On June 18, 2024, the Governor of Arizona approved HB 2897 (Chapter 209) which transferred $20M from the UST revolving fund to the state general fund to provide support and maintenance for the agencies of the state. The result of this transfer is that ADEQ is unable to provide the level of funding previously offered through UST financial assistance programs – including the Corrective Action Preapproval Program (“Preapproval Program”).

Previously, ADEQ processed applications and reimbursements without requiring or evaluating the corrective action priority and reimbursement priority factors included in the statute. Now that funding availability is limited, ADEQ is required to evaluate those factors and prioritize submittals.¹

The factors identified at the application stage are applicable to both small owners and other owners; however, the factors identified at the reimbursement stage are different between the owner types. The prioritization process for reimbursements impacts when different owner types may receive reimbursement.  In accordance with Arizona Revised Statutes (A.R.S.) § 49-1053, payment priority is for small owners. ADEQ has developed separate application and reimbursement request forms for small owners and other owners to clearly identify the additional information required for these evaluations.

¹ADEQ recommends that Preapproval Program applicants review the Arizona Revised Statutes including: A.R.S. § 49-1006.02, § 49-1051, § 49-1053, and § 49-1054 | View >

At the Application Stage

Prioritization requires a determination of the corrective action priority of the application [A.R.S. § 49-1051(E)]. To determine the corrective action priority, applicants are required to provide sufficient documentation that allows ADEQ to determine corrective action priority points based on:

1. The need for financial assistance, including the availability of coverage under insurance or other financial assurance mechanisms.

ADEQ has identified the minimum amount of information necessary to evaluate this factor. Applicants who rely on self-insurance or guarantees to meet financial responsibility requirements are considered financially able to conduct corrective actions and will not receive points for this factor. 

2. The extent to which a delay in reimbursement will affect the ability to conduct corrective actions.

Applicants who receive financial need points, will also receive points for this factor.

3. The risk to public health and the environment.

Applicants will be required to provide the most recent LUST Site Classification score to address this factor. 

4. The presence of preexisting contamination of groundwater by a hazardous substance as defined in section 49-281.

Applicants will be asked to identify whether their site is in an area with groundwater impacts from WQARF or a Superfund site. 

At the Reimbursement Stage

Prioritization requires applicants to provide documentation sufficient to allow ADEQ to determine the prioritization of both small owners and applicants who are not small owners [A.R.S. § 49-1053(E)].
NOTE: “Small owner” means an owner that owns fewer than 20 UST facilities in Arizona.

Prioritization of small owners is based on the following criteria:

1. The need for financial assistance.

ADEQ has identified the minimum amount of information necessary to evaluate this factor. Applicants who rely on self-insurance or guarantees to meet financial responsibility requirements are considered financially able to conduct corrective actions and will not receive points for this factor.  

2. The extent to which a delay in providing reimbursement will affect an eligible activity in progress.

Applicants who receive financial need points and have ongoing corrective actions will be eligible to receive points for this factor.       

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.

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 date of work completion to be provided on the reimbursement request form with reference to where the documentation is to support that information. 

In accordance with A.R.S. § 49-1012, information and documentation provided to demonstrate the amount or source of any income, profits, losses or expenditures will be considered confidential.

Preapproval forms allow applicants to opt-out of providing financial information for ADEQ’s evaluation. Applicants who do not provide financial information will not receive financial need points.

In accordance with A.R.S. § 49-1053(E) and (L), if monies are available in the corrective action allocation for that year at the end of the corrective action allocation year, ADEQ will prioritize reimbursement based on the date the corrective action is completed.

Yes. ADEQ recommends that potential preapproval program applicants submit an eligibility screening form to see if they qualify for the program prior to submitting an application for review (A.R.S. § 49-1006.02). For information on the eligibility evaluation process and the associated screening form | Learn More >

Yes. Prioritization under the Preapproval Program affects both applications and reimbursement requests — even reimbursement requests submitted against applications that were approved prior to fiscal year (FY) 2025.

Preapproval Program prioritization requires additional processing and review requirements for both applications and reimbursement requests. Prioritization is anticipated to impact the ADEQ review timeframes for preapproval application and reimbursement request processing.

No. Change notices are only applicable if the “preapproved scope of work cannot be implemented as approved” [A.R.S. § 49-1051(A)].

No. As an owner and/or operator (“responsible party”), you are required to conduct corrective actions. Participation in the Preapproval Program is voluntary and does not relieve you from regulatory requirements. Compliance with regulatory requirements is mandatory. Therefore, delays in reimbursement and lack of ADEQ financial assistance does not absolve you of your responsibility to conduct corrective actions in a timely manner by regulatory deadlines.

No. In accordance with A.R.S. § 49-1051(A), corrective actions and costs for activities that were completed before departmental approval are not eligible for reimbursement.

No. ADEQ may initiate enforcement actions when there is a failure to comply with regulatory requirements. 

In the preapproval process, there is one related consideration that is applicable during the time frame when an application for preapproval is considered “pending.”

In accordance with A.R.S. § 49-1051(C), ADEQ may not take enforcement action or impose penalties while the application for preapproval is pending and may not consider the passage of time while the preapproval application is pending to be a basis for taking an enforcement action. The period of time for compliance with corrective actions associated with that preapproval begins to run after the preapproval of the corrective action. 

ADEQ considers the period of time that a preapproval application is pending as the time period between submittal of the application for preapproval to ADEQ and issuance of ADEQ’s interim determination letter. 

 NOTE: If a responsible party does not believe they will be able to meet regulatory deadlines for corrective action requirements established by ADEQ, the responsible party may request to enter into a consent order. Doing so gives the responsible party the ability to negotiate deadlines with ADEQ to complete the required corrective actions.