SENATE STATE MANAGEMENT, INVESTMENT AND FINANCIAL INSTITUTIONS COMMITTEE

STATEMENT TO

SENATE, No. 724

STATE OF NEW JERSEY

DATED: NOVEMBER 7, 1996

      The Senate State Management, Investment and Financial Institutions Committee reports favorably Senate, No. 724.

      The purpose of this bill is to enable participating qualified nonprofit organizations to save money by buying materials, supplies and equipment at State contract prices. The bill provides that the Director of the Division of Purchase and Property shall include in any contract for the purchase of materials, supplies or equipment on behalf of the State a provision for the purchase of materials, supplies or equipment from the contractor for a two-year period by qualified nonprofit organizations which are used by State agencies to provide services or administer agency programs. The director shall distribute to each participating qualified nonprofit organization a list of all current State contracts, setting forth the materials, supplies or equipment included and the prices, terms and conditions.

      The basis for the selection of qualified nonprofit organizations to participate in the program shall include, but not be limited to, a sufficient volume of contracts to generate data for evaluating the effectiveness and value of extending to all nonprofit organizations the opportunity to purchase materials, supplies or equipment under the State's contracts. The participating qualified nonprofit organization shall have sole responsibility for any payment due the vendor for any purchase. All purchases shall be subject to audit and inspection by the qualified nonprofit organization.

      A "qualified nonprofit organization" is defined as a corporation, association or other organization established pursuant to the laws of this State and operated exclusively for charitable, literary or educational purposes, for scientific testing for public safety, for the prevention of cruelty to children or animals, or for the fostering of amateur sports competition. In addition, no part of its net earnings may inure to the benefit of any private shareholder or individual and the organization must be exempt from federal income tax.

      The Director of the Division of Purchase and Property is authorized to establish a schedule of fees to cover administrative costs and shall report to the Governor and the Legislature on the operation of the program during the first 18 months of its operation. This act shall take effect immediately and expire at the end of the two-year period during which qualified nonprofit organizations are authorized to make purchases.