N.J. Stat. § 40:37A-105
Upon contracting with a county improvement authority for the collection, treatment or disposal of garbage or solid waste as herein provided, no municipality shall, during the term of the contract, engage in, or grant, permit or enter into any new contract for, the collection, treatment and disposal of garbage and solid waste that might be competitive with the facilities or services being provided under contract to that municipality by the improvement authority.
This section shall in no way be construed so as to prevent or prohibit any municipality from erecting, constructing, operating and maintaining an incinerator or garbage and solid waste disposal plant or other means for the disposition of garbage and solid wastes in any manner or by any means by which the same may be lawfully erected, constructed, operated or maintained.
N.J.S. § 40:37A-105