Chapter 181 - 432R - H Ver of SB1376 - Title: underground storage tank program

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Chapter 181 - 432R - H Ver of SB1376

Reference Title: underground storage tank program

AN ACT
AMENDING SECTIONS 49-1005, 49-1014, 49-1019, 49-1052 AND 49-1054, ARIZONA REVISED STATUTES; AMENDING TITLE 49, CHAPTER 6, ARTICLE 1, ARIZONA REVISED STATUTES, BY ADDING SECTIONS 49-1017.01 AND 49-1022; AMENDING SECTION 49-1052, ARIZONA REVISED STATUTES, AS AMENDED BY SECTION 6 OF THIS ACT; AMENDING TITLE 49, CHAPTER 6, ARIZONA REVISED STATUTES, BY ADDING ARTICLE 6; MAKING AN APPROPRIATION; RELATING TO UNDERGROUND STORAGE TANK REGULATION.

Be it enacted by the Legislature of the State of Arizona:

Section 1. Section 49-1005, Arizona Revised Statutes, is amended to read:

49-1005 . Corrective action

A. When a release is discovered the owner and operator of an underground storage tank shall take immediate action to stop the release and to identify and mitigate any fire, explosion or vapor hazard.

B. Except as otherwise provided in section 49-1016, subsection C, the owner and operator of an underground storage tank shall take corrective action in response to the release of regulated substances from the tank.

C. Nothing in this section shall prevent the director from taking or requiring corrective action pursuant to any other provision of law.

D. CORRECTIVE ACTIONS SHALL:

1. ASSURE THE PROTECTION OF PUBLIC HEALTH AND WELFARE AND THE ENVIRONMENT.

2. TO THE EXTENT PRACTICABLE, PROVIDE FOR THE CONTROL, MANAGEMENT OR CLEANUP OF REGULATED SUBSTANCES SO AS TO ALLOW THE MAXIMUM BENEFICIAL USE OF THE WATER AND SOIL OF THIS STATE.

3. BE REASONABLE, NECESSARY, COST EFFECTIVE AND TECHNICALLY FEASIBLE.

D. E. Notwithstanding chapter 2, article 2 of this title, the director may approve a corrective action that may result in water quality exceeding water quality standards after completion of the corrective action, if the director finds that the corrective action meets the requirements of this section. The director's approval pursuant to this section does not affect the classification of an aquifer pursuant to section 49-224. The director shall adopt rules to implement this section. These rules shall include public notice provisions, criteria for the selection of corrective actions, including the level and extent of cleanup and the comparison of corrective action alternatives that may include a no action alternative, monitoring, source control, controlled migration, physical containment, natural attenuation or degradation, and plume remediation alternatives.

E. F. The director shall prescribe by rule the corrective actions to be taken in the event of a release of a regulated substance from an underground storage tank. Any rules adopted pursuant to this subsection shall be consistent with and no more stringent than federal regulations in effect on the date on which the rules are adopted. ANY RULES ADOPTED PURSUANT TO THIS SUBSECTION SHALL PERMIT A RISK BASED CORRECTIVE ACTION ALTERNATIVE THAT INCORPORATES THE USE OF CERTIFIED REMEDIATION SPECIALISTS. Corrective actions shall include requirements regarding:

1. Initial response measures.

2. Initial abatement measures.

3. A site check.

4. Initial site characterization.

5. Removal of free product.

6. Investigations for soil, surface water and groundwater cleanups.

7. Responses to contaminated soil, surface water and groundwater.

F. G. Corrective actions may include the use of biostimulation with indigenous microbes and bioaugmentation using microbes that are nonpathogenic, that are nonopportunistic and that are naturally occurring.

G. H. Until rules adopted pursuant to subsection E F of this section are in effect, corrective actions shall be accomplished in a manner consistent with and no more stringent than 40 Code of Federal Regulations sections 280.60 through 280.67.

Sec. 2. Section 49-1014, Arizona Revised Statutes, is amended to read:

49-1014 . Rules; policies; guidelines

A. The director shall adopt rules pursuant to title 41, chapter 6 necessary to provide procedures for the administration of this chapter and to cause the program for the regulation of underground storage tanks established by this chapter to be approved by the administrator of the environmental protection agency pursuant to 42 United States Code section 6991c.

B. SUBJECT TO THE FOLLOWING, THE DIRECTOR MAY ESTABLISH POLICIES AND GUIDELINES FOR THE ADMINISTRATION OF THIS CHAPTER:

1. IF A SUBSTANTIVE POLICY STATEMENT AS DEFINED IN SECTION 41-1001 OR A GUIDELINE IS ISSUED BY THE DIRECTOR, THE DIRECTOR SHALL PROVIDE WRITTEN NOTICE TO PERSONS REGULATED BY THIS CHAPTER BEFORE THE EFFECTIVE DATE OF A POLICY OR GUIDELINE THAT AFFECTS THE SUBSTANTIVE RIGHTS OF OWNERS AND OPERATORS OR OTHER PARTIES REGULATED UNDER THE UNDERGROUND STORAGE TANK PROGRAM. THE WRITTEN NOTICE SHALL SET FORTH THE EFFECTIVE DATE OF THE POLICY OR GUIDELINE. THE POLICY OR GUIDELINE SHALL NOT BE RETROACTIVE OR APPLIED RETROACTIVELY EXCEPT AS SPECIFICALLY AUTHORIZED BY LAW OR BY THE AGREEMENT OF THE DEPARTMENT AND THE PERSON WHO IS REGULATED BY THIS CHAPTER.

2.THE DEPARTMENT SHALL NOT BASE A DETERMINATION OF COMPLIANCE WITH THE REQUIREMENTS OF THIS CHAPTER IN WHOLE OR IN PART ON A POLICY OR GUIDELINE THAT IS NOT SPECIFICALLY AUTHORIZED BY STATUTE OR RULE.

Sec. 3. Title 49, chapter 6, article 1, Arizona Revised Statutes, is amended by adding section 49-1017.01, to read:

49-1017.01 . Settlement authority; participation; financial information; process; payment; notice

A. THE DIRECTOR SHALL CONSIDER ANY OFFER BY AN OWNER OR OPERATOR WHO IS POTENTIALLY LIABLE FOR DIRECT COSTS INCURRED BY THE DIRECTOR PURSUANT TO SECTION 49-1017, SUBSECTION C, WITHOUT REGARD TO THE EXTENT OF THAT OWNER'S OR OPERATOR'S LIABILITY, IF THE OWNER OR OPERATOR IS UNABLE TO PAY FOR THE DIRECT COSTS. AN OWNER OR OPERATOR WHOSE LIABILITY FOR DIRECT COSTS AROSE FROM A CRIMINAL ACT IS NOT ELIGIBLE TO ENTER INTO A SETTLEMENT AGREEMENT PURSUANT TO THIS SECTION. AN OWNER'S OR OPERATOR'S DECISION TO ENTER INTO A SETTLEMENT AGREEMENT PURSUANT TO THIS SECTION SHALL NOT BE CONSIDERED AN ADMISSION IN A JUDICIAL PROCEEDING AS TO THE FACT OR EXTENT OF THAT OWNER'S OR OPERATOR'S LIABILITY WITH RESPECT TO RELEASES OR THREATENED RELEASES THAT ARE COVERED BY THE SETTLEMENT. AN OWNER OR OPERATOR WHO IS A PARTY TO A SETTLEMENT PURSUANT TO THIS SECTION SHALL NOT BE REQUIRED TO PARTICIPATE IN ALLOCATION PROCEEDINGS PURSUANT TO SECTION 49-1017, SUBSECTIONS D AND E. ANY SETTLEMENT APPROVED BY THE DEPARTMENT SHALL NOT RELEASE THE OWNER OR OPERATOR FROM ANY RESPONSIBILITY OR DUTY IMPOSED PURSUANT TO THIS CHAPTER OTHER THAN LIABILITY FOR DIRECT COSTS INCURRED PURSUANT TO SECTION 49-1017, SUBSECTION C.

B. ANY SETTLEMENT APPROVED BY THE DEPARTMENT SHALL NOT INCREASE THE LIABILITY OF ANY OTHER OWNER OR OPERATOR PURSUANT TO THIS CHAPTER AND SHALL NOT CREATE ANY LIABILITY FOR THE DEPARTMENT OR THIS STATE.

C. THE DIRECTOR SHALL CONSIDER ALL OF THE FOLLOWING FACTORS IN CONSIDERING AN OWNER'S OR OPERATOR'S ABILITY TO PAY FOR THE DIRECT COSTS:

1. THE FINANCIAL RESOURCES OF THE OWNER OR OPERATOR, INCLUDING AVAILABLE FINANCIAL ASSURANCE MECHANISMS OTHER THAN THE ASSURANCE ACCOUNT.

2. THE AMOUNT OF COVERAGE AVAILABLE TO THE OWNER OR OPERATOR FROM THE ASSURANCE ACCOUNT FOR THE DIRECT COSTS. AS A CONDITION OF SETTLEMENT, THE OWNER OR OPERATOR SHALL APPLY TO THE ASSURANCE ACCOUNT AND ANY APPLICABLE GRANT PROGRAM FOR COVERAGE OF THE DIRECT COSTS BEFORE REQUESTING SETTLEMENT PURSUANT TO THIS SECTION.

3. THE OWNER'S OR OPERATOR'S ABILITY TO CONTINUE IN BUSINESS AFTER PAYMENT OF THE OWNER'S OR OPERATOR'S LIABILITY FOR DIRECT COSTS AS DEFINED IN SECTION 49-1017, SUBSECTION C.

4. WHETHER PAYMENT OF THE OWNER'S OR OPERATOR'S LIABILITY FOR DIRECT COSTS AS DEFINED IN SECTION 49-1017, SUBSECTION C WOULD REQUIRE THE OWNER OR OPERATOR TO SEEK PROTECTION UNDER THE FEDERAL BANKRUPTCY LAW OR RENDER THE OWNER OR OPERATOR INSOLVENT.

5. THE FINANCIAL RESOURCES OF ALL CONCERNS IN WHICH THE OWNER OR OPERATOR MAINTAINS OWNERSHIP, CONTROL OR MANAGEMENT.

D. AN OWNER OR OPERATOR SEEKING SETTLEMENT PURSUANT TO SUBSECTION A OF THIS SECTION SHALL SUBMIT A LETTER REQUESTING A FINANCIAL HARDSHIP SETTLEMENT AND SHALL INCLUDE THE OWNER'S OR OPERATOR'S TAX RETURNS AND ALL SCHEDULES, FINANCIAL STATEMENTS, BALANCE STATEMENTS AND OTHER INFORMATION CONCERNING THE OWNER'S OR OPERATOR'S GROSS INCOME AND NET WORTH FOR THE FIVE YEARS IMMEDIATELY PRECEDING THE DATE OF THE APPLICATION. WITHIN NINETY DAYS AFTER THE RECEIPT OF THE APPLICATION, THE DIRECTOR MAY REQUIRE ADDITIONAL INFORMATION TO VERIFY THE OWNER'S OR OPERATOR'S ELIGIBILITY FOR SETTLEMENT PURSUANT TO SUBSECTION A OF THIS SECTION. THE OWNER OR OPERATOR MAY PROVIDE ANY ADDITIONAL INFORMATION THE OWNER OR OPERATOR BELIEVES TO BE RELEVANT TO THE APPLICATION. THE DIRECTOR SHALL KEEP ANY FINANCIAL INFORMATION SUBMITTED BY THE OWNER OR OPERATOR PURSUANT TO THIS SUBSECTION CONFIDENTIAL. IF THE DIRECTOR OR THE ATTORNEY GENERAL DISPUTES A CLAIM OF CONFIDENTIALITY, THE DIRECTOR OR THE ATTORNEY GENERAL SHALL PROVIDE WRITTEN NOTICE THAT THE CLAIM IS DISPUTED TO THE OWNER OR OPERATOR CLAIMING THE CONFIDENTIALITY. THE INFORMATION SHALL BE MADE AVAILABLE TO THE PUBLIC IF THE OWNER OR OPERATOR CLAIMING CONFIDENTIALITY DOES NOT FILE AN ACTION FOR DECLARATORY RELIEF IN SUPERIOR COURT WITHIN THIRTY DAYS AFTER RECEIVING THE NOTICE.

E. THE OWNER OR OPERATOR SHALL COOPERATE WITH THE DIRECTOR IN PROVIDING REASONABLE ACCESS AND INFORMATION FOR THE DIRECTOR TO CARRY OUT THE REQUIREMENTS OF THIS SECTION AS A CONDITION OF THE SETTLEMENT.

F. IF THE DIRECTOR VERIFIES THAT THE OWNER OR OPERATOR IS UNABLE TO PAY THE DIRECT COSTS INCURRED BY THE DIRECTOR PURSUANT TO SECTION 49-1017, SUBSECTION C, THE DIRECTOR SHALL ENTER INTO A SETTLEMENT WITHIN NINETY DAYS AFTER RECEIPT OF THE APPLICATION AND ANY OTHER INFORMATION REQUIRED PURSUANT TO THIS SECTION. THE DIRECTOR SHALL ALLOW THE SETTLEMENT AMOUNT TO BE PAID OVER A PERIOD OF TIME THAT DOES NOT EXCEED TEN YEARS. SETTLEMENT PAYMENTS OVER A PERIOD OF TIME ARE SUBJECT TO THE PAYMENT OF INTEREST AT THE RATE OF SIX PER CENT A YEAR, EXCEPT THAT PAYMENTS ARE NOT SUBJECT TO INTEREST IF THE ENTIRE SETTLEMENT AMOUNT IS PAID WITHIN FIVE YEARS. THE OWNER OR OPERATOR MAY FILE A PETITION WITH THE DIRECTOR TO MODIFY THE PAYMENT SCHEDULE ON A SHOWING OF GOOD CAUSE THAT THE PAYMENT SCHEDULE CANNOT BE MET.

G. THE DIRECTOR MAY REQUIRE THAT NOTICE OF THE TERMS OF THE SETTLEMENT AGREEMENT BE PROVIDED TO THE PUBLIC TO ALLOW FOR COMMENT FOR A PERIOD OF THIRTY DAYS BEFORE THE DEPARTMENT ENTERS INTO A SETTLEMENT AGREEMENT. ANY INTERESTED PERSON MAY COMMENT ON THE SETTLEMENT AGREEMENT IN WRITING TO THE DIRECTOR. THE DIRECTOR MAY WITHDRAW FROM A SETTLEMENT AGREEMENT AFTER CONSIDERING THE COMMENTS.

H. IF THE DIRECTOR DETERMINES THAT THE OWNER OR OPERATOR DOES NOT QUALIFY FOR A SETTLEMENT PURSUANT TO THIS SECTION, THE DIRECTOR SHALL NOTIFY THE OWNER OR OPERATOR IN WRITING WITHIN NINETY DAYS AFTER THE RECEIPT OF ALL INFORMATION REQUIRED PURSUANT TO THIS SECTION STATING THE REASONS FOR INELIGIBILITY. THE APPLICATION FOR SETTLEMENT IS DEEMED DENIED IF THE DIRECTOR DOES NOT NOTIFY THE OWNER OR OPERATOR WITHIN NINETY DAYS OF THE DIRECTOR'S RECEIPT OF ALL APPLICABLE INFORMATION. A DENIAL OF A SETTLEMENT APPLICATION UNDER THIS SUBSECTION CONSTITUTES AN APPEALABLE AGENCY ACTION AS DEFINED IN SECTION 41-1092. IN ANY ADMINISTRATIVE APPEAL HEARING CONDUCTED PURSUANT TO TITLE 41, CHAPTER 6, ARTICLE 10, THE DOCUMENTS SUBMITTED BY THE OWNER OR OPERATOR PURSUANT TO THIS SECTION ARE NOT CONFIDENTIAL. ANY APPEAL IS LIMITED TO THE OWNER'S OR OPERATOR'S ELIGIBILITY FOR A FINANCIAL HARDSHIP SETTLEMENT PURSUANT TO THIS SECTION AND THE OWNER'S OR OPERATOR'S ABILITY TO PAY THE DIRECT COSTS INCURRED BY THE DIRECTOR PURSUANT TO SECTION 49-1017, SUBSECTION C.

Sec. 4. Section 49-1019, Arizona Revised Statutes, is amended to read:

49-1019 . Release of regulated substance; causes of action; limitation; liability

A. An owner or an operator of an underground storage tank or any other person who takes a corrective action for a release of petroleum from the underground storage tank pursuant to section 49-1005 or from whom costs are recovered by this state for a release of petroleum from an underground storage tank pursuant to section 49-1017 may bring an action in superior court against a person who caused or contributed to the release to require that person to reimburse him for the reasonable costs of the corrective action. The person seeking reimbursement shall have the burden of demonstrating that the corrective action costs incurred were reasonable.

A. ANY ONE OF THE FOLLOWING PERSONS MAY BRING AN ACTION IN SUPERIOR COURT AGAINST A PERSON WHO CAUSED OR CONTRIBUTED TO THE RELEASE OF A REGULATED SUBSTANCE FROM AN UNDERGROUND STORAGE TANK TO REQUIRE THAT PERSON TO REIMBURSE HIM FOR THE REASONABLE COSTS OF CORRECTIVE ACTIONS TAKEN IN RESPONSE TO THE RELEASE:

1. AN OWNER OR OPERATOR OF AN UNDERGROUND STORAGE TANK OR ANY OTHER PERSON WHO TAKES A CORRECTIVE ACTION PURSUANT TO SECTION 49-1005.

2. AN OWNER OR OPERATOR OF AN UNDERGROUND STORAGE TANK OR ANY OTHER PERSON FROM WHOM COSTS ARE RECOVERED BY THIS STATE PURSUANT TO SECTION 49-1017 OR 49-1017.01.

B. THE PERSON SEEKING REIMBURSEMENT HAS THE BURDEN OF DEMONSTRATING THAT THE CORRECTIVE ACTION COSTS INCURRED WERE REASONABLE.

B. C. This article does not affect or modify the obligations or liability of a person, by reason of subrogation or otherwise, under any other provision of common law, federal law or the laws of this state, for damages, injury or loss resulting from a release of petroleum A REGULATED SUBSTANCE or for the costs of a corrective action, except that a person who receives compensation for the costs of a corrective action pursuant to this article is precluded from recovering compensation for the same corrective action costs pursuant to any other federal law or the laws of this state. A person who receives compensation for corrective action costs pursuant to federal law or the laws of this state is precluded from receiving compensation for the same corrective action costs as provided in this article.

C. D. Liability under this section shall be equitably allocated on a case-by-case basis in accordance with section 49-1017, subsection D. Any party authorized to bring an action pursuant to subsection A of this section and any party against whom an action is brought may have liability allocated through mediation in accordance with section 49-1017, subsection D.

Sec. 5. Title 49, chapter 6, article 1, Arizona Revised Statutes, is amended by adding section 49-1022, to read:

49-1022 . Regulated substance migration off site; responsibility; corrective action; notice; appeal; coverage

A. THE DIRECTOR MAY UNDERTAKE CORRECTIVE ACTION IN RESPONSE TO A RELEASE FROM AN UNDERGROUND STORAGE TANK THAT MIGRATES ON OR UNDER A PERSON'S PROPERTY AS THE RESULT OF AN OCCURRENCE AT ANOTHER PROPERTY OR THAT THE DEPARTMENT DETERMINES IS LIKELY TO MIGRATE ON OR UNDER A PERSON'S PROPERTY, IF ALL OF THE FOLLOWING OCCUR:

1. THE PERSON HAS AUTHORITY TO ALLOW ACCESS TO THE PROPERTY SO THAT CORRECTIVE ACTION MAY BE TAKEN ON THE PERSON'S PROPERTY.

2. THE OWNER OR OPERATOR OF THE UNDERGROUND STORAGE TANK THAT IS THE SOURCE OF THE RELEASE MAKES A WRITTEN REQUEST THAT THE DEPARTMENT ATTEMPT TO OBTAIN ACCESS TO THE PROPERTY. AS PART OF THE WRITTEN REQUEST, THE OWNER OR OPERATOR SHALL DEMONSTRATE TO THE DEPARTMENT THE FOLLOWING BEFORE THE DEPARTMENT ATTEMPTS TO OBTAIN ACCESS TO THE PROPERTY:

(a) THE OWNER OR OPERATOR HAS SENT AND THE PERSON HAS RECEIVED AT LEAST TWO WRITTEN REQUESTS TO ALLOW THE OWNER OR OPERATOR TO HAVE ACCESS TO THE PROPERTY AT REASONABLE TIMES AND UNDER REASONABLE CONDITIONS.

(b) THE OWNER OR OPERATOR HAS MADE AN OFFER OF REASONABLE COMPENSATION TO THE PERSON.

3. THE PERSON HAS RECEIVED A WRITTEN REQUEST FROM THE DEPARTMENT TO HAVE ACCESS TO THE PROPERTY, AT REASONABLE TIMES AND UNDER REASONABLE CONDITIONS IN A MANNER THAT DOES NOT CONSTITUTE A TAKING AS PROVIDED BY LAW, TO TAKE CORRECTIVE ACTION WITH RESPECT TO ONLY THE RELEASE THAT HAS MIGRATED ON THAT PERSON'S PROPERTY.

4. THE PERSON HAS REFUSED TO ALLOW THE OWNER OR OPERATOR OR THE DEPARTMENT TO HAVE ACCESS TO THE PROPERTY OR DOES NOT RESPOND TO THE DEPARTMENT WITHIN SIXTY DAYS AFTER RECEIVING THE REQUEST FOR ACCESS.

B. THE DEPARTMENT SHALL ISSUE A NOTICE DESCRIBING THE PROPOSED CORRECTIVE ACTION TO THE OWNER OR OPERATOR AND THE PERSON ON WHOSE PROPERTY THE DEPARTMENT WILL UNDERTAKE CORRECTIVE ACTION IF IT ELECTS TO UNDERTAKE CORRECTIVE ACTION PURSUANT TO SUBSECTION A OF THIS SECTION. THE OWNER OR OPERATOR OR THE PERSON ON WHOSE PROPERTY THE DEPARTMENT UNDERTAKES CORRECTIVE ACTION MAY APPEAL PURSUANT TO TITLE 41, CHAPTER 6, ARTICLE 10, WITHIN THIRTY DAYS OF THE NOTICE OR WITHIN THIRTY DAYS FROM THE PERFORMANCE OF THE CORRECTIVE ACTION. IF, AFTER AN APPEAL, IT IS DETERMINED THAT THE DEPARTMENT FAILED TO RETURN THE PROPERTY TO SUBSTANTIALLY THE SAME CONDITION IT WAS IN PRIOR TO BEING ACCESSED, THE PERSON ON WHOSE PROPERTY THE DEPARTMENT UNDERTAKES THE CORRECTIVE ACTION MAY BE ELIGIBLE FOR COVERAGE FROM THE ASSURANCE ACCOUNT ONLY TO THE EXTENT THE DEPARTMENT FAILED TO RETURN THE PROPERTY TO SUBSTANTIALLY THE SAME CONDITION THE PROPERTY WAS IN PRIOR TO BEING ACCESSED.

C. THE DEPARTMENT IS ELIGIBLE FOR COVERAGE OF CORRECTIVE ACTION COSTS INCURRED IN OBTAINING ACCESS, PERFORMING CORRECTIVE ACTION PURSUANT TO THIS SECTION AND RETURNING THE PROPERTY TO SUBSTANTIALLY THE SAME CONDITION THE PROPERTY WAS IN PRIOR TO BEING ACCESSED. THE OWNER OR OPERATOR SHALL REIMBURSE THE ASSURANCE ACCOUNT FOR TEN PER CENT OF ANY COSTS PAID FROM THE ASSURANCE ACCOUNT TO THE DEPARTMENT OR THE PERSON PURSUANT TO THIS SECTION.

D. THE DEPARTMENT SHALL PROMPTLY PROVIDE TO A PERSON WHOSE PROPERTY IS ACCESSED UNDER THIS SECTION A COPY OF THE RESULTS OF ANY ANALYSIS OF THE SOIL OR GROUNDWATER RELATING TO THE ACCESSED PROPERTY ARISING FROM THE DEPARTMENT'S ACCESS OR CORRECTIVE ACTION UNDERTAKEN AT THE PROPERTY. THE DEPARTMENT SHALL NOT SUE THE PERSON FOR ANY SECONDARY CONTAMINATION CREATED BY THE ACCESS OR CORRECTIVE ACTION.

E. IF A RELEASE OF A REGULATED SUBSTANCE HAS MIGRATED ON OR UNDER A PERSON'S PROPERTY, THE DEPARTMENT SHALL RELIEVE THE OWNER OR OPERATOR OF THE UNDERGROUND STORAGE TANK FROM RESPONSIBILITY FROM PERFORMING CORRECTIVE ACTION AT THE PROPERTY WHERE THE RELEASE HAS MIGRATED OR WHERE THE DEPARTMENT HAS DETERMINED IT IS LIKELY TO HAVE MIGRATED, IF THE OWNER OR OPERATOR IS UNABLE TO GAIN ACCESS TO THE PROPERTY AFTER COMPLYING WITH THE PROVISIONS OF SUBSECTION A, PARAGRAPH 2, SUBDIVISIONS (a) AND (b) OF THIS SECTION. NOTHING IN THIS SECTION SHALL RELIEVE THE OWNER OR OPERATOR FROM LIABILITY FOR COMPLETING THE REQUIREMENTS OF SECTION 49-1005 AS THEY RELATE TO THE OWNER'S OR OPERATOR'S PROPERTY OR ANY OTHER PROPERTY TO WHICH THE CONTAMINATION MAY HAVE MIGRATED. THE DEPARTMENT MAY REQUIRE THAT THE OWNER OR OPERATOR INVESTIGATE ANY OTHER PROPERTIES POTENTIALLY IMPACTED BY THE RELEASE IN ORDER TO COMPLETE THE REQUIREMENTS OF SECTION 49-1005.

Sec. 6. Section 49-1052, Arizona Revised Statutes, is amended to read:

49-1052 . Partial coverage of corrective action costs

A. Except as provided in subsection O of this section, the department shall provide from the assurance account partial coverage of the costs incurred after September 15, 1989 of a corrective action initiated under section 49-1005. The partial coverage provided by this section is available only to the extent of the monies available in the assurance account. If there are insufficient monies available in the assurance account to pay all corrective action costs which the department has determined should be paid, the department shall defer such payment until sufficient monies are available to pay such corrective action costs. The department shall not provide any coverage, and the assurance account is not liable, for compensating third parties for bodily injury or property damage caused by releases from underground storage tanks.

B. The department may provide the coverage required by this section either by paying the owner, the operator or a designated representative of the owner or operator or any combination of these persons or a political subdivision covered by subsection H of this section or by making direct payments for corrective actions on behalf of the owner, operator or political subdivision. Pursuant to rules adopted by the department the department shall require compliance with preapproval procedures for all corrective actions and related costs for which payment is being sought pursuant to this section. Preapproval shall not be required by the department until final rules are adopted. Owners or operators who are not seeking payment pursuant to this section are exempt from any preapproval requirements. This subsection shall not be construed to relieve an owner or operator from any of the requirements of this chapter. The department shall not impose the requirements of this chapter on an owner or operator in a manner which is inconsistent with the procedures for preapproval adopted pursuant to the rules authorized under this subsection. The department shall not take enforcement action or impose penalties against the owner or operator who submitted the application for preapproval while the application for preapproval is pending. The department shall not consider the passage of time while the preapproval application is pending to be a basis for taking an enforcement action. For any corrective action submitted for preapproval, the period of time for compliance with corrective actions associated with that preapproval begins to run from the date of preapproval of the corrective action. If the department determines, based on the points received pursuant to subsection G of this section, that the site does not pose a significant risk to human health and the environment and that the applicant is financially needy, the period of time for compliance with corrective actions associated with that preapproval begins to run from the date monies are encumbered for the application.

C. An owner, an operator, a designated representative of an owner or operator or a political subdivision covered by subsection H of this section may apply to the department for partial coverage of the corrective action costs pursuant to this article and rules adopted pursuant to this article. Any employee of the owner or operator may submit an application to the department on behalf of the owner or operator.

D. The department shall not pay for corrective action costs unless the department determines that the corrective action has met, or when completed will meet, the applicable requirements of section 49-1005. The department may require by rule that persons who perform payable corrective actions meet specified standards of qualification and be approved by the department.

E. The department shall not provide any coverage described in this article to an owner or operator of underground storage tanks described in section 49-1031, subsection C. The department shall not provide any coverage described in this article with respect to the substances described in section 49-1031, subsection C, unless the tax imposed by article 2 of this chapter applies to such substances.

F. The department shall not provide any coverage described in this article to an owner or operator or any person or entity employed or retained by an owner or operator, if any of the following apply:

1. The owner or operator is delinquent in the payment of any fee, penalty, or interest thereon imposed under this chapter and fails to cure that delinquency within thirty days after receiving notice from the department. The department shall provide notice of the delinquency within thirty days after receiving an application for payment from the assurance account or within sixty days after a work plan is submitted for preapproval. If the department does not provide notice pursuant to this paragraph, the department shall not withhold payment based on that delinquency nor shall the department use that delinquency as a basis for the department to delay preapproval of corrective actions and related costs. An owner or operator remains eligible for coverage for other underground storage tank sites if no fees, penalties or interest is delinquent for those sites.

2. The owner or operator is delinquent in filing any excise tax return required by section 49-1032, subsection B and fails to cure that delinquency within thirty days after receiving notice of the delinquency from the department. The department shall provide notice of the delinquency within thirty days after receiving an application for payment from the assurance account or within sixty days after a work plan is submitted for preapproval. If the department does not provide notice pursuant to this paragraph, the department shall not withhold payment based on that delinquency. The department shall not use a delinquency pursuant to this paragraph as a basis for the department to delay preapproval or corrective actions and related costs.

3. The underground storage tanks included in the application for coverage are located at a site that is the subject of an enforcement proceeding under section 49-1013. The owner or operator remains eligible for coverage for other sites where underground storage tanks are located if the owner or operator is not the subject of an enforcement proceeding regarding those sites. Payment from the assurance account will be withheld during the time that a final compliance order is in effect only for those costs directly associated with those activities that are the subject of the compliance order. Any payment costs that are incurred prior to a compliance order becoming final and that are not directly associated with the subject of that compliance order shall be eligible for payment pursuant to this section. Processing of payment from the assurance account shall not be delayed until a compliance order becomes final. An owner or operator who formally consents in writing to an administrative order shall not be considered to be subject to an enforcement proceeding. If the department determines that the owner or operator is in violation of the consent order, the owner or operator shall not be considered to be subject to an enforcement proceeding and processing of payment from the assurance account shall not be delayed until a final administrative decision is rendered finding that the owner or operator is in violation of the consent order. Payment from the assurance account shall be withheld only for those costs determined in the final administrative decision to be incurred for those activities that are the direct subject of the determined violation of the consent order. Any other payment costs that are incurred prior to a final administrative decision finding a violation of the consent order or payment costs that are not the direct subject of the consent order violation shall be eligible for payment pursuant to this section.

4. An individual, an owner or operator or any entity seeking coverage is convicted of fraud relating to a corrective action or to any claim made for corrective action payment from the assurance account. This paragraph applies only to the individual, the owner or operator or the entity that is actually convicted of fraud relating to a corrective action or to a claim made for corrective action payment.

5. The owner or operator has failed to comply with the APPLICABLE financial responsibility requirements of 40 Code of Federal Regulations part 280, subpart H with respect to the underground storage tanks included in the application for coverage and all of the following conditions are met : on or after July 1, 1996:

(a) ON OR AFTER JULY 1, 1996, the person seeking coverage is an owner or operator of the tank.

(b) The tank is in operation and AS OF JULY 1, 1996, there are no preexisting conditions precluding the ability to obtain financial responsibility which would have covered the release.

(d) THE OWNER OR OPERATOR FAILS TO PROVIDE INFORMATION TO REFUTE BOTH OF THE FOLLOWING CONDITIONS:

(i) THE TANK WAS NOT PUMPED BEFORE JULY 1, 1996, FOR THE PURPOSE OF REMOVING FREE PRODUCT.

(ii) REGULATED SUBSTANCES WERE PLACED IN OR DISPENSED FROM THE TANK ON OR AFTER JULY 1, 1996.

The owner or operator remains eligible for coverage for other sites where the owner or operator has complied with the financial responsibility requirements of this paragraph. THE CONDITIONS DESCRIBED IN SUBDIVISION (d) OF THIS PARAGRAPH SHALL NOT APPLY TO RELEASES REPORTER AFTER JANUARY 1, 2000.

G. The department shall establish criteria for determining priorities among the applications for partial coverage under this article. The criteria shall include:

1. The need for financial assistance.

2. The risk to human health and the environment.

3. Whether the partial coverage is provided as a direct payment to a person performing a corrective action.

4. The extent to which a delay in providing coverage will affect a corrective action in progress.

5. The date on which an application for coverage is made.

6. The date on which a corrective action for which coverage is sought is to be or was taken.

7. Whether the payment has been previously deferred because of insufficient monies in the assurance account and, if deferred, the length of such deferral.

H. The department may provide the partial coverage described in this article for corrective action costs incurred by a political subdivision with respect to a release from an underground storage tank if the underground storage tank or the property where the underground storage tank is located comes into the possession or control of the political subdivision under either title 12, chapter 8, article 2 or 3.

I. The department may provide the partial coverage described in this article for corrective action costs with respect to a release from an underground storage tank incurred by a person who currently owns the property and who undertakes to meet the requirements of sections 49-1002, 49-1004, 49-1005 and 49-1008, but who is not an owner or operator. A person who undertakes to meet the requirements and who is not an owner or an operator is eligible for one hundred per cent coverage. By December 31 of each year, the department of environmental quality shall forward a list of the parties who received payment pursuant to this subsection during the previous calendar year to the department of revenue for purposes of determining eligibility for the income tax credit provided in sections 43-1085 and 43-1173. By December 31 of each year, the department of environmental quality shall also provide the department of revenue verification of the corrective actions taken by each person during the previous calendar year pursuant to this subsection.

J. On or after January 1, 1996 and subject to section 38-503 and other applicable statutes and rules, the department may contract with a private consultant for the purpose of assisting the department in reviewing work plans, site characterization reports, corrective action plans, monitoring reports and other information to determine whether corrective actions meet the criteria and requirements of this chapter and the rules adopted by the director. If the department contracts with a consultant pursuant to this section, an owner or operator may request that the department expedite the review or inspection process by requesting that the department use the services of the consultant and by agreeing to pay to the department the costs of the consultant's services. The department shall not use a private consultant if the fee charged for that service would be more than the fee the department would charge to provide that service. The department shall pay the consultant for the services rendered by the consultant from fees paid by the applicant to the department pursuant to this section.

K. Claims for coverage that are not paid within one hundred eighty days after receipt by the department of a complete and correct claim accrue interest at the rate of eight per cent per year. Interest shall not accrue on any claim that is unpaid as a result of insufficient monies in the area account for that claim.

L. Requests by the department for additional information from claimants shall be reasonably related to the determination of the validity of the claim as prescribed by this article.

M. Beginning on January 1, 1996, claims for coverage, or a work plan for preapproval, at a site shall be submitted to the department no more than one hundred eighty days after the claimant receives a site closure letter sent by the department by certified mail with notice that the claimant has one hundred eighty days to submit a claim for that site. If the claim is submitted in a timely manner, the claimant may correct or supplement the claim on request of the department within a reasonable time as specified by the department without loss of coverage. If a work plan is submitted in a timely manner, the claimant, at any time thereafter, may correct, supplement or resubmit the work plan. Failure to submit a timely claim or work plan shall result in denial of the claim. The one hundred eighty day time limit prescribed by this subsection does not apply to closed sites that are subsequently reopened for the performance of additional corrective actions or at which corrective actions are proceeding pursuant to a work plan for preapproval submitted before the site was closed.

N. The department shall provide coverage for the costs of corrective actions relating to soil remediation that are consistent with remediation standards developed pursuant to chapter 1, article 4 of this title. Payment shall only be made for corrective action costs to remediate to levels approved by the department pursuant to rule. The department shall not enforce this subsection until final rules are adopted.

O. No coverage shall be provided for any phase of corrective action unless the department is notified of the proposed corrective action prior to commencement of the action. The department, upon receipt of the notice, shall notify the owner or operator that:

1. Monies in the assurance fund are limited.

2. Payments from the fund may be delayed.

3. No interest shall be paid on any delayed payment pursuant to subsection K of this section.

Sec. 7. Section 49-1052, Arizona Revised Statutes, as amended by section 6 of this act, is amended to read:

49-1052 . Coverage of corrective action costs

A. Except as provided in subsection O of this section, The department shall provide from the assurance account partial coverage IN THE AMOUNTS AUTHORIZED BY SUBSECTION I OF THIS SECTION AND SECTIONS 49-1017, 49-1022 AND 49-1054 of the costs incurred after September 15, 1989 of a corrective action initiated under section 49-1005. The partial coverage provided by this section is available only to the extent of the monies available in the assurance account. If there are insufficient monies available in the assurance account to pay all corrective action costs which the department has determined should be paid, the department shall defer such payment until sufficient monies are available to pay such corrective action costs. The department shall not provide any coverage, and the assurance account is not liable, for compensating third parties for bodily injury or property damage caused by releases from underground storage tanks.

B. The department may provide the coverage required by this section either by paying the owner, the operator or a designated representative of the owner or operator or any combination of these persons or a political subdivision covered by subsection H of this section or by making direct payments for corrective actions on behalf of the owner, operator or political subdivision. THE OWNER, THE OPERATOR OR A DESIGNATED REPRESENTATIVE OF THE OWNER OR OPERATOR IS NOT REQUIRED TO SEEK PREAPPROVAL FOR CORRECTIVE ACTION AND RELATED COSTS. OWNERS AND OPERATORS ARE NOT REQUIRED TO COMPLY WITH PREAPPROVAL RULES AND PROCEDURES UNLESS THE PREAPPROVAL OPTION IS SELECTED. COMPLIANCE WITH OR NONCOMPLIANCE WITH PREAPPROVAL PROCEDURES IS NOT A BASIS FOR DETERMINING PRIORITY AMONG THE APPLICATIONS FOR COVERAGE PURSUANT TO THIS ARTICLE. Pursuant to rules adopted by the department the department shall require compliance with preapproval procedures for all corrective actions and related costs for which payment is being sought pursuant to this section. Preapproval shall not be required by the department until final rules are adopted. Owners or operators who are not seeking payment pursuant to this section are exempt from any preapproval requirements. This subsection shall not be construed to relieve an owner or operator from any of the requirements of this chapter. The department shall not impose the requirements of this chapter on an owner or operator in a manner which is inconsistent with the procedures for preapproval adopted pursuant to the rules authorized under this subsection. The department shall not take enforcement action or impose penalties against the owner or operator who submitted the application for preapproval while the application for preapproval is pending. The department shall not consider the passage of time while the preapproval application is pending to be a basis for taking an enforcement action. For any corrective action submitted for preapproval, the period of time for compliance with corrective actions associated with that preapproval begins to run from the date of preapproval of the corrective action. If the department determines, based on the points received pursuant to subsection G of this section, that the site does not pose a significant risk to human health and the environment and that the applicant is financially needy, the period of time for compliance with corrective actions associated with that preapproval begins to run from the date monies are encumbered for the application.

F. The department shall not provide any coverage described in this article to an owner or operator or any person or entity employed or retained by an owner or operator, if any of the following apply:

1. The owner or operator is delinquent in the payment of any fee, penalty, or interest thereon imposed under this chapter and fails to cure that delinquency within thirty days after receiving notice from the department. IF THE OWNER OR OPERATOR CURES THE DELINQUENCY MORE THAN THIRTY DAYS AFTER RECEIVING NOTICE FROM THE DEPARTMENT, THE OWNER OR OPERATOR MAY SUBMIT A NEW APPLICATION FOR COVERAGE. THIS NEW APPLICATION SHALL BE PRIORITIZED FOR REVIEW AND PAYMENT IN THE ORDINARY COURSE OF RANKING. IF THE OWNER OR OPERATOR CURES THE DELINQUENCY WITHIN THIRTY DAYS AFTER RECEIVING NOTICE FROM THE DEPARTMENT, THE OWNER OR OPERATOR RETAINS ITS PLACE IN THE PRIORITY SYSTEM. The department shall provide notice of the delinquency within thirty days after receiving an application for payment from the assurance account or within sixty days after a work plan is submitted for preapproval. If the department does not provide notice pursuant to this paragraph, the department shall not withhold payment based on that delinquency nor shall the department use that delinquency as a basis for the department to delay preapproval of corrective actions and related costs. An owner or operator remains eligible for coverage for other underground storage tank sites if no fees, penalties or interest is delinquent for those sites.

2. The owner or operator is delinquent in filing any excise tax return required by section 49-1032, subsection B and fails to cure that delinquency within thirty days after receiving notice of the delinquency from the department. IF THE OWNER OR OPERATOR CURES THE DELINQUENCY MORE THAN THIRTY DAYS AFTER RECEIVING NOTICE FROM THE DEPARTMENT, THE OWNER OR OPERATOR MAY SUBMIT A NEW APPLICATION FOR COVERAGE. THIS NEW APPLICATION SHALL BE PRIORITIZED FOR REVIEW AND PAYMENT IN THE ORDINARY COURSE OF RANKING. IF THE OWNER OR OPERATOR CURES THE DELINQUENCY WITHIN THIRTY DAYS, AFTER RECEIVING NOTICE FROM THE DEPARTMENT, THE OWNER OR OPERATOR RETAINS ITS PLACE IN THE PRIORITY SYSTEM. The department shall provide notice of the delinquency within thirty days after receiving an application for payment from the assurance account or within sixty days after a work plan is submitted for preapproval. If the department does not provide notice pursuant to this paragraph, the department shall not withhold payment based on that delinquency. The department shall not use a delinquency pursuant to this paragraph as a basis for the department to delay preapproval or corrective actions and related costs.

5. The owner or operator has failed to comply with applicable financial responsibility requirements of 40 Code of Federal Regulations part 280, subpart H with respect to the underground storage tanks included in the application for coverage and all of the following conditions are met:

(a) On or after July 1, 1996, the person seeking coverage is an owner or operator of the tank.

(b) As of July 1, 1996, there are no preexisting conditions precluding the ability to obtain financial responsibility which would have covered the release.

(d) The owner or operator fails to provide information to refute both of the following conditions:

(i) The tank was not pumped before July 1, 1996, for the purpose of removing free product.

(ii) Regulated substances were placed in or dispensed from the tank on or after July 1, 1996.

The owner or operator remains eligible for coverage for other sites where the owner or operator has complied with the financial responsibility requirements of this paragraph. The conditions described in subdivision (d) of this paragraph shall not apply to releases reporter after January 1, 2000.

G. The department shall establish criteria for determining priorities among the applications for partial coverage under this article. The criteria shall include:

1. The need for financial assistance.

2. The risk to human health and the environment.

3. Whether the partial coverage is provided as a direct payment to a person performing a corrective action.

4. The extent to which a delay in providing coverage will affect a corrective action in progress.

5. The date on which an application for coverage is made.

6. The date on which a corrective action for which coverage is sought is to be or was taken.

7. Whether the payment has been previously deferred because of insufficient monies in the assurance account and, if deferred, the length of such deferral.

H. The department may provide the partial coverage described in this article for corrective action costs incurred by a political subdivision with respect to a release from an underground storage tank if the underground storage tank or the property where the underground storage tank is located comes into the possession or control of the political subdivision under either title 12, chapter 8, article 2 or 3.

I. The department may provide the partial coverage described in this article for corrective action costs with respect to a release from an underground storage tank incurred by a person who currently owns the property OR A PERSON WITH PRINCIPAL CONTROL OF THE PROPERTY OR THE UNDERGROUND STORAGE TANK and who undertakes to meet the requirements of sections 49-1002, 49-1004, SECTION 49-1005 and 49-1008 , but who is not an owner or operator. A person who undertakes to meet the requirements and who is not an owner or an operator is eligible for one hundred per cent coverage. By December 31 of each year, the department of environmental quality shall forward a list of the parties who received payment pursuant to this subsection during the previous calendar year to the department of revenue for purposes of determining eligibility for the income tax credit provided in sections 43-1085 and 43-1173. By December 31 of each year, the department of environmental quality shall also provide the department of revenue verification of the corrective actions taken by each person during the previous calendar year pursuant to this subsection.

L. Requests by the department for additional information from claimants shall be reasonably related to the determination of the validity of the claim as prescribed by this article.

M. Beginning on January 1, 1996, claims for coverage, or a work plan for preapproval, at a site shall be submitted to the department no more than one hundred eighty days ONE YEAR after the claimant receives a site closure letter sent by the department by certified mail with notice that the claimant has one hundred eighty days ONE YEAR to submit a claim for that site. If the claim is submitted in a timely manner, the claimant may correct or supplement the claim on request of the department within a reasonable time as specified by the department without loss of coverage. If a work plan is submitted in a timely manner, the claimant, at any time thereafter, may correct, supplement or resubmit the work plan. Failure to submit a timely claim or work plan shall result in denial of the claim. ANY MONIES ENCUMBERED OR SET ASIDE REGARDING THE CLAIM SHALL BE RETURNED TO THE ASSURANCE FUND, EXCEPT FOR THOSE MONIES ENCUMBERED OR SET ASIDE FOR THE PURPOSE OF WELL ABANDONMENT OR SITE RESTORATION. The one hundred eighty day time limit prescribed by this subsection does not apply to closed sites that are subsequently reopened for the performance of additional corrective actions or at which corrective actions are proceeding pursuant to a work plan for preapproval submitted before the site was closed.

1. Monies in the assurance fund are limited.

2. Payments from the fund may be delayed.

3. No interest shall be paid on any delayed payment pursuant to subsection K of this section.

O. IF A PERSON INTENDS TO SEEK PAYMENT FROM THE ASSURANCE ACCOUNT, THE CORRECTIVE ACTION SELECTED IN THE CORRECTIVE ACTION PLAN SHALL BE THE MOST COST EFFECTIVE ALTERATIVE THAT MEETS THE REQUIREMENTS OF SECTION 49-1005. IF THE MOST INEXPENSIVE CORRECTIVE ACTION ALTERNATIVE IS NOT SELECTED, THE PERSON SHALL DEMONSTRATE TO THE DEPARTMENT THE CRITERIA SUPPORTING THE CORRECTIVE ACTION SELECTED IN THE CORRECTIVE ACTION PLAN. NOTHING IN THIS SUBSECTION SHALL AFFECT THE DEPARTMENT'S REVIEW OF CORRECTIVE ACTION COSTS PURSUANT TO THIS CHAPTER.

Sec. 8. Section 49-1054, Arizona Revised Statutes, is amended to read:

49-1054 . Extent of coverage; insurance

A. The department shall provide coverage from the assurance account for ninety per cent of the reasonable and necessary costs of corrective actions pertaining to soil and groundwater remediation. NINETY PER CENT OF THE REASONABLE AND NECESSARY COSTS SHALL BE THE EXTENT OF COVERAGE EXCEPT THAT OWNERS AND OPERATORS ARE ELIGIBLE FOR COVERAGE FROM THE ASSURANCE ACCOUNT FOR ONLY FIFTY PER CENT OF THE REASONABLE AND NECESSARY COSTS OF CORRECTIVE ACTIONS PERTAINING TO SOIL AND GROUNDWATER REMEDIATION FOR RELEASES REPORTED AFTER JUNE 30, 2000 FROM UNDERGROUND STORAGE TANKS THAT ARE NOT PERMANENTLY CLOSED, NOT TEMPORARILY CLOSED OR NOT UPGRADED IN ACCORDANCE WITH THE RULES PROMULGATED PURSUANT TO SECTION 49-1014. The claimant OWNER OR OPERATOR shall pay the remaining costs of the corrective action. The maximum amount that is subject to ninety per cent coverage is five hundred thousand dollars. An owner or operator is eligible for additional coverage from the assurance account up to a maximum of one million dollars if the owner or operator is in compliance with the requirements for coverage pursuant to section 49-1052, subsection F, paragraph 5 and meets both of the following conditions:

1. The owner or operator has submitted certification to the department that the owner or operator has submitted a claim against any applicable insurance coverage and has certified to the department the amount of any benefits or reimbursement that the owner or operator has received OR WILL RECEIVE from any insurance coverage that might apply to the costs of the corrective action. The owner or operator is eligible for payment from the department to the extent that the corrective action costs have not been reimbursed by insurance and within the coverage limits prescribed by this paragraph. The department may compel the production of documents to determine the existence, amount and type of coverage available. An owner or operator shall report to the department any subsequent payment or reimbursement for claims made for corrective actions costs. The owner or operator shall remit to the department within thirty days any amounts that were previously paid to the owner or operator from the underground storage tank revolving fund assurance account and that have also been recovered from insurance.

2. The owner or operator has utilized to the maximum extent possible any alternative financial assurance mechanisms required for coverage pursuant to section 49-1052, subsection F, paragraph 5. The department may compel the production of documents to determine the existence, amount and type of alternative coverage available. An owner or operator shall report to the department any payment of corrective actions costs through these alternative mechanisms. The owner or operator shall remit to the department within thirty days any amounts that were recovered by the owner or operator from the underground storage tank revolving fund assurance account and that have also been recovered from any alternative mechanisms.

B. The department shall not disburse more than the maximum amounts prescribed by subsection A of this section from the assurance account for corrective action costs associated with an occurrence regardless of the number of persons who are eligible for coverage.

C. The department shall not pay corrective action costs unless the department determines that the costs were reasonable and were actually incurred. Corrective action costs that are preapproved by the department or corrective actions performed at the written request or written instruction of the department are deemed reasonable, necessary and reimbursable. The department shall annually establish schedules of corrective action costs which the department considers reasonable. These cost schedules shall be task-based where practicable. The department shall not require costs associated with a given task to include details on time and materials if the total costs claimed for that task do not exceed the amount for that task in the schedule of corrective action costs as established pursuant to this section. Payments to an owner or operator shall be based on the schedule of corrective action costs in effect on the date a contract for corrective action work was entered into by the owner or operator, or if that date cannot be determined, the date work associated with the corrective action was performed. THE COST SCHEDULES APPLY TO ALL CORRECTIVE ACTION COSTS SUBMITTED FOR PAYMENT FROM THE ASSURANCE ACCOUNT, INCLUDING ANY COSTS INCURRED BY THE DEPARTMENT IN TAKING CORRECTIVE ACTIONS AFTER THE EFFECTIVE DATE OF THE AMENDMENTS TO THIS SECTION AND TO THE RECOVERY OF THOSE CORRECTIVE ACTION COSTS BY THE DEPARTMENT PURSUANT TO SECTIONS 49-1017, 49-1017.01 AND 49-1022.

D. The department shall allow upgrade and replacement costs incurred at the time of corrective action for compliance with 40 Code of Federal Regulations section 280.21 regarding corrosion protection and spill and overfill prevention to be applied on a dollar for dollar basis not to exceed ten per cent of the reasonable and necessary costs of corrective actions as calculated pursuant to subsection A of this section.

E. An owner or operator shall not receive payment from the department until after the owner or operator has submitted certification to the department that the owner or operator has submitted a claim against any applicable insurance coverage and has certified to the department the amount of any benefits or reimbursement that the owner or operator has received OR WILL RECEIVE from any insurance coverage that might apply to the costs of the corrective action. The owner or operator is eligible for payment from the department to the extent that the corrective action costs have not been AND WILL NOT BE reimbursed by insurance and within the coverage limits prescribed by this section. An owner or operator shall report to the department whether it has insurance coverage available and shall comply with all applicable financial responsibility requirements. The department may compel the production of documents to determine the existence, amount and type of coverage available. An owner or operator shall report to the department any subsequent payment or reimbursement for claims made for corrective actions costs. The owner or operator shall remit to the department within thirty days any amounts that were previously paid to the owner or operator from the underground storage tank revolving fund assurance account and that have also been recovered from insurance.

Sec. 9. Title 49, chapter 6, Arizona Revised Statutes, is amended by adding article 6, to read:

article 6. underground storage tank

informal appeals and underground storage tank policy commission

49-1091 . Underground storage tank informal appeals

A. A PERSON WHO UNDERTAKES CORRECTIVE ACTION PURSUANT TO SECTION 49-1052, SUBSECTION I OR AN OWNER OR OPERATOR MAY INFORMALLY APPEAL THE FOLLOWING DECISIONS OR DETERMINATIONS PURSUANT TO THIS SECTION:

1. A WRITTEN INTERIM DECISION FROM THE UNDERGROUND STORAGE TANK PROGRAM OF THE DEPARTMENT.

2. A WRITTEN INTERIM DETERMINATION FROM THE DEPARTMENT ON MATTERS RELATING TO OWNER OR OPERATOR STATUS.

3. A WRITTEN INTERIM DETERMINATION FROM THE DEPARTMENT ON MATTERS RELATING TO PREAPPROVAL, DIRECT PAYMENT OR REIMBURSEMENT FROM THE UNDERGROUND STORAGE TANK ASSURANCE ACCOUNT.

B. THE DEPARTMENT'S FAILURE TO RESPOND WITH A WRITTEN INTERIM DECISION TO THE OWNER'S OR OPERATOR'S SUBMISSION TO THE DEPARTMENT OF ANY DOCUMENTS IDENTIFIED IN SUBSECTION G OF THIS SECTION WITHIN ONE HUNDRED TWENTY DAYS OF RECEIPT CONSTITUTES A BASIS FOR AN INFORMAL APPEAL.

C. A PERSON WHO UNDERTAKES CORRECTIVE ACTION PURSUANT TO SECTION 49-1052, SUBSECTION I OR AN OWNER OR OPERATOR WHO IS SUBJECT TO AN INTERIM DECISION OR DETERMINATION DESCRIBED IN SUBSECTIONS A AND B OF THIS SECTION, AND WHO DISAGREES WITH THE INTERIM DECISION OR DETERMINATION, MAY FILE A WRITTEN NOTICE OF DISAGREEMENT WITH THE DEPARTMENT WITHIN THIRTY DAYS OF RECEIVING THE DEPARTMENT'S INTERIM DECISION OR DETERMINATION. THE NOTICE SHALL INCLUDE A DESCRIPTION OF THE SPECIFIC PORTIONS OF THE INTERIM DECISION OR DETERMINATION WITH WHICH THE PERSON, OWNER OR OPERATOR DISAGREE AND MAY INCLUDE A REQUEST TO MEET WITH THE DEPARTMENT TO RESOLVE THE DISAGREEMENT. THE DEPARTMENT SHALL SCHEDULE A MEETING WITHIN THIRTY DAYS AFTER RECEIVING THE REQUEST.

D. A PERSON WHO REQUESTS A MEETING PURSUANT TO SUBSECTION C OF THIS SECTION OR AN AUTHORIZED REPRESENTATIVE OF THE PERSON DESIGNATED IN WRITING MAY ATTEND THE MEETING WITH ANY INDIVIDUALS WHO MAY BE HELPFUL IN DISCUSSING THE MATTER WITH THE DEPARTMENT.

E. THE DEPARTMENT SHALL ISSUE A FINAL WRITTEN DECISION OR DETERMINATION WITHIN FORTY-FIVE DAYS OF RECEIVING THE NOTICE OF DISAGREEMENT OR WITHIN FIFTEEN DAYS FOLLOWING THE CONCLUSION OF A MEETING PURSUANT TO SUBSECTION D OF THIS SECTION, WHICHEVER COMES FIRST. IF THE DEPARTMENT FAILS TO ISSUE A FINAL WRITTEN DECISION OR DETERMINATION WITHIN THE TIME SPECIFIED IN THIS SUBSECTION, THE DEPARTMENT'S WRITTEN INTERIM DECISION OR DETERMINATION BECOMES THE FINAL WRITTEN DECISION OR DETERMINATION. THE FINAL WRITTEN DECISION OR DETERMINATION SHALL ADDRESS THE NOTICE OF DISAGREEMENT RECEIVED PURSUANT TO SUBSECTION C OF THIS SECTION. THE FINAL WRITTEN DECISION OR DETERMINATION IS THE ONLY DECISION OR DETERMINATION THAT IS APPEALABLE AS AN APPEALABLE AGENCY ACTION AS DEFINED IN SECTION 41-1092 OR A CONTESTED CASE DEFINED IN SECTION 41-1001.

F. THE PERIOD OF TIME FOR COMPLIANCE WITH CORRECTIVE ACTIONS ASSOCIATED WITH THE SUBJECT MATTER OF A NOTICE OF DISAGREEMENT IS TOLLED FROM THE DATE THAT A PERSON WHO UNDERTAKES CORRECTIVE ACTION PURSUANT TO SECTION 49-1052, SUBSECTION I OR AN OWNER OR OPERATOR FILES A WRITTEN NOTICE OF DISAGREEMENT WITH THE DEPARTMENT UNTIL THE DATE THE FINAL DECISION OR DETERMINATION IS RENDERED BY THE DEPARTMENT AND ANY APPEALS ARE COMPLETED.

G. A WRITTEN INTERIM DECISION ADDRESSES ONE OF THE FOLLOWING TECHNICAL ISSUES:

1. THE DEPARTMENT'S APPROVAL, DISAPPROVAL OR NOTICE OF DEFICIENCY OF SITE CHARACTERIZATION REPORTS.

2. THE DEPARTMENT'S APPROVAL, DISAPPROVAL OR NOTICE OF DEFICIENCY OF CORRECTIVE ACTION PLANS FOR SOIL, GROUNDWATER OR BOTH.

3. THE DEPARTMENT'S APPROVAL, DISAPPROVAL OR NOTICE OF DEFICIENCY OF A WORK PLAN.

4. THE DEPARTMENT'S DETERMINATION OR CONFIRMATION OF A RELEASE.

5. THE DEPARTMENT'S APPROVAL, DISAPPROVAL OR NOTICE OF DEFICIENCY OF REQUESTS FOR CLOSING A CASE FILE CORRESPONDING TO A RELEASE FROM A LEAKING UNDERGROUND STORAGE TANK.

49-1092 . Underground storage tank policy commission; membership; powers

A. AN UNDERGROUND STORAGE TANK POLICY COMMISSION IS ESTABLISHED TO REVIEW AND PROVIDE RECOMMENDATIONS TO IMPROVE THE PROGRAM ESTABLISHED PURSUANT TO THIS CHAPTER.

B. THE UNDERGROUND STORAGE TANK POLICY COMMISSION CONSISTS OF THE FOLLOWING MEMBERS:

1. A REPRESENTATIVE FROM A CITY OR TOWN GOVERNMENT THAT OWNS OR OPERATES UNDERGROUND STORAGE TANKS.

2. A REPRESENTATIVE OF AN ENVIRONMENTAL ORGANIZATION.

3. A REPRESENTATIVE OF THE PUBLIC WHO HAS ENVIRONMENTAL EXPERIENCE.

4. A REPRESENTATIVE OF OWNERS OR OPERATORS WITH ONE HUNDRED OR MORE UNDERGROUND STORAGE TANKS IN THIS STATE.

5. A REPRESENTATIVE OF OWNERS OR OPERATORS WITH AT LEAST TEN BUT FEWER THAN ONE HUNDRED UNDERGROUND STORAGE TANKS IN THIS STATE.

6. A REPRESENTATIVE OF OWNERS OR OPERATORS WITH FEWER THAN TEN UNDERGROUND STORAGE TANKS IN THIS STATE.

7. A REPRESENTATIVE OF ENVIRONMENTAL CONSULTANTS WHO IS QUALIFIED BY THE UNDERGROUND STORAGE TANK PROGRAM.

8. A REPRESENTATIVE OF THE PUBLIC WHO HAS EXPERIENCE IN FINANCE OR INSURANCE MATTERS.

9. AN ENVIRONMENTAL ATTORNEY NOT EMPLOYED BY THE STATE.

10. A REPRESENTATIVE OF THE ATTORNEY GENERAL'S OFFICE.

11. THE DIRECTOR OR THE DIRECTOR'S DESIGNEE.

C. THE GOVERNOR SHALL APPOINT THE MEMBERS LISTED IN SUBSECTION B, PARAGRAPHS 1 THROUGH 9 OF THIS SECTION. MEMBERS SERVE AT THE PLEASURE OF THE GOVERNOR FOR STAGGERED THREE YEAR TERMS. MEMBERS APPOINTED PURSUANT TO SUBSECTION B, PARAGRAPHS 4 THROUGH 9 OF THIS SECTION SHALL HAVE EXPERIENCE WITH UNDERGROUND STORAGE TANKS. MEMBERS ARE NOT ENTITLED TO COMPENSATION BUT ARE ELIGIBLE FOR REIMBURSEMENT OF EXPENSES PURSUANT TO TITLE 38, CHAPTER 4, ARTICLE 2. MEMBERS OF THE COMMISSION ARE SUBJECT TO TITLE 38, CHAPTER 3, ARTICLE 8, RELATING TO CONFLICT OF INTEREST.

D. THE UNDERGROUND STORAGE TANK POLICY COMMISSION SHALL:

1. SELECT A CHAIRPERSON AND VICE CHAIRPERSON FROM AMONG ITS MEMBERS.

2. SUBMIT REPORTS TO THE SPEAKER OF THE HOUSE OF REPRESENTATIVES, THE PRESIDENT OF THE SENATE, THE GOVERNOR AND THE DIRECTOR AT LEAST ANNUALLY. THESE REPORTS SHALL EVALUATE THE OVERALL EFFECTIVENESS OF THE UNDERGROUND STORAGE TANK PROGRAM, INCLUDING:

(a) THE ADEQUACY OF PROTECTION TO HUMAN HEALTH AND THE ENVIRONMENT.

(b) THE COST EFFECTIVENESS OF CORRECTIVE ACTIONS.

(d) THE NEED FOR ADDITIONAL ASSURANCE ACCOUNT MONIES OR OTHER MONIES TO MEET THE NEEDS OF THE PROGRAM.

(e) EVALUATION AND RECOMMENDATION OF DATES TO PHASE OUT THE ASSURANCE ACCOUNT AND TRANSFER RESPONSIBILITY FOR CORRECTIVE ACTION COSTS TO THE PRIVATE INSURANCE INDUSTRY.

(f) WAYS TO REDUCE FUTURE CLAIMS TO THE ASSURANCE ACCOUNT AND ENCOURAGE COMPLIANCE WITH NEW TANK STANDARDS BY LOWERING CLAIM CEILINGS AND INCREASING COPAYMENTS.

3. HAVE AT LEAST THIRTY DAYS TO REVIEW AND MAKE WRITTEN RECOMMENDATIONS TO THE DIRECTOR BEFORE THE DEPARTMENT'S ADOPTION OF SUBSTANTIVE POLICIES OR GUIDELINES OF THE PROGRAM THAT AFFECT THE SUBSTANTIVE RIGHTS OF OWNERS AND OPERATORS OR OTHER REGULATED PARTIES. THE DIRECTOR SHALL CONSIDER THE WRITTEN RECOMMENDATIONS OF THE COMMISSION BEFORE IMPLEMENTING THE POLICIES OR GUIDELINES.

4. BE PROVIDED WITH THE APPLICABLE INFORMATION DESCRIBED IN SECTION 41-1021, SUBSECTION B, AT THE TIME OF THE DOCKET OPENING REGARDING A PROPOSED RULE THAT AFFECTS THE SUBSTANTIVE RIGHTS OF OWNERS AND OPERATORS OR OTHER PARTIES REGULATED PURSUANT TO THIS CHAPTER. THE COMMISSION MAY PROVIDE WRITTEN COMMENTS WITHIN A TIMELY MANNER. THE DEPARTMENT SHALL CONSIDER ANY WRITTEN COMMENTS OF THE COMMISSION BEFORE PUBLICATION OF A NOTICE OF A PROPOSED RULE ADOPTION PURSUANT TO SECTION 41-1022.

E. THE COMMISSION MAY:

1. FORM SUBCOMMITTEES TO CONSIDER SPECIFIC ISSUES.

2. TRANSMIT SPECIFIC RECOMMENDATIONS FOR IMPROVING THE PROGRAM TO THE DIRECTOR, THE SPEAKER OF THE HOUSE OF REPRESENTATIVES, THE PRESIDENT OF THE SENATE AND THE GOVERNOR.

F. MEETINGS OF THE COMMISSION OR ANY SUBCOMMITTEE SHALL BE OPEN TO THE PUBLIC AND AN OPPORTUNITY FOR PUBLIC COMMENT SHALL BE PROVIDED AT EACH MEETING.

G. THE DIRECTOR AND THE DEPARTMENT SHALL COOPERATE IN PROVIDING INFORMATION TO THE COMMISSION. THE DIRECTOR SHALL CONSIDER THE RECOMMENDATIONS OF THE COMMISSION IN ADMINISTERING THE REQUIREMENTS OF THIS CHAPTER.

Sec. 10. Underground storage tank technical appeals panel; intent

The underground storage tank technical appeals panel established pursuant to section 11 of this act is a pilot program intended to address issues particular to the underground storage tank program and determine whether the use of technical panels in the office of administrative hearings appeals process will provide an effective method of resolving issues. The office of administrative hearings shall submit a report to the governor, the speaker of the house of representatives and the president of the senate on or before December 1, 1999, evaluating the underground storage tank technical appeals panel pilot program. The report shall include observations regarding the overall efficiency and effectiveness of the pilot program and any comments received by the office of administrative hearings from participating parties. The report shall also provide statistical information regarding the final disposition of all cases heard by the underground storage tank technical appeals panel.

Sec. 11. Underground storage tank technical appeals panel; process; membership; conflicts; decisions

A. Beginning September 1, 1998, an underground storage tank technical appeals panel pilot program is established. The underground storage tank technical appeals panel consists of five regular members and two alternate members who are appointed by and serve at the pleasure of the governor for terms that expire on completion of any administrative hearings involving the panel that are requested on or before September 1, 2000. Each member shall have a college degree and professional experience in engineering, hydrology, geology or hydrogeology. Experience with underground storage tank corrective actions is highly preferred but is not required. Members shall not be employees of the United States environmental protection agency or this state, but may be a faculty member at a state university.

B. Members and alternates are entitled to compensation pursuant to section 38-611, subsection D, Arizona Revised Statutes, for each day they attend hearings or conduct formal deliberations.

C. Members are subject to title 38, chapter 3, article 8, Arizona Revised Statutes, relating to conflict of interest. A member of the panel shall not participate in an administrative hearing if the member has an appeal pending pursuant to this section that is substantially similar to the matter on appeal. A former member of the panel may not appear before the panel as an employee or consultant for a party to an appeal for a period of one year. A member of the panel shall not participate in an administrative hearing for that hearing if either of the following apply:

1. The member is or has been an employee during the immediately preceding year of an appealing party at the hearing.

2. The member is or has been employed during the immediately preceding year by a firm appearing at the hearing on behalf of an appealing party.

D. The appellant, the department or the administrative law judge selected by the office of administrative hearings may request that the panel participate in a hearing arising from a final decision or determination issued pursuant to section 49-1091, Arizona Revised Statutes. If five members of the panel including alternates are not available, the hearing may proceed if at least three members, including alternates are available. The panel shall hear testimony, review evidence and examine witnesses.

E. Hearings shall be conducted in accordance with this section and, if not inconsistent with this section, according to the procedures set forth in title 41, chapter 6, article 10, Arizona Revised Statutes, pertaining to convening and conducting hearings and the time frames for issuing decisions.

F. The administrative law judge and the panel participants shall confer at the conclusion of the hearing. The panel shall prepare the written findings of fact regarding the technical issues set forth in section 49-1091, Arizona Revised Statutes, or technical matters arising from a written determination from the department relating to preapproval, direct payment or reimbursement from the assurance account. The administrative law judge shall adopt the panel's technical findings of fact in the recommended decision to the director unless the administrative law judge determines the technical findings of fact are technically invalid. The administrative law judge shall prepare a written explanation in the recommended decision to the director of the reasons for the administrative law judge's finding and shall include a copy of the panel's technical findings of fact with the recommended decision.

G. The director may affirm, reject or modify the recommended decision of the administrative law judge. The director may only reject or modify the technical findings of fact in the recommended decision if the director determines they are technically invalid. The director may only reject or modify the conclusions of law in the recommended decision if the director determines they are incorrect as a matter of law. The director's decision shall be rendered in accordance with the time frames prescribed in section 41-1092.08, subsection B, Arizona Revised Statutes. The recommended decision becomes the final administrative decision if the director's decision is not rendered within thirty days after receipt of the recommended decision.

H. Any party may intervene in an appeal pursuant to the discretion of the administrative law judge.

I. This section does not apply to administrative hearings that have not been requested on or before September 1, 2000.

Sec. 12. Underground storage tank grant periods; priority

A. Notwithstanding any other law, there are two periods for making payments from the underground storage tank revolving fund grant account established pursuant to section 49-1071, Arizona Revised Statutes. One period ends on November 15, 1996, and one period ends on December 31, 2000.

B. Grant monies committed during the grant period ending December 31, 2000 shall be committed first to applicants whose grant issues were forfeited in the grant period ending November 15, 1996, due to failure by the applicants to provide proof of a contract performance bond and contractor's insurance policy as prescribed by R18-12-705, subsection A, Arizona Administrative Code, and in accordance with R18-12-714, subsection D, Arizona Administrative Code, adopted effective May 23, 1996, if the failure was the result of ambiguity in the rule regarding consequences for failure to submit proof. The grant money committed to cover those forfeitures shall be committed to those applicants in the order that their applications were ranked in the grant period ending November 15, 1996.

C. The department of environmental quality shall adopt rules that clarify that the failure to provide proof of a contract performance bond and contractor's insurance policy, if required pursuant to the rules, is a basis for forfeiting a grant issue.

D. Once the commitments have been completed as outlined in subsection B of this section, all other applications shall be reviewed and ranked for payment priority. Applications that were submitted during the grant period ending November 15, 1996 for which funds were not committed due to the lack of monies shall be ranked with applications submitted in the grant period ending December 31, 2000. Applications submitted during the grant period ending December 31, 2000, that do not include the proof of contractor performance bond and contractor's insurance policy shall not have their grant applications forfeited pursuant to R18-12-714, subsection D, Arizona Administrative Code if the failure was the result of ambiguity in the rules regarding consequences of failure to submit proof and if the work that is the subject of the application was commenced before the effective date of the rules adopted pursuant to subsection C of this section.

E. The department of environmental quality may commit any surplus monies between area accounts as defined in section 49-1015, subsection A, Arizona Revised Statutes, once the commitments to the grants described in subsections B and D of this section have been satisfied. The department may transfer any remaining surplus monies, once all grant commitments have been satisfied, to the assurance account of that area.

Sec. 13. Initial terms of members of the underground storage tank policy commission

A. Notwithstanding section 49-1092, subsection C, Arizona Revised Statutes, the initial terms of the members of the underground storage tank policy commission appointed by the governor shall be as follows:

1. Three persons shall be appointed for a term of one year.

2. Three persons shall be appointed for a term of two years.

3. Three persons shall be appointed for a term of three years.

B. All subsequent appointments shall be as provided by law.

Sec. 14. Retroactive effect

Section 49-1052, Arizona Revised Statutes, as amended by section 6 of this act, is effective retroactively to July 1, 1996.

Sec. 15. Corrective actions

Notwithstanding section 49-1052, subsection M, Arizona Revised Statutes, as amended by this act, beginning after January 1, 1996, any person who submitted a claim for coverage or a work plan for preapproval for a site that received a site closure letter from the department of environmental quality is eligible for coverage if the claim or work plan was submitted within three hundred sixty-five days after the claimant received the site closure letter from the department. The department of environmental quality shall notify persons regulated by the underground storage tank program of the provisions of this section by a general mailing. A person is eligible for coverage under this section if the person was denied coverage because a claim was submitted untimely but within three hundred sixty-five days after the person received the site closure letter from the department. A person must resubmit the claim that was denied within sixty days of the date of the general mailing from the department to be eligible for payment.

Sec. 16. Appropriations

A. The sum of $450,000 is appropriated from the state general fund in fiscal year 1998-1999 to the regulatory account of the underground storage tank revolving fund pursuant to section 49-1015, Arizona Revised Statutes.

B. There is appropriated from the state general fund in fiscal year 1998-1999 to the underground storage tank policy commission established pursuant to section 49-1092, Arizona Revised Statutes, the sum of ten thousand dollars to be used to pay the administrative costs associated with the operation of the commission.

C. The appropriations made pursuant to this section are exempt from the provisions of section 35-190, Arizona Revised Statutes, relating to lapsing of appropriations.

Sec. 17. Emergency

This act is an emergency measure that is necessary to preserve the public peace, health or safety and is operative immediately as provided by law.

APPROVED BY THE GOVERNOR MAY 27, 1998.

FILED IN THE OFFICE OF THE SECRETARY OF STATE MAY 28, 1998.

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