NEW JERSEY REGISTER
ISSUE: VOLUME 37, NUMBER 8
ISSUE DATE: April 18, 2005
SUBJECT: RULE PROPOSALS
AGENCY: HEALTH AND SENIOR SERVICES
NEW JERSEY HEALTH CARE FACILITIES FINANCING AUTHORITY
37 N.J.R. 1119(a)
Proposed New Rules: N.J.A.C. 8:95
Proposal Number: PRN 2005-130.
Payment of Prevailing Wages in Authority Projects
Authorized By: New Jersey Health Care Facilities Financing Authority, Mark E. Hopkins, Executive Director.
Authority: N.J.S.A. 26:2I-1 et seq.
Calendar Reference: See Summary below for explanation of exception to calendar requirement.
Submit written comments by June 20, 2005 to:
Mark E. Hopkins
Executive Director
New Jersey Health Care Facilities Financing Authority
PO Box 366
Trenton, New Jersey 08625-0366
(or by overnight delivery to:
Station Plaza--Building # 4
22 South Clinton Avenue
Trenton, New Jersey 08609-1212)
Email: mhopkins@njhcffa.com
Fax: (609) 633-7778
The agency proposal follows:
Summary
The New Jersey Health Care Facilities Financing Authority was created by an Act of the New Jersey Legislature in 1972. The Authority is an independent State agency which operates according to the powers and intent granted by the original enabling law and broadened over the past 33 years as the Legislature identified new needs of the State's health care delivery system. The intent of the legislation was to ensure that all health care organizations (as that term is defined by N.J.S.A. 26:2I-3) have access to financial resources to improve the health and welfare of the citizens of the State. It is the policy of the State to encourage the provision of modern, well-equipped health care facilities. It is also the purpose of the legislation to provide assistance in the restructuring of the health care system of the State and to aid in the termination of the provision of acute care services at such locations as may be no longer useful or necessary for this purpose. The Authority was designed to be, and remains today, a financially self-sustaining organization.
In order to implement the statutory requirements set forth in N.J.S.A. 26:2I-5.3 to 5.6, the Authority proposes to adopt these rules to establish a procedure for requiring the payment of the prevailing wage rate for a worker's craft or trade, as determined by the Commissioner of the Department of Labor and Workforce Development pursuant to N.J.S.A. 34:11-56.25 et seq., for each such worker employed in the construction or rehabilitation of health care facilities undertaken in connection with loans, loan guarantees, expenditures, investments, tax exemptions or other incentives or financial assistance approved, provided, authorized, facilitated or administered by the Authority.
The enforcement of the requirement to pay the prevailing wage rate to workers involved with health care projects of health care organizations undertaken in connection with the assistance of the Authority, is, pursuant to N.J.S.A. 26:2I-5.3 to 5.6, vested with the Commissioner of the Department of Labor and Workforce Development (the "Department"), a worker employed in the performance of work or the employer or any designated representative of the worker. Any sanctions for violating the requirement to pay the prevailing wage rate are governed by N.J.S.A. 34:11-56.25 et seq. and the rules adopted by the Department found at N.J.A.C. 12:60.
As the Authority has provided a 63-day comment period for this notice of proposal, this notice is excepted from the rulemaking calendar requirements pursuant to N.J.A.C. 1:30-3.3(a)5.
Social Impact
The New Jersey Legislature has determined that a serious public emergency exists which is affecting the health, safety and welfare of the people of the State resulting from the fact that many aging health care facilities throughout the State are no longer sufficiently able to meet the needs of modern health care. The New Jersey Legislature has recognized that inadequate and outmoded facilities deny to the people of the State the benefits of health care of the highest quality and efficiency provided to the State's citizens at a reasonable cost. As a result, health care providers are restructuring their organizations, facilities and operations in order to develop integrated health care delivery systems capable of providing a full range of health care services in the most cost-effective manner. A public emergency exists affecting and threatening the welfare, health, safety and general well-being of the people of the State due to the lack of financial resources with which to construct and equip much needed health care facilities. The Authority seeks to ensure that all health care institutions have access to financial resources with which to improve the health and welfare of the citizens of the State. Thus, the Authority, by proposing and implementing these rules, hopes to encourage the provision of modern, well-equipped health care facilities for public use.
The proposed rules will have a positive social impact by continuing the Authority's ability to provide much needed financial assistance to health care organizations. Additionally, the proposed rules will ensure that workers on construction projects undertaken in connection with Authority assistance receive the wages and benefits to which they are due.
Economic Impact
There will be an economic impact on health care organizations that receive financial assistance from the Authority due to an increase in construction costs. However, the latter will be more than offset by the economic advantages of the financial assistance obtained by health care organizations from the Authority.
During the past five years, the Authority has provided financial assistance in the amount of approximately $ 2.7 billion, which resulted in the construction or rehabilitation of facilities at over 65 health care organizations throughout the State. Without the Authority's commitment of financial assistance, many of these projects would not have proceeded in the State. The State's continued commitment to health care relies on the ability of the Authority to provide financial assistance to health care organizations. The proposed rules are warranted as they serve the general public, the health care organization community and the State in ensuring fiscal responsibility and integrity in providing public financial assistance to such organizations. Most importantly, they comport with the requirements of the Prevailing Wage Act.
Federal Standards Statement
The proposed new rules are not subject to any Federal standards or requirements; therefore, a Federal standards analysis is not required.
Jobs Impact
The proposed new rules will not result in the generation or loss of any jobs, but will clarify the appropriate wages to be paid to workers employed on construction projects of health care organizations financed with assistance from the Authority pursuant to the New Jersey Prevailing Wage Act.
Agriculture Industry Impact
The proposed new rules will have no impact on the agriculture industry.
Regulatory Flexibility Analysis
The proposed new rules will apply to small businesses, as that term is defined in the Regulatory Flexibility Act, N.J.S.A. 52:14B-16 et seq. that receive financial assistance from the Authority. The number of small businesses which will be affected is unknown because it is not possible to estimate how many small businesses will receive financial assistance from the Authority at any given time. However, the proposed new rules impose compliance requirements on small businesses receiving financial assistance from the Authority by requiring the payment of prevailing wages on projects financed with Authority assistance, certification of compliance to the Authority on the completion of any such project, insertion of certain contractual provisions in construction contracts in excess of $ 2,000, and notification to the Department, prior to commencement of construction by its contractor, of the name and business address of the custodian of records where complete records for the project shall be maintained. The Authority does not anticipate that any additional professional services will be required. The proposed new rules also provide that a violation of these provisions shall be deemed a violation of N.J.S.A. 34:11-56.25 et seq., and N.J.A.C. 12:60. The compliance costs for small businesses indeed, all businesses, will be the potential increased costs of having to pay the prevailing wages to workers on an Authority subsidized construction project. The proposed new rules cannot be designed to minimize any adverse impact on small businesses because it is being adopted to comply with statutory requirements.
Smart Growth Impact
The proposed new rules will have no impact on the achievement of smart growth and the implementation of the State Development and Redevelopment Plan.
Full text of the proposed new rules follows:
CHAPTER 95 NEW JERSEY HEALTH CARE FACILITIES FINANCING AUTHORITY
SUBCHAPTER 1. PAYMENT OF PREVAILING WAGE WHERE AUTHORITY FINANCIAL ASSISTANCE HAS BEEN PROVIDED
8:95-1.1 Definitions
The following words and terms, when used in this subchapter, shall have the following meanings, unless the context clearly indicates otherwise:
"Authority" means the New Jersey Health Care Facilities Financing Authority.
"Construction contract" means any contract, subcontract or agreement, whether written or oral, for construction, reconstruction, renovation, demolition, alteration, repair work, maintenance work related to a project, or construction related to the installation of equipment, undertaken in connection with a project that has received final approval for Authority assistance and paid for in whole or in part with funds received through Authority assistance.
"Department" means the New Jersey Department of Labor and Workforce Development.
"Prevailing wage rate" means the prevailing wage rate established by the Commissioner of the New Jersey Department of Labor and Workforce Development from time to time in accordance with the provisions of N.J.S.A. 34:11-56.30 for the locality in which the project is located.
"Project" means a project, as defined in N.J.S.A. 26:2I-3.
8:95-1.2 Payments of prevailing wages in projects receiving assistance
Recipients of assistance from the Authority for projects, as a condition for receipt of such assistance, shall, in all construction contracts in the amount of $ 2,000 or more, require that wages paid to workers employed in the performance of the construction contracts be not less than the prevailing wage rate for such work.
8:95-1.3 Assurances required
(a) Recipients of assistance for construction contracts shall deliver a certificate to the Authority, upon completion of the project, signed by an authorized representative of the recipient, representing and confirming that:
1. The recipient has complied and has caused its contractors and subcontractors to comply with the requirements of N.J.A.C. 8:95-1.2; or
2. The recipient has not entered into any construction contracts subject to the provisions of N.J.A.C. 8:95-1.2.
8:95-1.4 Contract provisions required
(a) Each recipient of assistance from the Authority shall provide in all construction contracts in the amount of $ 2,000 or more that:
1. The general contractor shall apply or have each subcontractor apply to the Department for a wage determination for the locality where the project is to be performed and shall specify in the construction contract the rate to be paid for each craft, trade or classification of work to be performed;
2. The general contractor shall become the custodian of all records required by the provisions of this Chapter. Each subcontractor shall provide the general contractor with the records required to be kept by (a)3 below;
3. The general contractor and each subcontractor keep accurate records showing the name, craft or trade, and actual hourly rate of wages paid to each worker employed in connection with the performance of the contract, file all required reports, and preserve such records for two years from the completion date of the project, in compliance with N.J.S.A. 34:11-56.25 et seq. and N.J.A.C. 12:60; and
4. The general contractor and each subcontractor must permit the Department, its designated agent or other interested parties, including, but not limited to, the Authority or the recipient, complete access to all records required by the provisions of this subchapter for purposes of determining compliance with the provisions of this subchapter.
8:95-1.5 Notification requirement
The recipient shall notify the Department in writing, prior to the commencement of construction by the general contractor, of the name and business address of the custodian of records where complete payroll records for the project shall be maintained.
8:95-1.6 Violation
A violation of the provisions of this subchapter shall be deemed a violation of N.J.S.A. 34:11-56.25 et seq., and N.J.A.C. 12:60.
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