ASSEMBLY APPROPRIATIONS COMMITTEE

STATEMENT TO

[Second Reprint]

SENATE, No. 3750

STATE OF NEW JERSEY

DATED:  JANUARY 8, 2026

      The Assembly Appropriations Committee reports favorably Senate Bill No. 3750 (2R).

      As reported, this bill enhances the enforcement authority over developmental disability service providers, and establishes the “Residential Facility Quality of Care Improvement Fund” in the Department of Human Services (department).

      The department possesses licensing authority pursuant to N.J.A.C.10:44A-1.8 et seq. to take negative licensing actions against noncompliant providers, such as issuing written warnings, halting admissions, issuing provisional licensing, revoking licenses, and assigning a quality management team. This bill expands that authority to impose financial penalties.  In determining the amount of any financial penalty, the bill, as amended, directs the department to consider: whether the provider has had a history or pattern of repeated violations; the provider’s compliance with investigations and plans of correction; and whether the provider has taken adequate action to prevent future incidents.  The Office of Program Integrity & Accountability in the department licenses providers of residential services to adults with developmental or intellectual disabilities, while the Division of Developmental Disabilities in the department authorizes payment to providers of services to adults with developmental or intellectual disabilities through contracts and a fee-for-service system.

      Under the amended bill, the department is to have the authority to license authorized providers and licensed providers, as both of these terms are defined in the bill.

      The bill, as amended, provides that any person, firm, partnership, corporation, or association operating a residential setting without a license when a license is required or operating a day habilitation program without a certification is to be subject to penalties.  Any licensed provider that has been granted a second consecutive provisional license for the same licensed location is to be subject to a penalty.

      Any authorized provider or licensed provider is to be subject to penalties provided for in the bill if the provider:  (1) employs or fails to remove from employment a person who has been placed on the Central Registry of Offenders Against Individuals with Developmental Disabilities or included on the child abuse registry; (2) fails to conduct an initial or biannual criminal history record background check; (3) fails to meet the requirements of drug testing for controlled dangerous substances; (4) receives a substantiated finding from the Office of Investigations in the Department of Human Services of a violation outlined in the bill; (5) fails to conduct an internal investigation of an allegation of abuse, neglect, or exploitation of an individual with a developmental disability and submit a complete report, as described in the bill, to the department within 180 days of the date of the alleged incident; (6) fails to submit a plan of correction that addresses all cited violations and concerns to the department upon the completion of an investigation closed by the Office of Investigations, or (7) is assigned a Quality Management Team by the department due to demonstrating chronic noncompliance with health, safety, or quality requirements over an extended period of time and across multiple locations or programs.

      The bill also amends section 3 of P.L.2010, c.5 (C.30:6D-75) to grant the department authority to impose civil penalties for individuals who violate reporting obligations under P.L.2010, c.5, rather than penalties being imposed once that person is convicted of a disorderly person offense.

      Finally, the bill, as amended, establishes the “Residential Facility Quality of Care Improvement Fund” in the department as the repository of fines imposed pursuant to section 3 of P.L.2010, c.5 (C.30:6D-75) and all revenues from penalties imposed on authorized providers or licensed providers for violating the provisions of N.J.A.C. 10:44A-1.1 et seq., the provisions of  this bill, or the rules and regulations promulgated pursuant to this bill.  These funds are to be used to finance quality improvement initiatives, and administrative, licensing, and regulatory actions taken by the department to implement the provisions of the bill.

      As reported by the committee, Senate Bill No. 3750 (2R) is identical to Assembly Bill No. 5634 (1R), which was amended and reported by the committee on this date.

FISCAL IMPACT:

      The Office of Legislative Services (OLS) concludes that the bill would increase annual State revenues due to the collection of new fines imposed on developmental disability service providers under the bill; however, the nature, fine amount, and number of such infractions are all unpredictable and, therefore, the amount of revenue that would be generated each year is indeterminate. The Department of Human Services will also incur an indeterminate amount of annual costs due to its additional administrative and enforcement responsibilities under the bill.

      The OLS notes that the bill establishes the Residential Facility Quality of Care Improvement Fund in the department to support the quality improvement initiatives and administrative, licensing, and regulatory actions taken by the department to implement this bill. All revenues from the newly established penalties imposed under the bill, as well as existing revenues from the $350 penalty imposed on certain individuals who fail to report abuse or neglect of a person with a developmental disability by a caregiver, are to be deposited into the fund. These existing revenues are currently used by the department to fund the provision of food and care to individuals with developmental disabilities residing in community care residences.