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.

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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 that 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. An employee of the independent contractor may not wear any badge, insignia, patch, emblem, device, word or series of words that 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or duration of up to seven years with reasonable compensation to the contractor if the provisions of this article are repealed.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, on 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 on termination of the term of the agreement or on 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 on 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, if 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 that are used by the independent contractor in the operation of the program and that 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 are 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 shall establish bid specifications or contract terms for a contract with an independent contractor as provided in this section, review bids for an 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, additional consideration may not 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. If the director cannot negotiate an acceptable modification of the contract, the state may terminate the contract.