Arizona Revised Statutes § 49-1017.01 Settlement Authority; Participation; Financial Information; Process; Payment; Notice

49-1017.01. Settlement authority; participation; financial information; process; payment; notice

A. The director shall consider any offer by an owner or operator who is potentially liable for direct costs incurred by the director pursuant to section 49-1017, subsection C, without regard to the extent of that owner's or operator's liability, if the owner or operator is unable to pay for the direct costs. An owner or operator whose liability for direct costs arose from a criminal act is not eligible to enter into a settlement agreement pursuant to this section. An owner's or operator's decision to enter into a settlement agreement pursuant to this section is not an admission in a judicial proceeding as to the fact or extent of that owner's or operator's liability with respect to releases or threatened releases that are covered by the settlement. An owner or operator who is a party to a settlement pursuant to this section is not required to participate in allocation proceedings pursuant to section 49-1017, subsections D and E. Any settlement approved by the department does not release the owner or operator from any responsibility or duty imposed pursuant to this chapter other than liability for direct costs incurred pursuant to section 49-1017, subsection C.

B. Any settlement approved by the department does not increase the liability of any other owner or operator pursuant to this chapter and does not create any liability for the department or this state.

C. The director shall consider all of the following factors in considering an owner's or operator's ability to pay for the direct costs:

1. The financial resources of the owner or operator, including available financial assurance mechanisms other than the underground storage tank revolving fund.

2. The amount of coverage available to the owner or operator from the underground storage tank revolving fund for the direct costs. As a condition of settlement, the owner or operator shall apply to the underground storage tank revolving fund and any applicable grant program for coverage of the direct costs before requesting settlement pursuant to this section.

3. The owner's or operator's ability to continue in business after payment of the owner's or operator's liability for direct costs as defined in section 49-1017, subsection C.

4. Whether payment of the owner's or operator's liability for direct costs as defined in section 49-1017, subsection C would require the owner or operator to seek protection under the federal bankruptcy law or render the owner or operator insolvent.

5. The financial resources of all concerns in which the owner or operator maintains ownership, control or management.

D. An owner or operator seeking settlement pursuant to subsection A of this section shall submit a letter requesting a financial hardship settlement and shall include the owner's or operator's tax returns and all schedules, financial statements, balance statements and other information concerning the owner's or operator's gross income and net worth for the five years immediately preceding the date of the application. Within ninety days after the receipt of the application, the director may require additional information to verify the owner's or operator's eligibility for settlement pursuant to subsection A of this section. The owner or operator may provide any additional information the owner or operator believes to be relevant to the application. The director shall keep confidential any financial information submitted by the owner or operator pursuant to this subsection. If the director or the attorney general disputes a claim of confidentiality, the director or the attorney general shall provide written notice that the claim is disputed to the owner or operator claiming the confidentiality. The information shall be made available to the public if the owner or operator claiming confidentiality does not file an action for declaratory relief in superior court within thirty days after receiving the notice.

E. The owner or operator shall cooperate with the director in providing reasonable access and information for the director to carry out the requirements of this section as a condition of the settlement.

F. If the director verifies that the owner or operator is unable to pay the direct costs incurred by the director pursuant to section 49-1017, subsection C, the director shall enter into a settlement within ninety days after receipt of the application and any other information required pursuant to this section. The director shall allow the settlement amount to be paid over a period of time that does not exceed ten years. Settlement payments over a period of time are subject to the payment of interest at the rate of six percent a year, except that payments are not subject to interest if the entire settlement amount is paid within five years. The owner or operator may file a petition with the director to modify the payment schedule on a showing of good cause that the payment schedule cannot be met.

G. The director may require that notice of the terms of the settlement agreement be provided to the public to allow for comment for a period of thirty days before the department enters into a settlement agreement. Any interested person may comment on the settlement agreement in writing to the director. The director may withdraw from a settlement agreement after considering the comments.

H. If the director determines that the owner or operator does not qualify for a settlement pursuant to this section, the director shall notify the owner or operator in writing within ninety days after the receipt of all information required pursuant to this section stating the reasons for ineligibility. The application for settlement is deemed denied if the director does not notify the owner or operator within ninety days after the director's receipt of all applicable information. A denial of a settlement application under this subsection constitutes an appealable agency action as defined in section 41-1092. In any administrative appeal hearing conducted pursuant to title 41, chapter 6, article 10, the documents submitted by the owner or operator pursuant to this section are not confidential. Any appeal is limited to the owner's or operator's eligibility for a financial hardship settlement pursuant to this section and the owner's or operator's ability to pay the direct costs incurred by the director pursuant to section 49-1017, subsection C.

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Last modified: October 13, 2016