A. The water quality assurance revolving fund is established to be administered by the director. The fund consists of monies from the following sources:

1. Monies appropriated by the legislature.

2. Fertilizer license fees allocated under section 3-272, subsection B, paragraph 2.

3. Pesticide registration fees allocated under section 3-351, subsection D, paragraph 2.

4. The tax on water use pursuant to section 42-5302.

5. Water quality assurance fees collected under section 45-616.

6. Industrial discharge registration fees collected under section 49-209.

7. Hazardous waste facility registration fees collected under section 49-929.

8. Hazardous waste resource recovery facility registration fees collected under section 49-930.

9. Monies recovered from responsible parties as remedial action costs.

10. Monies received as costs for a review of remedial actions at the request of a person other than this state.

11. Monies received from the collection of corporate income taxes under Title 43, Chapter 11, Article 2 as prescribed by subsection B of this section.

12. Prospective purchaser agreement fees collected under Section 49-285.01.

B. The water quality assurance revolving fund shall be assured of an annual funding amount of $18,000,000. At the beginning of each fiscal year, the state treasurer shall transfer the sum of $15,000,000 to the water quality assurance revolving fund from the corporate income tax as collected pursuant to Title 43, Chapter 11, Article 2. As custodian of the fund, the director shall certify to the governor, the state treasurer, the president of the senate and the speaker of the house of representatives at the end of that fiscal year the amount of monies deposited in the water quality assurance revolving fund pursuant to subsection A, paragraphs 1 through 8 of this section. At the end of the fiscal year the state treasurer shall adjust the $15,000,000 transfer of corporate income tax so that, when combined with monies deposited in the fund during that fiscal year pursuant to subsection A, paragraphs 1 through 8 of this section, the fund receives $18,000,000 each fiscal year. This adjustment shall occur as part of the year-end book closing process for that fiscal year. If sufficient monies from the corporate income tax are not available to make any necessary upward adjustments as part of the year-end book closing, the state treasurer shall transfer the monies necessary to achieve the $18,000,000 funding level from the transaction privilege and severance tax clearing account pursuant to section 42-5029, subsection D, paragraph 4, to the water quality assurance revolving fund. Any transfers prescribed by this subsection shall not be deducted from the net proceeds distributed pursuant to section 43-206.

C. At the beginning of each fiscal year, the director of environmental quality shall contract with the department of water resources for the transfer of up to $800,000 from the water quality assurance revolving fund to the Arizona water quality fund established by section 45-618 for support services for the water quality assurance revolving fund program. The support services provided for the water quality assurance revolving fund program shall be determined by the director of water resources in consultation with the director of environmental quality.

D. Monies in the fund are exempt from lapsing under section 35-190. Interest earned on monies in the fund shall be credited to the fund.

E. Monies from the water quality assurance revolving fund shall be used for the following purposes:

1. To provide state matching monies or to meet such other obligations as are prescribed by section 104 of CERCLA.

2. For all reasonable and necessary costs to implement this article, including:

(a) Taking remedial actions.

(b) Conducting investigations of an area to determine if a release or a threatened release of a hazardous substance exists.

(c) Conducting remedial investigations, feasibility studies, health effect studies and risk assessments.

(d) Identifying and investigating potentially responsible parties and allocating liability among the responsible parties.

(e) Funding orphan shares.

(f) Participating in the allocation process, administrative appeals and court actions.

(g) Funding the community advisory boards and other community involvement activities.

(h) Remediating pollutants if necessary to remediate a hazardous substance.

3. For the reasonable and necessary costs of monitoring, assessing, identifying, locating and evaluating the degradation, destruction, loss of or threat to the waters of the state resulting from a release of a hazardous substance to the environment.

4. For the reasonable and necessary costs of administering the fund.

5. For the reasonable and necessary costs of administering the industrial discharge registration program under section 49-209.

6. For the costs of the water quality monitoring program described in section 49-225.

7. For compliance monitoring, investigation and enforcement activities pertaining to generating, transporting, treating, storing and disposing of hazardous waste. The amount to be used pursuant to chapter 5 of this title is limited to the amount received in the prior fiscal year from the hazardous waste facility registration fee.

8. For emergency response use as prescribed in Section 49-282.02.

9. For all reasonable and necessary costs of the preparation and execution of prospective purchaser agreements.

10. For all reasonable and necessary costs of the voluntary remediation program.

11. To reimburse a political subdivision of this state for its reasonable, necessary and cost-effective remedial action costs incurred in response to a release or threat of a release of a hazardous substance or pollutants that presents an immediate and substantial endangerment to the public health or the environment. The political subdivision is not eligible for reimbursement until it has taken all reasonable efforts to obtain reimbursement from the responsible party and the federal government. Not more than $250,000 may be spent from the fund for this purpose in any fiscal year.

12. For all reasonable and necessary costs incurred by the department pursuant to Section 49-282.04 and the department of water resources pursuant to section 45-605 for well inspections, remedial actions and review and approval of well construction necessary to prevent vertical cross-contamination. The director of environmental quality and the director of water resources shall enter into an agreement for the transfer of these costs.

13. For actions that are taken pursuant to Section 49-282.03 before the selection of a remedy.

14. For the reasonable and necessary costs of the conveyance, use or discharge of water remediated as part of a remedy under this article.

15. For the reasonable and necessary costs incurred by the department of health services at the request of the director of environmental quality to assess and evaluate the effect of a release or threatened release of hazardous substances to the public health or welfare and the environment. The director of environmental quality and the director of the department of health services shall enter into an agreement for the transfer of these costs. The assessment and evaluation by the department of health services may include:

(a) Performing health effect studies and risk assessments.

(b) Evaluating and calculating cleanup standards.

(c) Assisting in communicating health and risk issues to the public.

16. For the reasonable and necessary costs incurred by the department of law to provide legal services at the request of the director of environmental quality.

17. For the reasonable and necessary costs of contracting for the goods and services to enable the director to implement this article.

18. For remediation demonstration projects that use bioremediation or other alternative technologies. The department may not use more than $500,000 in a fiscal year pursuant to this paragraph.

F. Any political subdivision of this state that uses, used or may use waters of the state for drinking water purposes or any state agency, regardless of whether the political subdivision or state agency is a responsible party, may apply to the director for monies from the fund to be used for remedial action. An application to the fund for remedial action costs shall not be treated as an admission that a political subdivision or an agency of this state is a responsible party, but a political subdivision or a state agency that is a responsible party is liable for remedial action costs in the same manner, including reimbursement of the fund, as any other responsible party. The political subdivision shall commit a local matching amount at least equal to the amount sought from the fund.

G. The director of environmental quality shall prepare and submit a budget for the water quality assurance revolving fund program and the director of water resources shall prepare and submit a budget for the Arizona water quality fund with the departments’ budgets that are required pursuant to section 35-111. The committees on appropriations of the house of representatives and the senate shall review the water quality assurance revolving fund budget and the Arizona water quality fund budget to ensure that the departments’ expenditures are made in accordance with the legislature’s intent and that the departments are making adequate progress toward accomplishing that intent.