New Jersey Administrative Code › Title 17 - TREASURY - GENERAL › Chapter 49 - PUBLIC-PRIVATE PARTNERSHIPS RULES › Subchapter 8 - STATE GOVERNMENT ENTITY PROCEDURES AND REQUIREMENTS › Section 17:49-8.5 - Project review

Current through Register Vol. 56, No. 14, July 15, 2024
(a) A State
				government entity shall provide the Office of Public Finance the following
				items for review of a public-private partnership project in an application
				format prescribed by the Office of Public Finance:
1. A full description of the proposed
				public-private partnership project;
2. A copy of the entire proposed
				public-private partnership agreement, including, without limitation, riders,
				appendices, sub-agreements, and contingency agreements between the State
				government entity and the private entity, as well as any supporting documents
				including the development agreement, any relevant contracts and leases between
				the State government entity and the private entity, and all information
				obtained by, and findings of, the State government entity, including redacted
				copies of all documents for purposes of providing any public document as
				required under the Open Public Records Act.
3. In order to be eligible for consideration
				as a public-private partnership, an agreement between the State government
				entity and the private entity shall include adequate documentation of, at a
				minimum, the following:
i. An agreement term
				length clearly defined to include the estimated construction and operational
				period, as needed;
ii. A complete
				description of the public-private partnership project to be developed and the
				functions and responsibilities to be performed by the State government entity
				and the private entity;
iii. Terms
				regarding the planning, acquisition, financing, development, design,
				construction, reconstruction, rehabilitation, replacement, improvement,
				maintenance, management, operation, repair, leasing, and ownership of the
				public-private partnership project;
iv. A provision allowing express permission
				of the public entity, and State and local officials, to inspect project-related
				assets or property; such provision shall include any specific limitations,
				particular requirements, or allowances related to such review. Examples of
				limitations, particular requirements, or allowances may include, but are not
				limited to, any notice requirements, time constraints, or review
				restrictions;
v. The roles and
				responsibilities of the parties for the duration of the agreement;
vi. Procedures for amendment of the
				public-private partnership agreement;
vii. Requirements for bonds or other forms of
				security in amounts acceptable to the State government entity;
viii. Standards and rights of parties
				relating to payments by the State government entity to the private entity if
				payments are part of the project;
ix. Requirements for any payment by the
				private entity of any costs incurred by the State governmental entity before
				execution of the public-private partnership agreement, including costs of
				retaining independent experts to review, analyze, and advise the local
				government unit with respect to the project;
x. Standards for construction and maintenance
				of the project;
xi. Standards for
				allocation of costs of development including allocation of liability for cost
				overruns;
xii. Performance criteria
				and incentives, if any;
xiii. Risk
				mitigation plans and responsibilities at all project stages, including at
				project development, construction, operations, and maintenance for both the
				private entity and State government entity;
xiv. The rights that the State government
				entity and the private entity may have, if any, to revenue generated as a
				result of the agreement, and any standards for allocation of such revenue
				between the parties;
xv. A maximum
				rate of return to the private entity and a provision for the distribution of
				excess earnings to the State government entity or to the private party for debt
				reduction;
xvi. The minimum quality
				standards, technical requirements, and/or performance criteria applicable to
				the public-private partnership project, including key performance indicators,
				reporting requirements, incentives, cure periods, standards of performance or
				metrics, including performance points systems, monitoring rights of the State
				government entity, and penalties for failure to achieve these
				standards;
xvii. A maintenance plan
				for the full life cycle of the public-private partnership project;
xviii. A hand-back plan that includes
				requirements regarding return of the facility in a state of good repair, and
				standards for determining such state of repair;
xix. Any compensation and/or revenue
				structure of the private entity related to the project coming into the private
				entity, including the extent to which, and terms upon which, the private entity
				may charge fees to individuals and entities for the use of the public-private
				partnership project, as well as a full payment schedule (if
				applicable);
xx. Rights and
				remedies, including, but not limited to, compensatory, liquidated, or other
				types of damages, and dispute resolution procedures available or applicable in
				the event of nonperformance or breach of contract, up to and including,
				material default;
xxi. Procedures
				for notice and cure of default;
xxii. Insurance requirements for any project
				to be operated by the private entity;
xxiii. Grounds for termination of the
				public-private partnership agreement by the State government entity and the
				financial impact of that termination;
xxiv. Grounds for termination of the
				public-private partnership agreement by the private entity and the financial
				impact of that termination;
xxv.
				Provisions for the termination of the public-private partnership agreement and
				the disposition of public-private partnership facility upon
				termination;
xxvi. Identification
				of funding sources to be used to fully fund the capital, operation,
				maintenance, and other expenses under the public-private partnership
				agreement;
xxvii. The nature of the
				State government entity and private entity's property interest including the
				acquisition of any property, which must provide that the State government
				entity shall retain full ownership of the land upon which the project is
				located;
xxviii. An articulation of
				the legal relationship and requirements of the parties involved, including the
				rights and responsibilities of the parties as to design elements, technologies,
				techniques, methods, information, or intellectual property contained in an
				agreement; and
xxix. Details on
				distribution of costs between the private entity and State government entity,
				including costs of retaining independent experts to review, analyze, and advise
				the State government entity with respect to the proposal, and any stipends
				authorized for work completed, which shall not exceed 0.5 percent of the
				project total; and
xxx. When
				applicable, a provision in the agreement establishing that the private entity
				will not take any action or fail to take any action, if any such action or
				failure to take action would adversely affect the exclusion from gross income
				of the interest on any Outstanding Tax-Exempt Bonds under Section 103 of the
				Internal Revenue Code (Code). The provision shall also establish that the
				applicant will not directly or indirectly use or permit the use of any proceeds
				of any Outstanding Tax-Exempt Bonds or take or omit to take any action that
				would cause any Outstanding Tax-Exempt Bond to be an "arbitrage bond" within
				the meaning of Section 148(a) of the Code;
4. A project agreement, including the
				following terms and conditions:
i. Ensure each
				worker employed in the construction, rehabilitation, or building maintenance
				services of facilities by a private entity that has entered into a
				public-private partnership agreement with a State government entity 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 (N.J.S.A. 34:11-56.25et seq.) and
				P.L.
				2005, c. 379 (N.J.S.A.
				34:11-56.58et seq.);
ii. Guarantee
				that any building construction projects under a public-private partnership
				agreement contain a project labor agreement. The project labor agreement shall
				be subject to N.J.S.A. 52:38-1et seq., and shall be in a manner that, to the
				greatest extent possible, enhances employment opportunities for individuals
				residing in the county of the project's location;
iii. Ensure the general contractor,
				construction manager, design-build team, or subcontractor for a construction
				project be registered pursuant to N.J.S.A. 34:11-56.48et seq., and be
				classified by the Division of Property Management and Construction, or shall be
				pre-qualified by the Department of Transportation, New Jersey Transit, or the
				New Jersey Turnpike Authority, as appropriate, to perform work on a
				public-private partnership project;
iv. When practicable, adhere to the
				Leadership in Energy and Environmental Design Green Building Rating System as
				adopted by the United States Green Building Council, the Green Globes Program
				adopted by the Green Building Initiative, or a comparable nationally
				recognized, accepted, and appropriate sustainable development rating system and
				the green building manual prepared by the Commissioner of Community Affairs
				pursuant to
				section
				1 of
				P.L.
				2007, c. 132 (N.J.S.A.
				52:27D-130.6);
v. Ensure that the
				general contractor, construction manager, or design-build contractor post a
				performance bond to ensure the completion of the project and a payment bond
				guaranteeing prompt payment of moneys due in accordance with and conforming to
				the requirements of N.J.S.A. 2A:44-143et seq.;
vi. Where a project is less than $ 50
				million, include a requirement that precludes contractors from engaging in the
				project if the contractor has contributed to the private entity's financing of
				the project in an amount of more than 10 percent of the project's financing
				costs;
vii. Where appropriate,
				include a requirement that work performed under the agreement is subject to the
				provisions of the Construction Industry Independent Contractor Act,
				P.L.
				2007, c. 114 (N.J.S.A.
				34:20-1et seq.); and
viii. In the
				event that a private entity assumes full financial and administrative
				responsibility for a project, a stipulation that the private entity shall not
				be subject to the procurement and contracting requirements of statutes
				applicable to the State government entity at which the project is completed,
				including, but not limited to, the public contracting provisions of P.L. 1954,
				c. 48 (N.J.S.A. 52:34-6et seq.);
5. A State government entity shall provide
				the estimated costs, including development and operating costs, as well as
				financial documentation for the project showing the underlying financial models
				and assumptions that determined the estimated costs. The financial
				documentation shall include:
i. At least three
				different projected estimated costs showing scenarios in which materially
				different economic circumstances are assumed, and an explanation for how the
				estimated costs were determined based on the three scenarios, including a net
				present value analysis for each of the scenarios; and
ii. A long-range maintenance plan and a
				long-range maintenance bond specifying the expenditures that qualify as an
				appropriate investment in maintenance;
6. A completed Initial Screening Tool,
				including any changes to the project made in response to the results of the
				self-assessment;
7. A completed
				project analysis, including any supporting documents, as well as documentation
				of the qualification of any experts retained to perform any aspect of the
				project analysis;
8. A timetable
				for completion of the construction of the project, including all
				pre-development and development phases;
9. All relevant engineering and architectural
				plans, drawings, and schematics;
10. An analysis of all available funding
				options for the project, including an analysis of the financial viability and
				advisability of such project, along with evidence of the public benefit in
				advancing the project as a public-private partnership;
11. A performance monitoring plan for the
				agreement. The performance monitoring plan will provide details on how the
				State government entity will monitor the performance of the private entity for
				the full term of the agreement. This plan shall identify the required skills
				and resources for monitoring performance, specify schedules for periodic
				monitoring, and specify the requirements for the preparation and issuance of
				reports and/or updates to support performance monitoring, and specify any
				applicable metrics for monitoring performance, including the use of possible
				performance-points systems;
12. The
				record of the entity's compliance with N.J.A.C. 17:49-8.3(d);
13. A list of all experts retained, including
				information on expert qualification and industry experience;
14. An affirmation that any proposed
				procurement contains all necessary elements, based upon minimum contract
				standards outlined in this section; and
15. When applicable, an opinion of Bond
				Counsel, defined as an opinion signed by an attorney or firm of attorneys in
				good standing in the field of law related to municipal bonds, that such project
				will not adversely affect the tax-exempt status of any Outstanding
				Bonds.