LEGISLATIVE FISCAL ESTIMATE
[Third Reprint]
SENATE, No. 2760
STATE OF NEW JERSEY
220th LEGISLATURE
DATED: DECEMBER 21, 2023
SUMMARY
Synopsis: Concerns structural integrity regulations for certain residential
buildings.
Type of Impact: Increase in annual State and local expenditures; increase in annual
State and local revenue.
Agencies Affected: Department of Community Affairs; local code enforcing agencies.
Office of Legislative Services Estimate
Fiscal Impact Annual
State Cost Increase Indeterminate
State Revenue Increase Indeterminate
Local Cost Increase Indeterminate
Local Revenue Increase Indeterminate
The Office of Legislative Services (OLS) concludes that the bill will result in an indeterminate
increase in annual costs to State and local code enforcing agencies, including the Department
of Community Affairs, associated with conducting structural inspections of covered buildings,
and with administrative costs related to establishing inspection schedules and receiving
inspection plans and documents.
The bill is also expected to result in an indeterminate increase in annual revenue to State and
local code enforcing agencies associated with the collection of a fee to be paid by a covered
building owner during the construction application process. The fee is required to offset certain
additional costs incurred by the code enforcing agencies resulting from the bill.
BILL DESCRIPTION
This bill supplements the State Uniform Construction Code Act to require that certain covered
buildings, which are limited to condominiums and cooperatives, and plans be inspected and
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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reviewed by a structural inspector during the building’s pre-construction, construction, and post-
construction phases.
This bill supplements the act to require that a structural inspector, designated by the
construction permit applicant or, in the absence of a designation, chosen by the enforcing agency,
review the construction plans submitted with a construction application, set forth an inspection
schedule to confirm that the primary load bearing system conforms to the building plans, and issue
a written report that determines whether the primary load bearing system conforms to the building
plans. A certificate of occupancy is not to be issued until the structural inspector’s report confirms
that the construction of the primary load bearing system of the building is in conformance with the
approved construction plans. Further, a certificate of occupancy is not to be issued under this bill
if the construction permit applicant does not state at the time of application, or prior to the first
occupancy creating a condominium or cooperative, that the building is to be a condominium of
cooperative, until the required inspections have occurred. Similarly, this bill precludes the
issuance of a certificate of occupancy until any necessary repairs, renovations, alterations, or
modifications to the structural components of a covered building are made pursuant to the
inspector’s report. Under the bill, certain timelines for inspections are dependent on when a
certificate of occupancy was issued. Any additional costs to the enforcing agency incurred as a
result of inspections required under this bill are to be recovered through a fee associated with the
construction application.
FISCAL ANALYSIS
EXECUTIVE BRANCH
None received.
OFFICE OF LEGISLATIVE SERVICES
The OLS concludes that the bill will result in an indeterminate increase in annual costs to State
and local code enforcing agencies, including the Department of Community Affairs, which
enforces the State Uniform Construction Code in 45 municipalities in the State, associated with
conducting structural inspections of covered buildings, and with administrative costs related to
establishing inspection schedules and receiving inspection plans and documents. However, this
increase will be partially offset by the collection of a fee pursuant to the bill.
The bill provides that a structural inspector may be a construction official appointed by a
municipality who is also an engineer licensed by the State, an employee of the Bureau of Housing
Inspection in the Department of Community Affairs who is also an engineer licensed by the State,
or an engineer licensed by the State with whom the covered building owner contracts to perform
structural inspections of a covered building. The bill requires structural inspectors to review
construction plans which propose to create, amend, or modify the primary load bearing system of
a covered building, participate in setting forth a pre-occupancy inspection schedule for a covered
building, oversee and conduct inspections as set forth in a pre-occupancy inspection schedule and
post-occupancy inspections, complete written inspection reports, and determine when subsequent
structural inspections should take place.
The Bureau of Housing Inspection and local code enforcing agencies may experience increased
costs, to the extent that additional engineers licensed by the State need to be hired or appointed to
serve as structural inspectors to carry out the provisions of the bill and to the extent that current
employees’ working hours or pay increase as a result of the requirements of the bill. The OLS is
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unable to predict the number of covered buildings for which a construction application will be
received following the effective date of the bill and is unable to estimate the number of covered
buildings that have already received a certificate of occupancy in the State or the number of years
the certificates of occupancy preceded the bill’s effective date. The OLS notes, however, that
covered buildings include certain condominiums and cooperatives. The OLS is also unable to
predict the extent to which owners of covered buildings will choose to contract with a privately
employed structural inspector to conduct the structural inspections under the bill, and is therefore
unable to predict the demand for structural inspectors employed by the State or local code
enforcing agencies.
The bill is also expected to result in an indeterminate increase in revenue to State and local
code enforcing agencies associated with the collection of a fee paid by a covered building owner
during the construction application process. The fee is required to offset the costs incurred by an
enforcing agency as a result of certain pre-occupancy inspections set forth by an inspection
schedule pursuant to the bill. The OLS is unable to estimate the amount to be collected as the
Department of Community Affairs is tasked with adopting rules and regulations to effectuate the
purposes of the section of the bill which contains this requirement, which rules and regulations
would be expected to include the amount of the fee to be collected for each construction application
submitted by a covered building owner.
The OLS notes that the bill requires that the covered building owner retain the inspector for
post-occupancy inspections and further provides that post-occupancy inspections can be conducted
in conjunction with other required inspections, such as those inspections required pursuant to the
Hotel and Multiple Dwelling Law.
Section: Local Government
Analyst: Abigail Stoyer
Associate 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: 45:22A-26