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S4119 FISCAL ESTIMATE
LEGISLATIVE FISCAL ESTIMATE
SENATE, No. 4119
STATE OF NEW JERSEY
222nd LEGISLATURE
DATED: JULY 9, 2026
SUMMARY
Synopsis:
Requires water purveyors to inspect and repair underground
water distribution infrastructure; establishes certain liability of water
purveyors.
Type of Impact:
Annual State expenditure increase; annual local government
expenditure increase; potential annual State revenue increase.
Agencies Affected:
Department of Environmental Protection; certain local
government units.
Fiscal Impact
Annual
State Expenditure Increase
Indeterminate
Potential State Revenue Increase
Indeterminate
Local Expenditure Increase
Indeterminate
�
The
Office of Legislative Services (OLS) finds that this bill would result in
recurring expenditure increases to the State and certain municipal water
purveyors that are subject to the new underground water distribution
infrastructure inspection, monitoring, investigation, and repair or replacement
requirements imposed by the bill, but lacks sufficient information to estimate
the extent of the increase.
�
The
bill may also result in an indeterminate annual increase in State revenue from
civil administrative penalties and may increase costs to the water purveyors in
the State as a result of their becoming liable for property damage resulting
from infrastructure failures caused by failure to inspect as required under the
bill.
BILL DESCRIPTION
����� This bill requires water purveyors to inspect
underground water distribution infrastructure in their public community water
systems at least once every five years, or every two years on iron or
galvanized infrastructure or infrastructure 30 years or older, using techniques
determined by the Department of Environmental Protection.� In areas where water
loss is known, and neither leak detection nor visual and physical inspection of
the underground water distribution infrastructure yield a source of water loss,
a water purveyor is to verify soil conditions along its water distribution system
for anomalies through ground penetrating radar or other subsurface geological
conditions investigation.� In addition to soil condition observations, a water
purveyor is to undertake and verify, through customer-side water pressure
surveillance and feedback, areas of water loss.� In areas prone to sinkholes
due to karst or similar formations, a water purveyor is to implement an active
water loss monitoring and reporting system that is to result in physical
investigation of the water distribution system in isolated areas.� A water
purveyor is to immediately repair or replace any underground water distribution
infrastructure found to be weakened or in danger of collapse.
����� The bill provides that a water purveyor is to be
liable for and assume responsibility for the restoration of any property damage
that a homeowner or business incurs as a result of an underground water
distribution infrastructure failure that occurs due to a failure to inspect
that infrastructure pursuant to the bill.
FISCAL ANALYSIS
EXECUTIVE BRANCH
����� None received.
OFFICE OF LEGISLATIVE SERVICES
����� The OLS finds that the bill will result in an
indeterminate, recurring increase in State enforcement expenditures, and local
expenditures for those water purveyors that are subject to the new underground
water distribution infrastructure inspection, monitoring, investigation, and
repair or replacement requirements imposed by the bill.� The bill may also result
in an indeterminate annual increase in State revenues.
�However, the
OLS lacks sufficient information to estimate the extent of these increases. �
����� The bill may increase annual expenditures by the
Department of Environmental Protection to determine the inspection techniques
required under the bill, provide guidance to water purveyors in the State,
review water purveyor compliance with the provisions of the bill, and undertake
enforcement actions. �The OLS cannot determine whether the department would be
able to absorb these responsibilities using existing staff and resources, or
whether additional staff or resources would be required.
����� The bill may also increase expenditures for any State
entity that operates a public community water system that is subject to the
bill�s inspection, monitoring, repair, or replacement requirements. �
����� The bill would result in an indeterminate annual
increase in expenditures by local government units and local authorities that
operate public community water systems. �These entities would incur costs to
inspect underground water distribution infrastructure, conduct leak detection,
perform visual and physical inspections, conduct analytical tracking, isolate
water loss, perform ground penetrating radar or other subsurface
investigations, conduct customer-side water pressure surveillance, and
implement active water loss monitoring and reporting systems in areas prone to
sinkholes.
����� Local costs would also increase if inspections
identify infrastructure that is weakened or in danger of collapse, because the
bill requires a water purveyor to immediately repair or replace that
infrastructure. �Repair and replacement costs could vary significantly based on
the type, size, age, condition, depth, and location of the affected
infrastructure, as well as labor, engineering, permitting, excavation, traffic
control, and restoration costs.
����� The OLS notes that some water purveyors may already
perform certain inspections, leak detection, asset management, or water loss
control activities. �For these purveyors, the bill�s fiscal impact may be
lower. �For water purveyors that do not already perform inspections at the
frequency or level of detail required by the bill, the fiscal impact may be
greater.
����� The bill establishes liability for property damage
incurred by a homeowner or business resulting from underground water
distribution infrastructure failures that occur due to a failure to inspect water
infrastructure, pursuant to the bill. �This provision may increase costs for
water purveyors, including for local government units and local authorities,
depending on the number of claims, the extent of property damage, insurance
coverage, legal costs, and the outcome of any litigation. �The OLS cannot
estimate these costs because they will depend on future infrastructure failures
and case-specific, factual determinations regarding whether those
infrastructure failures occurred because a water purveyor failed to inspect its
water infrastructure, as required by the bill.
����� The bill may result in an indeterminate increase in
State revenue from civil administrative penalties imposed for violations of the
bill. �Because the OLS cannot predict the number of violations or enforcement
actions that will result from this bill, the amount of any penalty revenue
increase to the State is indeterminate.
Section:
Environment, Agriculture, Energy, and Natural
Resources
Analyst:
Neha Mehta Patel
Lead 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.).