S865 1R Senate Statement 6/21/18

These Senate amendments:

(1) include leaseback agreements;

(2) specify that this bill would not exempt a local government unit from the provisions of the Local Bond Law or the Local Authorities Fiscal Control Law, or other law, that may apply to local government unit borrowing or financing, including but not limited to, provisions requiring review by and approval from the Local Finance Board or the Director of the Division of Local Government Services in the Department of Community Affairs;

(3) define “school district” as provided in section 3 of P.L.2000, c.72 (C.18A:7G-3) and including a local school district, regional school district, or county special services school district or county vocational school established and operating under the provisions of Title 18A of the New Jersey Statutes that can demonstrate to the satisfaction of the Commissioner of Education and the Chief Executive Officer of the Schools Development Authority that a school facility is necessary due to overcrowding or is in need of replacement; the term also includes a charter school established under P.L.1995, c.426 (C.18A:36A-1 et seq.);

(4) include consultation by the State Treasurer with the Department of Education and the Schools Development Authority for school projects;

(5) delete the New Jersey Economic Development Authority, and other State entities, as public entities that would have qualified as a public partner for public-private partnership projects when it is the owner or lessee of the project or the land;

(6) eliminate the provisions providing property tax exemptions for certain projects;

(7) provide for project review and approval by the State Treasurer;

(8) require projects to be subject to a public hearing, the record of which will be made available to the public within seven days following the conclusion of the hearing, after the ranking of proposals;

(9) prior to entering into a public-private partnership, require the public entity to determine: (i) the benefits to be realized by the project, (ii) the cost of the project if it is developed by the public sector supported by comparisons to comparable projects, (iii) the maximum public contribution that the public entity will allow under the public-private partnership, (iv) a comparison of the financial and non-financial benefits of the public-private partnership compared to other options including the public sector option, (v) a list of risks, liabilities and responsibilities to be transferred to the private entity and those to be retained by the public entity, and (vi) if the project has a high, medium or low level of project delivery risk and how the public is protected from these risks;

(10) require the public entity, prior to entering into a public-private partnership, to find at a public hearing that the project is in the best interest of the public by finding that: (i) it will cost less than the public sector option, or if it costs more there are factors that warrant the additional expense, (ii) there is a public need for the project and the project is consistent with existing long-term plans, (iii) there are specific significant benefits to the project, (iv) there are specific significant benefits to using the public-private partnership instead of other options including No-Build, (v) the private development will result in timely and efficient development and operation, and (vi) the risks, liabilities and responsibilities transferred to the private entity provide sufficient benefits to warrant not using other means of procurement;

(11) require that projects that have a transportation component or impact the transportation infrastructure be submitted to the State Treasurer, in consultation with the Commissioner of the Department of Transportation, for review and approval;

(12) add criteria concerning financial models, assumptions, and funding analysis to the criteria the State Treasurer shall use when considering project applications;

(13) require that any public-private partnership agreement will also include, at a minimum, (i) the term of the agreement, (ii) the total project cost, (iii) a completion date guarantee, (iv) a provision for damages if the private entity fails to meet the completion date, and (v) a maximum rate of return to the private entity and a provision for the distribution of excess earnings to the public entity or to the private party for debt reduction;

(14) require that a request for qualifications for a public-private partnership agreement shall be advertised at least 45 days prior to the anticipated date of receipt; that the advertisement of the request for qualifications shall be published on the official Internet website of the public entity, and at least one or more newspapers with statewide circulation;

(15) after the public entity determines the qualified respondents, require the entity to issue a request for proposals to each qualified respondent within a specified timeframe, prior to the date established for submission of the proposals, in accordance with criteria promulgated by the State Treasurer, in consultation with the specified State entities;

(16) provide for specific advertisement in the case of unsolicited proposals;

(17) require the private entity to comply with all applicable laws and regulations;

(18) require the public entity to set aside one percent of each project and remit it to the Public-Private Partnership Review fund established under the bill, for purposes of plan review and analysis required under the bill;

(19) require highway projects to have an expenditure of at least $100 million, and limit the total number of highway projects approved by the State to eight at any given time;

(20) add New Jersey Transit to the definition of “State government entity;”

(21) specify responsibility of the private entity for the project, and ownership of the land by the public entity;

(22) allow 50-year leases for projects with a highway component;

(23) provide that any conveyance of real property, capital improvements and personal property owned by the State shall not be subject to the approval of the State House Commission or the State Legislature, provided the State Treasurer approves of such transfer as being necessary to meet the goals of the bill;

(24) delete the requirement for a resolution by the governing body of a State or county college;

(25) delete the ability of the New Jersey Economic Development Authority or State Treasurer to cancel a procurement offer after a short list of private entities is developed by the State or county college;

(26) for State and county colleges, add oversight by the New Jersey Educational Facilities Authority under the “New Jersey Educational Facilities Authority Law;”

(27) require the New Jersey Educational Facilities Authority to consider, or review, amend and approve public-private partnership agreements for certain building projects entered into by a private entity and the New Jersey Institute of Technology, or by a private entity and a State or county college, for the purposes set forth in the bill, and to provide to a private entity that is a party to an agreement any tax exempt private activity bond financing, including but not limited to a loan of funds under terms and conditions established by the authority in consultation with the State Treasurer and as otherwise authorized under State or federal law;

(28) establish in the Department of the Treasury the Public-Private Partnership Review fund, to support financial and administrative review functions associated with the Public Private Partnership plan review by the State Treasurer, along with the New Jersey Economic Development Authority, the Department of Community Affairs, and the Department of Transportation;

(29) provide that nothing in this bill would be construed to alter, limit or repeal any authority of any State entity to enter into public private partnership agreements as otherwise provided by law; and

(30) change the effective date to 180 days following the date of enactment.