ORDERS:
FINAL ORDER AND DECISION
I. Introduction
Joseph C. Hilton, III, and Joseph C. Hilton, III d/b/a Hilton's Grocery (Hilton) seek a reversal of the decision to deny
coverage pursuant to the SUPERB Financial Responsibility Fund for any releases from an underground storage tank. The
South Carolina Department of Health and Environmental Control (DHEC) opposes Hilton's position and asserts that Hilton
is ineligible for coverage since his tanks were not in substantial compliance with the Underground Storage Tank Control
Regulations.(1) After reviewing the exhibits, testimony, and arguments presented at the hearing of this matter on December
21, 1999, I conclude that Hilton is not entitled to coverage under the SUPERB Fund or the SUPERB Financial
Responsibility Fund.
II. Issue
Is Hilton eligible for coverage pursuant to the SUPERB Fund or the SUPERB Financial Responsibility Fund for any releases
occurring after December 22, 1998 from his underground storage tanks located at his place of business in Rock Hill?
III. Analysis
Eligibility For SUPERB Coverage
1. Positions of Parties
DHEC argues that Hilton is not eligible for coverage under the SUPERB Fund or the SUPERB Financial Responsibility
Fund since his USTs (Underground Storage Tank) were not in compliance with DHEC regulations on corrosion, spill
protection and overflow protection. Hilton argues that he was in substantial compliance with the regulations governing
underground storage tanks even though he had not upgraded his tanks for spill protection and overflow protection. Rather,
he argues that he was closing his business and that given such circumstance he had no need to make any alteration to the
tanks. Thus, he argues he is eligible for SUPERB coverage.
2. Findings of Fact
Prior to the deadline date of December 22, 1998, DHEC began reminding UST owners of the need to upgrade their
underground storage tank systems. The upgrade was required due to the SUPERB Act and UST Control Regulations.
DHEC gave notice of the impending deadline by certified mail to all owners and operators of non-upgraded UST systems.
The owners were told that all USTs had to be either upgraded by December 22, 1998, or else properly closed. The letter
also informed UST owners and operators that releases reported from non-upgraded UST systems after December 22, 1998,
would be considered not in substantial compliance and therefore not eligible for SUPERB Account Funding.
Hilton owned two USTs at Hilton's Grocery in Rock Hill, South Carolina, and he received his letter of notice on November
4, 1998. Hilton did not install spill and overflow prevention equipment as outlined at 25A S.C. Code Ann. Regs. 61-92,
Subpart B, § 280.20(c). Rather, despite the notice, Hilton continued to operate his USTs beyond the December 22, 1998
deadline even though the USTs had no upgrades for spill protection and no upgrades for overflow protection.
Hilton justified his continuing sales as merely being a means of reducing the gasoline in the USTs. Indeed, Hilton had
decided that he would no longer operate a gasoline business and began selling his gasoline at a loss. From his point of view,
he was selling gasoline as a means of discontinuing his business, and the discounted price was a means to accomplish
emptying his tanks.
On December 29, 1998, a DHEC inspector inspected Hilton's site. On December 29, 1998, Hilton was selling gasoline to
the public and was operating a UST system without the required upgrades. By the middle of 1999, Hilton had closed the
UST system and submitted a closure report to DHEC.
Information in the closure report caused DHEC to conclude that a release of gasoline had occurred from Hilton's non-upgraded UST system and to further conclude that the release had occurred after December 22, 1998. As a result, DHEC
notified Hilton that he was not eligible for funds for remediation costs from the SUPERB Fund or the SUPERB Financial
Responsibility Fund. The reason given by DHEC was that Hilton was not in substantial compliance with regulations
governing USTs.
While Hilton did not file a claim with the SUPERB Fund or with the SUPERB Financial Responsibility Fund, he has sought
this contested case challenging DHEC's determination. Thus, the issue is whether Hilton is in substantial compliance with
regulations governing USTs and thus eligible for coverage under the SUPERB Fund or the SUPERB Financial
Responsibility Fund.
a. Introduction
Under the facts proven in this case, Hilton is not eligible for coverage under the SUPERB Fund or the SUPERB Financial
Responsibility Fund for any release occurring after December 22, 1998.
The SUPERB Fund and the SUPERB Financial Responsibility Fund are designed to assist owners of USTs with the costs of
petroleum releases so long as certain minimum requirements are met. S.C. Code Ann. § 44-2-40(A) (Supp. 1998). One
requirement is that the owner's USTs must be "in substantial compliance with regulations promulgated pursuant to §
44-2-50(A)." S.C. Code Ann. § 44-2-40(A) (Supp. 1998).
b. Lack of Substantial Compliance
The promulgated regulations require that by December 22, 1998, owners must either upgrade or close their USTs. 25A
S.C. Code Ann. Regs. 61-92, Subpart B, § 280.20(a) (Supp. 1998). Here, Hilton neither upgraded nor closed his tanks by
the deadline, and thus was not in substantial compliance with the regulations promulgated pursuant to § 44-2-50(A).
Upgrades can be made to an existing system to comply with the promulgated regulations. To accomplish the upgrade, an
owner must install the spill and overflow prevention equipment explained at 25A S.C. Code Ann. Regs. 61-92, Subpart B, §
280.20(c). In this case, Hilton installed no spill or overflow prevention equipment to his existing system. Thus, Hilton failed
to comply with the upgrade provisions of the regulation and was therefore not in substantial compliance with the regulations.
As to complying with the regulations by demonstrating closure, Hilton did not close the UST system consistent with the
closure regulations. Rather, Hilton continued operating the system and was operating the system at least as late as one week
after the December 22, 1998 deadline. Indeed, on the December 29, 1998 inspection by DHEC, Hilton was actively selling
gasoline to the public.
While not argued directly, Hilton appears to assert that his sales to the public were actions demonstrating a closing of his
USTs. Hilton reaches this position by arguing that his sales to the public were made at a loss in an attempt to empty the
tanks as quickly as possible. In his view, such an act is an act of closure. I cannot agree with Hilton's argument.
The act of selling gasoline to the public by allowing pumping of gasoline into vehicles of individuals is not an act indicating
closure of the UST system even if the gasoline is sold at a loss in an attempt to quickly empty the UST. On the contrary, the
act of closure requires the owner to "cap and secure" the pumps. 25A S.C. Code Ann. Regs. 61-92, Subpart G, § 280.70(a).
To find that closure can be accomplished by pumping gasoline into vehicles owned by the public is contrary to the clear
language of the regulation. Accordingly, Hilton has not established a closure by the deadline date of December 22, 1998,
and thus has not demonstrated a substantial compliance with the applicable regulations.
IV. Order
Hilton is not eligible for coverage under the SUPERB Fund and the SUPERB Financial Responsibility Fund for any releases
from his USTs occurring after December 22, 1998 since Hilton failed to demonstrate substantial compliance with the
regulations promulgated under § 44-2-50(A).
AND IT IS SO ORDERED
RAY N. STEVENS
Administrative Law Judge
Dated: January 4, 2000
Columbia, South Carolina
1. Hilton's disagreement with DHEC's determination places jurisdiction in the Administrative Law Judge Division (ALJD).
S.C. Code Ann. §§ 1-23-310 et seq. (Supp. 1998). |
