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Arkansas Code Title 8. Environmental Law § 8-7-908. Third-party claims requirements

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(a)(1) No payment to any owner or operator against whom a third-party claim is brought for compensatory damages shall be paid from the Petroleum Storage Tank Trust Fund until the owner or operator has expended seven thousand five hundred dollars ($7,500) on third-party claims for the occurrence, except in cases in which:

(A) The Director of the Division of Environmental Quality is using his or her emergency authority under § 8-7-905(e);  or

(B)  The owner or operator has been discharged under the United States Bankruptcy Code, 11 U.S.C. § 101 et seq., or is determined by a court to be insolvent.

(2) It is the intent of the General Assembly that this initial level of expenditure be considered the equivalent of an insurance policy deductible.

(3) Owners and operators of underground storage tanks must demonstrate financial responsibility for the seven-thousand-five-hundred-dollar deductible for third-party liability costs.

(b) Payment for third-party claims shall not exceed one million dollars ($1,000,000) per occurrence.

(c) All payments for third-party claims shall be made only following proof that:

(1) At the time of the occurrence, the owner or operator was in substantial compliance with the financial responsibility requirements;

(2) At the time of discovery of the release, the owner or operator had paid all fees required under state law or regulations applicable to petroleum storage tanks;  and

(3) A valid final court order or valid final order of the Arkansas State Claims Commission establishing a judgment against the owner or operator for compensatory damages caused by an accidental release from a qualified storage tank has been entered.

(d)(1)(A) Any owner or operator against whom a third-party claim is filed in court or in the Arkansas State Claims Commission shall give written notice of the claim to the Division of Environmental Quality no later than twenty (20) days after service of summons or receipt of notification of the claim from the Arkansas State Claims Commission.

(B) As a condition of eligibility, an owner or operator shall cooperate with and assist the division and, if applicable, the Attorney General's office in connection with the third-party claim.

(C) At a minimum, the cooperation shall include active participation by the owner or operator throughout the litigation and providing assistance as required by the division or the Attorney General's office during resolution of a third-party claim.

(D) In determining compliance with subdivisions (d)(1)(B) and (C) of this section, the director shall consider the owner's or operator's financial condition.

(2) Upon receipt of the notice, the division shall immediately notify the Attorney General, who shall have the right to intervene in any such lawsuit or proceeding in order to protect the interests of the state in the fund.

(3) Payment of third-party claims from the fund may be denied for any owner or operator who fails to give the division notice as required in this subsection.

(e)(1) The Arkansas Pollution Control and Ecology Commission may provide through rules for payments for third-party claims under settlement agreements between the parties without entry of a final court order or Arkansas State Claims Commission order.

(2) Settlement payments for third-party claims shall be subject to these limitations:

(A) Proof of compliance with the requirement of subdivisions (c)(1) and (2) of this section must be provided;

(B) Specific assurances, such as dismissal with prejudice of the cause of action, that payment shall release the owner or operator from all future liability to the third-party claimant for this occurrence must be provided;  and

(C) The director must determine that litigation would result in costs to the fund which would exceed the settlement amount and, therefore, it would be in the best interests of the fund to pay the settlement amount.

(f)(1) In the event moneys are expended from the fund for third-party claims and the owner or operator was not at the time of the occurrence in substantial compliance, as defined by this subchapter and rules promulgated under this subchapter, the division may recover from the owner or operator the amount of moneys expended from the fund for the third-party claim by filing an action in the appropriate circuit court or by using the administrative procedures set forth in § 8-7-804.

(2)(A) The division also has a right of subrogation:

(i) To any insurance policies in existence at the time of the occurrence to the extent of any rights the owner or operator of a site may have had under that insurance policy;  and

(ii) Against any third party who caused or contributed to the occurrence.

(B) The right of subrogation shall apply to sites where corrective action is taken by:

(i) Owners or operators;  or

(ii) The division.

(C) As used in this subsection, “third party” does not include a former owner or operator of the site where corrective action is taken.

(g)(1) Unknown petroleum storage tanks that have satisfied the requirements of subdivision (c)(3) of this section shall be eligible for reimbursement for third-party claims as provided by this section if:

(A) The unknown petroleum storage tank is discovered while removing, upgrading, or replacing a petroleum storage tank meeting the requirements of subsection (c) of this section or while performing petroleum investigation or corrective action activities required by federal or state laws and the petroleum storage tank meeting the requirements of subsection (c) of this section is located on the same property or facility;  or

(B) The unknown petroleum storage tank is located on a right-of-way purchased by a city, county, or state governmental agency or entity and is discovered during construction in the right-of-way.

(2) Eligibility for reimbursement of unknown petroleum storage tanks will be conditioned on the payment of three hundred seventy-five dollars ($375) to the division.

(h)(1) An owner or operator determined to be eligible for payment for third-party claims for a release may transfer the eligibility to an owner or operator that acquires the storage tank if the division determines that the subsequent owner or operator has the financial and legal capacity and has assumed in writing the responsibility for third-party liability.

(2) A transfer under subdivision (h)(1) of this section does not affect the potential liability of the owner or operator for payment of compensatory damages to a third party.

(3) The removal of the storage tank after initiation of corrective action shall not bar the transfer of eligibility as provided in subdivision (h)(1) of this section.

Cite this article: - Arkansas Code Title 8. Environmental Law § 8-7-908. Third-party claims requirements - last updated January 01, 2020 |

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