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05/28/97 COLOR COMMUNICATIONS v. ILLINOIS POLLUTION

May 28, 1997

COLOR COMMUNICATIONS, INC., PETITIONER,
v.
THE ILLINOIS POLLUTION CONTROL BOARD AND THE ILLINOIS ENVIRONMENTAL PROTECTION AGENCY, RESPONDENTS.



Administrative Review of the Illinois Pollution Control Board. No. 96-125.

Honorable Robert J. Steigmann, P.j., Honorable Rita B. Garman, J. - Concur, Honorable Robert W. Cook, J. - Concur. Presiding Justice Steigmann delivered the opinion of the court.

The opinion of the court was delivered by: Steigmann

PRESIDING JUSTICE STEIGMANN delivered the opinion of the court:

Petitioner, Color Communications, Inc. (CCI), appeals from an order of respondent Illinois Pollution Control Board (Board), which affirmed an administrative decision by respondent Illinois Environmental Protection Agency (Agency), denying separate "Clean Air Act Permit Program" (CAAPP) permits for CCI's two Chicago plants. Color Communications, Inc. v. Illinois Environmental Protection Agency, Ill. Pollution Control Bd. Op. 96-125, at 17 (July 18, 1996). CCI contends that the Board erred by determining that CCI's two Chicago plants constituted a single source for the purposes of the CAAPP. We agree and reverse and remand.

I. BACKGROUND

CCI produces color systems, samples, color boards, and color marketing systems for paint, automotive, and other industries. It has manufacturing facilities in Chicago and other domestic and foreign locations. Its two Chicago facilities are located at 4000 West Fillmore Street (hereafter the 4000 plant) and 4242 West Fillmore Street (hereafter the 4242 plant). These two facilities are separated by more than a full city block. Another company, Ribbon Webbing Corporation (Ribbon), which is wholly unconnected to CCI, owns a manufacturing plant and offices in the city block between CCI's two plants.

The 4242 plant houses color-mixing operations and paint-coating lines and produces coated substrates, including paper and plastic. This plant sends color bases and colorants it produces to other CCI facilities, including the 4000 plant and plants in New York and New Zealand. The 4000 plant houses printing and assembly operations and warehousing and shipping functions. More than half of the printing and assembly of color boards at the 4000 plant involves the use of coated substrates provided by the 4242 plant. However, many of the 4000 plant's printing activities involve materials obtained from customers and third-party vendors, not materials produced at the 4242 plant.

Because the two plants perform different operations and use different raw materials, their pollutant-emitting activities are classified differently under the Standard Industrial Classification (SIC) Manual. The first two digits of the code designate the major industrial grouping to which each plant belongs. The 4000 plant's pollutant-emitting activities are classified as group 27 59 (27 is the SIC code for "commercial printing not elsewhere classified"). The activities at the 4242 plant are classified as group 26 72 (26 is the SIC code for "paper coating not elsewhere classified"). The CCI plants have had these SIC classifications for at least five years. The Agency does not question the appropriateness of the different SIC codes assigned to the two plants.

The 1990 amendments to the federal Clean Air Act (CAA) (42 U.S.C. ยง 7401 et seq. (1988)) required states to establish permitting programs for air pollution sources. Clean Air Act Amendments of 1990, Pub. L. No. 101-549, 104 Stat. 2399, 2404 (1990). The CAAPP (see 415 ILCS 5/39.5 (West 1994)) establishes permitting requirements for certain sources of air pollutants regulated pursuant to the CAA. The Agency administers the CAAPP. CCI's Chicago plants are subject to the CAAPP because they are located in a severe nonattainment area and each has the potential to emit 25 or more tons per year of volatile organic material. See 415 ILCS 5/39.5(2)(a), (2)(c)(iii)(A) (West 1994). The 4242 plant emits more than 25 tons per year of volatile organic material, and the 4000 plant emits approximately 10 tons per year of volatile organic material.

The Agency issued an air operating permit to the 4242 plant in 1979 and renewed the permit in 1983, 1988, and 1994. In 1989, CCI acquired the 4000 plant (from a company with which CCI was not associated in any way), and in 1994, the Agency issued an air operating permit for that plant. In 1995, the Agency issued a joint construction and operating permit for certain additional emission units at the 4000 plant. Each of these permits treated the two plants as separate, independent facilities.

In September 1995, CCI submitted separate CAAPP applications to the Agency for CCI's two Chicago plants. In November 1995, the Agency issued a "Notice of Incompleteness"--a form of permit denial--advising CCI that the two plants must be considered one "source" for purposes of CAAPP permits. The notice stated:

"The Agency has previously learned that operations at both of CCI's locations include pollutant[-]emitting activities that belong to the same industrial grouping, are located on one or more contiguous or adjacent properties[,] and are under common control. Because the locations together constitute a single CAAPP source, CCI cannot seek recognition for each of its locations of operation as a separate CAAPP source."

The Agency then informed CCI that it must submit only one CAAPP application that treated both plants as a single "source."

CCI appealed the Agency's decision to the Board, arguing that the two plants constituted separate, independent sources pursuant to the CAAPP. In July 1996, the Board affirmed the Agency's decision (with two Board members dissenting), agreeing ...


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