LEGISLATIVE FISCAL ESTIMATE

[First Reprint]

ASSEMBLY, No. 3974

STATE OF NEW JERSEY

221st LEGISLATURE

 

DATED: JULY 1, 2024

 

 

SUMMARY

 

Synopsis:

Prohibits use of deceptive marketing practices by substance use disorder treatment providers.

Type of Impact:

Minimum $0.5 million annual increase in State expenditures; annual increase in State revenues; annual increase in expenditures for the Judiciary and certain municipalities.

Agencies Affected:

Department of Health, the Judiciary, and certain municipalities.

 

 

Office of Legislative Services Estimate

Fiscal Impact

 

Annual

 

 

State Expenditure Increase

 

Minimum $500,000

 

 

State Revenue Increase

 

Indeterminate

 

 

Local Expenditure Increase

 

Indeterminate

 

 

 

 

 

·         The Office of Legislative Services (OLS) concludes, based on information provided by the Office of Management and Budget as part of the FY 2025 Budget process, that Department of Health expenditures will increase by $500,000 annually for the Office of Facility Licensing to hire additional staff to investigate violations, suspend or revoke the licenses or certificates of substance use disorder treatment providers who violate the bill’s provisions, and impose civil penalties against such violators.

·         The bill could increase State costs to the Judiciary and to certain municipalities to hear additional cases related to violations of the bill’s provisions.

·         The OLS cannot quantify the potential revenue increases under the bill because the number of treatment providers who will violate the bill’s provisions each year cannot be anticipated.  

 

 

 

BILL DESCRIPTION

 

      This bill prohibits the use of deceptive marketing practices by substance use disorder treatment providers who are licensed or certified by the Department of Health to provide inpatient or outpatient substance use disorder treatment or recovery residence services. 

      Treatment providers who violate the bill’s provisions will be liable for a maximum civil penalty of $20,000 for each violation.  A person who suffers any injury or damages as a result of the misleading or deceptive marketing or advertising methods or practices declared unlawful under the bill may bring an action or assert a counterclaim in a court of competent jurisdiction.  In addition to appropriate legal or equitable relief, the court will award threefold the damages sustained by any person in interest and award reasonable attorney's fees, filing fees, and reasonable costs of suit.

      The Office of Licensing in the Department of Health may investigate alleged violations of this bill.  Upon finding a violation, the department may suspend or revoke the treatment provider’s license or certification, if applicable, or may impose a civil penalty against the treatment provider. If the department imposes a civil penalty, the civil penalty will be not more than $20,000 for each violation.

 

 

FISCAL ANALYSIS

 

EXECUTIVE BRANCH

 

      None received.

 

OFFICE OF LEGISLATIVE SERVICES

 

      The OLS concludes, based on information provided by the Office of Management and Budget as part of the FY 2025 Budget process, that Department of Health expenditures will increase by $500,000 annually for the Office of Facility Licensing to hire additional staff to investigate violations, suspend or revoke the licenses or certificates of substance use disorder treatment providers who violate the bill’s provisions, and impose civil penalties against such violators.

      Additionally, the Judiciary and municipal courts could incur indeterminate annual costs to hear additional cases brought for treatment providers violating the provisions of the bill.  Additional annual revenues could accrue to the State and municipalities from the collection of civil penalties and court fees.  The OLS, however, cannot quantify the potential revenue increases under the bill because the number of providers who will violate the bill’s provisions each year cannot be anticipated.

      Under current law, the Department of Health licenses substance use disorder treatment providers for a two year period, as long as the provider continues to meet the departmental standards concerning patient health and safety, accurate representation of the treatment services available to patients, and the payment of licensure fees.  If a treatment provider fails to meet or maintain these standards, the department, after holding a hearing, may refuse to grant, restrict, suspend, or revoke the license of a treatment provider.  Prior to issuing or renewing a treatment provider’s license, department staff are required to first inspect the provider’s facility, and may examine the providers’ financial accounts and records, as determined necessary.

Section:

Human Services

Analyst:

Anne Cappabianca

Senior 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.).