Horsehead Resource Development Co. v. Pollution Control Board

                                                  FIFTH DIVISION
                                                  Filed: 8/15/97








No. 1-96-2571

HORSEHEAD RESOURCE DEVELOPMENT               )  
COMPANY, INC.,                               )  
                                             ) Petition for Review
     Petitioner-Appellant,                   ) of an Order of the
                                             ) Pollution Control
          v.                                 ) Board
                                             ) No. R95-20
ILLINOIS POLLUTION CONTROL BOARD             ) 
and CONVERSION SYSTEMS, INC.,                )  
                                             )  
     Respondents-Appellees.                  )


     JUSTICE HOFFMAN delivered the opinion of the court:

     The petitioner, Horsehead Resource Development Company, Inc.
(Horsehead), filed this appeal for review of an Illinois Pollution
Control Board (Board) decision adopting a federal hazardous waste
delisting of electric arc furnace dust (EAFD) treated by respondent
Conversion Systems, Inc. (CSI).  On appeal, Horsehead claims that
the Board exceeded its statutory authority under the Illinois
Environmental Protection Act (Act) by promulgating the delisting
through the identical-in-substance procedure under section 7.2(a)
of the Act (415 ILCS 5/7.2(a) (West 1994)).  We affirm.
     This administrative review action concerns methods for
treating EAFD, an emission from the primary production of steel in
electric arc furnaces.  Horsehead petitions for review of the
Board's decision to exclude from hazardous waste regulation the
EAFD that is generated and treated by the "Super Detox" process at
CSI's plant in Sterling, Illinois.
     The federal Resource Conservation and Recovery Act (RCRA) (42
U.S.C. sec. 6901 et seq.) is the foundation for regulation of
hazardous waste in the United States and provides a comprehensive
regulatory structure to manage such wastes.  The United States
Environmental Protection Agency (USEPA) is responsible for
identifying hazardous wastes, and the RCRA provisions regulate the
generation, treatment, storage, and disposal of such wastes.  
     Until 1991, EAFD was listed hazardous waste No. K061--
"emission control dust-sludge from the primary production of steel
in electric furnaces."  Listed hazardous wastes are those which the
USEPA deems to be hazardous as a class, and "listing" a waste is a
regulatory determination that the substance will be placed on the
USEPA list of hazardous wastes.  42 U.S.C. sec. 6921.  Conversely,
"delisting" a waste is an exclusion from hazardous waste control
after the USEPA makes a determination that, under specific
conditions, a particular waste previously listed as hazardous
should no longer be considered hazardous.  42 U.S.C. sec. 6921.  As
a listed waste, EAFD was subject to RCRA land disposal restrictions
for hazardous wastes, including stringent regulatory and
recordkeeping requirements.  These restrictions render hazardous
waste disposal much more costly than non-hazardous waste disposal.
     Section 6926 of RCRA allows the USEPA to authorize qualified
states to implement a hazardous waste program within the state in
lieu of the federal program.  42 U.S.C. sec. 6926(b).  Accordingly,
such states are authorized to make their own delisting decisions. 
The USEPA authorized Illinois' hazardous waste management program
in 1986.  See 51 Fed. Reg. 3778 (Jan. 30, 1986).  As an authorized
state, Illinois may operate a more stringent RCRA program than the
federal program, or it may adopt federal delistings and remain in
"lockstep" with the USEPA, but it may not operate a program less
stringent than the federal program without jeopardizing its RCRA
authorization.  See 42 U.S.C. secs. 6926(e), 6929.
     Illinois' implementing authority for RCRA is the Act (415 ILCS
5/1 et seq. (West 1994)), which authorizes the Illinois
Environmental Protection Agency (IEPA) to enforce the state's
hazardous waste management program requirements. The responsibility
for developing and promulgating environmental regulations in
Illinois rests with the Board.  415 ILCS 5/5 (West 1994).
     In 1991, the USEPA excluded from listed hazardous waste any
EAFD treated by the high temperature metals recovery process used
by Horsehead.  EAFD treated by CSI's "Super Detox" process was not
delisted in the USEPA's decision.  Since EAFD treated by Horsehead
could thereafter be transported and disposed of at a considerably
lower cost, Horsehead enjoyed a competitive advantage.
     In 1993, CSI pursued USEPA approval for the delisting of EAFD
treated by its "Super Detox" process.  CSI submitted information on
the process and included testing data.  After considering the
written data and public comments received from numerous sources,
including Horsehead, the USEPA delisted EAFD treated by CSI's
process.  60 Fed. Reg. 31107 (June 13, 1995).  Accordingly, EAFD
treated by this process was no longer considered hazardous waste as
long as it met the USEPA delisting criteria, which includes certain
testing requirements and disposal in licensed RCRA landfills.  
     Horsehead appealed the USEPA's decision to the Court of
Appeals for the District of Columbia.  Horsehead Resource
Development Co. v. USEPA, No. 95-1286 (D.C. Cir. Filed June 1,
1995).  At the time that CSI filed its appellate brief, the federal
appellate court apparently was considering jurisdictional motions
challenging Horsehead's standing to appeal.
     Since EAFD treated by CSI's "Super Detox" process continued to
be regulated as a hazardous waste under Illinois law, CSI then
requested that the Board adopt the USEPA delisting.  In February
1996, the Board issued a proposed opinion adopting the federal
delisting.  In the Matter of RCRA Update, USEPA Regulations, No.
R95-20, 20 Ill. Reg. 2651 (Feb. 16, 1996).  In considering this
issue, the Board implemented an expedited process called an
"identical-in-substance" procedure, the authority for which is
contained in section 7.2 of the Act:
     "(a) In the context of a mandate that the Board adopt
     regulations to secure federal authorization for a
     program, regulations that are 'identical in substance'
     means State regulations which require the same actions
     with respect to protection of the environment, by the
     same group of affected persons, as would federal
     regulations if USEPA administered the subject program in
     Illinois.  After consideration of comments from the
     USEPA, the Agency, the Attorney General and the public,
     the Board shall adopt the verbatim text of such USEPA
     regulations as are necessary and appropriate for
     authorization of the program. ***"  415 ILCS 5/7.2 (West
     1994).
     The Board also relied upon section 22.4 of the Act which provides:
     "(a) In accordance with Section 7.2, the Board shall
     adopt regulations which are identical in substance to
     federal regulations or amendments thereto promulgated by
     the Administrator of the United States Environmental
     Protection Agency to implement Sections 3001, 3002, 3003,
     3004, and 3005, of the (RCRA) ***."  415 ILCS 5/22.4(a)
     (West 1994).
          The Board published the proposed regulations in the Illinois
Register and held the docket open for 45 days after the date of
publication to receive public comment.  Horsehead filed comments in
opposition to the proposed delisting which argued that the Board
did not have the authority to promulgate the delisting through the
identical-in-substance procedure and that the proposed delisting
violated state and federal statutory mandates prioritizing
recycling and resource recovery over conventional treatment and
disposal.  Horsehead also challenged the proposed delisting on
scientific and technical grounds and urged the Board to consider
the broader environmental impacts of its proposal. 
     On June 20, 1996, the Board issued its final opinion and order
adopting the federal delisting of EAFD treated by CSI's process. 
In the Matter of RCRA Update, R 95-20 (June 20, 1996).  The Board
noted that its implementation of the identical-in-substance
procedure did not allow it to revisit the merits of a delisting
since the USEPA theoretically had reviewed all the merits in its
previous decision.  See 415 ILCS 5/7.2(a) (West 1994).  Therefore,
the Board eschewed its own substantive review and substantially
adopted the USEPA's opinion.  Horsehead filed a timely appeal.
     Horsehead contends that the Board exceeded its statutory
authority in adopting the federal K061 delisting through the
identical-in-substance procedure.  Horsehead argues that the Board
was required to follow the adjusted standard procedure under
section 28.1 of the Act which provides that "[a]fter adopting a
regulation of general applicability, the Board may grant, in a
subsequent adjudicatory determination, an adjusted standard for
persons who can justify such an adjustment ***."  415 ILCS
5/28.1(a) (West 1994).  A regulation of "general applicability" is
the general classification of a waste as hazardous, such as EAFD
previously listed as hazardous waste "K061."  Thus, an adjusted
standard would be a delisting for such a waste from a particular
facility.  Horsehead emphasizes that the adjusted standard
procedure for waste delistings under the Act includes public notice
of the proposed delisting in a newspaper, opportunity for a public
hearing, detailed environmental impact information provided by the
petitioner, and the opportunity for the IEPA to join as a
copetitioner--none of which is required by the identical-in-
substance procedure.  See 415 ILCS 5/28.1(d) (West 1994).   
     According to Horsehead, the Act authorizes the Board to adopt
identical-in-substance federal regulations only when failure to
adopt would threaten the USEPA's authorization of Illinois'
hazardous waste program.  Horsehead notes that, section 7.2(a) of
the Act, the Board's authority for the identical-in-substance
procedure, begins: "[i]n the context of a mandate that the Board
adopt regulations to secure federal authorization for a program
***."  415 ILCS 5/7.2(a) (West 1994).  Horsehead further notes that
section 22.4(a) of the Act provides: "[i]n accordance with Section
7.2, the Board shall adopt regulations which are identical in
substance to federal regulations or amendments thereto promulgated
by the administrator of the United States Environmental Protection
Agency."  415 ILCS 5/22.4(a) (West 1994).  Horsehead concludes that
the Board erroneously applied the identical-in-substance procedure
as a vehicle for adopting the K061 delisting because it was not
necessary in order for Illinois to maintain its RCRA authorization. 
     Since the Board is charged with administering the IEPA, its
interpretation of the statute is entitled to deference.  Central
Illinois Public Service Co. Pollution Control Board, 116 Ill. 2d 397, 409, 507 N.E.2d 819 (1987).  When an administrative agency
such as the Board exercises its rulemaking powers, it is performing
a quasi-legislative function and, therefore, has no burden to
support its conclusions with a given quantum of evidence.  Illinois
State Chamber of Commerce v. Pollution Control Board, 177 Ill. App.
3d 923, 928, 532 N.E.2d 987 (1988).  A reviewing court may overturn
the Board's determination only if it is arbitrary and capricious. 
CIPS, 116 Ill. 2d  at 407.  In Greer v. Illinois Housing Development
Authority, 122 Ill. 2d 462, 524 N.E.2d 561 (1988), the supreme
court provided certain guidelines for determining whether an
administrative agency's action is arbitrary and capricious:
     "Agency action is arbitrary and capricious if the agency:
     (1) relies on factors which the legislature did not
     intend for the agency to consider; (2) entirely fails to
     consider an important aspect of the problem; or (3)
     offers an explanation for its decision which runs counter
     to the evidence before the agency, or which is so
     implausible that it could not be ascribed to a difference
     in view or the product of agency expertise."  122 Ill. 2d 
     at 505-06, citing Motor Vehicle Manufacturers Association
     of the United States, Inc. v. State Farm Mutual
     Automobile Insurance Co., 463 U.S. 29, 43, 77 L. Ed. 2d 443, 458, 103 S. Ct. 2856, 2866-67 (1983).
          Prior to 1990, the Act provided that the Board could only
adopt federal hazardous waste delistings through the identical-in-
substance rulemaking procedure.  See In the Matter of Petition of
Envirite Corp., R87-30 (IPCB Jan. 7, 1988).  On March 1, 1990,
Illinois was delegated authority by the USEPA to delist wastes
directly.  55 Fed. Reg. 7320 (March 1, 1990).  The Board thereafter
promulgated the procedures under which Illinois waste delistings
were to proceed.  Specifically, section 720.120(a) of the Code
provides that: "[a]ny person may petition the Board to adopt as
State regulations rules which are identical in substance with
newly-adopted federal amendments or regulations.  The petition
shall take the form of a proposal for rulemaking ***."  35 Ill.
Adm. Code sec. 720.120(a) (1996).  Section 720.122 of the Code,
titled "Waste Delisting," states in pertinent part: "[d]elisting of
specific wastes from specific sources that have been adopted by
U.S. EPA may be proposed as State regulations that are identical in
substance pursuant to Section 720.120(a)."  35 Ill. Adm. Code sec.
720.122(m) (1996).  Furthermore, paragraph (n) of this section
provides that "[d]elistings which have not been adopted by U.S. EPA
may be proposed to the Board pursuant to a petition for adjusted
standard pursuant to 35 Ill. Adm. Code 106.Subpart G."  35 Ill.
Adm. Code 720.122(n).  (Emphasis added.)
     We find no support for Horsehead's assertion that the Board
may utilize the identical-in-substance procedure only when
necessary to secure or maintain USEPA authorization for the
Illinois RCRA program.  Similarly, Horsehead has not directed this
court to any provision in either the Act or the Code which
indicates that Illinois' authority to grant adjusted standards
thereby limits the Board's ability to adopt a new federal hazardous
waste delisting into Illinois law via the identical-in-substance
procedure under the facts of this case. 
     Horsehead claims that In re Petition of Envirite Corp. for an
Adjusted Standard, PCB No. 94-10 1994 (December 14, 1994) supports
the argument that the Board was only authorized to delist K061
hazardous waste through the adjusted standard procedure.  However,
in that case, Envirite did not petition the Board to adopt an
identical-in-substance regulation; rather, it proposed certain
changes in sampling and analytical protocols to a delisting
originally granted by the USEPA.  Therefore, the Board correctly
considered the revision through the adjusted standard procedure
because it was a proposed deviation of the federal delisting. 
Envirite simply stands for the proposition that the Board cannot
use the identical-in-substance procedure where the requested
delisting is not wholly contained in the federal regulation.  We
conclude that Horsehead has not met its burden of showing that the
Board's decision was arbitrary and capricious and, therefore, we
affirm the Board's decision. 
     Horsehead further argues that the Board erred in failing to
consider submitted comments to the proposed K061 delisting. 
Horsehead's comments asserted that the delisting violated state and
federal statutory mandates and policies prioritizing recycling over
treatment and disposal, that it violated the substantive
requirements of Illinois' delisting regulations, and that it was
scientifically and technically invalid.  However, given our
conclusion that the Board properly applied the identical-in-
substance procedure in adopting the USEPA delisting of K061, we
need not address this argument.  Section 7.2(a) of the Act
provides:
     "After consideration of comments from the USEPA, the
     Agency, the Attorney General and the public, the Board
     shall adopt the verbatim text of such USEPA regulations
     as are necessary and appropriate for authorization of the
     program. In adopting 'identical in substance'
     regulations, the only changes that may be made by the
     Board to the federal regulations are those changes that
     are necessary for compliance with the Illinois
     Administrative Code, and technical changes that in no way
     change the scope or meaning of any portion of the
     regulations ***."  415 ILCS 5/7.2(a) (West 1994).
     Section 7.2(a) lists a few exceptions to this general rule that are
not applicable to this case.  The Board was clearly cognizant of
this provision, as it stated in its ruling that "[t]he theory
behind the identical-in-substance procedure is that the USEPA has
reviewed all the merits of the actions that it has undertaken, so
substantive Board review of those actions is not necessary."  Since
we conclude that the Board properly implemented the identical-in-
substance procedure in adopting the K061 delisting, we also
conclude that it correctly adopted the verbatim text of the USEPA
regulations as necessary for compliance with the Code (415 ILCS
5/7.2(a) (West 1994)).
     For the foregoing reasons, we affirm the decision of the
Board.
     Affirmed.
     HARTMAN, P.J., and HOURIHANE, J., concur.