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Mr. Eriksen
noted for the Council that Mr. Chung Kil Lee was present to appeal
the license late payment penalty for Site #0002673 - The Laundry
Room - located at 1031 Waukegan Rd in Glenview, IL.
Mr. Eriksen
reviewed his summary memo with the Council noting that correspondence
from Mr. Lee indicates that he began operations of this drycleaning
facility on May 20, 2000. He paid his 2000 license fee on December
19, 2000, his 2001 license fee on June 7, 2001 and his 2002 license
fee on January 4, 2002. This resulted in late payment penalties
for calendar year 2000 totaling $1,060, calendar year 2001 totaling
$785 and calendar year 2002 totaling $15, for a combined total
of $1,760. The late payment penalty has not been paid and the
facility is currently not licensed. Mr. Lee, through his attorney,
had appealed the late payment penalty on March 13, 2002 on the
basis that Mr. Lee had sent a check for $500 on June 1, 2000 that
was returned to him in December 2000. The check Mr. Lee's attorney
referenced is dated June 1, 2000 but is made out to Enviroclean
and the Administrator's office has no record of receiving it.
Mr. Lee indicated
that he spoke very little English and Dr. So was asked to translate
his presentation for the Council. Mr. Lee outlined his case to
the Council, stating that he had initially sent a check in May
2000 to the Council. It was returned to him with a new address
for submission. He mailed that check in June 2000 and then received
it back in December 2000. He felt the penalty for calendar year
2000 was unfair, as he believes the Council held his check for
an extended period of time. He conceded that he owed the late
payment penalty for calendar year 2001 in the amount of $785 and
in calendar year 2002 in the amount of $15.
Council questions
focused around Mr. Lee's indication that he paid the license fee
in June 2000 but did not receive the check back from the Fund,
uncashed, until December 2000. Mr. Eriksen reiterated that according
to the Administrator's records, we never received the check and
therefore did not return it. The Administrator's first communication
with Mr. Lee was in the fall of 2000, when we sent out the license
renewal application for this facility. Mr. Eriksen noted that
even after instructions from the Administrator's office, Mr. Lee
had tried to pay the license fee with a business check that was
dated December 2000 and returned to him in December 2000. He subsequently
submitted a cashier's check to the Administrator's office, which
was forwarded to the Illinois Department of Revenue.
Dr. Chweh
commented that he feels that this is an example of confusion and
problems due to the language barrier between this drycleaner and
the Administrator's office. He made a motion to waive the calendar
year 2000 penalty in the amount of $1,060. It was seconded by
Mr. Kim and failed by a vote of 2-4.
Mr. Gibson
made a motion to deny the waiver of the late payment penalty for
calendar year 2000. It was seconded by Mr. Lewicki and passed
by a vote of 4-2. Mr. Eriksen stated that a letter would be sent
to Mr. Lee, indicating that he can appeal the Council's decision
to an Administrative Hearing Officer.
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Mr. Polak
stated that the primary topic for today's Council meeting was
continued discussion of legislative issues and a determination
by the Council on what modifications to the Illinois Drycleaner
Environmental Response Trust Fund Act (Act) they wish to include
in a legislative package. He reported he received a summary of
legislative issues from the Korean American Drycleaners Association
(KADA) and requested Mr. Sung Do Kang, President of KADA, review
the issues with the Council.
Mr. Dae Kim,
member of the KADA Environmental Committee, read a 3-page memo
prepared by KADA. The memorandum indicated the need for the Council
and the drycleaning industry to work together on a complete legislative
package with emphasis that cleanups between now and June 30, 2004,
be placed on hold, except for emergency situations, with emphasis
on completion of site investigations at potentially eligible sites.
This would allow the Council to quantify the liability of the
remedial program and better determine what revenues are needed
to meet the Fund's liability. Mr. Eriksen gave the Council a brief
review of the legislative process, noting that Rep. Mike Smith
introduced a shell bill on February 7, 2003, as a vehicle to assist
the Council in amending the Act. The bill's reference number is
HB1553 and he commented that Rep. Smith would need the Council's
proposed legislative recommendations no later than the first week
of March. He indicated that most bills need to pass out of committee
by the middle of March.
Mr. Chang
Lee, a drycleaner, voiced his opinion to the Council that the
law is not fair to everyone and that is the reason there are various
people opposed to the current law. If everyone gets benefits fairly,
everyone would cooperate. He noted that the Council must solve
the original problem and suggests that nothing be changed in the
legislation until everyone has reviewed and provided input. Secondly,
he noted that a key problem has been that the Koreans receive
Fund information in English. He stated a majority of the drycleaners
in Illinois are Korean and correspondence should be printed in
Korean. Third, he expressed his concern regarding the increase
in the insurance premium that was passed by the Council in December
2002. He asked how could the Council pass the increase where there
were three (3) members who were not in attendance at the meeting.
To him it did not seem fair that only four (4) Council members
discussed and made the decision of what the future insurance premium
should be. Fourth, he felt it was necessary for the Council to
go out and survey the drycleaner owners, meet and discuss the
survey and then put together a comprehensive legislative package.
Dr. Chweh
indicated new remedial technologies may reduce cleanup costs to
a level lower than what is projected by the Administrator and
stated that it is difficult to estimate the cleanup costs when
there is no standard testing protocol. Mr. Chung responded new
technologies are being developed all the time and there will never
be a definitive cost of remediation for all sites and any delay
in dealing with the revenue shortfall will end up creating additional
problems for the Fund. Mr. Lewicki noted that delaying cleanups
for 18-36 months would end up impacting drycleaners with landlords
who are in the process of renewing leases or selling their property.
Dr. Chweh reiterated that if the testing were all done by June
30, 2004, the Council would have an exact understanding of their
total liabilities as of that date. Mr. Eriksen replied that even
if all sites completed testing by June 30, 2004, the Administrator
could only provide an estimate of what the Fund's liability will
be at that point in time. There are so many variables that impact
the Fund's ultimate cleanup cost liability that it will be impossible
to determine the Fund's total liability at June 30, 2004. Hopefully,
the Administrator can be reasonably close but the evolution of
new technologies plus potential changes in regulatory requirements
as the program matures will impact the final cost.
Mr. Kil nam
Kim of Heritage Cleaners, shared his perspective on a variety
of issues including the fact that perc was initially not known
to be hazardous until about 10 years ago and that most new drycleaners
should not have contamination. The Council should also focus on
the late fees because the $5 per day has become onerous in a number
of situations. Mr. Polak responded to his comments by noting one
of the Council's proposed technical corrections would allow the
Council flexibility in determining when the late payment penalty
should be assessed.
Mr. Chang
Lee stated that most people do not understand the Fund process
and each other. Once we understand each other, it is not hard
to collect the necessary information and this problem is caused
by miscommunication. Also, the Program is currently not fair.
Mr. Polak asked Mr. Lee to clarify the "not fair" statement. Mr.
Lee stated that the $5 per day penalty, prioritization, the need
to do intrusive testing and clean sites not getting any remedial
benefits from the Fund were all examples of the Program not being
fair. Mr. Polak stated the $5 per day late payment penalty revised
wording is already in the Council's legislative package, prioritization
has not been implemented but is being reviewed by the Council
and he understood the perceived opinion that if a site tests clean
and does not receive benefits, it may not appear to be economically
fair but this is really a risk management issue. Mr. Lee responded
that insurance is for the future and the solvent taxes and license
fees are for payment of all past contamination. Mr. Polak disagreed
noting solvent taxes and license fees can be used to supplement
the insurance program and pay administrative expenses. Mr. Lee
stated that he is in favor of extending the Program sunset date
now but additional changes should be delayed and discussed at
a future date. Mr. Lee commented that he did not believe all the
testing could be completed by June 30, 2004 and that the intrusive
testing guideline should be extended for a period of at least
2 years.
A Korean drycleaner,
who owns a drycleaning facility in Tinley Park, addressed the
Council and referenced that the drycleaners are poor people and
that the current Act has unduly penalized them financially in
operating their business. Mr. Polak interrupted his presentation
and asked if he had specific recommendations for the Council's
consideration. He stated he had no specific recommendations but
his situation is unbearable, as he has to work daily until 8:00
p.m. to keep his business operating.
Mr. Peter
Valessares commented that he had recently attended a meeting of
Wisconsin drycleaners. They needed to make some changes to their
legislation and have come forward with one (1) voice. In doing
that, they have eliminated lobbying costs by working together
as one voice. He stated two (2) years ago, when the associations
were working on SB1069, KADA reportedly spent $80,000 and Illinois
State Fabricare Association (ISFA) spent $40,000 on lobbyists.
In the end, some people worked against the legislation to kill
it. He noted ISFA does not have $40,000 to lobby new legislation
but is committed to working with KADA and the Council in making
changes to the Act. He commented the revisions included in SB1069
should be reviewed to determine if they are still applicable today.
Mr. John Spomar,
speaking on behalf of the Alternative Solvents Coalition, distributed
a one (1) page memo, dated January 27, 2003, to the Council and
went through three (3) different suggestions. The first would
be an exemption from the solvent fees and a freeze on license
fees for all new "virgin" facilities using an alternative solvent
which would include Green Earth, Rynex, CO-2 and hydrocarbon-based
solvents. Secondly, it would exempt a drycleaning facility that
has had a No Further Remediation (NFR) letter without a claim
to the Fund who will be using alternative solvents and who agrees
not to make a claim against the Fund and third, providing an exemption
to former perc or petroleum drycleaning facilities who switched
to alternative solvents and state that they will not make a claim
for benefits against the Fund. Mr. Chung asked Mr. Spomar to clarify
the solvents that would be considered alternative solvents. Mr.
Spomar replied that DF2000 is non-toxic and that is the main difference
between a petroleum solvent versus a hydrocarbon solvent. Mr.
Eriksen asked Mr. Spomar if Federal or Illinois Environmental
Protection Agency (IEPA) has come out with a ruling making a differentiation
between regulatory requirements for hydrocarbon versus petroleum.
Mr. Spomar stated that they have met with the Region V Federal
EPA and they are very much interested in the toxicity information
of DF2000. Mr. Spomar is hopeful to persuade the regulatory agencies
to recognize DF2000 as being not toxic.
Mr. Polak
recessed the meeting at 5:05 p.m. and reconvened at 5:35 p.m.
Mr. Ken Sink
addressed the Council commenting that he wished the initial Act
had never been passed. He stated SB1069 was developed to obtain
a 2% gross receipts tax on all drycleaning items. He said when
that concept died, that changed the revenue mix and the success
of any Act modifications that would be beneficial to the industry.
It was his impression that none of the other state cleanup programs
are working and most of them have some sort of subsidy from government.
He stated the problem with our fund is that IEPA will not get
involved with it. He stated he believed it would be better for
the drycleaner to deal individually with their cleanup problems
and wait for IEPA to walk in and make them clean up then to pay
some of the potentially expensive fees to cleanup the sites through
the Fund. He stated he didn't have answers to the current issues
and appreciated the Council giving him time to express his view.
Mr. Polak
commented that from the last Council meeting, the Council talked
about identifying all possible alternative funding mechanisms
to help keep the Fund viable. He stated that the Council does
have a fiduciary responsibility to make certain that the Fund
is viable. He noted there are two (2) ways of addressing the viability
issue:
1. There is administrative authority under the Act for
the Council to adjust the solvent taxes, the license fee and the
remedial program deductible; or
2. Through a legislative proposal.
To date, Council
discussion has focused on the late fees, extending various dates
(including the sunset date and testing date) allowing people to
opt back into the Program and creating new classes of solvents
for alternative solvents. In addition, individuals have commented
that there are aspects of the Program that they perceive to be
unfair or inequitable. The Council has received input from associations
and individual drycleaners. Ideally, the Council could take all
of the suggestions and draft a piece of legislation that theoretically
everyone would support. However, there is no guarantee that this
could be accomplished but it would be best if the industry is
unified in moving forward with new legislation. He noted that
there were several ideas presented that the Council may need time
to digest and some ideas may contradict each other. Implementation
of some ideas may require a legislative change, some may be possible
by administrative rule. Mr. Polak stated he is certain it would
be the concurrence of everyone to have no increase in license
fees and solvent taxes, but what happens in two (2) years if the
legislature does not extend the sunset date and there is not enough
money to reimburse drycleaners who test their site and find it
to be contaminated? Based on this information, he would like to
make this recommendation to the Council:
1.
That the Council take time to digest all the information that
has been presented to them at today's meetings and look at addressing
the revenue issue out side of legislation;
2. Have the Administrator put together information that
could be circulated to the Council over the next week or two on
possible changes that will or will not work and then cost out
those changes. Once the legislative package is completed, then
the Council would spend time devising a contingency plan in the
event the legislative package is not passed by the legislature.
For example,
he noted that one thing he has been researching is being able
to purchase reinsurance to cover some of the Fund's liability.
Mr. Chung
indicated that the Council is faced with a time issue of putting
this package together, which as he understood, was the first week
of March. He noted that the Council could develop a contingency
plan if they cannot pass legislation by May 23, 2003, which is
the projected adjournment date for the legislature. His concern
is if the Council delays too long in addressing the revenue shortfall
that the Fund will not be able to raise the necessary revenue
in the remaining period of time.
The Council
discussed what needs to be done to achieve the Program's objectives
and of that, what must be done legislatively versus administratively.
The question "Should the old SB1069 be resurrected and does it
address the number of concerns and issues that have been brought
forward as of today?" was posed by the Council to members of the
public. Mr. Chang Lee replied, "Yes, at this time." Mr. Ken Sink
replied "No comment." Mr. Chang Lee noted that SB1069 was not
perfect but could work and again stated that he felt that there
needed to be a 10-year extension of the sunset date because not
everything could be accomplished during the remaining life of
the Program.
Mr. Kang addressed
the Council, thanking them for the time to present KADA's position,
noting that he appreciated the Council's discussion and believes
that the Council, along with KADA and the other drycleaner associations
can work toward a common goal. He stated members of his association
that recently completed a survey supporting deferring any increases
in Fund revenue until next year. The survey indicated that 92%
of their surveyed members would like to have money only spent
for site investigations except in the event of an emergency until
June 30, 2004. He commented that since the funding for the Program
is coming from the drycleaners, it needs to benefit all drycleaners
and he is not opposed to the fact that it may be necessary to
raise the fees but requests the Council postpone spending any
more money than necessary until June 30, 2004. He noted after
September 11, 2001, everyone suffered, including the drycleaners.
Additional license fee and solvent tax increases at this time
would be very detrimental to the industry. He is concerned that
if revenue increases were incorporated in the legislation and
it is not passed by the legislature, it will create more confusion
in the industry.
Mr. Chang
Lee briefly addressed the Council, stating that he has a concern
with waiting for cleanups to be started until next year but does
believe that the time period for testing should be extended by
at least 1 to 2 years.
The Council
continued discussion on how to incorporate the various suggestions
that have come forward, including those revisions that were incorporated
in SB1069. On a motion by Mr. Lewicki and a second by Mr. Gibson,
by a vote of 7-0, the Council directed the Administrator's office
to prepare a listing of potential legislative options that have
some probability of being passed by the legislature in this session.
They directed that the Administrator use SB1069 and the comments
that have been brought forward today, as a guideline to provide
an "ala carte" list of options for them to review at a Council
meeting to be held at 9:00 a.m. Friday, February 28, 2003.
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