ESBD_File_328572_DB63FA5B.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 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

October 31, 2026

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.

Texas Commission on Environmental Quality (TCEQ)

Authorized Official:

Title:

By (Authorized Signature):

Date of Signature:

Performing Party Legal Name (PERFORMING PARTY)

Authorized Official:

Title:

By (Authorized Signature):

Date of Signature:

Contract No. 582-23-XXXXX -VW 2

GENERAL CONDITIONS

for

TEXAS VOLKSWAGEN ENVIRONMENTAL MITIGATION PROGRAM

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 final reimbursement payment is issued under the grant, continuing for five (5) years afterwards. Upon completion of final 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 which track contract progress and management, including financial management, reporting, and retention of records. These are distinguished from Grant Activities requirements, which pertain to the specific Grant Activities approved by TCEQ.

1.3 Application – the Application for a grant submitted by the PERFORMING PARTY including any attachments or documents the PERFORMING PARTY provides with the Application, provides in response to a request from TCEQ staff, or provides to otherwise support the individual activities proposed to be conducted under the grant.

1.4 Authorized Official – the individual authorized to sign legal documents on behalf of TCEQ and the PERFORMING PARTY, as designated in writing 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 Activity/Activities – activities the PERFORMING PARTY has agreed to perform under this Contract that are detailed in the Scope of Work.

1.7 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.”

1.8 Grant Equipment – the equipment for which some or all of the cost of purchase is reimbursed by TCEQ under this Contract. The term includes replacements for Grant Equipment which is lost, stolen, or irreparably damaged. The term “Grant Equipment” shall be used interchangeably with “equipment.”

1.9 Incremental Costs – the eligible cost of an approved Grant Activity less TCEQ’s default scrappage value that would otherwise be paid by the PERFORMING PARTY in the normal course of business.

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) 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 privately-owned school bus under contract with a public school district is also eligible for this reimbursement amount. A federal government agency or entity is not included in this definition and will be considered a private entity for this grant program. 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.

https://comptroller.texas.gov/purchasing/grant-management/

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1.13 PERFORMING PARTY – the grant recipient indicated on the signature page of this Contract, also referred to in this Contract as the “grantee”.

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 TxVEMP Request for Grant Applications (RFGA), TxVEMP Application, and the Scope of Work of this Contract.

1.15 Project Representative – the individual to whom all communications, contracts and related documents, and written correspondence to either party will be addressed and delivered, as designated in writing in the Contract.

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 detailing 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 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 TCEQ – the Texas Commission on Environmental Quality

1.22 When any period of time is referred to in the Contract by days, it will be computed to exclude the first 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.

1.23 A calendar day of twenty-four (24) hours measured from midnight to the next midnight will constitute a day.

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 the Texas Grant Management Standards (TxGMS); (2) TCEQ rules and policies (pertaining to TCEQ contracts and grants); (3) the State Trust Agreement and the Mitigation Plan; (4) the RFGA; and (5) other applicable Federal and State rules and statutes.

ARTICLE 3. PURPOSE

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 Signature Page.

4.2 The PERFORMING PARTY may begin the Grant Activities at its own risk, prior to receiving a fully executed Contract.

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

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4.4 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 Contract Documents which comprise the entire Contract between TCEQ and the PERFORMING PARTY are provided in order of precedence in the event of conflicts:

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 RFGA, 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 Effective Date of the Contract 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.

ARTICLE 6. ELIGIBLE ACTIVITIES

6.1 The PERFORMING PARTY agrees to complete all Grant Activities as described in the Scope of Work and in accordance with the Contract.

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.

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.

6.4 Any costs associated with the grant equipment may not have been paid prior to the opening date of the

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, with written approval from TCEQ’s Project Representative or designee, may substitute a newer model year replacement equipment for the unit listed in the Scope of Work provided that the substitute unit meets all eligibility and other requirements, is of the same weight category, has the same or better certified NOX emissions rate, and will result in the same or better NOX emissions reductions as the unit listed.

6.6 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.

6.7 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. All claims, suits, or obligations arising under or related to this Contract are subject to the availability of grant funds which are actually received and deposited into the Texas Emissions Reduction Plan Fund for the purposes of this Contract.

Contract No. 582-23-XXXXX -VW 5

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 amount of reimbursement.

7.3 Request for Reimbursement Deadline. If the request for reimbursement has not been received by TCEQ by the Request for Reimbursement Deadline, TCEQ may terminate this Contract without any further obligation to the PERFORMING PARTY.

ARTICLE 8. ELIGIBILITY FOR COST REIMBURSEMENT

8.1 TCEQ will direct the Trustee of the State of Texas to act as Disburser to issue payment to the PERFORMING PARTY for those costs which are eligible for reimbursement in accordance with 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. Costs must be included in the Scope of Work to be eligible for reimbursement.

8.2 The amount of costs for which reimbursement may be requested is the lesser of A) the costs stated in the Scope of Work or B) the actual eligible costs.

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 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 arms’ 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.

8.6 For any expenses (goods or services) which 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.

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

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 which are directly attributable to the implementation of the Grant Activities, and which are included in the Scope of Work.

8.10 Unless expressly authorized by TCEQ, necessary costs do not include:

8.10.1 the cost of money, in particular, or the interest charges 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 which 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 which 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;

8.12.4 Baseline Costs designated by TCEQ in the Application reflecting the costs that would otherwise be incurred by the PERFORMING PARTY in the normal course of business; or

8.12.5 Amounts which 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.

8.13 The PERFORMING PARTY must document and maintain evidence of expenses.

Allowable Costs

8.14 In order to be allowable, costs must be included in 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

8.15 Consulting (Application Assistance) Fees. Any fees charged by a consultant for preparation of 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.

8.16 Administrative Costs. Internal costs of the grant recipient, such as personnel expenses, salaries, indirect costs, and travel are not eligible for reimbursement. This provision does not limit the ability of an

Contract No. 582-23-XXXXX -VW 7 equipment vendor or installer to include ordinary, reasonable, and necessary operational costs in the price of the equipment or installation services.

8.17 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

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

8.19 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

8.20 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

8.21 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

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

Required Waiver

8.23 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 the TCEQ solely to assist it in making payments and that such payees 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.”

8.23.1 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 9.4 below, to receive grant funds, all Grant Equipment costs must have been paid in full by the PERFORMING PARTY with either cash-on-hand or financing, and all Grant Equipment must have been received prior to the Request for Reimbursement Deadline.

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:

mailto:TERP-Fiscal@tceq.texas.gov

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Texas Commission on Environmental Quality Air Grants Division MC-204, ATTN: Reimbursement P.O. 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.

9.6 The final Request for Reimbursement Form, indicated by selecting the final request box 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 90 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 will 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 is within the judgment of TCEQ; however, such judgment must be reasonable.

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

Scrappage Value

9.10 For equipment replacement activities, TCEQ will use a default scrappage value of $1,000. For activities involving the repower of equipment the default scrappage value is $250. The default scrappage value will be subtracted from the eligible cost.

Replacement and Repower Project Costs

9.11 For replacement and repower projects, regardless of the Activity Grant Amount shown in the Scope of Work, TCEQ will reimburse the PERFORMING PARTY for 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.

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Refueling Infrastructure Costs

9.12 For refueling infrastructure associated with replacement or repower projects, regardless of the Activity Grant Amount shown in the Scope of Work, TCEQ will reimburse the PERFORMING PARTY for no more than the maximum reimbursement rate by entity type of the eligible incremental costs of the refueling infrastructure project.

Required Forms

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

9.13.1 Request for Reimbursement Form;

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

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

Required Documentation

9.14 Documentation for a reimbursable cost shall:

9.14.1 be legible;

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

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

9.14.4 confirm the reimbursable amount listed on the form; and

9.14.5 provide proof of payment for all costs for which reimbursement if requested.

9.15 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.

9.16 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.

9.17 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.

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

9.19 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.

9.20 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 prompt written notice to TCEQ within three (3) business days if there is any material change in these representations or certifications.

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.

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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 Any purchase made by the PERFORMING PARTY, especially any purchase not proposed/scheduled for reimbursement by TCEQ, is made at its 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, and 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 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 Unless otherwise expressly agreed by TCEQ, the PERFORMING PARTY must obtain and maintain a commercial policy of property insurance which is sufficient to replace Grant Equipment if it is lost, stolen, or irreparably damaged. This insurance policy must be maintained for the Activity Life.

10.11 The PERFORMING PARTY must obtain and maintain policies of commercial automobile liability insurance and workers’ compensation or accidental insurance coverage that are no less than the minimum levels set under Title 43 Texas Administrative Code Section 218.16, Insurance Requirements.

These insurance policies must be maintained for the Activity Life.

10.12 If the PERFORMING PARTY will be purchasing and installing refueling 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 the 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.

10.13 If requested by TCEQ, the PERFORMING PARTY shall provide proof of insurance coverage. 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.

10.14 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.

10.15 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.

10.16 Upon the occurrence of loss, theft, or irreparable damage of the Grant Equipment during the Activity Life, the PERFORMING PARTY will replace the lost, stolen, or damaged Grant Equipment with similar equipment which achieves the same optimum performance or better. The PERFORMING PARTY must replace the Grant Equipment no later than 60 consecutive days from the occurrence of loss, theft, or damage, unless TCEQ expressly agrees to a longer period. Replacement Grant Equipment is subject to all the requirements applicable to Grant Equipment contained in this Contract.

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10.17 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 State Trust.

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

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

Assignment

10.20 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 sale of the Grant Equipment, transfer of the Grant Equipment, 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 State Trust.

10.21 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.

10.22 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 State Trust.

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

Access to Records and Grant Equipment

10.24 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.

10.25 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.

Maintenance of Records

10.26 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 mileage and location records 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 (direct and indirect), 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

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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.

10.27 Records under this Article shall be maintained by the PERFORMING PARTY during performance of Grant Activity under this Contract and for four (4) years after the Activity Life of equipment under 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 Representative

10.28 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.

10.29 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.

10.30 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

10.31 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

10.32 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

10.33 Unless otherwise provided in the Contract, the PERFORMING PARTY shall obtain and pay for all applicable permits and licenses required for this performance of this Contract. Failure to comply with a permit issued by TCEQ or other state agency may result in a determination, within the sole discretion of TCEQ, that the best interests of the state are served by withholding reimbursement or by the application of other remedies under this Contract.

Laws and Regulations

10.34 The PERFORMING PARTY shall give all notices and comply in all material respects with all laws and regulations applicable to furnishing and performance of the Grant Activities. Except where otherwise expressly required by applicable laws and regulations, TCEQ shall not be responsible for monitoring the PERFORMING PARTY's compliance with any laws or regulations.

Data and Publicity

10.35 All data and other information developed under this Contract may be subject to public disclosure pursuant to the Texas Public Information Act, Texas Government Code Chapter 552. Except to the extent that it is exempted from public access by the Texas Public Information Act, the PERFORMING PARTY agrees to disclose all information and reports resulting under this Contract in a format that is accessible by the public at no additional charge to the State.

10.35.1 If the PERFORMING PARTY is claiming that data and information submitted to the TCEQ contains confidential or proprietary information, that information MUST be clearly marked

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“Confidential/Proprietary: inform applicant & seek AG opinion before releasing” on every page and must be submitted separately from all other material. Any information that is so marked, if requested under the PIA, will be sent by the TCEQ to the Texas Attorney General (AG) for a decision on whether it may be withheld. Note that the AG may determine that the information is not confidential and therefore must be released. The TCEQ will inform the PERFORMING PARTY of the request for the AG’s decision but will make no arguments in support of the request. It is the responsibility of the PERFORMING PARTY to explain the basis for its claim that the information is confidential.

10.36 Upon termination of this Contract, if requested by TCEQ, all copies of data and information developed under this Contract, including databases for which the costs of preparation are reimbursed under this Contract, shall be furnished at no charge to TCEQ, and shall become the property of TCEQ.

10.37 The PERFORMING PARTY agrees to notify TCEQ prior to releasing any information to the news media regarding the Grant Activities. The PERFORMING PARTY will acknowledge the financial support of TCEQ whenever a Grant Activity reimbursed, in whole or part, is publicized or reported in news media or publications. Reports and other documents, including news releases or public announcements, prepared as a part of this Contract, or referencing the Grant Activities under this Contract, shall carry the following or similar notation on the front cover or title page:

This project is funded in part by the Texas Volkswagen Environmental Mitigation Program Grant from the Texas Commission on Environmental Quality.

Accessibility

10.38 All electronic content and documents created as deliverables under this Contract must meet the accessibility standards prescribed in 1 Texas Administrative Code Sections 206.50 and 213, for state agency web pages, web content, software, and hardware, unless TCEQ agrees that exceptions or exemptions apply.

Conflict of Interest

10.39 The PERFORMING PARTY represents and warrants that performance under this Contract will not constitute an actual or potential conflict of interest or reasonably create an appearance of impropriety Further, PERFORMING PARTY represents and warrants that in the administration of the grant, it will comply with all conflict-of-interest prohibitions and disclosure requirements required by applicable law, rules, and policies. If circumstances change during the course of this Contract, PERFORMING PARTY shall promptly notify TCEQ.

Open Meetings

10.40 If the PERFORMING PARTY is a governmental entity, PERFORMING PARTY represents and warrants its compliance with Chapter 551 of the Texas Government Code which requires all regular, special, or called meetings of a governmental body to be open to the public, except as otherwise provided by law.

Identifying Mark

10.41 Upon request by TCEQ, the PERFORMING PARTY shall install, or allow TCEQ or its contractor to install, a prominently placed identifying mark on the Grant Equipment, identifying it as TxVEMP-funded equipment, and containing such other information as TCEQ shall specify. The PERFORMING PARTY may remove the mark upon the expiration of the Activity Life for each Grant Equipment.

ARTICLE 11. TCEQ’S RESPONSIBILITIES

11.1 The Executive Director of TCEQ will identify a person authorized to give direction to the PERFORMING PARTY and act on behalf of TCEQ.

11.2 TCEQ will not…