LEGISLATIVE FISCAL ESTIMATE

[First Reprint]

ASSEMBLY, No. 4535

STATE OF NEW JERSEY

221st LEGISLATURE

 

DATED: JANUARY 31, 2025

 

 

SUMMARY

 

Synopsis:

Concerns State regulation of cooperative sober living residences and boarding houses generally; appropriates $100,000.

Type of Impact:

Annual State expenditure and revenue increases; annual revenue increase for certain municipalities.

Agencies Affected:

Department of Community Affairs; certain municipalities.

 

 

Office of Legislative Services Estimate

Fiscal Impact

Year 1 

Thereafter 

 

State Expenditure Increase

Up to $100,000

Indeterminate

 

State Revenue Increase

Up to $20,000 per penalty

Up to $20,000 per penalty

 

Local Revenue Increase

Up to $20,000 per penalty

Up to $20,000 per penalty

 

 

 

 

·         The Office of Legislative Services (OLS) concludes that the bill will result in a State expenditure increase of up to $100,000 in the first year the bill is in effect for the Department of Community Affairs to conduct additional inspections of cooperative sober living residences, and maintain certain lists and reports.  If the full $100,000 is not expended in the first year, the residual amount will be spent in subsequent fiscal years until the full $100,000 is exhausted.

 

·         The bill will also result in increased revenue for the State and certain municipalities by increasing civil penalties for each rooming and boarding house licensure violation from a limit of up to $5,000 to a limit of up to $25,000.

 

 

BILL DESCRIPTION

 

      The bill amends the Rooming and Boarding House Act of 1979 in regards to the State’s regulation of cooperative sober living residences, as defined in the bill.  The bill increases the maximum civil penalty for certain licensing violations for a rooming or boarding house, including cooperative sober living residences.  The bill requires the department to maintain a list of licensed cooperative sober living residences on its Internet website including the location and contact information for each of these licensed residences.  The bill requires two unannounced inspection and record reviews of cooperative sober living residences per year to determine whether the owner or operator is complying with the provisions of the Rooming and Boarding House Act of 1979.  The bill also establishes reporting requirements for incidents affecting the safety or welfare of residents or staff.

      Additionally, the Department of Community Affairs, in consultation with the Department of Health and the Department of Human Services, is to require cooperative sober living residences to: (1) employ no less than one supervisor who is required to live in the cooperative sober living residence and who is certified as meeting qualifications, established by the department, requisite to manage the operations of the residence and assist others in recovery from alcohol and drug addiction, in a manner to be determined by the department and consistent with the bill; (2) forbid possession or use of alcohol or illicit drugs within the residence and subject residents to random testing for alcohol and drug use; and (3) encourage residents to attend self-help programs that are centered on recovery from alcohol and drug addiction, participate in activities related to maintaining sobriety and continuing recovery from alcohol and drug addiction, and receive off-site services deemed desirable or necessary to maintain sobriety.

      The bill also appropriates $100,000 to the Department of Community Affairs to effectuate the purposes of the bill.

 

 

FISCAL ANALYSIS

 

EXECUTIVE BRANCH

 

      None received.

 

OFFICE OF LEGISLATIVE SERVICES

 

      The OLS concludes that the bill will result in a State expenditure increase of up to $100,000 in the first year the bill is in effect for the Department of Community Affairs to conduct additional inspections of cooperative sober living residences, and maintain certain lists and reports.  If the full $100,000 is not expended in the first year, the residual amount will be spent in subsequent fiscal years until the full $100,000 is exhausted.   

      The bill requires the department to ensure that an unannounced inspection and record review of each cooperative sober living residence is conducted at least twice per year.  Currently, all rooming and boarding houses, including cooperative sober living residences, are required to be inspected at least once each year.  The FY 2025 Governor’s Budget indicates that there are an estimated 2,874 permanent boarding home licenses in the State.  According to a February 2024 report by the New Jersey State Commission of Investigation titled "The Dirty Business Behind Getting Clean," there are approximately 210 licensed cooperative sober living residences in the State.  The bill’s requirement to conduct an additional inspection of each CSLR would increase the total inspections of boarding homes in the State by about one percent.  The OLS, however, cannot predict the exact extent to which this new requirement will impact the department, including any potential staffing increase to meet the requirement.  The OLS also notes that there is currently an unknown number of unlicensed cooperative sober living residences in the State that the bill, in part, seeks to address.  Any increase in licensed cooperative sober living residences would increase the total required number of annual inspections by two, per new licensed residence.

      The bill also requires the department to publish and maintain a list of licensed cooperative sober living residences in the State on its Internet website; prescribe a form for which the operator of a residence can notify the department of any incident that jeopardizes the health, safety, or welfare of the residents or staff and receive such reports; and prepare rules, regulations, or guidelines necessary for the operation of cooperative sober living residences in the State, including concerning the certification of certain staff.  The department may experience an increase in administrative costs associated with these activities.  

      The bill may also result in increased revenue to entities that license rooming and boarding houses, including the department and certain municipalities that have elected to issue licenses for rooming and boarding houses.  Current law provides that a person found to own or operate an unlicensed rooming or boarding house is liable for a civil penalty of not more than $5,000 to be paid to the appropriate licensing entity.  The bill increases the allowable civil penalty to $25,000.  Current law also provides that a person who owns or operates, or is applying for a license to own or operate, a residential facility—who conceals that the person has been denied a license to own or operate a residential facility, or that the person has had a license to own or operate a residential facility revoked by a state entity—is liable for a civil penalty of not more than $5,000 to be paid to the State.  The bill increases the allowable civil penalty to $25,000.  While the FY 2025 Governor’s Budget estimates that there will be 230 penalties issued in FY 2025 for boarding home violations, it is unclear how many of these penalties are expected to be due to licensure violations.  Additionally, the OLS is unable to predict the exact monetary penalty for each violation. 

 

 

Section:

Local Government

Analyst:

Abigail Stoyer

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.).