Assigned to COMPS AS
PASSED BY COW
Assigned to COMPS AS
PASSED BY COW
ARIZONA STATE SENATE
Fifty-Third Legislature, Second Regular Session
AMENDED
(NOW: underground storage tanks; reimbursement claims)
Purpose
Establishes reimbursement allowances for Underground Storage Tank (UST) releases that were properly reported before the financial responsibility (FR) requirement was federally established in 1988.
Background
A UST system is any tank and underground piping connected to the tank used to contain regulated substances, primarily petroleum, that has at least 10 percent of its total volume underground (A.R.S. § 49-1001). The UST Program is administered by the Arizona Department of Environmental Quality (ADEQ), with the exception of USTs on Tribal Lands.
A release of a regulated substance is a spill, leak, emission, discharge, escape or disposal from a UST into groundwater, surface water or soil (A.R.S. § 49-1001).
Federal regulations established in 1988 require a UST owner or operator to have a FR mechanism in place for corrective action and third-party liability claims resulting from the release of a regulated substance. Financial mechanisms available to owners and operators include commercial liability insurance, self-insurance, a guarantee, a letter of credit, a surety bond, a trust and a certificate of deposit. Owners and operators may use a combination of mechanisms to meet the FR obligations. Documentation demonstrating FR compliance must be submitted to ADEQ on an annual basis (40 C.F.R. § 280).
The Director of ADEQ has the authority to utilize monies in the UST Revolving Fund to take corrective action and reimburse corrective action taken by owners and operators for the release of a regulated substance (A.R.S. § 49-1015).
Laws 2015, Chapter 247 established reimbursement allowances for releases of regulated substances that were properly reported before July 1, 2006 for facilities that satisfy FR obligations. The application deadline for reimbursement of those claims was December 31, 2016. Releases of regulated substances that were properly reported before the FR requirement was established in 1988 are currently not eligible for reimbursement.
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
UST Releases Before FR Requirement
1. Allows, for releases that were properly reported and confirmed before the FR requirement was established, reimbursement of up to $1,000,000 per facility for corrective actions conducted between July 1, 2010 and December 31, 2016.
2. Prohibits a facility from obtaining additional reimbursement if previous reimbursement for the facility exceeds $1,000,000.
3. Reduces reimbursement by any amount previously reimbursed for releases that were properly reported and confirmed before the FR requirement was established.
4. Prohibits reimbursement amounts from being reduced based on payments made pursuant to the UST Preapproval Program administered by ADEQ.
5. Requires the costs for corrective actions to be documented in an application by the facility for payment from the UST Revolving Fund.
6. Requires applications for reimbursement to include a declaration that is signed by the owner or operator and that affirms that the submitted costs:
a) are true and accurate;
b) have not previously been submitted to ADEQ; and
c) have not been reimbursed by insurance or an alternative FR mechanism.
7. Requires claims for releases that were properly reported and confirmed before the FR requirement was established to be submitted by December 31, 2018.
ADEQ
8. Stipulates that only claims approved by ADEQ are eligible for payment.
9. Requires ADEQ to:
a) determine the percentage of each claim to be paid based on available UST Revolving Fund monies;
b) pay all compensable claims in equal proportion based on claim amount, if timely submitted; and
c) reimburse 90 percent of reasonable and actual costs incurred for corrective actions.
Miscellaneous
10. Allows an owner or operator that satisfies the FR requirement through insurance to receive reimbursement of up to $500,000 for additional corrective action if the owner or operator:
a) reported the release between July 1, 2006 and December 31, 2015;
b) was in compliance with FR requirements at the time of the release;
c) participates in the UST Preapproval Program; and
d) meets a cost sharing obligation of the first $50,000 per facility.
11. Makes technical and conforming changes.
12. Becomes effective on the general effective date.
Amendments Adopted by the Commerce and Public Safety Committee
ˇ Adopted the strike-everything amendment.
Amendments Adopted by Committee of the Whole
1. Outlines additional reimbursement requirements and options.
2. Makes technical and conforming changes.
Senate Action
COMPS 3/19/18 DPA/SE 6-0-2
Prepared by Senate Research
April 5, 2018
GH/JN/lat