Color Communications, Inc. v. Pollution Control Board

NO. 4-96-0657

IN THE APPELLATE COURT

OF ILLINOIS

FOURTH DISTRICT

COLOR COMMUNICATIONS, INC., ) Administrative
Petitioner, ) Review of the
v. ) Illinois Pollution
THE ILLINOIS POLLUTION CONTROL BOARD and ) Control Board
THE ILLINOIS ENVIRONMENTAL PROTECTION ) No. 96-125
AGENCY, )
Respondents. )
_______________________________________________________________

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 sepa-
rate "Clean Air Act Permit Program" (CAAPP) permits for CCI's two
Chicago plants. Color Communications, Inc. v. Illinois Environ-
mental 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 indus-
tries. 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 Classi-
fication (SIC) Manual. The first two digits of the code desig-
nate the major industrial grouping to which each plant belongs.
The 4000 plant's pollutant-emitting activities are classified as
group 2759 (27 is the SIC code for "commercial printing not
elsewhere classified"). The activities at the 4242 plant are
classified as group 2672 (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. 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 appli-
cations 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 consid-
ered one "source" for purposes of CAAPP permits. The notice
stated:
"The Agency has previously learned that oper-
ations 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 proper-
ties[,] and are under common control. Be-
cause the locations together constitute a
single CAAPP source, CCI cannot seek recogni-
tion 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), agree-
ing that the two plants constituted the same "source" under the
CAAPP.
II. ANALYSIS
CCI appeals, arguing that the Board's decision con-
flicts with applicable state and federal statutes and regula-
tions. Specifically, CCI contends that the Board erred by
concluding that the two plants constitute a single source when
statutes and regulations require separate permits for sources of
emissions that (1) did not belong to the same industrial grouping
because they are classified by different SIC codes, and (2) are
located on properties that are neither contiguous nor adjacent.
A. Standard of Review
Section 3-110 of the Code of Civil Procedure (735 ILCS
5/3-110 (West 1994)) governs review of final administrative deci-
sions, providing in part that, in an action for review, "[t]he
hearing and determination shall extend to all questions of law
and fact presented by the entire record before the court." In a
case involving the legal effect of undisputed facts, as here, the
issue is a matter of law, and we review it de novo. Denton v.
Civil Service Comm'n, 277 Ill. App. 3d 770, 773, 661 N.E.2d 520,
524 (1996).
The primary rule in statutory construction is to give
effect to legislative intent. First of America Bank, Rockford,
N.A. v. Netsch, 166 Ill. 2d 165, 181, 651 N.E.2d 1105, 1112
(1995). Ordinarily, the statutory language provides the best
indicator of legislative intent, and where that language is plain
and unambiguous, courts must give it effect without considering
other indicia of legislative intent. First of America, 166 Ill. 2d at 181, 651 N.E.2d at 1112.
Generally, courts give a great deal of deference to an
agency's interpretation of a statute that it is charged with
administering. City of Decatur v. American Federation of State,
County, & Municipal Employees, Local 268, 122 Ill. 2d 353, 361,
522 N.E.2d 1219, 1222 (1988); Denton, 277 Ill. App. 3d at 774,
661 N.E.2d at 524. However, an agency's interpretation is not
binding and will be rejected if erroneous. City of Decatur, 122 Ill. 2d at 361, 522 N.E.2d at 1222.
B. Description of the CAAPP
The CAAPP provides that any major source of air pollu-
tion must apply for a CAAPP permit. 415 ILCS 5/39.5(2)(a)(i)
(West 1994). Section 39.5(1) of the Environmental Protection Act
(Act) defines "source" as follows:
"'Source' means any stationary source
(or any group of stationary sources that are
located on one or more contiguous or adjacent
properties, and are under common control of
the same person or persons ***) belonging to
a single major industrial grouping. For the
purposes of defining 'source,' a stationary
source or group of stationary sources shall
be considered part of a single industrial
grouping if all of the pollutant[-]emitting
activities at such source or group of sources
on contiguous or adjacent property belong to
the same Major Group (i.e., all have the same
two-digit code) as described in the Standard
Industrial Classification Manual, 1987."
(Emphasis added.) 415 ILCS 5/39.5(1) (West
1994).
Thus, for the two plants in this case to be considered a single
source, they must (1) be under common control by the same entity;
(2) be on contiguous or adjacent property; and (3) belong to a
single major industrial grouping. Sources belong to a single
major industrial grouping when they have the same two-digit SIC
code. No party disputes that CCI owns and operates both plants.
C. The SIC Codes
CCI contends that the Board erred by concluding that
the two plants constituted a single source even though they were
classified under different two-digit SIC codes. We agree.
The Board does not dispute that the two plants have
different SIC codes, nor does it contend that the codes should be
changed. Nevertheless, the Board concluded that the plants
should be treated as a single "source" despite the fact that
their individual operations have different SIC codes because the
4242 plant "supports" the 4000 plant by providing raw materials.
The Board explained this conclusion as follows:
"The Board finds it proper under
[s]ection 39.5 of the Act to apply the sup-
port[-]facility concept when determining
whether two or more facilities are within the
same major industrial grouping. *** [T]his
conclusion is supported by the fact that the
CAAPP's definition of 'source' shares the
language[] and history[] of the federal defi-
nition. Additionally, *** in order to avoid
imposing contradictory obligations upon the
Agency, the support[-]facility analysis must
be included ***."
The Board's decision relies on the fact that (1)
federal law allegedly incorporates the support-facility concept
into the federal definition of "major source"; and (2) Illinois
law parallels federal law and section 39.5(3)(a) of the Act ex-
pressly requires that the CAAPP must be consistent with federal
law, providing as follows: "The Agency shall issue CAAPP permits
under this [s]ection consistent with the [CAA] and regulations
promulgated thereunder and this Act and regulations promulgated
thereunder." 415 ILCS 5/39.5(3)(a) (West 1994).
The Board contends that federal law incorporates the
support-facility concept into its definition of "major source"
based on (1) language found in the preamble to a proposed federal
regulation, which preamble was never adopted (45 Fed. Reg. 52,676
(1980) (preamble to the Prevention of Significant Deterioration
regulations); and (2) the testimony of Ronald Van Mersbergen, a
national air permitting expert, who testified that the federal
Environmental Protection Agency employs the support-facility
concept when determining whether two facilities fall under a
single major industrial grouping.
In this case the plain language of the statute, as set
forth above, clearly requires that if several stationary sources
have the same two-digit SIC code, they must be considered to
belong to a single major industrial grouping. Accordingly, an
industrial grouping is defined by SIC codes. A plain reading of
this statute is that if several stationary sources do not have
the same two-digit SIC code, they do not belong to the same
industrial grouping.
Where a statute is clear and unambiguous, as this one
is, a court is not at liberty to depart from its plain language
and meaning by reading into it limitations or conditions that the
legislature did not express. Solich v. George & Anna Portes
Cancer Prevention Center of Chicago, Inc., 158 Ill. 2d 76, 83,
630 N.E.2d 820, 823 (1994). By relying on the support-facility
concept, the Board improperly looked beyond the unambiguous
language of the statute to determine whether the two plants
belonged to a single industrial grouping. Accordingly, the Board
erred in concluding the plants constituted a single "source" for
CAAPP purposes.
III. CONCLUSION
Because we hold that the two plants do not belong to a
a single major industrial grouping, we need not resolve whether
they are "adjacent" within the meaning of the statute.
For the reasons stated, we reverse the Board's decision
and remand for further proceedings consistent with this opinion.
Reversed and remanded.
GARMAN and COOK, JJ., concur.