49-545

49-545. Agreement with independent contractor;
qualifications of contractor; agreement provisions

A. The director is authorized to enter into an emissions inspection agreement with
one or more independent contractors, subject to public bidding, to provide for the
construction, equipment, establishment, maintenance and operation of any official
emissions inspection stations in such numbers and locations as may be required to provide
vehicle owners reasonably convenient access to inspection facilities for the purpose of
obtaining compliance with this article and the rules adopted pursuant to this
article. The agreement may provide that official inspection stations shall be placed in
permanent or movable buildings at particular locations as well as in mobile units for
conveyance from one preannounced particular location to another.

B. The director is prohibited from entering into an emissions inspection agreement
with any independent contractor who:

1. Is engaged in the business of manufacturing, selling, maintaining or repairing
vehicles, except that the independent contractor shall not be precluded from maintaining
or repairing any vehicle owned or operated by the independent contractor.

2. Does not have the capability, resources or technical and management skill to
adequately construct, equip, operate and maintain a sufficient number of official
emissions inspection stations to meet the demand for inspection of every vehicle which is
required to be submitted for inspection pursuant to this article.

C. All persons employed by the independent contractor in the performance of an
emissions inspection agreement are deemed to be employees of the independent contractor
and not of this state. No employee of the independent contractor shall wear any badge,
insignia, patch, emblem, device, word or series of words which would tend to indicate
that such person is employed by this state. Employees of the independent contractor are
specifically prohibited under this subsection from wearing the flag of this state, the
words "state of Arizona", the words "official emissions inspection program" or any
similar emblem or phrase.

D. The emissions inspection agreement authorized by this section shall contain, in
addition to any other provisions, provisions relating to the following:

1. A contract term or duration of between five and seven years with reasonable
compensation to the contractor if the provisions of this article are repealed.

2. That nothing in the agreement or contract shall require the state to purchase
any asset or assume any liability if such agreement or contract is not renewed.

3. The minimum requirements for adequate staff, equipment, management and hours and
place of operation of official emissions inspection stations.

4. The submission of such reports and documentation concerning the operation of
official emissions inspection stations as the director and the auditor general may
require.

5. Surveillance by the department of environmental quality and the auditor general
to ensure compliance with vehicular emissions standards, procedures, rules and laws.

6. The right of this state, upon providing reasonable notice to the independent
contractor, to terminate the contract with the independent contractor and the right of
this state on termination of the contract to assume operation of the vehicle emissions
inspection program through another contract provider or otherwise.

7. The right of this state upon termination of the term of the agreement or upon
assumption of the operation of the program to have transferred and assigned to it for
reasonable compensation any interest in land, buildings, improvements, equipment, parts,
tools and services used by the independent contractors in their operation of the program.

8. The right of this state upon termination of the term of the agreement or
assumption of the operation of the program to have transferred and assigned to it any
contract rights, and related obligations, for land, buildings, improvements, equipment,
parts, tools and services used by the independent contractors in their operation of the
program.

9. The obligation of the independent contractors to provide in any agreement to be
executed by them, and to maintain in any agreements previously executed by them, for
land, buildings, improvements, equipment, parts, tools and services used in their
operation of the program for the right of the independent contractors to assign to this
state any of their rights and obligations under such contract.

10. The right of the independent contractor, in the event the contract is terminated
and the state elects to assume operation of the vehicle emissions inspection program
through another contractor or otherwise, to retain and not transfer to the state any
interest in or any contract rights and related obligations for improvements, equipment,
parts, tools and services used by the independent contractor in the operation of the
program and which are proprietary in nature, as may be more specifically set forth in the
contract.

11. The amounts of liquidated damages payable by this state to the independent
contractor if the state exercises its right to terminate the contract at the conclusion
of each year of the contract pursuant to paragraph 6 of this subsection. The damages
recoverable by the independent contractor if the state exercises its right to terminate
the contract shall be limited to the liquidated damages specified in the contract.

12. Any other provision deemed necessary by the director for the administration or
enforcement of the emissions inspection agreement.

E. The department of environmental quality shall establish bid specifications or
contract terms for a contract with an independent contractor as provided in this section,
review bids for award of a contract with the independent contractors and negotiate any
terms of a contract with the independent contractors.

F. In evaluating bids for an emissions inspection agreement, no additional
consideration shall be given to a bid solely on the basis of the type of conditioning
mode proposed in the bid.

G. After a contract is awarded to an independent contractor, the director may
modify the contract with the independent contractor to allow the contractor and the state
to comply with amendments to applicable statutes or rules. These modifications are
exempt from public bidding and may include the addition, deletion or alteration of any
contract provision in order to make compliance feasible, including inspection fees and
services rendered. Provisions relating to contract term or duration may be amended,
except that the term or duration of the contract in existence on August 6, 1999 shall not
be extended beyond December 31, 2001. Any proposed modification or amendment to the
contract is subject to prior review by the joint legislative budget committee. If the
director cannot negotiate an acceptable modification of the contract, the state may
terminate the contract.

H. The following apply for any contract that takes effect beginning on or after
January 1, 2002 and for which the contractor will be providing services under this
section:

1. The department of environmental quality shall report at the end of each calendar
quarter to the joint legislative budget committee on the status of the contract process,
discussions, development of the request for proposal, contract negotiations, and any
other information as may be requested.

2. The contract terms are subject to prior review by the joint legislative budget
committee before placement of any advertisement that solicits a response to requests for
proposal.

3. Any proposed modification or amendment to the contract is subject to prior
review by the joint legislative budget committee.