RECE@V~
BEFORE
THE ILLINOIS POLLUTION CONTROL
BOARDrJAN
7
2004
CONSUMERS ILLINOIS WATER COMPANY
(VERMILLION
COUNTY)
(Property Identification Number
23-06-100-001-0060)
DorothyM. Gunn, Clerk
Illinois Pollution Control Board
James R. Thompson Center
100 West Randolph Street, Suite. 11-500
Chicago, Illinois 60601
Steve Santarelli
Illinois Department ofRevenue
101
WestJefferson
Post Office Box
19033
Springfield,
Illinois 62794
NOTICE
u~-~
pourn,oN co~i~oi
~o~o
)PCB(~~O?)
124
)
(Tax Certification)
)
Craig Cummings
Consumers Illinois Water Company
322 North Gilbert Street
P0 Box
1130
Danville Illinois 61832
PLEASE TAKE NOTICE
that I have today filed with the Office ofthe Clerk ofthe
Pollution Control Board
THE AMENDED RECOMMENDATION
ofthe Illinois
Environmental Protection Agency, a copy ofwhich is herewith served upon you.
DATED: December 19,
2003
Illinois Environmental Protection Agency
1021 North Grand Avenue East
Post Office Box
19276
Springfield,
Illinois 62794-9276
(217) 782-5544
ILLINOIS ENVIRONMENTAL
PROTECTION AGENCY
By:
Lisa Moreno
Assistant Counsel
Division ofLegal Counsel
THIS FILING
IS SUBMITTED
ON RECYCLED
PAPER
BEFORE
THE
ILLINOIS POLLUTION ~
CONSUMERS
ILLINOIS WATER COMPANY
)
(VERMILLION COUNTY)
)
PCB 03-124
(Property Identification Number
)
(Tax Certification)
23-06-100-001-0060)
)
AMENDED RECOMMENDATION
The Illinois Environmental Protection Agency (“Illinois
EPA”) hereby files its Amended
Recommendation regarding the tax certification ofwater pollution control facilities pursuant to
Section
125.204 of the regulations ofthe Illinois Pollution Control Board, 35 Ill. Adm. Code
125.204.
1.
On November 7, 2002,
the Illinois EPA received a request from Consumers Illinois
Water Company (“Consumers”) (log number TC 08-02, Exhibit A) for a recommendation
regarding the tax certificationofwater pollution control facilities, pursuant to 35
Ill.
Adm.
Code
125.204.
2.
On February 11, 2003, the Illinois EPA mailed for filing with the Board its
Recommendation, in which it recommended that the Board deny in totality Consumers’
request for tax certification.
On March
14, 2003
Consumers filed with the Board a
Petition for Administrative Review contesting the Illinois EPA’s recommendation.
On
March 20, 2003,
the Board accepted for hearing Consumers’ petition for review.
The
Illinois EPA mailed for filing the Record on May
5,
2003.
Since that time Consumers
and Illinois EPA have engaged in discussions, during which Consumers provided
additional clarifying information on the equipment and facilities for which it seeks tax
certification.
On December 4, 2003, theparties filed a Joint Statement ofStipulated
THIS FILING IS
SUBMITTED ON RECYCLED PAPER
Facts.
Based on ihformation set out in the Joint Stipulation, the Illinois EPA is amending
its Recommendation as set out below.
2.
The applicant’s address is:
Craig Cummings
Consumers Illinois Water Company
322 North Gilbert Street
POBox
1130
Danville Illinois 61832
3.
The proposed waterpollution control facilities in this request are located at 1301
West
Fairchild Street, Danville, Illinois, and consist ofthe following public water supply
treatment facilities:
Four upflow clarifiers;
Six rapid-rate gravitydual media filters;
An ionic ion exchange column;
A powdered activated carbon unit;
Three 3-million gallon sludge lagoons;
One 4-million gallon settling basin;
A wet welllstorage basin for ion exchange backwash; and
Various pipes, fittings, and
appurtenances
These facilities, which are used to treat raw water withdrawn from the North Fork River
for use as a public (drinking) water supply, are further described in the Illinois EPA’s
Record (Exhibit A)
1
and the Joint Stipulation ofFacts filed on December 4, 2003.
‘As described in the “Addenda to Application for Certification (PropertyTax Treatment) Pollution Control Facility”
included in Appendix A and the Joint Stipulation of Facts, water is drawninto the Consumer’s Illinois
facility
through a “raw” water intake located in the North Fork and pumped into clarifiers,
where sediment, hardness,
synthetic organic and volatile chemicals, totalinorganic carbon, fecal and total coliform, protozoans and other
organic contaminants are removedor reduced.
After primary and secondary clarification, the water is subjected to
pH adjustmentand filtered through the
dual-media rapid rate gravity filters before being pumped into the
TIllS FILING
IS
SUBMITTED ON
RECYCLED PAPER
4.
Section
11-10 ofthe Property Tax Code,
35 ILCS 200/11-10 (2000), defines “pollution
control facilities” as:
“any system, method, construction, device or appliance appurtenant thereto or any
portion of any building or equipment, that is designed, constructed, installed or
operated forthe primary purpose of:
(a) eliminating, preventing, or reducing air or
water pollution
.
. .
or (b) treating, pretreating, modifying or disposing of any
potential solid, liquid or gaseous pollutant which if released without treatment,
pretreatment modification or disposal might be harmful, detrimental or offensive
to human, plant or animal life, or to property.”
5.
Pollution control facilities are entitled to preferential tax treatment, 35 ILCS 200/11-5.
6.
Based on the information in the application for tax certification and the Joint Stipulation
ofFacts and the purpose ofthe facilities, it is the Illinois EPA’s engineeringjudgment
that the three 3-million gallon sludge lagoons and the single 4-million gallon settling
basin maybe considered “pollution control facilities,” pursuant to 35 Ill.
Adm. Code
125.200(a) and
are eligible for tax certification from the Board.
As described in the
“Residuals Treatment Equipment” provisions ofthe Joint Stipulation (pp.
5-6),
the sludge
lagoon and settling basin provide treatment--in the form ofsettling of solids that are later
removed and land-applied—for wastewater from the drinking water treatment process
and are therefore “pollution control facilities” within Section 11-10 ofthe Property Tax
Code.
7.
Based on the information in the application for tax certification and the Joint Stipulation
ofFacts and the purpose ofthe facilities and
equipment, it is the Illinois EPA’s
engineering judgment that the remaining described facilities may not be considered
“pollution control facilities,” pursuant to 35 Ill. Adm. Code
125.200(a) and
are not
distribution system.
Water that has a highnitrate concentration (greater than
8
mg/l) is also passed thoughan ion
exchange unit.
The contaminants that are removed during the water treatment process are land applied—in the form
THIS
FILING
IS
SUBMITTED
ON RECYCLED PAPER
eligible for tax certification from the Board.
As discussed in the Joint Stipulation of
Facts,
the function ofthese other facilities is to provide (1)
nitrate removal
from public
water supply to meet the National PrimaryDrinking Water regulations for nitrates (i.e.,
the upflow clarifiers, dual media filters, the ionic ion exchange column, and pipes,
fittings and appurtenances); (2) removal ofagricultural chemicals from the raw water
supply (i.e., the powered activation carbon unit) and (3) to provide storage and
equalization for the liquid waste from the nitrate removal process, which is pumped to
the
Danville Sanitary District (i.e., the wet welllstorage basin forion exchange backwash).
8.
It is evident from the Joint Stipulation ofFacts that the primary purpose ofthe listed
facilities and equipment otherthan the sludge lagoon and settling basin is to produce
potable water for distribution and sale to the public that meets the relevant Maximum
Contaminant Level required under the National Primary Drinking Water regulations.
While the raw water undergoes treatment, the primarypurpose ofthat treatment is not the
reduction of“water pollution” as defined in the Environmental Protection Act,2 but rather
the removal ofcontaminants from and processing of theraw waterto
make a product for
sale, i.e., potable water, that meets the required standards for human consumption.
Furthermore, Consumer’s Illinois
is not proposing to control an alteration ofor a
discharge to the waters ofthe State but is merely withdrawing from the waters ofthe
State.
of sludge—to agricultural lands.
~
.such alterationofthe physical, thermal, chemical,
biological orradioactivepropertie~
of aiiy.
waters ofthe
State, or such discharge of any contaminant into any waters of the State, as will or is
likely to create a nuisance or render such waters harmful or detrimental or injurious to public
health, safety or welfare, or to domestic, commercial, industrial, agricultural, recreational, or other
legitimate uses, or to livestock, wild animals, birds, fish, or other aquatic life.”
415 ILCS 5/3.540
THIS FILING IS SUBMITTED ON RECYCLED PAPER
9.
In its pleadings Consumers’ has emphasized the fact that the nitrate and
chemical-
removal equipment for which it seeks tax certificationwas installed pursuant to a
Consent Order and direction from the Illinois EPA.
This fact in and ofitself is not
relevant to whether the equipment qualifies forrelief under the Property Tax Code.
See,
for example, Cereal Mills v. Department of Revenue, 346 N.E.2d 69
(4th
Dist., 1976).
WHEREFORE, the Illinois EPA amends its previous recommendation ad now
recommends that the Board
grant
the requested tax certificationfor the three 3-million
gallon sludge lagoons
and the 4-million gallon settling basin and deny the requested tax
certification for the remainder ofthe equipment.
ILLINOISENVIRONMENTAL PROTECTION
AGENCY
By:
________
Lisa Moreno
Assistant Counsel
DATED:
December 19, 2003
Illinois Environmental Protection Agency
1021 North Grand Avenue East
Post Office Box 19276
Springfield, Illinois 62794-9276
(217) 782-5544
TIlTS FILING
IS SUBMITTED
ON RECYCLED PAPER
)
STATE OF ILLINOIS
COUNTY OF SANGAMON
)
)
)
)
PROOF OF SERVICE
I, the undersigned, on oath state that I have served the attached AMENDED
RECOMMENDATION, upon the person to whom it is
directed, by placing a copy in an
envelope addressed to:
DorothyM. Gunn, Clerk
Illinois Pollution Control Board
James R. Thompson Center
100
West Randolph Street, Suite 11-500
Chicago, Illinois 60601
(First Class)
Steve Santarelli
Illinois Department ofRevenue
101
West Jefferson
Post Office Box
19033
Springfield, Illinois 62794
(First Class)
t~s
5th
da
ofJanuary, 2
~
JJj9,~4/
Notary Public
Craig Cummings
Consumers Illinois Water Company
322 North Gilbert Street
POBoxll3O
-
Danville Illinois 61832
(First Class)
Charles T. Wehland
LauraM. Earl
JonesDay
77 WestWacker Drive, Suite 3500
Chicago, Illinois 60601-1692
(Overnight Mail)
OFFICIAL
SEAL
~
:~
CYNTHIA L.
WOLFE
NOTARY PUBLIC, STATE Off
ILLINOIS
MY COMMIsSlO~4
FV’~~~
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and mailing it from Springfield, Illinois on January
5,
2004 with sufficient postage affixed for
mailing as indicated.
SUBSCRIBED
AND SWORN TO BEFORE ME
THIS FILING IS SUBMITTED
ON RECYCLED PAPER