LEGISLATIVE FISCAL ESTIMATE
[First Reprint]
SENATE COMMITTEE SUBSTITUTE FOR
SENATE, No. 524
STATE OF NEW JERSEY
220th LEGISLATURE
DATED: JUNE 29, 2023
SUMMARY
Synopsis: Creates Mental Health Diversion Program to divert eligible persons
away from criminal justice system and into appropriate case
management and mental health services.
Type of Impact: Annual State expenditure increase.
Agencies Affected: The Judiciary; Department of Human Services; Department of Law
and Public Safety; Office of the Public Defender; county prosecutor’s
offices.
Office of Legislative Services Estimate
Fiscal Impact FY 2024 FY 2025 FY 2026 & After
Administrative Office of
the Courts Cost Increase $4.1 million $3.1 million At least $3.2 million
Other State Entities -
Administrative and
Operational Costs Indeterminate Indeterminate Indeterminate
 The Office of Legislative Services (OLS) determines that this bill would result in an annual
increase in State expenditures to the Judiciary and several State agencies. In response to an
OLS request for fiscal information, the Judiciary noted that its costs to establish and operate a
Mental Health Diversion Program in three judicial vicinages in FY 2024 would be $4.1 million,
which includes start up costs, $3.1 million in FY 2025, and $3.2 million in FY 2026.
 The Department of Law and Public Safety, the Department of Human Services, the Office of
the Public Defender, and county prosecutor’s offices will each incur some degree of
administrative and operational costs under the diversion program. These costs are not currently
discernable and can only be known once the program is being implemented and becomes
operational.
Office of Legislative Services Legislative Budget and Finance Office
State House Annex Phone (609) 847-3105
P.O. Box 068 Fax (609) 777-2442
Trenton, New Jersey 08625 www.njleg.state.nj.us
 FE to [1R] SCS 524
2
 No later than two years following its establishment, the program may be expanded to additional
vicinages, subject to the availability of funding. The annual State expenditure increase
following the second year of the program will depend on the number of vicinages into which
the program is expanded.
 The OLS notes that annual State costs to the Judiciary to operate the program are
approximately $1 million per vicinage and that additional State costs will accrue to various
State agencies if the program is expanded to additional vicinages.
BILL DESCRIPTION
This bill establishes a Mental Health Diversion Program to divert eligible persons with serious
mental disorders who have committed certain offenses away from the criminal justice system and
into appropriate managed mental health services. This bill initially establishes the diversion
program in three vicinages of the State, with the intention to expand the program to all vicinages
in the State eventually.
Within one year of the bill’s effective date, the Attorney General, in consultation with the
Administrative Office of the Courts, is required to establish a diversion program in one vicinage
in each of the northern, central, and southern regions of the State that will accept eligible persons
from within the vicinage. Similar programs in operation at that time may be deemed to comply
with the requirements of this bill and may be selected for inclusion in this diversion program. One
regional mental health diversion team is required to be designated for each region.
The mental health diversion team is a collaboration of professionals led by a Superior Court
judge and comprised of assistant prosecutors, designated public defenders, a licensed mental health
professional, a case manager, a specially trained mental health probation officer, and a
collaborative justice specialist. If resources are available, a certified drug and alcohol counselor
should be included as a member of the diversion team.
Involvement in the diversion program entails, among other criteria, an application process, a
legal determination of eligibility, which is to be made by the prosecutor, a clinical determination,
any additional terms of the specific program, and a determination of length of program
participation.
No fee is to be assessed for applying to, participating in, or receiving treatment through the
diversion program. Program participants are not to pay for treatment and services as a condition
of participating in the diversion program. The mental health diversion team is required to assist
program participants in applying for all federal and State benefits that may cover or offset the cost
of necessary treatment and services, including medication. The Department of Human Services is
also required to assist mental health diversion teams in identifying available resources, programs,
and benefits.
The bill would require the Administrative Office of the Courts to develop a differentiated
mental health supervision case type within the Probation Division of the Superior Court for eligible
persons who are sentenced to a term of probation supervision. To the extent that sufficient
resources are available, probation officers assigned to the specialized caseload should be
experienced in behavioral health and evidence-based therapeutic interventions. The probation
officers would also coordinate with federal and State case management and mental health care
providers to promote recovery and compliance with the terms of probation.
 FE to [1R] SCS 524
3
The bill establishes a special, non-lapsing fund to be known as the Mental Health Diversion
Program Support Fund. The fund shall be a depository for amounts made available for the program
and are to be dedicated to defraying the costs and expenses associated with the diversion program.
FISCAL ANALYSIS
EXECUTIVE BRANCH
None received.
OFFICE OF LEGISLATIVE SERVICES
Information received from the Judiciary on a substantively similar bill indicates that the
Judiciary would incur costs of $4.1 million in FY 2024, which includes start up costs, $3.1 million
in in FY 2025, and $3.2 million in FY 2026 under the Mental Health Diversion Program. In FY
2024, these costs include $1.8 million for administrative and operating costs of the regional mental
health diversion teams to manage the program, including salaries, fringe benefits, office and
courtroom space, and start up costs. Program development costs for application and system
development for the type of differentiated mental health supervision case to be implemented is
estimated at $800,000. Client service costs related to probation supervision of the mental health
diversion cases by probation officers are estimated at $1.5 million. Adjusting for start up costs the
Judiciary will incur and one-time costs for creating the differentiated case type, costs to the
Judiciary in FY 2025 are estimated at $3.1 million, and $3.2 million in FY 2026, as shown in the
table below.
FY 2024 FY 2025 FY 2026
Regional Mental Health
Diversion Teams $1,826,079 $1,746,500 $1,833,821
Creation of New Case Type $800,000 $0 $0
Probation Supervision of
Mental Health Diversion
Case Type $1,500,191 $1,316,274 $1,382,086
Total $4,126,270 $3,062,774 $3,215,907
The Department of Law and Public Safety, the Department of Human Services, the Office of
the Public Defender, and county prosecutor’s offices will each incur some degree of administrative
and operational costs under the diversion program. These costs are not currently discernable and
can only be known once the program is being implemented and becomes operational. Under the
bill, the mental health diversion team is required to assist program participants in applying for
federal and State benefits that may cover or offset the cost of treatment and services, including
medication. To the extent a program participant qualifies for additional State benefits, State costs
would increase to provide them. State revenues may also increase if these additional State
expenses are eligible for federal reimbursement.
No later than two years following the establishment of the diversion program, the program may
be expanded to additional vicinages, subject to the availability of funding. The annual State
expenditure increase following the second year of the program will depend on the number of
vicinages into which the program is expanded. The OLS notes that annual State costs to the
Judiciary to operate the program are approximately $1 million per vicinage and that additional
State costs will accrue to various State agencies if the program is expanded to additional vicinages.
 FE to [1R] SCS 524
4
The OLS also notes that there may be State cost savings in the short-term from diverting
individuals from incarceration to mental health service programs, and from reduced recidivism in
the long-term.
Section: Judiciary
Analyst: Anuja Pande Joshi
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.).


Statutes affected:
Introduced: 2C:43-13.1