Findings Of Fact The parties stipulated to findings of fact set forth in paragraphs 1.- 8.,below. Stipulated Facts Respondent has documented contamination from the abandoned petroleum storage system. The abandoned petroleum storage system has been properly closed. Petitioner submitted an application to Respondent on Respondent's forms 17-769.900(3) and (4), F.A.C., which was postmarked on or before June 30, 1992. The site is not eligible for cleanup pursuant to Section 376.3071(9) and (12), Florida Statutes, the Early Detection Incentive Program, or the Florida Petroleum Liability and Restoration Insurance Program pursuant to Section 376.3072, Florida Statutes. This site is not owned or operated by the federal government. This site did not have leaking tanks that stored pollutants that are not petroleum products as defined in Section 376.301, Florida Statutes. Respondent was not denied access to this site. Petroleum contamination was not discovered after the application deadline of June 30, 1992. Additional Facts Petitioner, a Florida corporation with its principal place of business in Leon County, Florida, is in the business of owning and leasing property. Petitioner is the fee simple owner of property located at 2022 Wahnish Way in Tallahassee, Florida. The property located on Wahnish Way was leased to James T. "Pete" Thomas by Petitioner's predecessor in title. Thomas operated a gasoline station and automobile repair garage on the property. The lease with Thomas was continued by Petitioner without change upon Petitioner's assumption of the legal title to the property in 1985. Prior to Petitioner's assumption of title to the property, Thomas had installed four petroleum storage systems in a four tank pit on the property in the early 1970's. Each tank and its integral piping is a petroleum storage system, as defined by Section 376.301(15), Florida Statutes (1991). In the early 1980's, Thomas and his wholesale gasoline distributor determined that one of the four underground tanks was losing petroleum product. In 1982, Thomas ceased using the southernmost tank in the pit for the storage of petroleum products for subsequent consumption, use or sale. The distributor ceased placing gasoline in the southernmost tank. Later, in compliance with subsequent statutory enactments, Thomas registered all of the tanks, including the abandoned southernmost tank with Respondent by the statutory deadline of December 31, 1984. Although Thomas signed the registration documents as an agent of Petitioner, he was not such an authorized agent and the registration occurred without the knowledge or approval of Petitioner. As a result, Petitioner cannot be viewed as having filed the registration. Petitioner, unaware that Thomas had experienced any product loss problems or that the tanks on the property had been registered by Thomas with Respondent, became aware of both matters following receipt of a letter from government officials of Leon County, Florida, on November 20, 1990. As set forth in that letter, Petitioner was apprised that the tanks were not in compliance with State of Florida standards and would have to be closed or retrofitted to bring the tanks into compliance. Following receipt of the letter, Petitioner informed Thomas that selling of gasoline at the site was to be discontinued immediately. Closure of the tanks, performed in early 1991 by contractors retained by Petitioner, consisted of excavation and removal of the petroleum storage systems from the property. All four tanks were in the tank pit side by side, from the northernmost end of the pit to the southern end of the pit fronting on Osceola Street in Tallahassee, Florida. When the removal was completed, a Closure Assessment form was prepared by one of the contractors, Jim Stidham and Associates, in accordance with requirements of Florida law. During that process, excessive contamination from petroleum product of the soils in the extreme south end of the tank pit was discovered. Excessive contamination, defined as anything more than 500 parts per million, was located beneath the southernmost pump on the southern end of the pump island and in the southern end of the pit. Both soil sample seven in the southernmost end of the pit and soil sample 11 under the southernmost pump document these unacceptable high levels of contamination. A 20 foot soil boring as near as possible to the southernmost tank on the site revealed the unacceptable levels of contamination extended to that depth. As supported by the testimony of James A. Stidham, Petitioner's expert in the assessment of contamination caused by underground petroleum storage tanks, the location of contamination in the pit area establishes that the tank causing the contamination was the southernmost tank. In view of the location of the contamination in the pit area, the tank discovered to have a hole in it at the time of removal was the southernmost tank. The excessive contamination located at the shallow depth of two feet under the southernmost pump resulted from the improper disconnection of piping attached to the pump and is not attributable to the leak in the tank. Each tank was connected by piping on the eastern end of each tank to the corresponding pump. The southernmost pump was not used after 1982 and was missing integral parts by the time the tanks were closed. In the course of exploring options for clean up of the property, Petitioner filed for assistance from Respondent in the form of participation in the ATRP. Unaware of the true date of the cessation of use of the southernmost tank, Petitioner gave the date of last use for all tanks in the pit by stating that the "tanks were taken out of service between December 15, 1990 and January 15, 1991." Petitioner provided this response to Respondent's July 30, 1991 request for further information on August 6, 1991. Although Respondent made an initial determination to deny Petitioner's application in the middle of August, 1991, that action was not communicated to Petitioner. Instead, Petitioner's application was held by Respondent, pending possible amendment to Section 376.305(7), Florida Statutes (1991), the law controlling admission to the ATRP. Respondent held Petitioner's application for a total of 19 months before issuance of a formal decision to deny the application on February 26, 1993. Such delay by Respondent is unreasonable. Respondent's denial of Petitioner's application was based upon the eligibility requirement restricting ATRP participants to those situations where the petroleum storage system has not stored petroleum products for consumption, use or sale after March 1, 1990, and the belief of Respondent's personnel that all storage systems on Petitioner's property had stored products beyond that date. Specifically, Respondent eventually gave notice that it intended to deny Petitioner's application for participation in the ATRP for the following reason: Eligibility in the Abandoned Tank Restoration Program is restricted to those petroleum storage systems that have not stored petroleum products for consumption, use or sale after March 1, 1990, pursuant to Section 17-769.800(3)(a), Florida Administrative Code. Respondent utilized provisions of Subsection 376.305(7)(f), Florida Statutes (1991), to permit entry of some applicants into the ATRP, demonstrating that Respondent did not consider the March 1, 1990 deadline contained in provisions of Subsection 376.305(7)(b), Florida Statutes (1991), to be absolute. As attested at the final hearing by Respondent's employee, Respondent considered "variables" when determining whether to enforce the March 1, 1990, deadline. Those variables comprise the criteria listed in Subsection 376.305(7)(f), Florida Statutes (1991). By use of those variables, Respondent effectively applied provisions of Subsection 376.305(7)(f), Florida Statutes (1991), to some program applicants other than Petitioner and permitted their participation while choosing to refrain from final agency action under that same criteria with regard to Petitioner's application pending subsequent legislative enactment. Petitioner's southernmost tank is an abandoned petroleum storage system that was not required to be registered with Respondent when it was in service; the system came into the possession of Petitioner following its abandonment; was never returned to service; and is not otherwise eligible for cleanup pursuant to Subsection 376.3071(9), Florida Statutes, or Section 376.3072, Florida Statutes.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that a final order be entered granting Petitioner's application for participation in the ATRP with regard to contamination resulting from Petitioner's southernmost petroleum storage system. DONE AND ENTERED this 1st day of February, 1994, in Tallahassee, Leon County, Florida. DON W. DAVIS Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 1st day of February, 1994. APPENDIX TO RECOMMENDED ORDER, CASE NO. 93-2658 The following constitutes my rulings, pursuant to Section 120.59, Florida Statutes, upon proposed findings of fact submitted by the parties: Petitioner's Proposed Findings. 1.-23. Adopted, though not verbatim. Respondent's Proposed Findings. 1.-2. Rejected, not supported by weight of the evidence. 3.-4. Rejected, subordinate to HO findings on this point. 5.-11. Accepted. Rejected, relevance. A mischaracterization of the evidence in that the testimony establishes that an existing lease agreement was continued. Accepted to the extent that the evidence establishes that there were four tanks in the pit. Rejected, credibility, weight of the evidence as to the accuracy of the registration form in the face of conflicting evidence. 16.-18. Rejected, weight of the evidence. 19.-20. Accepted. 21.-22. Rejected, subordinate. Accepted. Rejected, relevance. 25.-26. Accepted. 27.-29. Rejected, subordinate. Rejected, relevance. Rejected, argumentative. Accepted. Rejected, legal conclusion, argumentative. COPIES FURNISHED: Melissa Fletcher Allaman Attorney at Law Post Office Drawer 1170 Tallahassee, Florida 32302 Jefferson M. Braswell Lisa M. Duchene W. Douglas Beason Assistant General Counsels Department of Environmental Protection 2600 Blair Stone Road Tallahassee, Florida 32399-2400 Kenneth Plante General Counsel Department of Environmental Protection 2600 Blair Stone Road Tallahassee, Florida 32399-2400 Virginia B. Wetherell Secretary Department of Environmental Protection Twin Towers Office Building 2600 Blair Stone Road Tallahassee, Florida 32399-2400
The Issue The issue to be resolved in this proceeding concerns whether the Respondent installed certain septic tank and drainfield systems without having the appropriate permits from the Department of Health and Rehabilitative Services (HRS or Department) and without having the appropriate inspections performed before completing and being paid for the work in question. It is alleged, as well, that the Respondent engaged in advertising and performing septic tank contracting services under the name "Stone's Septic Services" without applying for and receiving an appropriate certificate of authorization from the Department to provide such services under that name.
Findings Of Fact On December 10, 1991, the Respondent installed a drainfield and septic system for Pam Matheny. He was paid $490.00 for that job, which was to include the cost of obtaining the required permit before the installation of the system. The Respondent obtained no such permit, but proceeded to install the system, which is currently operating. The Respondent performed drain line repair of a septic system for Mrs. Noel at 10 Royal Pines Drive, Pace, Florida. That job was also done without the required permit. A similar job was performed at 4844 Orleans Street, Pace, Florida, for a Mrs. Adams. No inspection of the work by the Department was obtained by the Respondent and no permit was issued to or obtained by the Respondent for the work, as established by the testimony of witness, Darla Ard, of the Santa Rosa County Health Unit of the Department. Mr. William Sirmans testified. He is Ms. Ard's supervisor in the Escambia County Health Unit of the Department. All permit applications for the installation and/or repair of septic tank and drainfield sewage disposal systems are processed and issued, if appropriate, by his office. He corroborated the testimony of Ms. Ard and witness, Pam Matheny, to the effect that no permits were ever issued for the three jobs in question which were performed by the Respondent. He discussed these matters with the Respondent during the investigation process underlying this complaint and the Respondent conceded that he had performed the three jobs in question without the required permits. The required inspections, as delineated above, were not obtained either.
Recommendation Having considered the foregoing Findings of Fact, Conclusions of Law, the evidence of record, the candor and demeanor of the witnesses, and the pleadings and arguments of the parties, it is therefore, RECOMMENDED that a Final Order be entered by the Department of Health and Rehabilitative services revoking the Respondent's septic tank contracting registration and authorization, as provided for in the above-cited legal authority. DONE AND ENTERED this 18th day of December, 1992, in Tallahassee, Leon County, Florida. P. MICHAEL RUFF Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 18th day of December, 1992. COPIES FURNISHED: Robert L. Powell, Agency Clerk Department of HRS 1323 Winewood Boulevard Tallahassee, FL 32399-0700 John Slye, Esq. General Counsel Department of HRS 1323 Winewood Boulevard Tallahassee, FL 32399-0700 Rodney M. Johnson, Esq. Department of HRS District One P.O. Box 8420 Pensacola, Florida 32505-0420 Marcus E. Stone 11601 Chemstrand Road Pensacola, FL 32514
Findings Of Fact Based upon the prehearing statement, the testimony of the witnesses, and the documentary evidence received at the hearing, the following findings of fact are made: The Petitioner is a Florida corporation in good standing, authorized to do business in this state. The Petitioner owns and controls the site which is the subject matter of these proceedings. Such site is located in Brevard County, Florida. The Department has identified the subject site as DER facility no. 05- 8500985 (the facility). At all times material to this case, the facility consisted of: three underground storage tanks (UST), one 3000 gallon UST used for storing diesel fuel, one 1000 gallon UST used for storing diesel fuel, and one 1000 gallon UST used for storing gasoline; five monitoring wells; and pipes and pumps related to the foregoing system. The facility constituted a storage tank system as defined in Section 376.301, Florida Statutes, and Rule 17-761.200(38), Florida Administrative Code. The Petitioner holds, and is named insured for, third party pollution liability insurance applicable to the facility. Such insurance was issued pursuant to Section 376.3072, Florida Statutes. The policy for the foregoing insurance, policy no. FPL7622040, was in force from March 22, 1991 through March 22, 1992. The Department issued a notice of eligibility for restoration insurance to Petitioner for the above-described facility. Based upon the foregoing, the Petitioner is a participating owner or operator as defined in Chapter 17-769, Florida Administrative Code. Pursuant to Section 376.3073, Florida Statutes, Brevard County operates a local program that has been approved by the Department. Such local program is managed by the Brevard County Office of Natural Resources Management (County). In July, 1990, a discharge of diesel fuel occurred at the Petitioner's facility. Petitioner's employees estimated that approximately twenty gallons of diesel fuel filled the pump box overflowed from the pump box across the seawall into the adjacent waters. Upon discovering the discharge, Petitioner shut down diesel fuel dispensing until repairs could be made to the apparent cause of the leak. Additionally, the diesel fuel remaining in the pump box and on top of the tank area was removed. Contaminated soil in the pump box was also removed. The apparent cause of the discharge described above was attributed to cracked pipe fittings which were repaired by Glover Oil Co. within a few days of the discharge. No detailed inspection was made to the system to determine if additional sources of discharge existed. Petitioner did not complete a discharge reporting form (DRF) for the above-described incident until April 18, 1991. The April DRF was completed after Petitioner was directed to do so by Ms. DiStasio, an inspector employed by the County. From August, 1990 until May, 1991, at least one monitoring well at the Petitioner's facility showed free product accumulating in the well pipe. The exact amounts of the free product found are unknown, but reports estimated the level at 100 centimeters. From August, 1990 until September, 1991, the Petitioner did not undertake any measure to explore the origin of the free product found in the monitoring well. Further, the Petitioner did not report the monitoring well testing results as a suspected or confirmed discharge. In April, 1991, an inspection of the Petitioner's facility was performed by Ms. DiStasio. That inspection resulted in a letter to the Petitioner that outlined several violations at the facility. Among those violations listed was the Petitioner's failure to report a suspected or confirmed discharge. At the time of the April, 1991 inspection, Petitioner had reported neither the July, 1990 discharge (a known discharge) nor the monitoring well test results (at the minimum a suspected discharge). In connection with the July, 1990 discharge, following the repairs made by Glover Oil, Petitioner did not have the system pressure tested. Only the area visible from the pump box was checked for leakage. In July, 1991, when Ms. DiStasio performed a re-inspection of the facility, she found Petitioner had not (in the interim period, April through July, 1991) taken any steps to test the system or to remove the fuels from the suspect tanks. Since the free product continued to appear in the monitoring well, a pressure test of the system would have definitively answered the discharge question. Alternatively, the removal of the fuels would have prevented further seepage until the system could be pressure tested. On August 6, 1991, the Petitioner issued a letter that advised the County that it had stopped dispensing fuel at the facility. The tanks were not drained, however, until on or about September 11, 1991. Further, the August, 1991, letter acknowledged that the Petitioner "had proposals for initial remedial cleanup related to diesel contamination in the tank field area." Obviously, the Petitioner must have contemplated a need for such cleanup. On September 11, 1991, at the Petitioner's request, Petroleum Equipment Contractors, Inc. attempted to pressure test the 3000 gallon diesel tank. The purpose of the pressure test was to determine if the diesel system had a leak. The company could not even run the test on the tank because of the defective system. A similar test on the Petitioner's gasoline tank passed without incident. Once the Petitioner learned the results of the test, it initiated Initial Remedial Action (IRA) as described on the IRA report filed by Universal Engineering Sciences. The IRA consisted of the removal of the excessively contaminated soil, approximately 74 cubic yards, and the removal of the USTs. The foregoing work was completed on or about September 15, 1991. On October 4, 1991, the Petitioner filed a discharge reporting form dated October 2, 1991, that identified September 11, 1991, as the date of discovery for the discharge. This discharge discovery was allegedly made incidental to the diesel tank pressure testing failure. No reference was made to the months of monitoring well reports showing a free product. On October 8, 1991, Ms. DiStasio prepared a Florida Petroleum Liability Insurance and Restoration Program Compliance Checklist that reported the Petitioner was not in compliance with applicable statutes and rules. When Petitioner applied for restoration coverage under the statute on January 31, 1992, such request was denied by the Department on March 6, 1992. The basis for the denial was as follows: Failure to notify the Department of a positive response to sampling within three working days of testing, pursuant to the rule in effect at the time of the initial response (17-61.050(1), Florida Administrative Code). An inspection by Brevard County on April 17, 1991, revealed that free product had been detected in one monitoring well since July 1990. The discharge reporting form was not submitted until October 2, 1991.
Recommendation Based on the foregoing, it is RECOMMENDED: That the Department of Environmental Regulation enter a final order denying Petitioner's claim for restoration coverage under the Florida Petroleum Liability Insurance and Restoration Program. DONE and ENTERED this 31st day of December, 1992, in Tallahassee, Leon County, Florida. JOYOUS D. PARRISH Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 31st day of December, 1992. APPENDIX TO CASE NO. 92-2121 RULINGS ON THE PROPOSED FINDINGS OF FACT SUBMITTED BY THE PETITIONER: Paragraphs 1, 2, 8, 12, 15, 16, 17, and 18 are accepted. Except as found above, paragraph 3 is rejected as not supported by the record cited. It is accepted that Brevard County acted as the local agent in this case. Paragraph 4 is rejected as not supported by the record. With regard to paragraph 5, substituting "A" for "The" and "confirmed" for "discovered" the paragraph can be accepted; otherwise rejected as contrary to the record. Similarly, with the substitution of the word "confirmation" for "discovery" in Paragraph 6, the paragraph can be accepted; otherwise rejected as contrary to the record. No suitable explanation was offered by the Petitioner for why, if a discharge were not reasonably suspected, it retained the company to immediately remove the USTs upon the failed pressure testing. Clearly, the Club had a notion the tanks were a discharge problem. Paragraph 7 is rejected as contrary to the weight of the evidence. While there was some confusion as to the exact volume of free product in the monitoring well, there was clear evidence that such was reported for many months prior to the confirmation in September, 1991. Further, the main confusion regarding the product found in the well was not as to its existence, but as to the individual's knowledge of the metric measurement of it. One hundred centimeters of product in a two or three inch pipe would not be a minute amount. Except as addressed in the foregoing findings, paragraph 9 is rejected as contrary to the weight of the evidence. Petitioner did not undertake all repairs necessary to abate a discharge problem. Paragraph 10 is rejected as not supported by the weight of credible evidence or irrelevant. Clearly, as early as August, 1990, Petitioner knew or should have known of a discharge problem based upon the monitoring well report; that all of the discharge did not necessarily flow from the fittings that had been repaired is irrelevant. Further, Petitioner did no testing to verify that the replaced fittings had solved the discharge problem (especially in light of the well reports). Paragraph 11 is rejected as an inaccurate restatement of the exhibit. Paragraph 13 is rejected as contrary to the weight of the evidence. Incidentally, the hearing in this case was in the year 1992. Paragraph 14 is rejected as contrary to the weight of credible evidence. RULINGS ON THE PROPOSED FINDINGS OF FACT SUBMITTED BY THE RESPONDENT: Paragraphs 1 through 11 are accepted. Paragraph 12 is rejected as a misstatement of the exhibit cited. Paragraphs 13 through 27 are accepted. COPIES FURNISHED: Brigette A. Ffolkes Assistant General Counsel Department of Environmental Regulation Twin Towers Office Building 2600 Blair Stone Road Tallahassee, Florida 32399-2400 Scott E. Wilt MAGUIRE, VOORHIS & WELLS, P.A. 2 South Orange Plaza P.O. Box 633 Orlando, Florida 32802 Carol Browner, Secretary Department of Environmental Regulation Twin Towers Office Building 2600 Blair Stone Road Tallahassee, Florida 32399-2400 Daniel H. Thompson, General Counsel Department of Environmental Regulation Twin Towers Office Building 2600 Blair Stone Road Tallahassee, Florida 32399-2400
The Issue Whether Petitioner is eligible for Florida Petroleum Liability Insurance and Restoration Program (FPLIRP) coverage for petroleum discharges on March 10, 1992 and June 22, 1992.
Findings Of Fact Realadyne is a Florida corporation. The current president of Realadyne is Mary J. Martin. Realadyne was the owner and operator of a facility located at 4846 4th Street North, St. Petersburg, Florida (Save-A-Step Food Store #7) (the "Facility"). The Facility was registered with the Department and was assigned DER Facility No. 52-8624627. The underground petroleum storage system located at the Facility included five underground petroleum storage tanks - four 4,000 gallon tanks and one 10,000 gallon tank. The date(s) that the tanks were installed at the Facility is unknown. At all times material, the Department has delegated to Pinellas County the authority to perform certain types of inspections with regard to underground petroleum storage systems. These inspections are performed by the Pinellas County Public Health Unit ("PCPHU"). Realadyne filed three (3) individual applications for eligibility for restoration coverage under FPLIRP for the Facility for petroleum discharges reported July 30, 1990, March 10, 1992, and June 22, 1992. The applications were all denied by the Department, for reasons articulated by the Department in individual responses to each application all dated September 3, 1993. Realadyne applied for FPLIRP coverage on or about July 25, 1991. Realadyne obtained FPLIRP coverage for the Facility for the period of October 7, 1991 to October 7, 1992. The July 30, 1990 discharge is not eligible for restoration coverage since it occurred outside the FPLIRP coverage period (prior to October 7, 1991). The parties have reviewed the grounds for FPLIRP restoration coverage ineligibility. The parties stipulate and agree that the sole remaining basis for a determination of ineligibility is the following: Failure to upgrade petroleum storage system in accordance to the schedule required by Section 17-761.510(6), F.A.C. The parties also stipulate and agree that if either discharge from the Facility shall be determined eligible for FPLIRP restoration coverage, then the Facility shall be eligible for reimbursement under the restoration program. Under the aforementioned regulations, the petroleum storage system at the Facility was required to be retrofitted on or before December 31, 1989. On July 13, 1990, a PCPHU Inspector (Arthur Caden) performed a compliance inspection at the Facility. A Pollutant Storage Tank System Inspection Report Form was prepared by the Inspector and a copy of the report was provided to Ms. Martin. On July 19, 1990, Ms. Martin had a phone conversation with Moghadam regarding the Facility. As noted, Moghadam's job duties included review of alternative procedure requests under Rule 17-761.850, Florida Administrative Code. As a result of the phone conversation, Martin sent correspondence to John Svec, an employee with the Department's Bureau of Waste Cleanup. The referenced letter requested the Department to grant an "alternate technical proceedings to be able to apply for FDER/FPLIRP" (the "Proceeding"). The July 19, 1990 letter signed by Martin provided in part: The above facility has not been in compliance for over a year, due to company not being able to afford or support a loan for the removal of and replacement of the tanks. By correspondence dated July 25, 1990, the PCPHU directed Petitioner to file a Discharge Notification Form (DNF) concerning a potential discharge of petroleum product. On August 1, 1990, Ms. Martin met with the PCPHU inspector concerning the results of the compliance inspection conducted on July 13, 1990. At that time, PCPHU informed Ms. Martin that "she had to . . . line/replace the old tanks which are unknown as to date of installation." On August 1, 1990, Petitioner filed a DNF with the PCHPU concerning a potential discharge of petroleum product. On or about September 12, 1990, the PCHPU sent Petitioner a Warning Letter concerning the issue of whether Petitioner intended to reline or replace the underground storage tanks. On September 25, 1990, Petitioner provided PCPHU with a copy of a contract proposal for removal and replacement of the underground storage tanks. The contract proposal was from Adams Tank and Lift dated September 4, 1990. Attached to the proposal was a "SNAP-A-GRAM" signed by Ms. Martin which provides in part: Regarding the above facility please be advised that I should be able to give you a date as to when the work will be started the first week of October. I am enclosing a copy of a proposal from Adams Tank and Lift of work to be done at this location. The work contemplated under the proposal from Adams Tank was never performed. On June 5, 1991, a PCPHU Inspector (Joyce Welch) performed a compliance inspection at the facility. A Pollutant Storage Tank Inspection Report Form was prepared by the Inspector and a copy of the report was provided to Ms. Martin. On or about July 8, 1991, the PCPHU sent Petitioner a Warning Notice concerning the DNF that Petitioner filed on July 30, 1990. On July 8, 1991, PCPHU sent Petitioner another warning letter concerning the DNF which Petitioner filed on August 1, 1990. The warning letter provided in part: On August 1, 1990, this agency received a discharge notification form with a discovery date of June 1990. The discovery was based upon the manual sampling of a monitor well. A routine compliance inspection on July 13, 1990 verified the presence of free product in well number 3. Said free products present in the groundwater confirms your site has excessively contaminated as defined in . . . Chapter 17-770. You are instructed to initiate a contamination assessment report (CAR) in accordance with . . . Chapter 17-770 within thirty days of receipt of this letter to determine the extent of contamination. On or about July 19, 1991, Ms. Martin had a phone conversation with Mr. Moghadam. The July 19 letter, which was received by the Department on or around July 22, 1991, requested that the Department grant "alternate technical proceedings to be able to apply for FDER/FPLIRP." (the "Proceeding") Petitioner requested the Proceeding in an effort to bring the Facility into compliance with applicable underground storage tank regulations. After filing the Proceeding, Petitioner applied for FPLIRP coverage on July 25, 1991. The Department never responded, in writing, to the request for the "Proceeding". On February 11, 1992, PCPHU performed another compliance inspection at the facility. On February 17, 1992, PCPHU sent Petitioner a Final Non- Compliance letter concerning the results of the inspection conducted on February 11, 1992. The above-referenced PCPHU noncompliance letter provides in part: Storage tanks do not meet storage tank standards. Please upgrade tanks to meet applicable storage tank standards. On March 10, 1992, Petitioner filed a second DNF for the Facility, based upon evidence of a discharge discovered while inspecting and repairing a portion of the storage tank system. On June 22, 1992, Petitioner began closure activities with regard to removal of the underground petroleum system. On that date, Petitioner filed a third DNF based on evidence of a discharge discovered during its closure activities. On June 23, 1992, Petitioner concluded closure activities with regard to removal of the underground petroleum storage system. Petitioner was not required to obtain the Department's approval of an alternate procedure as a condition precedent to the removal of the underground storage tanks. Removal of the tanks would have brought Petitioner into compliance with the requirements of Rule 17-761, Florida Administrative Code. On or about September 12, 1992, after the tanks were removed, PCPHU sent Petitioner a warning letter concerning the issue of whether Petitioner intended to reline or replace the underground storage tanks. The warning letter provided in part: . . . Chapter 17-61.061(1)(b)2, requires all tanks to be lined or replaced before certain dates. In the case of your facility, since the installation date is unknown, you are required to have the tanks relined or replaced by December 31, 1989. You were previously advised of this violation during an inspection by one of our staff, Arthur L. Caden, on July 13, 1990, and by letter dated July 25, 1990. You requested and obtained a meeting with our staff on August 1, 1990 at which time you were directed to submit a discharge notification form (DNF), and to advise this office whether you would reline or replace the tanks. The DNF had been filed, but staff has not been formally advised of your decision regarding the tanks. Therefore, since you have not responded formally to this office, we have no alternative than to advise you that we will proceed with an appropriate enforcement action if you ignore this letter of warning. Please be advised that the subject tanks shall be relined or replaced no later than November 30, 1992. Petitioner's request for the "proceeding" seeks an after-the-fact "exception" to the retrofit requirements of Rule 17-761.510, Florida Administrative Code. The basis for Petitioner's request for an exception is "financial inability". When Petitioner's request for a "proceeding" was filed, the Department had a policy of not proceeding with the review of any request for an alternative technical procedure if the facility submitting the request was then out of compliance with the retrofitting requirements of Chapter 17-761, Florida Administrative Code. The request for a "proceeding" was not a viable procedure to extend the December 31, 1989 retrofitting deadline even assuming the request otherwise complied with Rule 17-761.850, Florida Administrative Code. Likewise, the Department lacked authority to extend the December 1989 retrofitting deadline. The Department received Petitioner's application for FLIRP coverage on July 29, 1991, approximately three days after the Department received Petitioner's request for the "Proceeding". 1/ On July 26, 1991, Ms. Martin executed a FLIRP affidavit on behalf of Petitioner as part of its application for coverage under FLIRP. The introductory portion of the FLIRP affidavit provides in part: In order to be eligible for the. . . restoration program, a facility owner or operator must sign this affidavit to affirm that the facility is in compliance with the Department's storage tank rules. . . and Chapter 376, Florida Statutes, and that he/she has read and is familiar with these rules and statutes. The attestation portion of Petitioner's FLIRP affidavit, as executed by Ms. Martin, provides in part: The petroleum storage systems, as defined under Chapter 376.301, Florida Statutes, located at the facilities listed on the application, are now in compliance and shall maintain compliance with the applicable provisions of Chapter 376.303, Florida Statutes, and Florida Administrative Code Rule 17-761. . . including, but not limited to, those provisions: * * * (b) The installation, maintenance and repair of new and existing underground petroleum storage system; * * * (e) Notification of sale, abandonment, replacement or upgrading of petroleum storage systems. The attestation portion of Petitioner's FLIRP affidavit, as executed by Martin, also provides in part: I, Realadyne, Inc. have read Chapter 376, Florida Statutes, and Florida Administrative Rule 17-761 and the facility or facilities listed on the attached application meet the requirements for the participa- tion in the Florida Petroleum liability insurance and restoration program as described in Chapter 376.3072, Florida Statutes. In executing the affidavit, Ms. Martin knew, or should have known, that the facility was not in compliance with the Department's applicable storage tank regulations. On December 4, 1991, Petitioner contacted the Department, via telecommunique, concerning its request for the "proceeding" to apply for FDER/FPLIPA. At that time, the Department informed Petitioner that the Department would not proceed with the review of the request of an alternate technical proceeding because the facility was already out of compliance with applicable retrofitting requirements. On that day, Petitioner informed the Department that it could not afford to have the underground storage tanks removed. At that time, the Department requested that Petitioner take the tank out of service, pending a decision by it as to whether the tanks would be removed and/or replaced. Also, the Department requested that Petitioner provide it with an updated storage tanks registration form reflecting that the tanks had been taken from service. Petitioner informed the Department that the underground storage tanks would be taken out of service, pending its decision whether it would remove or replace the tanks. Petitioner also agreed, at that time, to provide the Department with an updated storage tank registration form reflecting that the tanks had, in fact, been removed or taken out of service. The Department requested that the tanks be taken out of service to minimize the potential for a discharge of a petroleum product. If Petitioner had taken the underground tanks out of service as requested (and as agreed), the facility would have been in compliance with the requirements of Rule 17-761.510, Florida Administrative Code. On September 11, 1991, PCPHU sent Petitioner another warning letter concerning its failure to comply with the retrofitting requirement. The above-referenced warning notice provides in part: On July 13, 1990, agency personnel inspected your storage tank facility for compliance with Florida's tank regulations and violations were noted. Then on July 25, 1990, this office sent you a letter requesting that you provide the Division with a written explanation of your failure to comply with F.A.C. Chapter 17-61, and to proceed with certain steps. This agency has received no response from your company. On September 25, 1991, the Department contacted Petitioner, by phone, concerning the request for an alternate technical proceeding. During the course of the conversation, Petitioner indicated that it had scheduled a meeting with PCPHU concerning the removal and/or replacement of the tanks. On September 25, 1991, the Department requested that Petitioner provide it with an updated registration form reflecting that the tanks had been taken out of service. On that date, Petitioner agreed to provide the registration form reflecting that the tanks had been taken out of service. On September 30, 1991, the Department again contacted Petitioner concerning its request for an alternate proceeding. At that time, the Department again requested the updated registration form reflecting the tanks had been taken out of service. On that date, Petitioner telecopied the Department a letter and a copy of a contract proposal from UST Engineering for the relining of the underground storage tanks. The contract was dated June 28, 1991, and was signed by Martin on behalf of Petitioner. Petitioner's letter dated September 30, 1991, to the Department was also signed by Martin. The above-referenced letter provides in part: "UST has assured me they will be able to complete the work before the first of the year." The document submitted by Petitioner to the Department on September 30, 1991, included a copy of a check issued by Petitioner made payable to UST Corrosion Engineering. The work contemplated under the UST contract proposal was never performed. Petitioner did not inform the Department of its decision not to have the work performed. A release of petroleum product occurred prior to removal of the petroleum storage system. Petitioner failed to comply with the retrofitting requirements set forth under Rule 17-761.510, Florida Administrative Code. Petitioner continued to sell petroleum products until mid June, 1992.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that: The Department of Environmental Protection enter a final order denying Petitioner's application for restoration coverage under the Florida Petroleum Liability Insurance and Restoration Program. RECOMMENDED in Tallahassee, Leon County, Florida, this 7th day of December, 1994. JAMES E. BRADWELL Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 7th day of December, 1994.
The Issue Whether proposed amendments to Rules 17-761.200, 17-761.500 and 17- 761.510, Florida Administrative Code, are arbitrary and capricious, and therefore, constitute an invalid exercise of delegated legislative authority? Whether the economic impact statement accompanying the proposed amendments to Chapter 17-761, Florida Administrative Code, was adequate? Whether the Department of Environmental Regulation properly considered the impacts of the proposed amendments to Chapter 17-761, Florida Administrative Code, on small and minority business pursuant to Sections 120.54(2)(a) and (3)(b), Florida Statutes?
Findings Of Fact The Parties. The Department is an agency of the State of Florida. The Department is responsible for, among other things, regulating underground petroleum storage tank systems in the State of Florida. Chapter 376, Florida Statutes. FPMA is a voluntary, nonprofit trade association comprised of 190 voting members who sell and distribute petroleum products on a wholesale and retail basis in Florida. FPMA also includes nonvoting associate members who provide equipment and technical services to FPMA members. FPMA's members include entities which are "small businesses" (approximately 18 to 20%) within the meaning of Section 288.703(1), Florida Statutes, and/or who sell petroleum products to customers that store petroleum products and constitute "small businesses." A substantial number of FPMA's members also include owners and operators of petroleum storage facilities with bare steel tanks and/or with storage tanks that currently are not equipped with secondary containment. A substantial number of FPMA's members operate in rural areas. FPMA's purposes include providing representation before the Florida Legislature and agencies. Background and History. The Water Quality Assurance Act, Chapter 83-310, Laws of Florida, was enacted by the Legislature in 1983. This Act gave the Department the authority to promulgate rules regulating the construction, maintenance, installation and removal of underground storage tanks. Section 376.303(1)(a), Florida Statutes. The Act also preempted local regulation of the prevention and removal of pollutant discharges unless a local ordinance had been adopted prior to September 1, 1984, or the local effort is approved by the Department. Section 376.317, Florida Statutes. Dade County, Florida, had adopted an Underground Storage Facilities Ordinance, Ordinance 83-108. Ordinance 83-108 imposed storage tank requirements depending on the location in Dade County relative to identified wellfield protection areas and zones of influence around potable well supplies. Ordinance 83-108 requires replacement of underground petroleum storage tanks by certain dates depending on when existing tanks were installed. The Ordinance also takes into account whether a tank is made of corrosion resistant materials. See proposed finding of fact 3 of the Petitioner's Proposed Final Order for some of the specific requirements of Ordinance 83-108. Dade County Ordinance 91-33 amended the requirements of Ordinance 83- 108. Ordinance 91-33 requires secondary containment for new underground petroleum storage tanks installed in Dade County 180 days after the effective date of Ordinance 91-33 but does not require the replacement of existing single- walled tanks not located in a zone of influence or which are on property served by a public utility. Broward County, Florida, adopted Chapter 27-10, in May, 1984, regulating underground storage tanks. Chapter 27-10 contains less stringent requirements than those required by the rules at issue in this proceeding. See proposed finding of fact 5 of the Petitioner's Proposed Final Order for some of the specific requirements of Chapter 27-10. In May, 1984, the Department promulgated Chapter 17-61, Florida Administrative Code. These rules regulated underground (and aboveground) storage tanks on a statewide basis, with two exceptions (Dade and Broward Counties). Rule 17-61.060(2)(b), Florida Administrative Code, required that new underground storage tanks and piping be constructed of corrosion-resistant materials, and be installed with overfill protection and monitoring systems. This Rule also prohibited the use of new bare steel tanks and integral piping containing motor vehicle fuels. Rule 17-61.060(2)(c), Florida Administrative Code, required that existing underground storage tanks be retrofitted with monitoring systems and overfill protection beginning December 31, 1986, and ending December 31, 1989, depending on the age of the tank. Rule 17-61.060(2)(c) and (3), Florida Administrative Code, also required that existing bare steel underground tanks and piping be replaced with corrosion-resistant systems on a schedule beginning December 31, 1989, and ending December 31, 1998, depending on the age of the tank. As an alternative, bare steel tanks could be retrofitted with internal lining or cathodic protection, and bare piping could be retrofitted with cathodic protection. Rule 17-61.060(2)(b)-(c) and (3), Florida Administrative Code. In adopting Chapter 17-61, Florida Administrative Code, the Department exempted facilities which did not receive, store, or use more than 1,000 gallons in any calendar month or more than 10,000 gallons in any calendar year. Rule 17-61.040(1), Florida Administrative Code. In adopting this exemption the Department indicated that "[v]ery small users are considered to pose a smaller risk and are not anticipated to contribute as significantly to contamination of groundwater across the state." The Department also indicated that the businesses being exempted included agricultural businesses, small businesses and other commercial activities and governmental installations. Finally, the Department indicated that it had developed the retrofitting schedules to allow for the exhaustion of the useful life of existing systems. In October, 1985, Alachua County, Florida, filed a petition with the Department for approval of its local storage tank ordinances, Ordinances 85-7 and 85-13. Alachua County required secondary containment for underground storage systems. The Department approved the ordinances conditioned upon Alachua County amending them to take into account concerns the Department expressed concerning the ordinances. In particular, the Department questioned whether Alachua County should require secondary containment for all of the County without taking into account the differences in the groundwater throughout the County. The Department also questioned the schedule for requiring secondary containment. For more specific complaints raised by the Department see proposed finding of fact 8 of the Petitioner's Proposed Final Order. Alachua County subsequently adopted a new storage tank ordinance, Ordinance 87-10. Ordinance 87-10 required secondary containment for new facilities and extended the retrofit schedule for existing facilities. The extended schedule took into account to hydrogeology of the location of the storage tank and the proximity to public water supply wells. Existing corrosion-resistent tanks were allowed twenty years from installation if overfill protection and leak detection were installed. Congress banned the installation of most new bare steel storage tanks. They were banned by the Resource Conservation and Recovery Act. The United States Environmental Protection Agency (hereinafter referred to as the "EPA"), was ordered to adopt regulations governing underground storage tanks. On September 28, 1988, the EPA promulgated 40 CFR 280. These regulations required, among other things, that: new underground storage tanks be constructed of corrosion-resistant materials; existing bare steel tanks must be upgraded by December 22, 1990; and, existing tanks may be replaced by corrosion- resistant materials, may be internally lined or protected by cathodic protection. The EPA also promulgated 40 CFR 281, authorizing the approval by the EPA of state storage tank programs which are no less stringent that the EPA's requirements. On June 8, 1990, the Environmental Regulation Commission adopted Chapter 17-761, Florida Administrative Code. These rules, which were adopted to bring Florida's storage tank program into compliance with the regulations adopted by the EPA in 1988, imposed new construction requirements on underground storage systems. In light of the fact that some of the requirements of Chapter 17-761, Florida Administrative Code, were more stringent than those imposed by the EPA, the Governor and Cabinet were required by Section 403.804, Florida Statutes, to approve the rules. On October 9, 1990, the Governor and Cabinet considered the new rules. ManaSota-88, Inc., appeared at the meeting and requested that the Governor and Cabinet limit the definition of secondary containment to double- walled tanks and piping, and to move up the date requiring secondary containment for the installation of new and replacement tanks from December 31, 1998, to December, 1990. The Governor and Cabinet approved Chapter 17-761, Florida Administrative Code (hereinafter referred to as the "Existing Rules"), and "recommended" that the Environmental Regulation Commission "review" ManaSota-88, Inc.'s, recommendations. On January 10, 1991, the Department held a public workshop before the Environmental Regulation Commission to receive public comment on several alternative changes to the Existing Rules developed as a result of ManaSota-88, Inc.'s, suggestions to the Governor and Cabinet. New information concerning the environmental or technological necessity of amending the Existing Rules was not provided at the workshop. On February 8, 1991, the Department caused notice of rule making to be published in Volume 17, Number 16, Florida Administrative Code, amending the Existing Rules (the proposed amendments will hereinafter be referred to as the "Proposed Amendments"). On March 1, 1991, FPMA filed a Petition to Determine Invalidity of Proposed Rules challenging the validity of the Proposed Amendments. On March 14, 1991, the Environmental Regulation Commission, following a public hearing, adopted the Proposed Amendments with certain changes not relevant to this proceeding. Members of the FPMA testified at the public hearing. The Requirements of the Existing Rules and the Changes Thereto of the Proposed Amendments. Generally, the Existing Rules require owners and operators of underground vehicular fuel storage tanks to upgrade their underground storage tank systems to include secondary containment according to a schedule which takes into account the date of installation of an existing storage tank or whether the tank is a new storage tank. "Secondary containment" under the Existing Rules is defined as a system used to improve release detection and release prevention and includes double-walled tanks, double-walled integral piping systems or a single-walled tank or integral piping system protected by an outside liner. For petroleum storage systems, secondary containment consists of a primary container composed of fiberglass or steel. The primary container is surrounded by an outer wall or liner. New Underground Storage Tanks. Under the Existing Rules new underground storage tanks (other than those used to store hazardous substances) installed between December 10, 1990, and December 31, 1998, may be single-walled tanks if they are corrosion- resistant. A storage tank is considered to be corrosion-resistant under the Existing Rules if it is a single-walled fiberglass tank, a tank with an internal lining or a tank with cathodic protection. New underground storage tanks installed after December 31, 1998, must be constructed with secondary containment under the Existing Rules. Under the Existing Rules, any new underground storage tank installed as a replacement for an underground storage tank during the existing life of the tank could be a single-walled tank if it was corrosion-resistant. The Existing Rules also provide that new storage tanks may not be installed within 50 feet of an existing potable water supply well. Secondary containment must be installed for any new, upgraded or replacement tank located within 300 feet of an existing private, public or noncommunity water supply system. These requirements were not changed by the Proposed Amendments. Under the Proposed Amendments, all new underground storage tanks installed after December 31, 1991, must be installed with secondary containment. New tanks that are corrosion resistant are not allowed under the Proposed Amendments. Replacement tanks under the Proposed Amendments also must be installed with secondary containment. Existing Underground Storage Tanks. Existing single-walled underground storage tanks must be replaced with secondary containment under the Existing Rules by certain dates, which depend on whether the existing tank has corrosion protection. The replacement dates recognize the useful life of the existing tanks being replaced. Under the Existing Rules, an existing underground storage tank was to be upgraded with an internal lining if the integrity of the tank is assured, it is tightness tested and it otherwise meets applicable standards. As an alternative, an existing tank was to be upgraded with cathodic protection if the structural integrity of the tank is certified after inspection and the tank is tightness tested. Finally, an existing tank could be upgraded with a combination of internal lining and cathodic protection. Cathodic protection is a device that utilizes an electrochemical process to protect the external surface of a metal tank against corrosion. Depending on the useful life of an existing underground storage tank, the Existing Rules require that existing tanks that were corrosion resistant or internally lined be replaced with secondary containment by December 31, 2012, 2015 or 2018. Existing underground storage tanks which are upgraded with cathodic protection must be replaced with secondary containment under the Existing Rules by December 31, 1989. Pursuant to the Proposed Amendments, existing steel tanks that have not been lined or that do not have cathodic protection prior to December 31, 1991, must be replaced with secondary containment by December 31, 1992, 1995 or 1998, depending on the age of the tank. Existing underground storage tanks that are made of corrosion resistent materials, that have been lined or that were initially installed with cathodic protection prior to December 31, 1991, must be replaced with secondary containment by December 31, 2009, under the Proposed Amendments. Existing tanks with field-installed cathodic protection must be replaced with secondary containment, depending on the age of the tank, by December 31, 1992, 1995 or 1998, under the Proposed Amendments. Under the Existing Rules and the Proposed Amendments, underground petroleum storage tanks are ultimately required to be installed with secondary containment. The Existing Rules allow the use of alternative forms of protection (corrosion resistant single-walled tanks, liners and/or cathodic protection) during a period of time beginning on the effective date of the Existing Rules and ending December 31, 2018. The Proposed Amendments substantially speed up the time schedule for secondary containment. The alternative forms of protection allowed under the Existing Rules may still be used, but only if installed before December 31, 1991. Justification for the Proposed Amendments. Petroleum storage systems, including underground storage tanks, can and do leak petroleum for a number of reasons, including failure of tanks and lines. There are 2,295 permitted petroleum storage facilities in Dade County. Of these facilities, approximately 1,614, or just over 70%, have petroleum contamination. The Dade County Department of Environmental Resources Management conducted a study of the cause of the petroleum contamination at 50 randomly selected permitted petroleum storage facilities. Based upon a review of these 50 sites, the source of contamination at 13 of the sites (26%) was discernible. The source of contamination at the other 37 sites could not be determined. Of the 13 sites for which the Dade County Department of Environmental Resources Management was able to determine the source of contamination, tank failures were identified as the source of contamination at 10 of the sites (20% of the total sites reviewed) and lines were the source of contamination at the other 3 sites. Five of the tank failures involved bare steel tanks, one involved a fiberglass coated steel tank, two were fiberglass tanks and one was a fiberglass tank with a liner. None of the 13 tank failures were attributable to double-walled steel or double-walled fiberglass tanks. There are in excess of 10,000 petroleum contamination sites located throughout the State of Florida that have been reported to the Department. These sites have been ranked by the Department based on fire and explosion hazards and the proximity of the contamination sites to drinking water wells. Some of the contamination sites reported to the Department for cleanup have been caused by leaking underground petroleum storage tanks. The Department's petroleum contamination cleanup standards are based on whether groundwater is considered to be of G-II quality. A G-II classification for groundwater includes all groundwater in aquifers suitable for potable water use. Such aquifers are considered to have a total dissolved solids content of less than 10,000 mg/1. Groundwater in Florida of G-II quality includes groundwater in both the surficial aquifers and the Floridan aquifer. The Department considers the quality of water in any aquifer that will produce water as having potential resource value regardless of whether it is currently used for potable drinking water. Therefore, contamination in such aquifers must be cleaned up to G-II quality. Petroleum contamination in Florida has affected every aquifer of G-II quality in the State. Ninety-two percent of Florida's drinking water is provided by groundwater. The Inland Protection Trust Fund was created in October, 1986, to provide funds for the cleanup of petroleum contamination (benzine) sites in Florida. Since that time, the Department has spent approximately $1,600,000.00 for the restoration and replacement of petroleum contaminated potable drinking water. Since October, 1986, 225 water supply wells (public and private) in Florida have been contaminated with benzine to the extent that action was necessary to correct the contamination. Eight of the 225 wells were used for municipal water. These 8 wells have been restored or replaced. Approximately 44 potable drinking water wells serving mobile homes, restaurants and service stations, (or noncommunity public water systems), and 143 private wells have been contaminated with petroleum and have been restored or replaced. Use of secondary containment systems of storing petroleum allows monitoring of the interstitial space between the primary container and the secondary external barrier of the storage tank. Interstitial monitoring methods include: (a) placing a probe inside the space which detects and responds to the product stored or vapors therefrom; (b) filling the space with liquid and monitoring the level of the liquid; and (c) creating and monitoring a vacuum in the space, which allows monitoring of both walls. There is a high probability that the use of secondary containment will facilitate the detection of petroleum leaks in a storage tank before the petroleum escapes the secondary containment into the environment. Interstitial monitoring in a secondary containment system greatly reduces the number of factors which can interfere with petroleum leak detection. For example, interstitial monitoring provides an opportunity to distinguish new leaks from existing contamination. Secondary containment represents the best underground petroleum storage tank technology currently available. Leak detection for a single-walled tank provides detection of a leak of petroleum contamination after the contamination has entered the environment. Double-walled secondary containment tanks are stronger than single- walled tanks. Therefore, double-walled tanks are less prone to flex and, consequently, are less prone to crack than a single-walled tank. Each wall of a double-walled tank provides protection from physical damage for the other wall not provided in single-walled tanks. Cathodic protection provides protection from external corrosion of metal storage tanks. It does not, however, provide leak detection in the manner that secondary containment does. Cathodic protection systems are generally not warranted because their effectiveness depends on the operation and maintenance of the system by the tank owner. Internal linings are used for either preventive maintenance or to repair existing underground storage systems. Internal linings do not prevent external corrosion unless cathodic protection is also provided. Internal linings provide a barrier to petroleum release. Internal linings extend the life of a storage tank system for at least 10 years. If the tank is also cathodically protected, the life of the tank is warranted for 20 years. Internal linings do not provide leak detection in the manner that secondary containment does. The Proposed Amendments Represent a Change in Policy. The record of the process of developing and adopting the Existing Rules indicates that the alternative forms of protection (use of corrosion- resistent tanks, internal linings and cathodic protection) included in the Existing Rules afford some protection to Florida's groundwater from petroleum contamination. In proposing the Existing Rules the Department supported the provisions of the Existing Rules concerning the use of alternative forms of protection and the schedules for implementing the use of secondary containment contained therein. At the time that the Existing Rules were presented to the Governor and Cabinet, the Department did not recommend that secondary containment be required in the manner that it has now provided for under the Proposed Amendments. In adopting the Proposed Amendments, the Department has not developed or obtained any additional information in support of the Proposed Amendments. Nor did ManaSota 88, Inc., provide any such information. The reason why the Department initiated the process of adopting the Proposed Amendments was that the Governor and Cabinet directed the Department to consider whether changes to the Existing Rules were needed. The foregoing findings of fact do not support a finding that the Proposed Amendments are arbitrary and capricious. At best, the record of the process of developing and adopting the Existing Rules and the requirements of the Existing Rules prove that a policy decision was made by the Department that the requirements of the Existing Rules were an acceptable method of dealing with petroleum contamination from underground storage tanks in Florida. The fact that the policy decision evidenced in the Existing Rules was made, however, does not prove that a policy decision to require the use of other methods of protection, i.e., secondary containment, is arbitrary and capricious. The record of the adoption of the Existing Rules does raise some question as to the propriety of adopting the more stringent requirements of the Proposed Amendments. That record, however, also adds support to the policy decision to adopt the more stringent requirements. First, although the Department accepted the use of alternative forms of protection when the Existing Rules were adopted, it still evidenced a policy decision that secondary containment is the preferred method of protecting Florida's waters. Additionally, the acceptance by the Governor and Cabinet of the policy decision evidenced in the Existing Rules was conditioned on a reconsideration of the use of the alternative forms of protection (at least for new tanks) which evidenced a willingness on the part of the Governor and Cabinet to make policy decisions which would more stringently protect Florida's waters. Although it is true that the Alachua, Broward and Dade County ordinances and the EPA's regulations are less stringent than the Proposed Amendments, these laws also support the use of secondary containment as the preferred method of protecting the environment from contamination from underground petroleum storage tanks. The evidence proved that there a range of methods available to provide varying degrees of protection to Florida's waters. The use of corrosion- resistant tanks, internal linings and/or cathodic protection provides better protection to Florida's waters than bare steel underground storage tanks. Therefore, these methods of protection are within the range of acceptable methods of protecting Florida's waters. The evidence also proved, however, that secondary containment is not only within the range of acceptable methods of providing protection to Florida's waters, but that it is the best method currently available. The evidence failed to prove that the policy decision of the Department evidenced in the Proposed Amendments is not within the range of reasonable methods of dealing with petroleum contamination of Florida's waters authorized and required by the Florida Legislature. Therefore, the decision to require the use of secondary containment of the Proposed Amendments is not arbitrary and capricious. The Economic Impact Statement and the Economic and Environmental Impact Statement. The Department, as required by Section 120.54(2), Florida Statutes, prepared an economic impact statement (hereafter referred to as the "EIS"), for the Proposed Amendments. The EIS was prepared by Clyde Diao, the Department's expert in environmental economics. The Department, as required by Section 403.804(2), Florida Statutes, also prepared an Economic and Environmental Impact Statement (hereinafter referred to as the "EEIS"). The EEIS consisted of a study of the economic impact of the Proposed Amendments and included the costs and benefits to the public of the Proposed Amendments. Dr. Diao also prepared the EEIS. The EIS and EEIS contain identical information, except that the EEIS also contains an analysis of the environmental impact of the Proposed Amendments. The following findings of fact only refer the EIS. To the extent relevant to this proceeding, the findings of fact concerning the EIS also apply to the EEIS except to the extent indicated otherwise. It is estimated in the EIS that the additional costs the Department may incur as a result of adopting the Proposed Amendments are expected to be minimal. The weight of the evidence failed to prove that this estimate impaired the fairness of the proceedings adopting the Proposed Amendments or the correctness of the Proposed Amendments. The following conclusions were included in the EIS concerning the impact of the Proposed Amendments on the installation of new underground storage tanks: It is recognized that the Proposed Amendments require that new tanks installed after December 31, 1991, have secondary containment instead of requiring secondary containment for new tanks installed after December 31, 1998, as provided under the Existing Rules. It is projected that even if new tanks were not required to have secondary containment until after December 1998, "investors intending to install underground storage tanks would most likely prefer to install secondary containment right away because it is more economical in the long run." In making this projection the Department recognized that "the immediate economic impact of having secondary containment might be greater than installing tanks with no secondary containment, . . ." but concluded that "long-run cost would likely be lower." In concluding that the long-run cost would be lower, the Department considered the difference in the cost of installing a tank with secondary containment with the cost of installing single-walled fiberglass tanks and steel tanks with cathodic protection. The Department estimated that the additional cost would be "in the range of 13.5% to 46.8% depending upon the type of tank used. . . ." It is pointed out that this additional cost, however, will "be a onetime expense to the facilities since they don't have to replace the double- walled tanks anymore." The Department, in concluding that the long-run cost would be lower, also relied upon its conclusion that insurance and monitoring cost associated with tanks installed with secondary containment would be lower in the long-run. The EIS indicates that the cost of insurance for a double-walled tank or a tank with a liner beneath it is about $200.00 per year as compared with $560.00 per year for a tank with no secondary containment. The EIS also indicates that the cost of groundwater monitoring wells or vapor monitoring devices of approximately $8,500.00 will be avoided by using tanks with secondary containment which will be required to have an interstitial monitoring device which cost approximately $1,000.00. Finally, the Department took into account the additional cost of ultimately replacing new underground storage tanks installed without secondary containment which will be incurred under the Existing Rules or the Proposed Amendments if secondary containment is not provided immediately in reaching its conclusion that it will be cheaper in the long-run to install new tanks with secondary containment. The Department included a cost comparison of the long-run cost of installing tanks with and without secondary containment in Annex I and Annex II to the EIS. Finally, the Department made the following finding in the EIS concerning the installation of new tanks: The only problem with requiring secondary containment by the end of 1991 instead of 1998 is that it gives the new underground storage tank owners a shorter period of time to generate the funds to install secondary containment. Smaller firms with lower financial leverage might have difficulty obtaining additional funds necessary to cover the incremental costs. This new requirement could have adverse effects on smaller gas stations that are already planned to be constructed in rural or remote areas where the market is very limited. The weight of the evidence failed to prove that these estimates impaired the fairness of the proceedings adopting the Proposed Amendments or the correctness of the Proposed Amendments. The Department did not make any specific findings in the EIS concerning the additional cost for new tanks which will be incurred in the short-term because of the acceleration of the date for which secondary containment will be required under the Proposed Amendments. See however, finding of fact 70.b., and 75.c., supra. The following conclusions were included in the EIS concerning the impact of the Proposed Amendments on existing tanks: The Department recognizes that "[t]he proposed requirements for existing underground storage tanks could have adverse economic impacts on some facilities, especially those with no corrosion protection and which were installed in 1981-1984 period." In reaching this conclusion, the Department recognized that owners of these tanks would not be able to "recoup their investments before the economic life of the tanks is reached." The Department's conclusion concerning the inability of facilities to recoup the useful life of existing underground storage tanks reasonably applies to almost all existing tanks. The Department recognized that approximately 731 of the owners of existing tanks (2,193 total tanks) constructed during the periods 1970-1975 and 1976-1980 will have to install secondary containment by 1992, and approximately 926 of such owners (2,778 total tanks) will have to install secondary containment by 1995, under the Proposed Amendments instead of the years 2012 and 2015, respectively, under the Existing Rules. These dates are extended to the year 2009 if corrosion protection is installed by December 31, 1991. The EIS indicates that the cost of adding corrosion protection is $2,500.00 to $4,000.00 per tank ($7,500.00 to $12,000.00 for a three tank facility). The EIS indicates that existing tank owners who do not install corrosion protection before December 31, 1991, "might experience economic hardship." The EIS estimates that, for "a typical facility with three tanks having a capacity of 10,000 gallons per tank, the replacement cost could be very high ranging from $101,500 to $107,000." This cost is compared to the $4,500.00 cost of adding internal lining or cathodic protection to an existing tank. The total cost of providing secondary containment for existing retailers is estimated to "range from $75 million to $79 million in 1992 and $94 million to $100 million in 1995." The EIS indicates the total cost could be higher if inflation is taken into account. Based upon these findings, the Department indicates in the EIS that "this could have some adverse economic impacts on some facilities which are currently struggling to survive under present economic conditions but are hoping to improve their business operations in the future." The Department recognizes that large suppliers will not experience the same difficulties as smaller facilities because of existing resources and the ability to pass on the additional costs to individual dealers. The Department also recognizes in the EIS that: smaller firms (gas stations) which are the recipient of this price hike could experience heavy financial strain. Since they operate in a highly competitive industry, they cannot just pass on any increase in the price of their products to the consumers without losing a certain part of their market share. Existing small gas stations without corrosion protection operating in rural areas where the market is small, might really be hurt financially by adoption of the proposed revisions. . . . The Department did not specifically address the costs of, or specify the total cost expected to be incurred for, replacing existing tanks with secondary containment in 1998, including those with field installed cathodic protection. Nor did the EIS specifically address cost which may be incurred by non-retail facilities in complying with the Proposed Amendments. The discussion in the EIS of some of the cost associated with existing tanks are more equivocal than the discussions of those costs in some of the internal documents utilized by the Department. The uses of "could" and "might" as opposed to "will" and "likely" did not impair the fairness of the proceedings adopting the Proposed Amendments or the correctness of the Proposed Amendments. The following conclusions were included in the EIS concerning the impact on competition and employment of the Proposed Amendments: The EIS indicates that the Proposed Amendments "might have some impacts on competition among existing underground storage tank owners and operators." In particular, the EIS indicates that some facilities "would have to either partly operate or shutdown their business for a while until the construction is done." During the time that facilities are partly operating or shutdown the Department projects that other facilities would have a competitive advantage and that employment would be adversely impacted. The EIS also indicates that smaller gas stations would be competitively disadvantaged by larger facilities because of their limited capitalization. The EIS concludes that "[s]ome [smaller facilities] may encounter difficulty in complying with secondary containment requirements." The EIS also indicates that competition will be enhanced between sellers/manufacturers of secondary containment materials at a much earlier date because the demand for such materials would increase much earlier. This same conclusion is reached with regard to businesses providing installation services associated with secondary containment. The EIS does not specifically address some of the costs which smaller facilities may be expected to occur as a result of the competitive advantage larger facilities will probably have in the short-run as a result of the Proposed Amendments. The EIS does not specifically discuss the competitive disadvantage to facilities which must replace tanks in 1995 or 1998. The EIS does not discuss the effect on competition between providers and installers of cathodic protection, single-walled corrosion resistant tanks or tank liners. The following conclusions were included in the EIS concerning the economic and environmental benefits of the Proposed Amendments: The Department indicates that "the new requirements would enhance protection of human health as well as to ground water resources of the State." Recognizing that it is difficult to quantify the economic benefits of the Proposed Amendments, the EIS indicates that "it can be strongly argued that the benefits would outweigh the costs in the long-run." It is concluded that the Proposed Amendments will prevent health hazards and groundwater contamination instead of relying on remedial solutions. The Department estimates that it is more economical to the public and to facility owners and operators to prevent contamination than to clean up contamination. It is estimated that the average cost of cleanup is approximately $200,000.00 per site. The Department also estimates that there are 56,018 underground storage tanks in Florida. Of these tanks, it is estimated that 10,500 are leaking underground fuel tanks, some of which are causing groundwater contamination. The Department has also estimated that 2,500 to 2,600 potable wells in Florida have been contaminated by petroleum storage systems. Because the groundwater level in Florida is very close to the surface, the Department indicates that discharge from a leaking tank will easily travel into the groundwater. The Department concludes that the Proposed Amendments will increase the protection of groundwater from potential contamination. The evidence failed to prove what the exact number of potable wells in Florida that have been contaminated by petroleum leaks. The evidence also failed to prove how many of the known petroleum contamination sites are attributable to underground storage tank leaks as opposed to other sources of leaks, i.e., overfill or pipe leaks. The weight of the evidence, however, failed to prove that the conclusions of the Department concerning the benefits of the Proposed Amendments are not reasonable or are so misstated as to be unreliable. The conclusions reached by the Department in the EIS concerning the benefits of the Proposed Amendments are consistent with the Legislatures intent set out in Chapter 376, Florida Statutes. The Department never conducts an econometric study in preparation of economic impact statements for proposed rules. Nor did the Department prepare such a detailed study in preparing the EIS in this case. As a consequence, there were a number of items of cost or amounts of cost which the Department did not specifically include in the EIS. Taking all of the facts concerning the EIS as a whole, based upon the conclusion that most of the economic impacts of the Proposed Amendments are fairly obvious and based upon the expression of Legislative intent found in Chapter 376, Florida Statutes, it is concluded that the evidence failed to prove that the EIS was so inadequate as to have impaired the fairness of the process or the correctness of the Proposed Amendments. Consideration of Small Businesses. In preparing the EIS, the Department assumed that a "small business" was any business with a net worth of $1,000,000.00 or less and which employed 25 or fewer employees. Small businesses in the petroleum industry often buy products from larger companies and are in competition with larger companies. It is recognized by the Department in several places in the EIS that small businesses will be adversely affected by the Proposed Amendments: It is recognized that small businesses will have difficulty raising capital and/or obtaining financing for the installation of secondary containment under the shorter time schedules of the Proposed Amendments; It is recognized that small businesses will have difficulty passing the cost of complying with the Proposed Amendments they incur on to consumers like larger facilities will likely be able to do; It is recognized that small businesses will be at a competitive disadvantage with larger facilities which are better able to obtain the funds necessary to pay the cost of complying with the Proposed Amendments; and It is recognized that rural facilities, which generally tend to be smaller facilities, will be adversely effected by the Proposed Amendments. The EIS does not specifically identify the number of small businesses which will be affected by the Proposed Amendments or the amount of additional cost small businesses can expect to incur. Although the majority of the cost which will be incurred by small businesses in complying with the Proposed Amendments will be the same as those for larger businesses, the effect on competition of small businesses will be greater. Therefore, the effect of the Proposed Rules will have somewhat of a disproportionate impact on small businesses. This impact, despite the Department's assertion in this case that there will be no disproportionate impact, is recognized in the EIS. As required by Section 120.54(2)(a), Florida Statutes, a number of options concerning secondary containment requirements with varying impacts on small businesses were considered at the Environmental Regulation Commission meeting of January 10, 1991. The express purpose of this meeting was to consider such options. The options specifically addressed during the meeting are set out in proposed findings of fact 98 and 99 of the Department's Recommended Final Order. Among the options obviously considered, are those which are contained in the Existing Rules which FPMA has argued should not be changed. Testimony was presented by representatives of the FPMA and others before the Environmental Regulation Commission at the January 10, 1991, meeting and at the March 14, 1991 public workshop concerning the impact of the Proposed Amendments on small businesses. The weight of the evidence failed to prove that the adverse impact on small businesses will be so great that the Department should have tiered the Proposed Amendments to reduce the impact on small businesses. The weight of the evidence failed to prove that small businesses do not contribute significantly to the problem the Proposed Amendments are designed to regulate. The Proposed Amendments do allow some flexibility by providing that facilities that provide the alternative forms of protection prior to December 31, 1991, need not provide secondary containment until after December 31, 1992, 1995, 1998 or 2009. Not all facilities will be able to take advantage of this flexibility because not all facilities can meet the December 31, 1991, deadline. The Department of Commerce's Review of the Proposed Amendments. The Department mailed a copy of the Proposed Amendments to the Department of Commerce, Bureau of Business Assistance, on February 8, 1991. A copy of the Proposed Amendments was logged into the Small and Minority Business Advocate's Office (hereinafter referred to as the "Advocate's Office") on February 12, 1991. Between February 12, 1991, and February 15, 1991, Jonathan Elimimian, an economic legislative analyst in the Advocate's Office, received a copy of the Proposed Amendments from the Bureau of Business Assistance. The evidence failed to prove what happened to the copy of the Proposed Amendments logged into the Advocate's office on February 12, 1991. Dr. Elimimian reviewed the Proposed Amendments and prepared two analyses. In his first analysis, he concluded that the economic impact on small and minority business "is very significant" and that: [m]ost importantly the existing small and minority businesses already operating underground storage tank systems will close their door to business because of economic hardships that might result form the proposed revised rule. To make the situation worst [sic] for small and minority businesses, the scheduled replacement of underground storage tanks shifted from the year 2012 to 12/31/95 makes it further difficult for small and minority underground storage tank owners to raise capital to carry out the expense involved in the changes and still be able to remain competitive or survive. The economic impact is direct and is not productive to small and minority businesses in the field. These findings are not inconsistent or different from the conclusions reached by the Department in the EIS. The findings of Dr. Elimimian were not provided to the Department. Nor was any other correspondence sent to the Department by the Advocate's Office. Instead, as was the practice of the Advocate's Office prior to the employment of the current Small and Minority Business Advocate (hereinafter referred to as the "Advocate"), Dr. Elimimian's review was simply filed in the Advocate Office's files. The weight of the evidence failed to prove that the Department failed to follow any of the procedural requirements of Section 120.54(3)(b), Florida Statutes, concerning the Advocate's Office. In light of the fact that the Advocate did not provide the Department with any comments, the Department did not fail to consider the Advocate's comments or take any action required under Section 120.54(3)(b), Florida Statutes. The weight of the evidence failed to prove whether the Advocate had any "evidence and argument . . . [or] alternatives regarding the impact of the rule on small business" concerning the Proposed Amendments. The weight of the evidence also failed to prove that the Advocate had any "evidence and argument . . . [or] alternatives regarding the impact of the rule on small business" which was not considered by the Department, the Environmental Regulation Commission or the Governor and Cabinet. Therefore, the weight of the evidence failed to prove that the fairness of the proceedings adopting the Proposed Amendments or the correctness of the Proposed Amendments were impaired by the Advocate's failure to comment of the Proposed Amendments pursuant to Section 120.54(3)(b), Florida Statutes.
The Issue Whether the Department of Environmental Protection (Department) proved by clear and convincing evidence that Southeastern Liquid Analyzers, Inc.'s (SELA) 1994 equipment approval for its Tank Chek Statistical Inventory Reconciliation (SIR) method should be revoked?
Findings Of Fact The Parties SELA Southeastern Liquid Analyzers, Inc., is a vendor of Tank Chek, a computer program that conducts Statistical Inventory Reconciliation for petroleum storage tanks. The vice president of SELA is David L. Roberts. SIR is a method of release or leak detection for petroleum storage tank systems. In 1994, the Department approved SELA's Tank Chek SIR method (equipment) for use in the State of Florida. The Department The Department has the statutory authority to establish rules to implement the storage tank regulation program. See § 376.303(1)(a), Fla. Stat. Regulated storage tank systems are required to use a method or combination of release detection that meet the applicable performance standards in Florida Administrative Code Rule 62-761.640 (1998). Fla. Admin. Code R. 62-761.610 (1998). Storage tank system equipment that does not have approval from the Department can still be sold in Florida, but purchasers cannot use that equipment to comply with Department rules. Owners of non-regulated tanks do not have to use approved storage tank system equipment because they are not obligated to comply with Department rules. Only aboveground storage tank systems having individual storage tank capacities greater than 550 gallons, and underground storage tank systems having individual storage tank capacities greater than 110 gallons, are regulated by the Department. See Fla. Admin. Code R. 62-761.100(1) (1998). As a release detection methodology, the SIR computer program or method is a piece of release detection equipment that is subject to equipment approval pursuant to Florida Administrative Code Rule 62-761.850(2) (1998), as it was in 1994 when the Department approved SELA's Tank Chek SIR method. See Rule 17-761.860 (1992). Pursuant to Florida Administrative Code Rule 62- 761.850(2)(b) (1998), "[e]quipment approval requests shall be submitted to the Department with a demonstration that the equipment will provide equivalent protection or meet the appropriate performance standards contained in this chapter." "A third-party demonstration by a Nationally Recognized Laboratory shall be submitted to the Department with the application. The third-party demonstration shall provide: 1. A technical evaluation of the equipment; 2. Test results that verify that the equipment will function as designed; and 3. A professional certification that the equipment meets the performance standards contained in Rule 62-761.500, F.A.C." Fla. Admin. Code R. 62-761.850(2)(c)1.-3. (1998). The function of a third-party evaluation is to verify the accuracy of the performance of a particular piece of release detection equipment in light of the performance standards. The Department does not make exceptions to the requirement that all equipment used by owners and operators of regulated storage tanks in the State of Florida must be approved unless expressly excepted by rule. See Fla. Admin. Code R. 62- 761.850(2) (1998). Compare Rule 17-761.860 (1992). The Department does not have the discretion, however, to deny a request for equipment approval if the applicant satisfies all of the requirements of Florida Administrative Code Rule 62-761.850(2) (1998). Once a vendor has met the requirements of Florida Administrative Code Rule 62-761.850(2) (1998), the equipment is approved and designated on a list maintained by the Department and updated quarterly. Marshall Mott-Smith testified that permits are not issued for equipment approvals, and the approvals are not viewed as a permit. Mr. Mott-Smith testified that the Department does not write any permits for storage tank systems, nor does the Department view an equipment approval as a license. The Department, however, can and does place conditions on equipment approvals. For example, the Department's 1994 SELA equipment approval Order required the installation of at least two monitoring wells at any facility using the SELA system for release detection. Equipment approvals can be and have been revoked. One of the reasons that equipment approvals have been revoked is because the equipment no longer meets the performance standards in the rule. SELA's PetroWorks Evaluation of SELA's Tank Chek SIR Method In 1993, SELA sought equipment approval from the Department of Environmental Protection Bureau of Petroleum Storage Systems (BPSS) pursuant to Rule 17-761.860 (1992), for SELA's Tank Chek SIR method. As part of its request for equipment approval, SELA submitted a third-party evaluation, dated June 3, 1993, of its SIR method. SELA has not submitted to the Department any other third-party evaluation of its SIR method. The third-party evaluation was conducted by Wayne E. Hill of PetroWorks. In 1993, at the time of the third-party evaluation, PetroWorks was a Nationally Recognized Laboratory. The 1993 PetroWorks evaluation verified that SELA's Tank Chek SIR method met the performance standard of the existing rule (1992) and that it "works as it was designed by a third party."2 The 1992 and 1994 versions of the underground storage tank systems rules contained a general release detection performance standard applicable to storage tanks that required that release detection methods demonstrate that the method can detect a "0.2 gallon per hour leak rate or a release of 150 gallons within a month with a probability of detection of 0.95 and a probability of false alarm of 0.05." Rule 17-761.610(5) (1992); Rule 62-761.610(5) (1994). See also Rule 17-761.620(7) (1992); Rule 62-761.620(7) (1994). The 1998 version remained substantially the same, although the term "leak rate" is omitted. See Fla. Admin. Code R. 62-761.640(1)(a) (1998)("(1) General. Method of release detection shall: (a) Be capable of detecting a release of 0.2 gallons per hour or 150 gallons within 30 days with a probability of detection of 0.95, and a probability of false alarm of 0.05.").3 The general leak detection performance standard of "0.2 gallon per hour leak rate or a release of 150 gallons within a month with a probability of detection of 0.95 and a probability of false alarm of 0.05" was applicable to all release detection methods under Chapter 17-761 (1992). SELA's 1993 PetroWorks evaluation concluded that the Tank Chek SIR method met the general release detection performance standard ("of 0.2 gallons per hour leak rate . . .") contained in Rule 17-761.610(5) (1992). The Department accepted this evaluation such that SELA's Tank Chek SIR method met the general leak detection performance standard as of the 1993 evaluation as evidenced by the Department's equipment approval Order dated January 21, 1994. The 1993 PetroWorks evaluation submitted to the Department by SELA is on a form entitled "Results of U.S. EPA [Environmental Protection Agency] Standard Evaluation Statistical Inventory Reconciliation Method" and states explicitly that "[t]he evaluation was conducted by the vendor of the SIR method or a consultant to the vendor according to the U.S. EPA's 'Standard Test Procedure for Evaluating Leak Detection Methods: Statistical Inventory Reconciliation Methods.'" The State of Florida has not adopted the EPA protocol because the Department does not perform third-party evaluations of SIR release detection software. However, the Department accepts third-party evaluations that are run based on the EPA protocol. The EPA Protocol was developed in response to the varied performance of leak detection methods.4 The EPA wanted to have leak detection methodologies that could be relied upon by tank owners to accurately detect leaks. The EPA published these "tests" (the protocols) that manufacturers of leak detection equipment must meet in order to sell their equipment, e.g., to a regulated owner or operator of an underground storage tank. The instructions in the EPA Protocol for SIR formed the basis for performing third-party evaluations. The three-page "SIR Method Results Form" indicates that PetroWorks evaluated SELA's "Statistically based proprietary method." This Form provides: This statistical inventory reconciliation method reports on the following basis (check one): [actual box displayed] quantitative results (leak rate reported) X [actual box displayed] qualitative results (pass, fail, inconclusive) Test results are reported and the Form further provides: "Based on these results, the method X [actual box displayed] does [actual box displayed] does not meet the federal performance standards established by the U.S. Environmental Protection Agency of 0.10 and 0.20 gallon per hour at P(D) of 95% and P(FA) of 5%." (Emphasis in original.) A three-page "Description Statistical Inventory Reconciliation Method" document is included as part of the PetroWorks evaluation. On page two under the heading "Identification of Causes for Discrepancies," the question is asked: "Which of the following effects does the method identify and quantify." Among other items, "leak rate" is a factor "identified and quantified by running a series of additional reports." On page three and under the heading "Reporting of Leak Status," the response "no" is given in response to the question, "Is the leak status reported in terms of a leak rate (e.g., gal/h or gal/day)?" The explanation for this response is: "Qualitative (Tight/Leaking/Inconclusive)." ("Tight/Leaking/Inconclusive" corresponds to "Pass/Fail/Inconclusive.") A "Reporting Form for Test Results" is included with the PetroWorks evaluation. There are 1 through 120 record numbers with a "Submitted" "Induced Leak Rate (gal/h)" heading for a vertical column. (The numbers listed vertically are either "0" or "0.1.") "The Results Reported by Vendor" are stated under two categories: (1) "If Quantitative," and below with two separate vertical columns identified as "Estimated Leak Rate (gal/h)" and "Est. Ind. Leak Rate (gal/h)" and (2) a separate category with one vertical column identified as "If Qualitative (Tank Tight? (Yes, No, or Inconclusive)." Only the "If Qualitative" vertical column is completed with "yes" or "no" responses. The data table for the two "If Quantitative" columns is blank. PetroWorks did not evaluate SELA's SIR method for leak rates. The 1993 PetroWorks evaluation described above certified that SELA's SIR method complied with the performance standard of Chapter 17-761 (1992), i.e., that the SELA Tank Chek SIR method is capable of reporting qualitative results such as "pass," "fail," and "inconclusive," and detecting a "0.2 gallon per hour leak rate." The Department's 1994 Approval of SELA's SIR Method The Department approved SELA's Tank Chek SIR Analysis System (method) on January 21, 1994, in an Order entitled "APPROVAL OF STORAGE TANK SYSTEM AND RELEASE DETECTION EQUIPMENT." The Department found, in part: "Based on the information provided by Warren [ ] Southeastern Liquid Analyzers, Inc., the Department finds that the applicant's Tank Chek Statistical Inventory Reconciliation Analysis System is comparable to an automatic tank gauging system and will provide environmental protection substantially equivalent to that provided by compliance with the requirements established in Florida Administrative Code Rule, [sic] 17-761.640(6)." See Findings of Fact 18 and 19 for a discussion of the slight differences in the wording of the "0.2 gallon per hour leak rate" performance standard. See also Endnote 3. The Department Re-examines Prior Release Detection Equipment Approvals In 1994 and 1996, the Department made minor revisions to the underground storage tank systems rules and Chapter 17-761 became Chapter 62-761. Effective July 13, 1998, the Department adopted revisions to Chapter 62-761, Florida Administrative Code ("Petroleum Storage Systems") which are detailed below. See also Findings of Fact 3-10 and 47-61. Beginning around December 30, 1999, Department personnel began a dialogue (by e-mail) relating to the requirements of the July 13, 1998, revisions. The participants included Jonathan Reeder and Farid Moghadam for the Department, and David L. Roberts for SELA. (Other persons at the Department including the Office of General Counsel, participated in the discussions.) Mr. Reeder requested guidance from Mr. Moghadam as follows: There seems to be a fundamental conflict between the 7/13/98 Rule requirements for SIR value and data reporting and the qualitative SIR method's ability to provide those values. Specifically, Rule 62-761.640(3)(c)3., F.A.C., requires that the data set leak threshold, the minimum detectable leak rate, and the calculated leak rate be reported. However, the SIR qualitative method will only produce a Pass, Fail, or Inconclusive result. My question is as follows: Does the above situation effectively rescind the approval status of the SIR qualitative methods? This "anomaly" affects those vendors that have approved qualitative SIR methods. Specifically: Entropy Limited, EQ-018 Horner Products, SIR Pro 1, Versions 1.0 and 2.0, EQ-126 Syscorp, Inc., EQ-179 South Eastern Liquid Analyzers, Inc., EQ- 157 Ustman Industries, YES SIR 90, EQ-065 I do know that South Eastern Liquid Analyzers is quite active in Florida as I have seen their reports and have, in fact, discussed this problem with David Roberts, the owner. I guess the real question here is "Can we make a new Rule that specifically excludes previously approved equipment?" Maybe we would need to get OGC's comments? This e-mail was sent to Mr. Moghadam on December 30, 1999, after Mr. Reeder had a phone conversation with Mr. Roberts. It was also sent to Mr. Roberts. On May 12, 2000, Mr. Roberts sent an e-mail to Mr. Reeder with the following message: "I understand from Curt Johnson that I need to talk with you about SIR evaluation list. I have several issues to be resolved to be included [sic]. I would like to see if I can work with you to resolve them. What happened with the questions in FL? For SC, I have added the leak rates per John Kneece's instructions. I have providing [sic] in FL as well for your regulators." On May 12, 2000, Mr. Reeder sent an e-mail to Mr. Roberts and stated: To resolve the issues in Florida you will need to submit a third-party evaluation for a QUANTITATIVE method to Farid Moghadam at our Tallahassee office. His phone number is (850) 921-9007. Since this third-party QUANTITATIVE method would initially be routed through me via the NWGLDE it most likely would also address the past issues of the Work Group. I have not seen the file on your Method but Curt is sending it to me via post. If you have any questions you may call either myself or Farid. I will be in Daytona Beach the week of the 15th for our annual DEP Tanks meeting, returning on May 22, 2000. On May 15, 2000, Mr. Roberts responded: "I do not have a third party on the quantitative method. My third party is for qualitative. We discussed this in regard to Florida. You were talking to the legal department about my being an approved vendor and then the state changed to quantitative at a later date and how you are going to handle it. The work group is a separate issue. . . ." (Emphasis added.) On May 22, 2000, Mr. Reeder responded to Mr. Roberts: I discussed this situation with our Office of General Council (sic) and the Tallahassee Engineering Department during our Conference last week. It is a consensus opinion that the SIR Qualitative Method does not meet the requirements of Florida Rule 62-761-640, F.A.C., and therefore any Facility that uses it as a method of Release Detection is in violation of Rule 62-761.610(1)(a), F.A.C. A letter is being sent from our Tallahassee office to the five vendors that currently have Florida approved Qualitative SIR Methods. This letter will basically state the above position and require that either the vendor "upgrade" their SIR method to that of Quantitative or have their Florida equipment approval revoked. This new Rule has been in effect since July 13, 1998 which is ample time for all SIR vendors to make the necessary adjustments to their methods in order to comply with the new requirements. Additionally, any Facility that continues to use the Qualitative method will be cited for using a Release Detection Method that does not meet the Florida Rule requirements. If you choose to comply with the Florida requirements and have your method third-party evaluated as Quantitative then that would most likely address the past concerns of the Work Group - - mainly the data set problem. However, if you elect to cease doing business in Florida and still desire to have your Qualitative Method listed we can then discuss the items needed to reopen the review process. Please let me know what you wish to do and if you would like to discuss this with Farid in Tallahassee his number is (850) 921-9007. From 1993 until the effective date of the 1998 amendments to Chapter 62-761, Florida Administrative Code, SELA complied with the performance standard in the rules. See Findings of Fact 17 and 21. After Chapter 62-761 was amended in 1998, Department employee Farid Moghadam was told to evaluate all SIR methods being used in the State of Florida to determine whether they were in compliance with the new performance standards. (Some of the recorded dialogue among Department employees and Mr. Roberts is recited above which led to the Department's decision to revoke SELA's equipment approval.) Mr. Moghadam evaluated the already-approved SIR methods by reviewing the third-party evaluations that had been submitted as part of the original application for equipment approval for each SIR method. Mr. Moghadam discovered that at the time of the 1998 amendments to Chapter 62-761, there were 15 SIR methods approved in the State of Florida and each appeared on the Department's approved equipment list. (SELA's SIR method remains on this approved list.) Ten of the approved SIR methods were a quantitative SIR methodology, and five were a qualitative SIR methodology. All 15 of the SIR methods had previously submitted a third-party evaluation. Among the five SIR programs that were qualitative, three of the SIR vendors voluntarily reapplied for equipment approval. All three of these programs were re-approved. One of the SIR vendors requested that the Department rescind its prior order approving the SIR method, thereby requesting that the SIR method be removed from the approved equipment list. Only SELA continued to require a new third-party evaluation as determined by Mr. Moghadam. Mr. Moghadam determined that SELA's Tank Chek SIR method required a new third-party evaluation because the previously submitted PetroWorks evaluation did not indicate that SELA met the performance standards contained in Florida Administrative Code Rule 62-761.640(3)(c)3. (1998), as required by Florida Administrative Code Rule 62-761.850(2) (1998). Chapter 62-761, Florida Administrative Code (1998), does not specify that previously-approved equipment required re- approval, re-certification, or re-evaluation. Because performance standards were added to Chapter 62-761 specific to SIR and because no previous versions of Chapter 62-761 contained any performance standards specific to SIR, the Department felt it was necessary to determine whether previously-approved equipment continued to satisfy the requirements of Florida Administrative Code Rule 62-761.850(2) (1998). The issue in this case is not whether SELA's Tank Chek SIR method can produce and report the leak rates required pursuant to Florida Administrative Code Rule 62-761.640(3)(c)3.b. (1998), because the testimony and documentary evidence established that Tank Chek can produce leak rates in its reports. The issue in this case is whether SELA's Tank Chek SIR method must be re-evaluated by a third-party so that the Department can know that the leak rates that are produced and reported are accurate and reliable. See Fla. Admin. Code R. 62-761.850(2)(b) and (c). SELA declined to obtain a new third-party evaluation. As a result, the Department gave notice of its intent to revoke the SELA Tank Chek SIR method equipment approval because, as of 1998, the Department no longer had a third-party evaluation certifying that SELA's Tank Chek SIR method complied with the performance standards in Chapter 62-761, Florida Administrative Code. Other than the PetroWorks evaluation of SELA's SIR method performed in 1993, SELA has not provided the Department with another third-party evaluation. On April 18, 2001, the Department advised Mr. Roberts as follows: The Bureau of Petroleum Storage Systems has reviewed the information submitted February 1, 16 and 20, 2001, regarding the Tankcheck Statistical Inventory Reconciliation (SIR) equipment approval order, DEP File Number EQ-157 dated January 21, 1994. The Tankcheck SIR algorithm has not been evaluated by a Nationally Recognized Laboratory, has not been verified that it works as designed by a third party laboratory, and has not been certified that it meets the performance standards in Rule 62-761.640, Florida Administrative Code, (1998) (F.A.C.), as required by Rule 62-761.850(2), F.A.C. Therefore, the equipment approval for Tankcheck SIR, DEP File No. EQ-157 is revoked and is no longer in effect. As of the effective date of this order, you must remove all references to the State of Florida and/or Department of Environmental Protection approval from any and all marketing materials distributed in the State of Florida regarding the use of Tankcheck SIR for storage tank systems regulated by the State of Florida. SELA filed a timely challenge to this Department action. The Department Amends Chapter 62-761 in 1998 Neither Chapter 17-761 (1992) nor Chapter 62-761 (1994), specifically enumerated "performance standards" for SIR. The general leak detection standard of "0.2 gallon per hour" was the only release detection performance standard applicable to SIR under Chapter 17-761 (1992). See Finding of Fact 18. Department witnesses testified that, from an inspection standpoint, a SIR methodology that met only the "0.2 gallon per hour" general performance standard would not be in compliance with Florida Administrative Code Rule 62- 761.640(3)(c)3. (1998), but would have been in compliance with Rule 17-761.610(5) (1992). In 1998, the Department amended Chapter 62-761 (1994), formerly Chapter 17-761 (1992), substantially revising this Chapter, including for the first time, at Florida Administrative Code Rule 62-761.640(3)(c)3. (1998), performance standards specific to SIR. The general release detection standard set forth in, e.g., Rule 62-761.610(5) (1994) (formerly Rule 17- 761.610(5) (1992)), see Finding of Fact 18, was subsumed by Florida Administrative Code Rule 62-761.640(1)(a) (1998). Under the 1998 revised rules, the general leak detection standard of "0.2 gallons per hour" was retained in the rule in Florida Administrative Code Rule 61-761.640(1)(a) (1998), and remained applicable to all release detection methods including SIR. The SIR-specific performance standards are intended to limit use of SIR to quantitative SIR methods only and to eliminate the use of qualitative SIR methods in Florida. Marshall Mott-Smith, the Department's Environmental Administrator, Storage Tank Regulation Section, Bureau of Petroleum Storage Systems, was instrumental in drafting the 1998 amendments to Chapter 62-761, and also recommended to the Department that the acceptance of either type of SIR methodology for use in Florida be changed. Mr. Mott-Smith testified that there was a need for the Department to address the type of SIR methodology because the Department was concerned that the current use of SIR in the State of Florida was not providing adequate protection for the groundwaters and the surface waters of the state. Field experience and discussion with experts indicated that qualitative SIR methods were not really working and were problematic. There are two types of SIR methodology, qualitative and quantitative. The major distinction between a qualitative SIR and a quantitative SIR methodology is how the results produced by the SIR method are reported. The fact that a SIR method meets the general performance standard of "0.2 gallon per hour" does not indicate whether it is a qualitative or a quantitative method. Third-parties evaluate the SIR method as either a qualitative or quantitative method. A qualitative SIR methodology produces release detection results identified as "pass," "fail," or "inconclusive." A SIR methodology that produces only "pass," "fail," and "inconclusive" results is not a quantitative SIR method. A quantitative SIR methodology, in addition to "pass," "fail," or "inconclusive," will produce release detection results in terms of other values such as the leak threshold, the calculated leak rate, and the minimum detectable leak rate. The general performance standard ("0.2 gallon per hour") is a measurement that works in conjunction with other quantitative results, but it is not determinative of the type of SIR methodology. Prior versions of the rule, including for example Chapter 17-761 (1992) and Chapter 62-761 (1994), allowed either a "qualitative" or a "quantitative" SIR methodology. In contrast to the requirements of Florida Administrative Code Rule 62-761.640(3)(c)3. (1998), the previous versions of the rules did not specify that the SIR method had to produce any particular numeric results in order to be in compliance with the rule, only the "0.2 gallon per hour" general performance standard had to be satisfied. Neither Chapter 17-761 (1992) nor Chapter 62-761 (1994), specifically identified SIR as a release detection method. SIR was indirectly referenced as "other similar release detection method." See Rule 17-761.610(5) (1992) and Rule 62-761.610(5) (1994). The performance standards for SIR found at Florida Administrative Code Rule 62-761.640(3)(c)3. (1998), do not specifically identify the SIR method as either a "qualitative" or "quantitative" SIR methodology. However, all of the Department witnesses persuasively testified that Florida Administrative Code Rule 62-761.640(3)(c)3. (1998), requires a "quantitative" SIR methodology. For, example, Mr. Reeder testified that the 1998 rule specifies a specific type of SIR method "in the sense that it requires the production of a leak rate, minimum detectable leak rate and threshold, because those are values that are only produced by a quantitative method and not a qualitative method. So, by that fact, it specifies that a quantitative method be used."5 Florida Administrative Code Rule 62-761.640 (1998), is entitled "Performance Standards for Release Detection Methods." Florida Administrative Code Rule 62-761.640(3)(c)3. (1998) provides, in part: "Statistical Inventory Reconciliation (SIR). SIR shall be conducted according to" requirements a. through i. Florida Administrative Code Rule 62-761.640(3)(c)3.b. (1998) requires that the results of each monthly analysis for the SIR method "include the calculated results from the data set for leak threshold, the minimum detectable leak rate, the calculated leak rate, and a determination of whether the result was 'Pass,' 'Fail,' or 'Inconclusive.' For the purposes of this section, the 'leak threshold' is defined as the specific leak threshold of the SIR method approved in accordance with Rule 62- 761.850(2), F.A.C., to meet the release detection level specified in Rule 62-761-640(1)(a), F.A.C." These required reported values are performance standards. A performance standard is something that determines the performance of the method; something that shows what the equipment is supposed to do. Prior versions of the rule, including specifically Chapter 17-761 (1992), did not require that if SIR was used as a leak detection methodology that the SIR method report these leak rates. The requirement that the SIR methodology produce and report these leak rates, see Finding of Fact 59, as well as "pass," "fail," and "inconclusive" results, are SIR-specific performance standards. The SIR performance standards contained in Florida Administrative Code Rule 62-761.640(3)(c)3. (1998), requiring that these results be produced defines the required SIR methodology as a quantitative methodology. Resolution of the Controversy Notwithstanding the 1993 PetroWorks evaluation, the evidence presented during the final hearing demonstrates that SELA's Tank Chek SIR method is capable of producing quantitative calculated results from a data set for leak threshold, the minimum detectable leak rate, and the calculated leak rate. Stated otherwise, SELA's SIR method can produce and report these values that are required. However, even though SELA's Tank Chek SIR method can produce and report quantitative results, and necessarily these values, a new third-party evaluation is required pursuant to Florida Administrative Code Rule 62- 761.850(2)(b) and (c) (1998), to demonstrate that SELA's Tank Chek SIR method complies with the performance standards of Florida Administrative Code Rule 62-761.640(3)(c)3. (1998). Compare Fla. Admin. Code R. 62-761.640(3)(c)3.b. (1998) with Fla. Admin. Code R. 62-761.850(2)(b) and (c) (1998). The problem with the quantitative results (leak threshold, the minimum detectable leak rate, and the calculated leak rate) SELA's Tank Chek SIR method produces in reports is that it is not known whether those results are accurate or reliable. Determining whether the results produced by a particular SIR method are reliable is the purpose of a third- party evaluation. As noted above, SELA has never had a third-party evaluation that demonstrates that Tank Chek SIR can reliably produce and report a leak threshold, a calculated leak rate, or a minimum detectable leak rate. SELA only has a third-party evaluation that demonstrates that its Tank Chek SIR method can detect a release of "0.2 gallon per hour," the general performance standard, and report the results as "pass," "fail," or "inconclusive." Importantly, the 1992 rules which applied when PetroWorks performed SELA's evaluation in 1993 did not require the production or reporting of leak rates; the rules required compliance only with the general performance standard of "0.2 gallon per hour." Fla. Admin. Code R. 17-761.610(5) (1992). The problem with the leak rates reported on, for example, DEP Exhibit 4, the Seffner Food Stores SIR Historical Summary Report, is that the PetroWorks evaluation did not evaluate the SELA Tank Chek SIR method to accurately produce the numbers (leak rates) that are reported. The 1993 PetroWorks evaluation specifically noted that the SIR method results are on the basis of "qualitative results (pass, fail, inconclusive)" and not on "quantitative results (leak rate reported)." The 1993 PetroWorks evaluation specifically noted that the testing results are not reported in terms of a leak rate. See Findings of Fact 26-29. The 1993 PetroWorks evaluation of SELA's Tank Chek SIR method did not and cannot have certified that Tank Chek meets the requirements of the 1998 rule as required for an equipment approval because the 1998 performance standards for SIR found at Florida Administrative Code Rule 62-761.640(3)(c)3. (1998), were not included in Chapter 17-761 in 1993. The 1993 Petroworks evaluation is no longer valid as it no longer satisfies the requirements of Florida Administrative Code Rule 62-761.850(2) (1998), which is a prerequisite to an equipment approval. SELA needs a new equipment approval to comply with Florida Administrative Code Rule 62-761.850(2) (1998).
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Environmental Protection enter a final order revoking SELA's 1994 equipment approval, EQ- 157, without prejudice to SELA submitting a new equipment approval application in compliance with Department rules. DONE AND ENTERED this 20th day of January, 2004, in Tallahassee, Leon County, Florida. S CHARLES A. STAMPELOS Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 20th day of January, 2004.
The Issue The issue is whether Respondent should have an administrative fine imposed for allegedly providing septic tank contracting services without a license.
Findings Of Fact Based upon all of the evidence, the following findings of fact are determined: When the events herein occurred, Respondent, Herman Campbell, operated a back-hoe service in Santa Rosa County, Florida. He presently holds no licenses with, or registrations from, Petitioner, Department of Health (Department), to engage in the septic tank contracting business. In April 1997, Wayne Sullivan, who resides in Navarre, Florida, made arrangements with a local contractor, Robert Hoover, to dig up the drainfield and replace the pipe on a septic tank system at his mother-in-law's home at 8207 Laredo Street, Navarre. Hoover purchased the necessary pipe but then backed out of the job at the last minute. Sullivan then called Mary Esther Plumbing, who recommended that Respondent be used. Respondent was a former licensed septic tank contractor who had installed the original septic tank at the residence more than ten years earlier. Sullivan agreed to purchase all materials (pipe and gravel) needed for the job. Although Sullivan claims that Respondent told him he was licensed to do the work, it is found that Respondent indicated to Sullivan that he held no license or registration and could not obtain any permits. Notwithstanding Respondent's lack of licensure, Sullivan nonetheless asked Respondent to perform the work. Respondent undertook the job on or about Thursday, April 24, 1997. Charging a rate of $45.00 per hour to operate his back-hoe, Respondent replaced the pipe in the drainfield. In addition, he dug up a number of stumps in the front yard. The total charge for all work, including the stump removals, was $1,375.00, which was paid by check from the mother-in-law. The amount related to the septic tank work is not known. The following Monday, the Department received an anonymous complaint that an unlicensed person had performed septic tank contracting services for Sullivan's mother-in-law. After an investigation was conducted by a Department environmental specialist, an administrative complaint was issued. Respondent did not register with the Department before performing the work, and he did not obtain the required permit from, and inspection by, the Department. By failing to do so, Respondent acted in contravention of Department rules. Although the complaint alleges that Respondent caused monetary harm to the customer, there is no evidence that Sullivan's mother-in-law suffered any damages by virtue of Respondent's work. Indeed, at hearing, Sullivan indicated that he was pleased with Respondent's workmanship. While the Department suggests that the mother-in-law has been left with an "unauthorized drainfield," there is no evidence that this caused her to incur additional expense. Respondent contended that he was merely "digging a ditch" with his back-hoe and was not providing septic tank contracting services. However, the evidence shows that he dug the ditch, removed the old pipe, placed gravel in the bed, and laid the new pipe into the ditch, all of which relate to septic tank contracting services. While Sullivan may have assisted Respondent in performing these tasks, it does not relieve Respondent of the responsibility of complying with Department rules. Respondent also contended that he was being singled out for enforcement purposes because he is black. There was no evidence, however, to support this contention. In mitigation, Respondent believed he was working with Sullivan, as the owner of the property, in jointly performing the work, and there was no intent on his part to evade the licensing requirements. In addition, there was no danger to the public, and the customer's property was not damaged. Although the Department contends that Respondent has installed many septic tanks and drain fields "without a permit," there is no evidence in the record of specific jobs performed illegally by Respondent. Finally, the $2,000.00 administrative fine suggested by the Department would appear to have an adverse impact on Respondent's livelihood.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Health enter a Final Order finding Respondent guilty of violating Rules 64E-6.022(1)(a) and (b), Florida Administrative Code, and that Respondent be issued a letter of warning as to the first violation and that an administrative fine in the amount of $250.00 be imposed for the second violation. The allegation that Respondent violated a third rule should be dismissed. DONE AND ENTERED this 6th day of January, 1998, in Tallahassee, Leon County, Florida. DONALD R. ALEXANDER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 6th day of January, 1998. COPIES FURNISHED: Angela T. Hall, Agency Clerk Department of Health Building 6, Room 102 1317 Winewood Boulevard Tallahassee, Florida 32399-0700 Rodney M. Johnson, Esquire 1295 West Fairfield Drive Pensacola, Florida 32501 Herman Campbell 621 Oak Lane Fort Walton Beach, Florida 32548 Willie Harmon Post Office Box 733 Fort Walton Beach, Florida 32548 Pete Peterson, Esquire Department of Health Building 6, Room 102 1317 Winewood Boulevard Tallahassee, Florida 32399-0700
Findings Of Fact Based upon all of the evidence, the following findings of fact are determined: Petitioner, Handy Food Stores, Inc. (HFS), is a small, family owned corporation that owns and operates a chain of thirty-four convenience stores in Florida, thirty two of which sell gasoline. At issue in this proceeding is Store No. 82 (Store 82 or the store) located on State Road 378 in LaBelle, Florida. The facility has also been identified by respondent, Department of Environmental Regulation (DER), as DER facility number 268520172. This controversy concerns an application by HFS for reimbursement of costs and expenses related to cleanup activities at Store 82 incurred after that store site became contaminated with petroleum and petroleum products. The application was preliminarily denied by DER on the ground HFS was "grossly negligent" in the maintenance of the petroleum storage system at Store 82. Because the average clean-up cost per site is $330,000, and HFS denied that it was grossly negligent in its operation and management of the system, HFS requested a formal hearing to contest the agency's proposed decision. The facts in this case are not complicated, and with certain exceptions, are relatively free of dispute. Until February 1988 HFS's director of operations was Ray Collier. On February 2, 1988 Collier ordered the installation of four monitoring wells at Store 82 to determine if any leaks were occurring in two underground storage tanks located on the site. Such wells were required to be installed by DER for monitoring purposes no later than December 31, 1988. The parties have stipulated that the wells were properly installed in accordance with agency rules. When the wells were installed on February 2, the contractor's report reflected no contamination was present. Collier also contracted with Purity Well Testing, Inc. (PWT) to conduct monthly monitor system checks at the store. Such checks are required by DER to determine if any discharges of product are occurring in the storage system. On February 10, 1988 Collier resigned as director of operations to accept a position in Saudi Arabia. Prior to his resignation Collier was replaced by David A. Laughner, who still remains in that position. According to Laughner, he and Collier spent only two weeks together prior to Collier's departure, and Collier did not advise him of the details concerning the monitoring program. Thus, he had no immediate knowledge of the existence of the monitoring wells or the tests being conducted by PWT. HFS's corporate offices are located in an office building at 9330 Adams Drive, Tampa, Florida. Besides three corporate officers and the director of operations, the corporation had only three office employees who worked at the corporate headquarters. The building is owned by B & B Cash Grocery Stores, Inc. (B & B), which operates a chain of grocery stores in southwest Florida. HFS's offices are on the second floor while B & B's corporate offices are located on the first floor. Although the two corporations are legally separate entities, they have certain common directors and shareholders, and the two corporations once utilized a centralized bookkeeping and billing department which was controlled and staffed by B & B. Under that arrangement, bills sent to HFS were actually processed by B & B's accounting department which paid the invoice on behalf of HFS. In addition, the two corporations once shared the same post office box. Under that arrangement, which existed in February 1988 and continued until at least August 1988, all mail sent to HFS at the post office box was initially processed by B & B's mail room rather than being sent directly upstairs to HFS. On April 24, 1988 PWT conducted its first monthly monitor well inspection at the store. That report indicated that three inches of free product was present in monitoring well three. A second monthly monitoring well inspection was conducted on May 10, 1988 reflecting the presence of two inches of free product in well number three and twelve inches in well number four. Free product was defined by a DER witness as "material (such as a petroleum product) that will be left on the water table." The presence of a free product, including a refined petroleum product, in a monitoring well is an indication that a discharge or release of the product from a storage tank has and may be continuing to occur. If free product is observed, it is the responsibility of the tank owner to determine the cause of the discharge, and if it is determined that the discharge is coming from the tank, he must empty the tank so that the system can be repaired or replaced. Also, the owner is obliged to notify DER within three working days of discovery of the discharge. The purpose behind these reporting and investigating requirements is to try to decrease the size of the petroleum plume and the area of contamination. The results of the two tests, and the invoices for the charges, were sent by PWT to HFS's post office box. Consistent with existing procedure, B & B's mail room received the reports and invoices and forwarded both to B & B's billing department for processing and payment of the invoices. Rather than forwarding the test reports upstairs to HFS, B & B filed the reports with the invoices in B & B's billing department. The parties have stipulated that no one in the billing department knew or had reason to know of the potential significance of the monitor well inspection reports. Because the bills had been paid, PWT did not contact HFS to determine whether the reports had been received. Consequently, neither Laughner nor any other HFS corporate employee had knowledge that monitor well inspections had been conducted at Store 82 or that inspection reports had been forwarded by PWT. However, it is found that copies of such reports were either forwarded to Store 82 by someone in Tampa or by PWT because they were available for inspection by DER representatives at a store inspection that took place in late June 1988. As the result of an unconfirmed telephonic report received in early February 1988 concerning possible contamination at Store 82, on June 17, 1988 a DER inspector, Jeffrey Gould, sent a letter to Laughner at HFS's corporate post office box advising that Gould would be conducting a stationary tanks compliance inspection at Store 82 during the week of June 27, 1988. The letter also requested that all records associated with the storage tank system be available at the facility for inspection. This inspection is commonly referred to as a "17-61 compliance inspection", meaning that the storage tanks would be checked to see if they met the requirements of Chapter 17-61, Florida Administrative Code (1987). Although the letter was addressed to Laughner, it was forwarded by an undisclosed person to a Store 82 employee, Betty Smith, whose title is area supervisor, and Laughner denies having seen the letter until several months later. 1/ Gould and another DER employee, Alicia Andersen, met with Betty Smith at the store on June 29, 1989. It may be inferred that Smith had copies of the PWT monitoring reports for she produced copies of the same for Gould, who then hand-copied and reviewed the two reports. Gould also made a physical inspection of the four monitoring wells on the site. He noted the presence of free product in two of the four monitoring wells. One had 7/8 of an inch of free product (gasoline) while a second well had fourteen inches of free product. Gould also detected a strong odor and observed sheen in the northeast monitoring well and a strong odor in the southeast monitoring well. These findings are memorialized in a written compliance inspection report received in evidence as respondent's exhibit 2. After the inspection was completed, Gould discussed generally the results with Smith, had her sign the report and gave her a copy. Since Smith was not present at final hearing, Gould's version of their conversation is the only competent evidence of record on the subject. According to Gould, he told Smith that he "had found product and that it is a problem." Gould acknowledged that he did not go into too much detail with Smith concerning the report since she was only an employee, but he specifically recalled advising her "there was a definite problem at this facility" and that he "spent a long time" with her. Finally, after giving Smith a copy of the report, Gould told Smith to "return it to her office." However, Smith did not do so. Gould's version of the events was not credibly contradicted and it is hereby accepted. On July 11, 1988 Gould, over the district manager's signature, sent Laughner by certified mail a "warning" letter and copy of the June 29 inspection report. The documents were sent to the post office box in Tampa. The return receipt was signed on July 15 by one Patty Jackson, whose relationship, if any, to HFS was not disclosed. The letter provided in pertinent part as follows: Free gasoline product was found in two of the compliance monitoring wells. Product thickness in one well exceeded the bailer limitation of fourteen inches. The presence of free product was also noted on monitor well records by Purity Well Testing Company for April 24, 1988 and May 10, 1988. A maximum thickness of twelve inches was measured. Such discharges are in violation of Chapter 376, Florida Statutes and Florida Administrative Code Rule 17-3. It is required that the discharges be stopped and the integrity of the storage system verified. Records available onsite indicate the 4000 gallon tank failed a tightness test with a leak rate of -0.1057 gallons per hour (gph) on September 26, 1986. The tank however passed the test on October 7, 1986 at +0.027 gph. Please describe all repairs, if any, to the storage system after the initial failure. The Department requests a meeting to discuss entry into a Consent Order to resolve the violations. Please contact Jeff Gould at 813/332-2667 or write the letterhead address within ten (10) days of receipt of this letter to schedule a meeting. Your cooperation is appreciated. (Emphasis added) As noted in the previous finding, the letter and report were received on July 15, 1988 but were not forwarded upstairs to Laughner or any other corporate employee. When Gould received no oral or written response - to his letter, Gould eventually telephoned Laughner on August 26, 1988. During the course of the telephone call, for the first time Laughner became aware of the existence of the contamination problem at Store 82 and the nature of the tests that had been performed that spring by PWT. It is also noted that during the telephone call, Laughner acknowledged that Gould's letter of July 11 had just been routed to his desk. The two agreed to meet at DER's Fort Myers district office on September 1, 1988 to discuss the violations. On August 29, 1988, or three days after Laughner spoke with Gould, HFS filed its incentive program application for Store 82. The application, which noted that the date of discovery of a petroleum discharge at Store 82 was on June 29, 1988, was received by DER on September 6, 1988. On September 1, 1988, Laughner met with DER representatives to discuss Store 82. Laughner was told that certain specific measures should be taken to insure the integrity of the storage tank system. That same day, in a letter to DER, HFS informed DER that a tank integrity test had been scheduled for Store 82 and that HFS was implementing initial remedial action (IRA) to remove any petroleum product and excessively contaminated soils and that an enviromental consultant had been contracted to conduct IRA, site contamination assessment and any necessary remedial action. Until that time, and dating back to June 29, 1988, HFS had only conducted a stick test at Store 82 to monitor the presence of petroleum product. Also, HFS personnel had not reviewed any repair records, monitoring well records, or inventory records during this same period of time. On September 7, 1988, HFS conducted a tank integrity test at Store 82. The integrity test passed under the criteria set by the National Fire Protection Association, which is the acceptable standard under Chapter 17-61, Florida Administrative Code. However, DER did not consider the testing to be a timely response since it considered no more than a week to be a reasonable period of time for testing once a discharge is discovered. On October 7, 1988, DER, through its inspector Gould, conducted an incentive program compliance inspection at Store 82. Although Gould observed two and one-eighth inches of free product in one well and a sheen in another well, the compliance inspection checklist noted that Store 82 was in compliance with Section 376.3071, Florida Statutes. Question 3 on the verification checklist asked if there was "evidence of gross negligence." Gould checked "yes" and made the following notations: See penalty worksheets (draft CO to OGC for review). Major violations failed tank test (enclosed) showed leaks Sept. 1986! - D.E.R. not notified, free product in well treated as a discharge and D.E.R. not notified of product in wells to take action. Gould responded in the above fashion because he concluded that nothing had been done for long periods of time to insure the integrity of the petroleum storage system at Store 82. It should be noted, however, that nothing in the checklist indicated that damages of any kind were caused by HFS's failure to take remedial action until September 1988, and DER representatives admitted they had no proof of such damages. On September 14, 1989, or approximately one year later, DER issued its proposed agency action denying Store 82's eligibility for reimbursement under the incentive program. As later amended on March 16, 1990, the agency's letter recited the following reason for denying the application: Monitor well reports dated April 24, 1988 and May 10, 1988 listed free product in monitoring wells. No report of discharge discovery was made to the Department by Handy Foods as required by Chapter 17-61, F.A.C. On June 29, 1988, an inspector from the Department discovered free product in Petitioner's monitoring wells. Petitioners were sent a warning letter by the Department on July 11, 1988, requesting that Petitioner stop any discharges and verify the integrity of its storage system. Petitioner conducted such tank tightness tests on September 7, 1988, or approximately five months after the monitoring well reports indicated the discovery of free product. Failure to report, investigate and abate where there is evidence of a discharge shall be construed to be gross negligence in the maintenance of a petroleum storage system. In other words, DER contended that HFS was "grossly negligent" within the meaning of the law by failing to "report, investigate and abate" the discharge until almost five months after the leaks were first detected by PWT. DER admits that it has no information to support a contention that, as to Store 82, HFS failed to maintain or falsified inventory or reconciliation records, intentionally damaged the petroleum storage system, failed to make monthly monitoring system checks, or failed to meet monitoring and retrofitting requirements in accordance with chapter 17-61 procedures. Although the incentive and reimbursement programs under section 376.3071 were enacted by the legislature in 1986, the agency has not promulgated formal rules that define or identify "gross negligence" or the criteria for determining eligibility under the incentive reimbursement program. Through the introduction of various agency records received in evidence as petitioner's composite exhibit 6, HFS sought to establish the fact that DER, in at least four prior cases, reached a result inconsistent with that reached in its proposed agency action regarding HFS. However, DER has processed thousands of applications of this nature, and the presence of four contrary results does not establish any binding precedent. Moreover, DER's administrator acknowledged that the agency had either erred in the cited cases or the facts were distinguishable from those presented herein. The parties disagree on the meaning of the words "gross negigence" as it is used in Subsection 376.3071(12(b), Florida Statutes (1987). Both parties presented expert testimony concerning what they perceived to be a proper interpretation of the statute. According to HFS's expert, Howard Ledbetter, he construed the term to mean a willful and reckless disregard for agency regulations that were known and understood by the alleged offender. Ledbetter established that in the spring of 1988 there was no firm understanding by the industry of what was required by DER's underground storage tank rules. Finally, he recalled receiving several different interpretations of the rules from DER personnel. In contrast, a DER expert, John Svek, opined that gross negligence occurs whenever an owner/operator commits a major violation of chapter 17-61. However, Svek conceded that chapter 17-61 does not distinguish or define major or minor violations, and nothing in chapter 17-61 equates a failure to immediately investigate a discharge to gross negligence. Further, he admitted that a lack of knowledge of a discharge is a factor to consider in determining whether gross negligence is present. A second DER expert, Patricia Dugan, acknowledged that not only is there no written document setting forth guidelines for determining when gross negligence occurs but that the term "gross negligence" does not appear in chapter 17-61. However, Dugan maintained that if notices are received by a corporation but are misfiled, as was alleged to have been done here, that conduct equates to gross negligence on the part of HFS.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the application of Handy Food Stores, Inc. for participation in the petroleum contamination clean-up program be approved. DONE and ORDERED this 23rd day of May, 1990, in Tallahassee, Leon County, Florida. DON ALEXANDER Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 23rd day of May, 1990.
The Issue Is Petitioner entitled to attorney's fees and costs under Section 57.111, Florida Statutes, the Florida Equal Access To Justice Act?
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant findings of fact are made: Stipulated Facts: The action in this case was initiated by the Department, a state agency. The Department was not a nominal party. ASI has incurred attorney's fees and costs in amount of $13,178.00 in defending the administrative proceeding brought against it in Department of Health and Rehabilitative Services v. Alpha Septic Industries, Inc., Case No. 91-0044. There is no dispute as to the reasonableness of the attorney's fees and costs. The attorney's fees and costs are as follows: James F. McCollum 62.4 hrs at $150/hr= $ 9,360 Gary R. Gossett 22.7 hrs at $100/hr= $ 2,270 Para Legal 7.4 hrs at $ 40/hr= $ 296 Costs $ 1,252 Total $13,178 There are no special circumstances which would make an award of attorney's fees and costs unjust. ASI is a corporation organized under the laws of the State of Florida, whose principal office is in Sebring, Florida and at all times material to this proceeding had not more than 25 full-time employees or a net worth of not more than $2 million. ASI is a "small business party" as that term is defined in Section 57.111(3)(d), Florida Statutes. The appellant court in Alpha Septic Industries, Inc., v. Department of Health and Rehabilitative Services, Case No. 91-03249, 2nd District Court of Appeal, reversed the final order entered by the Department in Department of Health and Rehabilitative Services v. Alpha Septic Industries, Inc., Case No. 91-0044, against ASI. That order was not appealed by the Department. ASI is a "prevailing small business party" as that term is defined in Section 57.111(3)(c), Florida Statutes. The action was commenced by the filing of an Administrative Complaint against Mr. Paul Poore d/b/a Alpha Septic Industries, Inc. on April 4, 1990. By an agreement reached during a hearing before a circuit judge, the original Administrative Complaint was amended on November 15, 1990 to delete Mr. Paul Poore from the Administrative Complaint. Facts Not Stipulated: Both the initial Administrative Complaint and the Amended Administrative Complaint allege that ASI violated Section 381.031(1)(g) Florida Statutes, and Rule 10D-6.055(2)(b), Florida Administrative Code, in that a septic tank manufactured by ASI, and serving 3727 Thunderbird Hill Circle, Sebring, Florida, was measured by the Department and found to be below the minimum thickness required by Rule 10D-6.055(2)(b), Florida Administrative Code. The complaint further alleges that the Department's measurements had been taken in three different places and found to be 0.162", 0.147" and 0.157" which were below the 0.187" minimum thickness required by the rule. The initial Administrative Complaint was signed by Kevin Sherin, M. D., Director, HRS-Highlands County Public Health Unit, the governmental entity charged with the responsibility of enforcing the Florida septic tank regulations. Dr. Sherin has the authority to authorize the filing of an Administrative Complaint and the responsibility of assuring that the complaint is valid. When Dr. Sherin authorized and signed the initial Administrative Complaint he was aware of the following facts: A complaint had been filed by Curtis Haberline, President, Thunderbird Homeowner's Association, on September 12, 1989, alleging that a fiberglass septic tank installed at 3727 Thunderbird Hill Circle, Sebring, Florida had "caved inwards". The 1050 gallon fiberglass septic tank had been installed by Dan Young, licensed septic tank contractor. Young recalled that all of the fiberglass septic tanks installed in Thunderbird Hill Village I, where this particular septic tank was installed, had been purchased and picked up from ASI. During the installation of the septic tank, Edward Dixon, Inspector, HRS-Highlands County Public Health Unit was on the site and inspected the septic tank installed by Young. The installation was approved on May 24, 1984. The tank was not measured for wall thickness at the time of the installation. Dixon did not recollect noticing any readily visible thin spots in the tank when he inspected it during installation. In response to the complaint, Edward Dixon visited the site on September 14, 1990 and inspected the septic tank then in place and the area surrounding the septic tank. Dixon drilled and removed a plug approximately one inch in diameter from a randomly selected area (not in the "caved-in part) on top of the septic tank. After Dixon removed the plug, he measured the tank's wall thickness around the drilled plug site with a micrometer. The tank wall thickness around the drill plug site measured between 0.140" and 0.150". The plug was taken to James B. Fisher. Neither Edward Dixon nor James B. Fisher, who was an employee of HRS- Highlands County Public Health Unit and also inspected the septic tank after the complaint was filed, recollect seeing any information on the tank that identified the manufacturer or the date of manufacture. However, there was no reason to suspect that the tank had been replaced since the life expectancy of a fiberglass tank is much longer than six years. Fisher measured the plug at three different locations with a micrometer. Those three measured thicknesses of the plug were 0.147", 0.157" and 0.162". The micrometer used by Fisher had been checked for accuracy, and found to be accurate within 0.0002". Three sixteenths of an inch is equal to 0.1875". The "caved in" portion of the tank appeared to have resulted from being impacted by a heavy weight, i.e., heavy equipment. The tank was not cracked and it did not appear that the "caving-in" had resulted from the tank being below specifications on wall thickness. There was no evidence that heat, light or caustic chemicals had affected the condition of the tank, i.e. wall thickness. ASI was on the State of Florida list of approved septic tank manufacturers. On October 10, 1989, ASI was advised of the complaint and requested to correct the alleged deficiency. ASI declined to take any action.
