Reference Title: financial hardship; WQARF

AN ACT
AMENDING SECTION 49-292.02, ARIZONA REVISED STATUTES; RELATING TO WATER QUALITY CONTROL.

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

Section 1. Section 49-292.02, Arizona Revised Statutes, is amended to read:

49-292.02 . Financial hardship settlement

A. The director shall consider any offer by a person who is potentially liable for remedial action costs under this article or section 107(a) of CERCLA without regard to the extent of that person's liability . , if the person is unable to pay the allocated share proposed by the director under section 49-287.05 or the share allocated under section 49-287.06, if the person participated in the allocation process, IN ORDER TO OBTAIN A SETTLEMENT UNDER THIS SECTION, A PERSON MUST DEMONSTRATE A FINANCIAL HARDSHIP WITH RESPECT TO PAYMENT OF A POTENTIAL LIABILITY UNDER THIS ARTICLE OR UNDER CERCLA. A person whose liability under this article arose OR COULD ARISE from criminal acts is not eligible to request a settlement under this section. In considering a person's ability to pay, the director shall consider all of the following:

1. The financial resources of the person, including available insurance.

2. The person's ability to continue in business after payment of the allocated A SETTLEMENT amount.

3. Whether liability for the allocated SETTLEMENT amount would require the person to seek protection under federal bankruptcy law.

B. An applicant seeking settlement under this section shall submit a letter to the director requesting a financial hardship settlement on a form provided by the director. The request letter shall include the applicant's tax returns and all schedules, financial statements, balance statements and other information concerning the person's gross income and net worth for the five years preceding the date of the application on a form provided by the director. Within ninety days of the application, the director may require additional information to verify the applicant's eligibility for settlement under this section. The applicant may provide any additional information the applicant believes to be relevant. Financial information submitted by the applicant pursuant to this section and marked "confidential" shall be kept confidential by the director. If the director or the attorney general disputes a claim of confidentiality, written notice shall be provided to the person claiming the confidentiality that the claim is disputed. If the person claiming the confidentiality does not file an action for declaratory relief in superior court within thirty days after receiving this notice, the information shall be made available to the public. AN APPLICANT WHO SUBMITS FALSE OR INTENTIONALLY MISLEADING INFORMATION IS NOT ELIGIBLE FOR A SETTLEMENT PURSUANT TO THIS SECTION.

C. If the director verifies that the applicant is unable to pay the allocated share HAS DEMONSTRATED A FINANCIAL HARDSHIP WITH RESPECT TO PAYMENT OF A POTENTIAL LIABILITY UNDER THIS ARTICLE OR CERCLA , the director shall enter into a settlement within ninety days after receipt of the request letter and other information required under this section. The settlement shall meet the requirements of section 49-292, but without regard to the extent of the person's liability, and shall be made pursuant to subsection A of this section. The director shall allow the settlement amount to be paid over time, up to a maximum of ten years, subject to payment of interest at the rate of six per cent per year. If the settlement amount is paid in full within the first five years, the payments shall not be subject to the payment of interest. Failure to make two consecutive timely payments shall be a breach of the settlement agreement. An applicant may file a petition with the director to modify the payment schedule.

D. The applicant shall cooperate with the director in providing reasonable access and information necessary for the director to carry out the requirements of this article.

E. Notice of the settlement shall be published as provided in section 49-292. The notice shall provide a general description of the contents of the agreement. Any interested person may comment on whether the applicant qualifies for a settlement pursuant to this section in writing to the director. The director may withdraw from a settlement after considering the comments.

F. If the director determines that the applicant does not qualify for a settlement pursuant to this section, the director shall notify the applicant in writing within ninety days of the receipt of all information required under subsection B of this section stating the reasons. If the director does not notify the applicant within ninety days, the application is deemed denied. A denial of settlement under this section may be appealed to the office of administrative hearings pursuant to section 49-298. In any appeal made pursuant to section 49-298, the documents submitted by the applicant under subsection B of this section are not confidential. If an applicant agrees not to contest the allocated share assigned by the director under section 49-287.05, the appeal shall include a determination of THE APPEAL SHALL DETERMINE ONLY the amount the applicant is able to pay. All other appeals shall include only a determination of the applicant's ability to pay its allocated share.

G. In reviewing a proposed settlement, the federal district court or superior court shall give deference to the director's determination that the settlement is in the public interest and meets applicable legal standards for court approval. Any person challenging a proposed settlement shall bear the burden of proving that the proposed settlement does not meet the applicable legal standards for court approval. If a settlement is reached with an applicant, the confidential information supplied to the director under this section may be submitted under seal to the court for in camera review.

H. In determining the applicant's financial resources, the financial resources of all concerns in which the applicant maintains ownership, control or management may be considered by the director. A settlement under this section applies only to the applicant and does not release or affect in any way , AFFECT OR INCREASE the liability of any other person. The director may adopt rules to implement this section.

I. If a settlement is made pursuant to this section, the director shall not file a lien pursuant to section 49-295 for an amount greater than the settlement.

J. WITHIN THIRTY DAYS AFTER THE DIRECTOR HAS PROPOSED AN ALLOCATION SHARE UNDER SECTION 49-287.05 OR A SHARE HAS BEEN ALLOCATED UNDER SECTION 49-287.06 TO A PERSON WHO HAS PREVIOUSLY SETTLED WITH THE DEPARTMENT PURSUANT TO THIS SECTION, THE DIRECTOR MAY REQUEST THAT THE PREVIOUS SETTLEMENT BE REOPENED TO DETERMINE WHETHER THE PERSON WHO HAS SETTLED CAN PAY AN AMOUNT THAT IS GREATER THAN THE PREVIOUS SETTLEMENT AMOUNT BUT NOT MORE THAN THE ALLOCATED SHARE. A DECISION BY THE DIRECTOR TO INITIATE A REVIEW OF THE PREVIOUS SETTLEMENT SHALL BE PUBLISHED IN A NEWSPAPER OF GENERAL CIRCULATION TWICE WITHIN A ONE WEEK PERIOD. THE NOTICE SHALL PROVIDE A GENERAL DESCRIPTION OF THE DIRECTOR'S REASONS FOR INITIATING A REVIEW OF THE PREVIOUS SETTLEMENT. ANY INTERESTED PERSON MAY COMMENT IN WRITING TO THE DIRECTOR ON WHETHER THE SETTLEMENT SHOULD BE REOPENED AND WHETHER THE PERSON WHO PREVIOUSLY SETTLED WITH THE DEPARTMENT PURSUANT TO THIS SECTION SHOULD BE REQUIRED TO PAY A DIFFERENT AMOUNT FROM THE PREVIOUS SETTLEMENT AMOUNT. PUBLIC COMMENTS MUST BE RECEIVED BY THE DIRECTOR WITHIN THIRTY DAYS OF THE LAST DATE OF PUBLICATION. THE PERSON WHO SETTLED SHALL SUBMIT UPDATED VERSIONS OF THE DOCUMENTS PRESCRIBED BY SUBSECTION B OF THIS SECTION TO PROVIDE FINANCIAL INFORMATION SINCE THE PREVIOUS SETTLEMENT. WITHIN NINETY DAYS AFTER RECEIPT OF THE INFORMATION PRESCRIBED BY THIS SUBSECTION, THE DIRECTOR SHALL NOTIFY THE PERSON WHETHER THE ORIGINAL SETTLEMENT AMOUNT WILL BE REVISED. IF THE DIRECTOR DETERMINES THAT THE ORIGINAL SETTLEMENT AMOUNT WILL BE REVISED, THE DIRECTOR SHALL PROVIDE THE PERSON WITH THE REVISED SETTLEMENT AMOUNT AND THE BASIS FOR THAT REVISION. ANY MONIES PAID PURSUANT TO THE ORIGINAL SETTLEMENT SHALL BE CREDITED TOWARD ANY REVISED SETTLEMENT AMOUNT. IF THE DIRECTOR DOES NOT NOTIFY THE PERSON WHO SETTLED WITHIN NINETY DAYS, THE ORIGINAL SETTLEMENT AMOUNT IS NOT SUBJECT TO REVISION. WITHIN THIRTY DAYS AFTER THE DIRECTOR'S DECISION TO REVISE THE ORIGINAL SETTLEMENT AMOUNT, THE DIRECTOR MUST PETITION THE COURT HAVING JURISDICTION OVER THE SETTLEMENT. THE COURT SHALL DETERMINE WHETHER THE SETTLEMENT AMOUNT SHALL BE REOPENED AND WHAT THE SETTLEMENT AMOUNT SHALL BE, BUT IT SHALL NOT BE MORE THAN THE ALLOCATED SHARE.

Sec. 2. Water quality assurance revolving fund advisory board; evaluation; report

The water quality assurance revolving fund advisory board established pursuant to section 49-289.04, Arizona Revised Statutes, shall periodically review and evaluate the completed settlements and the number of pending settlements by category authorized by title 49, chapter 2, article 5, Arizona Revised Statutes, and their affect on the remedial action program. The board shall report their findings to the speaker of the house of representatives, the president of the senate and the governor.

APPROVED BY THE GOVERNOR APRIL 27, 1999.

FILED IN THE OFFICE OF THE SECRETARY OF STATE APRIL 27, 1999.