89-001452RP Medx, Inc. vs. Department Of Environmental Regulation Status: Closed DOAH Final Order on Monday, June 12, 1989.

Summary: Rule regulating biological waste incineratore held valid.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

MEDX, INC. , )

)

Petitioner , )

)

vs. ) CASE NO. 89-1452RP

)

DEPARTMENT OF ENVIRONMENTAL )

REGULATION , )

)

Respondent , )

and )

)

WASTE MANAGEMENT OF FLORIDA, )

)

Intervenor. )

_______________________________)

FINAL ORDER

Pursuant to notice, the Division of Administrative Hearings by its duly

designated Hearing Officer, K. N. Ayers, held a public hearing in the above-

styled case on April 24, 1988, at Tallahassee, Florida.

APPEARANCES

For Petitioner: Paul H. Amundson, Esquire

Julie Gallagher, Esquire

204 B South Monroe Street

Tallahassee, Florida 32301

For Respondent: Chris McGuire, Esquire

Betsy Hewitt, Esquire

Suite 654

2600 Blair Stone Road

Tallahassee, Florida 32301

For Intervenor : William D. Preston, Esquire

Laura B. Pearce, Esquire

123 South Calhoun Street

Tallahassee, Florida 32301

STATEMENT OF THE ISSUES

1. Whether Amendments to Rules 17-2.600 and 17-2.710, Florida

Administrative Code are invalid by virtue of being an invalid exercise of

delegated legislative authority.

2. Whether the economic impact statement prepared by the Department was

adequate.

PRELIMINARY STATEMENT

At the commencement of the hearing, Waste Management of Florida's Petition

for leave to intervene in these proceedings was granted. Thereafter, the

parties presented a prehearing stipulation to reduce the issues in these

proceedings, Petitioner called four witnesses, Respondent called three witnesses

and 23 exhibits were admitted into evidence. Findings 1 and 4-7 were taken from

the Prehearing Stipulation.

Proposed findings have been submitted by the partieseatment accorded

those proposed findings is contained in the Appendix attached hereto and made a

part hereof.

FINDINGS OF FACT

1. The proposed amendments to Rule 17-2.600 and 17-2.710, Florida

Administrative Code (the Rule) were published in the February 17, 1989 Florida

Administrative Weekly, and were adopted by the Environmental Regulation

Commission on March 22, 1989. MEDX timely filed a petition to challenge the

Rule on March 13, 1989, prior to adoption.

2. Promulgation of the Rule resulted from Senate Bill 1192 later codified

as Section 403.704(31), Florida Statutes, which directed the department to

initiate rulemaking to address the management of biohazardous waste and

biological waste within the state. This statute requires such rules to address

on-site and off-site incineration as well as regulation of such waste from the

point of original to final incineration. The Rule here involves only the

incineration of this waste. Rule 17-712, Florida Administrative Code regulates

off-site handling, transportation and disposal of biological waste, while

proposed Rule 10D-104 (by DHRS) will regulate on-site handling and disposal of

biological waste.

3. Biohazardous waste is generally any solid or liquid waste which may

present a hazard of infections to humans. Biological waste is solid waste that

causes or has the capacity of causing disease and infection, and includes, but

is not limited to, biohazardous waste, diseased or dead animals, and other waste

capable of transmitting pathogens to humans or animals.

4. The Rule sets emission and operating standards for incinerators which

burn biological waste. The Rule sets different standards for different size

incinerators, with the result that incinerators with a capacity of 500 pounds

per hour (pph) or less, if properly constructed and operated, are likely to be

able to meet the standards and the rules without the use of additional pollution

control devices, such as scrubbers, depending upon the waste stream being

incinerated. Incinerators with capacities of more than 500 pph are unlikely to

be able to meet the standards in the Rule without the use of additional

pollution control devices such as scrubbers, although it is possible that some

may be able to meet these standards.

5. The incineration of a ton of biological waste in several 500 pph

capacity incinerators without scrubbers is likely to emit more total

particulates and hyrdogen chloride (HCl) into the air than would be the same ton

of biological waste burned in a 2,000 pph incinerator equipped with a scrubber.

6. All biological waste incinerators, of whatever size, would be subject

to all other applicable ambient air quality standards in addition to the minimum

emission standards in the Rule and would be further subject to pollution

limitations established for each area.

7. Proposed Rule 17-712 and Department of Health and Rehabilitative

Services proposed Rule 10D-104, which together regulate the storage, treatment

and disposal of biological waste, are likely to substantially increase the

number of biological waste generators regulated by the State of Florida and are

likely to increase the amount of biological waste regulated by the State of

Florida. It is, therefore, likely that the amount of biological waste

incinerated in the state, as well as the persons contracting with biological

waste incinerator facilities, will increase as a result of these rules.

8. Currently, all incinerators with capacities of less than 50 tons per

day (which includes all biological incinerators in this state) are exempt from

air emission standards, with the exception of visible emissions and odor.

9. The Rule, by setting standards for particulate emissions and HCl

emissions, as well as setting standards for residence time, carbon dioxide

emissions, monitoring, operator training, and start-up and shut-down procedures,

will impose more stringent requirements on all biological waste incinerators

than currently exist, regardless of the size of the incinerator.

10. MEDX is a biohazardous waste transportation and disposal company

founded in 1978. MEDX has two incinerators at its Miami facility with a

combined capacity of 4500 pph. The older unit is rated at 2000 pph and the

newer one at 2500 pph. During the last fiscal year, MEDX invested approximately

3.5 million dollars in its Dade County facility for pollution control devices,

buildings and water containment.

11. The Dade County facility incinerates all biological waste treated by

MEDX in Florida. Biological waste from northern and central Florida is

collected by trucks operating out of Lakeland, Florida, from where this waste is

transported on larger trucks to the Dade County facility for incineration.

12. As a result of emission control problems MEDX entered into a consent

decree with Dade County in which MEDX agreed to equip its two Dade County

incinerators with anti-pollution equipment (scrubbers) in 1989 at a cost of

approximately $300,000 each.

13. Prior to promulgating the Rule, DER held workshops at which MEDX and

all other interested parties were invited to participate and were given the

opportunity to present evidence regarding the Rule and the economic impact of

the Rule. Additionally, the Department considered studies by the Environmental

Protection Agency, looked at incinerators operating in Florida, consulted with

other professionals in the field, contacted other states and looked at their

rules, and solicited written comments from affected parties.

14. As a result of these studies, it was concluded that the most important

factor in reducing harmful emissions is to ensure good combustion. This is

addressed in the Rule by requiring 1800 degrees F. operating temperature in the

upper chamber, for a residence time of one second, with constant monitoring of

this temperature and to require the use of trained incinerator operators.

15. It was further concluded that good combustion could be further ensured

by monitoring carbon monoxide (CO) emissions and establishing a requirement that

CO emissions not exceed 100 parts per million.

16. Manufacturers of incinerators were contacted to determine the minimum

particulate emission attainable without control devices and these manufacturers

agreed their incinerators could, if properly operated, attain a particulate

limitation of 0.1 grain per dry standard cubic foot corrected to 7 percent

oxygen. Accordingly, this standard was adopted.

17. A majority of these incinerators burn hospital waste which generally

contains large quantities of polyvinyl chlorides (plastics) which, when burned,

produces HCl. The amount of HCl emissions can be controlled to a large extent

by controlling the amount of plastic that is put into the waste stream. Federal

regulations for hazardous waste facilities require the hydrogen chloride

emissions not exceed four pounds per hour. If the incinerator can't meet that

limitation they have to provide 99 percent elimination. Since most incinerators

with a capacity of less than 500 pph can meet this limitation of HCl emission,

that standard was adopted and is consistent with the Federal rule.

18. Biohazardous waste incinerators are controlled air incinerators.

Waste is loaded into a lower chamber which partially burns the waste creating a

smoke which is burned and consumed in the upper chamber leaving, theoretically,

carbon dioxide, nitrogen and water vapor. However, even the best incinerator

cannot reach complete combustion and some particulates remain. Also the burning

of plastics which contains chlorine results in the emission of HCl.

19. Small incinerators with a capacity of less than 500 pph are generally

referred to as batch incinerators because they are loaded with a batch of waste

to burn and when that process is completed the incinerator is turned off, the

ashes are removed and the incinerator is ready for another batch. Batch

incinerators are usually run for 10 - 12 hours per day.

20. Another type incinerator is the continuous burn incinerator. This

type incinerator generally has a capacity greater than 500 pph and is

characterized by some mechanism which can continuously feed waste material into

the incinerator and remove ashes without shutting dawn the incinerator.

21. In preparing the Rule DER conducted a survey of existing incinerators

in Florida which dispose of biohazardous wastes and found the vast majority of

these facilities have a capacity of less than 500 pph and a majority have a

capacity of less than 200 pph (Exhibits 6 and 23).

22. Installing pollution control devices (scrubbers) on small incinerators

with capacity less than 500 pph is not economically feasible because the amount

of emission reduction will not justify the cost of the scrubbers. On the other

hand, larger incinerators benefit from economies of scale which allows scrubbers

to be cost effective in reducing pollutants. Without controls and assuming the

same combustion, an incinerator with a capacity of 2,000 pph will emit four

times the pollutants of a 500 pph capacity incinerator, assuming both operate

the same number of hours per day. Accordingly, the concentration of harmful

emissions will be much higher in the vicinity of the large incinerator than in

the vicinity of the small incinerator. The concentration of HCl, for example,

is more significant in determining the adverse impact than is the quantity of

HCl emitted.

23. Petitioner's contention that the Rule will result in a proliferation

of small incinerators and therefore lead to increased air pollution instead of a

diminution of such pollution cannot be so. There is presently no control over

any of these incinerators burning biohazardous wastes, except for visible

emissions and odor; and even if the Rule did not limit the emissions which

require scrubbers on the larger incinerators, the Rule would improve air quality

simply by setting standards which will improve combustion in all of these

incinerators. By limiting total emissions of HCl and particulates, the Rule

will result in improved air quality.

ECONOMIC IMPACT STATEMENT

24. Pursuant to Section 120.54(2), Florida Statutes, an Economic Impact

Statement (EIS) was prepared by the Department prior to adoption of the Rule.

Section 120.54(2)(b), Florida Statutes provides the Economic Impact statement

shall include:

1. An estimate of the cost to the agency of

the implementation of the proposed action,

including the estimated amount of paperwork;

2. An estimate of the cost or the economic

benefit to all persons directly affected by

the proposed action;

3. An estimate of the impact of the proposed

action on competition and the open market for

employment, if applicable;

4. A detailed statement of the data and

method used in making each of the above

estimates;

5. An analysis of the impact on small

business as defined in the Florida Small and

Minority Business Assistance Act (FSNBA) Act

of 1985.

25. There is no issue that the EIS properly addresses the cost to the

agency.

26. The estimated cost to persons affected by the Rule, in addition to

permit fees, was estimated by the Department at $20,000 to $40,000 annually for

incinerators with a capacity greater than 500 pph. This figure was arrived at

by annualizing the cost of a scrubber over a 20 year period, and adding the

annual operating costs of that scrubber. The costs for incinerators with a

capacity of 500 pph or less was estimated as a one-time expense of $15,000 to

$20,000 to modify the incinerator to meet the retention time required by the

Rule. No evidence was presented to refute the accuracy of these figures.

27. MEDX contends the EIS is fatally defective because it fails to include

the transportation costs associated with the operation of large off-site

incinerators. While MEDX obviously incurs large transportation costs in

treating in its Dade County facility biohazardous wastes generated in the

Florida panhandle, for example, the same costs are not involved in treating

waste generated in South Florida. Even if the Rule may result in small

incinerators having a cost advantage in some areas over regional incinerators

many miles away, it does not follow that large regional incinerators which are

required to install scrubbers cannot compete economically with small

incinerators located in the same general area, or that the EIS is fatally

defective for not including such costs. Economies of scale will offset some of

the additional costs involved in having to install scrubbers.

28. In addition to not including transportation costs, the EIS also did

not include the cost of facility siting or construction which could vary greatly

depending on whether the facility is on-site or off-site. The EIS addresses

only the costs of complying with the Rule. The Rule sets emission and operating

standards and the EIS addresses only the costs associated with complying with

those standards.

29. Petitioner also challenges the statement in the EIS that the proposed

revisions would benefit the public in reducing emissions in the air. The

fallacy of that argument is pointed out in finding 23 above.

CONCLUSIONS OF LAW

30. The Division of Administrative Hearings has jurisdiction over the

parties to, and the subject matter of, these proceedings.

31. Section 120.52(8), Florida Statutes defines "invalid exercise of

delegated legislative authority" to mean:

Action which goes beyond the powers,

functions, and duties delegated by the

Legislature. A proposed or existing rule is

an invalid exercise of delegated legislative

authority if any one or more of the following

apply:

(a) The agency has materially failed to

follow the applicable rule making procedures

set forth in s. 120.54;

(b) The agency has exceeded its grant of rule

making authority, citation to which is

required by s. 120.54(7);

(c) The rule enlarges, modifies, or

contravenes the specific provisions of the law

implemented, citation to which is required by

s. 120.54(7);

(c) The rule is vague, fails to establish

adequate standards for agency decisions, or

vests unbridled discretion in the agency; or

(d) the rule is arbitrary or capricious.

32. Here, Petitioner's challenge to the proposed rule is based almost

entirely on the fact that the Rule will not require the small incinerators,

which presently account for the vast majority of the incinerators burning

biohazardous wastes, to install scrubbers. No credible evidence was presented

to rebut the Department's conclusion that installing scrubbers on small

incinerators is not economically feasible.

33. In contending that the Rule is an invalid exercise of delegated

legislative authority, Petitioner contends only that the Rule is arbitrary or

capricious; the Legislature specifically directed the agency to promulgate the

Rule. No evidence was submitted suggesting the agency failed to follow the

applicable rulemaking procedures; exceeded its grant of rulemaking authority;

enlarged, modified, or contravened the specific provisions of the law

implemented; or that the Rule is vague, fails to establish adequate standards,

or vests unbridled discretion in the agency.

34. Section 120.54(2)(a), Florida Statutes provides in pertinent part:

Each agency, prior to the adoption, amendment,

or repeal of any rule, shall consider the

impact of such proposed action on small

business as defined in the Florida Small and

Minority Business Assistance Act of 1985, and,

whenever possible shall tier such rule to

reduce disproportionate impacts on small

business and to avoid regulating small

businesses which do not contribute

significantly to the problem the rule is

designed to regulate ... The agency shall

consider each of the following methods for

reducing the impact of the proposed rule on

small business:

1. Establishing less stringent compliance or

reporting requirements in the rule for small

business.

2. Establishing less stringent schedules or

deadlines in the rule for compliance or

reporting requirements for small business.

3. Consolidating or simplifying the rule's

compliance or reporting requirements for small

business.

4. Establishing performance standards to

replace design or operational standards in the

rule for small business.

5. Exempting small business from any and all

requirements of the rule.

35. While no specific evidence was presented regarding the number of the

current operators of small incinerators who qualify as a small business, it is

obvious that many would so qualify. The fact that the Rule takes into

consideration those legislative mandates above quoted is hardly grounds for

finding the Rule to be in conflict with the statute under which it was

promulgated or is arbitrary or capricious and therefore an invalid exercise of

delegated legislative authority.

36. Petitioner has the burden to prove, by a preponderance of the

evidence, that the rule is an invalid exercise of delegated legislative

authority. Balino v. Department of Health and Rehabilitative Services, 348

So.2d. 349 (Fla. 1st DCA 1977). The Rule is invalid if it is arbitrary or

capricious. Agrico Chemical v. Department of Environmental Regulation, 365

So.2d 259 (Fla. 1st DCA 1978), or if in conflict with the statute under which it

was promulgated. Department of Health and Rehabilitative Services v. McTigue,

387 So.2d 454 (Fla. 1st DCA 1980). The Rule may also be invalid if the economic

impact statement is deficient. In determining the sufficiency of an EIS, the

"Harmless Error Rule" requires a showing that the EIS impaired the fairness of

the proceeding or the correctness of the action taken. Department of Health and

Rehabilitative Services v. Wright, 439 So.2d 937 (Fla. 1st DCA 1983).

37. The EIS prepared in this case covered the statutory requirements of S.

120.54(2)(b), above quoted. While almost any EIS could be improved and expanded

to cover most contingencies, the law does not require such exactitude. MEDX

participated in the workshops and public hearings held by the department to

gather information on which the Rule was predicated. MEDX Was given an

opportunity to submit written comments on the proposed rule and its effects.

MEDX now contends the EIS did not adequately address all costs associated with

the operation of different size incinerators. While the EIS did not attempt to

address all of the indirect impacts of the Rule, it did adequately address the

direct impacts of the Rule on the agency, the public and the regulated

community. Respondent can hardly be faulted for failing to make estimates on

the basis of unknown variables. State, Department of Insurance v. Insurance

Service Office, 434 So.2d 908 (Fla. 1st DCA 1983) ; Brewster v. State Department

of Environmental Regulation, 444 So.2d 483 (Fla. 1st DCA 1984). Furthermore,

even if MEDX's argument that the EIS is defective had merit, they have failed to

prove this to be a material error in procedure where the fairness of the

proceeding or the correctness of the action was impaired by any of the alleged

deficiencies. Polk v. School Board of Polk County, 373 So.2d 962 (Fla. 2nd DCA

1979). In Wright, supra at p. 941 the court held that, compiled

conscientiously, an EIS can shield an otherwise valid rule from collateral

attack on the basis that, as applied, the rule would be devastating economically

and therefore arbitrary and capricious. The emphasis MEDX placed upon the

effect of the Rule was not that the Rule would have devastating economic impact

on large incinerators, but that the Rule would lead to a proliferation of small

incinerators and result in an increase in the quantity of pollutants emitted

from the burning of biohazardous waste. As noted above, while the Rule could

lead to new installations of incinerators with a capacity of less than 500 pph,

the overall effect of the Rule will be to improve air quality, if only by

requiring more complete combustion and trained operators.

RECOMMENDATION

From the foregoing it is concluded that amendments to Rule 17-2.600 and 17-

2.710, Florida Administrative Code are not invalid exercises of delegated

legislative authority and that the Economic Impact Statement adequately reflects

the economic impact of the rules on the agency, the public, and the regulated

community affected by the rule. It is, therefore,

ORDERED that MEDX's challenge to Rule 17-2.600 and 17-2.710, Florida

Administrative Code be dismissed.

DONE AND ENTERED this 12th day of June, 1989, in Tallahassee, Leon County,

Florida.

_________________________________

K.N. AYERS

Hearing Officer

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, FL 32399-1550

[phone]

Filed with the Clerk of the

Division of Administrative Hearings

this 12th day of June, 1989.

APPENDIX

Treatment Accorded Petitioner's Proposed Findings

1. Included in HO #1 and #2.

2. Included in HO #2.

3. Included in HO #7.

4. Included in HO #1.

5. Included in HO #7.

6. Included in HO #10.

7. Included in HO #11.

8. Rejected as speculation and unreasonable.

9. Accepted.

10. Included in HO #18.

11. Included in HO #19.

12, 13, 14. Included in HO #20.

15, 16. Included in HO #18.

17. Accepted in principle. However, this finding is predicated upon the

fact that incomplete combustion will occur when the temperature in the upper

chamber is less than 1800 degrees F.

18. Accepted.

19. Included in HO #4.

20. Accepted, but irrelevant to the validity of the Rule.

21. Rejected. The Rule requires monitoring.

22. Included in HO #4.

23. Rejected.

24, 25. Included in HO #4.

26. Included in HO #5.

27. Included in HO #6.

28. Included in HO #7.

29. Same as 20.

30. Same as 20.

31. Same as 20. See HO #27.

32. Same as 20.

33. Accepted.

34. First two sentences accepted. Remainder rejected as mere opinion.

35. Rejected insofar as not included in HO #5, #6 and #9.

36. Same as 20.

37. Same as 20.

38. Rejected.

39.

First paragraph accepted; remainder rejected.

40. Rejected insofar as in conflict with HO #4, #5, #6, #7, #14 and #17.

41. Accepted insofar as compatible with HO #22.

44. Same as 20.

45. Accepted as the testimony of Dr. Fishkind ; conclusions that EIS

inadequate rejected.

46. Rejected as argument.

47-53. Rejected.

Treatment Accorded Respondent's Proposed Findings

1. Included in HO #1.

2. Included in HO #2 and #4.

3. Included in HO #8 and #9.

4. Included in HO #6.

5. Included in HO #7.

6, 7. Included in HO #13.

8. Accepted. See HO Conclusion of Law 5.

9. Included in HO #24.

10. Included in HO #25.

11. Included in HO #26.

12. Included in HO #28.

13. Accepted insofar as included in HO #23.

14. Accepted insofar as included in HO #22 and #23.

15. Accepted insofar as included in HO #23, #27 and #28; otherwise

rejected as irrelevant.

16. Accepted, but irrelevant to validity of Rule.

17. Included in HO Conclusion of Law 5.

18. Included in HO #16, #21, #27 and #28.

19. Rejected as argument.

20. Included in HO #23.

21. Same as 16.

22. Included in HO #17 and #22.

23. Included in HO #14 and #17.

24. Accepted.

25. Accepted insofar as included in HO #14; otherwise rejected as

argument.

26. Rejected as argument.

27. Accepted insofar as included in HO #17, #22 and #23.

28. Included in HO #15.

29. Included in HO #12; otherwise rejected as argument.

COPIES FURNISHED:

Paul H. Amundson, Esquire

Julie Gallagher, Esquire

204 B South Monroe Street

Tallahassee FL 32301

Chris McGuire, Esquire

Betsy Hewitt, Esquire

Suite 654

2600 Blairstone Road

Tallahassee, FL 32301

William D. Preston, Esquire

Laura B. Pearce, Esquire

123 South Calhoun Street

Tallahassee, FL 32301

Dale H. Twachtmann, Secretary

Department of Environmental Regulation

Twin Towers Office Building

2600 Blair Stone Road

Tallahassee, FL 32399-2400

Daniel H. Thompson

General Counsel

Department of Environmental Regulation

Twin Towers Office Building

2600 Blair Stone Road

Tallahassee, FL 32399-2400

Carroll Webb

Executive Director

Administrative Procedures Committee

Room 120, Holland Building

Tallahassee, FL 32399-1300

Liz Cloud

Chief

Bureau of Administrative Code

Room 1802, The Capitol

Tallahassee, FL 32399-1300