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

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;

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.);

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;

i. The public-private partnership advisor's review shall include a value for money analysis to determine whether a project provides more benefit to its user and the State government entity when delivered through a public-private partnership delivery process than when delivered through a traditional method; a review of the financial strength of the private entity and a risk assessment of the project.

ii. The public-private partnership advisor shall provide a report on the project to the Project Review Committee within 45 days of project assignment; however, such time limit shall be extended at the discretion of the Office of Public Finance.

i. All technical aspects of the proposal, including proposed project scope, innovative use of technology, engineering and design, and operation and maintenance of the project; and

ii. All financial aspects of each proposal including financing to be provided by the private partner, any external source of financing, and any fiscal obligations of the State government entity for the project as proposed.

i. The feasibility of the project's design, construction, and operation;

ii. The State government entity's assumptions regarding the project's scope, benefits, risks, and the cost of the public sector option, and whether such assumptions were fully and reasonably developed;

iii. The sufficiency of the experience and qualifications of the private entity;

iv. The soundness of the financial plan, within the context of the State government entity;

v. The adequacy of the long-range maintenance plan to protect the investment;

vi. The validity of the State government entity's determination that the project is in the best interest of the public, including an evaluation of the State government entity's determination that: