Section R18-12-608. Scope and Standard of Review

A.      Scope of Review. The Department shall base its determination to approve or deny, in whole or part, an application or direct payment request on the information provided in the applica- tion or direct payment request and the supporting documenta- tion submitted in accordance with this Article. The Department also may review other available information related to the application or direct payment request.

B.       A.R.S. § 49-1052(D). In accordance with A.R.S. § 49-1052(D), the Department shall evaluate whether an eligible activity is reasonable and necessary and has met, or when completed will meet, the applicable requirements of A.R.S. §§ 49-1004 or 49-1005 as follows:

1.        For a reimbursement application under R18-12-604, the eligible person shall demonstrate that the completed eligi- ble activities were performed in accordance with the law in effect at the time the relevant technical decision was

made, and the facts available to the eligible person when the technical decision was made.

2.        For a preapproval application under R18-12-605, the eli- gible person shall demonstrate that the planned eligible activities and corresponding costs are in accordance with the law in effect at the time the preapproval application is submitted, and the facts available to the eligible person when the preapproval application is submitted.

3.        For a direct payment request under R18-12-606, the eligi- ble person shall demonstrate all of the following, as applicable:

a.         The corrective action was actually performed as set forth in the preapproved work plan;

b.        For a work item that is actually performed and requested by the eligible person to be substituted for a preapproved work item, the substituted work item accomplishes the same objective as the preapproved work item using a different methodology, the cost of the substituted work item does not exceed the appli- cable cost in the schedule of corrective action costs governed by R18-12-607 or the approved cost of the preapproved work item for which the substitution is made;

c.         For a non-preapproved, non-substituted work item that is actually performed, the work item meets the requirements of subsection (C), is within the work objectives of the preapproved work plan, and the cost of the work item does not exceed the cost of the work item in the schedule of corrective action costs in accordance with A.R.S. § 49-1054(C); and

d.        The eligible person has waived any current or future claim to preapproved costs as described in R18-12- 606(D)(3).

C.      Standard of Review. The Department shall approve an applica- tion or direct payment request if the Department determines the eligible person has demonstrated that the eligible person, the corrective action service provider, the UST that is the source of the release, the release and all eligible activities and associated costs that are a subject of the application or direct payment request meet the requirements of A.R.S. Title 49, Chapter 6, and this Chapter, and the following standard of review:

1.        A corrective action is reasonable and necessary if the standard of subsection (B) is met and if all of the follow- ing are true:

a.         For soil remediation, the corrective action employed is the most cost effective alternative to remediate soil under the risk based corrective action rules at R18-12-263 through R18-12-263.02 to health based levels that allow either restricted or unrestricted use of the property that is the subject of the corrective actions;

b.        For groundwater or surface water remediation, the corrective action employed is the most cost effective alternative to remediate groundwater or surface water under the risk-based corrective action rules at R18-12-263 through R18-12-263.02;

c.         The corrective action is an eligible activity associ- ated with a phase of corrective action and the phase or phases of corrective action that are the subject of the application or direct payment request are identi- fied by the eligible person;

d.        The phase or phases of corrective action, task, and any incremental cost is included in the schedule of corrective action costs;

e.         The costs claimed do not exceed the amount for the task and any incremental cost in the schedule of cor- rective action costs;

f.         For time and materials review, the schedule of cor- rective action costs describes the task or incremental costs as payable on a time and materials basis and the Department shall evaluate the claimed cost based on the law and facts available to the eligible person at the time the technical decision was made and the costs were incurred or proposed;

g.        The eligible activities were actually performed in accordance with the applicable description in the schedule of corrective action costs;

h.        To the extent practicable, all costs for a task and all incremental costs associated with the task, as described in the schedule of corrective action costs, are included in the same reimbursement application or direct payment request. If an incremental cost associated with a task cannot be included in the reimbursement application or direct payment request, a rationale for its exclusion shall be pro- vided in the summary of work. The  Department shall not approve incremental costs associated with a task if the task and other incremental costs associ- ated with the task have been submitted in a separate reimbursement application or direct payment request, unless it includes a reference to the previ- ously submitted summary of work that documents the rationale required by this subsection. The sepa- rate reimbursement application or direct payment request under this subsection is subject to all appli- cable standards of this Section;

i.         The corrective action is technically feasible; and

j.         For reimbursement applications and direct payment requests, the costs claimed were actually incurred.

2.        A permanent closure is reasonable and necessary if all of the following are true:

a.         The permanent closure meets the requirements of

A.R.S. § 49-1008 and this Chapter;

b.        The permanent closure is eligible for coverage under

A.R.S. § 49-1052(A);

c.         The costs claimed do not exceed the amount for the task and any incremental cost in the schedule of cor- rective action costs;

d.        For time and materials review, the schedule of cor- rective action costs describes the task or incremental costs as payable on a time and materials basis and the Department shall evaluate the claimed cost based on the law and facts available to the eligible person at the time the technical decision was made and the costs were incurred or proposed; and

e.         The costs claimed were actually incurred.

3.        A cost is reasonable if it does not exceed a corresponding cost or costs in the schedule of corrective action costs. For costs that are not in the schedule of corrective action costs, a cost is reasonable as determined by the Depart- ment using the standards described in R18-12-607(C).

D.      Supplements and Corrections. An application or direct pay- ment request under review may be supplemented and cor- rected by the eligible person, but only as requested by the Department or as necessary to support the costs claimed in the application or direct payment request. No costs may be added to the amount originally claimed in the application or direct payment request. No supplement, correction, modification, or alteration of a work plan for preapproval may be made after the Department’s approval of the preapproval application.

E.       Resubmittal. The Department shall deny any application or direct payment request if any component of the application or direct payment request is being resubmitted after the eligible person has exhausted the administrative remedies as described under R18-12-610 and R18-12-611, as applicable, or has failed to timely file a notice of disagreement or appeal, as applicable, for the application or direct payment request or component.

F.       Limits on Payment of Costs. In addition to any determination by the Department under this Article that costs are not eligible for coverage or credit, and notwithstanding any other provi- sion of this Article, the following costs are not eligible for cov- erage or credit, as applicable, from the assurance account:

1.        Costs associated with a document identified on the fol- lowing list unless the document identified is sealed by a registrant holding a valid registration from the Arizona Board of Technical Registration at the time the document is sealed, provided the document contains information that is subject to the requirements of the Arizona Board of Technical Registration:

a.         The LUST site classification form under R18-12- 261.01;

b.        The LUST site characterization report under R18- 12-262(D);

c.         A corrective action plan under R18-12-263(D) and R18-12-263.02;

d.        A corrective action completion report under R18-12- 263.03(D);

e.         Periodic site status reporting under R18-12-263(G);

2.        Costs for eligible activities if the corrective action service provider who is a contractor did not hold a valid license from the Arizona Registrar of Contractors and, if required, a valid certification under Article 8 at the time of performance of the eligible activity;

3.        Under A.R.S. § 49-1052(A)(1), costs for collecting, ana- lyzing, and reporting samples pursuant solely to a site check or to investigate a suspected release, unless sam- ples taken from native soils confirm the presence of a release requiring corrective action. Only the single soil boring or sample collected from native soils that confirms a release requiring corrective action and the report required under R18-12-260(C) shall be eligible for assur- ance account coverage;

4.        Under A.R.S. § 49-1052(A)(2), costs for collecting, ana- lyzing, and reporting samples associated solely with an UST system permanent closure,  unless samples taken from native soils confirm the presence of a release requir- ing corrective action. Only the single soil boring or sam- ple collected from native soils that confirm a release and the report required under R18-12-271(D) shall be eligible for assurance account coverage;

5.        Subject to subsection (G), costs for other than the most cost effective risk based corrective action in accordance with A.R.S. § 49-1005 and this Chapter;

6.        Unless the tier evaluation meets the requirements of R18- 12-263.01(A), costs for performing a risk-based tier II or tier III risk assessment;

7.        Costs for installing engineering controls, unless the installation of the engineering controls meets the require- ments of A.R.S. § 49-1052(D), A.R.S. § 49-1005 and this Chapter, as necessary to achieve risk-based corrective action standards in accordance with R18-12-263.01;

8.        Costs for maintaining engineering controls;

9.        Costs for preparing a preapproval application or work plan that was not submitted to the Department, approved

by the Department, and implemented by the eligible per- son;

10.     Costs for remodeling, renovating, replacing, or recon- structing a building or other appurtenant structure, a dis- penser island, dispenser, canopy, awning, or similar item at the facility;

11.     Costs for demolishing a building or other appurtenant structure, a dispenser island, dispenser, canopy, awning, or similar item at the facility unless the demolition is rea- sonable and necessary and meets the requirements under

A.R.S. § 49-1052(D) to complete the corrective action;

12.     Costs for resurfacing with new materials of a kind and quality exceeding those in place before corrective action. Any eligible resurfacing shall be limited to the same area of surfacing required to be removed or destroyed during the corrective action;

13.     Attorney fees, consultant fees, and costs for appeals that do not meet the requirements under A.R.S. § 49-1091.01, unless fees and costs are awarded under A.R.S. § 41- 1007;

14.     Costs for activities that are not eligible for  coverage under A.R.S. § 49-1052(A) or that do not contribute to corrective action to the release that is the subject of the application or direct payment request;

15.     Costs related to documentation in an application or direct payment request if the Department has reason to believe the documentation has been altered or falsified;

16.     Costs for professional services to prepare the application or direct payment request if the application or direct pay- ment request is incomplete, incorrect, or if zero claimed costs are approved;

17.     Costs for repair, restoration, or replacement of property due to damage, theft, pilferage, vandalism, or malicious mischief; and

18.     Except for interest payable under A.R.S. § 49-1052(K), costs for loss of time or market.

G.      Not Feasible to Control Cleanup Technology. The Department shall approve coverage under this Article, subject to the provi- sions of A.R.S. §§ 49-1052 and 49-1054 and this Article, for corrective action costs incurred for reducing the concentration of a chemical of concern to a level below the applicable cor- rective action standard, if the eligible person demonstrates that the eligible person was unable to control the technology to pre- vent reduction in concentration of chemicals of concern to the level below the applicable corrective action standard.

Historical Note

Emergency rule adopted effective September 21, 1992, pursuant to A.R.S. § 41-1026, valid for only 90 days (Supp. 92-3). Emergency expired. Emergency rule adopted again effective January 13, 1993, pursuant to

A.R.S. § 41-1026, valid for only 90 days (Supp. 93-1). Adopted permanently with changes effective April 15, 1993 (Supp. 93-2). Section repealed; New Section made by final rulemaking at 12 A.A.R. 1611, effective June 4,

2006 (Supp. 06-2).