SENATE BUDGET AND APPROPRIATIONS COMMITTEE

STATEMENT TO

SENATE, No. 1326

STATE OF NEW JERSEY

DATED: JUNE 20, 1996

      The Senate Budget and Appropriations Committee reports favorably Senate Bill No.1326 of 1996.

      Senate Bill No.1326 authorizes the Department of Transportation to lease, license or contract for the use of department property in such manner as to produce revenues for the support of the State.

      The bill authorizes the commissioner to set a fee for the lease, license or contract, provided that the fee yields at least a fair rental value for the use of the property. A lease, license or contract may also be awarded on the basis of competitive public bids or competitive proposals. A competitively bid or proposed lease, license or contract would be awarded to the bidder or proposer whose bid or proposal is determined to be in the best interest of the State, price and other factors considered. The bill provides that any such lease, license or contract shall comply with all applicable State and federal requirements.

      The bill requires the commissioner to adopt regulations providing procedures and standards for the awarding of a lease, license or contract on the basis of competitive public bids or competitive proposals. The regulations are to provide a brief description of the property to be leased, licensed or contracted for and a summary of the terms and conditions of the proposed lease, license or contract be published in at least one newspaper in the municipality in which the property is located.

      Finally, the bill authorizes the commissioner to enter into a revenue sharing agreement with a municipality in which fibre optic facilities are erected on, above or below any State right-of-way or real property to proportionately allocate to the municipality 5% of net State revenues after the deduction of State expenses incident to the lease, license, use or operation.

      As reported, this bill is identical to Assembly, No.1343 (2R) of 1996 (DeCroce/Kavanaugh).

FISCAL IMPACT

      In a legislative fiscal estimate prepared on an identical Assembly bill, the Office of Legislative Services (OLS) noted that the Department of Transportation had in 1995 estimated that it would receive about $2.17 million annually in revenues, with anticipated expenditures of about $50,000 to hire an additional staff person to manage this new property leasing program. Consequently, that bill projected a $2.12 million annual net surplus to the State.

      The OLS considers this estimate by DOT to be reasonably accurate. However, OLS cannot readily determine how much of the net State surplus would be allocated to municipalities as a result of fibre optic revenue sharing agreements.