LEGISLATIVE FISCAL ESTIMATE
[Second Reprint]
ASSEMBLY, No. 3899
STATE OF NEW JERSEY
222nd LEGISLATURE
DATED: JUNE 30, 2026
SUMMARY
|
Synopsis: |
"General Contractor Licensing Act;" provides for regulation of general contractors and general contracting businesses. |
|
Type of Impact: |
Annual State revenue and expenditure increases. |
|
Agencies Affected: |
Department of Law and Public Safety. |
|
Office of Legislative Services Estimate |
||
|
Annual Fiscal Impact |
|
|
|
Annual State Expenditure Increase |
Indeterminate |
|
|
Annual State Revenue Increase |
Indeterminate |
|
· 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 and general contractor businesses, including the cost of establishing and operating the new nine-member board, establishing and administering biannual exams, and performing other administrative responsibilities under the bill.
· An indeterminate amount of additional annual State revenue will accrue from fee payments for the new general contractor licenses (valid for three years) and general contractor business registrations (valid for one year), 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 that licensure fees remain flexible to ensure that expenditures related to licensure and oversight are sufficient to pay the board’s expenses, yet do not generate excess revenues.
BILL DESCRIPTION
This bill establishes the New Jersey State Board of General Contractors in the Division of Consumer Affairs in the Department of Law and Public Safety to regulate the general contracting profession by requiring licensure by the board.
A general contractor is an individual or business that is or can be classified as one of the following 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; renew, suspend, or revoke licenses; prescribe or change fees for examination or licensure; and maintain a record of all licensed general contractors. No person may hold themselves out as a general contractor without being licensed.
The bill establishes criteria to be eligible as a general contractor. A supplemental examination in general contracting is required to be prepared by the board, in consultation with the American Institute of Constructors, and the examination is to be held in the State at least two times a year at a time and place determined by the board. Additionally, the board is required to create a study guide for the supplemental examination.
General contractor licenses issued by the board are to be renewed every three years. Fees for licensure are to be determined by the board and established by regulation. Fees shall be established, prescribed to the extent necessary to defray all proper expenses incurred by the board and any staff employed to administer the provisions of this act, but shall not be fixed at an amount that will raise revenue in excess of the amount estimated to be so required. The board is required to promulgate rules and regulations to implement continuing education requirements as a condition of licensure renewal, including the subject matter and content of courses of study. Once a license is issued, the licensee is to have the license readily available at the work site where general contracting services are being performed. If an individual is providing general contracting services under the direction or supervision of a licensed general contractor, the individual is to have a copy of the license readily available.
The bill also requires a general contractor business to annually register with the Division of Consumer Affairs and establishes a process for registration. The bill establishes a civil penalty of not more than $15,000 for the first violation and not more than $25,000 for the second and each subsequent violation of this registration requirement. A general contractor business that constructs, repairs, or maintains transportation infrastructure is not required to register with the division as a general contractor business under the bill. Nothing in the bill is to be construed to permit a general contractor business registered with the division in accordance with the bill’s provisions to bid on any contract for public work without first registering with the Department of Labor and Workforce Development as a public works contractor.
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 in the Division of Consumer Affairs in the Department of Law and Public Safety will result in indeterminate annual operating expenditures for the State associated with the licensure and regulation of general contractors and general contractor businesses, including the cost of establishing and operating the new nine-member board and establishing and administering biannual 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 that does not 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, registration, and renewal 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 and renewals is unknown. The bill requires the licensure fees to remain flexible to ensure that expenditures related to 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 has no information on which to base an estimate of the number and magnitude of future civil penalty assessments and payments.
|
Section: |
|
|
Analyst: |
Lead 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.).