Bill Amendment: AZ HB2636 | 2015 | Fifty-second Legislature 1st Regular
Bill Title: Underground storage tanks
Status: 2015-04-09 - Chapter 247 [HB2636 Detail]
Download: Arizona-2015-HB2636-SENATE_ADOPTED_AMENDMENT_Shooter_flr_amend_ref_RAE_sub_RULES_adopted.html
Bill
Number: H.B. 2636
Shooter Floor Amendment
Reference to: RAE amendment
Amendment drafted by: Leg Council
FLOOR AMENDMENT EXPLANATION
1. Removes the proposed requirements for insurers and replaces it with the following:
a) requires, beginning January 1, 2016, and continuing for a period of 24 months, an owner, operator or designated representative who makes a claim against their insurance or other financial responsibility (FR) mechanism that is denied or otherwise not paid to provide the Arizona Department of Environmental Quality (ADEQ) with a copy of the notice; and
b) requires the insurer to notify ADEQ within 30 days after the date of termination or nonrenewal of insurance and stipulates notice requirements.
2. Requires, beginning January 1, 2017, or on the insurance renewal date, whichever is earlier, an owner or operator who satisfies the FR requirements through insurance to have policy coverage that extends to either:
a) the date of the most recent baseline assessment or comparable site characterization as determined by ADEQ;
b) the underground storage tank (UST) installation date; or
c) the earliest retroactive coverage date of the previous insurance policy or alternative FR mechanism.
3. Directs ADEQ to assist an owner or operator in:
a) pursuing a claim against the FR mechanism; and
b) obtaining coverage for a confirmed release from a UST that is covered by the mechanism.
4. Applies the following to owners or operators who satisfy FR requirements through insurance:
a) the policy covering the UST at the time the release is discovered is primary to eligibility for corrective action and reimbursement;
b) no requirement to exhaust insurance coverage in order to be eligible for corrective action and reimbursement;
c) eligibility for corrective action and reimbursement is contingent on filing an insurance claim and pursuing that claim until a denial is received or until ADEQ determines the claim has been constructively denied; and
d) failure to pursue an insurance claim precludes eligibility for corrective action and reimbursement.
5. Provides eligibility for corrective action and reimbursement through a cost sharing obligation payment of the first $50,000 per facility for work conducted beginning January 1, 2016, for an owner or operator that satisfies FR requirements through:
a) insurance and will not receive payment until after the expenditure of at least $50,000 per facility as provided in an insurance policy in effect on April 1, 2015; or
b) an alternative mechanism.
6. Limits cost sharing eligibility to the limits prescribed, the preapproval process and on providing timely notice of the release to the insurance carrier, ending on the date the insurer is obligated to provide payment under the policy.
7. Removes the obligation of an owner or operator who satisfies the FR requirements with insurance and receives UST Revolving Fund (Fund) monies for corrective action to assign the rights necessary to ADEQ to recover those payments from the insurance coverage.
8. Allows, rather than requires, an owner, operator or other person to conduct a baseline assessment within the seven-year period.
9. Prioritizes reimbursement applications:
a) for small owners ahead of other owners eligible for Fund reimbursement through cost sharing; and
b) for other owners based on the work completion date.
10. Entitles ADEQ to place a lien on property for unrecovered corrective action costs incurred on behalf of a volunteer, owner, operator, property owner or a person other than the UST owner who did not have the required FR mechanism at the time the release is discovered or the claim is filed.
11. Provides administrative caps for the allocation of Fund monies in FY 2016.
12. Transfers statutes related to intergovernmental agreements and Indian Tribes.
13. Requires ADEQ to submit a report on the Fund Program by December 31, 2017, and every three years thereafter containing:
a) Fund financial information;
b) the amount of any remaining unpaid time-barred claims;
c) a description of work completed for each Grant program component;
d) the amount of Fund reimbursements made annually;
e) a listing of new releases reported, sites closed and liabilities;
f) a description of state-led corrective actions; and
g) the total number of open and closed releases, reimbursement application denials and preapproval appeals.
14. Requires the report to be distributed as specified and accessible on ADEQ’s website.
15. Amends the definition of small owner to mean an owner that owns fewer than 20 UST facilities in Arizona.
16. Defines volunteer.
17. Makes technical and conforming changes.
Fifty-second Legislature Shooter
First Regular Session H.B. 2636
SHOOTER FLOOR AMENDMENT
SENATE AMENDMENTS TO H.B. 2636
(Reference to RAE amendment)
Page 1, between lines 1 and 2, insert:
"Section 1. Section 49-1001, Arizona Revised Statutes, is amended to read:
49-1001. Definitions
In this chapter, unless the context otherwise requires:
1. "Being used" means not having been taken out of operation.
2. "Closure" means the removal of an underground storage tank from operation.
3. "Corrective actions" means those actions that are prescribed pursuant to section 49‑1005.
4. "Designated representative" means a person to whom an owner or an operator, or both, assign in writing any right, title or interest which that the owner or operator, or both, may have in and to the proceeds of a reimbursement for a corrective action made under article 3 of this chapter.
5. "Energy policy act" means the underground storage tank compliance act, title XV, subtitle B of the federal energy policy act of 2005 (P.L. 109‑58; 119 Stat. 1092; 42 United States Code section 6991), as amended.
6. "Fiduciary" means:
(a) A trust company or bank certified or authorized to engage in the trust business pursuant to title 6, chapter 8, article 1.
(b) Any person appointed by a court or testamentary act to act as personal representative, executor, trustee, administrator, guardian, conservator, receiver or trustee in bankruptcy.
(c) Any person acting as a trustee of a deed of trust pursuant to section 33-803.
(d) Any person acting as a trustee pursuant to title 14, chapter 7.
(e) Any person acting pursuant to and subject to fiduciary obligations under the employee retirement income security act of 1974 (29 United States Code sections 1101 through 1114).
7. "Guarantor" means a person, other than an owner or operator, who provides evidence of financial responsibility for an owner or operator pursuant to this chapter.
8. "Motor fuel" means petroleum or a petroleum based substance that is motor gasoline, aviation gasoline, number 1 or number 2 diesel fuel or any grade of oxygenated gasoline typically used in the operation of a motor engine.
9. "New piping component" means any underground pipe or combination of pipes that contains and conveys a regulated substance between a tank and a motor fuel dispenser, including any valve, elbow, connector or joint that is added to an underground storage tank on or after January 1, 2009 and that was not originally included or installed as part of the underground storage tank.
10. "Occurrence" means an incident or accident, including continuous or repeated exposure to conditions, which results in a release from an underground storage tank.
11. "Operator" means a person in control of, or having responsibility for, the day-to-day operation of an underground storage tank.
12. "Out of operation" means having been closed in accordance with all applicable fire codes and other statutory and regulatory requirements for closure in effect on the date that closure was accomplished.
13. "Person" means an individual, trust, firm, joint stock company, corporation, joint venture, partnership, association, consortium, state, municipality, interstate body, commission, political subdivision of a state and the United States government.
14. "Petroleum" means petroleum, including crude oil or any fraction of crude oil, which is liquid at sixty degrees Fahrenheit and 14.7 pounds per square inch absolute, and petroleum based substances comprised of a complex blend of hydrocarbons derived from crude oil through processes of separation, conversion, upgrading and finishing, such as motor fuels, residual fuel oils, lubricants, jet fuels, distillate fuel oils, petroleum solvents and used oils.
15. "Political subdivision" means a county, city, town or other taxing district other than the state that is authorized to take property by eminent domain.
16. "Regulated substance" means:
(a) Petroleum.
(b) A substance specified in the comprehensive environmental response, compensation, and liability act of 1980 (P.L. 96-510; 94 Stat. 2767; 42 United States Code section 9601(14)) but not including a substance regulated as a hazardous waste under the hazardous and solid waste disposal act amendments of 1984 (P.L. 98‑616; 98 Stat. 3221; 42 United States Code section 6921).
17. "Release" means a spill, leak, emission, discharge, escape, leach or disposal of a regulated substance from an underground storage tank into groundwater, surface water or soils.
18. "Suspected release" means any of the following:
(a) The discovery by owners and operators or others of released regulated substances at the underground storage tank site or in the surrounding area.
(b) Erratic behavior of regulated substance dispensing equipment, the sudden loss of a regulated substance from an underground storage tank, an unexplained presence of water in the underground storage tank or other extraordinary operating conditions that could reasonably be associated with a release from an underground storage tank and that are observed by owners and operators, unless system equipment is found to be defective but not leaking and is repaired or replaced immediately.
(c) That the monitoring results from a release detection method required under 40 Code of Federal Regulations sections 280.41 and 280.42, this chapter or rules adopted pursuant to this chapter indicate that a release may have occurred unless either of the following occurs:
(i) The monitoring device is found to be defective and is immediately repaired, recalibrated or replaced and additional monitoring data do not confirm the initial result.
(ii) In the case of inventory control, a second month of inventory reconciliation data does not confirm the initial result.
19. "Tank" means a stationary device constructed of wood, concrete, steel, plastic or other nonearthen materials and used to contain regulated substances.
20. "Under-dispenser containment" means a secondary containment device that is beneath a motor fuel dispenser, that is connected to the underground storage tank and that is designed to be liquid tight.
21. "Underground storage tank" means a tank or combination of tanks and underground pipes and impact valves connected to tanks being used or having been used to contain regulated substances and which has at least ten per cent percent of the total volume of the tank and underground portions of pipes connected to the tank underground. Underground storage tank does not mean any of the following:
(a) A farm or residential tank of one thousand one hundred gallons or less capacity used for storing motor fuel for noncommercial purposes.
(b) A tank used for storing heating oil for consumptive use on the premises where stored.
(c) A septic tank.
(d) A pipeline facility, including gathering lines, regulated under either:
(i) The natural gas pipeline safety act of 1968 (49 United States Code sections 1671 through 1686).
(ii) The hazardous liquid pipeline safety act of 1979 (49 United States Code section 2001).
(e) An intrastate pipeline facility regulated under a state law comparable to the provisions of law referred to in subdivision (d), item (i) or (ii) of this paragraph.
(f) A surface impoundment, pit, pond or lagoon.
(g) A storm water or wastewater collection system.
(h) A flow-through process tank.
(i) A liquid trap or associated gathering lines directly related to oil or gas production and gathering operations.
(j) A storage tank situated in an underground area, such as a basement, cellar, mine working, drift, shaft or tunnel, if the storage tank is situated on or above the surface of the floor.
(k) Pipes connected to any of the structures described in subdivisions (a) through (j) of this paragraph.
22. "Volunteer" means a property owner or a person other than an owner or operator that assumes responsibility for corrective actions for a release from an underground storage tank. "
Renumber to conform
Page 2, strike lines 14 through 32
Page 3, strike lines 1 through 6, insert:
"Sec. 3. Title 49, chapter 6, article 1, Arizona Revised Statutes, is amended by adding sections 49-1006.01 and 49-1006.02, to read:
49-1006.01. Insurance for releases; termination; notice; coverage; assistance
A. Beginning on January 1, 2016 and continuing for twenty-four months, if an owner or operator makes a claim against its insurance or an alternative financial responsibility mechanism for a release and its claim is denied or otherwise not paid, the owner or operator shall provide to the department a copy of the notice of denial or other evidence of nonpayment.
B. If the insurance used to meet the financial responsibility requirements of this chapter is terminated or not renewed, the insurer shall notify the department of the termination or nonrenewal within thirty days after the date of termination or nonrenewal. The notice to the department shall state the name and address of the insured, the date of termination or nonrenewal and the address of the facility that had been insured.
C. Before January 1, 2017 or on the insurance contract renewal date, whichever is earlier, an owner or operator that satisfies financial responsibility requirements through insurance shall have policy coverage that extends to one of the following:
1. The date of the most recent baseline assessment conducted pursuant to section 49-1052 or comparable site characterization as determined by the department.
2. The date of the underground storage tank system installation.
3. The earliest retroactive coverage date of the previous insurance policy or alternative financial responsibility mechanism.
D. The department shall assist an owner or operator in pursuing the owner's or operator's claim against the financial responsibility mechanism and obtaining coverage for a confirmed release from an underground storage tank system that is covered by the mechanism.
49-1006.02. Insurance primacy; requirements; fund access
A. For owners or operators that satisfy financial responsibility requirements through insurance, the following apply:
1. The policy that covers the underground storage tank system at the time the release is discovered shall be primary to eligibility under sections 49-1017 and 49-1054.
2. The owner or operator is not required to exhaust insurance coverage in order to be eligible under sections 49-1017 and 49-1054.
3. Eligibility under sections 49-1017 and 49-1054 is contingent on filing a timely insurance claim under the policy and pursuing that claim until a denial is received or, after assistance from the department as prescribed in section 49-1006.01, subsection D, until the department determines that the claim has been constructively denied.
4. An owner or operator that fails to pursue an insurance claim is no longer eligible under sections 49-1017 and 49-1054.
B. An owner or operator that satisfies financial responsibility requirements through insurance and that will not receive payment from its insurance provider until after the expenditure of at least fifty thousand dollars per facility as provided in an insurance policy that is in effect on April 1, 2015 or that satisfies financial responsibility requirements through an alternative financial responsibility mechanism is eligible under sections 49-1017 and 49-1054 after meeting a cost sharing obligation by payment of the first fifty thousand dollars per facility for work that is conducted on or after January 1, 2016. This eligibility is subject to the limits prescribed in section 49-1054, subsection A and is subject to the preapproval process prescribed in section 49-1051. Eligibility pursuant to this subsection for owners or operators that meet financial responsibility requirements through insurance is contingent on providing timely notice of the release to the insurance carrier under the policy and that eligibility ends on the date that the insurer is obligated to provide payment under the policy. "
Page 3, line 24, after "6991(c)" insert a parenthesis
Page 6, lines 1, 3 and 8, strike "excess"
Line 9, after "litigation" strike remainder of line
Strike line 10
Line 11, strike "limits prescribed in section 49-1054 and" insert "except for"
Page 7, line 25, strike "an owner,"
Strike lines 26 through 32
Page 8, strike lines 1 through 4
Lines 15, 18, 19 and 29, strike "excess"
Page 9, lines 5, 11, 14, 17 and 19, strike "excess"
Page 10, line 15, strike "excess"
Page 11, line 14, strike "excess"
Page 13, line 26, strike "excess"
Page 18, between lines 27 and 28, insert:
"Sec. 14. Title 49, chapter 6, article 1, Arizona Revised Statutes, is amended by adding section 49-1024, to read:
49-1024. Report; underground storage tank revolving fund program
The department shall compile a report on the underground storage tank revolving fund program on or before December 31, 2017, and on or before December 31 every three years thereafter. The department shall submit the report to the governor, the president of the senate and the speaker of the house of representatives and provide a copy of each report to the secretary of state. The department shall post each report on an accessible, public webpage on the department's website. The report shall contain the department's findings and shall include the following information:
1. Underground storage tank revolving fund financial information, including revenues, expenditures and current account balances.
2. The amount of any remaining unpaid time-barred claims.
3. A description of the work completed for each program grant component.
4. The amount of reimbursements made annually from the fund.
5. A listing of new releases reported and sites closed, a listing of liabilities owed to small owners and other owners and projected liabilities for the fund through the termination of the program.
6. A description of any state‑led corrective actions, including the number of new sites, the number of new releases reported, the number of sites closed, the average cost of corrective action and projected liabilities for state‑led corrective actions through the termination of the program.
7. The total number of open releases that are cleaned to closure, the remaining number of open releases, the number of application or reimbursement denials by the department and the number of preapproval appeals."
Renumber to conform
Page 23, line 5, strike "ten" insert "twenty"
Line 22, strike "an owner,"
Strike lines 23 through 31
Page 24, strike lines 1 and 2
Reletter to conform
Line 17, strike "any of shall" insert "may do the following:
1. Elect to"
Line 18, strike ", may" insert ".
2."
Line 19, strike "and may" insert ".
3."
Page 26, line 28, after "applications" insert "from small owners"; after the period insert "For all other owners that are eligible for reimbursement from the fund through the cost sharing prescribed in section 49-1006.02, subsection B, priority shall be based on the date of completion of the work."; after "criteria" insert "for small owners"
Page 29, line 19, strike "ten" insert "twenty"
Line 25, after "49-1052" insert a period
Page 31, between lines 28 and 29, insert:
"49-1056. Lien rights; unrecovered corrective action costs
If the department or this state INCURS unrecovered corrective action costs from a corrective action undertaken on behalf of a volunteer, a property owner, a person other than the underground storage tank owner or an owner or operator that did not have the required financial responsibility MECHANISM at the time the release is discovered or the claim is filed, the department has a lien on the property for the unrecovered corrective action costs, or, by agreement with the responsible party, may obtain a lien on any other property or other financial responsibility mechanism of the responsible party.
49-1057. Intergovernmental agreements
The department may enter into intergovernmental agreements with Indian tribes pursuant to title 11, chapter 7, article 3 to extend to the tribes the partial coverage provided by this article and the responsibilities imposed by articles 1 and 2 of this chapter. "
Page 32, line 7, after "49-1009" insert "or other applicable federal requirements"
Page 38, between lines 20 and 21, insert:
"Sec. 24. Laws 2015, chapter 13, section 6, is amended to read:
Sec. 6. Underground storage tank revolving fund; transfer of monies; uses
Notwithstanding any other law, the administrative caps established in section 49-1051, subsection B, paragraphs 2 and 3, Arizona Revised Statutes, are suspended for fiscal year 2015-2016, and the department of environmental quality may transfer a combined total of $6,531,000 from the assurance account of the underground storage tank revolving fund established by section 49-1051 49-1015, Arizona Revised Statutes, and the regulated substance fund established by section 49‑1015.01, Arizona Revised Statutes, as added by this act, for administrative costs of the department in fiscal year 2015-2016."
Renumber to conform
Page 39, line 4, after "2010" insert "as a result of payment or eligibility limits in place on that date"
Line 24, after "claims" insert "under this section"
Line 25, after the period insert "Claims submitted pursuant to this section are compensable only for costs incurred after June 30, 2010."
Page 40, line 13, after "accurate" insert ", have not previously been submitted to the department"
Line 19, strike "the assurance account of"
Line 20, strike "49-1051, Arizona Revised Statutes, as repealed" insert "49‑1015, Arizona Revised Statutes, as added"
Line 31, after "fund" insert "; regulated substance fund"
Page 41, strike lines 1 through 5, insert:
"All unexpended and unencumbered monies remaining in the following are transferred to the underground storage tank revolving fund established by section 49-1015, Arizona Revised Statutes, as added by this act:
1. The underground storage tank revolving fund established by section 49-1015, Arizona Revised Statutes, as repealed by this act.
2. The regulated substance fund established by section 49‑1015.01, Arizona Revised Statutes, as repealed by this act.
3. The regulatory account of the underground storage tank revolving fund established by section 49-1015, as repealed by this act.
4. The assurance account of the underground storage tank revolving fund established by section 49-1015, Arizona Revised Statutes, as repealed by this act.
5. The grant account of the underground storage tank revolving fund established by section 49-1015, Arizona Revised Statutes, as repealed by this act.
Sec. 27. Distribution of underground storage tank revolving fund monies for fiscal year 2015-2016
In addition to the monies transferred pursuant to Laws 2015, chapter 13, section 6, as amended by this act, for fiscal year 2015-2016, the director of environmental quality may distribute monies in the underground storage tank revolving fund established by section 49-1015, Arizona Revised Statutes, as added by this act, as follows:
1. Not more than $3,000,000 for the administrative costs of the underground storage tank program.
2. Not more than $3,000,000 for grants authorized under section 49‑1071, Arizona Revised Statutes.
3. Not more than $7,000,000 for corrective actions taken under section 49-1017, Arizona Revised Statutes.
4. Not more than $1,000,000 for noncorrective actions taken under section 49-1017.02, Arizona Revised Statutes.
5. Not more than $6,000,000 for corrective actions preapproved under title 49, chapter 6, article 3, Arizona Revised Statutes.
6. Not less than $28,000,000 for payment of time-barred claims as provided by this act."
Amend title to conform
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2636ds.doc
03/30/2015
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