Arizona-2013-SB1080-Chaptered

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

Section 1. Section 49-1015.01, Arizona Revised Statutes, is amended to read:

START_STATUTE49-1015.01. Regulated substance fund; purpose

A. A The regulated substance fund is established.� The director shall administer the fund.� Monies in the fund are continuously appropriated and are exempt from the provisions of section 35‑190 relating to lapsing of appropriations. On notice from the director, the state treasurer shall invest and divest monies in the fund as provided in section 35‑313, and monies earned from investment shall be credited to the fund.

B. The regulated substance fund consists of monies appropriated by the legislature, underground storage tank tax revenues, assurance account monies encumbered by the director for implementing work plans and corrective action plans in which monitored natural attenuation is all or a portion of the selected remedy, monies reimbursed to the fund and gifts, grants and donations.

C. Monies in the fund shall be used for releases from underground storage tanks. Monies in the fund are continuously appropriated and shall be used at sites selected based on an analysis of risk to human health and the environment by the director as follows:

1. For the reasonable and necessary costs of administering and taking corrective actions of regulated substances if the department cannot locate an owner or operator of the underground storage tank within ninety days or within such shorter period as necessary to protect human health or the environment.

2. Notwithstanding paragraph 1, for the reasonable and necessary costs of taking corrective actions of regulated substances.

D. Monies in the fund may also be used for corrective actions related to a work plan or corrective action plan approved by the department before July 1, 2010 in which monitored natural attenuation is all or a portion of the selected remedy, including corrective actions at sites at which monitored natural attenuation is not adequate. Monies for monitored natural attenuation shall be deposited in the monitored natural attenuation account of the fund and shall only be used for those purposes.

E. Monies in the fund shall not be used to implement the water quality assurance revolving fund program pursuant to chapter 2, article 5 of this title. END_STATUTE

Sec. 2. Section 49-1052, Arizona Revised Statutes, is amended to read:

START_STATUTE49-1052. Coverage of corrective action costs

A. The department shall provide from the assurance account 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 the following:

1. Sampling, analysis and reporting that are initiated pursuant to section 49‑1004 and that confirm the presence of a release that requires corrective action pursuant to section 49‑1005.

2. Sampling, analysis and reporting that are initiated pursuant to section 49‑1008 and that confirm the presence of a release that requires corrective action pursuant to section 49‑1005.

3. Permanent closure pursuant to section 49‑1008 before July 1, 1999, if the owner or operator satisfies both of the following requirements:

(a) A release associated with the tank being closed was reported to the department.

(b) The closure of the tank met all applicable closure requirements of section 49‑1008 and rules adopted pursuant to that section.

4. Permanent closure of a tank pursuant to section 49‑1008 on or after July 1, 1999, if the owner or operator satisfies all of the following requirements:

(a) The closure of the tank meets all applicable closure requirements of section 49‑1008 and the rules adopted pursuant to that section.

(b) A release to native soils was confirmed and reported to the department before closure activities were initiated.

(d) The tank that is being closed met the temporary closure requirements or the new or upgraded tank requirements in rules adopted pursuant to section 49‑1014 at the time of the release.

(e) The tank cannot be repaired under the rules adopted pursuant to section 49‑1014.

5. Corrective actions initiated pursuant to section 49‑1005.

6. Permanent closure pursuant to section 49‑1008, for persons described in subsection I of this section, if all of the following are met:

(a) The underground storage tank being closed is the source of a release to native soil that requires corrective action.

(b) Permanent closure of the underground storage tank met all of the applicable closure requirements of section 49‑1008 and the rules adopted pursuant to that section.

(d) The person described in subsection I of this section meets the requirements of section 49‑1016, subsection C.

7. Costs incurred for professional fees directly related to the preparation of an assurance account application.� The department shall credit these fees toward the applicant's copayment obligation.

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 eligible actions on behalf of the owner, operator or political subdivision. If the department determines that an application for direct payment or reimbursement is incomplete, the department within forty‑five days of the application shall notify the owner or operator of the missing information as specifically as possible and shall permit the owner or operator to provide the additional information within thirty days.� On the request of an applicant, the department shall grant an additional sixty days to submit the missing information.� The grant of additional time tolls the period for making an interim determination on matters relating to direct payment or reimbursement pursuant to section 49‑1091.

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 coverage of the eligible 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 eligible costs unless the department determines that the eligible activities have met, or when completed will meet, the applicable requirements of section 49‑1004 or 49‑1005. The department may require by rule that persons who perform payable eligible activities 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 applies:

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. The 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 the owner's or operator's 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. The 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 the owner's or operator's 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.

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 shall not be considered to be the subject of an enforcement proceeding for purposes of eligibility for assurance account payments if any of the following applies:

(a) The department has filed an action in superior court unless the court determines in its discretion on the merits of the action that withholding payment is an appropriate sanction.� Processing of payment shall be postponed until the court determines the owner's or operator's eligibility.

(b) The department takes corrective actions pursuant to section 49‑1017, subsection A, paragraphs 1 and 2, without the consent of the owner or operator.

(c) An owner or operator formally consents in writing to an administrative order. 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.� For compliance orders and violated consent orders that become final on or before November 1, 2000, on satisfaction of a final compliance order or a final administrative decision on a violated consent order, an owner or operator regains eligibility of coverage for costs incurred for activities that are the subject of the final compliance order or final violated consent order. For compliance orders and violated consent orders that become final after November 1, 2000, an owner or operator regains coverage for costs incurred for activities that are the subject of the final compliance order or final violated consent order, except that the director may withhold coverage of up to twenty‑five per cent of the eligible costs incurred for activities that are performed to cure the violation and that gave rise to the final compliance order or final violated consent order if the owner or operator has not demonstrated good faith attempts to meet the requirements of the final compliance order or to correct the violation of the consent order. Any decision by the director to withhold coverage under this subdivision is an appealable agency action.

4. An individual, an owner or operator or any entity seeking coverage is convicted of fraud relating to performance of eligible activities or to any claim made for 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 payment.

5. The owner or operator has failed to comply with the 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 purposes 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 reported after January 1, 2000.

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

1. The need for financial assistance.� The financial need evaluation shall include the owner's or operator's corrective action liabilities at all of the owner's or operator's underground storage tank sites in the state.

2. The risk to human health and the environment.

3. Whether the coverage is provided as a direct payment to a person performing an eligible activity.

4. The extent to which a delay in providing coverage will affect an eligible activity in progress.

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

6. The date on which an eligible activity 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 coverage described in this article for eligible activity 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 coverage described in this article for eligible activity 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 on which the underground storage tank is or was located or the underground storage tank and who undertakes to meet the requirements of section 49‑1005, but who is not an owner or operator.� For claims paid on or after August 25, 2004, a person who undertakes to meet the requirements and who is not an owner or an operator is eligible for ninety per cent coverage, except that if the ten per cent per application that is not covered exceeds the assessed valuation of the real property, the person is eligible for one hundred per cent coverage in an application.� If that person is not eligible for one hundred per cent coverage and does not pay the ten per cent remaining and notwithstanding the limitations prescribed in section 49‑1017, the department shall take corrective action with respect to that release.� A person who takes corrective action pursuant to this subsection shall submit certification to the department that the person has paid the remaining costs or has agreed to pay those remaining costs as demonstrated in an existing agreement.

J. 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. Except for claims for appeals costs authorized pursuant to section 49‑1091.01, claims for coverage, or a work plan for preapproval, claims at a site shall be submitted to the department no more than one year after the claimant receives a closure letter sent by the department by certified mail with notice that the claimant has one year to submit a claim for that release. If the claim is submitted in a timely manner, the claimant may correct or supplement the claim 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 account, except for those monies encumbered or set aside for the purpose of well abandonment or site restoration. The time limit prescribed by this subsection does not apply to closed releases 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 release was closed or to releases that are reported on or after July 1, 2006 that are subject to coverage.

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 may be made for the most cost‑effective corrective actions to remediate soil either to the predetermined residential soil clean up levels or site specific residential soil clean up levels for unrestricted use of the property as determined by a risk based health assessment performed pursuant to rules adopted pursuant to article 1 of this chapter. The department shall provide coverage for the costs of corrective actions relating to groundwater remediation and for approved corrective action plans that are submitted on or after August 25, 2004 and for work plans that are associated with an approved corrective action plan that is submitted to the department on or after August 25, 2004, and payment shall be made only for the most cost‑effective risk based corrective action in accordance with rules adopted under article 1 of this chapter.� On adoption of rules and after a request to the department, the department shall issue a no further action letter on completion of source removal and source control and approval of a groundwater monitored natural attenuation corrective action plan. The department shall provide coverage for corrective actions related to the control and removal of a source of contamination but shall not provide coverage for permanent closure of an underground storage tank. A source of contamination includes any one or more of the following:

1. Free product.

2. A regulated substance present in soil that causes or threatens to cause an exceedance of the aquifer water quality standards.

3. A regulated substance present in groundwater at levels that would prevent timely reduction of contaminant concentrations in comparison with the performance of active remediation.

4. Any other presence of a regulated substance causing an ongoing source of contamination, as determined by the department.

O. If a person intends to seek payment from the assurance account, the corrective action selected in a corrective action plan shall be the most cost‑effective alternative that meets the requirements of section 49‑1005. Monies from state appropriations shall not be used for administrative costs. 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 article 3 of this chapter.

P. The 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 eligible costs which the department has determined should be paid, the department shall defer such payment until sufficient monies are available to pay such eligible 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.

Q. The department shall not accept an application to the assurance account for coverage from an applicant for costs associated with a single facility more frequently than once each calendar month and the department shall not accept an application for costs associated with a single facility for an amount of less than five thousand dollars unless any of the following applies:

1. The reimbursement or preapproval application is the final application associated with the release.

2. The application for direct payment is the final application associated with the preapproved work plan.

3. The application is the last application submitted by that applicant on or before June 30, 2010.END_STATUTE

Sec. 3. Laws 2004, chapter 273, section 8 is amended to read:

Sec. 8. Regulated substance fund; deposit of monies

On July 1, 2011, after payment of all claims that were timely submitted to the department of environmental quality, The director of environmental quality shall transfer all of the following from the underground storage tank assurance account established pursuant to section 49-1015, Arizona Revised Statutes, into the regulated substance fund established pursuant to section 49-1015.01, Arizona Revised Statutes, as added amended by this act, :

1. An amount equal to the amount of copayments made by claimants pursuant to section 49-1052, subsection I, Arizona Revised Statutes, as amended by this act, and section 49-1054, subsection A, Arizona Revised Statutes, as amended by this act, and retained by the underground storage tank assurance account.

2. any monies remaining in the underground storage tank assurance account after all claims are paid or extinguished, or both, pursuant to section 9 of this act up to a maximum of sixty million dollars.� After the transfer of sixty million dollars into the regulated substance fund, any monies remaining deposited in the underground storage tank assurance account in excess of sixty million dollars shall be deposited in the state general highway fund ESTABLISHED by section 28-6991, Arizona Revised Statutes.

3. Any assurance account monies encumbered by the director on or before June 30, 2011 for corrective actions related to a work plan or corrective action plan approved by the department before June 30, 2010 in which monitored natural attenuation is all or a portion of the selected remedy and for which monies may be necessary to meet the standards for case closure.� Nothing in this paragraph shall be construed to affect the existing statutory claims process for claims involving monitored natural attenuation. Monies encumbered for monitored natural attenuation pursuant to this paragraph shall be deposited in the monitored natural attenuation account of the regulated substance fund.

Sec. 4. Laws 2004, chapter 273, section 9 is amended to read:

Sec. 9. Underground storage tank assurance account; termination of eligibility

Notwithstanding any other law:

1. From and after June 30, 2006, only releases of a regulated substance that are reported before July 1, 2006 as provided in section 49‑1004, Arizona Revised Statutes, are subject to coverage for corrective action costs from the underground storage tank assurance account except that releases that are reported on or after July 1, 2006 and that are reported at a site that is otherwise in compliance with title 49, Arizona Revised Statutes, and rules enacted under that authority and that could not have been reported before July 1, 2006 with the exercise of reasonable diligence are eligible for coverage.� If the underground storage tank assurance account does not have sufficient monies to pay for coverage of all releases, Releases that are reported on or after July 1, 2006 are eligible for coverage for corrective action costs from the underground storage tank assurance account in priority after releases of a regulated substance that are reported before July 1, 2006.

2. An application for reimbursement for or direct payment of eligible reasonable and necessary costs from the underground storage tank assurance account shall be filed with the department of environmental quality no later than 5:00 p.m. on June 30, 2010 December 31, 2015.

3. An application for preapproval made pursuant to section 49-1052, subsection I, Arizona Revised Statutes, or section 49-1053, Arizona Revised Statutes, shall be filed with the department of environmental quality no later than 5:00 p.m. on June 30, 2009 December 31, 2014.�

4. Any application made or expense incurred after June 30, 2010 December 31, 2015 is not eligible for coverage from the underground storage tank assurance account and all such claims are extinguished.

5. The department of environmental quality is not required to take any action on an application for coverage, reimbursement or payment from the underground storage tank assurance account or on an application for preapproval until after the underground storage tank program study committee submits a report of its findings and recommendations to the governor, the president of the senate and the speaker of the house of representatives and only if the underground storage tank assurance account has sufficient monies to pay claims.

6. If the underground storage tank assurance account does not have sufficient monies to pay all claims by the date of the termination of the account as otherwise provided by law, any claims unpaid on the date of termination of the account are extinguished without regard to whether those claims were eligible for coverage from the account.

Sec. 5. Laws 2004, chapter 273, section 14 is amended to read:

Sec. 14. Effective date

A. Section 7 of this act, relating to the repeal of title 49, chapter 6, articles 2 and 3, Arizona Revised Statutes, is effective on the earlier of the following:

1. Receipt of sixty million dollars into the regulated substance fund established by section 49-1015.01, Arizona Revised Statutes, as added by this act, after payment and extinguishment of all claims that were timely submitted and transfer of monies as prescribed by section 8, paragraph 2 of this act.

2. Receipt of sixty million dollars into the regulated substance fund established by section 49-1015.01, Arizona Revised Statutes, as added by this act, from monies transferred pursuant to this paragraph.� If the regulated substance fund does not receive sixty million dollars pursuant to paragraph 1 of this section, the director of environmental quality shall deposit into the regulated substance fund monies collected by the department pursuant to section 49-1031, Arizona Revised Statutes, until a total of sixty million dollars of tax revenues collected pursuant to section 49-1031, Arizona Revised Statutes, in addition to monies encumbered and deposited in the monitored natural attenuation account, is received by the regulated substance fund.

3. December 31, 2013 2015.

B. The director of environmental quality shall immediately provide written notice to the director of the Arizona legislative council when the regulated substance fund has received a total of sixty million dollars of tax revenues as prescribed by this section.

Sec. 6. Underground storage tank program study committee; membership; duties; delayed repeal

A. The underground storage tank program study committee is established consisting of the following members:

1. Three members of the house of representatives who are appointed by the speaker of the house of representatives, not more than two of whom are members of the same political party. The speaker of the house shall designate one of these members to serve as cochairperson of the committee.

2. Three members of the senate who are appointed by the president of the senate, not more than two of whom are members of the same political party. The president of the senate shall designate one of these members to serve as cochairperson of the committee.

3. The governor or the governor's designee.

4. The director of the department of environmental quality or the director's designee.

5. The director of the department of transportation or the director's designee.

6. The attorney general or the attorney general's designee.

7. A representative of an association of cities and towns in this state who is appointed by the speaker of the house of representatives.

8. A representative of an association of retail sellers of petroleum products in this state who is appointed by the speaker of the house of representatives.

9. A representative of a regional association of companies that produce, refine, transport and market petroleum products who is appointed by the speaker of the house of representatives.

10. A representative of insurance companies that provide coverage for releases from underground storage tanks who is appointed by the speaker of the house of representatives.

11. A representative of environmental consultants that provide services relating to corrective actions for underground storage tank releases who is appointed by the speaker of the house of representatives.

12. Two public members, one of whom is appointed by the president of the senate and one of whom is appointed by the speaker of the house of representatives.

B. The committee shall meet to consider and make recommendations on the following issues relating to the underground storage tank program:

1. Needs and possible sources for future funding of the program.

2. Financial responsibility requirements and mechanisms for demonstrating financial responsibility.

3. Tank compatibility issues.

4. Leak detection.

5. Tank inspections, including compliance and maintenance programs.

6. Reestablishing eligibility for claims barred by deadlines, including consideration of unpaid applications made against the underground storage tank assurance account after June 30, 2010.

7. Revenue collection and expenditures.

C. The committee may:

1. Request information, data and reports from any state agency or political subdivision of this state and other persons and businesses interested in the underground storage tank program.

2. Hold hearings and take testimony from affected persons including members of the public.

D. The committee shall meet at the call of the chairperson and shall submit a report of its findings and recommendations to the governor, the president of the senate and the speaker of the house of representatives on or before December 31, 2013 and shall provide a copy of the report to the secretary of state.

E. Members of the committee are not eligible to receive compensation or reimbursement of expenses.� Legislative staff shall provide assistance to the committee.

F. This section is repealed on February 28, 2014.