N.J. Stat. tit. 58, ch. 28

in effect

N.J. Stat. § 58:28-1 Definitions

1. As used in this act: "Private firm" means a corporation or other business entity that owns or operates, as of the effective date of this act, an industrial facility engaging in manufacturing operations having a Standard Industrial Classification number within 20-39 inclusive and is financially, technically, and administratively capable of financing, planning, designing, constructing, operating, or maintaining, or any combination thereof, water supply facilities, or of providing water supply services to a public entity under the terms of a partnership agreement awarded pursuant to the provisions of this act; "Water supply facility" means 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, as an industrial water supply system jointly owned or operated by two or more private firms, which individually or collectively possess, as of the effective date of this act, a water diversion for said system in excess of fifteen million gallons per day (mgd) under an existing water allocation permit granted by the Department of Environmental Protection pursuant to the "Water Supply Management Act," P.L.1981, c.262 (C.58:1A-1 et al.), 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; "Water supply services" means services provided by a water supply facility. L.1993,c.381,s.1.

N.J. Stat. § 58:28-2 Contracts with private firms for water supply

2. The provisions of any other law, rule or regulation to the contrary notwithstanding, a single municipality which owns and operates a municipal water utility system may, within six months of the effective date of this act, enter into a contract not exceeding 40 years with a private firm for the acquisition of an equitable interest, not to exceed 50 percent, in a water supply facility for the provision of water supply services to those customers located exclusively within the boundaries of the contracting municipality or such other customers served by the contracting municipality as of the effective date of this act, which may include the financing, construction, operation or maintenance, or any combination thereof, of a water supply facility. This act shall not apply to any contract entered into by more than one municipality. L.1993,c.381,s.2.

N.J. Stat. § 58:28-3 Contracts exempt from certain regulation

3. a. Any partnership or copartnership agreement entered into after the effective date of this act pursuant to a contract authorized under section 2 of P.L.1993, c.381 (C.58:28-2) involving a private firm not previously subject to the jurisdiction of the Board of Regulatory Commissioners or its predecessor organizations shall not be considered a public utility for the purposes of R.S.48:2-13 and shall not be subject to oversight by the Board of Regulatory Commissioners. b. Any transaction undertaken by a partnership or copartnership established pursuant to a contract authorized under section 2 of P.L.1993, c.381 (C.58:28-2) shall be subject to oversight and approval of the Department of Environmental Protection, and shall be subject to the permit system established pursuant to the "Water Supply Management Act," P.L.1981, c.262 (C.58:1A-1 et al.), except that any proposed modification to the existing water allocation permit of a water supply facility, relating to the transaction, that would authorize the transfer to a municipality of up to one-third of the quantity of water allocated by the existing permit shall be deemed to be automatically approved pursuant to the "Water Supply Management Act," P.L.1981, c.262 (C.58:1A-1 et al.). c. Any agreement entered into by a partnership or copartnership established pursuant to section 2 of P.L.1993, c.381 (C.58:28-2) shall not be subject to the provisions of the "New Jersey Water Supply Privatization Act," P.L.1985, c.37 (C.58:26-1 et seq.). L.1993, c.381, s.3.

N.J. Stat. § 58:28-4 Definitions relative to water supply, wastewater treatment services

3. As used in sections 3 through 6 of P.L.2002, c.47 (C.58:28-4 through 58:28-7): "Board" means the Board of Public Utilities. "Concession fee" means a payment from a duly incorporated nonprofit association to the governing body of a city of the first class, regardless of when it is received, that is exclusive of or exceeds any contractually specified reimbursement of direct costs incurred by the governing body. "Contract" means a long-term written agreement wherein a duly incorporated nonprofit association agrees to provide water supply services or wastewater treatment services on behalf of the governing body of a city of the first class and wherein the duly incorporated nonprofit association agrees to provide, during the term of the contract, capital expenditures on behalf of the governing body's water supply facility as defined in subsection (16) of section 15 of P.L.1971, c.198 (C.40A:11-15) or wastewater treatment system as defined in subsection (19) of section 15 of P.L.1971, c.198 (C.40A:11-15), or both, as the case may be, which expenditures are set forth in the contract. "Department" means the Department of Environmental Protection. "Director" means the Director of the Division of Local Government Services in the Department of Community Affairs. "Division" means the Division of Local Government Services in the Department of Community Affairs. "Proposal document" means the document prepared by or on behalf of the governing body of a city of the first class describing the water supply services or wastewater treatment services that the governing body is considering having provided by a duly incorporated nonprofit association pursuant to a contract. L.2002,c.47,s.3.

N.J. Stat. § 58:28-5 Published notice of intent to enter into contract

4. a. The governing body of a city of the first class shall publish notice of its intent to enter into a contract pursuant to sections 1 and 2 of P.L.2002, c.47 (C.40A:12-17.1 and 40A:11-5.1) in at least one newspaper of general circulation in the jurisdiction or service area that will receive water supply services or wastewater treatment services under the terms of the contract and one newspaper of broad regional circulation, at least 30 days prior to conducting the public hearing required under section 5 of P.L.2002, c.47 (C.58:28-6). In addition, a governing body that intends to enter into a contract with a duly incorporated nonprofit association for the provision of water supply services or wastewater treatment 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. c. The public entity shall set forth in writing the reasons for the selection of the nonprofit association 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 5 of P.L.2002, c.47 (C.58:28-6)(now before the Legislature as this bill). d. A contract entered into pursuant to sections 1 and 2 of P.L.2002, c.47 (C.40A:12-17.1 and 40A:11-5.1) 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 nonprofit association for the water supply services or wastewater treatment services to be provided. (2) The allocation of the risks of financing and constructing planned capital additions or upgrades to existing water supply facilities or wastewater treatment systems. (3) The allocation of the risks of operating and maintaining the water supply facilities or wastewater treatment systems. (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 city of the first class whose positions or employment will be affected by the terms of the contract. (7) The nonprofit association'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 nonprofit association such authority or specifically state that the nonprofit association is denied that authority. Nothing in P.L.2002, c.47 (C.40A:12-17.1 et al.) shall be construed to authorize a city of the first class that enters into a contract pursuant to sections 1 and 2 of P.L.2002, c.47 (C.40A:12-17.1 and 40A:11-5.1) to provide for the bulk sale, lease or transfer of water if the water being transferred, leased or sold has been supplied to the city of the first class 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 nonprofit association, if so required by the governing body. e. A contract entered into pursuant to sections 1 and 2 of P.L.2002, c.47 (C.40A:12-17.1 and 40A:11-5.1) shall provide that any lands leased or otherwise conveyed to the duly incorporated nonprofit association pursuant to the provisions of P.L.2002, c.47 (C.40A:12-17.1 et al.) shall not be developed for any purpose other than for the provision of water supply services or wastewater treatment services as determined by the Commissioner of Environmental Protection. f. If a dispute over contract compliance, performance or termination cannot be resolved by the parties to the contract 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 or wastewater treatment 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. L.2002,c.47,s.4.

N.J. Stat. § 58:28-6 Public hearing on contract

5. a. The governing body of a city of the first class that intends to enter into a contract with a duly incorporated nonprofit association for the provision of water supply services as defined in subsection (16) of section 15 of P.L.1971, c.198 (C.40A:11-15), or for the provision of wastewater treatment services as defined in subsection (19) of section 15 of P.L.1971, c.198 (C.40A:11-15), or both, as the case may be, shall conduct a public hearing on the proposed contract authorized pursuant to sections 1 and 2 of P.L.2002, c.47 (C.40A:12-17.1 and 40A:11-5.1)(now before the Legislature as this bill). The governing body shall also conduct a public hearing pursuant to this section on revisions to a contract required by subsection b. of section 6 of P.L.2002, c.47 (C.58:28-7) or on substantial amendments to a contract as required by subsection g. of section 6 of P.L.2002, c.47 (C.58:28-7). b. The governing body shall provide, at least 14 days prior to the public hearing, (1) notice in writing to the board, department and the division of its intent to enter into a contract with a duly incorporated nonprofit association for the provision of water supply services or wastewater treatment services, and (2) notice of the public hearing by publication in at least one newspaper of general circulation in the jurisdiction or service area of the governing body 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 will be paid by the duly incorporated nonprofit association to the governing body as a result of the contract for water supply services or wastewater treatment services, the monetary amount of the concession fee and the potential impact of the concession fee on the charges, rates or fees which will be paid for water supply services or wastewater treatment services by users in the jurisdiction or service area that will receive the water supply services or wastewater treatment services pursuant to the terms of the contract. c. At the public hearing, the governing body shall explain the terms and conditions of the proposed contract and shall answer questions raised by prospective consumers and other interested parties. The governing body shall explain during the hearing the charges, rates or fees that will or may be charged to users in the jurisdiction or service area for water supply services or wastewater treatment services as a result of the proposed contract. In addition, the governing body shall explain any concession fee to be paid by a duly incorporated nonprofit association to the governing body as a result of the contract for water supply services or wastewater treatment services, the monetary amount of the concession fee and the potential impact of the concession fee or benefit on the charges, rates or fees which will be paid for water supply services or wastewater treatment services by users in the jurisdiction or service area that will receive the water supply services or wastewater treatment services pursuant to the terms of the contract. d. The governing body 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 governing body shall prepare a written hearing report, which shall include a copy of the proposed 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 section 2 of P.L.2002, c.47 (C.40A:11-5.1) and a statement prepared by the governing body summarizing the major issues raised at the public hearing and the governing body's specific responses to those issues. The governing body 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 may adopt an ordinance as provided in section 1 of P.L.2002, c.47 (C.40A:12-17.1) and may enter into a contract as provided in section 2 of P.L.2002, c.47 (C.40A:11-5.1). The ordinance may be introduced at the first meeting of the governing body held after the public hearing on the proposed contract, and shall acknowledge that the contract requires approval pursuant to the provisions of section 6 of P.L.2002, c.47 (C.58:28-7). 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 seven days' prior written notice, the governing body shall submit an application for approval to the division and the board and shall submit the hearing report to the department for review pursuant to the provisions of section 6 of P.L.2002, c.47 (C.58:28-7). The division shall specify the form of the application to be submitted. L.2002,c.47,s.5.

N.J. Stat. § 58:28-7 Approval, conditional approval of application

6. a. Within 45 days of receipt of the application, the board and division shall approve, or conditionally approve, an application submitted by a governing body pursuant to subsection f. of section 5 of P.L.2002, c.47 (C.58:28-6). Within 25 days of receipt of the hearing report, the department shall provide any comments on the hearing report that it deems appropriate to the board, division and the governing body. If the board or division fail to approve or conditionally approve the application within 50 days after receipt, the application shall be deemed approved, unless the governing body has agreed to an extension of the period. b. If either the board or the 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 governing body shall hold a public hearing on the revision and adhere to the provisions of section 5 of P.L.2002, c.47 (C.58:28-6) in so doing, except that the required notice shall be published at least seven days prior to the public hearing. A substantial revision shall be a change that results in an increase in the charges, rates or fees which will be paid for water supply services or wastewater treatment services by users in the jurisdiction or service area that will receive the water supply services or wastewater treatment services pursuant to the terms of the contract, 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 the 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 governing body 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 duly incorporated nonprofit association entering into the contract has the 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 technical and administrative capacity of the nonprofit association 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 charge, rates or fees to be charged or assessed under the contract to determine that they are reasonable to the city of the first class, taking into consideration all of the obligations undertaken by the nonprofit association and all the benefits obtained by the city of the first class. 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 the nonprofit association 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 d. of section 4 of P.L.2002, c.47 (C.58:28-5). 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, rates or fees 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 governing body to punctually pay principal and interest due on its outstanding indebtedness and to supply other essential public improvements and services; (2) A concession fee paid by a duly incorporated nonprofit association as a result of the contract is paid directly to the municipality that created or constitutes the governing body, and any concession fee paid by a duly incorporated nonprofit association to a governing body is used for the purposes of reducing or off-setting property taxes, reducing water supply services or wastewater treatment services charges, rates or fees, one-time nonrecurring expenses or capital asset expenditures related to water supply facilities or wastewater treatment systems; and (3) The contract contains the provisions required by paragraphs (3), (4), (5), (7) and (8) of subsection d. of section 4 of P.L.2002, c.47 (C.58:28-5). The division shall also review and specifically approve any contract provision pursuant to which a governing body will or may execute a financing instrument for the purposes set forth in the contract. In addition, the division shall review any contract between the governing body of a city of the first class and a duly incorporated nonprofit association in which a concession fee is paid by the nonprofit association to determine if the payment of the concession fee is in the best interest of the parties to the contract. e. The board or division may provide the governing body with any non-binding comments or advice during or after the review of the application as the board or division deems 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 areas of water supply services or wastewater treatment services if during the review of an application the board or division determines that such an analysis is required. g. If the governing body of a city of the first class and the duly incorporated nonprofit association would like to amend a contract after approval of an application by the board and division, the governing body 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 governing body shall conduct a hearing pursuant to section 5 of P.L.2002, c.47 (C.58:28-6). Within 45 days of the receipt of proposed amendments that are not determined to be substantial, or within 45 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.2002,c.47,s.6.

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