaiting action for more than

ten months.

These documents are submitted ‘in lieu of’

130—291

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6

per the instructions of Mr. Kyle Rominger,

IEPA.

Mr.

Strong, who was primarily responsible for preparing the

application, testified concerning these forms and the note.

I put this on the sticker because

I had not been able

to get the document which was referred to in the

administrative instructions for this form from the

office of the state fire marshal and having worried

about it--by worried I mean phoning the fire marshal

and’ others to get a complete file.

I called the Agency

to an action person who turns out from this notice to

be Mr. Kyle Rominger and

I said we’re ready to submit

except that we’re gonna have to submit.

.

.

.It’s

interesting that just before

I talked to Mr. Rominger

I

talked to the fire marshal action person for providing

the document to me and I thought it had been lost.

Ten

months is a long time and they said no,

it’s right

here.

It’s coming up.

It’ll come up.

And

of course

it hasn’t come up yet.

We still do not have that

document.

So it’s lucky

I did work out with Mr.

Rominger a substitute procedure.

(Tr.

61,

62)

Karl Kaiser, project manager with the Agency performed an

initial review of the petitioner’s application on June 20,

1991.

At hearing, Mr Kaiser testified as to his findings and subsequent

actions regarding his initial review of this application:

Q.

What was your conclusion in June of 1991 as to this

application?

A.

At that particular time I considered this application

incomplete.

Q.

Why was that?

A.

It needed verification of proof of registration and fee

payment and it had some inconsistencies in the tank

information.

Q.

How did you attempt to clarify these questions that you

had in your mind?

A.

I requested the information that I would need to clarify

these items from the office of the state fire marshal.

(Tr.

73)

The Agency received the requested information from the OSFM on

July 26,

1991.

(Ag.

Rec.

38

& 39).

130—292

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7

First Busey’s application was incomplete because it did not

contain the required information concerning the tank

registration.

Mr. Strong was unable to obtain the required

information from the OSFN to complete the application, therefore

he contacted the Agency who provided an alternate means of filinç

the application.

It is undisputed that Mr. Rominger,

of the

Agency, provided Mr~Strong with a substitute procedure to submit

the application without the required information from the OSFM.

Mr. Rominger’s instructions to submit the forms “in lieu” of the

required, documents represents the Agency’s acceptance of the

application as submitted.

The receipt of the information from

the OSFM cured the deficiencies in the application discovered by

the Agency in their initial review.

The petitioner’s application was next reviewed by the Cost

Authorization Decision Group of the Agency sometime between

August

8 and August 14.

Cindy Davis, Southern subunit manager

with the Agency, testified as to the findings of this review:

We decided that the application was not complete

because it did not have a statement from the

owner/operator stating that he did not have prior

knowledge of the release

Our old application does

not have that question asked and in a previous

Pollution Control Board decision, which was Sparkling

Springs Mineral Water,

the Board suggested and strongly

suggested that we ask the owner/operators to provide

proof that they did not have any prior knowledge.

(Tr. 101)

The Agency subsequently developed a new application form in July

of 1991 that required the owner/operator to demonstrate the there

was no actual or constructive knowledge of the release prior to

July 28,

1989.

(Tr.

102)

(Res.

Ex.

1).

In reviewing old

applications, the Agency notified the applicant and requested the

applicant supplement the application by providing a statement

concerning prior knowledge.

(Tr.

103).

When the Petitioner originally filed its application, the

Agency did not require documentation concerning prior knowledge.

The new application requiring documentation was developed in July

of 1991, more than two months after the original application was

filed.

In Pulitzer the Board accepted the date that a letter

requesting reimbursement was sent to the Agency as the date the

application was filed because reimbursement forms had not yet

been developed by the Agency.

However, the Board cautioned that

the circumstances in Pulitzer were unusual and therefore much of

the discussion pertained only to those cases which fall intoa

“gap” period where procedures are not soundly in place.

A “gap”

130—293

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8

existed when First Busey’s application was being reviewed by the

Agency.

The Agency developed a new reimbursement form in July of

1991, based on recommendations in Sparkling Spring Mineral Water

V.

IEPA, PCB 91-9

(May 9,

1991).

For reimbursement applications

received on old forms after July of 1991, the Agency requested

the applicant to supplement the application with proof that there

was no prior knowledge of the release.

This transitional period

of adopting the new form created a “gap” period.

Upon developing

the new form all.the applications pending before the Agency,

in

which knowledge of the release was at issue, required additional

information before a decision could be made.

First Busey was

unable to submit a complete application because •the new forms

requiring proof that no prior knowledge existed where not

available at the time First Busey filed its application for

reimbursement.

An applicant cannot be expected to comply with the

requirements for an application that are not in effect at the

time that the application is filed with the Agency.

An

application is considered complete if it meets the requirements

in place. at the time that the application is received by the

Agency.

First Busey’s application was complete on July 26,

1991

when the Agency received the tank registration information from

the OSFN because the application contained the information

requested by the current reimbursement form.

The new form

requiring proof that there was no prior k.nowledge was not

available at the time the application was submitted to the

Agency.

CONCLUSION

The Board finds that the Petitioner’s application should

have been considered as filed complete on July 26,

1991 and the

applicable provisions of the statute in effect on that date

applied to determine the Petitioner’s appropriate deductible.

The applicable law to be applied to this application is PA 86-

958, effective December 5,

1989.

Since the tanks were not in use

on July 28,

1989 or registered before that date the $100,000

deductible does not apply.

This matter is remanded to the Agency

to apply the appropriate deductible to First Busey’s application

and determine which costs are recoverable.

The Board also notes that it has decided to remand to the

Agency those Agency determinations of eligibility which did not

reach the issue of reimbursability of costs and deductibility.

In Ideal Heating v.

IEPA, PCB 91—523,

(January 23,

1992)

the

Board held that such incomplete determinations are not

appealable.

The Board applies this principle only in cases where

no hearing has been held.

Because a hearing was held in this

case, the Board, therefore,

has decided this case on the merits.

130—294

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9

The above Opinion constitutes the Board’s finding of fact

and conclusions of law in this matter.

ORDER

The October 4,

1991 Agency determination of a $100,000

deductible on Petitioner’s application is hereby reversed and

this matter is remanded to the Agency.

IT IS SO ORDERED.

aC.

Marlin abstained.

Section 41 of the Environmental Protection Act

(Ill.Rev.Stat. 1991 ch.

111 1/2, par.

1041) provides for the

appeal of final orders of the Board within 35 days.

The Rules of

the Supreme Court of Illinois establish filing requirements

I, Dorothy N. Gunn,

Clerk of the Illinois Pollution Control

Board, hereby cer~if

hat the abo~y~

Opinion and Order was

adopted on/the ~

day of

_____________________,

1992 by a

vote of

(42~

.

j

~orothy

M. Gup~’~,Clerk

Illinois Poli~tionControl Board

130—295