Bill Text: NJ S4162 | 2026-2027 | Regular Session | Introduced
Bill Title: "Affordable Power Purchase Agreements Extension Act"; concerns extension of certain public entity contracts related to energy conservation and renewable energy production.
Sponsorship: Partisan Bill (Democrat 3)
Status: (Introduced) 2026-06-08 - Reported from Senate Committee, 2nd Reading [S4162 Detail]
Download: New_Jersey-2026-S4162-Introduced.html
Sponsored by:
Senator JOHN F. MCKEON
District 27 (Essex and Passaic)
SYNOPSIS
"Affordable Power Purchase Agreements Extension Act"; concerns extension of certain public entity contracts related to energy conservation and renewable energy production.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning certain public contracts, designated as the "Affordable Power Purchase Agreements Extension Act," and amending various parts of the statutory law.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. N.J.S.18A:18A-5 is amended to read as follows:
18A:18A-5. Exceptions to requirement for advertising. Any contract, the amount of which exceeds the bid threshold, shall be negotiated and awarded by the board of education by resolution at a public meeting without public advertising for bids and bidding therefor if:
a. The subject matter thereof consists of:
(1) Professional services. The board of education shall in each instance state supporting reasons for its action in the resolution awarding each contract and shall forthwith cause to be printed once, in an official newspaper, a brief notice stating the nature, duration, service, and amount of the contract and that the resolution and contract are on file and available for public inspection in the office of the board of education;
(2) Extraordinary unspecifiable services which cannot reasonably be described by written specifications. The application of this exception as to extraordinary unspecifiable services shall be construed narrowly in favor of open competitive bidding where possible and the Director of the Division of Local Government Services in the Department of Community Affairs is authorized to establish rules and regulations after consultation with the Commissioner of Education limiting its use in accordance with the intention herein expressed; and the board of education shall in each instance state supporting reasons for its action in the resolution awarding the contract for extraordinary unspecifiable services and shall forthwith cause to be printed, in the manner set forth in paragraph (1) of this subsection, a brief notice of the award of such contract;
(3) The doing of any work by employees of the board of education;
(4) The printing of all legal notices and legal briefs, records, and appendices to be used in any legal proceeding in which the board of education may be a party;
(5) Library and educational goods and services;
(6) Food supplies, including food supplies for home economics classes, when purchased pursuant to rules and regulations of the State board and in accordance with the provisions of N.J.S.18A:18A-6;
(7) The supplying of any product or the rendering of any service by a public utility, which is subject to the jurisdiction of the Board of Public Utilities, in accordance with the tariffs and schedules of charges made, charged and exacted, filed with said board;
(8) The printing of bonds and documents necessary to the issuance and sale thereof by a board of education;
(9) Equipment repair service if in the nature of an extraordinary unspecifiable service and necessary parts furnished in connection with such services, which exception shall be in accordance with the requirements for extraordinary unspecifiable services;
(10) Insurance, including the purchase of insurance coverage and consultant services, which exception shall be in accordance with the requirements for extraordinary unspecifiable services;
(11) Publishing of legal notices in newspapers as required by law;
(12) The acquisition of artifacts or other items of unique intrinsic, artistic or historic character;
(13) Those goods and services necessary or required to prepare and conduct an election;
(14) (Deleted by amendment, P.L.1999, c.440[.])
(15) (Deleted by amendment, P.L.1999, c.270)[.]
(16) (Deleted by amendment, P.L.1999, c.440[.])
(17) The doing of any work by persons with disabilities employed by a sheltered workshop;
(18) Expenses for travel and conferences;
(19) The provision or performance of goods or services for the support or maintenance of proprietary computer hardware and software, except that this provision shall not be utilized to acquire or upgrade non-proprietary hardware or acquire or update non-proprietary software;
(20) Purchases of goods and services at rates set by the Universal Service Fund administered by the Federal Communications Commission;
(21) Goods and services paid with funds that: are raised by or collected from students to support the purchase of student-oriented items or materials, such as yearbooks, class rings, and a class gift; and are deposited in school or student activity accounts; and require no budget appropriation from the board of education;
(22) Food services provided by food service management companies pursuant to procedures established by the New Jersey Department of Agriculture, Bureau of Child Nutrition Programs;
(23) Vending machines providing food or drink; [or]
(24) Preschool education services provided by a licensed childcare provider or Head Start program and supported by preschool education aid pursuant to section 12 of P.L.2007, c.260 (C.18A:7F-54); or
(25) The extension of the term of a renewable energy contract, pursuant to subsection o. of N.J.S.18A:18A-42.
b. It is to be made or entered into with the United States of America, the State of New Jersey, county, or municipality or any board, body, officer, agency, authority, or board of education or any other state or subdivision thereof.
c. Bids have been advertised pursuant to N.J.S.18A:18A-4 on two occasions and (1) no bids have been received on both occasions in response to the advertisement, or (2) the board of education has rejected such bids on two occasions because it has determined that they are not reasonable as to price, on the basis of cost estimates prepared for or by the board of education prior to the advertising therefor, or have not been independently arrived at in open competition, or (3) on one occasion no bids were received pursuant to (1) and on one occasion all bids were rejected pursuant to (2), in whatever sequence; any such contract may then be negotiated and may be awarded upon adoption of a resolution by a two-thirds affirmative vote of the authorized membership of the board of education authorizing such a contract, provided, however, that:
(a) A reasonable effort is first made by the board of education to determine that the same or equivalent goods or services, at a cost which is lower than the negotiated price, are not available from an agency or authority of the United States, the State of New Jersey or of the county in which the board of education is located, or any municipality in close proximity to the board of education;
(b) The terms, conditions, restrictions, and specifications set forth in the negotiated contract are not substantially different from those which were the subject of competitive bidding pursuant to N.J.S.18A:18A-4; and
(c) Any minor amendment or modification of any of the terms, conditions, restrictions, and specifications which were the subject of competitive bidding pursuant to N.J.S.18A:18A-4 shall be stated in the resolution awarding the contract, provided further, however, that if on the second occasion the bids received are rejected as unreasonable as to price, the board of education shall notify each responsible bidder submitting bids on the second occasion of its intention to negotiate and afford each bidder a reasonable opportunity to negotiate, but the board of education shall not award such contract unless the negotiated price is lower than the lowest rejected bid price submitted on the second occasion by a responsible bidder, is the lowest negotiated price offered by any responsible vendor, and is a reasonable price for such goods or services.
d. Whenever a board of education shall determine that a bid was not arrived at independently in open competition pursuant to paragraph (2) of subsection c. of this section, it shall thereupon notify the county prosecutor of the county in which the board of education is located and the Attorney General of the facts upon which its determination is based and when appropriate, it may institute appropriate proceedings in any State or federal court of competent jurisdiction for a violation of any State or federal antitrust law or laws relating to the unlawful restraint of trade.
e. The board of education has solicited and received at least three quotations on materials, supplies, or equipment for which a State contract has been issued pursuant to N.J.S.18A:18A-10, and the lowest responsible quotation is at least 10 percent less than the price the board would be charged for the identical materials, supplies, or equipment, in the same quantities, under the State contract. Any such contract or agreement entered into pursuant to subsection d. or subsection e. may be made, negotiated, or awarded only upon adoption of a resolution by the affirmative vote of two-thirds of the full membership of the board of education at a meeting thereof authorizing such a contract or agreement. The purchase order relating to any such contract shall include a notation that the material, supplies, or equipment was purchased at least 10[%] percent below the State contract price. The board of education shall make available to the Director of the Division of Local Government Services in the Department of Community Affairs, upon request, any documents relating to the solicitation and award of the contract, including, but not limited to, quotations, requests for quotations, and resolutions.
(cf: P.L.2025, c.101, s.1)
2. N.J.S.18A:18A-42 is amended to read as follows:
18A:18A-42. All contracts for the provision or performance of goods or services shall be awarded for a period not to exceed 24 consecutive months, except that contracts for professional services pursuant to paragraph (1) of subsection a. of N.J.S.18A:18A-5 shall be awarded for a period not to exceed 12 consecutive months. Any board of education may award a contract for longer periods of time as follows:
a. Supplying of:
(1) Fuel for heating purposes, for any term not exceeding in the aggregate, three years;
(2) Fuel or oil for use of automobiles, autobuses, motor vehicles or equipment, for any term not exceeding in the aggregate, three years;
(3) Thermal energy produced by a cogeneration facility, for use for heating or air conditioning or both, for any term not exceeding 40 years, when the contract is approved by the Board of Public Utilities. For the purposes of this paragraph, "cogeneration" means the simultaneous production in one facility of electric power and other forms of useful energy such as heating or process steam; or
b. Plowing and removal of snow and ice, for any term not exceeding in the aggregate, three years; or
c. Collection and disposal of garbage and refuse, for any term not exceeding in the aggregate, three years; or
d. Data processing service, for any term of not more than seven years; or
e. Insurance, including the purchase of insurance coverages, insurance consultant or administrative services, and including participation in a joint self-insurance fund, risk management program or related services provided by a school board insurance group, or participation in an insurance fund established by a county pursuant to N.J.S.40A:10-6, or a joint insurance fund established pursuant to P.L.1983, c.372 (C.40A:10-36 et seq.), for any term of not more than three years; or
f. Leasing or servicing of automobiles, motor vehicles, electronic communications equipment, machinery and equipment of every nature and kind, and textbooks and non-consumable instructional materials, for any term not exceeding in the aggregate, five years, except that contracts for the leasing of fossil fuel school buses may be awarded for any term not exceeding in the aggregate 10 years and contracts for the leasing of electric school buses and related charging equipment and services may be awarded for any term not exceeding the service life of the electric school buses. Contracts awarded pursuant to this subsection shall be awarded only subject to and in accordance with rules and regulations promulgated by the State Board of Education; or
g. Supplying of any product or the rendering of any service by a company providing voice, data, transmission, or switching services, for a term not exceeding five years; or
h. (Deleted by amendment, P.L.1999, c.440[.])
i. Driver education instruction conducted by private, licensed driver education schools, for any term not exceeding in the aggregate, three years; or
j. (Deleted by amendment, P.L.2009, c.4)[.]
k. Any single project for the construction, reconstruction, or rehabilitation of any public building, structure, or facility, or any public works project, including the retention of the services of any architect or engineer in connection therewith, for the length of time authorized and necessary for the completion of the actual construction; or
l. Laundry service and the rental, supply, and cleaning of uniforms for any term of not more than three years; or
m. Food supplies and food services for any term of not more than three years; or
n. Purchases made under a contract awarded by the Director of the Division of Purchase and Property in the Department of the Treasury for use by counties, municipalities, or other contracting units pursuant to section 3 of P.L.1969, c.104 (C.52:25-16.1), for a term not to exceed the term of that contract; or
o. (1) The provision or performance of goods or services for the purpose of producing [class] Class I renewable energy, as that term is defined in section 3 of P.L.1999, c.23 (C.48:3-51), at, or adjacent to, buildings owned by any local board of education, the entire price of which is to be established as a percentage of the resultant savings in energy costs, for a total term, including any extensions, not to exceed [15] 30 years, provided [, however,] that these contracts shall be entered into only subject to and in accordance with guidelines promulgated by the Board of Public Utilities establishing a methodology for computing energy cost savings and energy generation costs. The initial term of the contract shall not exceed 15 years. The contract may be extended for up to one or more additional terms, provided that the total term of the contract, including any extensions or renewals authorized by paragraphs (2) or (3) of this subsection, shall not exceed 30 years.
(2) Notwithstanding any law, rule, or regulation to the contrary, a contract with fixed rates or amounts may be extended beyond the initial 15-year term limit for up to one or more additional terms, provided that the total term of the contract, including any extensions or renewals, shall not exceed 30 years and the extension does not result in rates or amounts that are above the greater of:
(a) the previously contracted rates or amounts; or
(b) 20 percent below the volumetric retail rate, or charges that would be applicable based upon such volumetric rate, applicable to the customer for purchases of electricity from the applicable electric public utility at the time the extension is authorized.
(3) Notwithstanding any law, rule, or regulation to the contrary, a contract with de-escalating or escalating prices may be extended beyond the initial 15-year term limit for up to one or more additional terms, provided that the total term of the contract, including any extensions or renewals, shall not exceed 30 years and the extension does not result in prices above the greater of:
(a) the level that would occur if the annual rate of de-escalation or escalation applied between the second to last and last year of the original contract is applied to the price in the last year of the original contract and thereafter into future years; or
(b) the price that would result from applying the rate that is 20 percent below the volumetric retail rate applicable to the customer for the purchase of electricity from the applicable electric public utility at the time the extension is authorized; or
p. The provision or performance of goods or services for the purpose of providing electric school buses, on-site or off-site electric school bus charging infrastructure, and related maintenance and other related services, or any combination thereof for a specified price for a term up to the service life of the vehicle being contracted; or
q. Preschool education services provided by a licensed childcare provider or Head Start program and supported by preschool education aid pursuant to section 12 of P.L.2007, c.260 (C.18A:7F-54), for any term of not more than three years.
Any contract for services other than professional services, the statutory length of which contract is for three years or less, may include provisions for no more than one two-year, or two one-year, extensions, subject to the following limitations: (1) the contract shall be awarded by resolution of the board of education upon a finding by the board of education that the services are being performed in an effective and efficient manner; (2) no such contract shall be extended so that it runs for more than a total of five consecutive years; (3) any price change included as part of an extension shall be based upon the price of the original contract as cumulatively adjusted pursuant to any previous adjustment or extension and shall not exceed the change in the index rate for the 12 months preceding the most recent quarterly calculation available at the time the contract is renewed; and (4) the terms and conditions of the contract remain substantially the same.
All multiyear leases and contracts entered into pursuant to this section, including any two-year or one-year extensions, except contracts for insurance coverages, insurance consultant or administrative services, participation or membership in a joint self-insurance fund, risk management programs or related services of a school board insurance group, participation in an insurance fund established by a county pursuant to N.J.S.40A:10-6 or contracts for thermal energy authorized pursuant to subsection a. above, and contracts for the provision or performance of goods or services to promote energy conservation through the production of [class] Class I renewable energy, authorized pursuant to subsection o. of this section, shall contain a clause making them subject to the availability and appropriation annually of sufficient funds as may be required to meet the extended obligation, or contain an annual cancellation clause. All contracts shall cease to have effect at the end of the contracted period and shall not be extended by any mechanism or provision, unless in conformance with the "Public School Contracts Law," N.J.S.18A:18A-1 et seq., except that a contract may be extended by mutual agreement of the parties to the contract when a board of education has commenced rebidding prior to the time the contract expires or when the awarding of a contract is pending at the time the contract expires.
(cf: P.L.2025, c.101, s.2)
3. Section 5 of P.L.1982, c.189 (C.18A:64A-25.5) is amended to read as follows:
5. Any purchase, contract or agreement of the character described in section 4 may be made, negotiated or awarded by the county college by resolution at a public meeting of its board of trustees without public advertising for bids or bidding therefor if:
a. The subject matter thereof consists of:
(1) Professional services; or
(2) Extraordinary unspecifiable services and products which cannot reasonably be described by written specifications, subject however, to procedures consistent with open public bidding whenever possible; or
(3) Materials or supplies which are not available from more than one potential bidder, including without limitation materials or supplies which are patented or copyrighted; or
(4) The doing of any work by employees of the county college; or
(5) The printing of all legal notices and legal briefs, records and appendices to be used in any legal proceeding to which the county college may be a party; or
(6) Textbooks, copyrighted materials, [student produced] student-produced publications and services incidental thereto, library materials including without limitation books, periodicals, newspapers, documents, pamphlets, photographs, reproductions, microfilms, pictorial or graphic works, musical scores, maps, charts, globes, sound recordings, slides, films, filmstrips, video and magnetic tapes, other printed or published matter and audiovisual and other materials of a similar nature, necessary binding or rebinding of library materials and specialized library services; or
(7) Food supplies and services including food supplies and management contracts for student centers, dining rooms and cafeterias; or
(8) The supplying of any product or the rendering of any service by the public utility which is subject to the jurisdiction of the Board of Public Utilities, in accordance with tariffs and schedules of charges made, charged and exacted, filed with said board; or
(9) Equipment repair service if in the nature of an extraordinary unspecifiable service and necessary parts furnished in connection with such services; or
(10) Specialized machinery or equipment of a technical nature which will not reasonably permit the drawing of specifications, and the procurement thereof without advertising is in the public interest; or
(11) Insurance, including the purchase of insurance coverage and consulting services, which exceptions shall be in accordance with the requirements for extraordinary unspecifiable services; or
(12) Publishing of legal notices in newspapers, as required by law; or
(13) The acquisition of artifacts or other items of unique intrinsic, artistic or historic character; or
(14) The collection of amounts due on student loans, including without limitation loans guaranteed by or made with funds of the United States of America; or
(15) Professional consulting services; or
(16) Entertainment, including without limitation theatrical presentations, band and other concerts, movies and other audiovisual productions; or
(17) Contracts employing funds created by student activities fees charged to students or otherwise raised by students, not under the direct control of the college and expended by student organizations; or
(18) Printing, including without limitation catalogs, yearbooks and course announcements; or
(19) Providing goods or services for the use, support or maintenance of proprietary computer hardware, software peripherals and system development for the hardware; or
(20) Personnel recruitment and advertising, including without limitation advertising seeking student enrollment; or
(21) Educational supplies, books, articles of clothing and other miscellaneous articles purchased by a county college bookstore, or by a service or management company under contract with a county college to operate a county college [book store] bookstore for resale to college students and employees; or
(22) Purchase or rental of graduation caps and gowns and award certificates or plaques; or
(23) Expenses for travel or conferences; or
(24) Items available from vendors at costs below State contract pricing for the same product or service, which meets or exceeds the State contract terms or conditions; or
(25) The extension of the term of a renewable energy contract, pursuant to subsection q. of section 28 of P.L.1982, c.189 (C.18A:64A-25.28).
b. It is to be made or entered into with the United States of America, the State of New Jersey, a county or municipality or any board, body, or officer, agency or authority or any other state or subdivision thereof.
c. The county college has advertised for bids pursuant to section 4 of P.L.1982, c.189 (C.18A:64A-25.4) on two occasions and (i) has received no bids on both occasions in response to its advertisement, or (ii) has rejected such bids on two occasions because the county college has determined that they are not reasonable as to price, on the basis of cost estimates prepared for or by the county college prior to the advertising therefor, or have not been independently arrived at in open competition, or (iii) on one occasion no bids were received pursuant to (i) and on one occasion all bids were rejected pursuant to (ii), in whatever sequence; any such contract or agreement may then be negotiated by a two-thirds affirmative vote of the authorized membership of the board of trustees authorizing such contract or agreement; provided, however, that:
(1) A reasonable effort is made by the contracting agent to determine that the same or equivalent materials or supplies at a cost which is lower than the negotiated price are not available from any agency or authority of the United States, the State of New Jersey or from the county in which the county college is located, or any municipality in close proximity to the county college;
(2) The terms, conditions, restrictions and specifications set forth in the negotiated contract or agreement are not substantially different from those which were the subject of competitive bidding pursuant to section 4 of P.L.1982, c.189 (C.18A:64A-25.4); and
(3) Any relevant amendment or modification of any of the terms, conditions, restrictions and specifications, which were the subject of competitive bidding pursuant to section 4 of P.L.1982, c.189 (C.18A:64A-25.4), shall be stated in the resolution awarding such contract or agreement; provided, further, however, that if on the second occasion the bids received are rejected as unreasonable as to price, the county college shall notify each responsible bidder submitting bids on the second occasion of its intention to negotiate and afford each such bidder a reasonable opportunity to negotiate, but the county college shall not award such contract or agreement unless the negotiated price is lower than the lowest rejected bid price submitted on the second occasion by a responsible bidder, is the lowest negotiated price offered by any responsible vendor, and is a reasonable price for such work, materials, supplies or services.
Whenever a county college shall determine that a bid was not arrived at independently in open competition pursuant to subsection c. (ii) of this section, it shall thereupon notify the county prosecutor of the county in which the county college is located and the Attorney General of the facts upon which its determination is based and, when appropriate, it may institute appropriate proceedings in any State or federal court of competent jurisdiction for a violation of any State or federal antitrust law or laws relating to the unlawful restraint of trade.
(cf: P.L.2001, c.281, s.2)
4. Section 28 of P.L.1982, c.189 (C.18A:64A-25.28) is amended to read as follows:
28. Duration of certain contracts. A county college may only enter into a contract exceeding 24 consecutive months for the:
a. Supplying of:
(1) Fuel for heating purposes for any term not exceeding in the aggregate three years; or
(2) Fuel or oil for use in automobiles, autobuses, motor vehicles or equipment for any term not exceeding in the aggregate three years; or
b. Plowing and removal of snow and ice for any term not exceeding in the aggregate three years; or
c. Collection and disposal of garbage and refuse for any term not exceeding in the aggregate three years; or
d. Providing goods or services for the use, support or maintenance of proprietary computer hardware, software peripherals and system development for the hardware for any term of not more than five years; or
e. Insurance, including the purchase of insurance coverages, insurance consultant or administrative services, and including participation in a joint self-insurance fund, risk management programs or related services provided by a county college insurance group, or participation in an insurance fund established by a county pursuant to N.J.S.40A:10-6, for any term of not more than three years; or
f. Leasing or service of automobiles, motor vehicles, electronic communications equipment, machinery and equipment of every nature and kind for any term not exceeding in the aggregate five years; or
g. Supplying of any product or rendering of any service by a company providing voice, data, transmission or switching services, for a term not exceeding five years; or
h. The providing of food supplies and services, including food supplies and management contracts for student centers, dining rooms and cafeterias, for a term not exceeding 30 years; or
i. (Deleted by amendment, P.L.2009, c.4).
j. Any single project for the construction, reconstruction or rehabilitation of a public building, structure or facility, or a public works project including the retention of the services of an architect or engineer in connection with the project, for the length of time necessary for the completion of the actual construction; or
k. The management and operation of bookstores for a term not exceeding 30 years; or
l. Custodial or janitorial services for any term not exceeding in the aggregate three years; or
m. Child care services for a term not exceeding three years; or
n. Security services for a term not exceeding three years; or
o. Ground maintenance services for a term not exceeding three years; or
p. Laundering, dry-cleaning or rental of uniforms for a term not exceeding three years; or
q. (1) The performance of work or services or the furnishing of materials and supplies for the purpose of producing [class] Class I renewable energy, as that term is defined in section 3 of P.L.1999, c.23 (C.48:3-51), at, or adjacent to, buildings owned by, or operations conducted by, the contracting unit, the entire price of which is to be established as a percentage of the resultant savings in energy costs, for a total term, including any extensions, not to exceed 30 years; provided[, however,] that these contracts shall be entered into only subject to and in accordance with guidelines promulgated by the Board of Public Utilities establishing a methodology for computing energy cost savings and energy generation costs. The initial term of the contract shall not exceed 15 years. The contract may be extended for up to one or more additional terms, provided that the total term of the contract, including any extensions or renewals authorized by paragraphs (2) or (3) of this subsection, shall not exceed 30 years.
(2) Notwithstanding any law, rule, or regulation to the contrary, a contract with fixed rates or amounts may be extended beyond the initial 15-year term limit for up to one or more additional terms, provided that the total term of the contract, including any extensions or renewals, shall not exceed 30 years and the extension does not result in rates or amounts that are above the greater of:
(a) the previously contracted rates or amounts; or
(b) 20 percent below the volumetric retail rate, or charges that would be applicable based upon such volumetric rate, applicable to the customer for purchases of electricity from the applicable electric public utility at the time the extension is authorized.
(3) Notwithstanding any law, rule, or regulation to the contrary, a contract with de-escalating or escalating prices may be extended beyond the initial 15-year term limit for up to one or more additional terms, provided that the total term of the contract, including any extensions or renewals, shall not exceed 30 years and the extension does not result in prices above the greater of:
(a) the level that would occur if the annual rate of de-escalation or escalation applied between the second to last and last year of the original contract is applied to the price in the last year of the original contract and thereafter into future years; or
(b) the price that would result from applying the rate that is 20 percent below the volumetric retail rate applicable to the customer for the purchase of electricity from the applicable electric public utility at the time the extension is authorized.
All multi-year leases and contracts entered into pursuant to this section, except contracts and agreements for the provision of work or the supplying of equipment to promote energy conservation through the production of [class] Class I renewable energy and authorized pursuant to subsection q. of this section, and except contracts for insurance coverages, insurance consultant or administrative services, participation or membership in a joint self-insurance fund, risk management programs or related services of a county college insurance group, and participation in an insurance fund established by a county pursuant to N.J.S.40A:10-6 or a joint insurance fund established pursuant to P.L.1983, c.372 (C.40A:10-36 et seq.), shall contain a clause making them subject to the availability and appropriation annually of sufficient funds to meet the extended obligation or contain an annual cancellation clause.
(cf: P.L.2009, c.90, s.45)
5. Section 5 of P.L.1971, c.198 (C.40A:11-5) is amended to read as follows:
5. Any contract the amount of which exceeds the bid threshold, may be negotiated and awarded by the governing body without public advertising for bids and bidding therefor and shall be awarded by resolution of the governing body if:
(1) The subject matter thereof consists of:
(a) (i) Professional services. The governing body shall in each instance state supporting reasons for its action in the resolution awarding each contract and shall forthwith cause to be printed once, in the official newspaper, a brief notice stating the nature, duration, service and amount of the contract, and that the resolution and contract are on file and available for public inspection in the office of the clerk of the county or municipality, or, in the case of a contracting unit created by more than one county or municipality, of the counties or municipalities creating the contracting unit; or (ii) Extraordinary unspecifiable services. The application of this exception shall be construed narrowly in favor of open competitive bidding, whenever possible, and the Division of Local Government Services is authorized to adopt and promulgate rules and regulations after consultation with the Commissioner of Education limiting the use of this exception in accordance with the intention herein expressed. The governing body shall in each instance state supporting reasons for its action in the resolution awarding each contract and shall forthwith cause to be printed, in the manner set forth in subsection (1) (a) (i) of this section, a brief notice of the award of the contract;
(b) The doing of any work by employees of the contracting unit;
(c) The printing of legal briefs, records, and appendices to be used in any legal proceeding in which the contracting unit may be a party;
(d) The furnishing of a tax map or maps for the contracting unit;
(e) The purchase of perishable foods as a subsistence supply;
(f) The supplying of any product or the rendering of any service by a public utility, which is subject to the jurisdiction of the Board of Public Utilities or the Federal Energy Regulatory Commission or its successor, in accordance with tariffs and schedules of charges made, charged or exacted, filed with the board or commission;
(g) The acquisition, subject to prior approval of the Attorney General, of special equipment for confidential investigation;
(h) The printing of bonds and documents necessary to the issuance and sale thereof by a contracting unit;
(i) Equipment repair service if in the nature of an extraordinary unspecifiable service and necessary parts furnished in connection with the service, which exception shall be in accordance with the requirements for extraordinary unspecifiable services;
(j) The publishing of legal notices in newspapers as required by law;
(k) The acquisition of artifacts or other items of unique intrinsic, artistic or historical character;
(l) Those goods and services necessary or required to prepare and conduct an election;
(m) Insurance, including the purchase of insurance coverage and consultant services, which exception shall be in accordance with the requirements for extraordinary unspecifiable services;
(n) The doing of any work by persons with disabilities employed by a sheltered workshop;
(o) The provision of any goods or services including those of a commercial nature, attendant upon the operation of a restaurant by any nonprofit, duly incorporated, historical society at or on any historical preservation site;
(p) (Deleted by amendment, P.L.1999, c.440[.])
(q) Library and educational goods and services;
(r) (Deleted by amendment, P.L.2005, c.212)[.]
(s) The marketing of recyclable materials recovered through a recycling program, or the marketing of any product intentionally produced or derived from solid waste received at a resource recovery facility or recovered through a resource recovery program, including, but not limited to, refuse-derived fuel, compost materials, methane gas, and other similar products;
(t) (Deleted by amendment, P.L.1999, c.440[.])
(u) Contracting unit towing and storage contracts, provided that all of the contracts shall be pursuant to reasonable non-exclusionary and non-discriminatory terms and conditions, which may include the provision of the services on a rotating basis, at the rates and charges set by the municipality pursuant to section 1 of P.L.1979, c.101 (C.40:48-2.49). All contracting unit towing and storage contracts for services to be provided at rates and charges other than those established pursuant to the terms of this paragraph shall only be awarded to the lowest responsible bidder in accordance with the provisions of the "Local Public Contracts Law," P.L.1971, c.198 (C.40A:11-1 et seq.) and without regard for the value of the contract therefor;
(v) The purchase of steam or electricity from, or the rendering of services directly related to the purchase of steam or electricity from a qualifying small power production facility or a qualifying cogeneration facility as defined pursuant to 16 U.S.C. s.796;
(w) The purchase of electricity or administrative or dispatching services directly related to the transmission of purchased electricity by a contracting unit engaged in the generation of electricity;
(x) The printing of municipal ordinances or other services necessarily incurred in connection with the revision and codification of municipal ordinances;
(y) An agreement for the purchase of an equitable interest in a water supply facility or for the provision of water supply services entered into pursuant to section 2 of P.L.1993, c.381 (C.58:28-2), or an agreement entered into pursuant to N.J.S.40A:31-1 et al., so long as the agreement is entered into no later than six months after the effective date of P.L.1993, c.381 (C.58:28-1 et al.);
(z) A contract for the provision of water supply services entered into pursuant to P.L.1995, c.101 (C.58:26-19 et al.);
(aa) The cooperative marketing of recyclable materials recovered through a recycling program;
(bb) A contract for the provision of wastewater treatment services entered into pursuant to P.L.1995, c.216 (C.58:27-19 et al.);
(cc) Expenses for travel and conferences;
(dd) The provision or performance of goods or services for the support or maintenance of proprietary computer hardware and software, except that this provision shall not be utilized to acquire or upgrade non-proprietary hardware or to acquire or update non-proprietary software;
(ee) The management or operation of an airport owned by the contracting unit pursuant to R.S.40:8-1 et seq.;
(ff) Purchases of goods and services at rates set by the Universal Service Fund administered by the Federal Communications Commission;
(gg) A contract for the provision of water supply services or wastewater treatment services entered into pursuant to section 2 of P.L.2002, c.47 (C.40A:11-5.1), or the designing, financing, construction, operation, or maintenance, or any combination thereof, of a water supply facility as defined in subsection (16) of section 15 of P.L.1971, c.198 (C.40A:11-15) or a wastewater treatment system as defined in subsection (19) of section 15 of P.L.1971, c.198 (C.40A:11-15), or any component part or parts thereof, including a water filtration system as defined in subsection (16) of section 15 of P.L.1971, c.198 (C.40A:11-15); or
(hh) The purchase of electricity generated from a power production facility that is fueled by methane gas extracted from a landfill in the county of the contracting unit ; or
(ii) The extension of the term of a renewable energy contract pursuant to subsection (45) of section 15 of P.L.1971, c.198 (C.40A:11-15).
(2) It is to be made or entered into with the United States of America, the State of New Jersey, county, or municipality, or any board, body, officer, agency, or authority thereof, or any other state or subdivision thereof.
(3) Bids have been advertised pursuant to section 4 of P.L.1971, c.198 (C.40A:11-4) on two occasions and (a) no bids have been received on both occasions in response to the advertisement, or (b) the governing body has rejected the bids on two occasions because it has determined that they are not reasonable as to price, on the basis of cost estimates prepared for or by the contracting agent prior to the advertising therefor, or have not been independently arrived at in open competition, or (c) on one occasion no bids were received pursuant to (a) and on one occasion all bids were rejected pursuant to (b), in whatever sequence; a contract may then be negotiated and may be awarded upon adoption of a resolution by a two-thirds affirmative vote of the authorized membership of the governing body authorizing the contract; provided, however, that:
(i) A reasonable effort is first made by the contracting agent to determine that the same or equivalent goods or services, at a cost which is lower than the negotiated price, are not available from an agency or authority of the United States, the State of New Jersey or of the county in which the contracting unit is located, or any municipality in close proximity to the contracting unit;
(ii) The terms, conditions, restrictions, and specifications set forth in the negotiated contract are not substantially different from those which were the subject of competitive bidding pursuant to section 4 of P.L.1971, c.198 (C.40A:11-4); and
(iii) Any minor amendment or modification of any of the terms, conditions, restrictions, and specifications, which were the subject of competitive bidding pursuant to section 4 of P.L.1971, c.198 (C.40A:11-4), shall be stated in the resolution awarding the contract; provided further, however, that if on the second occasion the bids received are rejected as unreasonable as to price, the contracting agent shall notify each responsible bidder submitting bids on the second occasion of its intention to negotiate, and afford each bidder a reasonable opportunity to negotiate, but the governing body shall not award the contract unless the negotiated price is lower than the lowest rejected bid price submitted on the second occasion by a responsible bidder, is the lowest negotiated price offered by any responsible vendor, and is a reasonable price for goods or services.
Whenever a contracting unit shall determine that a bid was not arrived at independently in open competition pursuant to subsection (3) of this section it shall thereupon notify the county prosecutor of the county in which the contracting unit is located and the Attorney General of the facts upon which its determination is based, and when appropriate, it may institute appropriate proceedings in any State or federal court of competent jurisdiction for a violation of any State or federal antitrust law or laws relating to the unlawful restraint of trade.
(4) The contracting unit has solicited and received at least three quotations on materials, supplies, or equipment for which a State contract has been issued pursuant to section 12 of P.L.1971, c.198 (C.40A:11-12), and the lowest responsible quotation is at least 10 percent less than the price the contracting unit would be charged for the identical materials, supplies, or equipment, in the same quantities, under the State contract. A contract entered into pursuant to this subsection may be awarded only upon adoption of a resolution by the affirmative vote of two-thirds of the full membership of the governing body of the contracting unit at a meeting thereof authorizing the contract. A copy of the purchase order relating to the contract, the requisition for purchase order, if applicable, and documentation identifying the price of the materials, supplies or equipment under the State contract and the State contract number shall be filed with the director within five working days of the award of the contract by the contracting unit. The director shall notify the contracting unit of receipt of the material and shall make the material available to the State Treasurer. The contracting unit shall make available to the director upon request any other documents relating to the solicitation and award of the contract, including, but not limited to, quotations, requests for quotations, and resolutions. The director periodically shall review material submitted by contracting units to determine the impact of the contracts on local contracting and shall consult with the State Treasurer on the impact of the contracts on the State procurement process. The director may, after consultation with the State Treasurer, adopt rules in accordance with the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.) to limit the use of this subsection, after considering the impact of contracts awarded under this subsection on State and local contracting, or after considering the extent to which the award of contracts pursuant to this subsection is consistent with and in furtherance of the purposes of the public contracting laws.
(5) Notwithstanding any provision of law, rule, or regulation to the contrary, the subject matter consists of the combined collection and marketing, or the cooperative combined collection and marketing of recycled material recovered through a recycling program, or any product intentionally produced or derived from solid waste received at a resource recovery facility or recovered through a resource recovery program including, but not limited to, refuse-derived fuel, compost materials, methane gas, and other similar products, provided that in lieu of engaging in public advertising for bids and the bidding therefor, the contracting unit shall, prior to commencing the procurement process, submit for approval to the Director of the Division of Local Government Services, a written detailed description of the process to be followed in securing the services. Within 30 days after receipt of the written description the director shall, if the director finds that the process provides for fair competition and integrity in the negotiation process, approve, in writing, the description submitted by the contracting unit. If the director finds that the process does not provide for fair competition and integrity in the negotiation process, the director shall advise the contracting unit of the deficiencies that must be remedied. If the director fails to respond in writing to the contracting unit within 30 days, the procurement process as described shall be deemed approved. As used in this section, "collection" means the physical removal of recyclable materials from curbside or any other location selected by the contracting unit.
(6) Notwithstanding any provision of law, rule, or regulation to the contrary, the contract is for the provision of electricity by a contracting unit engaged in the distribution of electricity for retail sale, for the provision of wholesale electricity by a municipal shared services energy authority as defined pursuant to section 3 of P.L.2015, c.129 (C.40A:66-3), or for the provision of administrative or dispatching services related to the transmission of electricity, provided that in lieu of engaging in public advertising for bids and the bidding therefor, the contracting unit shall, prior to commencing the procurement process, submit for approval to the Director of the Division of Local Government Services, a written detailed description of the process to be followed in securing these services. The process shall be designed in a way that is appropriate to and commensurate with industry practices, and the integrity of the government contracting process. Within 30 days after receipt of the written description, the director shall, if the director finds that the process provides for fair competition and integrity in the negotiation process, approve, in writing, the description submitted by the contracting unit. If the director finds that the process does not provide for fair competition and integrity in the negotiation process, the director shall advise the contracting unit of the deficiencies that must be remedied. If the director fails to respond in writing to the contracting unit within 30 days, the procurement process, as submitted to the director pursuant to this section, shall be deemed approved.
(cf: P.L.2017, c.131, s.174)
6. Section 15 of P.L.1971, c.198 (C.40A:11-15) is amended to read as follows:
15. All contracts for the provision or performance of goods or services shall be awarded for a period not to exceed 24 consecutive months, except that contracts for professional services pursuant to subparagraph (i) of paragraph (a) of subsection (1) of section 5 of P.L.1971, c.198 (C.40A:11-5) shall be awarded for a period not to exceed 12 consecutive months. Contracts may be awarded for longer periods of time as follows:
(1) Supplying of:
(a) (Deleted by amendment, P.L.1996, c.113[.])
(b) (Deleted by amendment, P.L.1996, c.113[.])
(c) Thermal energy produced by a cogeneration facility, for use for heating or air conditioning or both, for any term not exceeding 40 years, when the contract is approved by the Board of Public Utilities.
For the purposes of this paragraph, "cogeneration" means the simultaneous production in one facility of electric power and other forms of useful energy such as heating or process steam;
(2) (Deleted by amendment, P.L.1977, c.53[.])
(3) The collection and disposal of municipal solid waste, the collection and disposition of recyclable material, or the disposal of sewage sludge, for any term not exceeding in the aggregate, five years;
(4) The collection and recycling of methane gas from a sanitary landfill facility, for any term not exceeding 25 years, when the contract is in conformance with a district solid waste management plan approved pursuant to P.L.1970, c.39 (C.13:1E-1 et seq.), and with the approval of the Division of Local Government Services in the Department of Community Affairs and the Department of Environmental Protection. The contracting unit shall award the contract to the highest responsible bidder, notwithstanding that the contract price may be in excess of the amount of any necessarily related administrative expenses; except that if the contract requires the contracting unit to expend funds only, the contracting unit shall award the contract to the lowest responsible bidder. The approval by the Division of Local Government Services of public bidding requirements shall not be required for those contracts exempted therefrom pursuant to section 5 of P.L.1971, c.198 (C.40A:11-5);
(5) Data processing service, for any term of not more than seven years;
(6) Insurance, including the purchase of insurance coverages, insurance consulting or administrative services, claims administration services, including participation in a joint self-insurance fund, risk management program or related services provided by a contracting unit insurance group, or participation in an insurance fund established by a local unit pursuant to N.J.S.40A:10-6, or a joint insurance fund established pursuant to P.L.1983, c.372 (C.40A:10-36 et seq.), for any term of not more than three years;
(7) Leasing or servicing of (a) automobiles, motor vehicles, machinery, and equipment of every nature and kind, for a period not to exceed five years, or (b) machinery and equipment used in the generation of electricity by a municipal shared services energy authority established pursuant to section 4 of P.L.2015, c.129 (C.40A:66-4), or a contracting unit engaged in the generation of electricity, for a period not to exceed 20 years; provided, however, a contract shall be awarded only subject to and in accordance with the rules and regulations promulgated by the Director of the Division of Local Government Services in the Department of Community Affairs;
(8) The supplying of any product or the rendering of any service by a company providing voice, data, transmission, or switching services for a term not exceeding five years;
(9) Any single project for the construction, reconstruction, or rehabilitation of any public building, structure, or facility, or any public works project, including the retention of the services of any architect or engineer in connection therewith, for the length of time authorized and necessary for the completion of the actual construction;
(10) The providing of food services for any term not exceeding three years;
(11) On-site inspections and plan review services undertaken by private agencies pursuant to the "State Uniform Construction Code Act," P.L.1975, c.217 (C.52:27D-119 et seq.) for any term of not more than three years;
(12) (Deleted by amendment, P.L.2009, c.4)[.]
(13) (Deleted by amendment, P.L.1999, c.440[.])
(14) (Deleted by amendment, P.L.1999, c.440[.])
(15) Leasing of motor vehicles, machinery, and other equipment primarily used to fight fires, for a term not to exceed [ten] 10 years, when the contract includes an option to purchase, subject to and in accordance with rules and regulations promulgated by the Director of the Division of Local Government Services in the Department of Community Affairs;
(16) The provision of water supply services or the designing, financing, construction, operation, or maintenance, or any combination thereof, of a water supply facility, or any component part or parts thereof, including a water filtration system, for a period not to exceed 40 years, when the contract for these services is approved by the Division of Local Government Services in the Department of Community Affairs, the Board of Public Utilities, and the Department of Environmental Protection pursuant to P.L.1985, c.37 (C.58:26-1 et al.), except that no approvals shall be required for those contracts otherwise exempted pursuant to subsection (30), (31), (34), (35) or (43) of this section.
For the purposes of this subsection, "water supply services" means any service provided by a water supply facility; "water filtration system" means any equipment, plants, structures, machinery, apparatus, or land, or any combination thereof, acquired, used, constructed, rehabilitated, or operated for the collection, impoundment, storage, improvement, filtration, or other treatment of drinking water for the purposes of purifying and enhancing water quality and insuring its potability prior to the distribution of the drinking water to the general public for human consumption, including plants and works, and other personal property and appurtenances necessary for their use or operation; and "water supply facility" means and refers to the real property and the plants, structures, or interconnections between existing water supply facilities, machinery and equipment and other property, real, personal, and mixed, acquired, constructed, or operated, or to be acquired, constructed, or operated, in whole or in part by or on behalf of a political subdivision of the State or any agency thereof, for the purpose of augmenting the natural water resources of the State and making available an increased supply of water for all uses, or of conserving existing water resources, and any and all appurtenances necessary, useful, or convenient for the collecting, impounding, storing, improving, treating, filtering, conserving, or transmitting of water and for the preservation and protection of these resources and facilities and providing for the conservation and development of future water supply resources;
(17) The provision of resource recovery services by a qualified vendor, the disposal of the solid waste delivered for disposal which cannot be processed by a resource recovery facility or the residual ash generated at a resource recovery facility, including hazardous waste and recovered metals and other materials for reuse, or the design, financing, construction, operation, or maintenance of a resource recovery facility for a period not to exceed 40 years when the contract is approved by the Division of Local Government Services in the Department of Community Affairs, and the Department of Environmental Protection pursuant to P.L.1985, c.38 (C.13:1E-136 et al.); and when the resource recovery facility is in conformance with a district solid waste management plan approved pursuant to P.L.1970, c.39 (C.13:1E-1 et seq.).
For the purposes of this subsection, "resource recovery facility" means a solid waste facility constructed and operated for the incineration of solid waste for energy production and the recovery of metals and other materials for reuse, or a mechanized composting facility, or any other facility constructed or operated for the collection, separation, recycling, and recovery of metals, glass, paper, and other materials for reuse or for energy production; and "residual ash" means the bottom ash, fly ash, or any combination thereof, resulting from the combustion of solid waste at a resource recovery facility;
(18) The sale of electricity or thermal energy, or both, produced by a resource recovery facility for a period not to exceed 40 years when the contract is approved by the Board of Public Utilities, and when the resource recovery facility is in conformance with a district solid waste management plan approved pursuant to P.L.1970, c.39 (C.13:1E-1 et seq.).
For the purposes of this subsection, "resource recovery facility" means a solid waste facility constructed and operated for the incineration of solid waste for energy production and the recovery of metals and other materials for reuse, or a mechanized composting facility, or any other facility constructed or operated for the collection, separation, recycling, and recovery of metals, glass, paper, and other materials for reuse or for energy production;
(19) The provision of wastewater treatment services or the designing, financing, construction, operation, or maintenance, or any combination thereof, of a wastewater treatment system, or any component part or parts thereof, for a period not to exceed 40 years, when the contract for these services is approved by the Division of Local Government Services in the Department of Community Affairs and the Department of Environmental Protection pursuant to P.L.1985, c.72 (C.58:27-1 et al.), except that no approvals shall be required for those contracts otherwise exempted pursuant to subsection (36) or (43) of this section.
For the purposes of this subsection, "wastewater treatment services" means any services provided by a wastewater treatment system; and "wastewater treatment system" means equipment, plants, structures, machinery, apparatus, or land, or any combination thereof, acquired, used, constructed, or operated for the storage, collection, reduction, recycling, reclamation, disposal, separation, or other treatment of wastewater or sewage sludge, or for the final disposal of residues resulting from the treatment of wastewater, including, but not limited to, pumping and ventilating stations, facilities, plants and works, connections, outfall sewers, interceptors, trunk lines, and other personal property and appurtenances necessary for their operation;
(20) The supplying of goods or services for the purpose of lighting public streets, for a term not to exceed five years;
(21) The provision of emergency medical services for a term not to exceed five years;
(22) Towing and storage contracts, awarded pursuant to paragraph u. of subsection (1) of section 5 of P.L.1971, c.198 (C.40A:11-5) for any term not exceeding three years;
(23) Fuel for the purpose of generating electricity for a term not to exceed eight years;
(24) The purchase of electricity or administrative or dispatching services related to the transmission of electricity, from a supplier of electricity subject to the jurisdiction of a federal regulatory agency, from a qualifying small power producing facility or qualifying cogeneration facility, as defined by 16 U.S.C. s.796, or from any supplier of electricity within any regional transmission organization or independent system operator or from an organization or operator or their successors, by a contracting unit engaged in the generation of electricity for retail sale, as of May 24, 1991, for a term not to exceed 40 years; or by a contracting unit engaged solely in the distribution of electricity for retail sale for a term not to exceed [ten] 10 years, except that a contract with a contracting unit, engaged solely in the distribution of electricity for retail sale, in excess of [ten] 10 years, shall require the written approval of the Director of the Division of Local Government Services. If the director fails to respond in writing to the contracting unit within 10 business days, the contract shall be deemed approved;
(25) Basic life support services, for a period not to exceed five years.
For the purposes of this subsection, "basic life support" means a basic level of prehospital care, which includes but need not be limited to patient stabilization, airway clearance, cardiopulmonary resuscitation, hemorrhage control, initial wound care, and fracture stabilization;
(26) (Deleted by amendment, P.L.1999, c.440[.])
(27) The provision of transportation services to an elderly person, an individual with a disability, or an indigent person for any term of not more than three years.
For the purposes of this subsection, "elderly person" means a person who is 60 years of age or older. "Individual with a disability" means a person of any age who, by reason of illness, injury, age, congenital malfunction, or other permanent or temporary incapacity or disability, is unable, without special facilities or special planning or design to utilize mass transportation facilities and services as effectively as persons who are not so affected. "Indigent person " means a person of any age whose income does not exceed 100 percent of the poverty line, adjusted for family size, established and adjusted under section 2 of the "Community Services Block Grant Act," (42 U.S.C. s.9902);
(28) The supplying of liquid oxygen or other chemicals, for a term not to exceed five years, when the contract includes the installation of tanks or other storage facilities by the supplier, on or near the premises of the contracting unit;
(29) The performance of patient care services by contracted medical staff at county hospitals, correction facilities, and long term care facilities, for any term of not more than three years;
(30) The acquisition of an equitable interest in a water supply facility pursuant to section 2 of P.L.1993, c.381 (C.58:28-2), or a contract entered into pursuant to the "County and Municipal Water Supply Act," N.J.S.40A:31-1 et seq., if the contract is entered into no later than January 7, 1995, for any term of not more than forty years;
(31) The provision of water supply services or the financing, construction, operation, or maintenance or any combination thereof, of a water supply facility or any component part or parts thereof, by a partnership or copartnership established pursuant to a contract authorized under section 2 of P.L.1993, c.381 (C.58:28-2), for a period not to exceed 40 years;
(32) Laundry service and the rental, supply, and cleaning of uniforms for any term of not more than three years;
(33) The supplying of any product or the rendering of any service, including consulting services, by a cemetery management company for the maintenance and preservation of a municipal cemetery operating pursuant to the "New Jersey Cemetery Act, 2003," P.L.2003, c.261 (C.45:27-1 et seq.), for a term not exceeding 15 years;
(34) A contract between a public entity and a private firm pursuant to P.L.1995, c.101 (C.58:26-19 et al.) for the provision of water supply services may be entered into for any term which, when all optional extension periods are added, may not exceed 40 years;
(35) A contract for the purchase of a supply of water from a public utility company subject to the jurisdiction of the Board of Public Utilities in accordance with tariffs and schedules of charges made, charged or exacted or contracts filed with the Board of Public Utilities, for any term of not more than 40 years;
(36) A contract between a public entity and a private firm or public authority pursuant to P.L.1995, c.216 (C.58:27-19 et al.) for the provision of wastewater treatment services may be entered into for any term of not more than 40 years, including all optional extension periods;
(37) The operation and management of a facility under a license issued or permit approved by the Department of Environmental Protection, including a wastewater treatment system, a stormwater management system, or a water supply or distribution facility, as the case may be, for any term of not more than [ten] 10 years.
For the purposes of this subsection, "wastewater treatment system" refers to facilities operated or maintained for the storage, collection, reduction, disposal, or other treatment of wastewater or sewage sludge, remediation of groundwater contamination, stormwater runoff, or the final disposal of residues resulting from the treatment of wastewater; "stormwater management system" means the same as that term is defined in section 3 of P.L.2019, c.42 (C.40A:26B-3); and "water supply or distribution facility" refers to facilities operated or maintained for augmenting the natural water resources of the State, increasing the supply of water, conserving existing water resources, or distributing water to users;
(38) Municipal solid waste collection from facilities owned by a contracting unit, for any term of not more than three years;
(39) Fuel for heating purposes, for any term of not more than three years;
(40) Fuel or oil for use in motor vehicles for any term of not more than three years;
(41) Plowing and removal of snow and ice for any term of not more than three years;
(42) Purchases made under a contract awarded by the Director of the Division of Purchase and Property in the Department of the Treasury for use by counties, municipalities, or other contracting units pursuant to section 3 of P.L.1969, c.104 (C.52:25-16.1), for a term not to exceed the term of that contract;
(43) A contract between the governing body of a city of the first class and a duly incorporated nonprofit association for the provision of water supply services as defined in subsection (16) of this section, or wastewater treatment services as defined in subsection (19) of this section, may be entered into for a period not to exceed 40 years;
(44) The purchase of electricity generated through Class I renewable energy or from a power production facility that is fueled by methane gas extracted from a landfill in the county of the contacting unit for any term not exceeding 25 years;
(45) (a) The provision or performance of goods or services for the purpose of producing Class I renewable energy or Class II renewable energy, as those terms are defined in section 3 of P.L.1999, c.23 (C.48:3-51), at, or adjacent to, buildings owned by, or operations conducted by, the contracting unit, the entire price of which is to be established as a percentage of the resultant savings in energy costs, for a total term, including any extensions, not to exceed [15] 30 years; provided [, however,] that a contract shall be entered into only subject to and in accordance with guidelines promulgated by the Board of Public Utilities establishing a methodology for computing energy cost savings and energy generation costs. The initial term of the contract shall not exceed 15 years. The contract may be extended for up to one or more additional terms, provided that the total term of the contract, including any extensions or renewals authorized by subparagraphs (b) or (c) of this paragraph, shall not exceed 30 years.
(b) Notwithstanding any law, rule, or regulation to the contrary, a contract with fixed rates or amounts may be extended beyond the initial 15-year term limit for up to one or more additional terms, provided that the total term of the contract, including any extensions or renewals, shall not exceed 30 years and the extension does not result in rates or amounts that are above the greater of:
(i) the previously contracted rates or amounts; or
(ii) 20 percent below the volumetric retail rate, or charges that would be applicable based upon such volumetric rate, applicable to the customer for purchases of electricity from the applicable electric public utility at the time the extension is authorized.
(c) Notwithstanding any law, rule, or regulation to the contrary, a contract with de-escalating or escalating prices may be extended beyond the initial 15-year term limit for up to one or more additional terms, provided that the total term of the contract, including any extensions or renewals, shall not exceed 30 years and the extension does not result in prices above the greater of:
(i) the level that would occur if the annual rate of de-escalation or escalation applied between the second to last and last year of the original contract is applied to the price in the last year of the original contract and thereafter into future years; or
(ii) the price that would result from applying the rate that is 20 percent below the volumetric retail rate applicable to the customer for the purchase of electricity from the applicable electric public utility at the time the extension is authorized.
(46) A power supply contract, as defined pursuant to section 3 of P.L.2015, c.129 (C.40A:66-3), between a member municipality as defined pursuant to section 3 of P.L.2015, c.129 (C.40A:66-3), and the municipal shared services energy authority established pursuant to the provisions of P.L.2015, c.129 (C.40A:66-1 et al.) to meet the electric power needs of its members, for the lease, operation, or management of electric generation within a member municipality's corporate limits and franchise area or the purchase of electricity, or the purchase of fuel for generating units for a term not to exceed 40 years;
(47) A contract entered into pursuant to paragraph (2) of subsection a. of section 6 of P.L.2006, c.46 (C.30:9-23.20) between a county hospital authority and a manager for the management, operation, and maintenance of a hospital owned by the authority or the county for a term not to exceed 20 years, provided, however, that a contract entered into pursuant to paragraph (2) of subsection a. of section 6 of P.L.2006, c.46 (C.30:9-23.20) may be renewed for two additional periods, not to exceed five years each; and
(48) (a) A lease agreement that provides for the use, lease, lease-back, acquisition, operation, or maintenance of ferry boats and related facilities and services, for a period not to exceed 20 years, except as provided by paragraph (b) of this subsection. For the purposes of this subsection, "related facilities and services" includes, but is not limited to, docks and terminals, parking facilities, intermodal facilities, ingress and egress to the parking and terminal facilities, and the provision of goods and services to the public, provided that a contract for the provision or performance of such goods or services is related to ferry services and requires:
(1) a total capital expenditure exceeding $300,000, as certified by the chief financial officer of the contracting unit, including but not limited to capital expenditures made by the lessee; or
(2) a capital improvement that has a life expectancy upon completion exceeding 20 years, as certified by the chief financial officer of the contracting unit.
(b) A lease agreement for a capital improvement under subparagraph (2) of paragraph (a) of this subsection may be awarded for a period not to exceed 50 years.
(c) Each worker employed in a construction project under a contract executed pursuant to this subsection 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.).
Any contract for services other than professional services, the statutory length of which contract is for three years or less, may include provisions for no more than one two-year, or two one-year, extensions, subject to the following limitations: a. The contract shall be awarded by resolution of the governing body upon a finding by the governing body that the services are being performed in an effective and efficient manner; b. No contract shall be extended so that it runs for more than a total of five consecutive years; c. Any price change included as part of an extension shall be based upon the price of the original contract as cumulatively adjusted pursuant to any previous adjustment or extension and shall not exceed the change in the index rate for the 12 months preceding the most recent quarterly calculation available at the time the contract is renewed; and d. The terms and conditions of the contract remain substantially the same.
All multiyear leases and contracts entered into pursuant to this section, including any two-year or one-year extensions, except contracts involving the supplying of electricity for the purpose of lighting public streets and contracts for thermal energy authorized pursuant to subsection (1) above, construction contracts authorized pursuant to subsection (9) above, contracts for the provision or performance of goods or services or the supplying of equipment to promote energy conservation through the production of Class I renewable energy or Class II renewable energy authorized pursuant to subsection (45) above, contracts for water supply services or for a water supply facility, or any component part or parts thereof authorized pursuant to subsection (16), (30), (31), (34), (35), (37), or (43) above, contracts for resource recovery services or a resource recovery facility authorized pursuant to subsection (17) above, contracts for the sale of energy produced by a resource recovery facility authorized pursuant to subsection (18) above, contracts for wastewater treatment services or for a wastewater treatment system or any component part or parts thereof authorized pursuant to subsection (19), (36), (37), or (43) above, contracts for the operation and maintenance of a stormwater management system authorized pursuant to subsection (37) above, and contracts for the purchase of electricity or administrative or dispatching services related to the transmission of electricity authorized pursuant to subsection (24) above, contracts for the purchase of electricity generated from a power production facility that is fueled by methane gas authorized pursuant to subsection (44) above, and power supply contracts authorized pursuant to subsection (46) respectively, shall contain a clause making them subject to the availability and appropriation annually of sufficient funds as may be required to meet the extended obligation, or contain an annual cancellation clause.
The Division of Local Government Services in the Department of Community Affairs shall adopt and promulgate rules and regulations concerning the methods of accounting for all contracts that do not coincide with the fiscal year.
All contracts shall cease to have effect at the end of the contracted period and shall not be extended by any mechanism or provision, unless in conformance with the "Local Public Contracts Law," P.L.1971, c.198 (C.40A:11-1 et seq.), except that a contract may be extended by mutual agreement of the parties to the contract when a contracting unit has commenced rebidding prior to the time the contract expires or when the awarding of a contract is pending at the time the contract expires.
(cf: P.L.2019, c.79, s.1)
7. This act shall take effect immediately.
STATEMENT
This bill, which is designated as the "Affordable Power Purchase Agreements Extension Act," amends current law regarding renewable energy power purchase agreements (energy contracts). Under current law, certain public entities are authorized to enter into energy contracts for a term not to exceed 15 years. The bill authorizes certain public entities to extend, without public advertising for bids and bidding, existing energy contracts for a term not to exceed 30 years in the aggregate.
It is the sponsor's intent that amending current law to allow certain energy contracts to be extended, subject to safeguards that preserve the ratepayer benefits of the original agreements, is in the public interest.
