New Jersey Governor Phil Murphy signed bill S-865, which provides financial oversight and approval of public-private partnership (P3) agreements by the State Treasurer.
Under the new legislation, government bodies including school district, municipalities, counties and state entities, may enter into a public-private partnership agreement with a private organization, which would assume the financial and administrative responsibility for the development, construction, reconstruction, repair, alteration, improvement, extension, operation, and maintenance of a government-related project that is financed in whole by the private sector organization. However, the law requires local public input and finance controls, as well as land use and financial approvals, should a municipality, county, or school district seek to pursue a P3.
The legislation also requires that workers employed in the construction, rehabilitation or building maintenance services of a project be subject to the applicable provisions of the "New Jersey Prevailing Wage Act;” that building construction projects contain a project labor agreement; and that the general contractor, construction manager, design-build team, or subcontractor for a project be registered and classified by the State to perform work on a project.
Additionally, the legislation allows for a small number (8) of statewide roadway or highway projects that require not only private investment, but also public support (at least $100 million). For local projects this limit is significantly lower ($10 million). A private entity is required to establish a construction account to fully capitalize and fund the project, while the general contractor, construction manager, or design-build team is required to post performance and payment bonds to ensure the completion of the project. The legislation prohibits the bundling of multiple projects. All projects are required to undergo a procurement process established under the bill.