LEGISLATIVE FISCAL ESTIMATE
[Fourth Reprint]
ASSEMBLY, No. 2138
STATE OF NEW JERSEY
220th LEGISLATURE
DATED: DECEMBER 13, 2023
SUMMARY
Synopsis: Updates regulation of home improvement and home elevation
contractors and contractors’ businesses.
Type of Impact: Annual State expenditure and revenue increases.
Agencies Affected: Department of Law and Public Safety.
Office of Legislative Services Estimate
Fiscal Impact
Annual State Cost Increase Indeterminate
Annual State Revenue Increase Indeterminate
 The Office of Legislative Services (OLS) finds that this bill would result in an indeterminate
annual State expenditure increase related to the establishment of the New Jersey State Board
of Home Improvement and Home Elevation Contractors, the processing of licenses and
regulation of home improvement and home elevation contractors, and the completion of the
public information campaign by the Division of Consumer Affairs in the Department of Law
and Public Safety. The OLS further notes that the bill will increase annual State revenue
collections from application fees, licensure fees, fines, and penalties by indeterminate amounts.
 The bill establishes the New Jersey State Board of Home Improvement and Home Elevation
Contractors, which is to consist of nine members under the Division of Consumer Affairs, to
provide for the licensure of home improvement and home elevation contractors. The bill
directs that the board members may be reimbursed for expenses related to their positions.
 The OLS anticipates that the State may annually collect indeterminate fines and penalty
payments from violators of statutory and regulatory requirements. A violator may receive
penalties of up to $15,000 for an initial violation and up to $25,000 for any subsequent
violations.
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
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BILL DESCRIPTION
This bill establishes a board to govern licensed contractors in the home improvement and home
elevation industries. The bill updates current law to oversee the registration of home improvement
and home elevation contractors’ businesses.
The New Jersey State Board of Home Improvement and Home Elevation Contractors
established in the bill is to consist of nine people. The board is entitled to retain all funds collected
from fees paid for initial licensure and business registration, as well as for the renewal, reactivation,
or reinstatement of licenses and registrations. The board may use those funds to reimburse board
members for expenses incurred.
The responsibilities of the board are to license, on a biennial basis, home improvement and
home elevation contractors and register, also on a biennial basis, home improvement and home
elevation businesses; develop education requirements for contractors, including principal
contractors, and a curriculum for voluntary examination preparatory courses; establish a code of
ethics and standards of conduct for contractors; develop standards for continuing education; and
promulgate rules and regulations as guidance for contractors. The bill requires the board to notify
the Division of Consumer Affairs when a license it otherwise issued is suspended, revoked, or
rejected for renewal. The bill moves the responsibility to maintain registration of certain parties
exempted from licensure from the board to the Division of Consumer Affairs and require licensure
of these parties by the board if financial earnings demonstrate the need for licensure.
The bill clarifies that a home improvement or home elevation contractor cannot practice in
New Jersey without a license. Penalties for the failure to complete a home improvement or home
elevation in accordance with a contract are deemed an unlawful practice under the consumer fraud
statute. A contractor who commits an unlawful practice under the consumer fraud act may be
liable up to $15,000 for a first offense and up to $25,000 for a subsequent offense. Additionally,
violators of the insurance and bond requirements will be liable for a minimum of $10,000 and not
more than $25,000.
Language also in current law on the establishment of a public information campaign is included
in this bill and states the need to publicize the provisions of the bill to applicable businesses.
FISCAL ANALYSIS
EXECUTIVE BRANCH
None received.
OFFICE OF LEGISLATIVE SERVICES
The OLS finds that this bill would result in an indeterminate annual State expenditure increase
related to: 1) the establishment of the New Jersey State Board of Home Improvement and Home
Elevation Contractors; 2) the processing of licenses and regulation of home improvement and
home elevation contractors; 3) and the completion of the public information campaign by the
Division of Consumer Affairs in the Department of Law and Public Safety. The OLS further notes
that the bill will increase annual State revenue collections from application fees, licensure fees,
fines, and penalties by indeterminate amounts.
State Expenditure Increase: This bill updates the regulation of home improvement and home
elevation contractors. The bill would increase annual State expenditures due to the establishment
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of a new board and from a public information campaign on the new licensure and education
requirement, in turn increasing the division’s responsibilities.
With the establishment of the new board, the bill directs that the nine board members may be
reimbursed for expenses related to their positions. While the bill does not specifically indicate
whether the board members will receive compensation for meeting and traveling expenses, which
would be a maximum total of $9,000 annually for all the members under current law, it does note
the board is entitled to retain all the fees it collects and that board members may be reimbursed for
expenses within the limits of appropriated funds or funds made available to the board. The board
is also to be provided with office and meeting facilities and have personnel made available to it to
carry out its business.
In any event, the OLS cannot determine the increased costs to the division because of the
uncertainty regarding the number of professionals who will be regulated and operational decisions
the board will make to implement this bill.
State Revenue Increase: The bill will increase annual State revenue collections from licensure
fees, fines, and penalties by indeterminate amounts. The OLS cannot quantify the licensure fee
payments the board will collect from the licensing requirement, as the bill leaves the setting of the
fee levels to the board’s discretion, and the number of licenses that will be issued is unknown. The
Office of the Attorney General estimates there are nearly 45,000 practitioners who will be affected.
The OLS anticipates that the State may annually collect indeterminate fines and penalty
payments from violators of statutory and regulatory requirements. As earlier noted, the legislation
allows for the collection of penalties under the consumer fraud statute. Additionally, a violator
may receive a fine or civil penalty of up to $15,000 for an initial violation and up to $25,000 for
any subsequent violations. The OLS, however, has no information on which to base an estimate
of the number and magnitude of future penalty assessments and payments and thus cannot project
the amount the State will collect.
The OLS also anticipates that as a result of a new board dedicated to providing oversight and
licensure of home improvement and elevation contractors, New Jersey consumers may experience
a higher confidence when hiring contractors. In addition, the State will have additional recourse
and accountability when a job has not been performed as contracted as the board can collect
penalties from a bond, letter of credit, or other security if penalties are assessed against a business,
which may promote growth in this industry, resulting in increased licensure fee payments to the
board.
Home Improvement and Home Elevation Contractors Background: Since 2006, the New
Jersey Contractors’ Registration Act and home improvement contractor regulations require home
improvement contractors to register with the Division of Consumer Affairs, with the home
elevation contractor registration added in 2014. To register, a home improvement contractor must
provide proof of liability insurance, disclose a legitimate business address, and provide other
information about the business. Contractors must display their registration number on all
contracts, advertisements, and commercial vehicles as a reference for consumers. According to
the Division of Consumer Affairs, in 2022 there were 2,310 consumer complaints against
contractors and home improvement contractors. The OLS notes that the application fee charged
by the Office of Consumer Protection to regulate home improvement and home elevation
contractors is $110, and the annual fee thereafter is $90.
Section: Law and Public Safety
Analyst: Kristin Brunner Santos
Lead Fiscal Analyst
Approved: Thomas Koenig
Legislative Budget and Finance Officer
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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: 45:1-2.1, 45:1-2.2