SENATE TRANSPORTATION COMMITTEE

STATEMENT TO

SENATE, No. 630

with committee amendments

STATE OF NEW JERSEY

DATED:  MARCH 12, 2018

      The Senate Transportation Committee reports favorably and with committee amendments Senate Bill No. 630.

      As amended and reported, this bill provides governance, oversight, and accountability reforms at the New Jersey Transit Corporation (NJ Transit).

Board Composition

      The bill establishes five new positions on NJ Transit’s board of directors, and restructures the existing board so that all public members are required to either have experience as regular public transportation riders or have expertise in human resources, real estate investment or development, or certain transportation topics.  The board goes from four public members chosen by the Governor to eight public members chosen by the Governor.  Four of the eight members are to be chosen upon the recommendation of the North Jersey Transportation Planning Authority, the New Jersey members of the Delaware Valley Regional Planning Commission, the President of the Senate, and the Speaker of the General Assembly respectively.  The bill provides for the appointment and initial terms of office for certain board members.  The bill prohibits a board member from serving for more than 90 days beyond the expiration of that board member’s term unless reappointed to the board.  The bill adds a labor organization member to the board, bringing the number of labor organization members to two.  The bill requires that one labor organization member be appointed by the Governor upon the recommendation of the labor organization representing the plurality of the employees of NJ Transit involved in motorbus operations and that one labor organization member be appointed by the Governor upon the recommendation of the labor organization representing a plurality of the employees of NJ Transit involved in rail operations.  The bill provides that the two labor organization members are voting members of the board.

Report of Political Contributions and Gifts

      The bill requires board members to annually disclose certain political contributions made within the two preceding years and gifts received over $250 to the board and the chief ethics officer. 

Chief Ethics Officer

      The bill requires NJ Transit to employ a chief ethics officer to investigate allegations and suspicions of unethical conduct or criminal activity within NJ Transit and to determine whether NJ Transit is in compliance with applicable State law.  The chief ethics officer is to operate independently of the executive director and is to report directly to the board of directors.

Board Meetings

      The bill requires that the board hold a minimum of 10 public board meetings per year.  The bill provides that the agenda of a board meeting, including any revised agenda, be provided to the public at least five calendar days prior to the meeting and that one-half of board meetings be held in the evening after 6:00 p.m.  The bill requires each notice of a board meeting, board agenda, and the minutes of each board meeting be published on NJ Transit’s website.  The bill also requires that each board meeting be viewable in real time on NJ Transit’s website and be archived and made available to the public on NJ Transit’s website.

New Board Responsibilities

      The bill imposes new statutory duties on the board of directors, including: executing direct oversight of NJ Transit’s management team in the effective and ethical management of NJ Transit; monitoring the implementation of fundamental financial and management controls and operational decisions of NJ Transit; establishing certain personnel policies; approving quarterly schedule changes; adopting guidelines for when it is appropriate for the chief ethics officer to forward the results of preliminary investigations to the appropriate authorities; and adopting a code of ethics.  The bill provides that the board members are to perform their duties in good faith and with the appropriate degree of diligence, care, and skill and to apply independent judgment in the best interest of NJ Transit, its mission, and the public.  The bill requires board members to take and subscribe an oath of office and to execute an acknowledgement that recognizes the duties and obligations of the board member. 

Committees

      The bill establishes an employee relations committee made up of board members and expands the audit committee, which is made up of board members, to include finance.

      The bill provides that the board is to appoint members of NJ Transit’s advisory committees and requires that the committees have no fewer than nine members and no greater than 15 members.  The members are to be selected upon a merit-based application process and the membership is to include representation of certain populations.  The bill requires at least two members of an advisory committee to have experience as regular motorbus regular route service riders and at least two members to have experience as regular rail passenger service or light rail service riders.  The advisory committees are required to conduct at least two public hearings per year in two different counties to gather information from interested parties and the general public.  The advisory committees are required to issue an annual report to the board.  The board is to review recommendations and solicit written input from each advisory committee prior to the adoption of any proposed fare increase, curtailment of services, or expansion of services.

Audits

      The bill requires the State Auditor to perform audits of NJ Transit every six years, which are to focus on specific areas to be determined by the State Auditor.  The bill also requires NJ Transit to hire an independent firm to conduct a study at least once every five years on the financial management practices and budget reporting practices of mass transit agencies throughout the country and to prepare and issue a report on its findings.  Following the issuance of the report, NJ Transit is required to adopt financial management and budget reporting policies and practices that are in line with the best practices of mass transit agencies throughout the country.  Upon the affirmative vote of seven members of the board of directors, NJ Transit may opt not to adopt individual policies or practices that are in line with the best practices of mass transit agencies throughout the country. 

Change of Service or Fare Increase Requirements

      The bill requires that NJ Transit hold at least two public hearings in the counties affected, within one-half mile of the route and, to the extent practicable, near each terminus of the route before implementing any substantial curtailment or abandonment of service, and at least 10 public hearings in separate counties at locations within a quarter mile of both a rail line and bus route before implementing any fare increase.  Each public hearing is required to consist of an afternoon and evening session, where each session lasts at least two hours and the sessions are in the same place and on the same day.  At least half of the public hearings are required to be held on a State working day.  At least two members of NJ Transit’s board of directors are required to be in attendance at each public hearing.  In addition to the public hearing requirements, NJ Transit is required to provide a postal mailing address and electronic mailing address where members of the public may provide written comments regarding the proposed fare increase or substantial curtailment or abandonment of service.  NJ Transit is required to prepare and publish a written response concerning any issue or concern raised by a member of the public at any public hearing or in any written comment.  NJ Transit is required to provide notice of its intent to discontinue, substantially curtail, or abandon service to each county and municipality whose residents will be affected.  “Substantial curtailment” and “substantially curtail” is defined to include, but not be limited to: the elimination of a motorbus regular route, scheduled trip, or scheduled stop along a motorbus regular route or of a rail passenger service line, scheduled trip, or scheduled stop along a rail passenger service line; a reduction of 30 minutes or more in the beginning or end of service for the corporation’s adopted schedule or timetable for a scheduled stop along a motorbus regular route or rail passenger service line; and any change to a motorbus regular route or rail passenger service which may increase barriers to accessibility for a person with disabilities.

Appearance before the Legislature

      The bill requires NJ Transit, at the request of the chairperson of any standing legislative committee, as approved by the presiding officer, to appear before that committee to present testimony and provide documents on any topic or subject requested by the committee and to respond to any questions by members of the committee. 

Reports

      The bill requires NJ Transit to report information to the Governor and the Legislature regarding its employees, including the average salary, number of employees in management positions, and number of employees that are not in management positions in key demographic groups, which are to include, at minimum, race, ethnicity, and gender.  The bill also requires NJ Transit to report certain accident information and safety violations to the Governor and Legislature. 

      The bill requires NJ Transit to utilize multi-year budget documents that cover the most recently completed fiscal year, the estimated results for the fiscal year in progress, a recommendation for the fiscal year to commence, and estimated needs and projections for the following fiscal year and to provide those documents to the Commissioner of Transportation, the President of the Senate, the Speaker of the General Assembly, the Assembly Transportation and Independent Authorities Committee, and the Senate Transportation Committee.  The budget documents are required to provide detailed information on several key areas listed in the bill.

      The bill also requires the board to approve and NJ Transit to transmit a report containing certain information regarding NJ Transit’s real property interests to the Commissioner of Transportation, the President of the Senate, the Speaker of the General Assembly, the Assembly Transportation and Independent Authorities Committee, and the Senate Transportation Committee.

Residency Waiver for Certain Positions

      The bill provides that any person hired by NJ Transit as an engineer or mechanic or any other position certified by the board as a position of critical need is exempt from the residency requirement established in N.J.S.A.52:14-7.

      The committee amended the bill to change the requirements of the public members of the board and to change the entities and individuals who are required to recommend certain public members.  The amendments add a labor organization member to the board and provide that both labor organization members are voting members.  The bill changes the number of members required to have a quorum and to take action or adopt motions and resolutions.  The amendments provide that in order to be considered to have experience as a regular public transportation rider, a member is required to have been a public transportation rider in three of the five years preceding the member’s appointment or reappointment to the board, instead of three of the seven years preceding the member’s appointment or reappointment.

      The committee amendments require certain board notices, agendas, meeting minutes, and meetings be made available on NJ Transit’s website and require half of the board’s meetings be held in the evening after 6:00 p.m.  The committee amendments require that any board agenda, including revised agendas, be provided to the public at least five calendar days prior to the meeting.

      The committee amendments require the employee relations committee to receive certain reports from the director of the Office of Equal Opportunity and Affirmative Action and the director of the Human Resources Office quarterly instead of monthly.

      The committee amendments remove provisions of the bill creating North Jersey Passenger Advisory Committee and South Jersey Passenger Advisory Committee.  The amendments require the board to appoint members of NJ Transit’s advisory committees and provide certain membership requirements for the advisory committees.  The amendments require the advisory committees to conduct at least two public hearings per year and issue an annual report to the board.  The amendments also require the board to review recommendations and solicit written input from the advisory committees prior to adopting any proposed fare increase, curtailment of service, or expansion of service.

      The committee amendments require NJ Transit’s annual report to include certain accident and safety violation information and require NJ Transit to annually approve and transmit a report containing certain information on NJ Transit’s real property interests.  The bill requires NJ Transit to approve an annual proposed budget recommendation by April 1 of each year, rather than by May 1 of each year.

      The amendments provide that the residency requirement does not apply to any person hired by NJ Transit as an engineer, mechanic, or any other position certified by the board as a position of critical need.

      The amendments require all new members of the board be appointed within 90 days of the bill’s effective date, rather than within 30 days of the bill’s effective date.

      The amendments remove: (1) provisions of the bill disqualifying a person from serving of the board if the person made certain political contributions; and (2) certain provisions of the bill expanding the powers of NJ Transit to partner with other public and private entities in forming corporate entities that provide public transportation services.

      The amendments make other technical corrections to the bill.

      This bill was pre-filed for introduction in the 2018-2019 session pending technical review.  As reported, the bill includes the changes required by technical review which has been performed.