S354

An Act permitting the establishment of programs requiring the employment of local residents in public work projects, amending P.L.2009, c.313 and supplementing Title 52 of the Revised Statutes.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. (New section) For the purposes of sections 1 through 10 of this act:

“Apprentice” means an apprentice participating in a registered apprenticeship program which provides to each trainee combined classroom and on-the-job training under the direct and close supervision of a highly skilled worker in an occupation recognized as an apprenticeable trade, registered by the Office of Apprenticeship of the United States Department of Labor, and meeting the standards established by that office.

“Area Median Income” or “AMI” means unadjusted median income levels derived from the Department of Housing and Urban Development (“HUD”) on an annual basis for the geographical area of the political subdivision, adjusted solely for household size.

"Disadvantaged worker" means a local resident who resides in a census tract within the geographical area of the political subdivision which has a rate of unemployment in excess of 150% of the unemployment rate for the entire area of the political subdivision, or at the time of commencing work on a covered project, has a household income of less than 80% of the AMI, or faces or has overcome one or more of the following barriers to employment: being homeless; being a custodial single parent; receiving public assistance; having discontinued education prior to obtaining a high school diploma; participating in a vocational English as a second language program; or having a criminal record or other involvement with the criminal justice system.

“Governing body” means the governing body of the political subdivision and any office or agency of the political subdivision, and any office or agency of the body which has authority over public work, or contracts for public work, of the political subdivision.

“Political subdivision” means any county, municipality, school district or other political subdivision of the State of New Jersey or any instrumentality or agency of the political subdivision;

"Public work" means any construction, reconstruction, demolition, alteration, custom fabrication, or repair work, or maintenance work, including painting and decorating, subject to the provisions of the “New Jersey Prevailing Wage Act,” P.L.1963, c.150 (C.34:11-56.25 et seq.), and done under contract and paid for in whole or in part out of the funds of a political subdivision, except work performed under a rehabilitation program. "Public work" shall also mean construction, reconstruction, demolition, alteration, custom fabrication, or repair work, subject to the provisions of the “New Jersey Prevailing Wage Act,” P.L.1963, c.150 (C.34:11-56.25 et seq.), done on any property or premises, whether or not the work is paid for from public funds, if, at the time of the entering into of the contract, the property or premises is owned by the political subdivision or:

(1) Not less than 55% of the property or premises is leased by the political subdivision, or is subject to an agreement to be subsequently leased by the political subdivision; and

(2) The portion of the property or premises that is leased or subject to an agreement to be subsequently leased by the political subdivision measures more than 20,000 square feet.

“Project work hours” means the total hours worked on a construction contract by all apprentices and journey level workers, whether those workers are employed by the contractor or any subcontractor.

2. (New section) a. Notwithstanding any other provision of law to the contrary, the governing body of a political subdivision may establish by ordinance or resolution a program requiring local hiring and employment in public work contracts of the political subdivision in a manner consistent with the provisions of this act, after issuing to the public a written finding, based on its evaluation of the economic and demographic impact of public work contracts on the political subdivision and its residents, that the local hiring and employment program will serve the interests of the political subdivision by utilizing limited public funds in a manner that provides an economic stimulus within the political subdivision or assists in overcoming the adverse impact of historic discrimination. In the ordinance or resolution establishing the program, the governing body shall set mandatory minimum participation levels for local residents and disadvantaged workers as it determines are necessary to serve the interests of the political subdivision or overcome the adverse impact of historic discrimination, except that the mandatory minimum participation levels shall not exceed the levels indicated in subsections b. and c. of this section. The governing body may set the mandatory minimum participation levels lower than the levels indicated in those subsections for any particular trade based on factors including a finding that there are insufficient numbers of currently qualified and available local residents and disadvantaged workers, or trainees anticipated to be available, to enable contractors and subcontractors in that trade to fully satisfy the local hiring and employment requirements at the indicated levels. The decision by the governing body to require local hiring and employment in a public work contract in a manner consistent with the provisions of this act shall not be deemed to unduly restrict competition if the governing body finds that the requirement is reasonably related to serving the interests of the political subdivision or overcoming the adverse impact of historic discrimination, and any bidder for the contract not agreeing to abide by the requirement shall not be regarded as a responsible bidder.

b. For any public work contract covered under the program, the following requirements regarding minimum mandatory participation levels for local residents and disadvantaged workers shall apply to each prime contractor and subcontractor that performs project work, with respect to project work actually performed by the prime contractor and work included under any subcontract, including all work performed by a subcontractor and all lower-tier subcontractors under the subcontract. A minimum mandatory participation level for employing local residents and disadvantaged workers on a project subject to this act may result in a reduction of work done by residents of this State who are not local residents or disadvantaged workers, but the minimum mandatory participation level shall not apply to the extent that its application would require the reduction of the amount of work done by workers who are not residents of the State. The minimum mandatory participation levels shall be the levels set by the governing body, but the levels set by the governing body shall not exceed the following minimum mandatory participation levels:

(1) For the first year the program is in effect, not less than 20% of all project work hours within each trade shall be performed by local residents, and not less than 10% of all project work hours within each trade shall be performed by disadvantaged workers;

(2) For the second year the program is in effect, not less than 25% of all project work hours within each trade shall be performed by local residents, and not less than 12.5% of all project work hours within each trade shall be performed by disadvantaged workers;

(3) For the third year the program is in effect, not less than 30% of all project work hours within each trade shall be performed by local residents, and not less than 15% of all project work hours within each trade shall be performed by disadvantaged workers;

(4) For the fourth year the program is in effect, not less than 35% of all project work hours within each trade shall be performed by local residents, and not less than 17.5% of all project work hours within each trade shall be performed by disadvantaged workers;

(5) For the fifth year the program is in effect, not less than 40% of all project work hours within each trade shall be performed by local residents, and 20% of all project work hours within each trade shall be performed by disadvantaged workers;

(6) For the sixth year the program is in effect, not less than 45% of all project work hours within each trade shall be performed by local residents, and not less than 22.5% of all project work hours within each trade shall be performed by disadvantaged workers; and

(7) For the seventh year the program is in effect, not less than 50% of all project work hours within each trade shall be performed by local residents, and not less than 25% of all project work hours within each trade shall be performed by disadvantaged workers.

c. On a project subject to this act, not less than 50% of the project work hours performed by apprentices within each trade shall be performed by local residents. Not less than 25% of project work hours performed by apprentices within each trade shall be performed by disadvantaged workers.

d. The governing body shall, once before the end of the second year that the program is in effect, once before the end of the fourth year that the program is in effect, and once before the end of the sixth year that the program is in effect, evaluate the impact of the program’s minimum mandatory participation levels required pursuant to subsections b. and c. of this section and the continued need for incentives provided pursuant to section 4 of this act. The governing body review shall determine whether there is, or will be, based on any relevant training and recruitment programs, a sufficient supply of qualified unemployed resident workers to meet required minimum mandatory participation levels for each year following the year of the review; assess the length of time required for each trade to develop a pool of qualified resident workers sufficient to support a minimum mandatory participation target; and, if necessary, propose amendments to reduce any minimum mandatory participation level by trade as determined to be necessary because of an insufficient supply of qualified resident workers. The governing body shall also report on the financial incentive program and make relevant findings and, if necessary, propose reducing or eliminating financial incentives. Promptly upon completion of a periodic review, the governing body shall make public a report setting forth its findings, determinations and any proposed amendments to the minimum mandatory participation level by trade and the financial incentive program. Prior to taking action on any proposed amendments, the governing body shall consult with a broad spectrum of relevant stakeholders, including community organizations, the Department of Labor and Workforce Development, contractors, building trade unions, and departments and agencies of the political subdivision, and provide the stakeholders an opportunity to respond to any amendments proposed by the governing body in connection with the review process. After reviewing any responses, the governing body shall, by resolution, make any necessary amendments for reductions in the minimum mandatory participation levels by trade and in financial incentive levels and the levels set by the amendments shall remain in effect until they are subsequently changed by the governing body.

3. (New section) The governing body of a political subdivision may provide one or more of the following mechanisms for contractors or subcontractors to receive conditional waivers from the local hiring and employment requirements on a project-specific basis:

a. The governing body may establish standards permitting contractors and subcontractors to accumulate credit hours for hiring and employing disadvantaged workers or other residents of the political subdivision to work on public work projects of other political subdivisions and apply those credit hours to contracts for covered projects to meet the applicable minimum mandatory hiring and employment requirements.

b. The governing body is authorized to negotiate and enter into direct entry agreements with apprenticeship programs that are registered with the Office of Apprenticeship of the United States Department of Labor and develop standards and procedures through which contractors and subcontractors may avoid assessments of the penalties provided by section 10 of this act by hiring and retaining, for the entire period of the contractor or subcontractor’s work on the project, apprentices who enrolled through such direct entry agreements in the number and trades specified by the governing body. The standards and procedures shall allow avoidance of penalty assessments only in those cases in which the governing body has made a project-specific determination that compliance with local hiring and employment requirements would be impractical for that contractor or subcontractor. Direct entry agreements negotiated pursuant to this subsection shall:

(1) be enforceable contracts;

(2) require apprenticeship programs to enroll a class of apprentices not less frequently than once every 365 days;

(3) specify all admissions standards related to applicants’ training and skills;

(4) specify a minimum number of local residents and disadvantaged workers meeting those standards who shall be admitted in each class of apprentices; and

(5) be on file with and be deemed permissible by the Office of Apprenticeship.

The governing body shall verify with the Office of Apprenticeship that the governing body-specified new apprentices are registered and active apprentices prior to issuing a release from penalties. The governing body shall report annually, by trade, the number of releases from penalties granted based on this subsection, the number of local residents enrolled as apprentices based on direct entry agreements, and the number of direct entry agreements in effect.

4. (New section) a. A governing body establishing a local hiring and employment program pursuant to this act may negotiate reciprocity agreements with other political subdivisions that maintain local hiring and employment programs, provided that those agreements advance the goals of this subsection. Any reciprocity agreement shall allow targeted workers in each political subdivision to utilize and benefit from local hiring and employment requirements and referral systems in the other political subdivision on the same terms as do the workers residing in that political subdivision. When a reciprocity agreement is in effect, residents of another political subdivision may be counted toward satisfaction of the local hiring and employment requirements of this act.

b. The governing body is authorized to engage its community-based partners in a workforce development system in which the political subdivision participates to assist with the recruitment and retention of targeted workers. The governing body shall, through the Workforce Investment Board for the service delivery area of which the political subdivision is a part, provide a forum for community members, community-based organizations, and representatives of all stakeholders affected by, or having an interest in, this act to exchange information and ideas and to advise the governing body staff concerning the operation and results of the act.

c. The governing body may establish financial and nonfinancial incentives for contractors and subcontractors who exceed the local hiring and employment requirements on a covered project. Any financial incentives provided on a covered project shall comply with the provisions of this act and shall not exceed one percent of the estimated cost of the project. If financial incentives are made available for a covered project, they shall be paid, only after a contractor or subcontractor has completed work on the project and the governing body has approved the contractor's or subcontractor's request for incentive payment. Subcontractors requesting incentive payments shall submit requests to the governing body through the prime contractor. Payment of subcontractor incentives shall be paid to the prime contractor for the benefit of the appropriate subcontractors. The prime contractor shall pay subcontractors within 10 days of receipt of financial incentives. Any cost to the political subdivision of implementing this act, including any incentive provided pursuant to this section, may be paid from the 0.5% share of public work contracts retained or transferred by the political subdivision pursuant to section 1 of P.L.2009, c.313 (C.52:38-7).

5. (New section) For covered projects estimated to cost more than $1,000,000, the prime contractor shall prepare and submit to the governing body for approval a local hiring and employment plan for the project. The local hiring and employment plan shall be a written plan for implementation of the requirements of this act, including an approximate timeframe for hiring and employment decisions of subcontractors, a description of the hiring processes to be utilized by subcontractors, an estimate of the numbers of targeted workers needed from various referral sources and qualifications needed for those targeted workers, and a recruitment plan detailing an outreach strategy for candidates representative of local demographics. No payments shall be made until it has been verified in writing that the governing body has approved the prime contractor's local hiring and employment plan.

6. (New section) This act shall not be construed as limiting contractors' or subcontractors' ability to assess qualifications of prospective workers and use those assessments to make hiring and retention decisions. No provision of this act shall be interpreted so as to require a contractor or subcontractor to employ a worker not qualified for the position in question, or to employ any particular worker.

7. (New section) a. Every contract and bid application for performance of project work shall contain a provision describing the requirements of this act and a statement that compliance with those requirements shall be a material term and condition of the contract or bid application and binding upon all parties entering into the contract, and directly enforceable by the political subdivision.

b. Each contractor and subcontractor shall ensure that every subcontractor of the contractor or subcontractor agree to comply with applicable requirements of this act. All subcontractors shall agree as a term of participation on a covered project that the political subdivision shall have third party beneficiary rights under all contracts under which subcontractors are performing project work. Those third party beneficiary rights shall be limited to the right to enforce the requirements of this act directly against the subcontractors. Every subcontractor on a covered project shall be responsible for complying with the recordkeeping and reporting requirements set forth in this act.

8. (New section) Each contractor and subcontractor shall keep, or cause to be kept, for a period of four years from the date of substantial completion of project work on a covered project, certified payroll and basic records, including time cards, tax forms, and superintendent and foreman daily logs, for all workers within each trade performing work on the covered project. The records shall include the name, address and social security number of each worker who worked on the covered project, his or her classification, a general description of the work each worker performed each day, the apprentice or journey-level status of each worker, daily and weekly number of hours worked, the self-identified race, gender, and ethnicity of each worker, whether or not the worker was a local resident or disadvantaged worker, and the referral source or method through which the contractor or subcontractor hired or retained that worker for work on the covered project. The governing body may require additional records to be kept with respect to contractor or subcontractor compliance with this act. The governing body shall establish reporting procedures for contractors and subcontractors to submit to the governing body and the awarding department the records described above, for purposes of monitoring compliance with and effectiveness of this act and monitoring operation of the political subdivision's public construction sector for other valid purposes. All records submitted by the contractor or subcontractor shall be accompanied by a statement of compliance signed by an authorized representative of the contractor or subcontractor, indicating that the records are correct and complete.

9. (New section) a. From time to time and in its sole discretion, the governing body may monitor and investigate compliance of the contractor and subcontractors working on covered projects with the requirements of this act. The governing body shall have the right to engage in random inspections of job sites, subject to construction schedules and safety concerns. Each contractor and subcontractor shall allow representatives of the governing body, in the performance of their duties, to engage in random inspections of job sites and to have access to the employees of the contractor and subcontractor and the records required to be kept by this act.

b. The governing body shall establish an administrative procedure for the monitoring of compliance with this act and to address allegations of noncompliance. The governing body shall have sole authority over the administration of this procedure.

c. Except as prohibited by law, the governing body will make data collected under this act available on-line to the public in real-time and establish a process for members of the public to submit complaints regarding alleged violations of this act.

d. The governing body shall investigate all complaints filed by members of the public. The scope, methods, and conclusions of all such complaint-driven investigations shall be within the discretion of the governing body, with no right of the complaining party to determine the scope or methods of the investigation.

e. All contractors, subcontractors and relevant agencies of the political subdivision shall cooperate fully with the governing body in monitoring and compliance activities. The governing body may interview, either at the worksite or elsewhere, any witness who may have information related to a complaint.

10. (New section) a. A governing body establishing a local hiring and employment program pursuant to this act shall have the authority to seek for violations of this act all of the consequences imposed by or described in this act or the contract for a covered project. This authority shall include the power to assess liquidated damages, assess damages for other violations of terms of this act, and seek debarment.

b. Any contractor or subcontractor who fails to satisfy local hiring and employment requirements established pursuant to this act that are applicable to project work hours performed by local residents shall pay, and if the failure is of a subcontractor, the contractor and subcontractor shall jointly and severally pay, to the political subdivision, an amount equal to the journeyman or apprentice prevailing wage rate, as applicable, as established by the provisions of the “New Jersey Prevailing Wage Act,” P.L.1963, c.150 (C.34:11-56.25 et seq.), for the primary trade used by the contractor or subcontractor on the covered project for each hour by which the contractor or subcontractor fell short of the local hiring and employment requirement. The assessment of penalties under this section shall not preclude the political subdivision from exercising any other rights or remedies to which it is entitled. Penalties under this section shall be imposed only upon an investigation by the governing body and upon written notice to the contractor or subcontractor identifying the grounds for the penalty, and providing the contractor or subcontractor with the opportunity to respond in a hearing.

c. The governing body shall withhold any penalties assessed as provided in this section until either the contractor or subcontractor has conceded to the penalties or, in the event of an objection, there is a determination no longer subject to judicial review. The governing body shall then deposit the amounts withheld into a special account which shall be created for the sole purpose of receiving those funds. The funds deposited into this account shall be used to support the enforcement of this act and the further development of workforce development initiatives to train and prepare local residents for careers in construction.

d. Violations of this act for which penalties or other remedies are not specified above constitute violations of contract terms, for which the full range of remedies under the contract may be invoked, including but not limited to withholding of progress payments in amounts deemed proportional to the violation. The governing body shall comply with and implement damages claims and other noncompliance consequences assessed or required by the governing body.

11. Section 1 of P.L.2009, c.313 (C.52:38-7) is amended to read as follows:

1. a. Notwithstanding the provisions of any law or regulation to the contrary, upon entering into any public works contract in excess of $1,000,000 which is funded, in whole or in part, by funds of a public body, or any public works contract of any size which is funded, in whole or in part, by funds provided to the public body pursuant to the "American Recovery and Reinvestment Act of 2009," Pub.L.111-5, the public body entering into the contract shall transfer an amount equal to one half of one percent (0.5%) of the portion of the contract amount funded by funds of the public body, or provided to the public body pursuant to the "American Recovery and Reinvestment Act of 2009," Pub.L.111-5, to the Department of Labor and Workforce Development, except that any Statewide authority which enters into the contract and administers a program which meets the requirements of this section may retain all or a portion of the 0.5% share of the funds under the contract as is necessary for the operation of the program, but shall transfer to the department any portion of the funds not necessary for the program, and except that funds shall not be transferred or retained pursuant to this section if the transfer or retaining of the funds is contrary to any federal requirement and may result in the loss of federal funds. For a project in which federal and State funds are combined, the entire amount may be transferred or retained from the State portion of the funds if doing so is necessary to prevent any loss of federal funds. A political subdivision may elect, but is not required, to transfer to the department or retain, for any one or more of the purposes indicated in subsection b. of this section or for the purpose of providing incentives or otherwise facilitating a local hiring and employment program pursuant to section 4 of P.L. , c. (C. ) (pending before the Legislature as this bill), an amount equal to one half of one percent (0.5%) of the portion of any public work contract of the political subdivision.

b. The department, political subdivision or authority shall use the transferred or retained funds to provide on-the-job or off-the-job outreach and training programs for minority group members and women in construction trade occupations or other occupations, including engineering and management occupations, utilized in the performance of public works contracts. The programs funded pursuant to this subsection, shall include, but not be limited to, programs preparing minority group members and women for admission into registered apprenticeships with opportunities for long-term employment in construction trades providing economic self-sufficiency for the minority group members and women, with priority given, with respect to the funds from a contract used for apprenticeship programs or apprenticeship-related programs, to trades utilized in that contract, and shall include programs providing supportive services to help facilitate successful completion of any apprenticeship or other training assisted pursuant to this section. The department or authority shall use funds transferred or retained pursuant to this section to provide grants to implement such programs to consortia which include those community-based organizations, faith-based organizations, labor organizations, employers, contractors and trade organizations, institutions of higher education, and schools and other local public agencies which the department or authority determines are best able to facilitate entry and success of minority group members and women into training and long-term trade and professional employment in the construction industry, and may use a portion of the funds for initiatives to prepare minority group members and women for registered apprenticeship programs and related post-secondary education, such as grants to consortia provided pursuant to the "Youth Transitions to Work Partnership Act," P.L.1993, c. 268 (C.34:15E-1 et seq.), and for initiatives, such as those of the NJ PLACE program established pursuant to P.L.2009, c.200 (C.34:15D-24 et al.), to facilitate the coordination and articulation of registered apprenticeship programs with degree programs in institutions of higher education, including initiatives to articulate programs in a manner which may assist in providing transitions from trade occupations to professional occupations utilized in the construction industry. The department, political subdivision or authority shall seek agreements and commitments from grant participants to provide long-term employment to successful applicants and trainees where possible. The department, political subdivision or authority shall be reimbursed from the transferred or retained funds for any reasonable and necessary costs incurred by the department, political subdivision or authority in administering those programs.

c. The Department of the Treasury, and the Division of Contract Compliance and Equal Employment Opportunities in Public Contracts in that department, shall provide, and make available to the public on the Internet, an annual report, not later than December 31 of 2010 and each year after that year, which shall list all public works contracts subject to this act and report, for each public works contract, the percentage and amount of funds withheld and provided to programs funded pursuant to this section and the numbers and percentages of apprentices and other workers under each contract who are of minority group members and women. The Department of Labor and Workforce Development shall, not later than December 31 of 2010 and each year after that year, provide an annual report, which shall also be made available to the public on the Internet, on all of the programs funded pursuant to this section, which shall include, for each program, data regarding the performance results of minority group members and women participating in the programs, including outcome measures detailing employment placement, increased earnings and employment retention, as those terms are used in the federal Workforce Investment Act of 1998, Pub.L.105-220 (29 U.S.C. s.2801 et seq.), and shall include data regarding enrollment into registered apprentice programs and results regarding their retention in long-term employment. Public bodies and political subdivisions entering into public works contracts subject to the provisions of this section, including Statewide authorities, and the Department of the Treasury shall provide such information to the Department of Labor and Workforce Development and the Department of the Treasury as the departments deem necessary for the purposes of this section.

d. For the purposes of this section: “political subdivision” means any county, municipality, school district or other political subdivision of the State of New Jersey or any instrumentality or agency of the political subdivision; "public body" means the State of New Jersey, [any of its political subdivisions,] any authority created by the Legislature of the State of New Jersey and any instrumentality or agency, but not any political subdivision, of the State of New Jersey [or of any of its political subdivisions]; "public works contract" means public works contract as defined in section 1 of P.L.1975, c.127 (C.10:5-31); "registered apprenticeship" means apprenticeship in a program providing to each trainee combined classroom and on-the-job training under the direct and close supervision of a highly skilled worker in an occupation recognized as an apprenticeable trade, and registered by the Office of Apprenticeship of the United States Department of Labor and meeting the standards established by that office; and "Statewide authority" means any authority created by the Legislature which is authorized by law to enter into contracts for construction at locations throughout the State.

(cf: P.L.2009, c.313, s.1)

12. This act shall take effect immediately.

STATEMENT

This bill authorizes any political subdivision of the State to establish a program requiring local hiring and employment in public work contracts of the political subdivision, after issuing a written finding that the local hiring and employment program will serve the interests of the political subdivision by utilizing limited public funds in a manner that provides economic stimulus or will help to overcome the adverse impact of historic discrimination. The bill permits the governing body of the political subdivision to set mandatory minimum participation levels for the hiring and employment of local residents and local disadvantaged workers as it determines to be necessary to serve the interests of the political subdivision or overcome the adverse impact of historic discrimination, subject to the following conditions:

1. For the first year the program is in effect, not less than 20% of all project work hours within each trade shall be performed by local residents, and not less than 10% of all project work hours within each trade shall be performed by disadvantaged workers;

2. The percentage of project work hours for local residents and disadvantaged workers shall increase, in equal increments over seven years, to a mandatory participation level of not less than 50% by local residents, and not less than 25% by disadvantaged workers;

3. Not less than 50% of the project work hours performed by apprentices within each trade shall be performed by local residents, and not less than 25% by disadvantaged workers;

4. The governing body is directed, before the end of the second, fourth and sixth years that the program is in effect, to evaluate the impact of the program’s minimum mandatory participation levels and the continued need for financial incentives, to determine whether the minimum mandatory participation levels should be reduced because of an insufficient supply of qualified unemployed resident workers; to assess the length of time required for each trade to develop a pool of qualified resident workers sufficient to support a minimum mandatory participation target; and propose any needed amendments for reductions in the participation levels; and

5. The minimum mandatory participation levels for hiring and employing local residents and disadvantaged workers on a project established pursuant to this act may result in a reduction of work done by residents of this State who are not local residents or disadvantaged workers, but the minimum mandatory participation level shall not apply to the extent that its application would require the reduction of the amount of work done by workers who are not residents of the State.

The governing body may set the mandatory minimum participation levels lower than the indicated levels for any particular trade based on factors including a finding that there are insufficient numbers of currently qualified and available local residents and disadvantaged workers or trainees anticipated to be available, to enable contractors and subcontractors in that trade to fully satisfy the local hiring requirements.

The bill permits the governing body to provide one or more of the following pipeline and retention compliance mechanisms for contractors or subcontractors to receive conditional waivers from the local participation requirements on a project-specific basis:

1. Establish standards permitting contractors and subcontractors to accumulate credit hours for hiring disadvantaged workers or other residents of the political subdivision to work on public work projects of other political subdivisions and apply those credit hours to contracts for covered projects to meet applicable hiring requirements.

2. Permit a contractor or subcontractor to avoid the assessment of penalties for failing to meet applicable participation requirements by demonstrating the impracticality of complying with requirements for a particular contract or class of employees and negotiating direct entry agreements with registered apprenticeship programs in which the governing body specifies that a number of new apprentices will be hired and retained for the entire period of a contractor's or subcontractor's work on the project.

For covered projects estimated to cost more than $1,000,000, the prime contractor is required to prepare and submit to the governing body for approval a local hiring plan for the project.

The bill permits a governing body establishing a local hiring program to negotiate reciprocity agreements with other political subdivisions that maintain local hiring programs, engage its community-based partners in a workforce development system in which the political subdivision participates to assist with the recruitment and retention of targeted workers, and establish financial and nonfinancial incentives for contractors and subcontractors who exceed the local participation requirements on a covered project, not exceeding one percent of the estimated cost of the project. Any cost to the political subdivision of implementing this bill, including the cost of any incentive, may be paid from the 0.5% share of public work contracts retained or transferred by the political subdivision pursuant to section 1 of P.L.2009, c.313 (C.52:38-7), the law requiring the set aside of an amount equal to 0.5% of the value of public work contacts for the recruitment and training of women and minorities in the construction industry. Finally, the bill amends that law to permit political subdivisions to elect whether to participate in the set aside program, to elect whether to retain the set aside funds for their own local use, and to elect whether to use the funds for the hiring incentives provided by the bill.