ESBD_369598_1721930831196_582-24-86400-VW TxVEMP ContractShell-FINAL-acc.pdf

Este es el contrato de subvención entre usted y la Comisión de Calidad Ambiental de Texas (TCEQ por sus siglas en inglés). Al firmar este documento, usted está aceptando los términos y condiciones legalmente vinculantes. Comuníquese al 833-215-TXVW (8989) para obtener ayuda con la interpretación de este contrato.

Texas Commission on Environmental Quality

Texas Volkswagen Environmental Mitigation Program (TxVEMP) Contract

Contract Signature Page

Contract Name Texas Volkswagen Environmental Mitigation Program (TxVEMP)

Contract Number

PERFORMING PARTY Name:

PERFORMING PARTY I.D. Number

Total Contract Amount Not to Exceed

Contract Effective Date The Effective Date of this Contract is the date of last signature

Request for Reimbursement Deadline & Contract Expiration Date

April 30, 2027

Activity Life Expiration Date Five years from final reimbursement date

The Texas Commission on Environmental Quality (TCEQ), an agency of the State of Texas and the named PERFORMING PARTY enter this Contract for the purpose of providing financial assistance for emissions reduction projects as authorized under Texas Water Code, Section 5.124, the Volkswagen Environmental Mitigation Trust Agreement for State Beneficiaries (State Trust), and the Beneficiary Mitigation Plan for Texas.

The Parties agree: (a) to be effective, the Contract must be signed by an Authorized Official of TCEQ and the PERFORMING PARTY; (b) the PERFORMING PARTY will conduct the Grant Activities required by the Contract, and (c) TCEQ will reimburse from the State Trust for authorized allowable costs in accordance with the Texas Uniform Grant Management Standards and the Contract.

Authorized Official Texas Commission on Environmental Quality (TCEQ)

«LegalName»

(PERFORMING PARTY)

Printed Name:

Title:

By (Authorized Signature):

Date of Signature:

Contract No. 582-23-XXXXX -VW

General Conditions for

Texas Volkswagen Environmental Mitigation Program (TxVEMP)

Article 1. Definitions

Unless defined herein, terms in this Contract and Contract Documents have the meanings provided in the Volkswagen Environmental Mitigation Trust Agreement for State Beneficiaries (State Trust), the Beneficiary Mitigation Plan for Texas (Mitigation Plan), and the Texas Grant Management Standards (TxGMS). TxGMS is available at: https://comptroller.texas.gov/purchasing/grant-management/.

The following terms have the meanings indicated.

1.1 Activity Life – the Activity Life begins on the date the reimbursement payment is issued for each Grant Activity under the grant, continuing for five (5) years afterwards. Upon completion of the reimbursement, TCEQ will notify the PERFORMING PARTY in writing of the Activity Life start and end dates for each Grant Activity.

1.2 Administrative Requirements – activities that track contract progress and management, including, but not limited to, financial management, reporting, and retention of records. These are distinguished from Grant Activity requirements, which pertain to the specific Grant Activities approved by TCEQ.

1.3 Application – the Application for a TxVEMP grant originally submitted by the PERFORMING PARTY including all sections, supplemental forms, and attachments, as well as any additional documentation submitted by the PERFORMING PARTY in support of the Application or grant award.

The Application is used to develop the Scope of Work of this Contract. In case of conflict between the Application and the Scope of Work, the Scope of Work will take precedence.

1.4 Authorized Official – the individual authorized to sign legal documents and requests for reimbursements on behalf of TCEQ or the PERFORMING PARTY, as designated in the Contract.

1.5 Final Completion – TCEQ determines the final completion of the Grant Activities. This typically occurs upon the completion of the longest-running Activity Life of the Grant Activities under this Contract.

1.6 Grant – means this Contract between TCEQ and the PERFORMING PARTY, consisting of the documents listed in Article 5, Contract Documents. The term “Grant” shall be used interchangeably with “Agreement,” “Contract,” or “grant.”

1.7 Grant Activity/Activities – activities the PERFORMING PARTY has agreed to perform under this Contract that are detailed in the Scope of Work.

1.8 Grant Equipment – the equipment for which the cost of purchase or upgrade is reimbursed in whole or in part by TCEQ under the terms of this Contract. The term includes insurance-funded replacements for Grant Equipment, which is lost, stolen, or irreparably damaged. The term “Grant Equipment” shall be used interchangeably with “equipment,” “engine,” and “Activity.”

1.9 Incremental Costs – defined by Project:

1.9.1 Incremental Costs for Replacement Projects are the eligible costs to purchase the replacement equipment minus the documented scrap value of the equipment being replaced.

1.9.2 Incremental Costs for Repower Projects are the eligible costs to purchase and install the replacement engine and associated equipment minus the documented scrap value of the old engine.

1.9.3 Incremental Costs for Charging Infrastructure are the eligible costs to purchase and install the charging infrastructure and associated equipment.

1.10 Maximum Reimbursement Rate – the maximum rate for which the PERFORMING PARTY may be reimbursed based on entity type. Governmental entities may request up to one hundred (100) https://comptroller.texas.gov/purchasing/grant-management/ percent of the incremental cost of a project. Governmental entities include a state or local government agency (including school district, municipality, city, county, special district, joint powers authority, or port authority owning fleets purchased with government funds) and a tribal government or native village. A federal government agency or entity is not included in this definition and will be treated as a non-governmental entity when determining the maximum reimbursement rate. Non-governmental entities may request up to seventy-five (75) percent of the incremental cost of a project.

1.11 NOX – oxides of nitrogen (NOX) are a class of pollutants formed when fuel is burned at a very high temperature (above 1200° F), such as in automobiles and power plants. For air pollution purposes, it is composed primarily of nitric oxide (NO), nitrogen dioxide (NO2), and other oxides of nitrogen.

NOX plays a major role in the formation of ground-level ozone in the atmosphere through a complex series of reactions with volatile organic compounds (VOCs).

1.12 Optimum Performance – the level of performance at which Grant Equipment functions in order to achieve the anticipated emissions reductions.

1.13 PERFORMING PARTY – the grant recipient indicated on the Contract Signature Page of this Contract. The term PERFORMING PARTY may also be used interchangeably with “grantee” in the Contract Documents.

1.14 Priority Areas – the eligible areas and counties where the PERFORMING PARTY must use the grant-funded equipment a minimum of 51% of the annual use during the Activity Life. The applicable Priority Areas are listed in the Scope of Work of this Contract.

1.15 Project Representative – the individual authorized to give and receive communications and directions on behalf of the PERFORMING PARTY. All communications to the PERFORMING PARTY will be addressed to the PERFORMING PARTY’s Project Representative or his or her designee.

1.16 Repower – replacement of an existing diesel engine with a new, rebuilt, or remanufactured engine, according to the criteria of the Beneficiary Mitigation Plan for Texas.

1.17 Request for Reimbursement Deadline – the date specified in the Contract when all Grant Equipment must be received, all costs for Grant Equipment must be paid in full with either cash-on-hand or financing, and all requests for reimbursement must be received by TCEQ from the PERFORMING

PARTY.

1.18 Scope of Work – the Contract Document describing the requirements of the Grant Activities.

1.19 State – means the State of Texas.

1.20 Termination – means a permanent end and cessation of the Contract because (1) all requirements of this Contract are completed within the sole discretion of TCEQ; (2) the PERFORMING PARTY has requested termination and repaid funds to the Trustee of the State Trust as allowed by the Contract; (3) the Contract is ended by action of TCEQ for cause or for convenience; or (4) the Request for Reimbursement Deadline has passed without completion and submission of purchases eligible for reimbursement and TCEQ, in its sole discretion, has terminated the Contract.

1.21 When any period of time is referred to in the Contract by days, it will be computed to exclude the day of the event that triggers the period and include the last day of such period. If the last day of any such period falls on a Saturday or Sunday or on a State of Texas or federal holiday, such day will be omitted from the computation. A day is considered a calendar day of twenty-four (24) hours measured from midnight to the next midnight.

Article 2. Governing Standards and Authority

2.1 This Contract shall be governed by and construed in accordance with the laws of the State of Texas, without regard to conflicts of law provisions.

2.2 This Contract is entered into by TCEQ through its authority under Texas Water Code, Section 5.124 (Authority to Award Grants).

2.3 This Contract is subject to: (1) the Uniform Grant and Contract Management Act, Texas Government Code, Section 783.001 et seq., and TxGMS; (2) TCEQ rules and policies (pertaining to TCEQ contracts and grants); (3) the State Trust Agreement and the Mitigation Plan; (4) the TxVEMP RFGA; and (5) other applicable Federal and State rules and statutes.

Article 3. Purpose

The purpose of this Contract is to provide a grant to financially incentivize and assist the PERFORMING PARTY in implementing the Grant Activities, thereby creating verifiable emissions reductions through monitored, enforceable performance of activities described in the Scope of Work. This grant program implements a portion of the Texas Volkswagen (VW) Environmental Mitigation Program (TxVEMP) established and administered by TCEQ.

Article 4. Contract Period

4.1 This Contract will commence on the Contract Effective Date as identified on the Contract Signature Page.

4.2 The Contract Period shall be the period of time from the Contract Effective Date through the Contract Expiration Date listed on the Contract Signature Page of this Contract unless the Contract is otherwise terminated or extended in accordance with its terms.

4.3 The PERFORMING PARTY agrees to perform through the end of the Activity Life of any Grant Activity for which the PERFORMING PARTY has been reimbursed. The PERFORMING PARTY acknowledges that certain contractual requirements, such as Activity Life performance and Administrative Requirements, survive the Contract Expiration Date, and that record retention and audit survive the Final Completion of the Contract.

Article 5. Contract Documents

5.1 The entire Contract between TCEQ and the PERFORMING PARTY consists of the documents listed below. The Contract Documents are intended to be interpreted in harmony with each other. Any inconsistency between the Contract Documents as amended shall be resolved by giving precedence to the following in descending order:

5.1.1 Contract Signature Page

5.1.2 Scope of Work

5.1.3 Special Conditions

5.1.4 General Conditions

5.1.5 TxVEMP RFGA (582-24-86400-VW), and any addenda, incorporated herein by reference.

5.1.6 Beneficiary Mitigation Plan for Texas, incorporated herein by reference.

5.1.7 Environmental Mitigation Trust Agreement for State Beneficiaries (“State Trust”), incorporated herein by reference.

5.1.8 The PERFORMING PARTY’s Application, incorporated herein by reference.

5.1.9 The following which may be delivered or issued after the Contract Effective Date at the sole discretion of TCEQ and are not attached: Written Amendments, Minor Changes, and other documents amending, modifying, or supplementing the Contract Documents pursuant to the General Conditions.

5.2 There are no Contract Documents other than those listed above in this Article. The Contract Documents may be amended, modified, or supplemented only as provided in the General Conditions at the sole discretion of TCEQ.

Article 6. Eligible Activities

6.1 The Grant Activities eligible for reimbursement are those contained in the Scope of Work.

6.2 The information and data the PERFORMING PARTY submitted in the Application may have been revised after submittal to TCEQ, to ensure that the information in the Application is accurate. By signing this Contract, the PERFORMING PARTY acknowledges that it has reviewed the Scope of Work and agrees to all representations contained within the Scope of Work. The PERFORMING PARTY agrees to complete all Grant Activities as described in the Scope of Work and in accordance with the Contract. The PERFORMING PARTY acknowledges that failure to complete all Grant Activities may require a return of grant funds to the Trustee of the State Trust.

6.3 TCEQ may accept performance of a reduced number of the individual Grant Activities or other changes to the Scope of Work at its sole discretion and reimburse the PERFORMING PARTY for only those Grant Activities for which eligible purchases are completed.

6.3.1 If the changes to the Scope of Work result in lower than estimated NOX reductions, TCEQ may reduce the grant amount to achieve the same cost per ton from the original Application.

6.3.2 If the changes to the Scope of Work result in greater than estimated NOX reductions, TCEQ will not reimburse more than the grant amount.

6.4 Any costs associated with the Grant Equipment may not have been paid prior to the program opening date as shown on the TxVEMP RFGA.

6.5 The Grant Equipment is listed in the Scope of Work. The NOX emissions of the engine must conform with the NOX emissions listed in the Application. The PERFORMING PARTY may substitute a newer model year replacement equipment for the equipment listed in the Scope of Work provided that the substitute equipment meets all eligibility and other requirements, is of the same weight category, is certified to the same or better NOX emissions rate, and will result in the same or better NOX emissions reductions as the equipment listed. The PERFORMING PARTY must seek written approval from TCEQ for any substitutions in accordance with the process described in the Scope of Work.

6.6 The PERFORMING PARTY understands that, in some cases, engines of the same make, model, and model year may be certified to different NOX emissions standards.

6.7 The PERFORMING PARTY understands that TCEQ’s approval of the Application does not constitute final verification that an engine meets the required certified NOX emissions rate of the Grant Equipment for cost reimbursement purposes.

6.8 The PERFORMING PARTY agrees to continuously own or otherwise commercially finance the Grant Equipment; continuously maintain registration of the Grant Equipment in Texas; and operate the Grant Equipment in Texas for the specified Activity Life, regardless of the financing arrangements used for the purchase of the Grant Equipment.

Article 7. Funds

7.1 This Contract shall not be construed as creating a debt on behalf of TCEQ in violation of Article III, Section 49a of the Texas Constitution. The PERFORMING PARTY understands that all obligations of TCEQ under the Contract are subject to the availability of grant funds from the State Trust and approval of the Trustee.

7.2 Amount Limits on Funds. The Contract Amount Not to Exceed on the Contract Signature Page is the maximum amount TCEQ will reimburse the PERFORMING PARTY for the costs of the eligible Grant Activities. Eligibility for reimbursement is subject to a fully executed Contract and eligible costs as determined by TCEQ. There is no guaranteed minimum amount of reimbursement.

7.3 Request for Reimbursement Deadline. Costs to be reimbursed under this Contract must be incurred by the Request for Reimbursement Deadline, as identified on the Contract Signature Page. If no reimbursement has been requested or paid as of this date, this Contract may be terminated by TCEQ without any further obligations to either party.

Article 8. Eligibility for Cost Reimbursement

8.1 TCEQ will direct the Trustee of the State Trust to act as Disburser to issue payment to the PERFORMING PARTY for those costs which are eligible for reimbursement in accordance with the RFGA and all contractual requirements. Costs are considered eligible for reimbursement when TCEQ, in its sole discretion, determines that the costs are reasonable, necessary, actual, and allowable for implementing the Grant Activities listed in the Scope of Work.

8.2 The Activity Grant Amounts stated in the Scope of Work are maximum amounts of reimbursement for each Grant Activity. By stating the amounts, TCEQ does not A) guarantee payment of those amounts or B) waive the requirements for reimbursement which must subsequently and continually be satisfied by the PERFORMING PARTY.

8.3 Grant funds must be spent consistent with all applicable cost principles from Title 30 Texas Administrative Code (TAC), Chapter 14.10, and TxGMS.

8.4 The PERFORMING PARTY has a continuing obligation to satisfy the requirements for reimbursement. A request for reimbursement, TCEQ’s payment of reimbursement, or any other action will not establish an entitlement in the PERFORMING PARTY to payment from TCEQ.

8.4.1 By directing the Disburser to issue a check for reimbursement, TCEQ does not waive any requirements for the reimbursement of costs. TCEQ may at any time before or after reimbursement, in its sole discretion, request additional evidence concerning costs. TCEQ may audit the records of the PERFORMING PARTY and may also audit the PERFORMING PARTY’s performance as to the Grant Activities and the Administrative Requirements. The PERFORMING PARTY shall return grant funding to the Trustee of the State Trust for reimbursed expenses that are later determined to be unallowable under the terms of this Contract.

Procurement

8.5 The PERFORMING PARTY must ensure that its procurement practices will be based on sound business decisions and arm’s length bargaining. The PERFORMING PARTY’s procurement practices must allow for and encourage fair and open competition for vendors and subcontractors providing goods and services under this Contract.

8.5.1 Purchases must be made without any actual or apparent personal or organizational conflicts of interest as described in TxGMS. Transactions between affiliated companies are considered organizational conflicts of interest. The PERFORMING PARTY agrees that if any actual or potential conflict of interest arises, it will make a full disclosure in writing to the TCEQ Project Representative. This disclosure must include a description of actions the PERFORMING PARTY has taken or proposes to take to avoid or mitigate the actual or potential conflict.

8.5.2 The PERFORMING PARTY agrees that TCEQ has sole discretion to determine (1) whether a conflict of interest exists, (2) whether the conflict of interest is such that it calls into question the eligibility of an expense for reimbursement, and (3) whether the conflict of interest may be considered a material breach of this Contract.

8.5.3 If the PERFORMING PARTY is a local government, it must comply with Texas Local Government Code, Chapter 176.

8.5.4 If the PERFORMING PARTY is a state agency, it must comply with Texas Government Code, Chapter 572.

8.5.5 The PERFORMING PARTY is encouraged to provide opportunities for Historically Underutilized Businesses (HUBs) to participate in any procurement and subcontracting under this Contract.

8.6 For any goods or services that are not procured using price competition, and which exceed the Texas Acquisition Threshold or federal Simplified Acquisition Threshold (currently $250,000), the PERFORMING PARTY must perform a price or cost analysis (for example, independent estimates) to determine the reasonableness of the price and maintain documentation of such analysis. All documentation regarding procurement and price or cost analysis must be provided to TCEQ upon request.

8.7 The PERFORMING PARTY must document and maintain evidence of expenses. TCEQ may at any time before or after reimbursement, in its sole discretion, request additional documentation concerning costs, the procurement process used, and any price or cost analysis performed. TCEQ may audit the records of the PERFORMING PARTY and may also audit the PERFORMING PARTY’s performance as to the Grant Activities and the Administrative Requirements.

Reasonable Costs

8.8 Reasonableness of costs depends upon a variety of considerations and circumstances, including:

8.8.1 whether it is the type of cost generally recognized as ordinary and necessary for the conduct of the PERFORMING PARTY’s business or the Contract performance;

8.8.2 generally accepted sound business practices, arm’s length bargaining, and federal and state laws and regulations;

8.8.3 the PERFORMING PARTY’s responsibilities to TCEQ, other customers, the owners of the business, employees, and the public at large; and

8.8.4 any significant deviations from the PERFORMING PARTY’s established practices.

Necessary Costs

8.9 Necessary costs include costs that are directly attributable to the implementation of the Grant Activities, and that are included in the Scope of Work.

8.10 Unless expressly authorized by TCEQ, necessary costs do not include the cost of money, in particular, the interest charges or fees on a purchase money loan or on a deferred payment purchase agreement.

Actual Costs

8.11 The criteria for actual costs include:

8.11.1 the direct Incremental Costs of implementing the Grant Activities, or

8.11.2 the invoice cost charged by a vendor/contractor to the PERFORMING PARTY for implementing the Grant Activities including taxes and government fees, delivery and shipping fees, factory and/or extended warranties, mechanic and safety inspections, cooperative fees, and dealer processing fees not related to financing.

8.12 Unless expressly authorized by TCEQ, actual costs do not include:

8.12.1 amounts deducted from the invoice cost of the purchase or financing of Grant Equipment whether as discounts, rebates, refunds, or otherwise;

8.12.2 amounts that the PERFORMING PARTY owes or agrees to pay a vendor or contractor for any purpose other than the implementation of Grant Activities;

8.12.3 amounts in the charges that a vendor/contractor intends to return to the PERFORMING PARTY in the form of cash, goods, services, gifts, intangibles, discounts, or any other items of value, or;

8.12.4 amounts that are reimbursed by other public sources or for which tax credits or other public financial incentives are or will be received by the PERFORMING PARTY.

Allowable Costs

8.13 In order to be allowable, costs must be directly related to implementing the Scope of Work and must satisfy the requirements of this Contract, the TxGMS, state agency rules, and all applicable state and federal laws.

Unallowable Costs

8.14 TCEQ will not reimburse the PERFORMING PARTY for those costs that are listed as ineligible for reimbursement in accordance with Section 10.3 of the RFGA, including, but not limited to:

8.14.1 Consulting or Third-Party Preparer (Application Assistance) Fees. Any fees charged by a person who is not an employee of the PERFORMING PARTY for preparing the Application, either directly or as an addition to the cost basis of the grant-funded equipment, are the sole responsibility of the PERFORMING PARTY or the vendor and are not an allowable cost under this Contract. It is generally considered acceptable for an applicant to accept assistance from a vendor or an agent of a vendor in preparing the Application, as long as any decision by the applicant to purchase the grant-funded equipment from that vendor is made independently and meets the other reasonableness provisions in the Contract.

8.14.2 Administrative Costs. Internal costs of the grant recipient, such as personnel expenses, salaries, indirect costs, insurance premiums, and travel are not eligible for reimbursement.

An equipment vendor or installer who is not the PERFORMING PARTY may include its ordinary, reasonable, and necessary operational costs in its invoice price of the equipment or installation services.

8.15 The PERFORMING PARTY will indicate any financial incentives received on the Request for Reimbursement Form. This includes tax credits or deductions, other grants, or any other public financial assistance. The combination of this grant and other financial incentives may not exceed the incremental cost to the applicant of the Grant Equipment. During the reimbursement process, TCEQ may reduce the amount of costs eligible for reimbursement by the value of any additional financial incentive received by the PERFORMING PARTY without a Written Amendment or Minor Change to this Contract.

Preapproval of Costs

8.16 TCEQ may request additional details regarding costs of Grant Equipment listed in the Scope of Work and may require the PERFORMING PARTY to obtain preapproval of specific costs from TCEQ prior to incurring those costs.

8.17 If requested by TCEQ, the PERFORMING PARTY must provide TCEQ with copies of purchase agreements or subcontracts for expenses to be reimbursed under this Contract for approval, prior to the PERFORMING PARTY entering into a final purchase agreement and/or subcontract.

Additional Criteria for Reimbursement

8.18 TCEQ may at any time, in its sole discretion, establish additional criteria and requirements for reimbursement of costs as serves the best interests of the State.

Debts Owed to the State

8.19 If the PERFORMING PARTY owes any amount(s) to the State of Texas, TCEQ may not authorize, and the Texas Comptroller may not pay a reimbursement until the debt is satisfied.

Outstanding Invoice to TCEQ

8.20 If the PERFORMING PARTY has an outstanding invoice from TCEQ, TCEQ may not authorize reimbursement until the invoice is resolved.

Required Waiver

8.21 Any checks to the PERFORMING PARTY will be issued on behalf of TCEQ by Wilmington Trust, N.A., acting as Disburser. Checks will include the following waiver language below the endorsement signature line of each check: “By endorsing and cashing this check the Payee hereof agrees and acknowledges that: (i) Wilmington Trust N.A. (“WT”) is acting merely as an agent of TCEQ solely to assist it in making payments and that such payee agrees to waive any and all claims whatsoever, in law and/or in equity, against WT, and agrees not to initiate a suit against WT in respect of, and agrees that WT will not be liable for any actions that WT takes, or abstains from taking, in either case, arising out of or in connection with the performance of its duties on behalf and as directed by TCEQ and (ii) WT shall not be liable for indirect, special, incidental, punitive or consequential losses or damages of any kind whatsoever or force majeure events or Acts of God in connection with making this payment for TCEQ.”

8.21.1 The PERFORMING PARTY acknowledges that the Disburser is a third-party beneficiary of this acknowledgement.

Article 9. Request For Reimbursement

9.1 Except as provided for under Article 9.5 below, to receive grant funds, the following must occur prior to the Request for Reimbursement Deadline:

9.1.1 all Grant Equipment costs must have been paid in full by the PERFORMING PARTY with either cash-on-hand or financing;

9.1.2 all Grant Equipment must have been received by the PERFORMING PARTY, any work on the Grant Equipment must be completed, and the Grant Equipment must be operational and in final form; and

9.1.3 the PERFORMING PARTY must submit and receive approval from TCEQ for the disposition of the replaced equipment or engines as outlined in Article 12.

9.2 All Request for Reimbursement forms must contain sufficient identification of and information concerning the total costs paid or obligated under a financing agreement. TCEQ must be able to determine the eligibility of a particular cost during the initial review and any later audits.

Supporting documentation materials must be attached to the Request for Reimbursement forms where indicated to clearly show that the cost was paid.

9.3 The PERFORMING PARTY shall submit a completed TCEQ Request for Reimbursement form. The forms shall be emailed to VWSettle@tceq.texas.gov or mailed to:

Texas Commission on Environmental Quality Air Grants Division MC-204, ATTN: Reimbursement PO Box 13087 Austin, TX 78711-3087

9.4 The PERFORMING PARTY will receive its reimbursement payment in the form of a check sent by Wilmington Trust, N.A., as Disburser. All payments will be sent to the PERFORMING PARTY by the Wilmington Trust, N.A., at the direction of TCEQ. Neither TCEQ or Wilmington Trust, N.A. is liable for any inaccurate or incomplete information provided by the PERFORMING PARTY. The PERFORMING PARTY is responsible for any additional costs or fees related to correcting any inaccurate information provided by the PERFORMING PARTY, including any tax penalties or fees resulting from inaccurate information.

9.5 If the PERFORMING PARTY has paid eligible expenses that are equal to or greater than the grant amount with cash-on hand, the reimbursement may be paid directly to the PERFORMING PARTY. In the event the PERFORMING PARTY finances the Grant Equipment, TCEQ will not pay the PERFORMING PARTY directly unless the PERFORMING PARTY has paid an amount equal to or greater than the grant amount. TCEQ will assign payment directly to the financing company.

Supporting documentation must be submitted to establish that the goods or services were received, and that the payment amount is owed to the financing company indicated by the

PERFORMING PARTY.

9.5.1 If an assignment is requested, the PERFORMING PARTY must complete the Assignment Request and Acceptance section on the Request for Reimbursement form.

9.5.2 If the Grant Equipment is financed, the PERFORMING PARTY must ensure that the finance agreement or finance company permits an early payment and that the grant funds are applied to principal only, not to any interest.

9.6 The final Request for Reimbursement form, indicated by signing the Release of Claims section on the form, shall be submitted to TCEQ by the Request for Reimbursement Deadline. Unless otherwise approved in writing by TCEQ, all work on the Grant Equipment must be completed, with the Grant Equipment fully operational, before final reimbursement will be made.

9.6.1 If project delays are experienced, the PERFORMING PARTY may submit a written extension request to TCEQ via email to TERP_Revise@tceq.texas.gov. Unless otherwise approved by TCEQ, an extension request must be submitted no later than sixty (60) days prior to the Request for Reimbursement Deadline. TCEQ’s decision to grant or deny an extension request will be provided in writing to the PERFORMING PARTY and may depend on factors such as the availability of grant funds.

9.7 The final Request for Reimbursement shall include a completed and signed Release of Claims. The Release of Claims will be for the benefit of TCEQ and the Disburser, and the PERFORMING PARTY will release all claims for payment of any funds due and payable, pending PERFORMING PARTY’s receipt of the funds from the Disburser for the Request for Reimbursement.

9.8 If the Request for Reimbursement does not satisfactorily demonstrate the accomplishment of the required tasks, or that costs are allowable, eligible, actual, and paid in full, TCEQ may reject the request, until the deficiencies have been corrected. Satisfactory accomplishment of a task and sufficient documentation to verify costs are within the judgment of TCEQ; however, such judgment must be reasonable.

mailto:TERP-Fiscal@tceq.texas.gov

9.9 The reimbursement of funds is contingent upon the PERFORMING PARTY’s satisfactory adherence to the terms of this Contract.

Replacement and Repower Project Costs

9.10 Subject to any associated General Condition requirements, for replacement and repower projects, TCEQ will reimburse the PERFORMING PARTY for the Grant Activities listed in the Scope of Work no more than the Maximum Reimbursement Rate by entity type of a) the eligible Incremental Costs for the purchase of the replacement equipment or b) the cost of the engine and any other eligible costs associated with a repower project under this Contract.

Charging Infrastructure Costs

9.11 Subject to any associated General Condition requirements, for charging infrastructure associated with replacement or repower projects, TCEQ will reimburse the PERFORMING PARTY for no more than the Maximum Reimbursement Rate by entity type of the eligible Incremental Costs for Charging Infrastructure.

Required Forms

9.12 In order to seek reimbursement, the PERFORMING PARTY, must submit fully completed and legible:

9.12.1 Request for Reimbursement Form;

9.12.2 Release of Claims (only with the final Request for Reimbursement); and

9.12.3 documentation of payment for all costs for which reimbursement is requested.

Required Documentation

9.13 Documentation for a reimbursable cost shall:

9.13.1 be legible;

9.13.2 identify the specific piece of equipment received or the services provided;

9.13.3 clearly identify the vendor or subcontractor who provided the equipment or services;

9.13.4 confirm the reimbursable amount listed on the form; and

9.13.5 provide proof of payment for all costs for which reimbursement is requested.

9.14 The documentation shall consist of an itemized and dated invoice that shows the amount billed to the PERFORMING PARTY, any “past due” amount from previous invoices, and explanation of services provided. The PERFORMING PARTY must provide any other documentation requested by

TCEQ.

9.15 Canceled checks and bank confirmation of electronic funds transfers represent the preferred types of documentation for purposes of this section; however, at TCEQ’s discretion, the PERFORMING PARTY may substitute/attach other records or documents that provide sufficient evidence of payment.

9.16 TCEQ is not obligated to direct the Disburser to make payment until the Request for Reimbursement is approved by TCEQ. Payments may be suspended or withheld in all, or part as authorized by TCEQ.

9.17 TCEQ may reject requests for reimbursement that fail to demonstrate that costs are eligible for reimbursement, or that fail to conform to the requirements of the Contract.

9.18 In determining the amount of the final payment, TCEQ may withhold from reimbursement the amount of any over payment and any reasonable amount until TCEQ is satisfied that all conditions and requirements are completed and accepted.

9.19 All requests for reimbursement must be signed by the Authorized Official of the PERFORMING

PARTY.

Article 10. Performing Party’s Responsibilities to TCEQ

10.1 All Grant Activities for which reimbursement is requested must be completed as described in the Scope of Work.

10.2 The PERFORMING PARTY hereby ratifies and attests to all representations and certifications in the Application and agrees to give written notice to TCEQ within three (3) business days if there is any material change in these representations or certifications.

10.2.1 If applicable, the PERFORMING PARTY will maintain active registration and be in good standing with the Texas Secretary of State and Texas Comptroller of Public Accounts during the Contract Period.

Professional Quality

10.3 The PERFORMING PARTY is solely responsible for the professional quality, technical accuracy, timely completion, and the coordination of all Grant Activities under this Contract.

Supervision and Superintendence

10.4 The PERFORMING PARTY is solely responsible for the supervision, inspection, and direction of the Grant Activities in a competent and efficient manner, utilizing such skills and expertise as may be necessary to perform the Grant Activities in accordance with the Contract. The PERFORMING PARTY shall be solely responsible for the means, methods, techniques, sequences, and procedures of the Grant Activities. The PERFORMING PARTY shall be responsible for ensuring that the implementation of the Grant Activities complies with the terms and conditions of this Contract, including requiring that applicable terms and conditions of this Contract be incorporated into subcontracts, and for following industry-standard practices for any infrastructure construction, such as requiring subcontractor bonds and sufficient insurance.

Materials & Equipment

10.5 Unless otherwise specified in the Contract, the PERFORMING PARTY assumes full responsibility for all materials, equipment, labor, transportation, tools, appliances, fuel, power, light, heat, telephone, water, sanitary facilities, temporary facilities, and all other facilities and incidentals necessary for the implementation and completion of the Grant Activities.

The PERFORMING PARTY’s Responsibility for Purchases

10.6 The PERFORMING PARTY is solely responsible for ensuring that any purchase it makes and seeks reimbursement for is eligible under this program and Contract, properly procured and documented, and included in the Scope of Work. Any purchases made prior to receiving a fully-signed Contract are made at the PERFORMING PARTY’s own risk.

10.7 All Grant Equipment will be of good quality and as described in the Scope of Work. All materials and equipment shall be applied, installed, connected, erected, used, cleaned, conditioned, and maintained in accordance with instructions of the applicable manufacturer and supplier.

10.8 The PERFORMING PARTY agrees to maintain the Grant Equipment as necessary to keep the Grant Equipment in good condition and functioning at Optimum Performance during the Activity Life.

10.9 The PERFORMING PARTY agrees that the emissions reductions generated by each activity over the Activity Life may not be used for credit under any state or federal emissions reduction credit averaging, banking, or trading program, nor as a marketable emissions reduction credit. The emissions reductions generated may be used to demonstrate conformity with the state implementation plan. The PERFORMING PARTY agrees that any marketable credits generated by emissions reduction measures are transferred to TCEQ, and that the reductions are permanently retired. The PERFORMING PARTY may not combine this grant funding with other incentive programs that require transfer of the emissions reductions to that other program.

Required Insurance

10.10 The PERFORMING PARTY must obtain and maintain a commercial policy of property insurance that is sufficient in coverage amounts to fully replace Grant Equipment if it is lost, stolen, or irreparably damaged. This insurance policy must be maintained for the Activity Life.

10.11 For any vehicles listed in the Scope of Work, or any other owned, hired, and non-owned vehicles used in performing this Contract, the PERFORMING PARTY must obtain and maintain a policy of commercial automobile liability insurance that is no less than the minimum levels set under Title 43 Texas Administrative Code, Section 218.16, Insurance Requirements. This insurance policy must be maintained for the Activity Life.

10.12 The PERFORMING PARTY must obtain and maintain coverage to secure the payment of compensation to injured employees as defined in the Texas Worker’s Compensation Act.

10.13 If the PERFORMING PARTY will be purchasing and installing charging infrastructure under this Contract, the PERFORMING PARTY must obtain and maintain a commercial general liability insurance policy for claims of personal injury and bodily injury, including accidental death, and property damage which may arise from the performance of this Contract. This insurance policy must provide a minimum coverage amount of $1,000,000 per occurrence for bodily injury and $1,000,000 per occurrence for property damage, or $2,000,000 if the policy is issued for bodily injury and property damage combined. TCEQ and its officers and employees must be included as named additional insureds with a waiver of subrogation in favor of TCEQ, its officers, and employees.

10.14 Commercial of Insurer Requirements. The PERFORMING PARTY will obtain all required policies from insurers licensed, eligible, or authorized under Texas law to issue insurance policies for the limits and coverage required.

10.15 If requested by TCEQ, the PERFORMING PARTY shall provide proof of insurance coverage including any deductible or self-insurance retention amounts. Failure to provide proof of requested insurance or failure to maintain required insurance during the Activity Life is considered a material breach of the Contract.

10.16 Any insurance proceeds received by or on behalf of the PERFORMING PARTY under an insurance policy due to the damage or destruction of Grant Equipment must be utilized to acquire equivalent or better Grant Equipment or be paid to TCEQ. Failure to do so shall constitute a material breach of this Contract.

10.17 Upon the occurrence of a repairable malfunction of or damage to Grant Equipment during the Contract Period, the PERFORMING PARTY will repair and restore the Grant Equipment to the level of Optimum Performance.

10.18 Upon the occurrence of loss, theft, or irreparable damage of the Grant Equipment during the Activity Life, the PERFORMING PARTY will provide prompt notice to TCEQ and will replace the lost, stolen, or damaged Grant Equipment with similar equipment that achieves the same Optimum Performance or better. The PERFORMING PARTY must replace the Grant Equipment no later than sixty (60) consecutive days from the occurrence of loss, theft, or damage. Failure to timely replace the Grant Equipment may be considered a material breach of this Contract. Replacement Grant Equipment is subject to all the requirements applicable to Grant Equipment contained in this Contract.

10.19 The PERFORMING PARTY shall fully comply with all requirements of any agreements with third parties that have a security interest or similar interest in the Grant Equipment. Repossession, seizure, or any other event where the PERFORMING PARTY loses possession of the Grant Equipment is considered a material breach of this Contract and requires the return of grant funds to the Trustee of the State Trust.

10.20 Governmental entities may use an established self-insurance program to satisfy any insurance requirements.

10.21 TCEQ reserves the right to require additional insurance coverage during the term of this Contract.

Assignment

10.22 TCEQ must remain in contractual privity with the entity owning and operating the Grant Equipment in order to enforce the Contract’s Grant Activities and Administrative Requirements until the termination of this Contract. Any act by the PERFORMING PARTY that impairs TCEQ’s ability to enforce this Contract, including the sale, transfer, or loss of the Grant Equipment, sale of the PERFORMING PARTY’s business interests, or liquidation of the PERFORMING PARTY’s assets (including the Grant Equipment), constitutes a material breach of this Contract and requires the return of grant funds to the Trustee of the State Trust.

10.23 TCEQ may allow the assignment of this Contract. The PERFORMING PARTY and proposed assignee will be required to execute a TCEQ-drafted assignment agreement stating the assignee’s obligation to accept this Contract and to continue to use the Grant Equipment subject to the terms of this Contract.

10.24 If TCEQ does not allow assignment of the Contract, or if the proposed assignee refuses to enter into an assignment agreement, TCEQ will deem the PERFORMING PARTY in breach of the Contract and may utilize any remedy under Article 15, including the return of grant funding to the Trustee of the State Trust.

10.25 No delegation of the obligations, rights, or interests in the Contract, and no assignment of payments by the PERFORMING PARTY will be binding on TCEQ without its written consent, except as restricted by law.

Access to Records and Grant Equipment

10.26 State Auditor’s Office. The PERFORMING PARTY understands that the state auditor may conduct an audit or investigation of any entity receiving funds from the state directly under the Contract or indirectly through a subcontract under the Contract. The acceptance of funds directly under the Contract or indirectly through a subcontract under the Contract acts as acceptance of the authority of the state auditor, under the direction of the legislative audit committee, to conduct an audit or investigation in connection with those funds. Under the direction of the legislative audit committee, an entity that is the subject of an audit or investigation by the state auditor must provide the state auditor with access to any information the state auditor considers relevant to the investigation or audit. The PERFORMING PARTY further agrees to cooperate fully with the State Auditor’s Office or its successor in the conduct of the audit or investigation, including providing all records requested.

The PERFORMING PARTY will ensure that this clause concerning the authority to audit funds received indirectly by subcontractors through the PERFORMING PARTY and the requirement to cooperate with the audit or investigation is included in any subcontract it awards under this Contract.

10.27 The PERFORMING PARTY shall cooperate with and allow access to all Grant Equipment as described in this Contract by TCEQ, the State of Texas, the State Auditor’s Office, and any of their authorized representatives for the purpose of review, on-site inspection, and/or audit. Failure to respond to or cooperate with any authorized review, inspection, or audit of the Grant Activities constitutes a material breach of this Contract.

10.28 If the PERFORMING PARTY expends more than $750,000 in state grant awards, including this Contract, during its fiscal year, the PERFORMING PARTY must have an annual independent financial audit conducted. All audits must be conducted in accordance with generally accepted government accounting standards (GAGAS). A federal single audit may be accepted if it addresses internal controls and other grant requirements applicable to this Contract’s Administrative Requirements and Grant Activities. TCEQ may allow a program-specific audit if the PERFORMING PARTY’s only state award expenditures are from the Texas Emissions Reduction Plan (TERP) and/or the Texas Volkswagen Environmental Mitigation Program (TxVEMP). The PERFORMING PARTY’s audit and reporting package must be provided to TCEQ as specified in TxGMS.

Maintenance of Records

10.29 The PERFORMING PARTY shall maintain books, records, documents, and other evidence reasonably pertinent to performance of the Grant Activities and requirements of the Contract, including any Contract Amendments. The PERFORMING PARTY will document and maintain records of usage and location for the Grant Equipment. All financial records will be maintained in accordance with generally accepted accounting principles and this Contract. The PERFORMING PARTY’s record retention system shall provide for the identification, accumulation, and segregation of allowable and unallowable costs among projects. The PERFORMING PARTY shall also maintain the financial information and data used in the preparation or support of any Request for Reimbursement, price or profit analysis, and a copy of any cost information or analysis submitted to TCEQ. The PERFORMING PARTY shall allow access to all the material including bank statements and records to TCEQ, the State of Texas, the State Auditor’s Office, and any of their authorized representatives for the purpose of review, inspection, audit, excerpts, transcriptions, and/or copying during normal business hours. The PERFORMING PARTY shall provide appropriate facilities and equipment for such access and inspection.

10.30 Records under this Article shall be maintained by the PERFORMING PARTY during performance of each Grant Activity under this Contract and for four (4) years after the Termination of this Contract. If any litigation, claim, negotiation, audit, cost recovery, or other action (including actions concerning costs of items to which an audit exception has been taken) involving such records has been started before the expiration of the four-year period, such records must be retained until completion of the action or resolution of all issues which arise from it, or until the end of the regular four-year period, whichever is later. The PERFORMING PARTY must maintain these records in a way that ensures business continuity if the primary records are destroyed such as establishing a back-up copy of such records.

PERFORMING PARTY’s Project Representative

10.31 The PERFORMING PARTY will identify in writing a Project Representative as the person authorized to receive and respond to inquiries and requests from TCEQ, to manage the Grant Activities being performed, and to act on behalf of the PERFORMING PARTY.

10.32 The PERFORMING PARTY agrees to make arrangements necessary to ensure that its authorized Project Representative, or someone to whom that person has delegated his or her authority, is available during regular business hours for consultation with TCEQ. Written notice of any such delegation, or change in delegation, will be provided to TCEQ.

10.33 Any notice issued pursuant to this Contract shall be addressed to the respective party’s authorized Project Representative or delegated authority. Such notices shall be written and emailed, hand-delivered, or sent by first-class mail. Any notice or other written communication shall be considered delivered upon date of receipt.

Personnel

10.34 The PERFORMING PARTY shall provide competent, suitably qualified personnel, whether employees or contractors to implement the Grant Activities as required by the Contract.

Safety and Protection

10.35 Where applicable, the PERFORMING PARTY shall be responsible for requiring employees, contractors, and subcontractors to maintain and supervise all necessary safety precautions and programs in connection with the Grant Activities. The PERFORMING PARTY shall take all necessary precautions to protect the health and safety of the public during performance of the Grant Activities.

Permits

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