96-403
No. 96-403
IN THE SUPREME COURT OF THE STATE OF MONTANA
1997
SAFEWAY, INC.,
Plaintiff and Respondent,
v.
MONTANA PETROLEUM RELEASE
COMPENSATION BOARD,
Defendant and Appellant.
APPEAL FROM: District Court of the First Judicial District,
In and for the County of Lewis and Clark,
The Honorable Thomas C. Honzel, Judge Presiding.
COUNSEL OF RECORD:
For Appellant:
Gregory A. Van Horssen, Luxan & Murfitt, Helena,
Montana
For Respondent:
Karl J. Englund, Missoula, Montana
Submitted on Briefs: January 9, 1997
file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/96-403%20Opinion.htm (1 of 7)4/11/2007 1:53:16 PM
96-403
Decided:
Filed:
__________________________________________
Clerk
Chief Justice J. A. Turnage delivered the Opinion of the Court.
The Montana Petroleum Release Compensation Board appeals a decision
of the First Judicial District Court, Lewis and Clark County, on
judicial review of an administrative decision by the Board. The
court reversed the Boardþs determination that Safeway, Inc., was
not eligible to receive reimbursement for cleanup costs associated
with a petroleum release on its property. We affirm the decision
of the District Court.
The issue is whether the District Court erred in determining
that Safeway was eligible for reimbursement for costs incurred in
cleaning up a release from an underground storage tank.
In 1979, Safeway purchased property in Polson, Montana, upon
which a gas station had been located. Safeway demolished the
structures on the property, removed underground storage tanks, and
converted the property into a parking lot for its adjacent retail
store.
In 1989, a substantial petroleum release was discovered at
Bjork Distributing and Beacon Tire in Polson. An environmental
consultant who investigated the release eventually opined that the
Safeway property may be the source of the contamination.
In September 1992, the Montana Department of Health and
Environmental Sciences, Solid and Hazardous Waste Bureau, Under-
ground Storage Tank Program notified Safeway by certified mail that
its property had been identified as the potential source for the
contamination. The Department required
that you determine the extent and magnitude of contami-
nation emanating from your site and take immediate action
to mitigate free product. . . . Within one week of
receipt of this letter please begin free product recovery
. . . . By October 30, 1992 please submit a Remedial
Investigation Work Plan.
Safeway then hired its own environmental consultant, who determined
that an underground tank may still be located on Safeway's
property. The consultant prepared and submitted to the Department
an investigation work plan which was also submitted to the Board
for approval and comment. The Department approved the plan and
warned Safeway that if a tank or piping was found on the property,
Safeway would have to apply for a permit for closure of an
file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/96-403%20Opinion.htm (2 of 7)4/11/2007 1:53:16 PM
96-403
underground storage tank and the tank or piping would have to be
removed pursuant to Department regulations.
The consultant found that although the storage tanks had been
removed from Safeway's property, piping was still in the ground.
The consultant also found several feet of soil contaminated with
gasoline. The Department directed Safeway to clean up the site
pursuant to the rules set out in ARM 16.45.601, et. seq., which the
Department had adopted to govern the methods used for cleaning up
releases from petroleum storage tanks.
In early 1994, Safeway submitted to the Board an eligibility
check list and application for voluntary registration for reim-
bursement for costs of cleaning up the petroleum release, pursuant
to Title 75, Chapter 11, part 3, MCA. The Board deemed Safeway
ineligible for reimbursement because the tank itself had been
removed prior to the release detection and because ARM 16.47.314
(1991) requires that the tank be in place when the release is
discovered.
Safeway filed a petition for judicial review, disputing the
Board's determination of noneligibility. Reasoning that the
administrative rule cited by the Board added an additional
requirement to the cleanup reimbursement statutes, the District
Court declared that part of the rule invalid and reversed the
Board's determination.
Did the District Court err in determining that Safeway was
eligible for reimbursement for costs incurred in cleaning up a
release from an underground storage tank?
As the District Court correctly noted, an agency's findings of
fact should be upheld unless they are clearly erroneous, and its
conclusions of law should be reviewed for correctness. Steer, Inc.
v. Department of Revenue (1990), 245 Mont. 470, 474, 803 P.2d 601,
603.
The Petroleum Storage Tank Cleanup Act, codified at Title 75,
Chapter 11, part 3, MCA, provides for reimbursement for the costs
of cleaning up releases of petroleum products from a petroleum
storage tank.
An owner or operator is eligible for reimbursement for
the applicable percentage as provided in 75-11-307
(4)(a) and (4)(b) of eligible costs caused by a release
from a petroleum storage tank only if:
(a) the release was discovered on or after April
13, 1989;
(b) the department is notified of the release in
the manner and within the time provided by law or rule;
(c) the department has been notified of the exis-
tence of the tank in the manner required by department
rule or has waived the requirement for notification;
(d) the release was an accidental release; and
file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/96-403%20Opinion.htm (3 of 7)4/11/2007 1:53:16 PM
96-403
(e) with the exception of the release, the opera-
tion and management of the tank complied with applicable
state and federal laws and rules when the release
occurred and remained in compliance following detection
of the release.
Section 75-11-308(1), MCA.
The term "petroleum storage tank" is defined at 75-11-
302(22), MCA:
"Petroleum storage tank" means a tank that contains or
contained petroleum or petroleum products and that is:
(a) an underground storage tank as defined in
75-10-403;
(b) a storage tank that is situated in an under-
ground area, such as a basement, cellar, mine, drift,
shaft, or tunnel;
(c) an above ground storage tank with a capacity
less than 30,000 gallons; or
(d) above ground or underground pipes associated
with tanks under subsections (22)(b) and (22)(c), except
that pipelines regulated under the following laws are
excluded:
(i) the Natural Gas Pipeline Safety Act of 1968 (49
U.S.C. 1671, et seq.);
(ii) the Hazardous Liquid Pipeline Safety Act of
1979 (49 U.S.C. 2001, et seq.); and
(iii) state law comparable to the provisions of law
referred to in subsections (22)(d)(i) and (22)(d)(ii), if
the facility is intrastate.
The term "underground storage tank" referenced under subpart (a)
above is defined at 75-10-403(18), MCA:
"Underground storage tank":
(a) means, except as provided in subsections
(18)(b)(i) through (18)(b)(xi):
(i) any one or a combination of tanks used to
contain a regulated substance, the volume of which is 10%
or more beneath the surface of the ground; and
(ii) any underground pipes used to contain or
transport a regulated substance and connected to a
storage tank, whether the storage tank is entirely
aboveground, partially aboveground, or entirely un-
derground[.]
The Board asserts that the statutory language at 75-10-
403(18), MCA, requiring pipes to be "connected to a storage tank"
excludes from the definition of "underground storage tank" the
pipes under the Safeway property, because those pipes had not been
file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/96-403%20Opinion.htm (4 of 7)4/11/2007 1:53:16 PM
96-403
connected to a storage tank since 1979. In denying Safeway's claim
for cleanup costs, the Board cited the following administrative
rule:
RELEASE DISCOVERED ON OR AFTER APRIL 13, 1989, CONSTRUED
(1) A tank owner or operator may be eligible under the
603 program for reimbursement for eligible costs result
ing from an accidental release from a petroleum storage
tank if the release was discovered on or after April 13,
1989, even though the tank, in place, was out of service
on the date of discovery or is presently out of service.
ARM 16.47.314(1)(1991)(emphasis added). Because the storage tanks
on Safeway's property were not "in place" when the petroleum
release was discovered, the Board found Safeway ineligible for
reimbursement for cleanup costs.
The Board points out that an administrative agency's inter-
pretation of a statute under its domain is presumed to be control-
ling. Christenot v. State, Dept. of Commerce (1995), 272 Mont.
396, 401, 901 P.2d 545, 548. However, an agency's rules are valid
only if they are "consistent and not in conflict with the statute."
Section 2-4-305(6)(a), MCA.
The courts have uniformly held that administrative
regulations are "out of harmony" with legislative
guidelines if they (1) "engraft additional and con-
tradictory requirements on the statute"; or (2) if they
engraft additional, noncontradictory requirements on the
statute which were not envisioned by the legislature.
Bell v. Dept. of Licensing (1979), 182 Mont. 21, 23, 594 P.2d 331,
333 (citations omitted).
This case presents the issue of whether it is permissible and
fair for two entities of the State of Montana--the Department and
the Board--to use one statutory definition to reach two opposite
conclusions, subjecting Safeway to the detriment of the State's
regulatory authority over releases from underground storage tanks
but denying Safeway the benefit of reimbursement for costs of
cleanup. The Department treated Safeway as if it owned an
underground storage tank, requiring Safeway to register and close
the "tank" and to clean up the leak from the tank according to its
detailed procedures. The Board, in contrast, treated Safeway as if
it did not own an underground storage tank and refused to provide
reimbursement for cleanup costs.
The Board points out that the Department and the Board are
separate entities and that the petroleum release cleanup require-
ments and the reimbursement program are separate statutes, codified
at Chapter 10 part 7 and Chapter 11 part 3 of Title 75, MCA.
However, it is clear in this case that the Department and the Board
were both interpreting the same definition of "underground storage
file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/96-403%20Opinion.htm (5 of 7)4/11/2007 1:53:16 PM
96-403
tank," which is found in the cleanup requirement statutes at 75-
10-403(18), MCA, and is cited in the reimbursement program statutes
at 75-11-302(22)(a), MCA.
Nothing in the statutory language of 75-10-403(18), MCA,
which includes pipes "connected to a storage tank" within the
definition of an "underground storage tank," requires that the
underground storage tank itself must be in place on the date a
petroleum release is discovered. We conclude that the Board's
decision is the result of an administrative rule that adds an
additional requirement to the statute. As stated above, when an
administrative rule adds additional requirements to a statute, the
rule is invalid.
Moreover, the administrative rule adopted by the Board is
inconsistent with the statutory purpose of protecting the public
health and safety and the environment by encouraging prompt cleanup
of petroleum releases. Section 75-11-301(5)(a), MCA. It is
inconsequential to that purpose whether the petroleum release comes
from a pipe formerly connected to an underground storage tank, or
from the underground storage tank itself.
We hold that the District Court was correct when it declared
invalid that portion of ARM 16.47.314(1)(1991) which adds the
requirement that the storage tank itself must be in place on the
post-April 13, 1989 date of discovery of a petroleum release. This
ruling will not, as the Board argues, result in the use of state
funds to remediate releases from tanks which were removed from the
ground decades ago--except, as here, where portions of pipe
included within the definition of "underground storage tank" remain
in the ground and release petroleum.
Because Safeway was treated as the owner of an underground
storage tank for purposes of application of cleanup requirements by
the Department, it should also be treated as the owner of an
underground storage tank for purposes of reimbursement for cleanup
by the Board. The petroleum release from the pipes in the ground,
which was discovered on or after April 13, 1989, triggers initial
eligibility for reimbursement under 75-11-308(1), MCA. It is
undisputed that the cleanup plan in this case was approved by the
Department. The Board does not allege that the costs were not
"actually, necessarily, and reasonably incurred" as required for
reimbursement under 75-11-309, MCA.
We affirm the decision of the District Court.
/S/ J. A. TURNAGE
We concur:
file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/96-403%20Opinion.htm (6 of 7)4/11/2007 1:53:16 PM
96-403
/S/ KARLA M. GRAY
/S/ JAMES C. NELSON
/S/ W. WILLIAM LEAPHART
/S/ JIM REGNIER
file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/96-403%20Opinion.htm (7 of 7)4/11/2007 1:53:16 PM