STATEMENT TO

SENATE, No. 2909

with Assembly Floor Amendments

(Proposed by Assemblyman BENSON)

ADOPTED: JUNE 29, 2022

      These Assembly floor amendments require the Department of Transportation (“department”) to create a grant program to compensate small business enterprises that are contractors and subcontractors on construction contracts awarded by the department for increases in the cost of acquisition of materials since March of 2020.  In order to be eligible for the grant program, a contractor or subcontractor would be required to demonstrate to the department that: (1) it holds an eligible contract with the department; (2) there has been an increase in excess of five percent of the cost of acquiring materials by a contractor or subcontractor purchasing eligible materials for an eligible contract; and (3) the contractor or subcontractor is a small business enterprise.

      A contractor or subcontractor would not be eligible for a grant if the department determines there is unacceptable or excessive material under an eligible contract.  An application submitted by a contractor or subcontractor would preclude the contractor or subcontractor from otherwise submitting claims to the department regarding or related to the same materials under an eligible contract.

      The department would be responsible for establishing streamlined procedures for the application process and post such forms, conditions, and requirements on the department’s website as soon as reasonably possible.  Applications for grants would be accepted within a 90 day period but the department would be authorized to open the application period for an additional 30 days if funds appropriated under the bill remain following the initial application period and eligibility determinations.  Grant awards will be made in the order in which applications are received and approved.  The New Jersey Contractual Liability Act, N.J.S.59:13-1 et seq., would apply to all applications for grant awards submitted under the bill.

      A contractor or subcontractor that is determined by the department to be eligible pursuant to the bill may be provided a grant for the cost difference paid by the contractor or subcontractor for eligible materials in an amount equal to the increase in the cost of acquisition of those eligible materials.  The Commissioner of Transportation may impose any additional conditions or requirements for receipt of a grant as the commissioner deems appropriate.

      As amended, the bill appropriates $10 million to the Division of Disaster Recovery and Mitigation (“division”) in the Department of Community Affairs from the federal “Coronavirus State Fiscal Recovery Fund” established pursuant to the federal “American Rescue Plan Act”, Pub.L.117-2, which is to be made available to and used by the department to effectuate the provisions of the bill.  A reasonable amount of these funds in an amount not to exceed 2.5 percent may be used by the department for organizational, administrative and other work and services, including salaries, equipment, services, and materials necessary to administer the activities authorized by the bill.  The department would be required to enter into a memorandum of understanding or grant agreement, as applicable, with the division to effectuate the purposes of this bill, to establish appropriate administrative costs, and to ensure compliance with federal rules and guidance, including with respect to the “American Rescue Plan Act,” Pub.L.117-2.

      As amended, this bill is identical to the Assembly Committee Substitute for Assembly Bill No. 4374, as reported by the Assembly Budget Committee on June 27, 2022.