A5730

An Act concerning the purchase and use of pervious pavement material and supplementing Titles 52 and 54 of the Revised Statutes.

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

1. a. (1) Notwithstanding the provisions of any law, rule or regulation to the contrary, the Director of the Division of Purchase and Property and the Director of the Division of Property Management and Construction in the Department of the Treasury, and any State agency having authority to contract for the purchase of goods or services, shall, when entering into a contract for the purchase of asphalt or concrete for any municipal, county, or State project that requires the use of asphalt or concrete, apply a pervious pavement material discount to the price of bids for the purpose of bid assessment and selection.

(2) The pervious pavement material discount rate applied pursuant to this subsection shall be established by the State Treasurer, in consultation with the Department of Environmental Protection.

(3) The specific price discount rates to be applied to bids for each pervious pavement material shall be based on the material’s placement within the Department of Environmental Protection’s stormwater management hierarchy.

(4) A pervious pavement material discount provided under this subsection shall not exceed five percent of the total bid price.

(5) The State Treasurer, in consultation with the Department of Environmental Protection, shall adopt, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), rules and regulations necessary to implement the price discount rate established pursuant to this section. The rules and regulations shall include, but need not be limited to:

(a) a uniform process for contractors to certify both that the asphalt or concrete selected for any municipal, county, or State construction or improvement project is a pervious pavement material that will provide environmental benefits, such as stormwater management, to the surrounding area, and that the material is included in the stormwater management hierarchy established pursuant to subsection b. of this section;

(b) guidelines to assist State agencies in determining which contracts are subject to the requirements of this section, and the rules and regulations adopted pursuant thereto;

(d) a mechanism for monitoring contractor compliance with the requirements of this section; and

(e) penalties to be applied when a contractor fails to comply with the provisions of this subsection or the rules and regulations adopted pursuant thereto.

(6) Whenever any agency or department of State government purchases asphalt or concrete, or undertakes any municipal, county, or State construction or improvement project that requires the use of asphalt or concrete, the agency or department shall follow the rules, regulations, and guidelines therefor, which have been established pursuant to this subsection.

b. The Department of Environmental Protection shall establish a stormwater management hierarchy to comparatively rank different pervious paving materials on their ability to do the following:

(1) reduce stormwater runoff; and

(2) filter out contaminants and improve water quality.

c. For State-funded construction projects that will be completed by a private contracting firm that has been contracted by the State, and for which asphalt or concrete will be procured by the contractor for the project, the contractor shall comply with the selection standards and rules established pursuant to this section when subcontracting products or services from asphalt or concrete providers. The State Treasurer shall establish policies and procedures for private contracting firms to comply with the requirements of this section.

d. In preparing the specifications for any contract for the purchase of asphalt or concrete for any municipal, county, or State construction or improvement project that requires the use of asphalt or concrete, the Director of the Division of Purchase and Property, the Director of the Division of Property Management and Construction, and any State agency having authority to contract for the purchase of goods or services shall include in the invitation to bid, where relevant, a statement that provides for any response to the invitation, which proposes or calls for the use of pervious pavement material, to receive the price discount rate established pursuant to subsection a. of this section.

e. The provisions of this section shall not apply to:

(1) any binding contractual obligations for the purchase of goods or services entered into prior to the effective date of P.L. , c. (C. )(pending before the Legislature as this bill);

(2) bid packages advertised and made available to the public, or to any competitive and sealed bids received by the State, prior to the effective date of P.L. , c. (C. )(pending before the Legislature as this bill); or

(3) any amendment, modification, or renewal of a contract entered into prior to the effective date of P.L. , c. (C. )(pending before the Legislature as this bill) where the application would delay timely completion of a project or involve an increase in the total moneys to be paid by the State under that contract.

f. No later than two years after the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill), the State Treasurer, in consultation with the Department of Environmental Protection, shall prepare and submit a report to the Governor and, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), the Legislature, which shall include a cost-benefit analysis of the pervious pavement material procurement preference established pursuant to this section, in order to quantify the budgetary impact of the program relative to the preference’s stormwater management impact. The report shall recommend whether the preference should be continued, modified, or repealed, and include any recommendations for legislative or regulatory action to improve the preference.

g. For the purposes of this section:

“Pervious pavement material” means an asphalt or concrete product that, when utilized, allows rainwater to penetrate the pavement and percolate into the supporting soils. “Pervious pavement material” includes, but is not limited to, pervious concrete, also referred to as porous concrete or permeable concrete; pervious asphalt, also referred to as porous asphalt or permeable asphalt; and permeable interlocking pavers.

“Stormwater management hierarchy” means a ranking system that evaluates and compares the ability of various pervious pavement materials to reduce stormwater runoff, filter out contaminants, and improve water quality, and which is established by the Department of Environmental Protection pursuant to subsection b. of this section.

2. a. (1) A taxpayer, who in a privilege period, purchases pervious paving material for a municipal, county, or State construction or improvement project that requires the use of asphalt or concrete, shall be allowed a credit against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5), to be calculated as provided in paragraph (2) of this subsection, to compensate the taxpayer for costs incurred as a result of utilizing pervious pavement material instead of asphalt or concrete that is impervious.

(2) The amount of the credit authorized pursuant to this section shall not exceed the lesser of: (a) the full cost incurred for utilizing pervious paving material, or (b) $3,000. A taxpayer may claim the credit authorized pursuant to this section for the cost of utilizing pervious pavement material instead of asphalt or concrete that is impervious for up to eight different construction or improvement projects during a single privilege period.

b. The order of priority of the application of the tax credit allowed pursuant to this section, and any other credits allowed against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5) for a privilege period, shall be as prescribed by the director. The amount of the credit applied pursuant to this section against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5) shall not reduce a taxpayer's tax liability to an amount less than the statutory minimum provided in subsection (e) of section 5 of P.L.1945, c.162 (C.54:10A-5). The amount of the tax credit otherwise allowable under this section which cannot be applied for the privilege period due to the limitations of this subsection or other provisions of P.L.1945, c.162 (C.54:10A-1 et seq.) may be carried forward, if necessary, to the seven privilege periods following the privilege period for which the tax credit was allowed.

c. The director, in consultation with the Department of Environmental Protection, shall adopt, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), rules and regulations as are necessary to implement the provisions of this section. The director may require the submission of any information the director deems necessary to award a tax credit pursuant to this section.

d. For the purposes of this section, “pervious pavement material” means an asphalt or concrete product that, when utilized, allows rainwater to penetrate the pavement and percolate into the supporting soils. “Pervious pavement material” includes, but is not limited to, pervious concrete, also referred to as porous concrete or permeable concrete; pervious asphalt, also referred to as porous asphalt or permeable asphalt; and permeable interlocking pavers.

3. This act shall take effect immediately.

STATEMENT

The bill would establish a State purchasing preference for pervious pavement material and provide a corporation business tax credit to taxpayers who purchase pervious paving material for a municipal, county, or State construction or improvement project within a privilege period. As used in the bill, “pervious pavement material” means an asphalt or concrete product that, when utilized, allows rainwater to penetrate the pavement and percolate into the supporting soils. The term expressly includes, but is not limited to, pervious concrete, also referred to as porous concrete or permeable concrete; pervious asphalt, also referred to as porous asphalt or permeable asphalt; and permeable interlocking pavers. “Stormwater management hierarchy” means a ranking system that evaluates and compares the ability of various pervious pavement materials to reduce stormwater runoff, filter out contaminants, and improve water quality, and which is established by the Department of Environmental Protection (DEP) pursuant to the bill.

Specifically, the bill would require the Director of the Division of Purchase and Property and the Director of the Division of Property Management and Construction in the Department of the Treasury, and any State agency having authority to contract for the purchase of goods or services, when entering into a contract for the purchase of asphalt or concrete for any municipal, county, or State project that requires the use of asphalt or concrete, to apply a pervious pavement material discount to the price of bids for the purpose of bid assessment and selection. The pervious pavement material discount rate would be established by the State Treasurer, in consultation with the DEP, and would be applied to bid prices based on each pervious pavement material’s placement on the DEP’s stormwater management hierarchy. The pervious pavement material discount provided under the bill may not exceed five percent of the total bid price.

For State-funded construction projects to be completed by a private contracting firm that has been contracted by the State, and for which asphalt or concrete will be procured by the contractor for the project, the contractor will be required to comply with the selection standards and rules established pursuant to the bill when subcontracting products or services from asphalt or concrete providers. The State Treasurer will be required to establish policies and procedures to assist private contracting firms in complying with the bill’s requirements.

In preparing the specifications for any contract for the purchase of asphalt or concrete for any municipal, county, or State construction or improvement project that requires the use of asphalt or concrete, a State entity will be required to include in the invitation to bid, where relevant, a statement providing for any response to the invitation that proposes or calls for the use of pervious pavement to receive the price discount rate established in the bill. The State purchasing preference would not apply to certain contracts as specified in the bill.

No later than two years after the bill’s effective date, the State Treasurer, in consultation with the DEP, will be required to prepare and submit a report to the Governor and the Legislature. The report is to: (1) include a cost-benefit analysis of the pervious pavement material procurement preference established in the bill, in order to quantify the budgetary impact of the program relative to the preference’s stormwater management impact; (2) indicate whether the preference should be continued, modified, or repealed; and (3) include any recommendations for legislative or regulatory action to improve the preference.

The bill would also provide a tax credit against the corporation business tax to compensate a taxpayer who purchases pervious pavement material for a municipal, county, or State construction or improvement project that requires the use of asphalt or concrete. The amount of the tax credit may not exceed the lesser of: (1) the full cost incurred for utilizing pervious pavement material instead of impervious asphalt or concrete; or (2) $3,000. A taxpayer may claim the credit authorized under the bill for up to eight different construction or improvement projects during a single privilege period.

This bill is necessary to incentivize the use of pervious pavement material for municipal, county, or State construction or improvement projects. Utilizing pervious pavement material for construction or improvement projects, such as parking lots, sidewalks, or roads, can result in environmental benefits, including improved stormwater management, by significantly reducing runoff and improving water quality.