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S3174 FISCAL ESTIMATE
LEGISLATIVE FISCAL ESTIMATE
SENATE, No. 3174
STATE OF NEW JERSEY
222nd LEGISLATURE
DATED: JUNE 2, 2026
SUMMARY
Synopsis:
Concerns authority of owners, agents, or other persons to
elect to contract with private on-site inspection agencies to complete
inspections under the construction code; provides for charging of inspection
fees.
Type of Impact:
Annual local expenditure decrease; annual local revenue
impact.
Agencies Affected:
Local governments; Department of Community Affairs.
Office of
Legislative Services Estimate
Annual Fiscal Impact
Municipalities with Ordinance
Municipalities without Ordinance
Local Expenditure
Decrease
Indeterminate
Indeterminate
Local Revenue
Decrease
No Impact
Indeterminate
�
The
Office of Legislative Services (OLS) finds that the bill would result in a
decrease in annual local expenditures by allowing for the privatization of
inspections currently conducted by local enforcing agencies.� The OLS cannot
anticipate the number of inspections that owners, agents, or other responsible
persons in charge of construction work will elect to have privately inspected
in each municipality.� Therefore, the decrease in local expenditures is
indeterminate.
�
The
bill will have a divergent revenue impact on local governments depending on
whether or not a municipality adopts an ordinance mitigating the loss of
inspection fee revenue, which the bill authorizes.� The OLS anticipates that
the bill will result in a revenue decrease in municipalities that do not adopt
an ordinance and will not result in a revenue decrease in municipalities that
adopt an ordinance.� Therefore, the fiscal impact of the bill on local revenue
is $0 for municipalities with an ordinance and indeterminate for municipalities
without an ordinance.
BILL DESCRIPTION
����� This bill would authorize the owner, agent, or other
responsible person in charge of construction work to independently elect, for
any reason, to contract with a private, on-site inspection agency, to: (1)
perform a requested inspection; or (2) conduct any inspection required for the
issuance of a certificate of occupancy.� Current law permits an owner, agent,
or other responsible person in charge of work to contract with a private,
on-site inspection agency if the enforcing agency is unable to perform the requested
inspection within three business days of the date for which the inspection is
requested and the owner, agent, or other responsible person and enforcing
agency are unable to agree on a different date and time for inspection.
����� The bill would also provide that the authorization to
contract with a private, on-site inspection agency applies to inspections
required for the issuance of a certificate of occupancy in addition to on-site
inspections pursuant to a provision of the State Uniform Construction Code Act.
Current law only authorizes, under certain circumstances, the private
inspection of on-site inspections under that statute.
����� The bill would additionally authorize a municipality
to, by ordinance, require that the municipality receive the amount regularly
charged as an inspection fee by the enforcing agency as a condition of
accepting or recognizing an inspection performed by a private, on-site
inspection agency.� The bill would add fees for inspection to the list of fees
that a municipal governing body is required to set and would delete a provision
establishing a procedure for utilization of an authorized, private, on-site inspection
agency under certain circumstances.
FISCAL ANALYSIS
EXECUTIVE BRANCH
����� None received.
OFFICE OF LEGISLATIVE SERVICES
����� The OLS finds that the bill would result in a decrease
in annual local expenditures by allowing for the privatization of inspections
currently conducted by local enforcing agencies.� Private inspections conducted
pursuant to the bill would reduce the expenditures associated with an
inspection conducted by the local enforcing agency and would reduce the revenue
generated from the inspection fees paid to the local enforcing agency.� The
bill authorizes a municipality, by ordinance, to require the receipt of the
amount regularly charged as an inspection fee.� The OLS anticipates that the number
of inspections that would be conducted privately, and the cost of those
inspections if they had been conducted by the local enforcing agencies, would
be different across municipalities.� Therefore, the decrease in local revenue
and expenditures for municipalities that elect not to adopt an ordinance
requiring the receipt of the amount regularly charged as an inspection fee is
indeterminate.� The OLS determines that the bill would not reduce local revenue
in a municipality that elects to adopt an ordinance to receive the amount
regularly charged as an inspection fee.
����� The OLS anticipates that the Department of Community
Affairs would utilize existing resources to authorize private on-site
inspection agencies to conduct inspections required for the issuance of a
certificate of occupancy.
Section:
Local Government
Analyst:
Grace Ahlin
Associate Fiscal Analyst
Approved:
Thomas Koenig
Legislative Budget and Finance Officer
This legislative fiscal estimate has been produced by the
Office of Legislative Services due to the failure of the Executive Branch to
respond to our request for a fiscal note.
This fiscal estimate has been prepared pursuant to P.L.1980,
c.67 (C.52:13B-6 et seq.).