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Anoplate Corp - Hearing Report, January 14, 1994

Hearing Report, January 14, 1994

STATE OF NEW YORK : DEPARTMENT OF ENVIRONMENTAL CONSERVATION
50 Wolf Road
Albany, New York 12233-1550

In the Matter

- of -

ANOPLATE CORPORATION
REGULATORY FEE DISPUTE
HEARING REPORT

- by -

/s/
Edward Buhrmaster
Administrative Law Judge

January 14, 1994

INTRODUCTION

Anoplate Corporation ("Anoplate") is disputing a $3,000 hazardous waste program fee which has been assessed by the Department of Environmental Conservation ("the Department" or "DEC") during each of the calendar years 1990-1993. This fee is assessed annually for "generators of equal to or greater than fifteen tons per year of hazardous wastewater," pursuant to Environmental Conservation Law ("ECL") Section 72-0402(1)(e). No factual dispute exists between Anoplate and the Department. However, legal issues exist as to the interpretation of ECL 72-0402(1)(e) and whether that section applies to the Anoplate operation.

Because the issues involved are strictly legal, this matter is hereby referred to the Department's general counsel for a declaratory ruling, in accordance with 6 NYCRR Part 619. Pursuant to 6 NYCRR 481.10(f)(4), this report summarizes the material facts and disputed issues. There will be no hearing. Instead, this report shall be served on the parties, and they may file briefs on the issues identified below as in dispute. All briefs shall be filed with the general counsel on a schedule determined by him.

BACKGROUND

By invoice, the Department has assessed a $3,000 fee against Anoplate for each of the calendar years 1990-1993. These fees have been assessed for the generation per year of more than 15 tons of hazardous wastewater.

The $3,000 fee was first assessed in 1992, based on the Department's redetermination of Anoplate's 1990 overall hazardous waste program fee. Anoplate was informed of the additional fee by a letter dated April 20, 1992, from Barbara Barrell, supervisor of DEC's regulatory fee bureau. By letter dated May 19, 1992, the fee was challenged by John Stevenson, Anoplate's director of environmental affairs. Mr. Stevenson said the fee should not be applied to Anoplate since it has an on-site wastewater treatment plant, which assures that no heavy metals in excess of U.S. Environmental Protection Agency (EPA) limits leave its facility and enter New York State waters.

Anoplate's challenge was dismissed in a determination made on July 13, 1992, by Kim Starsiak of DEC's regulatory fees program. Ms. Starsiak noted Anoplate's argument that it "should not be assessed an additional fee of $3,000 for hazardous wastewater because discharges from (its) wastewater treatment plant meet permit limits for metals." Answering this claim, Ms. Starsiak wrote that generator fees for hazardous wastewaters are assessed in relation to the point at which they are generated, regardless of whether they are then treated on-site. Therefore, she wrote, Anoplate is subject to a hazardous wastewater fee of $3,000 if it generated (or "created") over 15 tons of wastewater during 1990, even if it was subsequently treated on-site and discharged. Since Anoplate said in its annual report that over 15 tons of hazardous wastewater were generated at its site, Anoplate was correctly assessed a hazardous wastewater fee of $3,000, wrote Ms. Starsiak.

Anoplate's continued disagreement with the $3,000 fee was confirmed in a letter, dated July 21, 1992, from Neil Gingold, Esq., of Syracuse, New York, who is Anoplate's attorney. On August 6, 1992, Mr. Gingold had a telephone conference with John D. Miccoli of DEC's division of hazardous substances regulation. The call was summarized by Mr. Miccoli in a letter to Mr. Gingold dated August 12, 1992, to which Mr. Gingold responded on August 25, 1992.

Based on these letters, it was Anoplate's position that it does not generate hazardous wastewater. Anoplate's contention, wrote Mr. Gingold, was that the wastewater that is generated at the conclusion of the various Anoplate processes, and which is discharged to the Onondaga County metropolitan sewage treatment plant, is not hazardous, and therefore should not be subject to fees.

In his letter for Anoplate, Mr. Gingold wrote that a material does not become a waste until it is discarded, and the fact that some of Anoplate's materials are hazardous does not mean they are hazardous wastes. According to Mr. Gingold, Anoplate's wastewater is not hazardous at the point of discharge. Also, said Mr. Gingold, DEC's $3,000 fee is duplicative of a sewer use fee that Anoplate pays to Onondaga County for discharge of non-hazardous wastewater to the county's publicly-owned treatment works.

Summarizing the telephone conference, Mr. Miccoli restated DEC's position that hazardous waste fees apply at the point of generation and not at the point of discharge. He said these fees are not duplicated by discharge fees that are paid to the county.

PRE-HEARING CONFERENCE

This matter was referred to the Department's Office of Hearings on March 30, 1993, given the continued disagreement between Anoplate and DEC Staff. The matter was assigned to Administrative Law Judge ("ALJ") Edward Buhrmaster, who had a telephone conference on April 12, 1993, with Mr. Gingold, Anoplate's attorney, and Eugene Kelly, attorney for DEC Staff. As the parties seemed to agree their dispute was one of law, the ALJ provided them an opportunity to negotiate a stipulation of material facts and a statement of the legal issues involved, to be forwarded to the Department's general counsel. Another opportunity was provided during a second conference call, held on October 20. 1993, following Staff's reassignment of the file from Mr. Kelly to Thomas McGuire.

On December 20, 1993, the ALJ had a telephone pre-hearing conference with Mr. Gingold and Mr. McGuire. According to 6 NYCRR 481.10(f), the functions of the conference are "to narrow or resolve issues concerning the disputed fees and penalties raised by the parties and to define and limit the scope of issues remaining as subjects for the hearing sessions."

The ALJ discussed with the parties a proposed stipulation of facts and legal issues, which had been prepared by Mr. McGuire. The stipulation had not been discussed with Mr. Gingold prior to the conference and he objected to its characterizations both of fact and law. After the telephone conference, the ALJ drafted his own findings of material fact and statement of legal issues, which are set out below. These were discussed with the parties during a second conference call held on January 4, 1994. During this call both Mr. Gingold (for Anoplate) and Mr. McGuire (for DEC Staff) accepted the ALJ's findings and statement of legal issues as the basis for this referral to the Department's general counsel.

FINDINGS OF MATERIAL FACT

  1. Anoplate Corporation ("Anoplate") is located at 459-475 Pulaski Street, Syracuse.
  2. Anoplate's facility performs electroplating and metal finishing processes.
  3. During each of the calendar years 1990-1993, Anoplate's processes created more than 15 tons of process water identified as "hazardous" pursuant to ECL Article 27, Title 9.
  4. This process water was then treated on-site prior to being discharged to a treatment works owned and operated by Onondaga County.
  5. The on-site treatment removed excess heavy metals from the process water and rendered it non-hazardous at the point of its discharge from the facility.

STATEMENT OF LEGAL ISSUES

This matter presents two issues involving the interpretation and application of ECL Section 72-0402(1)(e), which provides for assessment of a $3,000 annual fee "for generators of equal to or greater than fifteen tons per year of hazardous wastewater."

  1. Given that its process water is treated on-site and is not hazardous at the point of its discharge from the facility, is it properly classified as "hazardous wastewater"?
  2. Given these same considerations, does Anoplate "generate" hazardous wastewater?

ORDER OF DISPOSITION

This matter is hereby referred to the Department's general counsel on the two issues identified above. A third issue raised by Anoplate (whether the Department's fees are duplicative of county sewer use fees) does not involve the interpretation and application of ECL Section 72-0402(1)(e) and is therefore inappropriate for a declaratory ruling, as acknowledged by the parties.

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