ILLINOIS POLLUTION CONTROL BOARD
March 14,
1991
AR.A.
LAND,
INC.,
)
Petitioner,
v.
)
PCB 90—177
)
(Underground Storage
ILLINOIS ENVIRONMENTAL
)
Tank Fund Reimbursement
PROTECTION AGENCY,
)
Determination)
Respondent.
DAVID
L. ANTOGNOLI APPEARED ON BEHALF OF THE PETITIONER, AND
RONALD SCHLLAWITZ APPEARED ON BEHALF OF THE RESPONDENT.
OPINION AND ORDER OF THE BOARD
(by J. Anderson):
This matter comes before the Board on a petition filed by
A.K.A. Land,
Inc.
(AKA)
on September 26,
1990.
AKA requests
review of a determination by the Illinois Environmental
Protection Agency (Agency)
to impose a $100,000 deductible,
rather than a lesser amount, as a condition for reimbursement
from the State’s Underground Storage
•Tank Fund
(State Fund)
following AKA’s removal of
a number of Underground Storage Tanks
(UST’s).
The provisions
related to the State Fund are found in
Sections 22.18,
22.l8a,
22.18b, and 22.18c of the Environmental
Protection Act
(Act).
(Ill. Rev.
Stat.
lii 1/2, pars.
1001 et
seq.) The deductibility provisions are found
in Section
22.18b(d)(3)(A),
(B), and
(C) of the Act.
Hearing was held on November
15, 1990, and no members of the
public were present.
At hearing, the Agency presented
a
statement of the Illinois Petroleum Marketers Association
(IPMA),
which was not present at hearing.
The statement and a response
by AKA were filed without objection.
The Agency filed its brief
on December 14,
1990,
and AKA filed its reply brief
on December
20,
1990.
On February 7,
1991,
the Board entered an Interim Order
requesting responses
to questions posed in that Order.
On
February 13,
1991, ARA,
the Agency, and the IPMA filed
responses.
(Because the responses essentially repeat arguments
already contained in the record,
we will not separately address
them in this Opinion.)
120—35
—2—
SUMMARY
At the outset, we note that the issues raised
in this matter
not only were intertwined to an unusual degree, but also tended
to evolve during the course of the proceeding.
We believe that
the following brief explanation and identification of the major
issues raised,
as well as the Board’s conclusions, may enhance
the reader’s understanding when subsequently more fully addressed
in this Opinion.
AKA, after finding on its property some abandoned
underground gasoline tanks
that had leaked,
had the tanks and
contaminated surrounding soil removed.
AKA applied to the Agency
for reimbursement from the State Fund.
The State Fund was
created by statute and provides for corrective action
reimbursements,
after
a varying deductible amount
is imposed,
to
eligible owners and operators of tJST’s containing petroleum.
The
Agency found AKA eligible for reimbursement, but imposed the
highest deductible ($100,000).
AKA appealed the Agency’s
deductibility determination.
How the State Fund operates, and who
is covered,
is linked
to the UST regulatory program adopted by the USEPA.
The USEPA’s
regulations have vastly expanded the standards applying to
UST’s.
Among them are the requirements
for “private” financial
assurance.
It
is the financial assurance provisions that provide
for the State Fund as an alternate compliance route,
a route that
is potentially more accessible and less expensive.
Although the
monies for the State Fund come from tank registration fees
collected by the Office of the State Fire Marshal (OSFM),
the
Agency determines who gets the reimbursements and what the
deductible amount
is.
In the State Fund deductibility provisions, whether the
phrase
“in use” means that the
tJST’s petroleum is actively being
utilized,
or •whether it means
that the UST simply contains
petroleum,
affects whether the full $100,000 deductibility
imposed on AKA was correct.
Additionally, when applying the
phrase
“in use”
in the “active”
sense to other language,
particularly to the federally derived definitions of “owner” and
“operator”,
the question was argued as to whether AKA was an
owner and if not an owner,
then an operator.
If neither, then
it
was argued that AKA was not eligible for any reimbursement at all
from the State Fund.
The Board has construed
“in use” as meaning that the UST’s
are utilized in the
“active” sense;
that AKA is not the “owner”
but
is an “operator” and is thus eligible for the State Fund; and
that the $100,000 deductible does not apply.
The Board is
remanding this matter
to the Agency for
it
to determine whether
the $50,000
or the $10,000 deductible applies, as that issue was
not fully aired in this proceeding.
120—36
—3.—
THE STATE FUND
A summary of the pertinent provisions of the State Fund follows.
As a general observation, we recognize the concern of the
Agency and the IPMA about
the sufficiency of the State Fund
if
AKA’s arguments were to prevail.
However, we emphasize that the
arguments put forth by the parties and the IPMA have raised
issues that, by implication, affect the liability provisions of
the Resource Conservation and Recovery Act
(RCRA)
UST enforcement
program as well as the State Fund deductibility provisions
in
dispute here.’
The arguments over the meaning of the phrase “in
use” in the State Fund deductibility provisions has raised a
fundamental problem with the Agency’s view as
to who is an
“owner” and who is an “operator”, as defined in the federal RCRA
regulations.
This Opinion will focus on the intertwining aspects
of these issues as they arise.
The State Fund provides
that eligible owners or operators of
UST’s may receive reimbursement for the costs of corrective
action taken when there has been a release of petroleum; however,
the State Fund also provides for a deductible of $10,000,
$15,000,
$50,000 or $100,000.
The amount depends on such factors
as the timing of the removal, when the leak first occurred, when
the tanks were registered,
etc.
The State Fund implements a provision of the RCRA.
RCRA
requires that UST owners/operators have “private” financial
assurance to cover
a release, and details what must be covered in
the financial assurance.
RCRA also permits the establishment of
an “equivalent” State Fund.
(40 CFR 280.101
(1990)).
The Board
has incorporated the State Fund into its RCRA “identical
in
substance” regulations.
(See R89—l9, April
26, 1990;
35
Iii. Adm.
Code 731.200, adopted at 15
Ill. Reg.
9454, June
15,
1990).
It
is important to note that the State Fund defines “owner”,
“operator”,
and “underground storage tank”
by directly
referencing these definitions
in RCRA’s Hazardous and Solid Waste
Amendments of 1984
(HSWA).
The Board has adopted these
definitions as part of its adoption of other HSWA provisions as
identical in substance.
(See R88—27, April
27, 1989).
The
definitions are found at 35
Ill. Adm. Code 731.112.
One requirement
for eligibility to the State Fund is a
showing that the tanks be
registered and fees paid into the State
Fund.
This activity
is under the jurisdiction of the OSFM,
pursuant to Section 4 of “An Act
to regulate the storage,
transportation,
sale and use of gasoline, violatile oils and
other regulated substances”.
(Gasoline Act)
(Ill. Rev.
Stat.
1989,
ch.
127 1/2,
par.
156).
RCRA corrective action, on the
other
hand,
is under the jurisdiction of the Agency.
Thus,
it
is
the Agency that oversees the State Fund’s expenditures.
The
120—37
—4—
Agency determines eligibility and the applicable deductible and
processes claims.
In this case,
the Agency determined that AKA
was eligible for reimbursement from the State Fund,
and that its
deductible was $100,000.
(See Section 22.18b and c of the Act
generally).
If the Agency refuses to reimburse,
in whole or in part,
then the affected owner/operator may petition the Board pursuant
to the permit appeal provisions of Section 40 of
the Act.
(See
Section 22.l8b(g) of the Act).
AKA’s appeal
is based on a
dispute over the Agency’s decision to impose the $100,000
deductible.
THE DEDUCTIBILITY PROVISIONS
The base deductible amount
in the Act
is $10,000, except
that the deductible increases to $15,000, $50,000
or $100,000
under certain circumstances.
The $15,000 deductible
is not at
issue here.
When one
is determining which deductible applies to
AKA.,. the point at which the following events occurred in relation
to the State Fund’s “break point” date of July 28,
1989 are
highly relevant:
a)when
the tanks were registered with the
OSFM,
b) when the tanks were “in use”, and
c) when the release
first occurred.
It
is undisputed that AKA purchased the property containing
the UST’s prior
to July 28,
1989.
It
is also agreed by the
parties that AKA’s tanks were registered after that date, on
August
15,
1990, and that the release occurred before July 28,
1989
(an event that becomes important if the $100,000 deductible
does not apply).
(R.
4,
56; Agency Record,
p.
20).
What is
in
dispute
is whether the tanks were “in use” prior
to July 28,
1989, which in turn depends on what
“in use” means.
As quoted
later in this Opinion,
the phrase
“in use”
is used
in both the
deductibility provisions of the Act and
in the RCRA regulations
defining “owner”,
but
is not expressly defined in either place.
Generally, the Agency and the
IPMA
argue that “in use” means
“containing”, even residual amounts,
of petroleum.
AKA, on the
other hand,
argues that
“in use” should be construed
in the
active sense of the tanks being used for some purpose.
The Agency’s and the EPMA’s interpretation supports the
imposition of the $100,000 deductible, and AKA’s interpretation
supports
a lesser deductible (either $10,000 or $50,000).
We
note that the IPMA,
in its statement filed at hearing, asserts
that applying the minimum $10,000 deductible would inadvertently,
by expanding the scope of the program, deplete the State Fund;
however,
the IPMA does not discuss the $50,000 deductible
(Ex. A
of Agency Brief, December
14,
1990).
The Agency based
its $100,000 determination on Section
22.18b(d)(3)(B)(i) of the Act, which states
in pertinent part:
120—38
If
prior
to
July
28,
1989,
the
owner
or
operator
had
registered
none
of
the
underground
storage
tanks
in
use
on
that
date.. .the
deductible
amount.. .shall
be
$100,000
rather
than
$l0,000....(Emphasis
added).
AKA contends that the $100,000 deductible would not apply
because the tanks were not “in use” prior
to July
28, 1989.
If
such is the case then the $50,000/$lO,000 deductibility
provisions of Section 22.18b(d)(3)(B)(ii) of the Act come
into
play.
That Section states
in pertinent part:
If
the
costs
incurred
were
in
response
to
a
release
of
petroleum
which
first
occurred
prior
to July
28,
1989,
and
the owner
or the
operator
had actual
or constructive knowledge
that such a release had occurred prior
to July
28,
the
deductible
arnount...shall
be
$50,000
rather
than
$10,000,
unless
the
$100,000
deductible
applies,
in
which
case
the
deductible amount shall be $100,000.
If...the
owner
or
operator
had
no
actual
or
constructive knowledge that such a release had
occurred
prior
to
July
28,
1989,
the
deductible
amount
shall
be
$10,000.
It
shall
be
the burden
of
the
owner
or
operator
to
prove
to
the
satisfication
of
the
Agency
that
the
owner
or
operator had
no
actual
or
constructive
knowledge
that
the
release
of
petroleum for which a claim is submitted first
occurred prior
to July 28,
1989.
As noted earlier,
it was agreed that the release occurred
before July 28,
1989.
Thus, AKA’s deductible would be $50,000
rather than $10,000, unless
it can prove that it had no actual or
constructive knowledge of the release before July
28,
1989.
We will now summarize the testimony at hearing,
as
it will
help place into perspective the issues as identified by the
parties as well as the underlying issues affecting the outcome of
this matter.
HEARING TESTIMONY
At hearing,
the president of AKA, Mr. Thomas
C. Armstrong,
testified that the company had been in the business of buying,
selling,
and developing real estate
for approximately two years
(R.
9).
In November of 1988, AKA acquired what was then vacant
property located at 755 South Belt West
in Belleville,
Illinois
(R.
16).
The purpose of the purchase was to develop the property
120—39
—6—
for use as a Super
K convenience store with gasoline pumps.
(R.
10).
At that time there was evidence of a former Texaco station
on the property which, according to available records, closed in
about 1975 and,
in any event, was no longer operating in 1976.
(R.
18).
Remaining on the lot at the time of AKA’s purchase were
a building, partial paving, and an abandoned gasoline pump island
with two service bays.
(R.
10,
17).
The gas pumps had been
removed
(R. 11,
17).
The only later use of the facility was as a
muffler shop.
(R.
18).
Mr. Armstrong testified that he was not aware of the
presence of any UST5 at
the time of acquisition.
However, when
AKA entered into a long—term lease agreement with Quick Trip
Corporation (Quick Trip)
for AKA to construct a facility for
it,
Quick Trip,
as was its policy, had the property tested for the
presence of hydrocarbons
in November of
1989.
(R.
12,
13,
23).
The tests, conducted by Geo—Technology Environmental
Inc.
(Geo—
Technology), showed that
a release of petroleum had occurred, and
that there were an undetermined number of tanks on the
property.
The Agency was notified at this time.
(R.
13,
25).
Mr. Armstrong,
after determining what the alternatives were,
including an additional—testing option, decided to proceed with
the clean—up.
Although no dollar amounts were given,
Mr.
Armstrong testified that the clean—up cost considerably more than
the estimates.
(R.
26).
AKA foundsix underground storage tanks
when it had the tanks and the contaminated soil surrounding the
removed in March/ April of 1990.
The tanks contained residual
petroleum sludge and dirt that could be contained in two or three
55 gallon drums.
(R.
13,
14,
28).
Mr. Armstrong testified that he had made no inquiries of
either
the muffler shop or adjoining land owners to determine
if
tanks were on the property and hadbeen removed,
and that he
assumed that Texaco, as a reputable company, would properly
abandon any tanks.
(R.
20).
He stated
that,
in his prior
experience as a real estate developer
for 7—Eleven stores,
construction was overseen by a construction manager and that he
had not personally experienced a situation where tanks weren’t
properly abandoned,
although he had knowledge of others being
involved in such situations.
(R.
21,
22,
26).
He stated that AKA
had never been a member of IPMA or
received materials from them,
and was not even aware of the existence of the State Fund until
told of
it by Geo—Technology.
(R.
34).
The other person who testified at hearing was Mr.
Bur
Filson., Agency, project manager of the UST program, whose duties
in part were to review applications for reimbursements.
(R.
40).
He reviewed AKA’s supplemental application and determined
that AKA could access the fund and that the deductible was
120—40
—7—
$100,000, which amount would have to be paid’before AKA could
receive monies from the State Fund.
(R.
54,
56).
Regarding his understanding of
“in use”,
Mr. Filson
testified that he had consulted with the then-head attorney
in
the Division of Land Pollution Control, Mr. Gary King.
(R.
60).
Mr. Filson noted that the phrase “in use” appears in two
subsections of the deductiblity provisions,
those being the
$15,000 and $100,000.
He also testified that the July 28,
1989
“start” date was the same date the State Fund was amended in the
legislature and applied to everyone, and that,
if the phrase “in
use” were not present
in the deductibility provisions,
“it would
be cost prohibitive for someone to open up a service station
today”.
(R.
61).
As the Board understands Mr. Filson’s testimony,
the reason
he believed “in use” meant “in the ground” prior
to July 28,
1989
was because there was nothing
in the OSFM’s tank registration
language that otherwise fit the scenario;
there was a definition
for “existing tanks”,
which Mr. Filson testified was “in the
ground or substantial construction had been begun on December of
1988.
So as a result of that, and the lag time from December of
1988 to July of 1989, the “in use” was inserted to,
I guess,
in
effect redefine what existing tank was for the purposes of the
funds.”
(R.
61,
62).
Mr. Filson decided on the $100,000 deductible on the basis
that the tanks were not registered on July 28,
1989,
but were in
the ground on that date.
(R.
69).
He did not consider the
possibility of any other deductible applying, nor did he
specifically consider whether Mr. Armstrong had any knowledge of
the release before July 28,
1989 (which, as earlier noted,
is a
consideration articulated in the $50,000 deductible provisions).
(R.
67).
Mr. Filson agreed that indications were
that the tanks were
not dispensing fuel,
but asserted that AKA was storing a
regulated substance on July 28, 1989,
and that “use” could mean
employing something for
a purpose, although he had no idea what
purpose AKA’s tanks were being employed for before July 28,
1989.
(R.
69).
Regarding “storing”, Mr Filson felt that it did not
require that
there be a purpose;
he felt,
for example,
that when
a milk carton
is used for storing and dispensing milk, the
presence of remaining residue still constitutes storage even
after
the carton
is thrown in the garbage.
(R. 72).
ARGUMENTS AND BOARD DISCUSSION
In a lengthy brief,
the Agency uses four arguments to
support its interpretation of “in use”.
The parties’
and the
IPMA’s arguments and responses are summarized,
and the Board
discussion of them follows.
120—4 1
—8—
RCRA/Board Definitions
The Agency references, and partially quotes, definitions for
“existing tank system”,
“tank”,
“underground storage tank or
UST”, and “regulated substance” that are found in the Board’s
identical in substance
RCRA
regulations at 35
Ill. Adm. Code
731.112.
The Agency points out, with the Agency’s emphasis
repeated here,
that in the definition of:
“Existing tank system”,
the phrase used to contain is used;
“Tank”, the phrase designed
to contain is used; and that “underground storage tank or UST”
means one or more tanks used to contain an accumulation of
regulated substances
(we note for later discussion purposes,
that the UST definition also specifies that 10
of the volume,
including underground pipes connected thereto,
is to be beneath
the ground).
The Agency also notes that “Regulated substance”
means petroleum.
The Agency then asserts that a
tJST is a tank designed to
contain petroleum,
that the amount of petroleum is not specified,
and that the federal view is that the purpose of a UST
is that
it
is designed to contain a regulated substance,
in this instance
petroleum.
We believe that the Agency’s arguments beg the question as
to what the phrase “in use” means as it
is used in the State Fund
deductibility provisions
in the State statute.
It
is because the
“contained” language
is already used
in these definitions that
the addition of “in use” becomes a useless redundancy if
it means
the same thing. People
v. Wick,
107 Ill.2d 62,
481 N.E.2d 676,
679 (1985).
More specifically,
if used
to contain
is already
used in the definition of “underground storage tank”,
then why
would it be repeated directly after the words “underground
storage tank”
in the $100,000 deductibility provisions
(i.e.
“..underground storage tanks
in use on that date at the
site...(Section 22.lSb(d)(3)(B)(i))?
As for the Agency’s
assertion that “regulated substance” means “petroleum, we are
uncertain as
to its relevancy, because no one is arguing that
point.
We must conclude that, because the State Fund
specifically relies on the federal definitions for “petroleum”
and “underground storage tank”, and because “contain” language
is
already used, but the term “in use”
is not used
in those
definitions, then “in use”
is put
in the deductibility provisions
for a purpose and must mean something different.
The Gasoline Act
The Agency also quotes from the IPMA statement, which itself
takes exerpts
from the Gasoline Act.
(Agency Brief pp.
17—18).
The IPMA notes
that the Gasoline Act requires tJST’s which
contained petroleum to register the tank withtheOSFM and notify
the OSFM of their removal.
120—42
—9—
Ironically, we find this to be additionalpersuasive
evidence that “in use” does not mean “contained”.
First, we see
nothing inconsistent with using
“contained” as a determinant for
registration (and fee collection)
purposes in the Gasoline Act,
and using “in use” as a different determinant for deductibility
purposes
in the Act.
It
is obvious from this record that the
OSFM’s registration
(and fee) activities and the persons they
affect operate independently from the Agency’s duty to oversee
who get.s paid, and how much,
from the State Fund.
A State Fund
applicant must simply show to the Agency that OSFM accepted the
registration and that
the fees were paid; OSFM’s statutory or
regulatory language that served as a basis for OSFM’s
determination is not for the Agency to review.
The language of
the Act, not the OSFM Act,
is before the Board for
interpretation.
*
Next, of particular note regarding the question of
legislative intent as
to whether the “contained” language in the
Gasoline Act and the “in use” language
in the Act mean something
different,
the “contained” provisions
in the Gasoline Act were
enacted at the same time
in the same legislation as the “in use”
provisions of Section 22.18b of the Environmental Protection Act.
(see P.
A.
86—25).
Deductibility for New Tanks Affected
The Agency next argues that “in use” must be used in the two
subsections of Section 22.l8b(d)(3)
of the Act that describe the
$100,000 and $15,000 deductibles,
to cover the situation where
the release was from a new tank, one that was installed after
July 28,
1989.
Without
“in use”, the maximum $100,000 deductible
would be assigned to these new tanks.
The Agency cites the
definition of “new tank system”
in 35
Ill. Adm. Code 731.112,
which refers
to a “tank system that will be used
to contain an
accumulation of regulated substances and for which installation
has commenced after December 22,1988.”
(Agency emphasis).
The
Agency argues that, because the deductible sections focus on the
date of July 28,
1989, which
is after the December
22, 1988
effective date of the federal
rules, the term “new tank system”
could not be used to clarify which deductible applies
to a UST
installed after July 28,
1989.
(Agency Br. pp.
14, 15).
We do not accept the Agency’s reasoning.
The State Fund’s
deductible definitions are State selected definitions
implementing the State Fund program.
The State Fund definitions
*
We also note that the Agency has argued in another UST case
that
it
is bound, not by the OSFM regulations,
but
by the
definitions
in the Act and Board regulations. Rockford Drop Forge
Company v.
Illinois Environmental Protection Agençy,
PCB 90—46,
Opinion and Order
of
the Board
p.
7
(December
20, 1990)
120—43
—10—
reference the federal definitions of “petroleum” and “UST’s”, but
make no use of the term “new tank system” by reference or
otherwise.
Moreover, the only “triggering date”
in the State
Fund for determining deductibility is July 28,
1989.
Most
important, until the tank
is installed below the surface
(i.e.
to
comport with the 10
or more petroleum by volume “beneath the
surface of the ground”
language in the UST definition)
it
is not
yet an underground storage tank.
(35 Ill. Adm. Code 731.112).
Until
a tank is an underground storage tank,
the deductibility
distinctions, including the registration requirements, do not
apply, no matter which interpretation, AKA’s or the Agency’s,
is
given to the phrase “in use”.
Except
for the $10,000 deductible,
all of the deductibility provisions refer to UST related events
occurring prior to July 28,
1989.
Put another way, how can a
“new”
storage tank be “in use” prior
to July 28, 1989,
if
it was
not yet a UST?
We agree with AKA that the statutory phrase “in use” must
mean something else.
AKA argues that the only plausible
explanation is that the phrase was intended
to mitigate the
consequences of failure
to register tanks not being used for
storage or dispensing fuel.
(AKA Reply Br.
p.
3).
The Board
finds that the term “in use” means “use for
a purpose”
as
interpreted by AKA.
The deductibility provisions can be read
rationally with this interpretation, the words
“in use” are not a
meaningless redundancy,
or surplusage as AKA calls
it, and the
Board’s interpretation is consistent with how “in use” is used in
the RCRA definition of “owner”.
The discussionbelow addresses
this latter
issue.
“Owner” as defined
The Agency next claims that AKA would not be an “owner”
if
AKA’s construction of “in use” prevails.
The Agency then asserts
thatAKA is not an “operator”,
so then AKA would be precluded
from access
to the State Fund.
We’ do agree that AKA would not be
an owner of the tanks under
the RCRA definition of “owner”,
but
do not agree that AKA is not an operator under the RCRA
definition of “operator”.
We note again that,
if the Agency’s arguments are implying
that AKA could be neither the owner
nor operator, such arguments
suggest consequences that go well beyond the issue of who has
access
to the State Fund;
only owners or operators fall within
the jurisdictional purview of the whole federal RCRA and State
UST regulatory program.
The Agency clearly granted AKA access to the Fund and thus,
that determination was not raised as an issue here p~ se.
However,
the Agency argues
that it based its determination on its
conclusion that AKA,
as the current owner, was an “owner”
as
defined
in the RCRA regulations, which definition
is relied on by
120—44
—11—
reference
in the State Fund.
In fact, the Agency prepared its
forms on the assumption that the current owner of the tanks was
the owner under the RCRA definition, and essentially ignored the
“in use” language.
In its formsrequired to be filled out for
access
to the Fund, the Agency asked for the name of the current
owner/operator (Agency Record p.
18)
The Board will first address the owner
issue.
In Section
22.l8(e)(l)(B) of the Act,
“owner”
is defined as follows:
For purposes of this Act:
When
used
in
connection
with,
or
when
otherwise
relating
to,
underground
storage
tank,
the
terms
“owner”,
“operator”,...shall
have the meanings ascribed to them in Subtitle
I of the Hazardous and Solid Waste Amendments
of
1984
(P.L.
98—616),
as
amended,
of
the
Resource Conservation and Recovery Act of 1976
(P.L.
94—580),
as
amended.
(Also see
35
Ill.
Adm Code 731.112).
Owner is defined
in the federal regulations
(also see
35
Ill. Mm. Code 731.112) as follows:
“Owner”
means
(A)
in
the
case
of
an
underground storage tank in use on November
8,
1984, or brought into use after that date, any
person
who
owns
an
underground
storage
tank
used
for
the
storage,
use,
or
despensing
of
regulated substances,
and
(B)
in
the case
of
any
underground
storage
tank
in
use
before
November
8,
1984,
but
no
longer
in
use
on
November
8,
1984,
any
person
who
owns
such
tank immediately before discontinuation of its
use.
42 U.S.C.
§6991(3).
(Emphasis added).*
Given the facts of this case, since
the Board intreprets
“in
use”
in the active sense
that AKA would have those words
interpreted,
it
is clear
that AKA is not an owner
under the Act,
RCRA,
or for purposes of access
to the State Fund.
If the tanks
were not,
as AKA asserts,
in use on November
8, 1984 or
thereafter,
AKA would not be an owner under subsection
(A).
If
the tanks were in use prior
to November
8,
1984,
then, under
subsection
(B), the owner would not be AKA, but Texaco because
it
was Texaco that under
subsection
(B)
had the UST’s in use before
November
8,
1984 and then discontinued their use before that
date.
*
For clarity,
the Board removed the
(A) and
(B) from the
definition.
See 35
Ill. Adm. Code 731.112.
120—45
—12—
As noted,
the Agency
(and the IPMA)
read “owner”
to mean
that if a storage tank
in
a UST system contains even a residual
amount of petroleum,
then a $100,000 deductible would be
appropriate
for AKA, because those tanks were not registered
until after July 28,
1989.
Basically, the Agency and the IPMA
contend that it is their “containing petroleum”
interpretation
that makes AKA eligible for the State Fund,
and that their
interpretation is assertedly correct on this basis alone.
As earlier noted, we disagree with the Agency’s
interpretation of “in use”.
However, the Agency is correct
insofar as,
if the proper interpretation is applied,
then the
definition of
“owner” would be construed to mean that Texaco,
not
AKA,
is the owner.
We note that AKA appears to concede the point
on the “owner” issue, while asserting that
it is an
“operator”.
(see Reply Brief p.
3).
In any event,
the definition of
“owner” supports AKA’s
interpretation of “in use”
in the active sense as meaning for
a
purpose.
If used in the passive sense as meaning “contained”,
the words used in the definition of “owner” would not make sense,
and, the very least,
one would have to ignore the phrase
“storage, use or dispensing of”
regulated substances.
This
language distinguishes between UST’s being used for storage, use
or dispensing of regulated substances and those which are not,
and would be unnecessary surplusage under
the Agency’s
interpretation.
The Agency claims
“in use” means
“containing”,
and that “used for”,
“storage” and “use”
(but not “dispensing”)
also means “containing”,
(although the Agency agreed at hearing
that
“use” could mean employed for
a purpose).
(R.
70).
In any
event,
if all this means “containing”, the words “storage” and
“use” are useless, and the phrase “dispensing of”
is rendered
meaningless.
Also,
it
is particularly noteworthy that the
definition of UST itself already includes the phrase “used to
contain regulated substances”.
In the definition of
“owner”,
the
“used for storage, use or dispensing of regulated substances”
would have to be ignored to have the Agency’s argument make
sense.
Finally,
we note that substituting “containment” for
“use”
in the last word of the definition makes
for awkward
interpretation indeed.
Operator
as defined
With regard to the issue of whether AKA is an “operator”,
35
Ill. Adm. Code 731.112, defines the term as
follows:
“Operator” means
any person in control of,
or
having responsibility for,
the daily operation
of the UST system.”
Somewhat ironically,
the Agency construes “operator11, unlike its
construction of “owner”, as limited
to those persons who are
actively using the tanks.
120—46
—13—
The Agency first contends that AKA has already admitted that
it
is not an “operator”.
The Agency correctly notes that AKA
stated both in its supplemental application for reimbursement
(Agency ‘Record p.
18)
that it never operated the UST’s, and also,
at hearing,
that it never
“operated,
used or
stored fuel
in the
USTs
(see R.
10—11,
26—27).”
(Agency Br.
p.
16.)
We note that,
in filling out the forms, AKA’s answers were consistent with the
questions asked both on the Agency’s forms and at hearing, and
with its understanding that the reference was
to the current
operator of
a filling station.
We also note that the Agency’s
forms never inquired whether or when the tanks were
“in use”;
the
closest
it cOmes
is a question as to when the tanks were “taken
out of service”.
(Agency Record p.
21).
The Agency, on the Application form asked for “current owner
operator of
tanks”.
(emphasis added).
AKA listed its name and
then added in a footnote, “AKA owns the site where the tanks are
located.
It has never “operated”
the tanks.
They were
previously abandoned and discovered after AKA Land,
Inc.
rpurchased the site.”
(Agency Record p.
18).
On the next page,
the Agency asked
for the “current owner of the site property”,
to
which AKA listed its name.
(Agency Record pp.
5,
19).
The context of these answers
is also made clear
in the
hearing transcripts referenced by the Agency above:
Q
Agency
After
that
date
1975
has
the
property
ever
been
operated
as
a
filling
station?
A
AKA
Not to my knowledge or
information we
could get.
Q
Now,
what
use
is
(sic)
AKA Land,
Inc. made
of
this
property
since
it
was
acquired
in
November of 1988?
A
The property has remained vacant.
The only
activity
that
we
have
conducted
there
is
to
demolish
the
structure
which
existed
at
the
time
we
acquired
it,
and
to
remove
the
gasoline
tanks
that
were
found
to
be
there,
and
the contaminated
soil around them and
to
refill the excavated space.
(R. 10—12)
In like manner, AKA verified that it had answered
“no” when
the Agency asked whether AKA had ever used the tanks.
(R.
26,
27).
It
is clear that AKA was not the current operator of a
filling station, and had never used the tanks
for that purpose.
However,
the Board finds
that AKA became an operator of the UST
system when it became subject
to the UST closure regulations.
We
120—47
—14—
do not construe the definition of “operator”
as applying only to
those persons in daily operational control only of tanks in
active service.
We construe “daily operation” as meaning
“on an
ongoing basis”, not only when tanks are in active use, but
throughout
their life.
We first point out that “operational life”
in 35 Ill. Adm.
Code 731.112 is defined as follows:
“Operational
life”
refers
to
the
period
beginning
when
the
installation
of
the
tank
system has
commenced
until
the
time the
tank
system is properly closed under Subpart G.
The breadth of the beginning—to—end compliance
responsibilities are included in the tJST rules at
35
Ill. Adm.
Code 731.
These regulations address the proper design and
operation of the tanks,
installation and operation of release
detection,
confirmation of suspected releases, and corrective
action and removal of the tanks.
The UST regulations place continuing and enforceable
responsibilities
for the proper operation of an UST system
specificially and exclusively on an owner/operator, whomever
those owner/operator persons may be at a particular point
in time
during the operational life of the tank.
As will be discussed
below,
the USEPA specially addressed the effect of its
regulations on owners and operators of closed’ or abandoned
tanks.
The USEPA, after reconsidering how the closure aspects of
its regulations should be implemented with regard to tanks
already closed or abandoned, determined that the owner/operator
closure responsibilities may be applied selectively.
By the
language of that determination, it is clear
that a person may be
an operator,
as opposed to an owner,
of a closed or abandoned
tank.
Such language is found in the USEPA preamble at
53 Fed.
Reg.
37185,
September
23, 1988, and is quoted below:
EPA
now
believes
that
for
tanks
closed
or
abandoned before the effective date of
today’s
regulations,
the
closure
provisions
should
only
be
applied
se1ectivel~y
under
the
discretionary
authority
of
the
implementing
agency.
These
agencies
are
in
the
best
position
to
identify abandoned
tanks
that may
have been improperly
closed,
and to gauge the
nature and extent of the threat posed by those
tanks.
They
are also better able
to
identify
the
responsible
owners
and
define
the
appropriate
site assessment
techniques.
This
approach
is
intended
to
enable
the
implementing agencies
to effectively allocate
their
resources and only focus
upon abandoned
120—48
—15—
tanks that are suspected of posingpotentially
significant
problems.
This
revised
approach
also
reduces
the
unnecessary
burden
upon
owners
and
operators
of
the
discovered
abandoned tanks by eliminating the requirement
for
them
to
revisit
and
conduct
a
site
assessment
at
all
tanks
that
have
been
previously closed and
removes the uncertainty
associated
with
the
“improper
closure”
standard.
Ther~efore,the final
rule deletes the proposed
requirements
to
conduct
site
assessments
at
all
tanks
improperly
closed
before
the
effective date of the
final
regulations.
The
final
rule,
however,
requires
owners
and
operators
of
abandoned
tanks
to
comply
with
the closure
provisions
if
so directed
by
the
implementing
agency when
it
determines
there
is a resonable probability that the tank poses
a
potential
threat
to
human
health
and
the
environmental either now or
in the future.
(Emphasis added)
It
is clear from the above language that anyone who removes a
closed or abandoned tank must be either an owner
or an operator
who must comply with the closure provisions
if so directed by the
Agency.
One could argue, though,
that AKA was not first notified by
the Agency.
However,
it would be a strained interpretation
indeed to say that AKA was not an operator because
it initiated
the contact with the Agency before the Agency contacted AKA.
The
intent was to not require a revisiting and site assessment of all
such tanks;
it
is not the federal ‘intent
to have the Agency lose
jurisdiction and the closure regulations not apply.
Compliance with the corrective action requirements involves
repeated notifications
to the Agency, and the filing and approval
of
a series of plans and studies.
(35 Ill. Adm. Code 731.161,
731.162(b)
and Section 22.l8b(d)(4)
of the Act).
The statute
anticipates that corrective action can take place over a year.
(see Section 22.l8b(d)(3)(A)).
There is no indication that the
Agency ever objected on the basis
that AKA was not, strictly
speaking,
an “operator”.
Had AKA initiated corrective action and removal without
notifying the Agency, filing the plans,
or obtaining the
necessary approvals,
it would have been in violation of the UST
rules;
however,
unless
it became an “operator”, how would AKA be
subject
to enforcement?
In this case,
though, AKA complied with
the rules,
and
is hence entitled
to compensation.
120—49
—16—
We also emphasize that,
in contrast to the federal
definition of
“owner”,
there
is no language
in the definition of
“operator”
that reaches back to a prior operator before the tanks
were closed or abandoned.
That the USEPA intended this
difference
is buttressed by the reference only to past “owners”,
not “operators”,
in the above quoted USEPA preamble, where it
states:
“They
state
agencies
are also better able to identify
the responsible owners....”
Thus,
if one construes
“daily
operation”
to be only the active use period
in the operating life
of a tank,
there can be no operator, past
or present,
for closed
or abandoned tanks;
it would be
a contradiction.
This
interpretation directly conflicts with the tJSEPA preamble quoted
above,
and cannot stand.
We cannot ignore the USEPA’s statement,
nor can we interpret the meaning of language in an “identical
in
substance” program that is contrary to the tJSEPA’s intent.*
We note that this is not the first time that the issue of
whether a person, other than the owner,
is entitled to
compensation when initiating a cleanup.
In Union Petroleum Corp.
~v..United States,
651 F.2d 734,
743
(Ct.
Cl.
1981), Union sought
reimbursement,under the Federal Water Pollution Control Act,
for
costs incurred for cleaning up an oil spill at
its terminal from
tanks
it did not own.
The Court stated
in footnote 23:
That
Union
was
not
the
“owner”
of
the
tank
cars or the oil
is not a reason for denying it
access to the fund
That
Union
was
not
the
“owner”
of
the
tank
cars or the oil
is not a reason
for denying
it
the
benefit
of
the
reimbursement
provision.
To
take
an
analogy
from
the
law
of
sales,
under
the Uniform Commercial Code ownership or
“title”
of
goods
does
not determine who must
bear
the
risk
of
loss.
tJCC
§
2—509
attempts
to “place the
loss upon the one most likely
*
*
*
to
take
precautions
to
protect
against
loss,”
and
that
means
in most
cases
the
one
who
has possession
and control
of
the
goods.
White
&
Summers,
Handbook
Of
The
Uniform
Commercial
Code
(1972)
at
138.
Likewise
in
this
case
it
is
clearly
Union
which
was
responsible in
the sense of having possession
and
control
of
the
tank
cars,
despite
Hartwell’s ownership
of
the oil and
lease
of
*
The Board notes that
it has experienced
in an “identical
in
substance” setting,
in this and other media,
federal language
that gives one pause
——
requires interpretation to give a program
a coherent whole.
For example,
the tJSEPA’s use of “owners and
operators”
(e.g.
see the preamble) clearly means
“owners or
operators”
(i.e.
a person regulated is one or
the other, or
both).
120—50
—17—
the
cars.
Just
as
possession
and
control
would determine the responsibility for loss of
the oil,
so should it determine responsibility
for
operation
of
the
“facility”
involved
in
the
spill.
Union
did
not
act
as
a
mere
volunteer
in
promptly
initiating
cleanup
operations.
It
proceeded
as
the
Act
envisioned.
We again emphasize that what
is being regulated is tanks,
not filling station operations.
For example,
if a person were an
operator of a filling station and,
like AKA, had found “problem”
tanks on the property that were closed or abandoned,
that person
also would become an operator under the regulations addressing
closed or abandoned tanks, and would have access to the Fund,
if
that person properly registered and removed those tanks.
Put
another way,
the State Fund is set up for corrective action;
the
only “daily operations” left
in the operating life of closed or
abandoned tanks are the corrective action measures and reports
under 35
Ill.
Adin. Code 73l.Subpart
F operations,
not gas
dispensing operations.
When AKA took control of, and became
responsible for,
on a daily basis, from start to finish, the
removal of the tanks and the contaminated soil it became the non—
owner person in daily responsible charge of the proper closure
requirements.
We believe that identifying the person responsible for the
‘“daily operation” language
in particular serves
to more clearly
identify who actually is an operator, as distinguished,
say, from
a contractor or employee.
This distinction is important from
both a compliance and an enforcement perspective.
The
definitions of “operator”, where they exist at all, vary in the
language used.
However, while the language may vary,
there
is a
consistent attempt to identify and regulate the person
in control
of or
in responsible charge of all aspects of an activity on a
continuous,ongoing basis.
(See e.g.
35
Ill.
Adm. Code 807.104
and 810.103).
Even where a definition of
“operator”
did not
exist,
the Board has articulated this reasoning in determining
who was the operator.
(See Richard W. Termat
v. Milton Anderson,
City of Belvidere, County
of Boone, and the Belvidere Municipal
Landfill No.
2, PCB 85—129, October
23,
1986, an enforcement
case,
that revolved around the closure, post—closure care, and
financial assurance requirements for waste disposal
in Section
21.1(a)
of the Act and that identified whether the “operator” was
the City or
a contract employee.
We also note that the Agency seems
to give special weight
to
the use of the term “system”, which is found in both the
definition of
“owner” and
“operator”.
We find nothing
significant
in the use of that word for purposes of construing
the State Fund deductibility provisions.
We have a final observation regarding the owner/operator
issue.
As noted earlier,
if AKA were neither the owner
nor
120—5 1
—18—
operator as defined, one could
raise a question as to whether AKA
could be held liable for the costs of corrective action or other
liabilities articulated in Section 22.18 and the following
sections of the Act relating to
tJST’s,
where the same definitions
of owner/operator as in the State Fund portions apply.
From an
environmental perspective, which is what the Act
is all about,
it
seems prudent not
to construe the Act’s language in a manner that
has a chilling effect on achieving prompt cleanup of a leaking
UST.
CONCLUSIONS
The Board finds that the Agency incorrectly applied the
$100,000 deductible to AKA.
As requested by the Agency
in its
Brief, we will remand this matter to the Agency for its
determination as
to whether the $50,000 or $10,000 deductible
applies.
We note that,
at hearing., AKA presented testimony and
the Agenby asked questions relating to the constructive knowledge
issue; however, neither AKA nor the Agency addressed this issue
directly on point.
This Opinion constitutes the Board’s findings of fact and
conclusions
of law
in this matter.
ORDER
The Agency’s determination that the $100,000 deductible in
the UST State Fund applied to A.K.A.
Land,
Inc.
is hereby
reversed.
This matter
is remanded to the Agency for its
determination as
to whether the $50,000 or $10,000 deductible
applies pursuant to Section 22.18b(d)(3)(C)(ii)
of the Act.
Section 41 of the Illinois Environmental Protection Act,
Ill.
Rev.
Stat.
1989,
ch. lll~,par.
1041, provides
for appeal of
final orders of the Board within
35 days.
The Rules
of the
Supreme Court of Illinois establish filing requirements.
IT
IS SO ORDERED.
J. Dumelle,
B.
Forcade and M. Nardulli dissented.
R.
Flemal issued a supplemental statement.
I, Dorothy M. Gunn,
Clerk of the Illinois Pollution Control
Board,
hereby certify that the above Opinion and Order was
adopt5 on the
/~/‘~day of
~2Z~-~/~
,
1991,
by a vote
of
~
Dorothy
M.
c~4hn,
Clerk
Illinois Pollution Control Board
120—52
