A-5170

Sponsored by: Assemblyman WAYNE P. DEANGELO District 14 (Mercer and Middlesex), Assemblyman CHRISTIAN E. BARRANCO District 26 (Essex, Morris and Passaic), Assemblyman JOSEPH V. EGAN District 17 (Middlesex and Somerset)

STATEMENT

This bill, entitled the “Energy Infrastructure Public-Private Partnerships Act,” would permit private entities to propose to public-private partnership eligible entities, as defined in the bill, certain energy-related projects through a public-private partnership (P3) agreement. The bill would create an Energy Public-Private Partnerships Program (Energy P3 Program) and an Energy Infrastructure Financing Program within the New Jersey Infrastructure Bank (bank).

The Energy P3 Program would be responsible for the formulation and execution of a comprehensive Statewide policy for P3 agreements that facilitate the development of energy-related projects and for the development, promotion, coordination, oversight, and approval of P3 agreements for energy-related projects. The Energy Infrastructure Financing Program would provide loans and other forms of financial assistance to P3 eligible entities that are parties to public-private partnership agreements to develop and finance energy-related projects pursuant to the bill.

The bill defines “public-private partnership eligible entity,” or “P3 eligible entity,” as the State, its subdivisions, and any department, agency, commission, authority, board, or instrumentality thereof, a county, a municipality, a board of education, a State college or university, a county college, a private not-for-profit higher education institution, a regional or municipal utility authority, a quasi-State agency, a State-created corporation, and a private not-for-profit hospital licensed by the Department of Health pursuant to the “Health Care Facilities Planning Act,” P.L.1971, c.136 (C.26:2H-1 et seq.). (The term does not include a municipal electric utility established pursuant to R.S.40:62-12.)

The Energy P3 Program would consult and coordinate with representatives of other State departments, agencies, boards, and authorities to accomplish the goals of the bill and facilitate P3 agreements for energy-related projects. The bill directs the bank to develop criteria by which a P3 eligible entity would award an energy-related project to a private entity whose proposal is determined to be the most advantageous. The bill prescribes competitive contracting procedures to govern P3 agreements, including procurements and prevailing wage requirements for workers engaged in construction activities and other worker protections, and provides oversight authority to the Energy P3 Program to protect the interests of participating entities. The bill permits the inclusion of a project labor agreement in all energy-related projects created pursuant to the provisions of the bill. The bill also requires, beginning three years after the bill is enacted into law, an annual report concerning energy-related P3 projects to be submitted to the Governor and to the Legislature.

The bill establishes an Energy Infrastructure Financing Program in the bank to provide loans and other forms of financial assistance, as the bank deems appropriate, to P3 eligible entities and private entities that are parties to P3 agreements to develop and finance energy-related projects pursuant to the bill. The bill amends the “New Jersey Infrastructure Trust Act,” P.L.1985, c.334 (C.58:11B-1 et seq.), to reflect the establishment of this new program. In addition, the bill would add the President of the Board of Public Utilities as an ex-officio member to the board of directors for the bank.

The bill makes various changes to existing statutes related to the bank in order to expand its mission from water, environmental infrastructure, and transportation projects, to include energy-related projects. The bill requires that funds and accounts of the bank be segregated in such a way as to prevent the mixing of transportation, water, or environmental infrastructure monies with energy-related monies. The bill creates an interim financing program for energy-related projects and establishes an Energy Loan Origination Fee Fund similar to the existing interim financing programs and fee funds for environmental and transportation projects.

The bill would require the bank to submit to the Legislature, on or before May 15 of each year, a financial plan designed to implement the financing of the energy-related projects on the Energy Financing Program Project Priority List or the Energy Financing Program Project Eligibility List. The bill provides that on or before June 30 of each year the Legislature may reject the financial plan through the adoption by both houses of a concurrent resolution. If the Legislature rejects the financial plan, the project list would be removed from the annual appropriations act and the bank would not undertake any of the proposed activities contained in the plan. If the Legislature takes no action on the financial plan on or before June 30, the financial plan would be deemed approved.

Under the bill, the development of an energy-related project would be deemed to constitute the performance of an essential public function. A component of an energy-related project predominantly used by, or developed in furtherance of the purposes of, a P3 eligible entity that is owned by or leased to a P3 eligible entity, foreign or domestic nonprofit business entity, or business entity wholly owned by a nonprofit business entity would be exempt from property taxation and special assessments of the State, a municipality, and any other political subdivision of the State, and, notwithstanding the provisions of any other law to the contrary, would not be required to make payments in lieu of taxes, and the land upon which an energy-related project is located would be exempt from property taxation for the useful life of the project.

The bill provides that the provisions of P.L.2009, c.136 (the requirements for certain public contracts with private firms) do not apply to energy-related projects developed under the bill.

The bill also provides that nothing in the bill limits the powers of the Office of the State Comptroller or the authority of the Board of Public Utilities.

Lastly, the bill amends the “Public School Contracts Law” and the “Local Public Contracts Law” to provide that a contract may be for up to 30 years for the sale of electricity or thermal energy, or both, produced by a combined heat and power facility, cogeneration facility, on-site generation facility, a district energy system, or a distributed electric generation resource constructed and operated pursuant to a public-private partnership agreement under the bill.