SUBJECT: Natural Resources and Environmental Protection Act, 1994 PA 451, as amended; Part 215, Underground Storage Tank Financial Assurance.

Petition of Bio-Tech, Inc.

File No. Z0210

The above captioned matter was the subject of a contested case hearing resulting in the issuance of a Proposal For Decision dated February 9, 1999. In a letter dated February 9, 1999, the Office of Administrative Hearings gave the Parties until February 19, 1999, to file written Exceptions to the Proposal for Decision. Bio-Tech, Inc., has not filed Exceptions. The Department of Environmental Quality (Department) filed its Exceptions on February 17, 1999. The matter is now before the Chief Administrative Law Judge of the Office of Administrative Hearings for a final agency decision pursuant to Executive Order 1995-18 and Delegation Letter No. OAH-324.101 et seq.-01.

This Tribunal has considered the Proposal For Decision, the Department's Exceptions, exhibits, pleadings, arguments and the transcript. Proposed findings and conclusions not addressed in this Final Determination and Order were found to be unsupported by the record or unnecessary in making a final decision in this contested case.

The Department's Exceptions request the clarification of the following factual representations contained in the Proposal for Decision:

1. The action in the Ingham County Circuit Court between the Parties to this case resulted in an Order which required the Department to place Bio-Tech, Inc., on the Qualified Consultant List. Therefore, the purpose of this contested case was to determine if Bio-Tech, Inc. should be removed from the list.

2. Whether Mr. Stephen H. Sutherland meets the statutory criteria of a Certified Professional is immaterial to these proceedings.

Neither of these Exceptions relate to the legal conclusions contained in the Proposal for Decision, or the validity of that document's ultimate finding. However, to ensure the record in this matter is as accurate as possible, the Department's Exceptions as they pertain solely to the foregoing representations are adopted.

The Chief Administrative Law Judge of the Office of Administrative Hearings ADOPTS AND INCORPORATES BY REFERENCE the Proposal For Decision dated February 9, 1999, including the Findings of Fact and Conclusions of Law.

THEREFORE, IT IS ORDERED:

1. The Proposal For Decision dated February 9, 1999, is adopted by reference and incorporated into this Final Order.

2. Bio-Tech, Inc's. license as a Qualified Underground Storage Tank Consultant is REVOKED and the Department shall remove Bio-Tech, Inc., from the list of Qualified Consultants it maintains under Part 215.

3. The Office of Administrative Hearings does not retain jurisdiction in this matter.

Dated: March 3, 1999 ________________________________

Richard G. Lacasse, Chief

Administrative Law Judge, MDEQ

Office of Administrative Hearings

___________________________________________________________________

SUBJECT: Natural Resources and Environmental Protection Act, 1994 PA 451, as amended; Part 215, Underground Storage Tank Financial Assurance.

Petition of Bio-Tech, Inc.

File No. Z0210

___________________________________________________________________

The issue in this contested case is whether Bio-Tech, Inc. (Bio-Tech) can remain on the list of Qualified Underground Storage Tank Consultants. The list is maintained by the Michigan Department of Environmental Quality (Department) under the provisions of Part 215, Underground Storage Tank Financial Assurance, Natural Resources and Environmental Protection Act (NREPA), 1994 PA 451, as amended. MCL 324.21501 et seq.; MSA 13A.21501 et seq.

This case was heard under Part 215, Underground Storage Tank Financial Assurance, of the NREPA. MCL 324.21501 et seq.; MSA 13A.21501 et seq. Procedurally, the hearing was conducted pursuant to the Administrative Procedures Act (APA), 1969 PA 306, as amended; MCL 24.201 et seq.; MSA 3.560(101) et seq.

Bio-Tech, Inc. (Bio-Tech) through its then counsel John Michael Singer filed a petition for a contested case with this Tribunal on December 1, 1997. After a series of delays, which are set forth below, the hearing was conducted on January 25, 1999. Mr. Craig W. Elhart, who had subsequently appeared in Mr. Singer's place, represented Bio-Tech during that hearing. Due to inclement weather and a traffic mishap, Mr. Stephen Sutherland, President, Bio-Tech, Inc., was unable to attend the hearing. Mr. Elhart, after consulting with Mr. Sutherland by telephone, elected to proceed without him being present or testifying. Bio-Tech presented no witnesses and entered no exhibits at the hearing.

The professional staff of the Storage Tank Division (STD) of the Department of Environmental Quality (Department) is responsible for administering Part 215 of the NREPA. The Department, represented by Mr. James L. Stropkai, Assistant Attorney General, presented the testimony of Ms. Betty Gilreath and entered eight (8) exhibits during the hearing. A list of those exhibits is attached to this Proposal for Decision.

At the conclusion of the hearing the Petitioner was given a five (5) day time-frame to file a written closing argument, with the Department's filing to come five (5) days after the submission of that document. As of the date of this Proposal for Decision the Petitioner has not filed a closing argument.

As indicated above, this contested case hearing was initiated by the petition filed by Bio-Tech over the Department's denial of its application for certification as a Qualified Consultant under §21542 of Part 215. The petition contends the Department was required to place Bio-Tech on the Permanent Qualified Underground Storage Tank Consultant List as a result of the Ingham County Circuit Court's Order in Bio-Tech, Inc., et al v Michigan Department of Natural Resources, No. 95-79852-CZ (1996). A copy of that Order is included on this record as Exhibit 2. The petition contests the appropriateness of the Department's denial of Bio-Tech's application to remain on the aforementioned list. Exhibit 1.

Typically, under the provisions of the APA a license revocation proceeding is initiated by the agency, as opposed to the licensee. Although Bio-Tech's petition for a contested case hearing cites no authority for this Tribunal to conduct a contested case hearing, a formal hearing on the record is required by law before a license may be revoked. MCL 24.292; Rogers v State Bd of Cosmetology, 68 Mich App 751; 244 NW2d 20 (1976). Based on the nature of this proceeding and the fact the Department is the proponent of revocation, this Tribunal placed both the burden of moving forward and the burden of proof on the Department by way of a letter dated May 15, 1998.

At any time the Department moves toward revoking a license, it must comply with the procedural requirements of §92 of the APA as expressed in Rogers, supra. MCL 24.292. Although the Petitioner did not make an issue of the Department's compliance with these provisions, a finding in that regard is necessary. These provisions require the following four step process be followed by the agency:

1. A preliminary notice of facts stating the reasons for non-compliance must be provided to the licensee.

The Department provided notice of facts regarding Bio-Tech's non-compliance with §21542(2)(b) of Part 215, specifically Bio-Tech's failure to have a Certified Underground Storage Tank Professional on staff. This notice was provided to Bio-Tech by letters dated September 16, 1996, after initial review, and August 25, 1997, subsequent to a Divisional review. Exhibit 4 and Exhibit 6.

2. An agency must provide the licensee with an opportunity to show it is in compliance with regulatory requirements; this is the so-called "Rogers" hearing.

The Department provided Bio-Tech with a notice of this informal opportunity to show compliance by letter dated August 25, 1997. Exhibit 4. The informal, or "Rogers" hearing, was held on October 17, 1997. Bio-Tech was provided with notice of the Department's determination by letter dated November 19, 1997. Exhibit 8.

3. A notice of hearing which complies with §71 of the APA. MCL 24.271.

4. A formal contested case hearing which complies with §71 of the APA. MCL 24.271.

After a series of abeyances were granted, motions filed and decided Bio-Tech was provided, consistent with §71 of the APA, with initial notice of the formal contested case hearing in a letter from this Tribunal dated May 15, 1998. Due to a conflict in Bio-Tech's counsel's schedule, the hearing was rescheduled for August 20, 1998. The matter was then temporarily stayed by the United States Bankruptcy Court, and ultimately rescheduled for January 7, 1999. Lastly, due to inclement weather the matter was postponed to the actual date of hearing on January 25, 1999.

Based on the foregoing, I find, as a Matter of Fact, the four step procedure required by the APA before revocation of a license may occur, has been met.

During the course of this proceeding the Parties made reference to the issues in Bio-Tech, Inc., et al v Michigan Department of Natural Resources, No. 95-79852-CZ (1996), a case litigated in the Ingham County Circuit Court. The thrust of the Ingham County Circuit Court case was whether Bio-Tech, and others, had licenses under Part 215 to work on underground storage tanks. The basis of the assertion that they did was their inclusion on a list maintained first by the Department of Management and Budget, and subsequently by the Department of Environmental Quality.

Under Part 215, persons working on underground storage tanks must meet the requirements of a Qualified Underground Storage Tank Consultant (QC). MCL 324.21542(2). One of the requirements of a QC is to have "... 1 or more individuals actively on staff who are certified underground storage tank professionals". MCL 324.21542(2)(b). The requirements necessary for a Certified Underground Storage Tank Professional (CP) designation are found in MCL 324.21543. The Ingham County Circuit Court held that Bio-Tech's inclusion on the list of QC's is tantamount to a license. The Court also ruled in another Order that ". . .being placed on the interim certified underground storage tank professional list does not constitute a license which requires Defendants to place him on the permanent certified underground storage tank professional list". Bio-Tech, Inc., et al, supra (2-27-96). Regarding the QC list and license issue, the Department has been granted leave to appeal this decision to the Michigan Court of Appeals.

During the hearing, counsel for the Department objected, and this Tribunal sustained, any inquiry or evidence being introduced regarding Mr. Sutherland's status as a CP or the Department's reasons for denial of that application. Upon further review of that ruling and the record in this matter, I find that the CP status of Mr. Sutherland is irrelevant and immaterial to this proceeding for the following reasons:

1. The CP and QC licenses are separate and distinct licenses.

2. The Ingham County Circuit Court's Order provides that being on the interim CP list does not constitute a license.

3. There is no right to a contested case hearing on initial licensing matters. Kelly Downs v Michigan Racing Commission, 60 Mich App 539; 231 NW2d 443 (1975).

4. This Tribunal has no jurisdiction under Part 215 or any other authority to conduct a contested case hearing regarding Mr. Sutherland's CP status.

Therefore, the only factual issue remaining in this case is whether Bio-Tech meets the requirements of a QC, and specifically whether it has an individual on staff who is certified by the Department as a CP. MCL 324.21542(2)(b).

The only witness to testify during the hearing was Ms. Gilreath, who was called by the Department. In her capacity with the Department, she testified she is a member of the review board which certifies applicants for CP status, is familiar with the procedure and keeper of the records. She testified, based on the records in her possession and her personal involvement, that Mr. Sutherland has never been certified as a CP nor has anyone else in the employ of Bio-Tech applied or been so certified. I find, as a Matter of Fact, that Bio-Tech does not have an individual on its staff who is approved by the Department as a CP. I find, as a Matter of Fact, that Bio-Tech does not meet the requirements of a QC as specified in §21542(2)(b) of Part 215.

1. Based upon the Findings of Fact, I conclude, as a Matter of Law, the procedural requirements of the Administrative Procedures Act regarding license revocation have been satisfied in this matter. Therefore, the Department may properly move forward with revoking Bio-Tech, Inc.'s license as a Qualified Consultant.

2. Based upon the Findings of Fact, I conclude, as a Matter of Law, Bio-Tech, Inc. does not meet the requirements of a Qualified Consultant (QC) because it does not have a Certified Professional (CP) on its staff. MCL 324.21542(2)(b).

3. I further conclude, as a Matter of Law, Bio-Tech's failure to have in its employ an individual who is certified by the Department as a CP is sufficient grounds to revoke Bio-Tech's license as a QC.

Based on the Findings of Fact and Conclusions of Law, it is proposed that a Final Order be entered which REVOKES the license as a Qualified Underground Storage Tank Consultant held by Bio-Tech, Inc.

Date: February 9, 1999

Richard A. Patterson

Administrative Law Judge

SUBJECT: Part 315, Underground Storage Tank Financial Assurance, of the Natural Resources and Environmental Protection Act (NREPA), 1994 PA 451, as amended.

Petition of Bio-Tech, Inc. and Stephen H. Sutherland

Application No. Z0210

Exhibits - all photocopied

1 Petition for Contested Case Hearing, Bio-Tech, Inc., dated 11/28/97.

2 Circuit Court for the 30th Judicial Circuit, Ingham County, File No. 95-79852-CZ, Hon. William E. Collette, Order Granting in Part and Denying in Part Defendants' Motion for Summary Disposition, dated November 26, 1996.

3 Qualified Underground Storage Tank Consultant Application (Permanent), Bio-Tech, Inc., date stamped 02/28/94.

4 Certified Mail dated September 16, 1996 to Mr. Stephen Sutherland, President, Bio-Tech from Ms. Betty Michalski, Michigan Department of Environmental Quality (MDEQ), Underground Storage Tank Division, (USTD).

5 Letter dated September 23, 1996 to Ms. Betty Michalski from Jay A. Harter, Knaggs, Harter & King, P.C.

6 Certified Mail dated August 25, 1997 to Mr. Stephen Sutherland from Mr. Arthur R. Nash Jr., Chief, MDEQ, USTD.

7 Letter dated September 15, 1997 from John Michael Senger, Attorney to Ms. Betty Michalski.

8 Letter dated November 19, 1997 from Mr. Arthur R. Nash Jr. to Mr. Stephen Sutherland.