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Bill

A 4648

Provides for State agencies to issue advanced payments to certified business enterprises awarded State contracts.

2024-2025 Regular Session Introduced by Linda Carter and 5 co-sponsors

Allows up to 10% upfront payment on state contracts to DOR-certified CBEs, with pass-through to certified subcontractors and repayment if work isn't started or completed.

Reported and Referred to Assembly Labor Committee
#stcontracts #statedepts
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Bill Summary · A 4648

Summary: Assembly Bill No. A 4648

Overview

A 4648 would authorize New Jersey state agencies that award public contracts for construction, goods and services, or professional services to issue an advanced payment to a contractor. The advanced payment could be up to 10% of the total contract value and would be available only if the contractor is certified under New Jersey’s Division of Revenue Business Certification Program. The bill requires passage of the advanced payment through to certified subcontractors and establishes repayment obligations if the work is not started or completed.

Purpose and Intent

  • To help certified business enterprises (CBEs) that want to bid on public contracts or participate as subcontractors but lack upfront capital.
  • To promote participation of CBEs in state contracting, including small businesses and businesses owned by minorities, women, veterans, LGBTQ+ individuals, and other socially and economically disadvantaged groups.

Key Provisions

  • Eligibility for Advanced Payment (Section 1a):
    State agencies may issue an advanced payment of up to 10% of the contract’s total value to a contractor that is certified by the Division of Revenue Business Certification Program in the Department of the Treasury. A bid may include a request for this advanced payment if it is necessary for the contractor to fulfill the contract.

  • Pass-Through to Subcontractors (Section 1b):
    If a subcontractor is also a certified business enterprise, the contractor must pass through a proportionate share of the advanced payment to the subcontractor. The amount passed through should reflect the subcontractor’s estimated charges under the contract and must be paid within 60 days of the contractor receiving the advanced payment.

  • Repayment Obligation (Section 1c):
    Any contractor or subcontractor that receives an advanced payment and does not begin or complete the contracted work is liable to repay the advanced payment.

  • Certification Programs (Statement):
    The bill references the Division of Revenue’s Business Certification Program, which certifies small businesses, LGBTQ+ businesses, minority and women-owned businesses, veteran and disabled veteran-owned businesses, and businesses owned by socially and economically disadvantaged individuals.

  • Effective Date (Section 2):
    The act would take effect 90 days after enactment.

Affected Entities

  • State Agencies and Authorities: Gov/award public contracts for construction, goods/services, or professional services.
  • Contractors and Subcontractors: Particularly those that are certified CBEs; primes must manage and distribute the advanced payment.

Procedural Timeline and Status

  • Introduced: February 4, 2025.
  • Legislative actions show initial referrals to committees, including Assembly Labor Committee (status noted as “Reported and Referred to Assembly Labor Committee”).
  • Previous committee progression: transferred to Assembly Community Development and Women’s Affairs and previously to the State and Local Government committee in earlier stages.
  • Sponsor: Kwani O’Pharrow (primary).

Potential Impact and Considerations

  • Pros: Increased access to working capital for certified businesses; potential growth in CBE participation in state contracts; improved timely payments to subcontractors.
  • Cons/Risks: Administrative implementation requirements; potential compliance/repayment risk if projects stall or are not completed; lack of explicit interest/fee terms or collateral requirements in the text.
  • Implementation economics would depend on agency rules and intergovernmental processes once the act is enacted.

Compiled from official sources — confirm details with the bill’s official record.

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