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.
Page 1, between lines 1 and 2, insert:
"Section 1. Section 49-1001, Arizona
Revised Statutes, is amended to read:
START_STATUTE49-1001. 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.END_STATUTE"
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:
START_STATUTE49-1006.01. 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. END_STATUTE
START_STATUTE49-1006.02. 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.END_STATUTE"
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:
START_STATUTE49-1024. 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.END_STATUTE"
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:
"START_STATUTE49-1056. 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. END_STATUTE
START_STATUTE49-1057. 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.END_STATUTE"
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