LEGISLATIVE FISCAL ESTIMATE

[First Reprint]

SENATE, No. 4100

STATE OF NEW JERSEY

221st LEGISLATURE

 

DATED: JUNE 9, 2025

 

 

SUMMARY

 

Synopsis:

Requires establishment of automated platform to expedite construction code approval of applications to install residential solar energy systems.

Type of Impact:

Annual increase in State expenditure and revenue; annual local expenditure impact; annual local revenue decrease.

Agencies Affected:

Department of Community Affairs; local governments.

 

 

Office of Legislative Services Estimate

Fiscal Impact

 

 

Annual State Expenditure Increase

Indeterminate

 

Annual State Revenue Increase

Indeterminate

 

Annual Local Expenditure Increase for Local Units Developing Own Platform

Indeterminate

 

Annual Local Expenditure Decrease for Local Units Using State Platform

Indeterminate

 

Annual Local Revenue Decrease for Local Units Using State Platform

Indeterminate

 

 

 

 

·         The Office of Legislative Services (OLS) finds that the bill would result in an indeterminate increase in one-time information technology costs for the Department of Community Affairs to develop and make available, within one year of the bill’s effective date, the State Smart Solar Permitting Platform.  The magnitude of the cost increase would depend on several unknown factors, including the system’s full functionality and whether it would be developed in house or by an outside developer, which precludes the OLS from estimating the State cost increase.

 

·         Ongoing costs to the State would result from system maintenance, training of local enforcing agencies on the use of the platform, and oversight of those local governments that elect to develop their own similar online permitting platform.

·         The OLS finds that the bill would result in an indeterminate increase in State revenue because of the solar permit surcharge fees that would be collected by a local enforcement agency and remitted to the department to defray the cost of developing and administering the platform.  The OLS is unable to project the number of applicants for permits that will be made through local enforcement agencies and the amount of the fee that will be charged to estimate the revenue increase.

 

·         The OLS further finds that the bill would result in an indeterminate one-time increase in local expenditures for a municipality that elects to develop its own alternative automated solar permitting platform.  Ongoing costs would be incurred thereafter for system maintenance.  A local government opting to develop its own system that is found not to comply with the provisions of the bill could have funding withheld by the department, resulting in a revenue loss.

 

·         Moreover, a local government that uses the department’s State Smart Solar Permitting Platform is required to revise its permitting fee schedule to reduce the fee for a solar permit to reflect the reduction in costs to evaluate applications, leading to a revenue loss.  The amount of the permit fee currently charged by each local enforcing agency and the reduction that each would enact are unknown.

 

 

BILL DESCRIPTION

 

      The bill would require the Department of Community Affairs to establish an online platform, the State Smart Solar Permitting Platform, to automatically perform plan review of applications to construct a residential solar system and to instantly release a permit or permit revision to construct a code-compliant solar system.  The bill requires the platform to be developed within one year of the bill’s effective date.

      The bill establishes requirements for the operation of the platform and would require a local enforcing agency to allow for the submission of applications to construct a solar system through the platform or through an alternative automated solar permitting platform equivalent to the platform.  The bill subjects a local enforcing agency utilizing an alternative platform to additional requirements including a deadline to establish the alternative program, the submission of a local compliance report, and submission of an annual report to the department.  A local enforcing agency using the platform would also be required to, within two years from the date of the bill’s enactment, revise its fee schedule to reflect the reduction in resources expended to evaluate permits through the platform.

      The bill would authorize the department to condition or deny funding to a local unit from any program the department administers for violations of the bill.

      The bill would require the department to: (1) provide training opportunities on the use of the platform for employees of local enforcement agencies; (2) adopt rules and regulations to govern the form and format of applications for permits, approval documents, specifications, and other information exchanged through the platform; and (3) adopt, amend, and repeal rules and regulations concerning solar permit surcharge fees, which are to be remitted by a local enforcing agency to the department to defray the costs associated with the platform.  The bill would permit the department to waive State Uniform Construction Code requirements in order to release a permit for a solar system through the platform.

FISCAL ANALYSIS

 

EXECUTIVE BRANCH

 

      None received.

 

OFFICE OF LEGISLATIVE SERVICES

 

      The OLS finds that the bill would result in an indeterminate increase in one-time information technology costs for the Department of Community Affairs to develop and make available, within one year of the bill’s effective date, the State Smart Solar Permitting Platform.  The platform is to be an Internet-based, automated permit approval system for the construction of residential solar energy systems.  The platform is to be accessible by the department, local code enforcing agencies, and contractors and available 24-hours a day, seven days a week.  The magnitude of the cost increase would depend on several unknown factors, including the system’s full functionality and whether it would be developed in house or by an outside developer, which precludes the OLS from estimating the State cost increase.  Ongoing costs to the State would result from system maintenance, training of local enforcing agencies on the use of the platform, and oversight of those local governments that elect to develop their own similar online permitting platform.

      The OLS finds that the bill would result in an indeterminate increase in State revenue because of the solar permit surcharge fees that would be collected by a local enforcement agency and remitted to the department to defray the cost of developing and administering the platform.  The OLS is unable to project the number of applicants for permits that will be made through local enforcement agencies and the amount of the fee that will be charged to estimate the revenue increase.

      The OLS further finds that the bill would result in an indeterminate increase in local expenditures for a municipality that elects to develop its own alternative automated solar permitting platform.  A local government opting to develop its own system that is found not to comply with the provisions of the bill could have funding withheld by the department, resulting in a revenue loss.  Moreover, a local government that uses the department’s State Smart Solar Permitting Platform is required to revise its permitting fee schedule to reduce the fee for a solar permit to reflect the reduction in cost to evaluate applications, leading to a revenue loss.  The amount of the permit fee currently charged by each local enforcing agency and the reduction that each would enact are unknown.

 

 

Section:

Local Government

Analyst:

Grace Ahlin

Assistant 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.).