SENATE COMMUNITY AND URBAN AFFAIRS COMMITTEE

STATEMENT TO

SENATE, No. 3456

with committee amendments

STATE OF NEW JERSEY

DATED:  MARCH 4, 2019

      The Senate Community and Urban Affairs Committee reports favorably Senate Bill No. 3456, with committee amendments.

      As amended, this bill permits local governments to enter into certain extended-term agreements pursuant to the “Local Public Contracts Law,” P.L.1971, c.198 (C.40A:11-1 et seq.).

      Under the “Local Public Contracts Law,” a county, municipality, or other local contracting unit may enter into an agreement with a private firm that provides for the provision or performance of certain goods or services.  Under current law, these contracts generally cannot be for a period greater than 24 consecutive months, but there are a number of exceptions under which certain types of contracts may be for periods exceeding 24 consecutive months.

      This bill creates a new exception that permits local governments to enter into extended agreements exceeding 24 months.  Specifically, ferry boat and related facility and service lease agreements may be for a period of up to 20 years, except that a lease agreement for certain capital improvements with a life expectancy upon completion exceeding 20 years may be awarded for a period of up to 50 years.  Contracts for the provision or performance of goods and services have to be related to ferry services and: (i) have a total capital expenditure of more than $300,000, including expenditures by the lessee; or (ii) have a capital improvement that has a life expectancy upon completion greater than 20 years.  The chief financial officer of the local government unit is required to certify that the capital expenditure or capital improvement requirement is satisfied.  The prevailing wage would have to be paid for any construction project under these contracts.

      As reported by the committee, Senate Bill No. 3456, as amended, is identical to Assembly Bill No. 4897 (1R), which also was reported by the committee on this date.

COMMITTEE AMENDMENTS:

      The committee amendments remove the word “and” and replace it with the word “or” so that the exception for ferry service and related facilities and services applies to any lease agreement that provides for the use, lease, lease-back, acquisition, operation, or maintenance of ferry boats and related facilities.

      The committee also amended the bill to clarify that a contract for the provision or performance of goods and services is to be related to ferry services in order to qualify for the exception and to clarify that, in addition to the exception applying to lease agreements for the use, lease, lease-back, acquisition, operation, or maintenance of ferry boats and related facilities: (1) the 20-year exception applies to contracts for goods and services that relate to ferry services and (2) the 50-year exception applies to lease agreements for goods and services that relate to ferry services and that have a capital improvement with a life expectancy upon completion greater than 20 years.