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($$   1  ((' dxd dP Pd'''''dxd !  ݛTR[A' Legal3'A' Legal3'T G9 dO7XXdXXd7  Ӝ    r )<,(j 8` `@E` 8ttxP  r   @} }  INTHECOURTOFAPPEALSOFTENNESSEE t )>.*jxE` `@E` 8ttxP E tߛ @$ATNASHVILLÈ򀀀  STONEFORTLANDCOMPANY,  ) `     `     h   )  Petitioner/Appellant,   h   )  DavidsonChanceryNo.95136III @     `     h   ) 0  v.   `     h   )  p     `     h   )  AppealNo.01A019707CH00370  `  THETENNESSEEPETROLEUM  ) P  UNDERGROUNDSTORAGETANK  ) @  BOARD,andJUSTINP.WILSON,  ) 0  COMMISSIONEROFTHE h   )   DEPARTMENTOFENVIRONMENT  )  ANDCONVERSATION,   h   )     `     h   )  Respondents/Appellees. h   )   0   @CC(#(#APPEALFROMTHECHANCERYCOURTOFDAVIDSONCOUNTY@ATNASHVILLE,TENNESSEE@  THEHONORABLEELLENHOBBSLYLE,CHANCELLORForthePetitioner/Appellant:   h   FortheRespondents/Appellees: "  C.CrewsTownsend    h   JohnKnoxWalkup $" BrianE.Humphrey   h   ElizabethP.McCarter % # Chattanooga,Tennessee   h   Nashville,Tennessee p&!$     `     h   AFFIRMED  @)$'    `     h   HOLLYKIRBYLILLARD,J.CONCUR:W.FRANKCRAWFORD,P.J.,W.S.DAVIDR.FARMER,J.  p504  G9  7XXdXXd7  @55' OPINION     Thiscaseinvolveseligibilityforenvironmentalcleanupfunds.TheplaintifflandownerappealsthedecisionoftheTennesseePetroleumUndergroundTankBoardfindingtheplaintiffineligibletoreceivereimbursementfromthepetroleumundergroundstoragetankfundestablishedinTennesseeCodeAnnotated68215110.Uponinitialreviewinchancerycourt,theBoardsdecisionwasreversed.Thetrialcourtsubsequentlyreconsidereditsdecisionand,basedonrecentTennesseeappellatedecisions,affirmedtheBoardsdecisiontodenyassistance.Weaffirm.  StoneFortLandCompany( StoneFort)ownspropertylocatedat4400AmnicolaHighway,Chattanooga,Tennessee(the Property).In1968,pursuanttoalongtermlease,StoneFortconstructedforthelesseeabuildingandotherimprovementsontheProperty,includinga500gallonundergroundstoragetank( UST)forthestorageofusedoil.In1975,StoneFortinstalledasecond500gallonUSTontheProperty. h     In1988,theTennesseePetroleumUndergroundStorageTankAct(the Act)tookeffect.TheActrequiredthatallUSTsinuseasofJuly1,1988,beregisteredwithinoneyear,byJune30,1989.Tenn.CodeAnn.68215106(a)(1)(1996).OwnersandoperatorsofUSTsarerequiredtopayanannualfeeforeachUST.Tenn.CodeAnn.68215109(a)(1996).Inaddition,theActestablishedthePetroleumUndergroundStorageTankFund(the Fund).Tenn.CodeAnn.68215110(a)(1996).TheFundisavailabletoreimbursepropertyownersforexpendituresfor thereasonableandsafecleanupofpetroleumsiteswithinthestate.Tenn.CodeAnn.68215111(a)(1996).PursuanttotheAct,theTennesseePetroleumUndergroundStorageTankBoard(the Board)promulgatedrulesaddressing FundEligibilityRequirementsand Loss,Restoration,andEstablishmentofFundEligibility.Tenn.Comp.R.&Regs.tit.14,ch.1200115.09(4)(a)  (5)(a)(1998).  StoneFortdidnotregisterthetwoUSTsbytherequireddate,nordiditpaythemandatedfees.  In1991,StoneFortsoughttorefinancealoansecuredbyseveralofthecompanysproperties,includingthePropertyatissue.AprospectivelenderhiredGeologicalandEnvironmentalServices,Inc.( EnvironmentalServices)toconductareviewoftheProperty.Environmental 926  dO   dO   dO   dO   dO   ServicesdiscoveredtheexistenceoftheUSTsonthepropertyandlearnedthattheUSTswerenotregisteredasrequiredbytheAct.OnSeptember13,1991,StoneFortsubmittedthenecessaryformsandfeestotheDivisionofUndergroundStorageTanks(the Division)oftheDepartmentofEnvironmentandConservationtoregistertheUSTsandpaythelateannualfees.  InOctober1991,EnvironmentalServicesperformedanenvironmentalassessmentoftheProperty.Theassessmentrevealedelevatedlevelsofpetroleumhydrocarbonsinthesoil. Asa `  result,StoneFortremovedtheUSTsandremediatedthesoilcontamination.Subsequently,onNovember19,1992,StoneFortsubmittedarequesttotheDivisionforreimbursementfromtheFundforitsexpenditurestocleanupthecontaminatedsoil.OnApril8,1993,theDivisiondeniedStoneFortsrequest,findingthatStoneForthadneverestablishedeligibilityforFundreimbursement.TheDivisionadvisedStoneFortthat,inordertobecomeFundeligible,itmustcomplywiththeRulesby(1)insuringthatallstoragetankswereproperlyregistered;(2)insuringthatallcurrentandpastduefeesandlatechargeswerepaid;(3)conductingasitecheckwithcleansoilsampleresults.Thethirdrequirement,thecleansoilsample,wasatthetimeaninternalpolicyoftheDivision,referredtoastheSiteCheckPolicy.TheSiteCheckPolicyrequiredownerstoconductsoilsampletests , andsampleresultswererequiredtobebelowstatedlevelsofcontamination.  StoneFortwasnot   informedbytheDivisionoftheSiteCheckPolicybeforeStoneFortsubmitteditsapplicationforreimbursement.  StoneFortthensoughtahearingbeforetheBoard.ThecontestedhearingbeforetheBoardwasconductedonSeptember21,1994.TheBoarddecidedtopermitStoneForttoseekreimbursementfromtheFund,despitethefactthatStoneForthadfailedtocomplywiththeFundeligibilityrequirements.TheBoardallowedStoneForttoseekreimbursementbecauseitmadeagoodfaithefforttocomplywiththeeligibilityrequirementsandtheDivisionsfailuretonotifyStoneFortoftheSiteCheckPolicybeforeStoneFortsubmitteditsapplicationforreimbursement.  AftertheBoardsdecision,pursuanttoTennesseeCodeAnnotated45322(a)(2),theTennesseeDepartmentofEnvironmentandConservation( theDepartment)filedaPetitionforJudicialReviewwiththeDavidsonCountyChanceryCourt.OnOctober4,1995,thetrialcourtremandedthemattertotheBoardforclarificationofthereasonsforitsdecision,notingthatStoneForthadnotcompliedwiththeActortheRules. 0948   Onremandandafteranotherhearing,theBoardreverseditsinitialdecision.ItfoundthatStoneFortwasineligibleforFundassistancebecauseitfailedtoregistertheUSTsandpaytherequiredannualfees.  StoneFortthensoughtjudicialreviewoftheBoardsdecision,pursuanttoTennesseeCodeAnnotated45322(h).Thisstatuteprovides:Thecourtmayreverseormodifythedecisioniftherightsofthepetitionerhavebeenprejudicedbecausetheadministrativefindings,inferences,conclusionsordecisionsare:(1)Inviolationofconstitutionalorstatutoryprovisions;(2)Inexcessofthestatutoryauthorityoftheagency;(3)Madeuponunlawfulprocedure;(4)Arbitraryorcapriciousorcharacterizedbyabuseofdiscretionorclearlyunwarrantedexerciseofdiscretion;or(5)Unsupportedbyevidencewhichisbothsubstantialandmaterialinthelightoftheentirerecord.$w$$Tenn.CodeAnn.45322  (h)(1)(5)(1996). Afterahearing,thetrialcourtreversedtheBoards ` decision.ThetrialcourtnotedthatitwasundisputedthatregistrationoftheUSTsandpaymentoftheannualfees,thoughnottimely,occurredbeforethecontaminationofthesoilwasdiscovered.ItobservedthattherewasnoallegationthatthetardyregistrationandpaymentoffeeswasmotivatedbyknowledgeorsuspicionthatitwouldhavetoconductanenvironmentalcleanupoftheProperty.ThetrialcourtfoundthattheActdidnotgivetheBoardauthoritytorestrictFundaccesstopropertyownerswhohadtimelyregisteredandpaidtherequiredfees.Thus,underTennesseeCodeAnnotated45322(h),thetrialcourtconcludedthattheBoardsdecisiontodenyStoneFortFundeligibilitywas inviolationofstatutoryprovisions.Tenn.CodeAnn.45322  (h)(1)(1996).  TheBoardthenfiledamotiontoreconsider,citingthisCourtsdecisionsin Christianv. -@), TennesseePetroleumUndergroundStorageTankB oar d ,No.01A019410CH00489,1995WL / +. 241331(Tenn.App.April26,1995) (ChristianI) and Christianv.TennesseePetroleum 1-0 UndergroundStorageTankB oar d ,928S.W.2d927(Tenn.App.1996)( ChristianII ).Thetrialcourt 3.2 grantedthemotionandsetanotherhearing.  Uponreconsideration,thetrialcourtnotedthatwhilethefactsinthe Christian decisions P726 weredistinguishablefromthoseinthiscase,theCourtin Christian neverthelessconsideredthesame 0948 rulesatissueinthecaseatbar.Thetrialcourtfoundthatitwasboundbytherulingsin Christian   andreverseditsearlierdecision.Thus,thetrialcourtaffirmedtheBoardsdecisiontodenyStoneForteligibilityforFundreimbursement.Fromthisorder,StoneFortnowappeals.  Onappeal,StoneFortcontendsthetrialcourtwascorrectinitsfirstrulingthattheBoardexceededitsstatutoryauthorityinpromulgatingruleslimitingfundeligibilitytopropertyownerswhotimelyregisteredandpaidtheannualfees.StoneFortassertsthatthetrialcourterroneouslyreliedon ChristianI and ChristianII initssubsequentaffirmanceoftheBoardsdenialofFund @  reimbursementtoStoneFort.Inthealternative,StoneFortassertsthatitcompliedwithallrequirements,andthattheBoardhadwaivedapplicationofthesitecheckrequirement.  WereviewtheBoardsdecisionpursuanttothesamestatutethatgovernedthetrialcourtsdecision,TennesseeCodeAnnotated45322(h),whichprovidesthatwemay reverseormodifytheBoardsdecisionifitprejudicestherightsofthepetitionerbecauseitis:(1)Inviolationofconstitutionalorstatutoryprovisions;(2)Inexcessofthestatutoryauthorityoftheagency;(3)Madeuponunlawfulprocedure;(4)Arbitraryorcapriciousorcharacterizedbyabuseofdiscretionorclearlyunwarrantedexerciseofdiscretion;or(5)Unsupportedbyevidencewhichisbothsubstantialandmaterialinthelightoftheentirerecord. See Tenn.CodeAnn.45322(h)(1996). "    StoneFortcontendstheBoardexceededitsstatutoryauthorityinpromulgatingruleswhichrequiretheregistrationoftheUSTsandthepaymentoffeesannuallyandtherebylimitingFundeligibility.StoneFortarguesthatthestatutefailstoincludeatemporallimitation,andthusanyrequirementcreatedbytheBoardinlimitingFundeligibilityexceedsitsstatutoryauthority.TheBoardarguesthatStoneFortignoresotherprovisionsinthestatute,andthoseprovisions,inadditionto ChristianI and ChristianII ,allowtheBoardtopromulgateruleslimitingFundeligibility. -@),   TennesseeCodeAnnotated    68215107(f)addressestheauthorityoftheBoardtopromulgaterulesimplementingtheAct.68215107(f)statesinpart: TheboardmaypromulgateandadoptsuchrulesandregulationsinaccordancewiththeprovisionsoftheUniformAdministrativeProceduresAct,compliedintitle4,chapter5,asarerequiredelsewhereinthischapterorareotherwisenecessaryordesirabletoimplementtheprovisionsofthischapter  . ... Tenn.CodeAnn.68215107(f)(1996). 0948   ThisCourtaddressedtheBoardsauthoritytopromulgaterulesandregulationsimplementingtheTennesseePetroleumUndergroundStorageTankActin Christianv.TennesseePetroleum  UndergroundTankBoard ,      ,       No.01A019410CH00489,  1995WL241331(Tenn.App.April26,1995)( ChristianI ).In p  ChristianI , Christian,theownerofproperlyregisteredUSTs,failedtotimelypayannual P  registrationfeesforthetimeperiodJuly1,1990,throughJune30,1991.  Christian   ,1995WL241331,at*1.    Id.         AftertheDivisionsent 0  twonoticesrequestingpaymentandinformingChristianoftheconsequencesresultinginuntimelypayment,theDivision,onApril26,1991,notifiedChristianthattheUSTsweredeemedineligiblepursuanttountimelypaymentoffees. Id. ThenoticerequiredChristiantopay allpastduefees   andlatepenaltiesandhavesoilsamplesanalyzedforcontaminationinorderto reestablishfundeligibility. Id. ByMay30,1991,Christianpaidtheoutstandingregistrationfeesandpenalties. Id.    Subsequently,ChristianfiledapetitionwiththeBoardcontendingthattheBoardsdecision p torevokefundeligibilitywasarbitraryandcapricious. Id. at*2.Thesoleissueonappealwas P whetherChristianlostfundeligibilitypursuanttountimelypaymentofannualregistrationfeesasrequiredunderTennesseeCodeAnnotated68215109andtheBoardsrulesandregulationspromulgatedunderthestatute. Id.ChristianI didnotaddresstheSiteCheckPolicy. @   In ChristianI ,theCourtdiscussedtheActandtheBoardsauthoritytopromulgaterulesand   regulationspursuanttotheAct: 8  TheTennesseePetroleumUndergroundStorageTankAct(Act)grantstheBoard $" authoritytopromulgate,inaccordancewiththeUniformAdministrativeProceduresAct,thoserulesandregulationspertainingtothe [r]equirementsformaintainingevidenceoffinancialresponsibilityfortakingcorrectiveactionandcompensatingthirdpartiesforbodilyinjuryandpropertydamagecausedbysuddenandnonsuddenaccidentalreleasesarisingfromoperationofapetroleum[UST]and themechanismbywhichthefundmayprovidereliefifandwhensucheventsoccur.Thefundisavailable toassistwiththefinancialresponsibilityrequirementsforownersand/oroperatorsofpetroleum[USTs],includingcleanupofcontamination....Toqualifyforfundassistance,theownerand/oroperatormusthavepaid therequired[UST]fee.TheBoardisauthorizedtopromulgatethoserulesnecessaryforthe assessmentandcollectionofthesefees,includingtheiramountsandthedateswhendue.       ӜChristian ,1995WL241331,at*2(citationsomitted).TheCourtnotedthattheBoardsrules 1-0 required substantialcomplianceinordertobeFundeligible,andthat substantialcomplianceincludedthe timelypaymentofallannualtankfees.... Id. at4.Therulessetforthprocedures p504 fornotifyingtheownerofimpendingFundineligibility. Id. TheCourtnotedthattheChristians P726 actionswerein directcontraventionoftheBoardsrulesforFundeligibility. Id. at6.TheCourt 0948 concludedthattheBoardsdenialofFundeligibilitytoChristianwas neitherarbitrarynorcapriciousandwas supportedbytheevidence. Id.     In ChristianII  , thesamepartieswerebeforetheCourt. Christianv.TennesseePetroleum p UndergroundStorageTankBoard ,928S.W.2d927(Tenn.App.1996).   Assetforthabove,on P  April26,1991,theDivisionnotifiedChristianthattheUSTswerefundineligible. Christian ,   Id.  1995 0    @   WL241331,at*1       at*1 .Inordertoreestablishfundeligibility,theDivisionalsodirectedChristianto `  performasitecheckdemonstratingthatthesitehadnotbeencontaminated. Christian ,928S.W.2d @  at928.OnoraboutSeptember9,1991,theDivisionnotifiedChristianofaDecember22,1991,deadlineofrequiringownerstoimplementamethodforleakdetection. Id. Christianfailedto  respond. Id.    OnapproximatelyFebruary27,1992,theDivisionreceivedacomplaintofapotential p contaminationnearthelocationofChristiansUSTs. Id. Subsequently,theDivisionperformedsoil P sampletestsatthelocationandfoundcontamination. Id. at929.TheDivisioninformedChristian 0 ofthenecessaryrequirementsasaresultofa confirmedreleaseofpetroleum. Id. Christiansent ` theDivisionan InitialSiteCharacterizationReport. Id. However,thereportdidnotcontainthe @ resultsofasitecheckwhich is  was requiredunder Rule1200115.06(4)(a)3  theRules . Id. 󀀀       ChristiancontendedthattheBoardexceededitsauthorityinimplementingapolicyrequiring "  asitecheckforthoseownerswhowerereestablishingFundeligibilitybypayingoverduefees. Id.  $" at928.ChristianreceivednotificationthattheUSTswerefundineligible,andthatasitecheckwasrequiredinordertoregainFundeligibility. Id. ChristianchallengedtheBoardsauthorityin P(#& adoptingtheSiteCheckPolicy. Id. 󛀀 0*%(   TheCourtin ChristianII citedProgramRule1200115.09(5)(c): ,`'* AnowneroroperatorthathasbeenissuedaNoticeofFundIneligibilitymustresolvethenoncompliancetothesatisfactionoftheDivisionforFundeligibilitytobe .0*- Мrestored...   .   Itistheresponsibilityoftheowneroroperatortoprovideevidenceof / +. compliancetotheDivision.TheFundwillnotcovereitherinvestigativeor 0,/ correctiveactioncostsorthirdpartyliabilityclaimsassociatedwithareleasewhichoccurredduringthetimeofFundineligibility.(emphasisinoriginal). 2-1 Ѐ `  3.2  Id. at930.TheCourtfoundthattheBoardwaswithinitsauthoritytorequireasitecheckto 4/3 determinewhetherareleasehadoccurredduringtheperiodofFundineligibility:8  Theruleclearlyprohibitstheapplicationoffundmoniesforcorrectiveactioncostsduetoareleaseoccurringduringthetimeoffundineligibility.Withoutthesitecheckrequirement,howelsecould areleasewhichoccurredduringthetimeoffund  :p59 ineligibilitybediscovered?Further,wedonotfindtherecordtosuggestthattheBoardhasinconsistentlyorarbitrarilyimposedsuchrequirement.     Id. at93031.    Asthetrialcourtconcludeduponreconsideration,wefindthe Christian decisionscontrolling `  inthiscase.MostoftheargumentsprofferedbyStoneFortinthiscasewereconsideredandrejectedbythiscourtinthe Christian decisions.  p    StoneFortarguesthat ChristianI isdistinguishablecasebecauseChristian,theownerofthe P  UST,failedtomaintainFundeligibilitybytheuntimelypaymentoftheannualfees,whereasStoneFortneverestablishedinitialeligibilitybecausetheUSTswerenotinitiallyregistered.However,ProgramRule1200115.09(5)(a)statesinpart: Ifatthetimeofdiscoveryofarelease,theDivisiondeterminesthatanownerand/oroperatorhasfailedtoestablishFundeligibilityinaccordancewithsubparagraph(4)(a),correctiveactioncostsand/orthirdpartydamagesassociatedwiththatreleasearenoteligibleforcoveragebytheFund.Tenn.Comp.R.&Regs.tit.14,ch.31200115.09(5)(19 8  9 8).ProgramRule(4)(a)requiresbothregistrationofthetankandpaymentofannualfeesinordertoacquireandretainfundeligibility.  Tenn.Comp.R.&Regs.tit.14,ch.31200115.09(4)(a)(19 8  9 8).Inthiscase,StoneFortfailedtoregistertheUSTsandpaythefeeswithintheperiodoftimesetoutbytheBoard.  StoneFortalsoarguesthat ChristianII isdistinguishablebecauseChristianreceivednotice #! oftheSiteCheckPolicycontemporaneouswiththepaymentoftheoverduefees.Inthiscase,StoneFortreceivednonoticeoftheSiteCheckPolicyuntilitrequestedreimbursementfromtheFund,fifteenmonthsafterlateregistrationandpaymentofoverduefees.TheBoardnotesStoneFortcouldnothaveestablishedeligibilityfortheseUSTsbecausetheyfailedtotimelyregisterandpayfeesasrequiredbyProgramRule1200115.09(4)(a).In1992,thesitecheckrequirementwasaninternalpolicy;in1995theBoardsRuleswereamendedtoincludetheSiteCheckPolicy.In1992,sinceStoneForthadfailedtotimelyregisterandpayfeesasrequiredbytheRules,StoneFortcouldnotestablisheligibilityforthetwoUSTsontheProperty.  StoneFortassertsaviolationofdueprocessforthefailureoftheBoardtogiveStoneFortnoticeoftheSiteCheckPolicy.StoneFortmustassertsomeprejudiceonitsbehalfintheBoardsfailuretonotifythemoftheSiteCheckPolicy. SeeDavisv.Barr ,646S.W.2d914(Tenn.1983); @837  Childsv.RoaneCountyBd.ofEduc. ,929S.W.2d364(Tenn.App.1996).Therehasbeenno  :p59 showinginthiscasethat,hadthesoilsampletestbeenperformedatthetimeStoneFortsaysitshouldhavebeennotified,theresultswouldhaveshownnocontaminationasofthatdate.Therefore,StoneFort  failedtosubmitevidencedemonstratingthatthelackofnotificationbythe p BoardprejudicedStoneFort.Therefore,thetrialcourtsaffirmanceoftheBoardsdenialofFundeligibilityisaffirmed.  Thedecisionofthetrialcourtisaffirmed.CostsareassessedagainstAppellant,forwhichexecutionmayissueifnecessary. X7XXX   `     h 򀀀     `     h HOLLYKIRBYLILLARD,J.     CONCUR:򀀀 8 W.FRANKCRAWFORD,P.J.,W.S. $t  򀀀 8  DAVIDR.FARMER,J. #XLXX X7'j# $   ̀