1 BEFORE THE POLLUTION CONTROL BOARD

OF THE STATE OF ILLINOIS

3 IN THE MATTER OF: )

)

4 BROWNFIELD SITE RESTORATION )

PROGRAM ) No. R03-20

5 )

(AMENDMENTS TO 35 ILL. ADM. )

6 CODE 740) )

8 TRANSCRIPT FROM THE PROCEEDINGS

9 taken before the HEARING OFFICER AMY C. ANTONIOLLI

10 by LORI ANN ASAUSKAS, CSR, RPR, a notary public

11 within and for the County of Cook and State of

12 Illinois, at Room 2-025 of the James R. Thompson

13 Center, 100 West Randolph Street, Chicago, Illinois,

14 on the 14th day of May, A.D., at 1:30 p.m.

L.A. REPORTING (312) 419-9292

1 A P P E A R A N C E S:

3 ILLINOIS POLLUTION CONTROL BOARD

James R. Thompson Center

4 100 West Randolph Street - Suite 11-500

Chicago, Illinois 60601

5 (312) 814-3665

MS. AMY C. ANTONIOLLI, HEARING OFFICER

ILLINOIS POLLUTION CONTROL BOARD MEMBERS

Mr. Nicholas Melas

9 Mr. Michael Tristano

Dr. G. Tanner Girard

ILLINOIS ENVIRONMENTAL PROTECTION AGENCY

Ms. Kimberly A. Geving

ALSO PRESENT

Mr. Anand Rao, IPCB, Technical Unit

16 Mr. William F. Murphy, IPCB, Attorney

Ms. Lisa Liu, IPCB, Environmental Scientist

17 Mr. Chris Perzan, Attorney General's Office

L.A. REPORTING (312) 419-9292

1 I N D E X

2 PAGE

3 Greeting by the Hearing Officer.............. 4 - 7

4 Direction Examination of Mr. King............ 8 - 13

5 Cross-Examination by Mr. King................14 - 19

6 Concluding Statements by Hearing Officer.....19 - 20

8 E X H I B I T S

9 Marked for

Identification

11 IEPA Exhibit No. 1....................... 4

L.A. REPORTING (312) 419-9292

1 (Document marked as

2 IEPA Exhibit No. 1

3 for identification, 5/14/03.)

4 HEARING OFFICER ANTONIOLLI: Good

5 afternoon. Welcome to this hearing being held

6 by the Illinois Pollution Control Board on this

7 rainy afternoon.

8 My name is Amy Antoniolli and

9 I have been appointed by the Board to serve as

10 hearing officer in this proceeding entitled,

11 In The Matter Of: Brownfield Site Restoration

12 Program, Amendments to 35 Illinois Administrative

13 Code, Part 740, Site Remediation Program. This

14 matter is docketed as R03-20.

15 Present today on behalf of the

16 Illinois Pollution Control Board and seated on my

17 right is Member Nicholas Melas. He is the lead

18 board member assigned to this matter. Seated

19 to the right of Member Melas is Member Michael

20 Tristano, who is also assigned to this matter.

21 Also present from the Board today is Dr. G. Tanner

22 Girard and Anand Rao from the technical unit and

23 Bill Murphy.

24 The purpose of today's hearing

L.A. REPORTING (312) 419-9292

1 is two-fold. First, this is a rulemaking that

2 is subject to Section 27(b) of the Environmental

3 Protection Act. Section 27(b) of the Act requires

4 the Board to request the Department of the Commerce

5 and Community Affairs, or DCEO, to conduct an

6 economic impact study on certain proposed rules

7 prior to the adoption of those rules.

8 If DCEO chooses to conduct an

9 impact study, DCEO has 30 to 45 days after such

10 request to produce a study of the economic impact

11 of the proposed rules. The Board must then make

12 the impact study or the explanation for not

13 conducting the study available to the public at

14 least 20 days before public hearing on the economic

15 impact of the proposed rules.

16 As required by 27(b), the Board

17 has requested by a letter dated April 3, 2003, that

18 DCEO conduct an economic study of this rulemaking.

19 An April 17, 2003, letter from DCEO formally claims

20 that DCEO will not perform economic impact studies

21 for current or future proposed rulemakings due to

22 the lack of staff and financial resources.

23 (Whereupon, Lisa Liu

24 entered the proceedings.)

L.A. REPORTING (312) 419-9292

1 HEARING OFFICER ANTONIOLLI: For the

2 record, I would just like to note that Lisa Liu from

3 the Board's technical unit is present today.

4 Accordingly, the Board relies

5 on the April 17, 2003, letter as DCEO's explanation

6 for not producing an economic impact study. We

7 have DCEO's April 17, 2003, letter available

8 at this side of the room today.

9 The second purpose of this

10 hearing is to allow any members of the public

11 who wish to testify the opportunity to do so

12 and also to ask questions of the proponent in

13 this matter, the Environmental Protection Agency.

14 However, there is no prefiled testimony today

15 for the hearing.

16 At this time I would ask if

17 Member Melas wishes to comment.

18 BOARD MEMBER MELAS: Other than to

19 welcome everybody, I think I have said enough at

20 the previous hearing.

21 HEARING OFFICER ANTONIOLLI: Okay.

22 Today is the second of two hearings scheduled so

23 far in this matter. The first hearing was held

24 on April 30, 2003, in Springfield.

L.A. REPORTING (312) 419-9292

1 Before we turn to the Agency's

2 proposal, I would like to ask if anyone objects

3 to, as I already explained, DCEO's explanation

4 for not submitting the environmental impact

5 statement?

6 Seeing no objections, I will

7 turn to the Agency and ask Ms. Geving if she

8 would like to present today on behalf of the

9 Agency a brief summary of the Agency's proposal.

10 MS. GEVING: Good afternoon. I'm

11 Kimberly Geving. I am assistant counsel for the

12 Illinois Environmental Protection Agency, Bureau

13 of Land.

14 This afternoon, Mr. King has

15 two items that he would like to address. He is

16 going to provide a brief summary of our proposal,

17 but first he is going to go through and summarize

18 errata sheet number two, which was filed with the

19 Board subsequent to the previous hearing.

20 At this time I would like to go

21 ahead and have Mr. King sworn and lay a foundation

22 for errata sheet number two.

23 HEARING OFFICER ANTONIOLLI: Sure.

24 Would you go ahead and swear in Mr. King?

L.A. REPORTING (312) 419-9292

1 THE COURT REPORTER: Would you raise

2 your right hand, please?

3 MR. KING: Yes.

4 THE COURT REPORTER: Do you swear the

5 testimony that you are about to give will be the

6 truth, the whole truth, and nothing but the truth?

7 MR. KING: Yes.

8 (Witness sworn.)

9 WHEREUPON:

10 G A R Y K I N G

11 called as a witness herein, having been first duly

12 sworn, deposeth and saith as follows:

13 D I R E C T E X A M I N A T I O N

14 by Ms. Geving

15 Q. Mr. King, I'm going to show you

16 what has been marked as Exhibit No. 1 by the court

17 reporter and if you could identify that for the

18 record, please.

19 (Document tendered

20 to the witness.)

21 BY THE WITNESS:

22 A. Yes. This is a document entitled

23 errata sheet number two and this document was

24 filed by the Agency with the Board in this

L.A. REPORTING (312) 419-9292

1 proceeding.

2 BY MS. GEVING:

3 Q. Is that a true and accurate copy

4 of the item that was filed with the Board?

5 A. Yes, it appears to be so.

6 MS. GEVIN: At this time I

7 would make a motion for errata sheet

8 number two to be entered into the record.

9 HEARING OFFICER ANTONIOLLI: Are

10 there any objections to errata sheet number

11 two being entered as Exhibit No. 1?

12 Seeing none, I would admit

13 this as Exhibit No. 1.

14 (Exhibit No. 1 has been

15 admitted into the record

16 without objection.)

17 BY MS. GEVING:

18 Q. Mr. King, if you would like to,

19 proceed with your summary.

20 A. Yes. I would like to cover two

21 things on this rainy afternoon. First, this is

22 just a brief summary of errata sheet number two

23 and then secondly, I would like to just give a

24 summary of this rulemaking for those who were not

L.A. REPORTING (312) 419-9292

1 in attendance at the -- at the April hearing.

2 It's going to be basically repetitive of what I

3 have to say on that point.

4 Errata sheet number two is the

5 result of questions that were posed by the -- by

6 the Board at the hearing on April 30th and as a

7 result of those questions, we concluded that there

8 should be some -- some changes to the Agency's

9 proposal. They are not ones that change the nature

10 of the proposal, but kind of -- kind of deal with

11 some -- the change from DCEO to the Department of

12 Commerce and Economic Opportunity and then a couple

13 of other clarification items. So that's basically

14 the summary on errata sheet number two.

15 Just to have a -- kind of go

16 briefly through why this proposal came -- came

17 forward to the Board, there was a legislation

18 that was passed that became effective in July

19 of 2002 and that was called the Brownfield Site

20 Restoration Program. That legislation was passed

21 in the hope that it would be an effective financial

22 incentive for the cleanup and reuse of Brownfield

23 sites in lieu of the environmental remediation

24 tax credit that sunset on December 31, 2001.

L.A. REPORTING (312) 419-9292

1 That tax credit provision was

2 not used very often. I think over a period of

3 five years, it was used, I think, maybe four, maybe

4 five times that we had requests for application of

5 that credit. So there was some hope that a

6 different financial incentive would work a little

7 more effectively. The nub of this legislation and

8 the nub of the rules that we propose is that

9 basically you would have a reimbursement process for

10 persons who had spent funds cleaning up Brownfield

11 sites.

12 We took a lot of the language

13 that we put in the rule from the regulations that

14 were adopted by the Board relative to the tax

15 credits because it did have a lot of procedural

16 carry-overs and we used some of the procedural

17 principals that we used for the tank program.

18 So it was really a putting together of language

19 similar to what the Board has used in other

20 similar rules.

21 One of the things that, you

22 know, really nobody could have -- well, I suppose

23 somebody could have predicted that the state was

24 going to enter this very bad economic times that

L.A. REPORTING (312) 419-9292

1 we have entered, but, you know, certainly the

2 proponents of the bill were not anticipating that

3 we were going to have the kind of deficits that

4 we have run into.

5 So the notion that there would

6 be extra money available to reimburse private

7 parties from state funds relative to the cleanup

8 of Brownfield sites is really, you know, it's

9 going to be -- we have allocated some money within

10 the IEPA's budget to have some measure of

11 reimbursement, but it's not going to go very

12 far.

13 So part of the reason why I

14 don't think there has been a whole lot of interest

15 in this proceeding from a public standpoint is

16 the fact that I just don't think this is going

17 to be used too much, certainly over the next few

18 years. Nonetheless, we are required by the

19 statute to come forward and propose a set of

20 rules and that's what we have done. That's kind

21 of my summary.

22 HEARING OFFICER ANTONIOLLI: Okay.

23 Thank you, Mr. King.

24 We can turn now to questions. Do

L.A. REPORTING (312) 419-9292

1 any Board members or any members of the technical

2 unit that are here or other staff in attendance have

3 any questions or care to make any comments?

4 Seeing no questions at this time,

5 if the board members don't object, we will take a

6 10-minute recess to see if anyone shows and are

7 there any objections to taking a recess?

8 MR. PERZAN: Yes, please.

9 HEARING OFFICER ANTONIOLLI: Oh, go

10 ahead.

11 MR. PERZAN: My name is Chris Perzan,

12 P-E-R-Z-A-N. I'm with the attorney general's

13 office. I have a couple of very quick questions --

14 minor questions on the language.

15 HEARING OFFICER ANTONIOLLI: Please,

16 go ahead.

17 THE COURT REPORTER: Could you have

18 Mr. Perzan step forward so his back is not to me. I

19 can't hear him back there.

20 BOARD MEMBER MELAS: Could you step

21 forward so the court reporter can hear you?

22 THE COURT REPORTER: Thank you.

L.A. REPORTING (312) 419-9292

1 C R O S S - E X A M I N A T I O N

2 by Mr. Perzan

3 Q. I was wondering in 740.815 if it would

4 be helpful to have a provision where the Agency

5 could request information that is possibly missing

6 or deficient from an application and give an RA time

7 to submit additional information during the review?

8 These are somewhat in the nature of comments as

9 well.

10 A. Was there a specific section in the

11 report? You are looking at .815 or .915 as we

12 modified it in the proposal, but are you looking

13 at a specific subsection?

14 Q. No. Actually, what I was thinking

15 is whether or not it would be helpful to have an

16 additional subsection that would allow the Agency

17 to request additional information.

18 A. During the course of the review?

19 Q. Yes.

20 A. Well, I don't think that really would

21 be necessary. I mean, I don't know -- we do that --

22 the normal process is we complete our review, send

23 out a request for information as to the deficiencies

24 and then that retriggers the clock as far as any new

L.A. REPORTING (312) 419-9292

1 submittal. If we somehow set up an interim

2 provision within the 60 days of the rules, then I

3 don't know what that does as far as restarting the

4 clock. I'm just not sure. We have informally --

5 you know, we have -- if it's something that's a

6 minor piece of information that's not in the

7 documentation that was submitted to us, we have,

8 you know, typically called people and asked them

9 to submit it and tried to do that without restarting

10 the clock.

11 Q. Another question was is there --

12 I don't think there is in the regs as they are

13 proposed, but is there a mechanism by which funds

14 may be withheld or a request denied for people who

15 are already delinquent in some debt to the state

16 and that comes up in the context of the procurement

17 code as a provision that does that. The cite is

18 30 IL CS 500/50-11(a).

19 A. As I understand it, the normal

20 procedure -- the way that's picked up is if we're

21 going to approve of payments, the payment is not

22 issued by the Agency. The payment is issued by

23 the comptroller's office as, you know, a typical

24 state of Illinois check. If that -- if somebody

L.A. REPORTING (312) 419-9292

1 has on file a withholding requirement, there is

2 a procedure by which people can have payments

3 withheld from other agencies. If that procedure

4 has been followed, I assume the comptroller would

5 just deduct the delinquent amount from the check

6 being issued.

7 Q. That's the offset system?

8 A. Right.

9 Q. Which does exist?

10 A. Right.

11 Q. But it has to actually -- there

12 actually has to be a question and the procurement

13 code has a similar provision to what I mentioned

14 in addition to the offset and I'm just thinking of

15 it as an additional safeguard or just throwing it

16 out for general consideration. Maybe it wouldn't

17 be a bad thing to look at that provision. It's just

18 a suggestion.

19 A. Yes. I think it would have -- I

20 mean, we do -- the comptroller offset provision

21 is used. I just don't know about the advisability

22 of setting up an additional procedural mechanism.

23 I think the comptroller offset provision has worked

24 okay in the past.

L.A. REPORTING (312) 419-9292

1 Q. I think I have one other quick, minor

2 comment. 748.930, which sets out ineligible costs,

3 it has ineligible costs incurred in two places,

4 in (f) and (g), costs incurred by negligence of any

5 contractor or subcontractor or other person and

6 I was just -- perhaps this is intended to be

7 included, but I would suggest possibly including

8 gross negligence or willful misconduct in there.

9 In other places in the regulations -- in other

10 state regulations, it tends to have all three.

11 A. I don't have -- you know, most of

12 these, we've drawn from the underground storage

13 tank rules and one of the things I would not

14 want to do is get out of sync with those. We

15 want to kind of -- because the people who are

16 going to be administering the provisions as

17 far as making eligibility determinations

18 under these rules are the same people making

19 the tank rules.

20 I think we should be consistent

21 across the board in making those determinations.

22 I think it's something that we would need to think

23 about, you know, doing it in a way that's consistent

24 across all of these rules.

L.A. REPORTING (312) 419-9292

1 Q. And actually, just to follow-up,

2 when I was suggesting that first thing for RA's

3 that may be delinquent in debt, I was sort of

4 thinking it might be one of the things that

5 could be included in ineligible cost that equals

6 a delinquent amount would be ineligible for

7 reimbursement, but that was where I was thinking if

8 it went anywhere, it could be there. That's all I

9 have.

10 A. Okay.

11 HEARING OFFICER ANTONIOLLI: Thank

12 you for your comments and your questions,

13 Mr. Perzan.

14 MR. TRISTANO: Could you repeat those

15 three things again that you said are typically used?

16 I didn't hear you.

17 MR. PERZAN: Do you mean in the

18 contexts of negligence?

19 MR. TRISTANO: Yes.

20 MR. PERZAN: Well, negligence,

21 gross negligence and willful misconduct. If you

22 have negligence, you could probably assume that

23 gross and willful misconduct, which are worse,

24 are included, but I think it's probably safest

L.A. REPORTING (312) 419-9292

1 to make it clear that all three would be types

2 of conduct that would render costs ineligible.

3 BY THE WITNESS:

4 A. In the context that we have the rules

5 here, you know, it would be an issue of gross

6 negligence or willful misconduct on the part of the

7 contractor or subcontractor or somebody practicing

8 professional engineering. In that situation,

9 probably it would rise to the level just about of

10 fraud and then we take it and look at issues of

11 licensure if you are talking about a professional

12 engineer.

13 Most of the -- most of the

14 occurrences that we would see would be relative

15 to a negligence situation where some -- some act

16 of misperformance on the field that occurs. I

17 mean, one typically we find is, you know, there

18 is a well at a site and some guy takes a backhoe

19 and runs over the well. Well, we're not going

20 to pay for the repair of that well if somebody

21 runs it over. That would be an issue of some

22 negligence.

23 BY MR. PERZAN:

24 Q. Well, there have been and there

L.A. REPORTING (312) 419-9292

1 could be or something that I would think of would

2 be deliberate falsification of some portion of

3 test results or whatever. So it's probably very

4 rare.

5 A. Right.

6 HEARING OFFICER ANTONIOLLI: Are there

7 any further questions?

8 Okay. Can we go off the record

9 for a few minutes?

10 (Whereupon, a discussion

11 was had off the record.)

12 HEARING OFFICER ANTONIOLLI: We'll go

13 back on the record.

14 The Board will accept public

15 comments on this proposal until June 14, 2003.

16 There will also be a public comment period after

17 the Board adopts these rules for first notice.

18 This concludes the hearings that

19 are so far scheduled by the Board in this matter,

20 but any party can request an additional hearing

21 pursuant to Section 102.412(b) of the Board's

22 procedural rules.

23 If there is nothing further,

24 we should thank everyone here for coming. This

L.A. REPORTING (312) 419-9292

1 hearing is adjourned. Thank you.

3 (Whereupon, no further

4 proceedings were had

5 in the above-entitled

6 cause.)

L.A. REPORTING (312) 419-9292

1 STATE OF ILLINOIS )

) SS.

2 COUNTY OF C O O K )

4 I, LORI ANN ASAUSKAS, a notary public

5 within and for the County of Cook and State of

6 Illinois, do hereby certify that heretofore,

7 to-wit, on the 14th day of May, A.D., 2003,

8 personally appeared before me at Room 2-025 of

9 the James R. Thompson Center, in the City of

10 Chicago, County of Cook and State of Illinois,

11 a certain cause now pending and undetermined

12 before the Illinois Pollution Control Board in

13 the above-entitled cause.

14 I further certify that any said

15 witnesses were by me first duly sworn to testify

16 the truth, the whole truth and nothing but the truth

17 in the cause aforesaid; that the testimony then

18 given by them were by me reduced to writing by means

19 of shorthand in the presence of said witness and

20 afterwards transcribed upon a computer, and the

21 foregoing is a true and correct transcript of the

22 testimony so given by them as aforesaid.

23 I further certify that the taking of

24 this hearing was pursuant to notice, and that there

L.A. REPORTING (312) 419-9292

1 were present at the taking of the hearing of the

2 aforementioned parties.

3 I further certify that I am not

4 counsel for nor in any way related to any of the

5 parties to this hearing, nor am I in any way

6 interested in the outcome thereof.

7 In testimony whereof I have hereunto

8 set my hand and affixed my notarial seal this

9 19th day of May, A.D., 2003.

11 _____________________________

LORI ANN ASAUSKAS, CSR, RPR.

12 Notary Public, Cook County, IL

Illinois License No. 084-002890

L.A. REPORTING (312) 419-9292