LEGISLATIVE FISCAL ESTIMATE
[First Reprint]
ASSEMBLY, No. 1457
STATE OF NEW JERSEY
221st LEGISLATURE
DATED: DECEMBER 26, 2024
SUMMARY
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Synopsis: |
“General Contractor Licensing Act;” provides for licensure of general contractors. |
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Type of Impact: |
Annual State revenue and expenditure increases. |
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Agencies Affected: |
Department of Law and Public Safety. |
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Office of Legislative Services Estimate |
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Fiscal Impact |
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Annual State Expenditure Increase |
Indeterminate |
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Annual State Revenue Increase |
Indeterminate |
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· The Office of Legislative Services (OLS) finds that the establishment of the New Jersey State Board of General Contractors will result in indeterminate annual expenditures for the State associated with the licensure and regulation of general contractors, including the cost of establishing and operating the new nine-member board and establishing and administering biennial exams.
· An indeterminate amount of additional annual State revenue will accrue from fee payments for the new general contractor licenses, as well as from indeterminate fines and penalty payments from violators of statutory and regulatory requirements applicable to the newly licensed profession. The bill requires the licensure and renewal fees to remain flexible to ensure that expenditures related to licensure and oversight are sufficient to pay for the board’s expenses, yet do not generate excess revenues.
BILL DESCRIPTION
This bill establishes the New Jersey State Board of General Contractors to regulate the general contracting profession by requiring licensure by the board.
A general contractor is as an individual or business that is classified in certain trades by the Division of Property Management and Construction in the Department of the Treasury: construction manager as constructor (006), design build (007), general construction (008), or general construction alterations and additions (009).
The board is to consist of nine members and is required to: establish the standards required for licensure; review the qualifications of individuals who apply for licensure; ensure the proper conduct and standards of examination; issue and renew licenses to general contractors; renew, suspend, or revoke licenses; prescribe fees for examination or licensure; and maintain a record of all licensed general contractors. No person may represent themselves as a general contractor without being licensed.
The examination is to be held at least twice a year and licenses are to be renewed every three years. The board is also permitted to establish standards and procedures to provide the examination via the Internet. Additionally, a study guide for the examination is to be created by the board.
FISCAL ANALYSIS
EXECUTIVE BRANCH
None received.
OFFICE OF LEGISLATIVE SERVICES
The OLS finds that the establishment of the New Jersey State Board of General Contractors will result in indeterminate annual operating expenditures for the State associated with the licensure and regulation of general contractors, including the cost of establishing and operating the new nine-member board and establishing and administering biennial exams. Under current law, members of professional boards are generally compensated on a per diem basis in the amount of $25, or another amount determined by the Office of the Attorney General with the approval of the Department of the Treasury, but not to exceed $100 per diem or $2,500 annually. The OLS, however, cannot determine the potential magnitude of board expenditures due to uncertainty regarding the number of professionals who will be regulated and the operational decisions the board will make to implement the bill.
The bill will increase annual State revenue collections from licensure fees, fines, and penalties by indeterminate amounts. The OLS cannot quantify the fee payments the board will collect from the licensing and renewal requirements, because the bill leaves the setting of specific fee levels to the board’s discretion, and the number of future licensees is unknown. The bill does require the licensure and renewal fees to remain flexible to ensure that expenditures related to the licensure and oversight are sufficient to pay the board’s expenses, yet do not generate excess revenues.
The OLS anticipates that the State may annually
collect indeterminate fines and penalty payments from violators of statutory
and regulatory requirements applicable to the newly licensed profession. The
OLS cannot project the amount the State will collect because the bill leaves
the setting of the specific fine and penalty levels to the board’s discretion.
Additionally, the OLS has no information on which to base an estimate of the
number and magnitude of future penalty assessments and payments.
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Section: |
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Analyst: |
Lead Fiscal Analyst |
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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.).