SC Administrative Law Court Decisions

I. INTRODUCTION

Safety Disposal Systems, Inc. ("SDS") sought a contested case hearing to challenge a decision by the South Carolina Department of Health and Environmental Control ("DHEC", or "the Department") to issue Administrative Order 01-012-A, 01-06-HW, 01-03-SW. This appeal places contested case jurisdiction in the Administrative Law Judge Division under S.C. Code Ann.§§ 1- 23-310 et seq. (Rev. 1987 & Supp. 2000) and 25 S.C. Code Ann. Regs. 61-72.201 (Supp. 2001). After considering the evidence and applicable law, the decision to issue the order is upheld as modified by the Department's stipulations at trial as discussed below.

II. ISSUES

A. Motion in Limine

On July 9, 2001, SDS filed a motion in limine seeking to exclude various items of evidence relating to the Department's claims.

1. Evidence relating to prior Consent Orders

SDS sought to exclude evidence relating to two Consent Orders entered into by Chambers, Inc. and DHEC in 1993 and 1995. The Department stipulated that the evidence relating to the prior consent orders was introduced to prove violations of additional operational conditions that were imposed by those orders. The Department argued that when the subject permit for the facility was transferred to SDS, SDS agreed to assume responsibility for all obligations under the permit, as well as all obligations under any consent orders that Chambers had executed. These consent orders contained requirements relating to future conduct, and specifically included the requirement that the operator must maintain all incinerator exhaust and temperature monitors and associated waste feed interlocks.

Because the Department alleged that SDS violated conditions of the 1993 and 1995 Consent Orders, those orders are admitted into the record to show SDS was obligated to obey them, and that its failure to do so constituted a legal basis for this action. Testimony by Brian Barnes, the Department's enforcement officer for this facility, established that the additional requirements imposed by the 1993 and 1995 Consent Orders were written into the SDS Title V air permit when it was issued in July 1999, thereby making those requirements applicable to SDS. In paragraph 5 of its Petition for Administrative Review, SDS admitted that it assumed all operating permits and construction permits for the facility, as well as the obligation to operate the facility in accordance with any and all consent orders in effect at the time of the transfer of ownership of the facility. Thus, the Department was allowed to introduce Consent Orders 93-037-A and 95-84-A for the limited purpose of establishing that SDS was required to maintain all incinerator exhaust and temperature monitors and associated waste feed interlocks.

At trial, SDS also attempted to exclude any reference to previous violations noted in Consent Order 98-34-A, entered into between the Department and SDS on May 26, 1998, following a fire at the facility and violations noted in 1997 and 1998. In addition to the requirements imposed upon SDS in the 1993 and 1995 Orders, the 1998 Order contained a requirement that the facility operate and maintain a hopper fire suppression system to ensure that any fires or burning waste left in the hopper would be extinguished. SDS argued that because that requirement was not contained in the facility's 1999 Title V Permit, the Permit Shield language means that the Permit's requirements were the only requirements applicable to the facility. SDS further argued that since the terms of a Consent Order are in the form of a contract, the Department could not attempt to enforce its terms in an administrative proceeding before the Division.

In support of its argument, SDS cited Exide Corp. v. SCDHEC, 99-ALJ-07-0417-IJ (1999), a case in which the Department attempted to bring an action to enforce the provisions of a Consent Order regarding the remediation of a hazardous waste site. Judge Anderson ruled that since the terms of a Consent Order are in the form of a Contract, the Division did not have the jurisdiction to enforce the requirements of a Consent Order, and that the Department should seek enforcement of the Order before the Circuit Court. However, the agency's action in this case is not identical, and neither are the circumstances underlying the issuance of the Order.

First of all, SDS was obligated to comply with the requirement to maintain the fire suppression system by the terms of its Title V Permit. Under Attachment C of the SDS Title V Permit (Applicable and Non-Applicable Federal and State Regulations), SDS certified that it is subject to S.C. Code Ann. §§48-1-10 et. seq, the Pollution Control Act. Sections 48-1-50 (3) and (4), and 48-1-330 of the Pollution Control Act vest the Department with the authority to issue and enforce orders with regard to a facility's discharge of air contaminants, and to issue civil penalties for the violation of those orders. There are two issues here: (1) whether the Department can penalize SDS for its alleged failure to comply with the terms of the 1998 Consent Order, and (2) whether the Department may, in this action, force SDS to comply with the terms of the Order.

To the extent that the Department's Order in this case assessed a civil penalty for SDS's failure to comply with the provision of the 1998 Consent Order requiring that it maintain and operate the hopper fire suppression system, there is no question that the Department may issue an Administrative Order and punish such conduct. Further, the Division has jurisdiction of this issue when the Department revokes a permit on grounds including violation of a prior consent order. To the extent that the Department's Order in this case ordered SDS to resume operating and maintaining the hopper fire suppression system pending closure, the fact that the 1998 Consent Order was issued pursuant to the Pollution Control Act indicates that there is nothing in the permit shield that would prohibit DHEC from taking such an action. I find this situation distinguishable from the Exide matter. The matter under review in Exide involved an agreement regarding how a remediation action was to be undertaken, whereas this case involves the method by which the Department intended to ensure continuing compliance with the regulatory requirement that SDS minimize fugitive emissions, and compliance with Part 7.0 A. 1, of its Title V permit, which prohibits SDS from allowing waste to burn outside of the incinerator units. In this situation, while taking a matter to Circuit Court to force compliance with a previously issued Order is one venue for redress of the problem, it is not necessarily the only remedy available. In light of the multitude of violations cited in this case, requiring the Department to pursue a separate action in a separate forum to force compliance with a single requirement does not serve the interests of judicial economy.

SDS also attempted to exclude reference to requirements under, and violations cited in the 1998 Consent Order, claiming that the Order includes a "nonadmissions" clause. SDS claimed that the provision of the 1998 Order which states that SDS and the Department, "without the adjudication of any issues of fact or law and upon the consent of the parties concerned hereto, hereby agree to the terms of this Consent Order as follows:" means that SDS's agreement to sign the Order does not constitute an admission of any sort. The Department's witness Brian Barnes testified that the Department does occasionally include language in orders where a party stipulates that its entry into the Consent Order will not constitute an admission of a violation. However, he stated that in the case of this particular Order that language was not included.

I am unpersuaded by SDS's argument that the "without the adjudication of any issues of facts or law" phrase by itself constitutes a nonadmissions clause. Every Consent Order is entered into because the parties wish to forego the necessity of resorting to the adjudication of the issues. Even if an order contains a "nonadmissions" clause, a permittee is required to obey the conditions of that consent order .

2. Evidence underlying the decision to revoke the Title V Permit

In its Motion in limine and at trial, SDS argued that the Department may not revoke a Title V Air permit by means of an Administrative Order. SDS cites no authority for the proposition that specifically prohibits the Department from using an Administrative Order to revoke a permit, other than to state that an enforcement action and a permit revocation are two distinct and separate procedures. However, there is no logical or legal reason why an Administrative Order cannot perform both functions. I find that the Order under review provided SDS with notice of the proposed revocation, the factual and legal bases relied upon by the Department, and opportunity to be heard. Counsel for SDS also argued that the Department did not follow the appropriate procedure for revoking a Title V permit, citing S.C. Code Ann. Regs. 61-62.70.7(f):

(f) Reopening for cause.

(1) Each issued permit shall include provisions specifying the conditions under which the permit will be reopened prior to the expiration of the permit. A permit shall be reopened and revised under any of the following circumstances...:

(i) Additional applicable requirements under the Act become applicable to a major Part 70 source with a remaining permit term of 3 or more years. Such a reopening shall be completed not later than 18 months after promulgation of the applicable requirement. No such reopening is required if the effective date of the requirement is later than the date on which the permit is due to expire, unless the original permit or any of its terms and conditions has been extended pursuant to SECTIONS 70.7(c)(1)(ii).

(ii) Additional requirements (including excess emissions requirements) become applicable to an affected source under the acid rain program. Upon approval by the Administrator, excess emissions offset plans shall be deemed to be incorporated into the permit.

(iii) The Department or EPA determines that the permit contains a material mistake or that inaccurate statements were made in establishing the emissions standards or other terms or conditions of the permit.

(iv) The Administrator or the Department determines that the permit must be revised or revoked to assure compliance with the applicable requirements.

(2) Proceedings to reopen and issue a permit shall follow the same procedures as apply to initial permit issuance and shall affect only those parts of the permit for which cause to reopen exists. Such reopening shall be made as expeditiously as practicable.

(3) Reopenings under Section 70.7(f)(1) shall not be initiated before a notice of such intent is provided to the Part 70 source by the Department at least 30 days in advance of the date that the permit is to be reopened, except that the Department may provide a shorter time period in the case of an emergency.

SDS claims that because R. 61-62.70.7(f)(2) and (3) require advance notice to the permittee and the same procedures for initial permit issuance - public notice and an opportunity for comment - for a permit "reopening", a permit revocation requires the Department to follow the same procedure. First of all, R. 61-62.70.7(f)(2) refers to "[p]roceedings to reopen and issue a permit...," and is to be used in situations where the Department deems it necessary to either revise a permit, or to revoke an existing permit prior to its expiration date and replace it with a new permit. This is not the situation before the Court in this case. Nothing in the record indicates that the Department intended to revise or replace the existing permit; the record indicates that the Department intended to permanently revoke SDS's permit and close the facility.

S.C. Code Ann. Regs. 61-62.70.6, in specifying standard Title V permit contents, also addresses the issue of revocation:

(6) [all permits shall contain] [p]rovisions stating the following:

(i) The permittee must comply with all conditions of the Part 70 permit. Any permit noncompliance constitutes a violation of the South Carolina Pollution Control Act and/or the Federal Clean Air Act and is grounds for enforcement action; for permit termination, revocation and reissuance, or modification; or for denial of a permit renewal application.

(ii) It shall not be a defense for a permittee in an enforcement action that it would have been necessary to halt or reduce the permitted activity in order to maintain compliance with the conditions of this permit.

(iii) The permit may be modified, revoked, reopened and reissued, or terminated for cause. The filing of a request by the permittee for a permit modification, revocation and reissuance, or termination, or of a notification of planned changes or anticipated noncompliance does not stay any permit condition.

Neither of these regulations are at odds with the Department's general grant of authority to revoke air permits under S.C. Code Ann. §48-1-50(5) or with the procedural requirements of the APA under S.C. Code Ann. §1-23-370(c). Read together, the requirements call for nothing more than notice to the permittee of the intended agency action, the reason for the action, and an opportunity for a hearing. SDS's claim that it should have an opportunity to contend that the permit should not be revoked before the Department makes its decision is equally misguided, as this would result in a set of multiple hearings, the first prior to the agency decision, and a second challenge after the Department's decision. While due process and the statutory scheme afford SDS the right to a hearing in this matter, there is no authority to support the proposition that it has a right to multiple hearings.

SDS essentially argues that although S.C. Code Ann. §48-1-50(5) and S.C. Code Ann. §1-23-370(c) lay out some of the procedural requirements for permit revocations, R. 61-62.70.7 provides additional requirements for revocation of Title V permits. This argument cannot stand. While a regulation does have the force of law, it must fall when it alters or adds to a statute. Banks v. Batesburg Hauling Co., 202 S.C. 273, 24 S.E.2d 496 (1943); Society of Professional Journalists et al v. Sexton and DHEC, 283 S.C. 563, 324 SE2d 313 (1984); Goodman v. City of Columbia, 458 SE2d 531, 318 S.C. 488 (1995). Simply put, no regulation can mandate additional procedural requirements for a specific kind of permit revocation beyond the statutory framework established by the Administrative Procedures Act.

SDS also cites Marietta Garage, Inc. v. S.C. Dept. of Public Safety, 522 S.E. 2d 605 (Ct. App. 1999) for the proposition that it was entitled to a hearing and an opportunity to show that it was in compliance before DHEC issued an administrative order revoking its Title V permit. The instant proceeding provides SDS exactly that. In this matter, the Department took the position that the permit revocation was stayed, as S.C. Code Ann. Regs. 61-72.205(A) allow SDS to remain in operation pending adjudication of the merits of the case. Regardless of the Court's view of the applicability of the automatic stay provision in such matters, the fact of the matter is that the Department did not attempt to summarily shut down operations at the facility prior to this hearing. SDS has been afforded an opportunity to present its case prior to the agency's action becoming final.

SDS also claimed that it should be given an opportunity to cure the deficiencies complained of at the facility, while the Department cites Garris v. Governing Bd. of South Carolina, 319 S.C. 388, 461 S.E.2d 819 (1995) (Garris I) to substantiate its argument that the hearing need only give the permittee an opportunity to challenge the order by showing that in fact it had complied with the law. SDS cites the Supreme Court's reversal in Garris v. Governing Bd. of South Carolina, 333 S.C. 432, 511 S.E. 2d 48 (1999) (Garris II) in furtherance of its claim that in a revocation proceeding, a permittee must be allowed the opportunity to show that it has corrected cited deficiencies. However, this is not the Court's holding in Garris II. In Garris II the Court stated: "[w]e also addressed Garris's argument, holding that the APA does not require Facility to give him time to correct any deficiencies, but only requires [The State Reinsurance] Facility to give him an opportunity to show he had complied with the law." Id at 448 (emphasis added). The Supreme Court reversed the Court of Appeals ruling in Garris II on entirely different grounds that are inapplicable to the present case, and the citation above indicates that the Court found it unnecessary to revisit its earlier ruling on this issue.

In any event, SDS's argument that the Department's decision to revoke the Title V Permit is unlawful because of its failure to follow the technical procedures specified in R. 61-62.70.7 is unpersuasive because it fails to even allege that it was, or could have been prejudiced by the alleged failure. The cited regulations provide for public notice and public comment, and the right to request a non-adjudicative public hearing before Title V permits are issued. Nowhere in its pleadings or in arguments at trial did SDS state that it had been harmed by these allegedly improper denials, and there is no showing that had the agency decision been placed out for public notice and comment, the Department's decision would somehow have been changed. Absent a showing of prejudice, it is not enough to simply allege a defect in the Department's procedure. Ballenger, et.al. v. SC DHEC, 331, S.C. 247, 254, 500, S.E.2d 183, 186 (Ct.App. 1998).

3. Abuse of Discretion

SDS also claims that DHEC treated it more harshly than other facilities. The Department need not exercise its authority in the same fashion in every situation, its actions in other enforcement cases are not relevant to this proceeding. "An agency need not exercise its discretion identically in every case. 'A penalty that is within the authority of the agency is not rendered invalid in a particular case because it is more severe than sanctions imposed in other cases' and 'mere unevenness in the application of the sanction does not render its application in a particular case unwarranted in law.' [citation omitted]." Deese v. South Carolina Bd. of Dentistry, 286 S.C. 182, 332 S.E.2d 539 (1985). As long as the Department's action is within the range of possible remedies established by law, SDS cannot claim that it was inappropriate. "The Board was clearly authorized by Section 40-15-200 of the South Carolina Code of Laws of 1976 (Supp.1984) to revoke or suspend Deese's license, reprimand him, or take any other reasonable action short of license revocation or suspension. Since the sanctions were within those established by law, Deese's contention that they were arbitrary and capricious is without merit." Id, 286 S.C. at 185. The Department has the authority to revoke this permit under S.C. Code Ann. §48-1-50(5). R. 61-62.70.6 (i) states: "Any permit noncompliance ... is grounds for enforcement action; for permit termination, revocation and reissuance, or modification; or for denial of a permit renewal application...,"; thus, the sanction sought here is legally available. The evidence adduced at the hearing justifies the sanction sought by the Department.

4. Impossibility

SDS's pleadings claim that it cannot pay fees and penalties due because it is without the means to pay, and interposes impossibility as a defense. SDS agreed to pay some of the outstanding fees pursuant to a consent order, and those obligations are enforceable as a matter of law, not unlike a contract. With regard to all the fees, it is obligated to pay them under S.C. Code Ann. §44-93-160 (B). Where a party alleges that fulfilling its obligations is "impossible" merely because it is too expensive, the legal defense of impossibility is unavailable. Hawkins v. Greenwood Development Corp., 328 S.C. 585, 493 S.E. 2d 875 (Ct. App. 1990); Moon v. Jordan, 301 S.C. 161, 390 S.E. 2d 488 (Ct. App. 1990). Impossibility "...must be real and not a mere inconvenience. 17A Am. Jur.2d Contracts § 673, at 681 (1991). "A party to a contract cannot be excused from performance on the theory of impossibility of performance unless it is made to appear that the thing to be done cannot by any means be accomplished, for if it is only improbable or out of the power of the obligor, it is not deemed in law impossible." Hawkins, 328 S.C. at 593.

A. General Findings

Having observed the witnesses and exhibits presented at the hearing and closely passed upon their credibility, taking into the consideration the burden of persuasion by the parties, I make the following Findings of Fact by a preponderance of the evidence:

1. Notice of the date, time, place, and nature of the hearing was timely given to all parties.

2. On February 23, 2001, the Department issued Administrative Orders 01-012-A; 01-06-HW; 01-03-SW. SDS timely appealed the Order.

3. The Order alleged that SDS had violated numerous Air Quality and Infectious Waste statutes, regulations, permit conditions, and Consent Orders.

4. The Order revoked SDS's Title V Air Permit, denied its applications for Infectious and Solid Waste Permits, and ordered SDS to begin an orderly process of shutting down the facility. It also required the immediate payment of $ 337, 538.11 in past due infectious waste fees and penalties, payment of a past due Title V permit fee in the amount of $2,178.00, and assessed a $ 226,000.00 penalty for air violations.

5. The facility consists of three "starved air" incinerators, with a common permitted ambient emission point. ⁽¹⁾ The system controls air emissions using several techniques. The facility limits the amount of oxygen in the incineration chamber to control the rate of burning. Gases pass from the primary chambers to secondary and tertiary chambers for enhanced incineration. The facility controls the pH of the emissions by injecting powdered sodium sesquacarbonate into the combustion gases to eliminate acid. The sorbent injector is required to have an audible alarm that alerts the operator when the level of sodium sesquacarbonate is low. The permit does not allow the facility to incinerate waste without a functioning acid scrubber system. Particulate matter is removed from the emissions by means of a Electrostatic Precipitator (ESP) system, which uses a static charge to cause particulates to fall out of the combustion gases.

6. The facility is also required to conduct continuous emissions monitoring (CEM) for O₂, CO, CO₂, opacity, and temperature. The permit also requires SDS to maintain and operate an automatic safety interlock system. In the event that any of the CEMs detect excessive levels of emissions or cease functioning, the interlock must engage. The interlock stops the operator from placing more waste into the loading hopper by preventing the hopper door from opening until emission levels return to acceptable parameters.

7. The permit prohibits SDS from burning waste outside of the primary incinerator chamber, and requires SDS to control fugitive emissions by employing a hopper fire suppression system (and as necessary, a hose) to extinguish hopper fires. SDS is required to extinguish smoldering ash leaving the primary chamber by using a quench tank. The interior of the chamber is lined with a refractory material that insulates the steel shell of the incinerator. In the event that the incinerator fire burns through the refractory and the steel shell of the chamber, SDS is required to prevent fugitive emissions in accordance with its Operations and Maintenance (O&M) Manual by immediately plugging the hole with kao wool, shutting down the unit, and repairing the damage.

B. Air Quality

8. Chambers, Inc. entered into Consent Orders with the Department in 1993 and 1995. These Orders imposed additional operational conditions on the incinerators. Under the Orders the operator was required to maintain all incinerator exhaust and temperature monitors and associated waste feed interlocks. When SDS purchased the facility in 1996, it also assumed the duty to comply with these requirements. These requirements were incorporated into the facility's current Title V permit in 1999.

9. In 1998, SDS entered into a Consent Order following a fire at the facility. The Order cited SDS for numerous violations of Air Quality regulations and permit requirements. SDS admitted to two opacity violations, a source test where the average emission rate was found to be excessive, several occasions where SDS was emitting excessive fugitive emissions from an Electrostatic Precipitator (ESP), two occasions where SDS continued charging of waste while the facility was in violation of the applicable opacity limit, one instance where the facility was operating with the acid scrubber system malfunctioning, some sixteen occasions where SDS discharged excess fugitives from 16 hopper fires and from waste burning outside of the incinerator units, and a fugitive emission from ESP flyash. The Order imposed an additional operational condition on the facility; and required SDS to operate and maintain a hopper fire suppression system to prevent waste from burning outside the incinerator. DHEC imposed a $50,000 fine, which was by SDS.

10. On July 14, 1999, the Department issued Part 70 Air Quality Permit TV-1280-0021 to SDS.

11. The Title V permit and State regulations required SDS to conduct Continuous Emissions Monitoring (CEM) for Carbon Dioxide (CO₂), Oxygen (O₂), Carbon Monoxide (CO), and opacity. The Title V permit and State regulations also required continuous temperature monitoring of the gases exiting the incinerator's tertiary chambers. SDS was required to submit quarterly reports detailing any excess emissions or temperature excursions. SDS was not allowed to operate the incinerator without conducting continuous emissions monitoring.

12. The Title V permit and State regulations required SDS to have, and maintain in working order, an automatic interlock system. The system must automatically prevent the operator from adding additional waste to the incinerator if any of the required monitoring equipment is not functioning or if the equipment indicates that any of the required parameters is out of tolerance. Diana Zakrzwski, the Department's permitting engineer for this facility, testified that the permit requires the interlock to engage to prevent charging of additional waste when a monitor has ceased functioning or is removed from the system.

13. For the period up to May 26, 2000, applicable law required SDS to recertify the monitors annually according to USEPA NSPS Regulation 40 CFR 60 Appendix B. After that date, a regulatory change provided for annual recertification according to the manufacturer's standard.

14. At the time of the issuance of the Order, SDS had not performed an annual recertification for its CEM equipment under the earlier requirement. Tim Cooper, who worked as a Maintenance Manager at SDS from March of 1998 until July of 2000, testified that during his employment, certifications on the CEM equipment were not performed regularly as required. As to the requirement existing after May 26, 2000, Mr. Huffman testified that when SDS replaced the CO and CO₂ CEM equipment after the monitor failure in July of 2000, these monitors were recertified. Brian Barnes stated that SDS had never submitted to the Department any documentation relating to an annual recertification, although SDS's annual compliance certification states that "the equipment" was RATA certified on August 8, 2000.

15. Melissa Poage, a Department inspector, testified that on June 22, 2000, she inspected the facility and noted that the carbon monoxide (CO) monitor had been removed. Brian Polk, a former SDS employee, testified that the monitor had malfunctioned and required repair.

16. The facility continued to charge waste after the CO monitor had been removed. Ms. Poage testified that the facility continued to operate for three weeks without the CO monitor in place.

17. On July 11, 2000, Ms. Poage noticed that the CO monitor had not been shipped off for repair, but instead had been left in the office of an SDS employee. Brian Polk, a former SDS employee, testified that he removed the monitor but never sent it off for repair.

18. On July 11, 2000, SDS employees reinstalled the CO monitor. Ms. Poage testified that the monitor appeared to function but that the interlock did not function properly.

19. Tim Cooper testified that the interlock system was not functioning when he came to work at SDS in March of 1998 and was not functioning as of the time he stopped working at the facility in July of 2000. He testified that the solenoids, which are designed to lock the hopper door, were in place but never functioned. Mr. Cooper testified that repair of the interlock was an item scheduled for repair, but that he never got to it.

20. Mr. Ray Huffman, who became SDS's plant manager in July of 2000, admitted that upon his arrival at the facility, the interlock was not functioning, and that he repaired the system.

21. After the Department learned of the CEM failure, Department staff contacted Carlos Campos, the President of Med/Waste, SDS's corporate parent, and after a series of teleconferences instructed SDS to shut down the facility until the CEM issue could be resolved. Richard Sharpe testified that even after learning of the CEM failure, Mr. Campos initially stated that he intended to continue operating the facility without the CEM equipment operating, and requested that the Department waive the CEM requirement.

22. During the course of these teleconferences, waste trailers continued to arrive at the facility, until more than forty trailers were onsite on October 24, 2000. The Department allowed SDS to process two putrescent trailers and then shut down the facility.

23. Ms. Poage testified that on numerous occasions the CEM monitors had unreliable, inconsistent, and even impossible readings, or could not be properly calibrated. She testified that SDS did not cease operations on any of these occasions, with the exception of the incidents occurring in July of 2000.

24. Under 40 CFR 60.13(d)(1) and (d)(2), SDS is required to perform daily zero (the low level value between 0 and 20 percent of span value) and span (50 to 100 percent of span value) calculations for its CEM equipment.

25. To perform these daily calibrations properly, SDS must maintain an adequate supply of standard calibration gases for each monitor at the facility.

26. On July 25, 2000, Melissa Poage discovered that SDS's cylinder containing CO₂ calibration gas (Cal Gas) had run out, and had been empty since July 22, 2000. The monitor had been reading a continuous 20% concentration of CO₂ since running out, which is inconsistent with a properly calibrated monitor. SDS admitted this violation in a letter to the Department on August 2, 2000.

27. Despite the fact that SDS was unable to properly calibrate its CO₂ monitor, the facility continued to operate its incinerators until Ms. Poage discovered the problem on July 25, 2000.

28. The Title V permit requires SDS to submit a number of periodic reports to the Department. Richard Sharpe, the director of the Bureau of Air Quality's division of compliance and enforcement (Compliance Management Division) testified concerning the role of these reports under the Title V program. The Title V program requirements of periodic self-reporting and annual compliance certification were intended to lessen the burden on regulatory agencies by requiring the facility to monitor itself, to know what the regulations require, to report conditions, and certify its compliance statuts.

29. In addition to a filing of quarterly reports, SDS is also required to certify annually whether or not it is in compliance with all the permit's requirements, and with all applicable statutes and regulations. If the facility is in violation, SDS is required to report accurately all violations. These certifications are due forty-five days after the anniversary of the permit's issuance.

30. Brian Barnes, the Department's enforcement officer and document custodian, testified that SDS had failed to submit a number of reports and certifications to the Department on the date the Administrative Order was issued. SDS failed to submit the following reports, either in a timely fashion, submitted no report at all, or submitted an incomplete report:

A. Quarterly reports on charge rates for tires, medical waste, and special waste, calculated in million Btus/day: SDS failed to submit these reports for the third and fourth quarter of 1999, and for all four quarters of 2000.

B. Quarterly certification of compliance with the facility's Operation and Maintenance (O&M) Plan: SDS failed to submit these reports for the third and fourth quarter of 1999, and for the first and fourth quarters of 2000.

C. Quarterly Acid Gas System Operation Certification: SDS failed to submit these reports for the third and fourth quarter of 1999, and for the first and fourth quarters of 2000.

D. Quarterly Electrostatic Precipitator Operation Certification: SDS failed to submit these reports for the third and fourth quarter of 1999, and for the first and fourth quarters of 2000.

E. Quarterly report on Combustion Efficiency Exceedances for each unit: SDS failed to submit these reports for both unit 1 and 2 for the third and fourth quarter of 1999, and for all four quarters of 2000.

F. Annual report on the facility's Ash Quality Carbon Content: SDS failed to submit the annual report for the year starting July 29, 1999, through July 28, 2000.

G. Annual certification for the Title V Permit: SDS failed to submit the annual certification for the year starting July 29, 1999, through July 28, 2000. While Ray Huffman, a representative of SDS stated that he timely submitted an annual certification, Mr. Barnes testified that the Department did not receive it, The Department did receive an annual certification on October 25, 2000. However on cross-examination Mr. Huffman admitted that the certification was not complete in that it failed to disclose the July 25, 2000, incident where the CO₂ calibration gas cylinder ran out, the other July incidents where the CO₂ monitor failed, and the fact that the interlock system was not functioning.

H. A quarterly report on temperature exceedances for each unit: SDS failed to submit reports on temperature exceedances for the fourth quarter of 2000.

I. A quarterly report on CO₂ monitor "downtime": SDS failed to submit CO₂ monitor downtime reports for the third and fourth quarter of 1999, and for all four quarters of 2000.

J. A quarterly report on O₂ monitor "downtime": SDS failed to submit O₂ monitor downtime reports for the third and fourth quarter of 1999, and for all four quarters of 2000.

K. Opacity Excursions and opacity monitor "downtime" reports: SDS failed to submit opacity monitor downtime reports for the fourth quarter of 2000.

L. CO excursions and CO monitor "downtime" reports: SDS failed to submit CO monitor downtime reports for the fourth quarter of 2000.

Mr. Ray Huffman, who became the facility's manager in July of 2000, testified that he eventually submitted some of the missing reports when they were brought to his attention in a Notice of Violation issued by the Department on October 18, 2000.

31. As part of the Title V permitting program, SDS is required to pay annual Title V permit fees. On October 19, 2000, the Department issued SDS an invoice in the amount of $1,980.00 to cover its operations for the 2001 fiscal year. As of the date the Administrative Order was issued, SDS had not paid its Title V permit fees. Witnesses for the Department testified that SDS's failure to pay fees delayed the Department's issuance of approvals for new special waste streams, and requested permit modifications.

32. On November 29, 2000, Roger Stevens, the Department's Low Country District Air Section Manager, inspected the facility and noted smoke coming from the doors of the facility. Smoke had also filled the upper part of the building containing the incinerator units. Two fires which were burning in the loading hoppers of units 1 and 2 were caused by burning plastics sticking to the hopper. A third fire was caused by burning ash that had not been extinguished by the quench tank. Mr. Stevens noted the smoke as he arrived at the facility, and noted that the fire burned from the time of his arrival, his check in, and the arrival of his facility escort. SDS's Title V permit requires it to minimize fugitive emissions by immediately extinguishing hopper fires, and specifically prohibits burning waste outside of the incinerator. Mr. Stevens notified the incinerator operator, Scott Terry, of the burning waste; Mr. Terry stated that he had already asked SDS's maintenance department to extinguish the fire, but they had not done so. Mr. Terry left to get the maintenance staff and SDS workers extinguished the fire approximately three minutes later. Mr. Stevens also inspected the facility's second quarter strip charts which showed that SDS experienced twenty-one opacity exceedances over 30% during that period. The permit limits the opacity to no more than 30% at any one time.

33. On December 12, 2000, Roger Stevens inspected the facility and noted smoke coming from a hopper fire on unit 1. He also noted smoke emitting from the door where the hopper feeds into the primary combustion chamber on unit 2. Mr. Stevens testified that SDS had improperly compiled CEM data reports for the units. The CO report omitted a 159.8 ppm CO exceedance that the strip charts recorded on September 27, 2000. The opacity report was inaccurate, because it reported a 12 minute exceedance on August 24, 2000 as a 6-minute exceedance; omitted an exceedance on August 26, 2000, and reported a 24-minute exceedance on August 29, 2000 as a 12- minute exceedance.

34. On February 7, 2001, Roger Stevens inspected the facility and noted that the sorbent feed system fan for the acid gas scrubber system was not functioning. The Title V permit requires SDS to operate and properly maintain the acid gas scrubber system. Additionally, the permit requires that there be an audible alarm to warn staff of failures in the sorbent feed system. Despite the fact that the feed system had failed, no alarm sounded.

35. Mr. Stevens also noted on February 7 that hot spots on both units had burned through the incinerator shell, allowing uncontrolled fugitive emissions. SDS staff continued to charge waste to the incinerator. Section 5.6.5 of SDS's O&M manual, the preparation and submittal of which was made a requirement of the Title V permit, requires the incinerator operator to plug immediately breaches with kao wool, shut down the incinerators as soon as possible, and permanently repair the breach. Continued operation of the units with burn-throughs present is a violation of SDS's permit requirement to minimize fugitive emissions. Frank Hutchinson, III, a witness called by SDS and qualified as an expert in combustion engineering, environmental engineering and the design and operation of waste energy incinerators, specifically stated that under the O&M Manual, the facility operator cannot properly operate the incinerator with burn-throughs present. He testified that air leaking into a 'starved air' incinerator can degrade the efficiency of the unit.

36. Under CO 98-034-A, SDS was required to maintain a hopper fire suppression system. Brian Polk, a former SDS employee, testified that this system consisted of a sensor that is designed to detect hopper fires and automatically turn on spray nozzles to extinguish the fire. Mr. Polk testified that he had performed maintenance on this system while employed at SDS.

37. Mr. Polk testified that the fire suppression system was difficult to maintain, and that spray nozzles would often be torn off and feed lines would often clog with rust. He testified that SDS only kept the system running for a matter of months, and that SDS staff eventually stopped repairing and using the system, and instead relied on a fire hose to extinguish hopper fires.

C. Infectious Waste

38. On June 16, 1998, SDS entered into Consent Order 98-25-HW, admitting four violations of the South Carolina Infectious Waste Management Act. The Order required SDS to submit to the Department documentation of additional waste handling procedures and to pay a penalty of $22,500.

39. On November 26, 1991, Southland Exchange Joint Venture (a predecessor in interest) had applied for an Infectious Waste Permit from the Department for the Hampton facility. Phil Morris, the Infectious Waste Program Manager, testified that the Program was entirely funded through fees, and that ongoing litigation had prevented the Department from collecting fees until 1994. The resulting manpower shortages in the program delayed processing of the permit application. Over the intervening years, as the Department identified concerns at the facility, it requested that Chambers (and eventually SDS) revise its application several times. Mr. Morris testified that in June of 1999, the Department held a public hearing regarding the permit, a final step in the permitting process. However, starting in May of 1999, SDS had stopped paying its infectious waste fees, and the Department did not issue the permit for that reason. SDS's failure to pay statutory fees was the cited reason for denying the permit in AO 01-012-A, 01-06-HW, 01-03-SW.

40. Under S.C. Code Ann. §44-93-160, SDS is required to pay infectious waste fees to the Department. SDS must pay a fee of $30.00 per ton of infectious waste treated for the first 1,500 tons per month, and a fee of $8.00 per ton for additional waste disposed of each month.

41. The Department assigned an inspector to the SDS facility, and under S.C. Code Ann. §44-93-190, the Department has the authority to impose an additional fee to cover the costs of implementing such a program. The Department required SDS to pay an additional fee of $4.00 per ton of waste treated.

42. SDS failed to pay $121,759.34 in fees for waste disposed of in June, July and August of 1999. SDS entered into Consent Order 99-52-IW whereby it agreed to pay the past-due fees. SDS fulfilled the requirements of this Order.

43. SDS failed to pay $47, 902.24 in fees for waste treated in March of 2000 by the deadline established in the statute, subjecting it to an additional statutory 1% penalty. While SDS did pay the fees, it has not paid the $474.28 penalty due under the statute.

44. SDS failed to pay fees due for waste treated in May, June, and July of 2000. On October 5, 2000, SDS entered into Consent Order 00-28-HW to pay these past-due infectious waste and inspector fees, and the 1% statutory penalty. The total amount due under the Order was $106,389.14, due in four monthly installments. SDS has not paid any of these fees.

45. From August to December of 2000, SDS failed to pay any fees for waste treated during those months. For the months cited in the Administrative Order, SDS has failed to pay a total of $337,538.11 in infectious waste fees, inspector fees, and statutory penalties.

46. On August 2, 2000, Jacob Baker, an Environmental Health Manager for the Department's Infectious Waste Section, inspected the facility. The facility had shut down because of the failure of the facility's CEM equipment. He noted that there were 40 trailers present at the site. Nine of the waste trailers had exceeded the regulatory fourteen-day maximum holding period. Two trailers contained waste in a putrescent state.

47. On September 21, 2000, Mr. Baker inspected the facility and noted used needles on the tipping floor of the facility.

48. During Roger Stevens' inspections on July 10, 2000 and November 29, 2000, he noted additional instances where infectious waste was left on the tipping floor and not immediately cleaned up as required.

49. The SDS facility has a tipping device that can pick up an entire trailer and empty its contents onto the facility floor. Phil Morris testified that the Department had prohibited SDS from using the tipper, because the regulation requires that SDS keep waste under control at all times. The tipper previously had created potential health hazards, as waste containers spilling out of the trailers tended to leak onto the floor. On December 11, 2000, the Department sent SDS a letter denying a recent request for permission to resume using the truck tipper. However, in an inspection report dated November 29, 2000, Roger Stevens noted that SDS did not wait to receive the Department's response to this request, and had resumed using the tipper on several occasions.

50. Mr. Morris testified that the Department was in the process of issuing SDS an Infectious Waste Permit. He stated that other facilities meeting certain requirements under the Infectious Waste Regulations, S.C. Code Ann. Regs. 61-105 (X) are considered permitted under the "permit by rule" provisions, and were not required to be issued a permit. Facilities not falling within the purview of R. 61-105 (X)- such as SDS- require the issuance of a permit.

51. Mr. Morris testified regarding the Department's interpretation of S.C. Code Ann. §44-93-160, entitled "Fees on Commercial Treatment of Infectious Waste; Reports; Penalties." He testified that he had participated in the drafting of the statute, and that in doing so he did not intend to draw a distinction between SDS's facility and other operations. He testified that staff interpreted the statute to require the infectious waste treatment fee to be collected from any facility that treats waste generated from someone other than that facility's owner/operator. Counsel for SDS pointed out that the statute references "commercial" treatment of infectious waste only in the heading of the code section. Counsel for SDS inquired about the Department's practices regarding the operation of the Spartanburg Medical facility's infectious waste treatment facility, and Mr. Morris testified that as soon as the Spartanburg Medical facility began accepting waste from other infectious waste generators the Department started assessing fees on that waste.

D. Solid Waste

52. SDS submitted a municipal solid waste incinerator permit application to the Department on July 12, 2000. In this application, SDS requested a permit under the Solid Waste Incineration and Solid Waste Pyrolysis Facilities Regulations, S.C. Code Ann. Regs. 61-107.12. The facility is subject to these regulatory requirements with regard to solid waste handling activities.

53. Processing of this permit application was delayed because it was not administratively complete. The Department notified SDS of the fact that the application was incomplete in letters sent on July 18, August 24, and November 15, 2000. The Department may not process a permit application unless it is complete. See R. 61-107.12 (D)(2)(a).

54. Art Braswell, the Director of the Department's Solid Waste Permitting Section, testified that the Department denied the request under S.C. Code Ann. §44-96-300. This statute allows the Department to deny a permit application where the applicant has a prior history of violations of environmental statutes, regulations, or permit requirements.

55. Mr. Braswell testified that he was notified of SDS's current air and infectious waste violations, as well as its prior enforcement history, and its nonpayment of infectious waste and Title V permit fees. He made the decision to deny the Solid Waste Permit based on these violations.

E. Additional Waste Handling and Operational Concerns

56. During Roger Stevens' inspection on July 5, 2000, he noted that special wastes were stored on the tipping floor in an unsafe manner. The wastes were stored directly adjacent to the incinerator hoppers, creating a fire hazard. No aisle space was present, and leaking containers could not be easily identified. Melissa Poage noted similar waste storage problems during the inspection period running from June 6, 2000 to July 25, 2000.

57. During Roger Stevens' inspections on July 5 and 10 of 2000, he noted that the facility's ash storage was nearing capacity. He was informed by SDS personnel that the facility was experiencing problems having the ash hauled off for disposal.

58. Roger Stevens testified that on June 29 of 2000, the company operating the facility's wastewater pretreatment plant terminated its services for nonpayment. Despite the fact that SDS's pretreatment plant was not operating, the facility continued to incinerate waste, and used the ash quench tanks and the facility's lower floor as wastewater storage tanks. The facility continued to operate until July 4, 2000, when the lower floor and quench tanks became filled with wastewater. This lower floor and quench tanks are not permitted for the storage of wastewater. Pumps discharging to the town's system resumed operation on July 5, 2000.

59. Mr. Stevens testified that on July 5, 2000, he observed that hot spots previously noted on the incinerator units had not been repaired. Facility staff notified him that the facility did not have sufficient supplies of refractory material on hand to repair the hot spots, and that cash flow problems prevented an earlier purchase of the material.

60. Ms. Poage testified that in June and July of 2000, there was significant ash build-up on the lower floor of the facility, caused by gaps in the transfer ram areas of the incinerator. She also noted significant water leaks under both units. Ms. Poage testified that burning ash had fallen out of the incinerator on several occasions.

61. Mr. Stevens testified that on July 10, 2000, the facility ran out of sawdust, which it uses for absorbing infectious waste spills. The facility was instead using some of its special waste to attempt to absorb spills. The facility's sawdust supplier had terminated services for nonpayment.

62. Mr. Stevens testified that on July 12, 2000, the Town of Hampton terminated water and sewer service to the facility for nonpayment.

63. Mr. Stevens testified that on July 12, 2000, he learned that the facility's supplier of T-200, the sorbent used in the facility's acid gas scrubber, had terminated supplies for nonpayment. Mr. Cooper also testified to this fact.

64. Mr. Polk testified that SDS had problems with employees' payroll checks being dishonored for nonpayment on several occasions.

65. Mr. Cooper testified that SDS had a problem getting monitors and CEM equipment repaired because the repair company was owed money on a previous repair and demanded payment before performing any more work.

F. Penalties

66. Testimony indicated that the Infectious Waste Section did not assess any penalties for the Infectious Waste violations other than the statutory penalties assessed for nonpayment of fees.

67. Brian Barnes testified concerning the Department's penalty assessments for the Air violations. Mr. Barnes testified that he has worked for the Department's Bureau of Air Quality, Enforcement Section since June of 1990; and that he participates in the issuance of approximately fifteen consent orders every year.

68. Mr. Barnes testified Department staff generally goes through a peer review process when reviewing the appropriateness of penalty calculations. However, in high profile cases, an enforcement officer seeks input from senior members of the Department's staff. This is the Bureau of Air Quality's standard procedure for any important case. In this case, Mr. Barnes submitted his penalty calculations to senior members of the Bureau of Air Quality for review of the penalty calculation.

69. For the violations related to the nonfunctioning interlock system, and the nonfunctioning CEM equipment, Mr. Barnes assessed a base penalty of $75,000, and doubled the penalty as a repeat violation, as per the Department's Uniform Enforcement Policy, for a total of $150,000. This penalty was assessed in light of the fact that the Department had documented approximately twenty-five days of interlock and CEM violations. Mr. Barnes testified that for a facility with a single CEM violation for one day, $3,000 would be consistent with the Department's practices. Mr. Cooper testified that for the entire period of his employment from 1998 to 2000, the interlock system was not operational, and the Department could have assessed a penalty for every day the facility was operating without the interlock system.

70. For the violations related to SDS's failure to minimize fugitive emissions, including emissions from hopper fires, holes in the side of the incinerator, burning waste falling out of the incinerator, and burning ash that should have been extinguished in the quench tanks, Mr. Barnes assessed a penalty of $2,000. Mr. Barnes testified that this penalty was only $2,000 because some of the other violations (i.e., the violations in Finding of Fact 73) closely relate to the same conduct.

71. For SDS's failure to complete required reports and submit them to the Department, Mr. Barnes assessed a penalty of $28,000. SDS failed to submit thirty-seven reports, which constitutes a penalty of less than one thousand dollars per report. Mr. Barnes testified that in the past the Department has assessed penalties as high as $2,000 for a facility's failure to submit a single report. ⁽²⁾ The fact that SDS later submitted some of the reports after being notified by the Department does not mitigate this violation.

72. Because the Department stipulated at the hearing that the spark rate indicators were present at the facility, it deleted a previously-calculated penalty of $2,000 for that violation from the total assessed in the Administrative Order.

73. For all violations relating to the Title V permit condition that SDS not allow waste to burn outside of the incinerator units, Mr. Barnes calculated a penalty of $10,000. This includes violations relating to the hopper fires and burning ash.

74. For SDS's failure to conduct an annual CEM certification, according to the standard applicable prior to May 26, 2000, Mr. Barnes assessed a penalty of $3,000. Mr. Barnes testified that when the Department imposed penalties on other facilities which failed to conduct an annual certification, $3,000 was consistent.

75. For SDS's failure to conduct an annual CEM certification, according to the standard applicable prior to May 26, 2000, when the regulation was revised, Mr. Barnes assessed a penalty of $3,000.

76. For SDS's failure to comply with its Title V Permit requirement that it maintain the acid gas scrubber system, Mr. Barnes assessed a penalty of $2,000. Mr. Barnes stated that in enforcement actions where a facility allows air pollution control equipment to fall into disrepair, a fine in the amount of $2,000 is consistent with the Department's practices, and that the Department often fines a company more than this for such occurrences.

77. In 1998, SDS had been cited for failing to properly operate and maintain the hopper fire suppression system. Mr. Barnes testified that the Department viewed SDS's violation of its previous agreement as a very significant violation and assessed a $10,000 penalty for this violation. Mr. Polk testified that the fire suppression system only functioned for a matter of months during his years of employment at the facility, and the Department could have assessed a similar penalty for every day the system was inoperative.

78. For the violations associated with SDS's reinstalling the CO monitor after it malfunctioned, without first having the monitor properly repaired and recalibrated by a trained technician, Mr. Barnes assessed a penalty of $2,000. This is consistent with the Department's practices, but Mr. Barnes testified that it was toward the lower range of the penalties assessed for this kind of violation. While SDS did take pains to note that Mr. Polk had attempted to repair the monitor, and that it initially appeared to function, counsel for SDS at trial also made objections to the Department's attempts to elicit testimony from Mr. Polk relating to the functions of the CEM equipment on the basis of his lack of expertise.

79. For the violations associated with SDS continuing to operate the incinerators after allowing the calibration gases for the CO₂ analyzer to run out, Mr. Barnes testified that he assessed a penalty of $2,000. The gaseous monitor strip chart began sending an incorrect default value of 20% starting on July 22, 2000, when the calibration gas ran out, although the display on the CO₂ monitor continued to display a normal reading. The gaseous monitor strip chart, and not the display on the CO₂ monitor is the regulatory compliance indicator. Once the strip chart began to record an incorrect default value of 20%, SDS staff should have recognized that the CEM had failed and taken corrective action. The fact that the CEM had previously registered a default 20% value when the CO₂ analyzer had malfunctioned earlier in July, as Ms. Poage testified, further underscores the fact that SDS should have discovered the violation instead of having it pointed out to it by the Department inspector.

80. For SDS's failure to pay Title V Permit fees as required, Mr. Barnes testified that he assessed a penalty of $2,000. Mr. Barnes stated that while he had never been in a situation where a permittee failed to pay statutory permit fees, that he considered a penalty of $2,000 to be low considering the type of violation.

81. The penalty, excluding the penalty for the spark rate indicators, and the penalty for failure to submit reports on unit 3, totals $224,000.

G. The Department's Decision to Revoke Part 70 Air Quality Permit TV-1280-0021

82. Mr. Sharpe, the Director of the Division of Air Compliance Management in the Department's Bureau of Air Quality testified that he participated in the staff decision to revoke SDS's permit. He considered the compliance history of this permittee in making this decision, starting with the 1997 facility fire and regulatory violations that resulted in the issuance of the 1998 Consent Order.

83. Mr. Sharpe testified that the issues relating to the CEM equipment in June and July of 2000 were a factor in his decision. He testified that he was aware of the fact that SDS removed a non-functioning monitor that was required by their permit; that SDS staff claimed they sent the monitor off for repairs; that SDS continued to operate the facility; and that they re-installed the monitor without having it properly repaired and certified. He testified that he was aware of the fact that SDS had allowed the calibration gas for another monitor to run out and kept operating until Department staff discovered the problem. Mr. Sharpe testified that since the violations of the CEM requirements were violations of the Title V permit, he treated them most seriously.

84. Mr. Sharpe testified that the SDS and Med/Waste officials did not appear to appreciate the gravity of Title V permit violations, and that when he spoke with representatives of SDS's corporate parent at the time of the CEM failure, Med/Waste's president initially stated that he wished to continue operating the facility without the CEMs in place and properly functioning.

85. Mr. Sharpe testified that he contacted Pete Light at the time of the CEM failure. Mr. Light is a senior Med/Waste employee who was managing operations at the facility. Mr. Sharpe testified that he asked Mr. Light whether the CEM equipment had been calibrated in the last year, but Mr. Light did not know. Mr. Light asked Melissa Poage, the Department's onsite inspector, to determine whether the recertification had been done. Mr. Sharpe testified that the fact that SDS and Med/Waste staff were relying on Department inspectors to determine whether the facility was in compliance concerned him, and he concluded that SDS was not in control of its own operations, and was relying on the Department's inspector for her expertise in operating the facility.

86. Mr. Sharpe testified that it is the permittee's responsibility to investigate and ensure that it is running a facility properly, and that the Department is under no burden to identify problems that the permittee might overlook. He further testified that the presence of an onsite inspector does not lessen the permittee's responsibility. The inspector's job is merely to report the compliance status of the facility to the Department.

87. Mr. Sharpe testified that environmental permitting in general is based on a system of trust. The Department must trust that the facility will report what its intended operations and activities are and the Department will authorize them to operate in that manner through a permit. In issuing a permit the Department is essentially trusting that the permittee will be aware of conditions that are imposed on operation, and that it will understand and comply with the applicable standards and regulations.

88. Mr. Sharpe testified that with regard to air compliance and enforcement, the Title V permit scheme was designed to replace periodic government inspections with regular self-reporting by the permittee.

89. Mr. Sharpe testified that it would be impossible for the Department's staff to perform all the functions that are served by annual compliance certifications and periodic reporting for all the Title V facilities currently operating in South Carolina.

90. Mr. Sharpe testified that if a facility fails to submit a certification or submits an inaccurate or incomplete certification, the Department cannot determine whether that facility is in compliance. The quarterly and other periodic reports perform a similar function on a more limited scale.

91. Mr. Sharpe testified that as air pollution control laws and regulations become more and more comprehensive, accurate self-reporting and self-monitoring have become critical compliance and enforcement requirements.

92. Mr. Sharpe testified that all the Department's regular enforcement tools, including issuance of Orders, assessment of civil penalties, and the imposition of additional operational conditions had failed to bring SDS into compliance.

93. Mr. Sharpe testified that in twenty years as a government regulator, twelve of which had been in enforcement, he had never before confronted a permittee with such a history of chronic noncompliance. Mr. Sharpe stated that the normal enforcement tools the Department uses to return a facility to compliance had been ineffective.

94. Mr. Sharpe testified that in August 2000, he and other members of the Department's senior management staff met with Carlos Campos, the President of Med/Waste, and Ross Johnston, Med/Waste's corporate counsel and a corporate officer. In the meeting, Department staff expressed the seriousness of the facility's violations, and their very serious concerns concerning SDS's willingness and ability to comply. At this meeting, Mr. Campos assured the Department that SDS would return to compliance and requested that the Department allow SDS to enter into an installment agreement to pay the delinquent fees. As a result of this meeting, the Department and SDS entered into CO 00-28-HW on October 5, 2000 for repayment of the fees. SDS failed to make even a single installment payment on CO 00-28-HW.

95. Mr. Sharpe testified that he considered the option of issuing another Consent Order against SDS with higher penalties, but rejected this option because SDS had recently entered into CO 00-28-HW and failed to comply with the provisions of the Order. He concluded that another Consent Order would not solve the compliance problems at the facility.

96. Mr. Sharpe concluded that penalties would not serve as a sufficient deterrent, because the penalties assessed against SDS in previous Orders had not served as a deterrent. He also concluded that under the existing circumstances, the Department would not be able to collect any significant penalties from SDS.

97. Because one of SDS's defenses in this action is that they are unable to pay a penalty, then civil penalties cannot serve as a deterrent.

98. Having exhausted all other avenues for returning the facility to compliance, Mr. Sharpe concluded that revocation was the only option remaining.

99. Bob King, the Department's Assistant Deputy Commissioner for Environmental Quality Control also testified regarding the decision to revoke the permit. Mr. King is a Professional Engineer and has been employed by the Department since 1972. He has held his current position since 1984.

100. Mr. King also concluded that issuing a Consent Order would be ineffective, as SDS was at that time in violation of CO 00-28-HW, an agreement it had entered into only months earlier.

101. Mr. King received input from the various media (air, infectious waste and solid waste) regarding the decision and relied on their judgment. He testified that all the media represented recommended permit revocation and denying the infectious waste and solid waste permits, and that he made the final decision to revoke the permit. He stated that he and the other staff members reached the conclusion that revocation was the only appropriate option in January of 2001.

Based on the foregoing Findings of Fact, I conclude the following as a matter of law:

A. General Provisions

1. The Administrative Law Judge Division has subject matter jurisdiction in this action pursuant to Chapter 23 of Title 1 of the 1976 Code, as amended.

2. S.C. Code Ann. §44-96-300(E) and (F), 1-23-370 (C), 48-1-50(5) all provide for contested case hearings, conducted pursuant to the APA, to be held if an aggrieved party appeals the Department's denial or revocation of certain permits, or the issuance of an Administrative Order.

3. S.C. Code Ann. §1-23-350 (1986) requires that a final decision in a contested case shall be in writing and include findings of fact and conclusions of law.

4. In weighing the evidence and deciding a contested case on the merits, the Administrative Law Judge must make findings of fact and conclusions of law by a preponderance of the evidence. Anonymous (M-156-90) v. State Board of Medical Examiners, 329 S.C. 371, 496 S.E.2d 17 (1998).

5. With regard to the issue of revocation of the Title V permit and the imposition of civil fines, the Department has the burden of proof. ALJD Rule 29 (B).

6. With regard to the issue of denying the application for a Solid Waste Permit, the Department denied the permit under S.C. Code Ann. §48-96-300 (B) and (B)(4), based on SDS's compliance record. The statute states that the Department shall deny a solid waste permit application if it finds by a preponderance of the evidence that an applicant has a documented history of violation of state or federal environmental law such that the applicant's ability to operate within the law is questionable. The Department has the burden of proof on this issue.

7. With regard to the issue of denying the application for the Infectious Waste Permit, the burden is on the Department to show that SDS did not pay the infectious waste fees. SDS did not deny that it failed to pay the infectious waste fees. SDS has the burden of proving that the Department acted improperly in denying the permit.

B. AIR QUALITY

8. SDS has violated Part 5.0 E. 4 of Title V operating permit #TV-1280-0021 and the applicable portions of Consent Orders # 93-037-A and #95-084-A for its chronic failure to maintain the automatic waste feed interlock in an operational condition at all times.

9. SDS has violated U.S. EPA 40 CFR 40 CFR 60.11(d) Compliance with Standards and Maintenance Requirements, by failing to maintain and operate an affected facility in a manner consistent with good air pollution control practices for minimizing emissions, in that SDS failed to maintain the facility in such a manner as to control fugitive emissions from the hopper, exit area, and primary chambers of its incinerators.

10. SDS has violated the South Carolina Pollution Control Act, S.C. Code Ann. § 48-1-110(d), by violating the terms of Title V operating permit TV-1280-0021 by failing to complete required periodic reports and annual certifications and submit them to the Department.

11. SDS has violated the South Carolina Pollution Control Act, S.C. Code Ann. § 48-1-110(d) because it allowed waste to burn outside the incinerator units in violation of the terms of Title V operating permit TV-1280-0021.

12. SDS has violated the South Carolina Air Pollution Control Regulations, S.C. Code Ann. Regs. 61-62.5, Standard No. 3.1 (prior to May 26, 2000) by failing to certify annually its CEMs in accordance with USEPA NSPS Regulation 40 CFR 60 Appendix B.

13. SDS has violated the South Carolina Air Pollution Control Regulations, S.C. Code Ann. Regs. 61-62.5, Standard No. 3.1 (after May 26, 2000) by failing to certify annually its CEMs in accordance with the manufacturer's specifications.

14. Under the South Carolina Pollution Control Act, S.C. Code Ann. § 48-1-50(3), the Department may require a permittee to comply with the requirements of Consent Orders it has entered into or assumed responsibility for as a successor permittee. The Department similarly has the authority to sanction conduct that violates the requirements of those Orders under §48-1-330.

15. Nothing in the South Carolina Air Pollution Control Regulations or the Title V Permit Shield in TV-1280-0021 prohibits the Department from requiring SDS to comply with the requirements of Consent Orders it has entered into or assumed responsibility for as a successor permittee, or from sanctioning SDS for violations of those Orders.

16. SDS has violated the South Carolina Pollution Control Act, S.C. Code Ann. § 48-1-110(d), because it violated the terms of its Title V operating permit [TV-1280-0021], and Consent Order 95-084-A by failing to maintain the acid gas scrubber system.

17. SDS has violated the terms of Consent Order 98-034-A by failing to maintain the hopper fire suppression system to ensure that any fires or smoldering wastes were extinguished immediately.

18. SDS has violated the terms of its Title V operating permit [TV-1280-0021], the South Carolina Pollution Control Act, S.C. Code Ann. § 48-1-110(d), and §48-1-340, by operating the incinerator without a CO monitor present, and by reinstalling an improperly functioning monitor without having it repaired and recertified by a qualified technician.

19. SDS has violated the terms of its Title V operating permit [TV-1280-0021], and the South Carolina Pollution Control Act, S.C. Code Ann. § 48-1-110(d) by continuing to operate the incinerators and a CO₂ monitoring device after the CO₂ calibration gas canister was empty.

20. SDS has violated the South Carolina Pollution Control Act, S.C. Code Ann. § 48-1-110(d) and the South Carolina Environmental Protection Fees Regulation, S.C. Code Ann. Regs. 61-30(C)(4) by failing to pay Title V Permit fees for fiscal year 2001.

21. S.C. Code Ann. § 48-1-330 (1987) authorizes civil penalties of up to $10,000 per day for violations of the Pollution Control Act, regulations promulgated thereunder, or violations of permits or orders issued by the Department of Health and Environmental Control.

22. The South Carolina Pollution Control Act, S.C. Code Ann. § 48-1-50(5) authorizes the Department to...revoke permits, under such conditions as it may prescribe for the discharge of...air contaminants,... provided, however; no permit shall be revoked without first providing an opportunity for a hearing.

23. S.C. Code Ann. Regs., 61-62.70.6 (a)(6)(i), states that "[t]he permittee must comply with all conditions of the Part 70 permit. Any permit noncompliance constitutes a violation of the South Carolina Pollution Control Act and/or the Federal Clean Air Act and is grounds for enforcement action; for permit termination, revocation and reissuance, or modification; or for denial of a permit renewal application." (emphasis added)

24. S.C. Code Ann. Regs., 61-62.70.6 (a)(7), authorizes the Department to revoke a Title V permit for failure to pay permit fees. The Environmental Protection Fees Regulation, R. 61-30 (C)(4) states that the Department will not issue construction permits or modifications, revisions or reissue an operating permit for a facility that is in default of fees due under this regulation.

25. Under the South Carolina Administrative Procedures Act, S.C. Code Ann. §1-23-370 (c), a state agency desiring to revoke a permit or license must give notice by mail to the licensee of facts or conduct which warrant the intended action, and give the licensee an opportunity to show compliance with all lawful requirements for retention of the license.

26. The "Reopening for Cause" provisions of S.C. Code Ann. Regs. 61-62.70.7(f) are applicable only in the context of a situation where the Department desires to revoke and reissue a Title V permit, not where the Department seeks to permanently terminate the permit.

27. The "Reopening for Cause" provisions of the Title V regulations cannot impose additional requirements for revocation of Title V permits beyond that required by the Administrative Procedures Act. While a regulation does have the force of law, it must fall when it alters or adds to a statute. Banks v. Batesburg Hauling Co., 202 S.C. 273, 24 S.E.2d 496 (1943); Society of Professional Journalists et al v. Sexton and DHEC, 283 S.C. 563, 324 SE2d 313 (1984); Goodman v. City of Columbia, 458 SE2d 531, 318 S.C. 488 (1995). No regulation can mandate additional procedural requirements for a specific kind of permit revocation beyond that established in the Administrative Procedures Act.

28. Under Garris v. Governing Bd. of South Carolina, 319 S.C. 388, 461 S.E.2d 819 (1995) (Garris I) and Garris v. Governing Bd. of South Carolina, 333 S.C. 432, 511 S.E. 2d 48 (1999) (Garris II) the APA does not require the Department to give SDS an opportunity to correct the deficiencies complained of before revoking the permit, but only requires the Department to give SDS an opportunity to show that the Department erred and that in fact SDS had complied with the law. SDS has been given an opportunity to show that it has complied with the law, and the record reflects numerous and chronic violations of statutory, regulatory and permit requirements.

C. Infectious Waste

29. SDS has violated the South Carolina Infectious Waste Management Act, S.C. Code Ann. § 44-93-140 by failing to comply with numerous infectious waste handling procedures and requirements set forth in the regulations.

30. SDS has violated the South Carolina Infectious Waste Management Regulations, S.C. Code Ann. Regs. 61-105, (K)(5)(c), by storing infectious waste in excess of fourteen (14) days at ambient temperature.

31. SDS has violated the South Carolina Infectious Waste Management Regulations, S.C. Code Ann. Reg. 61-105, (K)(5), because it failed to maintain the infectious waste in a nonputrescent state, using refrigeration when necessary.

32. SDS has violated the South Carolina Infectious Waste Management Regulations, S.C. Code Ann. Reg. 61-105, (U)(7)(b), because its personnel failed to clean up and disinfect accidental spills of infectious waste immediately.

33. SDS has violated the South Carolina Infectious Waste Management Regulations, S.C. Code Ann. Reg. 61-105, (U)(7)(c), because SDS personnel failed to pick up, repackage as required, or otherwise immediately remove spilled material into the treatment system.

34. SDS has violated the South Carolina Infectious Waste Management Act, S.C. Code Ann. § 44-93-160(B)(2), in that SDS failed to submit not later than the tenth day of each month a check payable to the Department for the fees due for the preceding month.

35. The South Carolina Infectious Waste Management Act, S.C. Code Ann. § 44-93-40 , authorizes the Department to issue, deny, revoke, suspend, or modify registrations, permits, or orders under such conditions as it may prescribe for the operation of infectious waste treatment facilities or sites.

36. The South Carolina Infectious Waste Management Act, S.C. Code Ann. § 44-93-160(B)(3) authorizes the Department to revoke a permit to operate for failure to pay any fees, penalties, or interest required by law. Counsel for SDS has argued that while section 44-93-160 refers to revocation of permits for failure to pay infectious waste fees, it does not address the issue of denying a permit for the failure to pay fees, and that the Department may not use section 44-93-160 as a basis for permit denial. SDS is essentially arguing that the Department, had it issued an infectious waste permit, could have revoked that permit for failure to pay fees, but that it cannot deny a permit on the same grounds. Under SDS's analysis, had the Department issued SDS a permit on February 21, 2001, and revoked it under the Administrative Order which was issued a day later, the Department's action would have been proper, but that merely denying the permit was not!

37. SDS, in its Prehearing Statement, challenged the requirement to pay the fees, claiming that they are "unconstitutional in that they are unreasonably excessive, are not rationally related to public health and safety, and violate SDS's rights of Due Process and Equal Protection under the federal and State constitutions." To the extent that SDS argues that the infectious waste fee provisions of the South Carolina Infectious Waste Management Act are unconstitutional, the ALJD may not rule on this issue. It is well settled that the Administrative Law Judge Division has no authority to pass upon the constitutionality of a statute or regulation. Video Gaming Consultants, Inc. v.South Carolina Department of Revenue,342 S.C. 34, 535 S.E. 2d. 642 (2000); Beaufort County Bd. of Educ. v. Lighthouse Charter Sch. Comm., 335 S.C. 230, 516 S.E.2d 655 (1999). Such a determination must be left to the courts.

38. To the extent that SDS is arguing that the Department's actions violated SDS's right to equal protection under the law, the ALJD may rule on this issue. "While an administrative agency is generally not bound under the rule of stare decisis by its prior decisions, it cannot act arbitrarily. 330 Concord Street Neighborhood Association v. Campsen, 309 S.C. 514, 424 S.E. 2d 538 (Ct. App. 1992). In Weaver v. South Carolina Coastal Council, 309 S.C. 368, 423 S.E.2d 340 (1992), the South Carolina Supreme Court stated that a agency violates a party's equal protection and due process rights by treating that party in a manner different from the manner in which it treats others who are similarly situated. See Hall v. SCDHEC OCRM, 96-ALJ-07-0305-CC (January 29, 1997).

39. The essence of SDS's equal protection argument seems to be that because the Department requires SDS to be issued an infectious waste permit, and does not issue a permit to facilities that comply with the "permit by rule" provisions of S.C. Code Ann. Regs. 61-105 (X), SDS is treated in a manner different from other similarly situated facilities. This is not the case, as SDS is not "similarly situated." Mr. Morris testified that any facility not falling within the purview of R. 61-105 (X) must obtain a permit. SDS cannot fall under the exception in the regulation because R. 61-105 (X)(2)(b) requires all permit by rule facilities to demonstrate that seventy-five percent of their waste is generated onsite. Because SDS does not generate any of its waste onsite, it must obtain a permit. Thus, it is not similarly situated to "permit by rule" facilities.

40. SDS makes a similar equal protection argument with regard to the "commercial treatment facilities" provision of S.C. Code Ann. §44-93-160, claiming that because the fees are due from any "facility required to be permitted" under the Act, it is singling out SDS for disparate treatment, because the Department deems other facilities "permitted" under R. 61-105 (X), and does not collect fees from facilities that only treat waste generated onsite. I disagree. The Department did not take the position that R. 61-105 (X) facilities are "required to be permitted." Second, SDS does not argue that the Department is not authorized to collect fees from it. SDS has never denied that it is a"commercial" treatment facility, and under the statute must pay the fees. SDS's argument is instead that the Department should be requiring every infectious waste treatment facility in the state to pay the fees, even those facilities which only treat the waste they generate onsite. Its argument is not that SDS is improperly singled out to shoulder the burden of paying the fees, but that other facilities are improperly excused from having to shoulder that burden. This is not the situation complained of in Weaver. SDS is not similarly situated to facilities that only treat waste generated onsite, and so cannot claim disparate treatment.

41. The Department interpreted the statute and the regulations to mean that any infectious waste generated from third parties constituted "commercial treatment of infectious waste" as described in the heading of section 44-93-160, and assessed fees on treatment of that waste. Mr. Morris testified that as soon as another treatment facility - the Spartanburg Medical Center facility- started treating waste generated offsite, it was required to pay fees on this "commercial" waste. This is an indication that the Department has in fact treated all facilities that accept third-party waste in a similar fashion, and that the Department has not violated SDS's right to equal protection under the law.

42. I find the Department interpretation of the Infectious Waste statute and regulations reasonable, and its application of the statute consistent. "In construing an ambiguous statute, a reviewing court is to give great deference to the government agency's consistent application of the statute." Bunch v. Cobb, 273 S.C. 445, 257 S.E.2d 225 (1979). "It is well established that construction of a statute by the agency charged with its administration will be accorded the most respectful consideration and will not be overruled absent compelling reasons." Lloyd v. South Carolina Dep't of Health and Environmental Control, 328 S.C. 419, 428- 29, 491 S.E.2d 592, 597 (Ct.App.1997). However, the deference afforded to an agency's construction of a statute is not without limits, and the principle of deference "affords no basis for the perpetuation of a patently erroneous application of the statute." Richland County School District Two v. South Carolina Dep't of Education, 335 S.C. 491, 517 S.E. 2d 444 (Ct. App. 1999). In this case I find neither "compelling reasons" to disagree with the Department's interpretation of the statute, nor a "perpetuation of a patently erroneous application of the statute." Also, a court may consider the title of a statute as an aid in interpreting an act. The Lite House, Inc. vs. J.C. Roy Company, Inc., 309 S.C. 50, 419 S.E. 2d 817 (Ct.App.1992); University of South Carolina vs. Elliott, 248 S.C. 218, 149 S.E.2d 433 (1966). I find that the Department's assessment of fees on SDS's waste treatment operation was both proper and lawful.

D. Solid Waste

43. SDS is subject to the requirements of the Solid Waste Incineration and Solid Waste Pyrolysis Facilities Regulations, S.C. Code Ann. Regs. 61-107.12, and must obtain a permit to operate a Solid Waste Incinerator.

44. To obtain a Solid Waste Permit R. 61-107.12 (D)(2)(a) requires an applicant to submit a complete permit application. The Department may not process an incomplete permit application.

45. The South Carolina Solid Waste Policy and Management Act of 1991, S.C. Code Ann. § 44-96-300(B)(4), requires the Department to deny a solid waste management permit if it finds by a preponderance of the evidence that the applicant has a documented history of violation of state or federal environmental laws which demonstrates that the applicant's ability to operate within the law is questionable.

46. In making this determination, The South Carolina Solid Waste Policy and Management Act of 1991, S.C. Code Ann. § 44-96-300(C)(4), authorizes the Department to consider whether the applicant has substantially complied with this State's statutes, rules, regulations, permits, and orders pertaining to the applicant in this State relative to the activity for which the permit is sought.

47. The record contains numerous documented violations of both state and federal environmental laws, and demonstrates by a preponderance of the evidence that DHEC had a basis to question seriously whether SDS would be able to operate within the law.

48. The Pollution Control Act, S.C. Code Ann. §§ 48-1-10, et seq. and the South Carolina Air Pollution Control Regulations, S.C. Code Ann. Reg. 61-62, the South Carolina Infectious Waste Management Act, S.C. Code Ann. §§ 44-96-10 et seq. and the Infectious Waste regulations, R. 61-105, regulate associated activities which relate to the activity for which the Solid Waste Permit is sought.

49. The record is replete with evidence indicating that SDS has not "substantially complied" with South Carolina's statutes, rules, regulations, permits, and orders relating to the operation of its Hampton facility.

50. Additionally, S.C. Code Ann. § 44-96-300(B)(1) requires the Department to deny a solid waste permit if the applicant is not financially...qualified to carry out the activity for which the permit is sought. While Findings of Fact 58-60 and 62-66 do not necessarily state specific violations, they are facts tending to show that SDS lacks the financial resources to properly run this facility. The Findings of Fact relating to its nonpayment of fees, which are specific and significant violations, also lead to the conclusion that SDS lacks sufficient funds to properly operate in compliance with the law.

E. Additional Waste Handling and Operational Concerns

51. At trial, I allowed testimony contained in Finding of Fact 58, relating to an inspection upon which a Department Inspector noted that SDS's wastewater treatment service had been discontinued for nonpayment, and the fact that SDS was using the facility's ash quench tank and the lower floor of the facility to store wastewater. I ruled that SDS's entire course of conduct in operating the facility was relevant to this case.

52. I similarly rule that the fact that SDS frequently lacked the resources to pay for the basic goods and services that are required to properly operate this facility (i.e.- water, pretreatment, sewer service, repair and ash hauling services, sorbent, sawdust, and refractory supplies) is relevant to the ultimate issue whether the Department's action in revoking the Title V Permit and in denying the Infectious and Solid Waste Permits was proper. The existence of these chronic problems all tend to show that the Department had sufficient reason to question whether SDS could ever return this facility to compliance.

F. Penalties

53. Under S.C. Code Ann. § 48-1-330, the Department may assess a civil penalty of up to $10,000 per day, per violation, for violations of the Pollution Control Act, regulations promulgated thereunder, or permits or orders issued by the Department of Health and Environmental Control.

54. The relevant Air Pollution Control Regulations, S.C. Code Ann. 61-62, are promulgated under the authority of the Pollution Control Act.

55. I find that the Department's computation of the $224,000 civil penalty, given the circumstances, was reasonable, and that the Department did not arrive at the penalty amount in an irrational or arbitrary manner. However, fundamental to the powers of an Administrative Law Judge, as the trier of fact in contested cases under the Administrative Procedures Act, is the authority to decide the appropriate sanction when such is disputed. Walker vs. South Carolina ABC Comm'n, 305 S.C. 209, 407 S.E.2d 633 (1991). The Administrative Law Judge, as fact-finder, must impose a penalty based on the facts presented at the contested case hearing. In particular, in assessing a penalty, "each fine must be analyzed individually to determine if it is appropriate under the circumstances." Midlands Utility, Inc. vs. South Carolina Department of Health and Environmental Control, 313 S.C. 210, 212, 437 S.E. 2d 120,121 (1993). Furthermore, the fact-finder "should give effect to the major purpose of a civil penalty - deterrence." Id. Similarly, an Administrative Law Judge must also consider relevant evidence presented in mitigation. Mitigation is defined as a lessening to any extent, great or small. It may be anything between the limits of complete remission on one hand and a denial of any relief on the other. In a legal sense, it necessarily implies the exercise of the judgment of the court as to what is proper under the facts of the particular case. 58 C.J.S. Mitigation, p.834, 835 (1948).

The sanction of revocation of SDS' permit is the severest sanction possible. Although a penalty of $224,000 may be warranted because the Department has proven that those violations occurred, I find that the severest penalty authorized by statute, that of revocation, is a sufficient penalty in this case.

However, the remaining monetary amount of $337,538.11 for past due infectious waste and inspector fees is due to DHEC. Pursuant to §44-93-160, these fees are calculated on the amount of infectious waste being treated by the company. The penalties for failing to remit payment are established by law. Although the civil penalty of $224,000 has been deleted, nothing in this order should be interpreted as relieving SDS from payment of its $337,538.11 in fees and related penalties.

G. The Decision to Revoke the Title V Permit

56. I find that the Department's ultimate conclusion as to the frequency, severity, and chronic nature of these permit violations is reasonable. The Title V Permit, like all other permit programs, is a system based on trust between the Department and the permittee. The functioning of the Title V Permit is distinct from many other environmental permits because there are an unusually large number of parameters with which a permittee must comply. It is understandable that the Title V Permit system relies on regular, accurate, and complete self-reporting instead of the traditional method which uses frequent regulatory inspections to determine compliance. The Title V Permit system cannot function properly without a firm commitment from the permittee to continually monitor its compliance status and accurately report conditions to the Department. A permittee that chronically fails to discharge its duties under the Title V Permit must be brought into compliance using the Department's enforcement tools or cease operations.

57. The Department's concerns regarding the inability of this permittee to respond to traditional enforcement methods such as civil penalties or additional conditions imposed by permit modifications or in Consent Orders are fully supported by the record. SDS has demonstrated repeatedly that it is unable to fulfil the requirements of the agreements it makes with the Department, and the imposition of civil penalties has failed to deter additional violations. This fact, coupled with its allegation that SDS is unable to pay any civil penalty, leaves the Department with only one way to ensure that SDS will not violate the law in the future, and that is by requiring SDS to cease operations altogether. I find that the Department's ultimate conclusion in this matter was reasonable.

ORDER

THEREFORE, IT IS HEREBY ORDERED that Administrative Order 01-012-A, 01-060-HW, 01-03-SW, dated February 23, 2001, is sustained, except that the $224,000 civil penalty is deleted. SDS shall take immediate action to comply with the Administrative Order's requirements.

AND IT IS SO ORDERED.

______________________________

CAROLYN C. MATTHEWS

Administrative Law Judge

This 5^th day of June 2002