ASSEMBLY, No. 2948
STATE OF NEW JERSEY
INTRODUCED MAY 12, 1997
By Assemblyman T. SMITH
An Act concerning the acceptance of payment by counties for certain permits and supplementing chapter 23 of Title 40 of the Revised Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Notwithstanding any law, rule or regulation to the contrary, whenever the governing body of any county shall require the provision of a deposit or withholding of payment of a percentage of the amount of any contract by any person, contractor or other entity as a condition of granting a road opening permit, the county shall accept as a deposit therefor in lieu of cash, registered book bonds, entry municipal bonds, State bonds or other appropriate bonds of the State of New Jersey, or negotiable bearer bonds or notes of any political subdivision of the State, the value of which is equal to the amount necessary to satisfy the amount that otherwise would be required to be deposited or withheld, as the case may be, pursuant to the terms of the contract. The nature and amount of the bonds or notes to be deposited shall be subject to approval by the governing body of the county. For purposes of this section, "value" shall mean par value or current market value, whichever is lower.
If the person, contractor or other entity agrees to the withholding of payments, the amount withheld shall be deposited, with a banking institution or savings and loan association insured by an agency of the Federal government, in an account bearing interest at the rate currently paid by such institutions or associations on time or savings deposits. The amount withheld, or the bonds or notes deposited, and any interest accruing on such bonds or notes, shall be returned to the person, contractor or other entity upon fulfillment of the terms of the contract relating to such withholding. Any interest accruing on cash payments withheld shall be credited to the governing body of the county.
2. This act shall take effect immediately.
STATEMENT
This bill requires that counties accept bonds in lieu of cash for road opening permits. It would appear that at present, counties vary considerably in their practice regarding the acceptance of deposits for road opening permits. While some may allow for bonds to be used for retainage, maintenance, and payment of subcontractors and material suppliers and performance, other counties require that cash be raised, which serves as a major deterrent to smaller contractors, who would otherwise seek out these jobs.
By requiring that counties accept bonds, this bill would remove any disincentive which may currently prevent smaller contractors from bidding on jobs involving road opening permits. In so doing, this bill increases the competitiveness of certain jobs involving road openings, thereby promoting economic efficiency and ultimately, lowering the costs associated with certain construction jobs, with the resultant cost savings accruing to the taxpayer.
Requires that counties accept bonds in lieu of cash for road opening permits.