A.R.S. tit. 41 ch. 25 — Arizona Revised Statutes Title 41 Chapter 25 — State Government Competition With Private Enterprise

41-2751. Definitions In this article, unless the context otherwise requires: 1. "Governing board" means the Arizona board of regents for the universities or any community college district governing board. 2. "Invited guests" means persons who enter onto a campus for an educational, research or public service activity and not primarily to purchase or receive goods and services not related to the educational, research or public service activity for which such persons enter onto the campus. 3. "Private enterprise" means an individual, firm, partnership, joint venture, corporation, association or any other legal entity engaging in the manufacturing, processing, sale, offering for sale, rental, leasing, delivery, dispensing, distributing or advertising of goods or services for profit. 4. "Public service" means an activity that is normally and generally associated with community colleges and universities in this state, a purpose or significant result of which is not to engage in competition with private enterprise. 5. "State agency" means a department, office, commission, institution, board or other agency of state organization regardless of whether monies are appropriated to the agency. 41-2752. State competition with private enterprise prohibited; exceptions; definition A. A state agency shall not engage in the manufacturing, processing, sale, offering for sale, rental, leasing, delivery, dispensing, distributing or advertising of goods or services to the public that are also offered by private enterprise unless specifically authorized by law other than administrative law and executive orders. B. A state agency shall not offer or provide goods or services to the public for or through another state agency or a local agency, including by intergovernmental or interagency agreement, in violation of this section or section 41-2753. C. The restrictions on activities that compete with private enterprise contained in this section do not apply to: 1. The development, operation and management of state parks, historical monuments and hiking or equestrian trails. 2. Correctional industries established and operated by the state department of corrections if the prices charged for products sold by the correctional industries are not less than the actual cost of producing and marketing the product plus a reasonable allowance for overhead and administrative costs. 3. The office of tourism. 4. The Arizona highways magazine, operated by the department of transportation. 5. Printing and distributing information to the public if the agency is otherwise authorized to do so, and printing or copying public records or other material relating to the public agency's public business and recovering through fees and charges the costs of such printing, copying and distributing. 6. The department of public safety. 7. The construction, maintenance and operation of state transportation facilities. 8. The development, distribution, maintenance, support, licensing, leasing or sale of computer software by the department of transportation. 9. Agreements executed by the Arizona health care cost containment system administration with other states to design, develop, install and operate information technology systems and related services or other administrative services pursuant to section 36-2925. 10. Agreements executed by the department of economic security with other states to design, develop, install and operate support collection technology systems and related services. The department shall deposit, pursuant to sections 35-146 and 35-147, monies received pursuant to this paragraph in the public assistance collections fund established by section 46-295. 11. Educational, vocational, treatment, training or work programs of the department of juvenile corrections and contracts between the department of juvenile corrections and this state, a political subdivision of this state or a private entity in order to provide employment or vocational educational experience. 12. The aflatoxin control technologies of the cotton research and protection council. 13. The lease or sublease of lands or buildings by the department of economic security pursuant to section 41-1958. 14. The Arizona commerce authority. 15. The Arizona game and fish commission, but only for the sale of goods or services and not firearms. 16. The lease or sublease of lands or buildings by the department of child safety pursuant to section 8-460. 17. Agreements executed by the department of child safety with other states to design, develop, install and operate support collection technology systems and related services. The department shall deposit, pursuant to sections 35-146 and 35-147, monies received pursuant to this paragraph in the child safety collections fund established by section 8-461. 18. The lease or sublease of state hospital lands or buildings by the department of health services. 19. The sale or lease of software, computer systems or intellectual property developed by the department of education or associated services provided for the sale or lease of software, computer systems or intellectual property by the department of education. The department shall deposit, pursuant to sections 35-146 and 35-147, sixty percent of the profit from the monies generated pursuant to this paragraph in the state general fund and the remaining forty percent in the department of education intellectual property fund established by section 15-231.04. The department of education may not transfer or expend monies or personnel resources for the purposes of marketing or soliciting goods or services authorized pursuant to this paragraph that were appropriated and authorized for other functions and programs of the department of education. 20. The lease or sublease of any real estate or related infrastructure by the department of emergency and military affairs pursuant to section 26-262, subsection K, paragraph 4. D. The restrictions on activities that compete with private enterprise contained in subsection A of this section do not apply to community colleges and universities under the jurisdiction of a governing board. E. For the purposes of this section, "profit" means any monies generated from the sale or lease of goods and services after accounting for the costs paid by this state, including appropriations from the state general fund. 41-2753. Competition with private enterprise by community colleges and universities; limitations; rules; complaints A. Community colleges and universities under the jurisdiction of a governing board shall not, unless specifically authorized by statute: 1. Provide to persons other than students, faculty, staff and invited guests goods, services or facilities that are practically available from private enterprise, unless the provision of the goods, service or facility offers a valuable educational or research experience for students as a part of their education or fulfills the public service mission of the community college or university. This paragraph does not apply to sponsoring or providing facilities for recreational, cultural and athletic events or to facilities providing food services and sales. 2. Enter competitive bidding for rendering any goods or services unless a clear educational or research advantage would accrue to this state by the community college or university rendering the goods or services. Any such bid shall fairly and fully allocate all direct and indirect costs unless the funding agency or sources provide for or require all bidders to use a specific procedure or formula for allocating costs. 3. Provide to students, faculty, staff or invited guests goods, services or facilities that are practically available from private enterprise except as authorized by the state governing board. 4. Provide goods, services or facilities for or through another state agency or a local agency, including by intergovernmental or interagency agreement, which, if provided directly by the contractor, would be in violation of this section or section 41-2752. B. A governing board may adopt and implement rules or policies, as appropriate, to provide for the disposal by sale of products and by-products which are an integral part of research or instruction conducted by community colleges and universities under its jurisdiction if the products and by-products are not sold to a retailer or sold at retail to the public by the particular community college or university unless the sale is an integral part of the particular research project or instructional program or there is no other practical way of disposing by sale of the products or by-products, and if the products or by-products are sold at their market value. C. A governing board shall adopt and implement rules or policies, as appropriate, to: 1. Regulate community college and university competition with private enterprise and ensure compliance with this section. 2. Regulate use of community college and university facilities by students, faculty, staff, invited guests and the general public. 3. Provide procedures for promptly hearing and resolving complaints lodged under this article relating to community colleges and state universities under the jurisdiction of the governing board. Such procedures shall include provisions for an expedited hearing process if it is determined the alleged competition may cause severe financial hardship on the person filing the complaint. D. Any person aggrieved by a violation of this section may file a complaint with the governing board. The governing board shall hear complaints made pursuant to this section within sixty days and shall render its decision within thirty days after the hearing. A person does not have standing to challenge violations of this section in the courts of this state until the person has first made a complaint to the board and has received the board's decision. E. This section does not apply to: 1. The Arizona health sciences center operated by the university of Arizona, except in those cases in which the health sciences center provides prosthetic or medical devices, or services related to such devices, and a surgical or medical procedure is not involved in the application of the device. 2. The provision of free medical services or equipment to indigents in association with a community service health program. 3. Public service radio and television stations licensed to the governing boards or to community colleges and universities under their jurisdiction. 4. Skill centers operated by the community college districts. 41-2771. Definitions In this article, unless the context otherwise requires: 1. "Competitive government process" means the process, as developed by the governor's office of management and budget, designed to standardize the methodology for how the state identifies and evaluates state functions to determine if future competitive contracting with the private sector and other state agencies is in the best interest of this state. 2. "Competitive government program" means the program, as developed by the governor's office of management and budget, designed to manage the process of introducing private sector and interagency competition into the delivery of state goods and services. 3. "Function" means a good or service that is provided through the direct efforts of state employees. 4. "Office" means the governor's office of management and budget, established by executive order, or its successor. 5. "Privatization" means the utilization of a private sector entity in the delivery of goods and services currently provided by a state function or program. 6. "Relevant costs" means those costs that relate to a target function that can be eliminated if the target function is transferred to another agency or the private sector. 7. "State agency" means any executive department, office, commission, institution, board or other executive agency of state organization regardless of whether monies are appropriated to the agency. State agency does not include the Arizona board of regents, the universities under its jurisdiction or community college districts. 8. "Target function" means a current state function that has been identified for review through the competitive government process. 9. "Total costs" means all costs borne by an agency to provide a state function including all indirect costs and applicable allocated costs. 41-2772. Arizona state competitive government program A. A statewide competitive government program shall be established within the governor's office of management and budget. The program shall emphasize this state's fiduciary responsibility to taxpayers by encouraging value in the provision and delivery of state services by identifying and pursuing opportunities for increasing the use of market forces in the delivery of state services, while preventing unfair competition between state agencies and the private sector. B. The competitive government process shall be utilized whenever a state agency chooses to, or is compelled to, privatize a state function or program currently provided through the direct use of state employees. C. The Arizona board of regents and the community college districts shall develop a program comparable to the competitive government program for themselves and institutions under their jurisdiction and shall present a report to the office on or before October 1 of each year that contains a summary of all activities conducted by the Arizona board of regents and community college districts relating to competitive government activities. The office may require oral or written status reports relating to competitive government activities from the state agencies as deemed necessary. 41-2773. Powers and duties of the office of management and budget relating to competitive government In addition to the duties assigned by the governor, the office: 1. Shall develop, implement and manage a statewide competitive government program. 2. Shall identify, with the assistance of state agencies, functions in state government appropriate for submittal to the competitive government process. 3. May require a state agency to conduct an in-house total cost estimate, a management study or any hearing, study, review or cost estimate concerning any aspect of a target function to determine the potential for privatization. 4. May require a state agency to release a request for proposal or invitation to bid for any target function the office deems appropriate for competitively contracting. 5. Shall develop minimum savings criteria for governing the award of contracts resulting from the competitive government process. 6. Shall develop a costing model that accurately estimates and accounts for the total cost of providing a state function and develop methods by which state in-house costs can be compared to private sector costs. The model shall: (a) Take into account relevant costs for determining whether savings would result from the privatization of a target function. (b) Specifically account for conversion, transaction, disruption, contract monitoring costs, and revenue increases and decreases related to a privatization. (c) Include uniform definitions of direct costs and indirect costs. 7. Shall develop a handbook and training program that educates state agencies in the competitive government process. 8. Shall preapprove requests for proposals and invitations to bid, as the office deems appropriate, that could result in the privatization or transfer to another state agency of a target function.