Ariz. Admin. Code § R18-12-322 - Drawing on Financial Assurance Mechanisms

A. Except as provided in subsection (D), the Director shall require the guarantor, surety, or institution issuing a letter of credit to place the amount of funds stipulated by the Director, up to the limit of funds provided by the financial assurance mechanism, into the standby trust if either of the following circumstances exist:

1. Occurrence of both of the following circumstances:

a. The owner or operator fails to establish alternate financial assurance within 60 days after receiving notice of cancellation of the guarantee, surety bond, letter of credit, or, as applicable, other financial assurance mechanism; and

b. The Director determines or has reason to believe that a release from an underground storage tank covered by the financial assurance mechanism has occurred and so notifies the owner or operator, or the owner or operator notify the Director pursuant to A.R.S. § 49-1004 and the rules promulgated thereunder of a release from an underground storage tank covered by the financial assurance mechanism.

2. The conditions of subsections (B)(1), (2), or (3) are satisfied.

B. The Director may draw on a certificate of deposit or standby trust fund when any of the following occurs:

1. The Director makes a final determination that a release has occurred and immediate or long-term corrective action for the release is needed, and the owner or operator, after appropriate notice and opportunity to comply, has not conducted corrective action as required under A.R.S. § 49-1005 and the rules promulgated thereunder;

2. The Director receives a certification from the owner or operator and the 3rd-party liability claimant and from attorneys representing the owner or operator and the 3rd-party liability claimant that a 3rd-party liability claim should be paid. The certification shall be worded as provided in 40 CFR 280.112(b)(2)(i), amended as of October 13, 2015, except that instructions in brackets are to be replaced with the relevant information and the brackets deleted; or

3. The Director receives a valid final court order establishing a judgment against the owner or operator for bodily injury or property damage caused by an accidental release from an underground storage tank covered by financial assurance under this Article and the Director determines that the owner or operator has not satisfied the judgment.

C. If the Director determines that the amount of corrective action costs and 3rd-party liability claims eligible for payment under subsection (B) may exceed the balance of the certificate of deposit or standby trust fund and the obligation of the provider of financial assurance, the first priority for payment shall be corrective action costs necessary to protect human health and the environment. The Director shall pay 3rd-party liability claims in the order in which the Director receives certifications under subsection (B)(2) and valid court orders under subsection (B)(3).

D. A governmental entity acting as guarantor under R18-12-316(E), the local government guarantee without standby trust, shall make payments as directed by the Director under the circumstances described in subsections (A), (B), and (C).

Notes

Ariz. Admin. Code § R18-12-322

Adopted effective July 30, 1996 (Supp. 96-3). Amended by final rulemaking at 25 A.A.R. 3123, effective 10/1/2020.