Bill Text: AZ HB2704 | 2019 | Fifty-fourth Legislature 1st Regular | Chaptered
Bill Title: Underground storage tanks; process
Spectrum: Partisan Bill (Republican 2-0)
Status: (Passed) 2019-04-22 - Chapter 114 [HB2704 Detail]
Download: Arizona-2019-HB2704-Chaptered.html
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House Engrossed |
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State of Arizona House of Representatives Fifty-fourth Legislature First Regular Session 2019
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CHAPTER 114
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HOUSE BILL 2704 |
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AN ACT
amending sections 49-1051, 49-1052, 49-1053, 49-1056 and 49-1071, Arizona Revised Statutes; relating to underground storage tanks.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Section 49-1051, Arizona Revised Statutes, is amended to read:
49-1051. Preapproval process; requirements; corrective action priority
A. An owner, an operator, or the designated representative of either the owner or operator or a person that meets the requirements of section 49‑1016, subsection C must follow the preapproval process pursuant to this section to be eligible for reimbursement from the underground storage tank revolving fund for corrective actions taken pursuant to section 49‑1053, subsection A. Preapproval applications must include a detailed scope of work that conforms to the requirements of sections 49‑1005 and 49‑1053, a schedule for conducting corrective actions and a cost sheet. Beginning January 1, 2016 and except as prescribed in SUBSECTION J of this section, corrective actions and costs for activities that were completed before departmental approval of the scope of work are not eligible for reimbursement under section 49‑1054. If the preapproved scope of work cannot be implemented as approved, the person seeking reimbursement shall submit a change notice to the department. To be eligible for reimbursement, a change notice must be approved by the department before implementation of the change notice.
B. This section does not relieve an owner, an operator or the designated representative of either the owner or operator from any of the requirements of this chapter.
C. While the application for preapproval is pending, the department may not take enforcement action or impose penalties against the owner, operator or designated representative who submitted the application for preapproval. The department may 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 pursuant to rule, the period of time for compliance with corrective actions associated with that preapproval begins to run from after the date of preapproval of the corrective action.
D. On determination by the department or its designated contractor that the application for preapproval is complete, the department or its designated contractor shall determine whether the owner or operator was a small owner at the time of the application. For the purposes of this subsection, "small owner" means an owner that owns fewer than twenty underground storage tank facilities in this state.
E. In processing the application for preapproval, the department shall determine the corrective action priority of the release within ninety days after the receipt of the materials required by this section. The corrective action priority shall be based on all of the following:
1. The need for financial assistance, including the availability of coverage under insurance or other financial assurance mechanisms.
2. The extent to which a delay in reimbursement will affect the ability to conduct corrective actions.
3. The risk to human health and the environment.
4. The presence of preexisting contamination of groundwater by a hazardous substance as defined in section 49‑281.
F. An owner, operator or person who meets the requirements of section 49‑1016, subsection C may request reimbursement under section 49‑1053. Subject to the availability of monies allocated and the assigned priority of the site pursuant to subsection E of this section, the department may make reimbursements from the underground storage tank revolving fund.
G. An application for preapproval and reimbursement pursuant to this section shall be on a form provided by the department and shall contain sufficient information to allow the director to make a determination of priority for that request.
H. Any determination made by the department pursuant to this section constitutes a written interim determination relating to preapproval pursuant to section 49‑1091.
I. The department may alter the corrective action priority of the release at any time based on the results of sampling and monitoring conducted pursuant to this section or any other information obtained by the department.
J. Corrective actions and costs for activities that were completed before the department's approval of the scope of work are eligible for reimbursement under section 49-1054 if the applicant otherwise complies with subsection a of this section, the corrective actions and costs for activities could not reasonably have been incurred through the preapproval process and any of the following apply:
2. For corrective actions and costs for activities completed from and after December 31, 2015 through December 31, 2019, and for which the applicant's compliance with the preapproval process was impracticable due to:
(a) The urgency of the corrective action to address newly discovered contamination.
(b) The need for corrective action to avoid risk to public health and the environment.
3. For corrective actions and costs for activities completed from and after December 31, 2015 through December 31, 2018, the corrective actions and costs are not the subject of a time-barred claim or were not otherwise reimbursed by the department.
4. Only for corrective actions and costs of activities completed before January 1, 2019, the claim for reimbursement is received by the department before January 1, 2020 and paragraph 1, 2 or 3 of this subsection applies.
K. The department shall develop an expedited preapproval process not later than December 31, 2019 to address those corrective action costs incurred for newly discovered contamination and to address those corrective action costs necessary to avoid risk to public health and the environment.
L. Direct costs incurred by the department in conducting corrective action pursuant to section 49‑1017 that are in excess of the coverage limits applicable to time‑barred claims as otherwise provided by law shall reduce the amount otherwise payable to an owner or operator pursuant to section 49‑1054 but any amount remaining under section 49‑1054 shall be available to the owner or operator for additional corrective action costs.
M. For direct costs incurred by the department in conducting corrective action pursuant to section 49‑1017 after December 31, 2016, the owner or operator is liable to the department for any amount incurred except for the amount that is eligible and within the amount allowable under section 49‑1054.
Sec. 2. Section 49-1052, Arizona Revised Statutes, is amended to read:
49-1052. Noncorrective actions; baseline assessment
A. A baseline period of seven years from after January 1, 2016 is established for underground storage tanks. Beginning January 1, 2016, during the baseline period, an owner, operator or person who meets the requirements of section 49‑1016, subsection C may do the following:
1. Elect to conduct a baseline assessment pursuant to this section.
2. Request a grant monies to cover costs associated with the baseline assessment pursuant to section 49‑1071.
3. Request the department to perform the baseline assessment under section 49‑1017.02.
B. The department shall establish standards for conducting baseline assessments pursuant to this section. Until the department establishes standards by rule or by guidance documents, baseline assessment work plans shall be submitted to the department for approval and shall be considered for preapproval on a case-by-case basis, based on compliance with subsection D of this section.
C. Baseline assessments shall be conducted under the direction of a person who is a professional engineer or a registered geologist who is registered under title 32, chapter 1 or a remediation specialist who is certified under title 32, chapter 1 and the rules adopted under that chapter.
D. The scope of the baseline assessment shall address likely release areas and shall include a collection of sufficient information to allow for a determination of the current environmental condition of the property. Samples shall be collected in areas where contamination is most likely to have occurred and sample locations shall consider site-specific conditions, location of potential receptors and preexisting contamination. The baseline assessment must include the registered or certified professional's interpretation regarding confirmation of an unknown release and evaluation of potential risk for the purpose of prioritizing corrective actions.
E. If unknown contamination is identified in the baseline assessment, all of the following apply:
1. The owner, operator or person that meets the requirements of section 49‑1016, subsection C shall comply with the reporting requirements pursuant to section 49‑1004 and shall initiate corrective actions pursuant to section 49‑1005.
2. Unless documentation is provided to the department that demonstrates that the operating underground storage tank is not the source of the release, the department shall require tightness testing.
3. If continued operation of the underground storage tank may result in a continued release, the department may initiate delivery prohibition as prescribed in section 49‑1023.
Sec. 3. Section 49-1053, Arizona Revised Statutes, is amended to read:
49-1053. Reimbursement of corrective action costs; definition
A. The department may provide reimbursement from the underground storage tank revolving fund under the preapproval process prescribed in section 49‑1051 in the amounts authorized by section 49‑1054 of the costs incurred for 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. Corrective actions initiated pursuant to section 49‑1005.
4. Preparation of the initial approved preapproval application and the consulting expenses incurred in participating in the initial preapproval meeting but not more than two percent of the amount incurred for the project cost in the first year. Costs must be submitted in the first reimbursement request for corrective actions that is submitted pursuant to section 49-1054.
B. The department may provide the reimbursement 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, a political subdivision pursuant to subsection F of this section or a person who meets the requirements of section 49‑1016, subsection C. If the department determines that an application for reimbursement is incomplete, the department within forty‑five days after receiving the application shall notify the applicant of the missing information as specifically as possible and shall permit allow the applicant 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 reimbursement pursuant to section 49‑1091.
C. The department may 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 that perform payable eligible activities meet specified standards of qualification and be approved by the department.
D. The department may not provide any reimbursement described in this article to an owner or operator of underground storage tanks described in section 49‑1031, subsection C. The department may not provide any reimbursement 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.
E. The department shall establish criteria for determining priorities among the applications from small owners for reimbursement under this article. 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. The criteria for small owners shall include:
1. The need for financial assistance.
2. The extent to which a delay in providing reimbursement will affect an eligible activity in progress.
3. The date on which an application for reimbursement is submitted to the department.
4. Whether the payment has been previously deferred because of insufficient monies in the underground storage tank revolving fund and, if deferred, the length of the deferral.
F. The department may provide the reimbursement 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 title 12, chapter 8, article 2 or 3.
G. 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 preapproval and reimbursement applications, 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.
H. Requests by the department for additional information from applicants shall be reasonably related to the determination of the validity of the claim as prescribed by this article.
I. Except for appeals costs authorized pursuant to section 49‑1091.01, applications for reimbursement under a preapproved scope of work shall be submitted to the department not more than one year after the applicant receives a closure letter sent by the department by certified mail with notice that the applicant has one year to submit a claim for that release. Failure to submit a timely reimbursement request under a preapproved scope of work shall result in denial of the claim. 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.
J. The department may provide reimbursement under a preapproved scope of work for the reasonable, necessary, cost-effective and technically feasible costs of corrective actions relating to soil remediation that are consistent with remediation standards adopted pursuant to chapter 1, article 4 of this title or site-specific, risk‑based levels as determined under rules adopted pursuant to this chapter. The department may provide reimbursement under a preapproved scope of work for the reasonable, necessary, cost‑effective and technically feasible costs of corrective actions relating to groundwater remediation to predetermined standards or site-specific, risk‑based levels as determined under rules adopted pursuant to this chapter. The department may provide reimbursement for corrective actions related to the control and removal of a source of contamination. 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.
K. On preapproval by the department or its designated contractor of corrective action costs for small owners, the department or its designated contractor shall encumber monies in the corrective action allocation for that year. If monies are available in the corrective action allocation for that year, reimbursement shall be made when the corrective action for which the monies were encumbered is completed as determined by the department or its designated contractor.
L. The department or its designated contractor shall preapprove reimbursement of corrective action costs for an owner that is not a small owner without encumbering monies. If monies are available in the corrective action allocation for that year at the end of the corrective action allocation year, reimbursement shall be based on the date the corrective action is completed as determined by the department or its designated contractor.
M. If there are insufficient monies to pay for approved corrective action in any annual corrective action allocation, the department shall reimburse the corrective action from the next annual corrective action allocation, with the priority that reimbursements first go to small owners.
N. The department may not accept an application to the underground storage tank revolving fund for reimbursement from an applicant for costs associated with a single facility more frequently than once each calendar month, and the department may not accept an application for costs associated with a single facility for an amount of less than five thousand dollars $5,000 unless the reimbursement is the final application associated with the facility.
O. An application for reimbursement pursuant to this section shall be on a form provided by the department and shall contain sufficient information to allow the director to make a determination of priority for that request.
P. For the purposes of this section, "small owner" means an owner that owns fewer than twenty underground storage tank facilities in this state.
Sec. 4. Section 49-1056, Arizona Revised Statutes, is amended to read:
49-1056. Lien rights; unrecovered corrective action costs; lien amount
A. 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.
B. The lien shall be in the amount of the estimated increase in the market value of the property as determined by a commercial real estate appraiser who shall determine the difference between the current market value of the property and the estimated market value of the property after corrective action is complete. The director shall use an appraiser who is a member of a nationally recognized real estate appraisal association, institute or society.
C. The department shall reduce the amount of the lien as follows:
1. To the amount of the total unrecovered corrective action costs if that amount is less than the difference between the current market value of the property and the estimated market value of the property after corrective action is complete.
2. If 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 makes a determination at any time after corrective action begins that a change in circumstances has substantially reduced the increase in the market value of the property.
Sec. 5. Heading change
The article heading of title 49, chapter 6, article 4, Arizona Revised Statutes, is changed from "GRANTS" to "NONCORRECTIVE ACTION TANK SITE IMPROVEMENT".
Sec. 6. Section 49-1071, Arizona Revised Statutes, is amended to read:
49-1071. Noncorrective action tank site improvement; purposes; priority
A. Subject to the availability of monies in the underground storage tank revolving fund that are annually allocated by the director for each of the following types of actions, an owner, operator or person that meets the requirements of section 49‑1016, subsection C may request that the department provide monies for that person to conduct one or more of the following actions, up to a maximum of one hundred thousand dollars $300,000 per site:
1. Actions necessary to ensure that the underground storage tank, its piping and its under-dispenser containment comply with standards for new installations prescribed by section 49‑1009 or other applicable federal requirements, including replacement of system components, up to a maximum of one hundred thousand dollars $200,000.
2. Removal of underground storage tanks for purposes of permanent closure or replacement, up to a maximum of twenty thousand dollars $25,000 per tank. If petroleum contaminated media that require over-excavation are encountered during removal of the underground storage tank, up to an additional $15,000 per site is available for reimbursement.
3. Confirmation of a suspected release at a tank or site, up to a maximum of ten thousand dollars $20,000.
4. Obtaining a baseline assessment of a site as prescribed in section 49‑1052, up to a maximum of thirty thousand dollars $40,000.
B. In determining the priority for requests under subsection A of this section, the director may consider the following factors:
1. The age, construction and operational history of the underground storage tank.
2. The hydrogeologic characteristics of the site where the underground storage tank is located and the surrounding area.
3. The proximity, quality and current and future uses of nearby surface water and groundwater.
4. The potential effects of residual contamination on nearby surface water and groundwater.
5. The degree of exposure.
6. The financial resources of the grant applicant.
C. A request for a grant of monies An application for funding and request for reimbursement under this section shall be on a form provided by the department and shall include:
1. Detailed information about the site, including the type, number and location of tanks.
2. Information about the owner and operator, including the type of financial responsibility.
3. A description of the evidence of any release or suspected release.
4. The proposed actions necessary to meet tank and system performance standards.
D. Monies may not be provided under this section for work that takes place more than one year after the date that monies are approved.
E. An application for monies pursuant to this section may be filed with the department at any time during the actions prescribed by subsection A of this section but only those costs incurred after the department approves the application are eligible for reimbursement. The maximum amounts prescribed in this section apply to applications approved by the department whether before or after the effective date of this amendment to this section.
APPROVED BY THE GOVERNOR APRIL 22, 2019.
FILED IN THE OFFICE OF THE SECRETARY OF STATE APRIL 22, 2019.
