LEGISLATIVE FISCAL ESTIMATE

SENATE, No. 876

STATE OF NEW JERSEY

218th LEGISLATURE

 

DATED: MAY 21, 2018

 

 

SUMMARY

 

Synopsis:

Revises process for development and administration of Transportation Trust Fund projects and capital program oversight; establishes transportation research center.

Type of Impact:

Increase in State expenditures; change in disposition of Transportation Trust Fund expenditures; possible increase in county transportation funding.

Agencies Affected:

New Jersey Department of Transportation (department), New Jersey Transit, Transportation Trust Fund Authority, New Jersey institutes of higher education, Counties.

 

 

Office of Legislative Services Estimate

Fiscal Impact

Year 1

Year 2

Year 3

 

State Revenue

Indeterminate potential increase

 

State Expenditure

Indeterminate Increase

 

County Revenue

Indeterminate Increase

 

County Expenditure

Indeterminate Increase

 

 

 

 

         Producing capital program consulting reports and project bundling will not increase or decrease the amount of annual capital program revenues or appropriations, but will change the distribution of appropriations among the existing pool of available funds.† To the extent that these changes in appropriations allow existing capital projects to be completed at a lower cost, the changes may have the effect of allowing more projects to be completed with the same amount of funding.

 

         Establishing the New Jersey Transportation Research Center may increase State expenditures by an indeterminate amount. It may also allow the State to qualify for additional federal capital program funding for transportation research.† To the extent that the research center qualifies for more federal funding than is currently provided to the State for transportation research, this may result in an indeterminate increase in State revenue in the form of additional federal grant funding, either directly to State institutions of higher education or indirectly to State institutions of higher education with the department serving as a pass-through entity.

 

         The highway project priority list may result in additional funding for counties to construct State transportation projects that would have otherwise been constructed by the department.† This additional funding would not be increased revenue available to the county for its own projects. The counties are to utilize this funding to construct a project in a contracting role where the department would continue to own and be responsible for the project once completed, so the county would experience no net gain.

 

 

BILL DESCRIPTION

 

††††† This bill revises the process by which capital projects authorized to be paid for through the New Jersey Transportation Trust Fund are to be administered.†

 

Capital Program Consultant Reports

††††† The Transportation Trust Fund Authority (authority) may hire engineering consultants to generate bi-annual reports which identify, for each transportation project and public transportation project, the progress achieved in expending capital funds and the progress achieved in completing capital projects.† The authority may also hire an outside consultant to generate a bi-annual report on all non-project line items in the annual capital program that are not included in the engineering consultantís report.† This report is to focus on the progress achieved in expending funds appropriated in the capital program and provide a description of how those funds are being expended, including but not limited to, contracts, employment levels, and measurable outcomes relating to each capital program line item.

 

Highway Project Priority List

††††† The bill requires the Department of Transportation (department) to develop an annual highway project priority list for each county. The highway project priority list is a list of State highway projects chosen by the counties in which the projects are located, from a candidate list provided by the department to the counties of all structurally deficient State bridges and State highway pavement areas in less than acceptable condition. The dollar amount of projects that a county can add to the list each year is limited by the amount of grant money a county is statutorily scheduled to receive each year through the local county aid program. The commissioner is to consider each highway project priority list for the inclusion of those projects into the capital program subject to the availability of funds. If the State is unable to begin a project on the highway project priority list that was included in the capital program within three fiscal years, the county can confer with the department, and if the department finds that allowing the county to take over the project is cost-effective and will expedite completion of the project, the department can transfer the project to the county. The department is to remain responsible for the cost of the project and provide payments to the county for the project on a reimbursement basis. If the department and county agree that a county is better suited to complete a project on the list, the department and county can form an agreement and transfer the project to a county in less than three years. For all projects on the list, regardless of whether a county has taken over completion of a project, local aid program funds are not to be used for these projects. All projects are State projects and are to be funded with department capital appropriations. Projects on the list that are transferred to a county are still required to adhere to all existing State procurement laws, including those applying to bidding and business set-asides.

Project Bundling

††††† The bill requires the department to bundle certain transportation design projects funded, in whole or in part, by the Transportation Trust Fund. Projects that are eligible to be bundled are projects of similar complexity, project type, or geographic proximity, that are of similar size or design, where the bundling of design projects will not require more stringent environmental review, and whose inclusion in the program will save the department time or money. The purpose of the program is to save costs and time by allowing multiple transportation projects to be designed under a single contract. Contracts issued under the design bundling program are still required to adhere to all existing procurement laws, including those applying to bidding and business set-asides.

 

New Jersey Transportation Research Center

††††† This bill establishes the New Jersey Transportation Research Center (center) within the department. The Commissioner of Transportation is to appoint a director of the center. The director is to award research contracts to New Jersey public research institutions of higher education (institutions). The center is to identify specific areas of expertise for institutions. The institutions are to conduct research for the center in their areas of expertise, pursuant to research contracts that are awarded in a manner that is subject to all relevant existing State and federally established public bidding regulations and processes. In addition to operating and administering the center and awarding research contracts, the director is responsible for supporting institutions in obtaining and maintaining status as University Transportation Centers under the United States Department of Transportation Federal Highway Administration University Transportation Centers Program. The director may authorize competitive bidding for the awarding of research contracts, after making a determination that the department stands to benefit from additional competition in terms of quality of work product, timeliness of work product delivery, or availability of expertise in one or more specific transportation areas. This competitive bidding process is to include certain non-profit entities in addition to the New Jersey public research institutions of higher education that may be awarded a contract.

 

 

FISCAL ANALYSIS

 

EXECUTIVE BRANCH

 

††††† None received.

 

OFFICE OF LEGISLATIVE SERVICES

 

††††† The Office of Legislative Services notes that producing capital program consulting reports, project bundling, and expanding FRAP criteria will not increase or decrease the amount of annual capital program revenues or appropriations, but will change the distribution of appropriations among the existing pool of available funds. To the extent that these changes in appropriations allow existing capital projects to be completed at a lower cost, the changes may have the effect of allowing more projects to be completed with the same amount of funding.

††††† The production of capital program consulting reports will require capital program funds to be expended for the production of the reports, which would have otherwise been used on other capital program projects.† These reports may result in a better selection and management of capital projects so that those capital projects are being completed faster and at a lower cost. This may potentially result in overall capital program savings, which would then be available to be used to complete additional projects with existing resources.

††††† The use of single design contracts for similar projects in a design bundle is intended to reduce costs by simplifying the scope of design work that needs to be performed on certain transportation projects.† To the extent that the use of single design contracts for similar projects is successful, it may result in those projects being completed faster and at a lower cost. This may potentially result in overall capital program savings, which would then be available to be used to complete additional projects with existing resources.

††††† Establishing the New Jersey Transportation Research Center may increase State expenditures by an indeterminate amount. It may also allow the State to qualify for additional federal capital program funding for transportation research.† To the extent that the research center qualifies for more federal funding than is currently provided to the State for transportation research, this may result in an indeterminate increase in State revenue in the form of additional federal grant funding, either directly to State institutions of higher education or indirectly to State institutions of higher education with the department serving as a pass-through entity.

††††† The highway project priority list may result in additional funding for counties to construct State transportation projects that would have otherwise been constructed by the department. This additional funding will not increase revenue available to the counties for their own projects. The counties are to utilize this State funding to construct a project in a contracting role where the department would continue to own and be responsible for the project once completed, so the county would experience no net gain.

 

 

Section:

Authorities, Utilities, Transportation and Communications

Analyst:

Patrick Brennan

Lead Fiscal Analyst

Approved:

Frank W. Haines III

Legislative Budget and Finance Officer

 

 

This fiscal estimate has been prepared pursuant to P.L.1980, c.67 (C.52:13B-6 et seq.).