New Jersey-2014-A973-Introduced

An Act concerning public school construction public-private partnership agreements, supplementing Title 18A of the New Jersey Statutes, and amending P.L.1974, c.80.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. (New section) As used in P.L. , c. (C. ) (pending before the Legislature as this bill):

"Authority" means the New Jersey Economic Development Authority established pursuant to section 4 of P.L.1974, c.80 (C.34:1B-4).

"Public-private partnership agreement" means an agreement entered into by a school district and a private entity pursuant to section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill) for the purpose of permitting a private entity to assume full financial and administrative responsibility for the construction, reconstruction, repair, alteration, improvement, or extension of a school facilities project of, or for the benefit of, the school district.

"School district" means and includes a local school district, regional school district, or county special services school district or county vocational school established and operating under the provisions of Title 18A of the New Jersey Statutes. The term "school district" shall not include a charter school established under P.L.1995, c.426 (C.18A:36A-1 et seq.).

"School facilities project" or "project" shall have the same meaning as provided in section 3 of P.L.2000, c.72 (C.18A:7G-3).

2. (New section) a. A school district may enter into a public-private partnership agreement with a private entity, subject to the approval of the authority pursuant to subsection f. of this section, that permits the private entity to assume full financial and administrative responsibility for the construction, reconstruction, repair, alteration, improvement, or extension of a school facilities project of, or for the benefit of, the school district, provided that the project is financed in whole by the private entity, the board of education retains full ownership of the land upon which the project is completed, and that the project has been approved by the Commissioner of Education as part of the district's long-range facilities plan.

b. (1) A private entity constructing a school facilities project pursuant to subsection a. of this section shall not be subject to the procurement and contracting requirements of any statute applicable to the school district, including, but not limited to, the "Public School Contracts Law," N.J.S.18A:18A-1 et seq. For the purposes of facilitating the financing of a project pursuant to subsection a. of this section, a school district may become the owner or lessee of the project, may issue indebtedness pursuant to law and, notwithstanding the provisions of any law, rule, or regulation to the contrary, shall be empowered to enter into contracts with a private entity and its affiliates without being subject to the procurement and contracting requirements of the "Public School Contracts Law," N.J.S.18A:18A-1 et seq. provided that the private entity has been selected by the school district pursuant to a solicitation of proposals or qualifications.

(2) A school facilities project undertaken pursuant to this section that is owned by or leased to a school district, shall at all times be exempt from property taxation and special assessments of the State, or any municipality, or other political subdivision of the State and, notwithstanding the provisions of section 15 of P.L.1974, c.80 (C.34:1B-15), section 2 of P.L.1977, c.272 (C.54:4-2.2b), or any other section of law to the contrary, shall not be required to make payments in lieu of taxes. The land upon which the project is located shall also at all times be exempt from property taxation. The project and land upon which the project is located shall not be subject to the provisions of section 1 of P.L.1984, c.176 (C.54:4-1.10) regarding the tax liability of a private party conducting a for profit activity on tax exempt land, or section 1 of P.L.1949, c.177 (C.54:4-2.3) regarding the taxation of a leasehold interest in exempt property that is held by a nonexempt party.

c. A worker employed in the construction, rehabilitation, or building maintenance services of a school facilities project by a private entity that has entered into a public-private partnership agreement with a school district pursuant to subsection a. of this section shall be paid not less than the prevailing wage rate for the worker's craft or trade as determined by the Commissioner of Labor and Workforce Development pursuant to P.L.1963, c.150 (C.34:11-56.25 et seq.) and P.L.2005, c.379 (C.34:11-56.58 et seq.).

d. (1) A school facilities project under a public-private partnership agreement entered into pursuant to this section shall contain a project labor agreement. The project labor agreement shall be subject to the provisions of P.L.2002, c.44 (C.52:38-1 et seq.), and shall, to the greatest extent possible, enhance employment opportunities for individuals residing in the county of the school facilities project's location. The general contractor, construction manager, or subcontractor for a school facilities project proposed pursuant to this paragraph shall be prequalified to bid on a school facilities project pursuant to P.L.2000, c.72 (C.18A:7G-1 et al.), and shall be classified by the New Jersey Schools Development Authority to perform work on a project.

(2) The school district shall require the private entity financing a school facilities project to post, or cause to be posted, a bond guaranteeing prompt payment of moneys due to the private entity's contractor, the contractor's subcontractors, and to all persons furnishing labor or materials to the contractor or the contractor's subcontractors in the performance of the work on the project.

e. (1) On or before August 1, 2017, a school facilities project proposed pursuant to this section shall be submitted to the authority for the authority's review and approval. A school facilities project shall meet the facilities efficiency standards developed by the Commissioner of Education pursuant to subsection h. of section 4 of P.L.2000, c.72 (C.18A:7G-4) and any school facility regulations promulgated by the State Board of Education or the Department of Community Affairs. A school facilities project application that is deemed to be incomplete by the authority on August 2, 2017 shall not be eligible for consideration.

(2) (a) In order for an application to be complete and considered by the authority pursuant to this subsection, the application shall include, but not be limited to: (i) a public-private partnership agreement between the school district and the private entity; (ii) a full description of the school facilities project; (iii) the estimated costs and financial documentation for the project; (iv) a timetable for completion of the project extending no more than five years after consideration and approval; and (v) any other requirements that the authority deems appropriate or necessary.

(b) As part of the estimated costs and financial documentation for the school facilities project, an application shall contain a long-range maintenance plan and shall specify the expenditures that qualify as an appropriate investment in maintenance. The long-range maintenance plan shall be approved by the authority if the plan includes building maintenance standards established by the State Board of Education. All contracts to implement a long-range maintenance plan pursuant to this paragraph shall contain a project labor agreement. The project labor agreement shall be subject to the provisions of P.L.2002, c.44 (C.52:38-1 et seq.), and shall, to the greatest extent possible, enhance employment opportunities for individuals residing in the county of the project's location.

(3) The authority shall review all completed applications, and request additional information as is needed to make a complete assessment of the school facilities project. A project shall not be undertaken until final approval has been granted by the authority. The authority shall retain the right to revoke approval at any time if it determines that the project has deviated from the plan submitted pursuant to paragraph (2) of this subsection.

(4) The authority shall promulgate any rules and regulations necessary to implement this subsection, including provisions for fees to cover administrative costs.

3. Section 5 of P.L.1974, c.80 (C.34:1B-5) is amended to read as follows:

5. The authority shall have the following powers:

a. To adopt bylaws for the regulation of its affairs and the conduct of its business;

b. To adopt and have a seal and to alter the same at pleasure;

c. To sue and be sued;

d. To acquire in the name of the authority by purchase or otherwise, on such terms and conditions and such manner as it may deem proper, or by the exercise of the power of eminent domain in the manner provided by the "Eminent Domain Act of 1971," P.L.1971, c.361 (C.20:3-1 et seq.), any lands or interests therein or other property which it may determine is reasonably necessary for any project; provided, however, that the authority in connection with any project shall not take by exercise of the power of eminent domain any real property except upon consent thereto given by resolution of the governing body of the municipality in which such real property is located; and provided further that the authority shall be limited in its exercise of the power of eminent domain in connection with any project in qualifying municipalities as defined under the provisions of P.L.1978, c.14 (C.52:27D-178 et seq.), or to municipalities which had a population, according to the latest federal decennial census, in excess of 10,000;

e. To enter into contracts with a person upon such terms and conditions as the authority shall determine to be reasonable, including, but not limited to, reimbursement for the planning, designing, financing, construction, reconstruction, improvement, equipping, furnishing, operation, and maintenance of the project and to pay or compromise any claims arising therefrom;

f. To establish and maintain reserve and insurance funds with respect to the financing of the project or the school facilities project and any project financed pursuant to the "Municipal Rehabilitation and Economic Recovery Act," P.L.2002, c.43 (C.52:27BBB-1 et al.);

g. To sell, convey, or lease to any person all or any portion of a project for such consideration and upon such terms as the authority may determine to be reasonable;

h. To mortgage, pledge, or assign or otherwise encumber all or any portion of a project, or revenues, whenever it shall find such action to be in furtherance of the purposes of this act, P.L.2000, c.72 (C.18A:7G-1 et al.), the "Municipal Rehabilitation and Economic Recovery Act," P.L.2002, c.43 (C.52:27BBB-1 et al.), P.L.2007, c.137 (C.52:18A-235 et al.), and sections 3 through 18 of P.L.2009, c.90 (C.52:27D-489c et al.);

i. To grant options to purchase or renew a lease for any of its projects on such terms as the authority may determine to be reasonable;

j. To contract for and to accept any gifts or grants or loans of funds or property or financial or other aid in any form from the United States of America or any agency or instrumentality thereof, or from the State or any agency, instrumentality, or political subdivision thereof, or from any other source and to comply, subject to the provisions of P.L.1974, c.80 (C.34:1B-1 et seq.), section 6 of P.L.2001, c.401 (C.34:1B-4.1), P.L.2000, c.72 (C.18A:7G-1 et al.), the "Municipal Rehabilitation and Economic Recovery Act," P.L.2002, c.43 (C.52:27BBB-1 et al.), and P.L.2007, c.137 (C.52:18A-235 et al.), with the terms and conditions thereof;

k. In connection with any action undertaken by the authority in the performance of its duties and any application for assistance or commitments therefor and modifications thereof, to require and collect such fees and charges as the authority shall determine to be reasonable, including but not limited to fees and charges for the authority's administrative, organizational, insurance, operating, legal, and other expenses;

l. To adopt, amend, and repeal regulations to carry out the provisions of P.L.1974, c.80 (C.34:1B-1 et seq.), section 6 of P.L.2001, c.401 (C.34:1B-4.1), P.L.2000, c.72 (C.18A:7G-1 et al.), the "Municipal Rehabilitation and Economic Recovery Act," P.L.2002, c.43 (C.52:27BBB-1 et al.), and P.L.2007, c.137 (C.52:18A-235 et al.);

m. To acquire, purchase, manage and operate, hold and dispose of real and personal property or interests therein, take assignments of rentals and leases, and make and enter into all contracts, leases, agreements, and arrangements necessary or incidental to the performance of its duties;

n. To purchase, acquire, and take assignments of notes, mortgages, and other forms of security and evidences of indebtedness;

o. To purchase, acquire, attach, seize, accept, or take title to any project or school facilities project by conveyance or by foreclosure, and sell, lease, manage, or operate any project or school facilities project for a use specified in this act, P.L.2000, c.72 (C.18A:7G-1 et al.), the "Municipal Rehabilitation and Economic Recovery Act," P.L.2002, c.43 (C.52:27BBB-1 et al.), P.L.2007, c.137 (C.52:18A-235 et al.), and sections 3 through 18 of P.L.2009, c.90 (C.52:27D-489c et al.);

p. To borrow money and to issue bonds of the authority and to provide for the rights of the holders thereof, as provided in P.L.1974, c.80 (C.34:1B-1 et seq.), section 6 of P.L.2001, c.401 (C.34:1B-4.1), P.L.2000, c.72 (C.18A:7G-1 et al.), the "Municipal Rehabilitation and Economic Recovery Act," P.L.2002, c.43 (C.52:27BBB-1 et al.), P.L.2007, c.137 (C.52:18A-235 et al.), and sections 3 through 18 of P.L.2009, c.90 (C.52:27D-489c et al.);

q. To extend credit or make loans to any person for the planning, designing, acquiring, constructing, ject or school facilities project, which credits or loans may be secured by loan and security agreements, mortgages, leases, and any other instruments, upon such terms and conditions as the authority shall deem reasonable, including provision for the establishment and maintenance of reserve and insurance funds, and to require the inclusion in any mortgage, lease, contract, loan, and security agreement or other instrument, of such provisions for the construction, use, operation, and maintenance and financing of a project or school facilities project as the authority may deem necessary or desirable;

r. To guarantee up to [90%] 90 percent of the amount of a loan to a person, if the proceeds of the loan are to be applied to the purchase and installation, in a building devoted to industrial or commercial purposes, or in an office building, of an energy improvement system;

s. To employ consulting engineers, architects, attorneys, real estate counselors, appraisers, and such other consultants and employees as may be required in the judgment of the redevelopment utility to carry out the purposes of P.L.1974, c.80 (C.34:1B-1 et seq.), section 6 of P.L.2001, c.401 (C.34:1B-4.1), P.L.2000, c.72 (C.18A:7G-1 et al.), the "Municipal Rehabilitation and Economic Recovery Act," P.L.2002, c.43 (C.52:27BBB-1 et al.), P.L.2007, c.137 (C.52:18A-235 et al.), and sections 3 through 18 of P.L.2009, c.90 (C.52:27D-489c et al.), and to fix and pay their compensation from funds available to the redevelopment utility therefor, all without regard to the provisions of Title 11A of the New Jersey Statutes;

t. To do and perform any acts and things authorized by P.L.1974, c.80 (C.34:1B-1 et seq.), section 6 of P.L.2001, c.401 (C.34:1B-4.1), P.L.2000, c.72 (C.18A:7G-1 et al.), the "Municipal Rehabilitation and Economic Recovery Act," P.L.2002, c.43 (C.52:27BBB-1 et al.), P.L.2007, c.137 (C.52:18A-235 et al.), and sections 3 through 18 of P.L.2009, c.90 (C.52:27D-489c et al.), under, through or by means of its own officers, agents, and employees, or by contract with any person;

u. To procure insurance against any losses in connection with its property, operations, or assets in such amounts and from such insurers as it deems desirable;

v. To do any and all things necessary or convenient to carry out its purposes and exercise the powers given and granted in P.L.1974, c.80 (C.34:1B-1 et seq.), section 6 of P.L.2001, c.401 (C.34:1B-4.1), P.L.2000, c.72 (C.18A:7G-1 et al.), the "Municipal Rehabilitation and Economic Recovery Act," P.L.2002, c.43 (C.52:27BBB-1 et al.), P.L.2007, c.137 (C.52:18A-235 et al.), and sections 3 through 18 of P.L.2009, c.90 (C.52:27D-489c et al.);

w. To construct, reconstruct, rehabilitate, improve, alter, equip, maintain, or repair or provide for the construction, reconstruction, improvement, alteration, equipping, or maintenance or repair of any development property and lot, award and enter into construction contracts, purchase orders and other contracts with respect thereto, upon such terms and conditions as the authority shall determine to be reasonable, including, but not limited to, reimbursement for the planning, designing, financing, construction, reconstruction, improvement, equipping, furnishing, operation, and maintenance of any such development property and the settlement of any claims arising therefrom and the establishment and maintenance of reserve funds with respect to the financing of such development property;

x. When authorized by the governing body of a municipality exercising jurisdiction over an urban growth zone, to construct, cause to be constructed, or to provide financial assistance to projects in an urban growth zone which shall be exempt from the terms and requirements of the land use ordinances and regulations, including, but not limited to, the master plan and zoning ordinances, of such municipality;

y. To enter into business employment incentive agreements as provided in the "Business Employment Incentive Program Act," P.L.1996, c.26 (C.34:1B-124 et al.);

z. To enter into agreements or contracts, execute instruments, and do and perform all acts or things necessary, convenient, or desirable for the purposes of the redevelopment utility to carry out any power expressly provided pursuant to P.L.1974, c.80 (C.34:1B-1 et seq.), P.L.2000, c.72 (C.18A:7G-1 et al.), and P.L.2007, c.137 (C.52:18A-235 et al.), including, but not limited to, entering into contracts with the State Treasurer, the Commissioner of Education, districts, the New Jersey Schools Development Authority, and any other entity which may be required in order to carry out the provisions of P.L.2000, c.72 (C.18A:7G-1 et al.), P.L.2007, c.137 (C.52:18A-235 et al.), and sections 3 through 18 of P.L.2009, c.90 (C.52:27D-489c et al.);

aa. (Deleted by amendment, P.L.2007, c.137);

bb. To make and contract to make loans to local units to finance the cost of school facilities projects and to acquire and contract to acquire bonds, notes, or other obligations issued or to be issued by local units to evidence the loans, all in accordance with the provisions of P.L.2000, c.72 (C.18A:7G-1 et al.), and P.L.2007, c.137 (C.52:18A-235 et al.);

cc. Subject to any agreement with holders of its bonds issued to finance a project or school facilities project, obtain as security or to provide liquidity for payment of all or any part of the principal of and interest and premium on the bonds of the authority or for the purchase upon tender or otherwise of the bonds, lines of credit, letters of credit, reimbursement agreements, interest rate exchange agreements, currency exchange agreements, interest rate floors or caps, options, puts or calls to hedge payment, currency, rate, spread or similar exposure or similar agreements, float agreements, forward agreements, insurance contract, surety bond, commitment to purchase or sell bonds, purchase or sale agreement, or commitments or other contracts or agreements, and other security agreements or instruments in any amounts and upon any terms as the authority may determine and pay any fees and expenses required in connection therewith;

dd. To charge to and collect from local units, the State, and any other person, any fees and charges in connection with the authority's actions undertaken with respect to school facilities projects, including, but not limited to, fees and charges for the authority's administrative, organization, insurance, operating, and other expenses incident to the financing of school facilities projects;

ee. To make loans to refinance solid waste facility bonds through the issuance of bonds or other obligations and the execution of any agreements with counties or public authorities to effect the refunding or rescheduling of solid waste facility bonds, or otherwise provide for the payment of all or a portion of any series of solid waste facility bonds. Any county or public authority refunding or rescheduling its solid waste facility bonds pursuant to this subsection shall provide for the payment of not less than fifty percent of the aggregate debt service for the refunded or rescheduled debt of the particular county or public authority for the duration of the loan; except that, whenever the solid waste facility bonds to be refinanced were issued by a public authority and the county solid waste facility was utilized as a regional county solid waste facility, as designated in the respective adopted district solid waste management plans of the participating counties as approved by the department prior to November 10, 1997, and the utilization of the facility was established pursuant to tonnage obligations set forth in their respective interdistrict agreements, the public authority refunding or rescheduling its solid waste facility bonds pursuant to this subsection shall provide for the payment of a percentage of the aggregate debt service for the refunded or rescheduled debt of the public authority not to exceed the percentage of the specified tonnage obligation of the host county for the duration of the loan. Whenever the solid waste facility bonds are the obligation of a public authority, the relevant county shall execute a deficiency agreement with the authority, which shall provide that the county pledges to cover any shortfall and to pay deficiencies in scheduled repayment obligations of the public authority. All costs associated with the issuance of bonds pursuant to this subsection may be paid by the authority from the proceeds of these bonds. Any county or public authority is hereby authorized to enter into any agreement with the authority necessary, desirable or convenient to effectuate the provisions of this subsection.

The authority shall not issue bonds or other obligations to effect the refunding or rescheduling of solid waste facility bonds after December 31, 2002. The authority may refund its own bonds issued for the purposes herein at any time;

ff. To pool loans for any local government units that are refunding bonds and do and perform any and all acts or things necessary, convenient, or desirable for the purpose of the authority to achieve more favorable interest rates and terms for those local governmental units;

gg. To finance projects approved by the board, provide staff support to the board, oversee and monitor progress on the part of the board in carrying out the revitalization, economic development, and restoration projects authorized pursuant to the "Municipal Rehabilitation and Economic Recovery Act," P.L.2002, c.43 (C.52:27BBB-1 et al.), and otherwise fulfilling its responsibilities pursuant thereto;

hh. To offer financial assistance to qualified film production companies as provided in the "New Jersey Film Production Assistance Act," P.L.2003, c.182 (C.34:1B-178 et al.); [and]

ii. To finance or develop private or public parking facilities or structures, which may include the use of solar photovoltaic equipment, in municipalities qualified to receive State aid pursuant to the provisions of P.L.1978, c.14 (C.52:27D-178 et seq.) and municipalities that contain areas designated pursuant to P.L.1985, c.398 (C.52:18A-196 et al.) as Planning Area 1 (Metropolitan), Planning Area 2 (Suburban), or a town center, and to provide appropriate assistance, including but not limited to, extensions of credit, loans, and guarantees, to municipalities qualified to receive State aid pursuant to the provisions of P.L.1978, c.14 (C.52:27D-178 et seq.) and municipalities that contain areas designated pursuant to P.L.1985, c.398 (C.52:18A-196 et seq.) as Planning Area 1 (Metropolitan), Planning Area 2 (Suburban), or a town center, and their agencies and instrumentalities or to private entities whose projects are located in those municipalities, in order to facilitate the financing and development of parking facilities or structures in such municipalities. The authority may serve as the issuing agent of bonds to finance the undertaking of a project for the purposes of this subsection; and

jj. To consider, review, amend, and approve public school facilities construction public-private partnership agreements that comply with the criteria established pursuant to section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill) for the purposes set forth therein and provide, to a private entity that is a party to the agreement, any tax-exempt private activity bond financing under terms and conditions established by the authority and as otherwise authorized under State or federal law.

(cf: P.L.2010, c.28, s.3)

4. This act shall take effect immediately.

STATEMENT

This bill allows a public school district to enter into a contract with a private entity, under a public-private partnership (P3) agreement, that permits the private entity to assume full financial and administrative responsibility for the construction, reconstruction, repair, alteration, improvement, or extension of a school facilities project (project) of, or for the benefit of, the school district, provided that the project is financed in whole by the private entity, the school district retains full ownership of the land upon which the project is to be completed, and that the school facilities project has been approved by the Commissioner of Education as part of the district's long-range facilities plan. For the purposes of facilitating the financing of a project, a school district may become the owner or lessee of the project, may issue indebtedness pursuant to law, and is empowered to enter into contracts with a private entity and its affiliates without being subject to the procurement and contracting requirements of any statute applicable to the school district, including the "Public School Contracts Law," provided that the private entity has been selected by the school district pursuant to a solicitation of proposals or qualifications.

The bill requires that workers employed in the construction, rehabilitation, or building maintenance services of a project by a private entity that has entered into a P3 agreement with a school district be subject to the applicable provisions of the "New Jersey Prevailing Wage Act," that projects undertaken pursuant to a P3 agreement shall contain a project labor agreement, and that the general contractor, construction manager, or subcontractor for a project is to be prequalified to bid on a project pursuant to P.L.2000, c.72 (C.18A:7G-1 et al.) and be classified by the New Jersey Schools Development Authority to perform work on a project. All applications for P3 agreements authorized under the bill are to be submitted to the New Jersey Economic Development Authority (EDA) for the EDA's review and approval by August 1, 2017. Where practicable, all projects are encouraged to adhere to the green building manual prepared by the Commissioner of Community Affairs.

In order for an application to be complete and considered by the EDA, the bill requires the application to include, but not be limited to: 1) a P3 agreement between the school district and the private entity; 2) a full description of the project; 3) the estimated costs and financial documentation for the project; 4) a timetable for completion of the project extending no more than five years after consideration and approval; and 5) any other requirements that the EDA deems appropriate or necessary. As part of the estimated costs and financial documentation for the project, an application shall contain a long-range maintenance plan and shall specify the expenditures that qualify as an appropriate investment in maintenance. This long-range maintenance plan is to be approved by the EDA if it includes building maintenance standards established by the State Board of Education.

In order to encourage private entities to enter into P3 agreements with school districts to develop projects, the bill authorizes the EDA to provide private entities tax-exempt private activity bond financing under terms and conditions established by the EDA and as otherwise authorized under State or federal law.