N.J. Stat. tit. 58, ch. 26

in effect

N.J. Stat. § 58:26-1 Short title

This act shall be known and may be cited as the "New Jersey Water Supply Privatization Act." L. 1985, c. 37, s. 1, eff. Feb. 1, 1985.

N.J. Stat. § 58:26-2 Findings, determinations

The Legislature finds that the construction, rehabilitation, operation, and maintenance of modern and efficient water filtration facilities are essential to protecting and improving the State's water quality; that many of the water filtration systems in New Jersey must be replaced or upgraded if an inexorable decline in water quality is to be avoided during the coming decades; that the citizens of this State, in recognition of the crucial role the construction of new and the upgrading of existing water supply facilities play in maintaining and augmenting the natural water resources of the State, and with an understanding that the cost of financing and constructing these systems is beyond the limited financial resource capabilities of local governments and authorities and must be borne by the bonding authority of the State and repaid, in part, through a system of water supply user charges, approved the enactment of the "Water Supply Bond Act of 1981" (P.L. 1981, c. 261); that the water filtration needs of the State are so great that the limited funds allocated for this purpose from the "Water Supply Fund" established by that 1981 bond act are insufficient; that given this inadequate present level of State funding, alternative methods of financing the construction of new or the rehabilitation of antiquated or inadequate existing water filtration systems must be developed and encouraged; that one alternative method of financing these necessary facilities available to local government units consists of contracting with private-sector firms for the financing, construction and operation of these systems; and that for some local government units, contracting for the provision of water supply services, if done in such a way as to protect the interests of water users and to conform with environmentally sound water quality standards will constitute an appropriate method of securing these needed water filtration systems. The Legislature therefore determines that it is in the public interest to establish a comprehensive procedure designed to authorize local government units to contract with private firms for the construction of water filtration systems and the provision of water supply services. L. 1985, c. 37, s. 2, eff. Feb. 1, 1985.

N.J. Stat. § 58:26-3 Definitions

As used in this act: a. "Contracting unit" means a county, district water supply commission, municipality, municipal or county utilities authority, municipal water district, joint meeting or any other political subdivision of the State authorized pursuant to law to operate or maintain a public water supply system or to construct, rehabilitate, operate, or maintain water supply facilities or otherwise provide water for human consumption; b. "Department" means the Department of Environmental Protection; c. "Division" means the Division of Local Government Services in the Department of Community Affairs; d. "Vendor" means any person financially, technically, and administratively capable of financing, planning, designing, constructing, operating, or maintaining, or any combination thereof, a water filtration system, water supply facilities, or of providing water supply services to a local government unit under the terms of a contract awarded pursuant to the provisions of this act; e. "Water filtration system" means any equipment, plants, structures, machinery, apparatus, or land, or any combination thereof, acquired, used, constructed, rehabilitated, or operated for the collection, impoundment, storage, improvement, filtration, or other treatment of drinking water for the purposes of purifying and enhancing water quality and insuring its potability prior to the distribution of the drinking water in the general public for human consumption, including plants and works, and other personal property and appurtenances necessary for their use or operation; f. "Water supply facilities" means and refers to the real property and the plants, structures, interconnections between existing water supply facilities, machinery and equipment and other property, real, personal and mixed, acquired, constructed or operated, or to be acquired, constructed or operated, in whole or in part by or on behalf of a political subdivision of the State or any agency thereof, for the purpose of augmenting the natural water resources of the State and making available an increased supply of water for all uses, or of conserving existing water resources, and any and all appurtenances necessary, useful or convenient for the collecting, impounding, storing, improving, treating, filtering, conserving or transmitting of water, and for the preservation and protection of these resources and facilities and providing for the conservation and development of future water supply resources; g. "Water supply services" means services provided by a water supply facility. L. 1985, c. 37, s. 3, eff. Feb. 1, 1985.

N.J. Stat. § 58:26-4 40-year contract maximum

The provisions of any other law, or rules and regulations adopted pursuant thereto to the contrary notwithstanding, any contracting unit may enter into a contract for a period not to exceed 40 years, with a vendor for the financing, designing, construction, operation, or maintenance, or any combination thereof, of a water supply facility, including a water filtration system, or for water supply services, pursuant to the provisions of this act. L. 1985, c. 37, s. 4, eff. Feb. 1, 1985.

N.J. Stat. § 58:26-5 Notice of intention.

5. A contracting unit which intends to enter into a contract with a private vendor for the provision of water supply services pursuant to the provisions of this act shall notify, at least 60 days prior to issuing a request for qualifications from interested vendors pursuant to section 6 of this act, the division, the department and the Board of Public Utilities and the Director of the Division of Rate Counsel in, but not of, the Department of the Treasury of its intention, and shall publish notice of its intention in at least one newspaper of general circulation in the jurisdiction which would be served under the terms of the proposed contract. L.1985, c.37, s.5; amended 1994, c.58, s.58; 2005, c.155, s.98; 2010, c.34, s.45.

N.J. Stat. § 58:26-6 Request for qualifications

Upon submitting the notices of intent pursuant to section 5 of this act, a contracting unit may issue a request for qualifications of vendors interested in entering into a contract with the contracting unit for the provision of water supply services. The request for qualifications shall include a general description of the water supply services required by the contracting unit, the minimum acceptable qualifications to be possessed by a vendor proposing to enter into a contract for the provision of these services, and the date by which vendors must submit their qualifications. In addition to all other factors bearing on qualifications, the contracting unit shall consider the reputation and experience of the vendor, and may consider information which might result in debarment or suspension of a vendor if the vendor has been debarred or suspended by a State agency. The request for qualifications shall be published in at least one appropriate professional or trade journal, and in at least one newspaper of general circulation in the jurisdiction which would be served under the terms of the proposed contract. L. 1985, c. 37, s. 6, eff. Feb. 1, 1985.

N.J. Stat. § 58:26-7 Qualified vendors

After reviewing the qualifications submitted by vendors pursuant to section 6 of this act, a contracting unit shall establish a list of all vendors responding to the request for qualifications, and shall designate the vendor or vendors which the contracting unit has determined to be qualified to provide the water supply services described in the request for qualifications. This list shall include a statement setting forth the criteria applied by the contracting unit in selecting qualified vendors, and shall be published in the same publications in which the requests for qualifications were published pursuant to section 6 of this act. L. 1985, c. 37, s. 7, eff. Feb. 1, 1985.

N.J. Stat. § 58:26-8 Request for proposals

Upon selecting the qualified vendors pursuant to section 7 of this act, a contracting unit shall transmit a request for proposals to the qualified vendors, which shall include a detailed description of the water supply facility and services required, the format and procedure to be followed in submitting proposals, the specific information which the vendor must provide in the proposal, a statement setting forth the relative importance of factors, including cost, which the contracting unit will consider in evaluating a proposal submitted by a qualified vendor, and any other information which the contracting unit deems appropriate. The request for proposals shall include the date and time of day by which, and the place at which, the proposals shall be submitted to the contracting unit. The contracting unit may extend the deadline for submission of proposals, but this extension shall apply to all qualified vendors, who shall be provided with simultaneous written notification of this extension. L. 1985, c. 37, s. 8, eff. Feb. 1, 1985.

N.J. Stat. § 58:26-9 Review of proposals; revisions

A contracting unit shall review proposals submitted by vendors pursuant to section 8 of this act in such a manner as to avoid disclosure of the contents of any proposal to vendors submitting competing proposals. If provided for in the request for proposals, the contracting unit may conduct discussions with qualified vendors who have submitted proposals for the purpose of clarifying any information submitted in the proposal, or assuring that the vendor fully understood and responded to the requirements set forth in the request for proposals. If, as a result of these discussions, the contracting unit decides to revise the request for proposals, it shall immediately notify in writing each qualified vendor which has submitted a proposal of any such revision or revisions to the request for proposals. In the event of any revision to the request for proposals, a qualified vendor shall be permitted to submit revisions to its proposal. L. 1985, c. 37, s. 9, eff. Feb. 1, 1985.

N.J. Stat. § 58:26-10 Designation of vendor

After reviewing the proposals submitted by qualified vendors pursuant to section 9 of this act, a contracting unit shall designate in writing the selected vendor or vendors. This designation shall include a list of the qualified vendors submitting proposals, the basis on which the selected vendor or vendors was chosen, and a finding that the proposal submitted by the selected vendor or vendors constitutes the proposal most advantageous to the jurisdiction to be served under the terms of the proposal, based upon the evaluation factors included in the request for proposals. This designation shall be published in at least one newspaper in general circulation in the jurisdiction to be served under the terms of the proposaL. L. 1985, c. 37, s. 10, eff. Feb. 1, 1985.

N.J. Stat. § 58:26-11 Proposed contract with vendors.

11. Upon designating the selected vendor or vendors pursuant to section 10 of this act, a contracting unit shall negotiate with the selected vendor or vendors a proposed contract, which shall include the accepted proposal and the provisions required pursuant to section 15 of this act. Upon negotiating a proposed contract, the contracting unit shall make the proposed contract available to the public at its main offices, and shall transmit a copy of the proposed contract to the division, the department, the Board of Public Utilities and the Division of Rate Counsel in, but not of, the Department of the Treasury. L.1985, c.37, s.11; amended 1994, c.58, s.59; 2005, c.155, s.99; 2010, c.34, s.46.

N.J. Stat. § 58:26-12 Public hearing.

12. a. A contracting unit shall conduct a public hearing or hearings on the charges, rates, or fees, or the formula for determining these charges, rates, or fees, and the other provisions contained in a proposed contract negotiated pursuant to section 11 of this act. The contracting unit shall provide at least 90 days' public notice of this public hearing to the Division of Rate Counsel in, but not of, the Department of the Treasury, prospective consumers and other interested parties. This notice shall be published in at least one newspaper of general circulation in the jurisdiction to be served under the terms of the proposed contract. Within 45 days after giving notice of the public hearing, the contracting unit shall hold a meeting with prospective consumers and other interested parties to explain the terms and conditions of the proposed contract, and to receive written questions which will be part of the record of the public hearing. At the public hearing, the selected vendor or vendors shall be present, and the contracting unit shall have the burden to answer the questions received at the meeting, and to show that the proposed contract complies with the provisions of section 15 of this act, and that it constitutes the best means of securing the required water supply services among available alternatives. The contracting unit shall provide that a verbatim record be kept of the public hearing, and that a written transcript of this record be printed and made available to the public within 30 days of the close of the public hearing. After the public hearing the contracting unit and the vendor may agree to make changes to the proposed contract, and shall transmit the proposed contract, a copy of the printed transcript of the public hearing, and a statement summarizing the major issues raised at the public hearing and the response of the contracting unit to these issues, to the division, the department, the Board of Public Utilities, and the Division of Rate Counsel, and to all persons who attended the public hearing. b. If the Division of Rate Counsel represents the public interest at a public hearing or hearings conducted pursuant to this section, the Division of Rate Counsel shall be entitled to assess the vendor for costs incurred in this representation in the manner provided in section 20 of P.L.1974, c.27 (C.52:27E-19). The basis of the assessment shall be the prospective first year's revenue realized by the vendor from the provision of the water supply services pursuant to the terms of the proposed contract. c. If a contract awarded pursuant to the provisions of this act is renegotiated, the contracting unit shall conduct a public hearing on the renegotiated contract pursuant to the provisions of this section. L.1985, c.37, s.12; amended 1994, c.58, s.60; 2005, c.155, s.100; 2010, c.34, s.47.

N.J. Stat. § 58:26-13 Approval; conditional approval

a. The department, within 60 days of receipt of a proposed contract submitted to it by a contracting unit pursuant to section 12 of this act, shall approve or conditionally approve the proposed contract. If the department approves the proposed contract, it shall accompany its approval with a written finding that the proposed contract will meet appropriate environmental and water quality standards, and that it is consistent with the State primary drinking water regulations or requirements for the jurisdiction to be served under the terms of the proposed contract pursuant to the "Safe Drinking Water Act," P.L. 1977, c. 224 (C. 58:12A-1 et seq.). If the department conditionally approves a proposed contract, it shall state in writing the revisions which must be made to the proposed contract prior to receiving approval, and shall inform the contracting unit if the revisions to be made to the proposed contract warrant a public hearing. After revising the contract, the contracting unit may resubmit the proposed contract to the department for approval. b. The division, within 60 days of receipt of a proposed contract transmitted to it by a contracting unit pursuant to section 12 of this act, shall approve or conditionally approve the proposed contract. If the division approves the proposed contract, it shall accompany its approval with a written finding that the proposed contract complies with the provisions of section 15 of this act, and that the proposed contract is compatible with the fiscal and financial capabilities of the contracting unit. If the division conditionally approves the proposed contract, it shall state in writing the revisions which must be made to the proposed contract prior to receiving approval, and shall inform the contracting unit if the revisions to be made to the proposed contract warrant a public hearing. After revising the proposed contract, the contracting unit may resubmit the proposed contract to the division for approval. c. If the contracting unit is subject to the jurisdiction of the Board of Public Utilities, the board within 60 days of receipt of a proposed contract submitted to it by a contracting unit pursuant to section 12 of this act, shall approve or conditionally approve the proposed contract if the board finds the proposed contract to be in the public interest. If the Board of Public Utilities conditionally approves the proposed contract because the contract is not in the public interest, the board shall notify the contracting unit in writing of the changes needed in the proposed contract in order for it to be in the public interest, and shall inform the contracting unit if the revisions to be made warrant a public hearing. After revising the proposed contract, the contracting unit may resubmit the proposed contract to the board for approval. In reviewing and approving the proposed contract, the Board of Public Utilities shall not determine a rate base for, or otherwise regulate the tariffs or return of, the proposed water supply facility or the provision of water supply services. The board shall not, thereafter, conduct any further review of the contract. d. Notwithstanding the provisions of subsection c. of this section, all parties to any proposed contract may request the Board of Public Utilities to determine a rate base for the proposed water supply facility or the provision of water supply services, in which case the board may make that determination and the terms of any proposed contract so approved shall be subject to the continuing jurisdiction of the board. L. 1985, c. 37, s. 13, eff. Feb. 1, 1985.

N.J. Stat. § 58:26-14 3 approvals required

A contracting unit may award a contract negotiated pursuant to the provisions of this act to a vendor only after the department, the Board of Public Utilities, and the division have approved the proposed contract pursuant to section 13 of this act. L. 1985, c. 37, s. 14, eff. Feb. 1, 1985.

N.J. Stat. § 58:26-15 Mandatory contract provisions

Any contract for the provision of water supply services negotiated and awarded to a vendor by a contracting unit pursuant to this act, or the "Local Public Contracts Law," P.L. 1971, c. 198 (C. 40A:11-1 et seq.), shall include, but shall not be limited to, provisions concerning: a. The allocation of the risks of financing and constructing a water supply facility including delays in completion of the construction of the system, construction and financing cost overruns and increased costs resulting from change orders, construction changes required by revisions in applicable laws, rules, or regulations, failure of the system to achieve its required operating performance or efficiency, changes in tax benefits, and the need for equity contributions in addition to those provided for in the contract; b. The allocation of the risks of operating and maintaining a water supply facility, including excessive or nonscheduled periods of inoperation or technical failure, excess labor and materials costs due to underestimation, changes in operating procedures required by revisions in applicable laws, rules, or regulations, changes in the quantity or composition of water delivered for filtration or treatment, excessive operation or maintenance costs due to poor management, and increased costs of distribution of the water resulting from costs associated with filtration or treatment; c. The allocation of the risks associated with circumstances or occurrences beyond the control of the parties to the contract; d. The defaulting and termination of the contract; e. The periodic preparation by the vendor of an operating performance report and an audited balance statement of the water supply facility, which shall be submitted to the contracting unit, the department and the division; f. The intervals at which the contract shall be renegotiated; g. The employment of current employees of the contracting unit whose positions or employment will be affected by the terms of the contract; and h. The formulas to be used to determine the charges, rates, or fees to be charged for the water supply services, and the methodology or methodologies used to develop these formulas. L. 1985, c. 37, s. 15, eff. Feb. 1, 1985.

N.J. Stat. § 58:26-16 Lease to vendor

A contracting unit which has awarded a contract for the provision of water supply services to a vendor pursuant to this act or the "Local Public Contracts Law," P.L. 1971, c. 198 (C. 40A:11-1 et seq.) may lease to the vendor, for a fair market price, the property to be used as a site for a water supply facility, the provisions of any other laws or rules and regulations adopted pursuant thereto to the contrary notwithstanding. L. 1985, c. 37, s. 16, eff. Feb. 1, 1985.

N.J. Stat. § 58:26-17 Prior negotiations

Any contracting unit which, prior to the effective date of this act, has issued a request for qualifications and a request for proposals from vendors for the provision of water supply services, or has initiated negotiations with a vendor for the provision of water supply services, may petition the department and the Board of Public Utilities for certification as being substantially and materially in compliance with the provisions of this act, and, upon receiving this certification, may award a contract for the provision of water supply services pursuant to the provisions of this act. L. 1985, c. 37, s. 17, eff. Feb. 1, 1985.

N.J. Stat. § 58:26-18 Rules, regulations

The department, the Board of Public Utilities, and the division may adopt, pursuant to the "Administrative Procedure Act," P.L. 1968, c. 410 (C. 52:14B-1 et seq.), rules and regulations necessary to carry out their respective responsibilities under this act. L. 1985, c. 37, s. 18, eff. Feb. 1, 1985.

N.J. Stat. § 58:26-19 Short title

1. Sections 1 through 8 of P.L.1995, c.101 (C.58:26-19 et seq.) shall be known and may be cited as the "New Jersey Water Supply Public-Private Contracting Act." L.1995,c.101,s.1.

N.J. Stat. § 58:26-20 Findings, determinations

2. The Legislature finds that it is in the public interest and the policy of the State to foster and promote by all reasonable means the provision and distribution of an adequate supply of water for the public and private uses of counties and municipalities and their inhabitants; that while the "New Jersey Water Supply Privatization Act," P.L.1985, c.37 (C.58:26-1 et seq.), enabled local government units to enter into long-term contracts with private-sector firms, the time consuming procedures and the regulatory framework required therein have dissuaded private firms and local government units from entering into contracts; that there is a need for an alternate statutory process which enables local government units to enter with private firms into long-term contracts that protect the rights and interests of residents of the local government unit, but allows the private firms to utilize their expertise, experience and resources to enable the local water system to comply with existing and more stringent future requirements of the federal Clean Water Act, 33 U.S.C. s.1251 et seq., the "Water Pollution Control Act," P.L.1977, c.74 (C.58:10A-1 et seq.) and the "Safe Drinking Water Act," P.L.1977, c.224 (C.58:12A-1 et seq.); and that such contracts can adequately protect the interests of residents and water users and assure conformance with environmentally sound water quality standards. The Legislature therefore determines that it is in the public interest to establish a comprehensive procedure designed to authorize local government units to enter into contracts with private firms for the financing, designing, construction, improvement, operation, maintenance, or administration, or any combination thereof, of a water supply facility. L.1995,c.101,s.2.

N.J. Stat. § 58:26-21 Definitions

3. As used in sections 1 through 8 of P.L.1995, c.101 (C.58:26-19 et seq.): "Board" means the New Jersey Board of Public Utilities. "Department" means the New Jersey Department of Environmental Protection. "Division" means the Local Finance Board within the Division of Local Government Services in the Department of Community Affairs. "Governing body" means the board of chosen freeholders in the case of the county; the board of chosen freeholders and the county executive, the county supervisor or the county manager, as appropriate, in the case of a county organized pursuant to the provisions of the "Optional County Charter Law," P.L.1972, c.154 (C.40:41A-1 et seq.); the commission, council, board or body, by whatever name it may be known, having charge of the finances of the municipality, in the case of a municipality; and the decision-making body of an authority or commission. "Contract" means a long-term written agreement wherein a private firm agrees to provide water supply services for a public entity and wherein the private firm agrees to provide, during the term of the contract, capital expenditures on behalf of the public entity's water supply facilities, which expenditures are set forth in the contract. "Private firm" means any privately or publicly held company qualified to do business in the State of New Jersey that is financially, technically, and administratively capable of providing water supply services to a public entity under the terms of a contract entered into pursuant to P.L.1995, c.101 (C.58:26-19 et al.). "Proposal document" means the document prepared by or on behalf of a public entity describing the water supply services that the public entity is considering having provided by a private firm pursuant to a contract. The proposal document shall include specific minimum qualifications that a private firm shall meet, as well as the criteria that will be used by a public entity to evaluate a proposal submitted by a private firm. "Public entity" means a county, a municipality, a municipal or county authority or any commission or other political subdivision of the State, or any two or more counties, municipalities, municipal or county utility authorities or any commission or other political subdivision of the State, acting jointly, that are authorized by law to operate or maintain a public water supply system or to construct, rehabilitate, operate, or maintain water supply facilities or otherwise provide water for human consumption. "Water supply facility" means the plants, structures, or other real or personal property acquired, constructed or operated, or to be acquired, constructed or operated, by or on behalf of a public entity for the collection, impoundment, storage, improvement, treatment, filtration, conservation, protection, transmission or distribution of water. "Water supply services" means the financing, designing, construction, improvement, operation, maintenance, administration, or any combination thereof, of a water supply facility which services are provided pursuant to P.L.1995, c.101 (C.58:26-19 et al.). L.1995,c.101,s.3.

N.J. Stat. § 58:26-22 Contract for provision of water supply services

4. Notwithstanding the provisions of any other law, rule or regulation to the contrary, a public entity may enter into a contract with a private firm pursuant to P.L.1995, c.101 (C.58:26-19 et al.) for the provision of water supply services. The provisions of P.L.1995, c.101 (C.58:26-19 et al.) shall not be deemed or interpreted to permit, nor used to accomplish, the acquisition of water supply facilities by private firms from public entities. L.1995,c.101,s.4.

N.J. Stat. § 58:26-23 Notice of intent, review of proposals, negotiation of contract, terms.

5. a. A public entity shall publish notice of its intent to enter into a contract pursuant to P.L.1995, c.101 (C.58:26-19 et al.) in at least one newspaper of general circulation in the jurisdiction or service area that will receive water supply services under the terms of a contract and one newspaper of broad regional circulation, at least 60 days prior to conducting the public hearing required under section 6 of P.L.1995, c.101 (C.58:26-24). In addition, a public entity that intends to enter into a contract with a private firm for the provision of water supply services shall notify in writing the board, department and division of its intent. b. The public notice required under subsection a. of this section shall describe the type of services desired and provide the name, address and phone number of the person who can provide additional information and a proposal document to an interested party. The notice shall specify a deadline, that shall be not less than 30 days from the date of the publication of the notice for the submission of proposals by private firms to the public entity. The public entity may at any time revise the proposal document and each private firm that received a proposal document shall be provided with the revised proposal document. c. The public entity shall conduct a review of the proposals submitted by private firms to determine which proposals meet the minimum qualifications and standards. The review shall be conducted in a manner that avoids disclosure of the contents of a proposal to any private firm submitting a competing proposal. The public entity may conduct discussions with a private firm submitting a qualified proposal for the purpose of clarifying the information submitted in the proposal. The public entity may at any time revise its proposal document after the review of the submitted proposals if it notifies simultaneously and in writing each private firm that submitted a proposal of the revision and provides a uniform time within which a firm may submit a revised proposal for review. d. A public entity shall select one qualified proposal from among those submitted. The public entity shall negotiate a contract with the private firm that submitted the selected proposal. If the public entity is unable to negotiate a satisfactory contract with the selected private firm, it may select another qualified proposal from among those submitted and proceed to negotiate a contract with the private firm that submitted the proposal. The public entity shall set forth in writing the reasons for the selection of the qualified proposal submitted by the private firm with which the public entity has negotiated a proposed contract and shall make this document available to the public along with the proposed contract upon request and during the public hearing conducted pursuant to section 6 of P.L.1995, c.101 (C.58:26-24). e. A contract entered into pursuant to P.L.1995, c.101 (C.58:26-19 et al.) shall include provisions addressing the following: (1) The charges, rates, fees or formulas to be used to determine the charges, rates, or fees to be charged by the public entity for the water supply services to be provided; (2) The allocation of the risks of financing and constructing planned capital additions or upgrades to existing water supply facilities; (3) The allocation of the risks of operating and maintaining the water supply facility; (4) The allocation of the risks associated with circumstances or occurrences beyond the control of the parties to the contract; (5) The defaulting and termination of the contract; (6) The employment of current employees of the public entity whose positions or employment will be affected by the terms of the contract; (7) The private firm's authority and the extent, or the procedures for the use, of that authority to initiate, negotiate and finalize the terms for a bulk sale of surplus water. The contract shall either grant the private firm such authority or specifically state that the firm is denied that authority. Nothing in P.L.1995, c.101 (C.58:26-19 et al.) shall be construed to authorize a public entity that enters into a contract pursuant to P.L.1995, c.101 (C.58:26-19 et al.) to provide for the bulk sale, lease or transfer of water if the water being transferred, leased or sold has been supplied to the public entity either by the New Jersey Water Supply Authority or by the North Jersey District Water Supply Commission, unless the authority pursuant to P.L.1981, c.293 (C.58:1B-1 et seq.) or the district pursuant to R.S.58:5-1 et seq., as appropriate, has agreed to the bulk sale, lease or transfer; (8) The requirements for the provision of a performance bond by the private firm, if so required by the public entity; and (9) The allocation of responsibility for compliance with the provisions of the "Water Quality Accountability Act," P.L.2017, c.133 (C.58:31-1 et seq.), if applicable . A contract may contain any other terms and conditions that have been negotiated by the public entity and the private firm. f. If a dispute over contract compliance, performance or termination cannot be resolved by the public entity and the private firm pursuant to the procedures set forth in the contract, either party to the contract may file with the Superior Court which has appropriate jurisdiction a request for an order either to terminate the contract based on the reasons stated in the request or for an order for other appropriate relief to the dispute. The court may take such action as it may deem necessary to facilitate the expeditious resolution of the dispute and an expeditious response to the request, including ordering the parties to undertake a dispute resolution or mediation process. The court shall use, as it deems necessary, the services of a financial expert in the area of water supply service contracts in its analysis of the contract and the issues before it. Within 90 days after the filing of a request, the court shall either grant the request or deny the request. If the request is granted, the court shall order such appropriate relief measures or remedies as it deems appropriate and necessary. g. A public entity that has negotiated a contract with a private firm pursuant to P.L.1995, c.101 (C.58:26-19 et al.) shall obtain the written opinion of bond counsel as to effect of the contract on the tax exempt status of existing and future financing instruments executed by the public entity given the terms of the contract and the federal laws or regulations concerning this matter. h. If a public entity entering a contract consists of multiple municipalities, a concession fee or other monetary benefit paid by a private firm as a result of the contract shall be paid directly to the municipalities constituting that public entity. Any concession fee or monetary benefit paid by a private firm to a public entity shall be used for the purpose of reducing or off-setting property taxes. L.1995, c.101, s.5; amended 2021, c.184, s.15.

N.J. Stat. § 58:26-23.1 Prior procurements deemed valid

15. Any procurement commenced prior to the effective date of P.L.1995, c.101 (C.58:26-19) which was advertised as being undertaken pursuant to that act in anticipation of its enactment and which is in substantial compliance with the provisions of P.L.1995, c.101 (C.58:26-19 et al.), is hereby deemed valid and undertaken under valid legal authority. L.1995,c.101,s.15.

N.J. Stat. § 58:26-24 Public hearing; ordinance; application

6. a. A public entity that intends to enter into a contract with a private firm for the provision of water supply services pursuant to P.L.1995, c.101 (C.58:26-19 et al.) shall conduct a public hearing on the proposed contract negotiated pursuant to section 5 of P.L.1995, c.101 (C.58:26-23). A public entity shall also conduct pursuant to this section a public hearing on revisions to a contract required by subsection b. of section 7 of P.L.1995, c.101 (C.58:26-25) or on substantial amendments to a contract as required by subsection g. of section 7 of P.L.1995, c.101 (C.58:26-25). b. The public entity shall provide at least 14 days' prior notice of the public hearing by publication in at least one newspaper of general circulation in the jurisdiction or service area of the public entity to be served under the terms of the proposed contract. The publication shall include notice of the date, time and place of the public hearing, notice of the place at which copies of the proposed contract will be available for public inspection, and the times during which such inspection will be permitted. The notice shall specifically state whether any concession fee or monetary benefit will be paid by a private firm to the public entity as a result of the contract for water supply services, the monetary amount of the fee or benefit and the potential impact of the fee or benefit on the charges, rates or fees which will be paid for the supply of water by water users in the jurisdiction or service area that will receive the water supply services pursuant to the terms of the contract. c. At the public hearing, the public entity shall explain the terms and conditions of the proposed contract and shall answer questions raised by prospective consumers and other interested parties. The public entity shall explain during the hearing the charges, rates or fees that will or may be charged by the public entity for the supply of water as a result of the proposed contract. In addition, the entity shall explain any concession fee or monetary benefit to be paid by a private firm to the public entity as a result of the contract for water supply services, the monetary amount of the fee or benefit and the potential impact of the fee or benefit on the charges, rates or fees which will be paid for the supply of water by water users in the jurisdiction or service area that will receive the water supply services pursuant to the terms of the contract. d. The public entity shall produce a verbatim record of the public hearing. The record of the public hearing shall be kept open for a period of seven days following the conclusion of the hearing, during which time interested parties may submit written statements to be included in the hearing report. The public entity shall prepare a written hearing report, which shall include a copy of the proposed contract, a copy of the statement setting forth the public entity's reasons for the selection of the proposal submitted by the private firm with which the entity has negotiated a contract, the verbatim record of the public hearing, written statements submitted by interested parties, a copy of the bond counsel's written opinion required pursuant to subsection g. of section 5 of P.L.1995, c.101 (C.58:26-23) and a statement prepared by the public entity summarizing the major issues raised at the public hearing and the public entity's specific responses to those issues. The public entity shall make copies of the hearing report available to interested parties upon request at a cost not to exceed the actual cost of printing or copying. e. The governing body of a public entity that has negotiated the proposed contract shall adopt an ordinance or a resolution, as appropriate, or parallel ordinances or resolutions, as the case may be, if there is more than one governing body involved, approving the proposed contract. The ordinance or resolution may be introduced at the first meeting of the governing body of the public entity held after the public hearing on the proposed contract, and shall acknowledge that the agreement needs to be approved pursuant to section 7 of P.L.1995, c.101 (C.58:26-25). f. Within 30 days after the close of a public hearing on a proposed contract held pursuant to subsection a. of this section and upon at least 10 days' prior written notice, the public entity shall submit pursuant to section 7 of P.L.1995, c.101 (C.58:26-25) an application for approval to the division and the board and shall submit the hearing report to the department for review. The board and division shall specify the form of the application to be submitted. L.1995,c.101,s.6.

N.J. Stat. § 58:26-25 Approval of application.

7. a. Within 60 days of receipt of the application, the board and division shall approve, or conditionally approve, an application submitted by a public entity pursuant to subsection f. of section 6 of P.L.1995, c.101 (C.58:26-24). Within 60 days of receipt of the hearing report, the department shall provide any comments on the hearing report it deems appropriate to the board, division and public entity. If the board or division fail to approve or conditionally approve the application within 60 days after receipt, the application shall be deemed approved, unless the public entity has agreed to an extension of the period. b. If either the board or division conditionally approves the application, the board or division shall state in writing the revision to the proposed contract that is necessary in order for it to be approved. If the board or division determines that the required revision is substantial, the public entity shall hold a public hearing on the revision and adhere to the provisions of section 6 of P.L.1995, c.101 (C.58:26-24) in so doing. A substantial revision shall be a change that results in an increase in the charges, rates or fees of the private firm or that materially changes other terms and conditions of the contract. The proposed revision to the contract shall be submitted to the board, division and department 15 days prior to the date of the public hearing. If the board or division determines that the required revision in the conditional approval is not substantial, the public entity shall submit the proposed revision to the contract to the board and the division for approval and to the department for review. The revision shall be approved if found to be consistent with the conditions set forth in the conditional approval, or disapproved with a written explanation as to why the revision is not consistent, within 15 days after the next public meeting of the board or division. c. In its review of a contract, the board shall apply the following criteria in determining whether to approve the contract: (1) The private firm entering into the contract has the financial capacity and technical and administrative experience to ensure continuity of service over the term of the contract and that the standards and requirements contained in the application documents concerning the financial, technical and administrative capacity of the private firm are necessary and sufficient to protect the public interest. (2) The terms of the contract are not unreasonable. In determining whether the terms of the contract are not unreasonable, the board shall review the fees and charges to be charged or assessed under the contract to determine that they are reasonable to the public entity, taking into consideration all of the obligations undertaken by the private firm and all the benefits obtained by the public entity. In making this determination, the board shall not use the traditional rate based rate of return methodology. (3) The franchise customers of a public utility participating in a contract are protected from the risks of the proposed contract and that they are not subsidizing the contract. If a private firm is not a public utility, the board shall ensure that under the terms of the proposed contract the users of water outside of the jurisdiction or service area that will receive water supply services under the contract are also protected from the risks of the contract and that water users outside the jurisdiction or service area are not subsidizing the contract through increased charges, rates or fees for the supply of water. (4) The contract contains the provisions required by paragraphs (1), (2) and (6) of subsection e. of section 5 of P.L.1995, c.101 (C.58:26-23). Upon approval of a contract as proposed or as revised in response to a conditional approval, the jurisdiction of the board over the contract shall terminate until or unless the contract is amended to change the formula or other basis of determining charges contained therein. d. In its review of a contract, the division shall apply the following criteria in determining whether to approve the contract: (1) The terms of the proposed contract do not materially impair the ability of the public entity to punctually pay principal and interest due on its outstanding indebtedness and to supply other essential public improvements and services. (2) A concession fee or other monetary benefit paid by a private firm as a result of the contract is paid directly to the municipalities constituting that public entity, if a public entity consisting of multiple municipalities has entered into a contract. Any concession fee or monetary benefit paid by a private firm to a public entity is used for the purpose of reducing or off-setting property taxes. (3) The contract contains the provisions required by paragraphs (3), (4), (5), (7), (8), and (9) of subsection e. of section 5 of P.L.1995, c.101 (C.58:26-23). The division shall also review and specifically approve any contract provision pursuant to which a public entity will or may execute a financing instrument for the purposes set forth in the contract. e. The board or division may provide the public entity with any non-binding comments or advice during or after the review of the application as the board or division deem appropriate. f. The board or division shall assess and the applicant shall pay a fee equal to the cost incurred by the board or division for an analysis of an application by an independent person who has expertise in the area of water supply services if during the review of an application the board or division determine that such an analysis is required and a person with the required expertise is not readily available from within any executive department of the State government. g. If the public entity and private firm would like to amend a contract after approval of an application by the board and division, the public entity shall submit proposed amendments to the board and division for approval and to the department for review. At the next public meeting of the board and of the division after receipt of proposed amendments, the board and the division shall determine whether the proposed amendments are substantial. If the amendments are substantial in nature as determined by either the board or the division, the public entity shall conduct a hearing pursuant to section 6 of P.L.1995, c.101 (C.58:26-24). Within 60 days of the receipt of proposed amendments that are not determined to be substantial, or within 60 days of the receipt of an application for approval of proposed amendments that are determined to be substantial, the board and division shall approve or conditionally approve the amendments in accordance with the applicable procedures established for approval of an original contract pursuant to this section . L.1995, c.101, s.7; amended 2021, c.184, s.16.

N.J. Stat. § 58:26-26 Issuance of bonds

8. In order to pay its part of the cost of the water supply facility, a public entity may issue bonds in accordance with the "Local Bond Law," N.J.S.40A:2-1 et seq. If a public entity enters into a financing instrument the proceeds of which are used by the private firm for a capital expenditure for the benefit of a water supply facility, the expenditure of the funds provided by the public entity shall be in compliance with applicable public contracting statutes. L.1995,c.101,s.8.

N.J. Stat. § 58:26-27 Jurisdiction, regulation, control

9. Notwithstanding any other provision of P.L.1995, c.101 (C.58:26-19 et al.) whenever a private firm enters into a contract with a public entity to provide water supply services pursuant to P.L.1995, c.101 (C.58:26-19 et al.), and that public entity operates water supply facilities, in accordance with the provisions of N.J.S.40A:31-4, within another public entity, the private firm or public entity shall be subject to the jurisdiction, regulation and control of the Board of Public Utilities as provided in N.J.S.40A:31-23, to the extent the private firm or public entity operates water supply facilities within another public entity. L.1995,c.101,s.9.

Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://www.njleg.state.nj.us/legislative-activity/statutesFetched: 10/17/2026