Appeal from a decision by the Pollution Control Board No. 01-170
The opinion of the court was delivered by: Justice Breslin
Petitioners Community Landfill Company and City of Morris (collectively, the company) appeal from a decision by respondent Illinois Pollution Control Board (Board) affirming respondent Illinois Environmental Protection Agency's (Agency) denial of the company's application for a waste disposal permit because the surety that provided the previously approved performance bonds was later removed from a United States Department of the Treasury list of approved sureties. We affirm and hold that a permit for waste disposal is appropriately denied if the surety that provides the financial assurance is removed from the list of approved governmental sureties.
Community Landfill Company is the operator of a landfill located in Morris, Illinois. The landfill is owned by the City of Morris. The property on which the landfill is located consists of two parcels of land, parcel A and parcel B.
In August of 2000, the Agency issued a significant modification permit to the company that called for the closure of parcel B and authorized the continued operation of parcel A under new landfill regulations. The new regulations required increased leachate collection and control devices as well as the installation of a separation layer.
The permit was supported by financial assurance of $17,427,366 guaranteed by bonds issued by Frontier Insurance Company. The permit required that the company file a supplemental permit application in the future to secure approval of the construction of the separation layer and authorize the acceptance of waste for disposal in the newly constructed area located in parcel A.
On November 14, 2000, the Agency sent notice to the company that it was in violation of the Environmental Protection Act (Act) (415 ILCS 5/1 et seq. (West 2000)) because the surety that wrote the bond for the significant modification permit was no longer on the list of approved governmental sureties. Two weeks after receiving this notice, the company filed its supplemental permit application for parcel A.
On May 11, 2001, the Agency denied the company's application for the supplemental permit for two reasons. One was because the surety was no longer on the list of approved government sureties. Specifically, the application was denied for failure to comply with section 811.712(b) of the Illinois Administrative Code (Code) (35 Ill. Adm. Code §811.712(b) (West CD-ROM 2000)), which requires that the surety company that guarantees the bonds or other financial assurance for a permit be licensed by the Illinois Department of Insurance and approved by the United States Department of the Treasury as an acceptable surety. The Treasury Department lists acceptable sureties in its Circular 570. See 35 Ill. Adm. Code §811.712(b) (West CD-ROM 2002). The second reason the application was denied was because the owner of the landfill company had a felony conviction record. The company appealed the Agency's decision to the Board, claiming that both reasons for denying the supplemental permit were improper and that the denial amounted to impermissible enforcement by permitting.
At a hearing before the Board, Blake Harris, a financial assurance analyst for the Agency, testified that he reviewed the bonds relied upon by the company to support its supplemental permit application. The bonds were insufficient because the issuing surety, Frontier Insurance Company, had been removed from the Circular 570 list on June 1, 2000.
John Taylor, a former financial assurance analyst for the Agency, testified on behalf of the company. He reviewed the bonds when they were originally submitted by the company in support of the significant modification permit that was issued in August of 2000. According to Taylor, he was aware that Frontier had been removed from the list of approved sureties one day after the company obtained the bonds. He concluded, however, that the bonds met the applicable statutory and regulatory requirements because at the time they were issued Frontier was an approved surety.
At the hearing, the company sought to introduce testimony of several employees of the Agency involved in the permit application process and documents regarding a permit issued to the company on June 29, 2001, for the installation of perimeter gas monitoring probes.
After an offer of proof was made, the hearing officer excluded the evidence, finding that it was not part of the record before the Agency when the permit application was considered and thus could not be considered by the Board on appeal. Thereafter, the company filed an objection to the officer's decision to exclude the evidence and to an earlier decision not to allow a separate evidentiary hearing regarding the matter.
In December of 2001, the Board issued an opinion and order affirming the denial of the supplemental permit on the basis that the surety which issued the bonds was not on the approved list of sureties. In addition, the Board affirmed the hearing officer's exclusion of testimony and documents regarding the grant of the June 29, 2001, permit and the hearing officer's decision to deny a separate hearing. The Board, however, reversed the Agency's decision to use the felony conviction as a basis to deny the permit and ...