Ariz. Rev. Stat. § 41-1682 – Private prisons; prohibitions; liability for services; financial responsibility

A. No private prison may operate in this state unless the private contractor complies with this section.
B. A private prison shall provide the department of administration with financial responsibility to cover this state's potential liability in the amount of ten million dollars. The monies shall be used by the state if the state is held liable for civil damages resulting from the escape of a prisoner from the private prison. The private prison may file proof of financial responsibility by filing one of the following:
1. 1. Proof that ten million dollars is deposited in the private prison escapee fund established by section 41-1830.31.
2. 2. An insurance policy that is in a form approved by the department of administration that provides civil liability and civil rights liability coverage in the amount of ten million dollars and listing the state as an insured.
3. 3. A surety bond with the principal sum of ten million dollars.
4. 4. A certified financial statement that is not more than ninety days old and that shows a net worth of more than fifteen million dollars. Every ninety days the private prison shall submit a certified financial statement to the department of administration signed under oath by the chief financial officer of the prison. If the financial statement indicates a net worth of less than fifteen million dollars, the private prison shall comply with paragraphs 1, 2 or 3 of this subsection.
C. An insurance company or surety company duly authorized to transact business in this state shall execute the insurance policy or bond prescribed in subsection B of this section.
D. The insurance policy or surety bond shall continue in effect until ninety days after the private prison is sold or closed. Any monies deposited in the private prison escapee fund by the private prison shall be refunded to the private prison within ninety days after submission of evidence to the director of the department of administration that the private prison is either sold or closed and there are no remaining liabilities for which the state might be required to assume responsibility.
E. On receipt by the director of the department of administration of notice to cancel an insurance policy or bond by an insurance company or surety, the director shall immediately notify the private prison on the insurance policy or the surety bond of the effective date of cancellation of the insurance policy or the surety bond. The private prison shall furnish a like insurance policy or surety bond within thirty days after mailing of the notice by the director. Unless a replacement insurance policy or surety bond is filed with the director, the right of the private prisons to operate in this state shall be suspended by operation of law on the date the bond is canceled.
F. If any of the monies required by subsection B, paragraph 1 of this section are used to satisfy civil damage claims or civil rights claims, the private prison shall reestablish the full amount of those monies within thirty days after notification by the director of the department of administration.
G. A security officer employed by a private prison contractor shall be at least twenty-one years of age and have no felony convictions.