ASSEMBLY APPROPRIATIONS COMMITTEE
STATEMENT TO
[First Reprint]
ASSEMBLY, No. 5042
STATE OF NEW JERSEY
DATED: JANUARY 8, 2026
The Assembly Appropriations Committee reports favorably Assembly Bill No. 5042 (1R).
As reported, the bill provides that the Central Nonprofit Agency will develop and support relationships between approved facilities and commercial entities that frequently receive State contracts in order to promote the use of approved facilities as subcontractors.
Under current law, State and local government agencies and political subdivisions of the State that are authorized to purchase goods and services are required to make a good faith effort to purchase five percent of such goods and services through the Central Nonprofit Agency, an agency established by the “Rehabilitation Facilities Set-Aside Act.” This bill requires such State government agencies to purchase five percent of goods and services through the Central Nonprofit Agency.
The bill clarifies reporting and oversight requirements. Under the bill, the Division of Purchase and Property (DPP) in the Department of the Treasury must submit a report of purchasing data to the Central Nonprofit Agency for the Rehabilitation Facilities Set-Aside program no more than six months after the effective date of this bill, and on a quarterly basis thereafter. In addition, the Department of the Treasury will be required to report annually to the Governor and the Legislature detailing the compliance of State government entities and political subdivisions with the purchasing thresholds.
The bill also provides that the DPP, in collaboration with the Central Nonprofit Agency, must establish training protocols for all purchasing agents employed by State government entities or political subdivisions required to meet the purchasing thresholds.
The bill provides that compliance with the five percent goods and services purchase requirement from the Central Nonprofit Agency will not be required until the Department of the Treasury promulgates certain guidelines. The department will issue the guidelines no later than 90 days following the effective date of the bill and the guidelines will be publicly posted and transmitted to all State government entities and political subdivisions subject to the purchasing requirement at least 60 days prior to the commencement of any compliance period.
The bill also provides that the Central Nonprofit Agency will have a right of first refusal for all goods and services that are currently provided, or may otherwise be purchased, through a cooperative purchasing agreement catalog, so long as the Central Nonprofit Agency can deliver the goods or services that would otherwise be provided or purchased through a cooperative purchasing agreement catalog at a price that is within 15 percent of fair market value.
The bill allows the Central Nonprofit Agency to request that the Commodities and Services Council set aside any goods or services for approved facilities as long as the price for such goods or services provided by the approved facility is within 15 percent of fair market value provided through any cooperative contract in which the State participates. If approved by the Commodities and Services Council, such goods and services will be removed from any applicable cooperative purchasing agreement in which the State participates and will instead be procured from an approved facility in order to fulfill the purpose of the “Rehabilitation Facilities Set-Aside Act.”
The bill also requires that any good or service that the Central Nonprofit Agency has approved a community rehabilitation provider to provide be made available to all State government entities for purchase or contract.
The bill requires the Central Nonprofit Agency and the DPP to jointly develop rules and guidelines to identify components of new and existing contracts where goods and services provided by the Central Nonprofit Agency are to be used and require the joint development of language for the contracts requiring the use of the goods and services to ensure meaningful employment opportunities for people with disabilities through the Central Nonprofit Agency, as well as satisfying the needs of the State and its instrumentalities.
The “Rehabilitation Facilities Set-Aside Act” assists persons who are blind or have a severe disability with achieving maximum personal independence through productive employment by assuring a continuous market for their goods and services, which are produced at qualified rehabilitation facilities and distributed through the Central Nonprofit Agency. The Central Nonprofit Agency is designated by the Commissioner of the Department of Human Services to facilitate the distribution of orders received from various State agencies as provided in the “Rehabilitation Facilities Set-Aside Act.”
FISCAL IMPACT:
The Office of Legislative Services (OLS) finds that requiring State government entities to purchase five percent of their goods and services through the Central Nonprofit Agency, as well as granting the Central Nonprofit Agency the right of first refusal, may lead to a potential increase in State expenditures if the goods and services provided through the Central Nonprofit Agency are priced higher than market value.
The OLS also concludes that the Department of the Treasury will experience an annual indeterminate State expenditure increase due to the establishment of training protocols, the compilation and submission of various reports, and the development and issuance of various guidelines. The actual increase will depend on whether the Division of Purchase and Property’s current level of staff and resources is sufficient to implement the provisions of the bill or would need to be augmented.
Additionally, the OLS finds that affected counties and municipalities may also experience an annual indeterminate expenditure increase due to annual reporting requirements. Moreover, local governments are required to make a good faith effort to meet the five percent threshold, which could potentially increase their annual procurement costs.