A1685

An Act concerning public contracts and supplementing Title 52 of the Revised Statutes.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. The Legislature finds and declares:

Manufacturing in New Jersey has been steadily declining for decades, costing the State well-paying manufacturing jobs. Since the year 2000, manufacturing jobs in the State have declined by almost 20%. This decline is due in large part to competition from manufacturers producing in other jurisdictions with lower wages and benefits, insurance costs, regulatory costs, and utility costs.

The decline in the manufacturing sector has resulted in considerable unemployment among those residents who do not have the job skills and training for, or access to, other types of employment.

It is a proper public purpose for the State and its contracting units to grant a limited preference in the award of public contracts to those qualified manufacturers located in the State in order to reverse the erosion of manufacturing jobs and to encourage economic development and revitalization through the retention and creation of well-paid manufacturing jobs.

2. For the purposes of P.L. , c. (C. ) (pending before the Legislature as this bill):

"Contracting unit" means the State; any independent State authority; any public institution of higher education; and any entity or political subdivision of the State, not included among the foregoing, that is subject to: the "Public School Contracts Law," N.J.S.18A:18A-1 et seq.; the "Local Public Contracts Law," P.L.1971, c.198 (C.40A:11-1 et seq.); or the State construction contracts law, R.S.52:32-1 et seq.

“Director” means the Director of the Division of Business Assistance, Marketing, and International Trade in the New Jersey Economic Development Authority.

“Division” means the Division of Business Assistance, Marketing, and International Trade in the New Jersey Economic Development Authority established by section 6 of P.L.2008, c.27 (C.34:1B-215).

"Manufactured good or product" means a commodity that was produced in New Jersey by processing raw materials or other materials into a finished product with machinery that has been classified for manufacturing purposes under the North American Industry Classification System (NAICS) promulgated by the United States Department of Commerce.

"Qualified manufacturer" means a for-profit business that produces a manufactured good or product in New Jersey, has paid property taxes or rent within New Jersey for that production facility for at least the two tax years prior to the year in which the business is granted a preference under section 3 of P.L. , c. (C. ) (pending before the Legislature as this bill), and is certified by the director pursuant to section 4 of P.L. , c. (C. ) (pending before the Legislature as this bill).

3. a. Notwithstanding any provision of law, rule or regulation to the contrary, a contracting unit using State or State authority funds to pay, in whole or in part, for (1) the direct purchase of a manufactured good or product, or (2) the cost of construction of a project requiring the use of a manufactured good or product, shall allow, or provide under the construction contract for the allowance of, as the case may be, a preference to a qualified manufacturer, up to the limits set forth under rules and regulations promulgated pursuant to section 4 of P.L. , c. (C. ) (pending before the Legislature as this bill). The contracting unit shall include in its bid specifications and in its public advertising for bids on every project using State funds a notice stating that it shall allow or provide for the allowance of a preference, pursuant to P.L. , c. (C. ) (pending before the Legislature as this bill), for manufactured goods or products produced by a qualified manufacturer.

b. Notwithstanding any provision of law, rule or regulation to the contrary, a contracting unit not using State or State authority funds to pay, in whole or in part, for (1) the direct purchase of a manufactured good or product, or (2) the cost of construction of a project requiring the use of a manufactured good or product, may allow, or provide under the construction contract for the allowance of, as the case may be, a preference to a qualified manufacturer, up to the limits set forth under rules and regulations promulgated pursuant to section 4 of P.L. , c. (C. ) (pending before the Legislature as this bill), provided that the contracting unit includes in its bid specifications and in its public advertising for bids a notice stating that it shall allow or provide for the allowance of a preference, pursuant to P.L. , c. (C. ) (pending before the Legislature as this bill), for manufactured goods or products produced by a qualified manufacturer.

c. (1) Whenever a contracting unit awards a contract allowing or providing for the allowance of a preference under subsection a. or subsection b. of this section, it shall file a notice with the division on a form promulgated by the director.

(2) The director shall maintain and promote a voluntary list of qualified manufacturers.

4. On or before the first day of the seventh month next following enactment of P.L. , c. (C. ) (pending before the Legislature as this bill) the director, in consultation with the State Treasurer, the Commissioner of Community Affairs, and the Commissioner of Education, shall promulgate rules and regulations, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), to establish a process to identify and certify manufacturers as qualified manufacturers. The rules and regulations also shall set forth limits on the amount of preference that may be given for any particular manufactured good or product, which shall be broadly based on an amount determined necessary to equalize the competitive advantages of manufacturers producing from other jurisdictions.

5. This act shall take effect immediately, except that section 3 shall remain inoperative until the adoption of rules and regulations pursuant to section 4 of this act.

STATEMENT

This bill requires contracting units, when using State or State authority funds to pay, in whole or in part, for (1) the direct purchase of a manufactured good or product, or (2) the cost of construction of a project requiring the use of a manufactured good or product, to allow, or provide under the construction contract for the allowance of, as the case may be, a preference to a qualified manufacturer as established by regulation. The contracting unit is to include in its bid specifications and in its public advertising for bids on every project using State or State authority funds a notice stating that it shall allow or provide for the allowance of such a preference. “Contracting units” under the bill include the State, independent State authorities, public institutions of higher education, local governments, and school districts. A “qualified manufacturer” is a for-profit producer of manufactured goods or products in New Jersey that has paid property taxes or rent in the State for two years and been officially certified as a qualified manufacturer.

The bill would also permit a contracting unit that is not using State or State authority funds in connection with a project to give the same limited preference to qualified manufacturers in its award of bids.

Under the bill, the Director of the Division of Business Assistance, Marketing, and International Trade in the New Jersey Economic Development Authority (“director”) would be responsible for certifying a manufacturer as a "qualified manufacturer." The director shall maintain and promote a voluntary list of qualified manufacturers and, in consultation with the State Treasurer and the Commissioners of Community Affairs and Education, would be responsible for establishing preference limits on particular manufactured goods and products at a level designed to equalize the competitive advantages enjoyed by manufacturers operating outside of New Jersey.