LEGISLATIVE FISCAL ESTIMATE
[First Reprint]
SENATE, No. 1034
STATE OF NEW JERSEY
221st LEGISLATURE
DATED: OCTOBER 25, 2024
SUMMARY
Synopsis: Requires disclosure of lead drinking water hazards to tenants of
residential units; prohibits landlords from obstructing replacement of
lead service lines; concerns testing of residential rental units for lead
drinking water hazards.
Type of Impact: Annual cost and revenue increases to the State and local government
units.
Agencies Affected: Department of Health; Department of Community Affairs;
Department of Environmental Protection; the Judiciary; certain local
units.
Office of Legislative Services Estimate
Fiscal Impact Annual
State Cost Increase Indeterminate
Potential State Revenue Increase Indeterminate
Local Cost Increase Indeterminate
Local Revenue Increase Indeterminate
 The Office of Legislative Services (OLS) determines that the bill will result in an indeterminate
annual cost increase to operate a public community water system associated with conducting
tests of lead levels in drinking water as may be requested by residential customers.
 To the extent that a public community water system operated by a local unit chooses, and is
approved, to adjust its rate base collected from customers to offset costs associated with
conducting drinking water testing pursuant to the bill, the public community water system will
see an increase in revenues.
 The Department of Health, the Department of Environmental Protection, and the Department
of Community Affairs have several administrative responsibilities established in the bill which
may result in increased costs to those agencies.
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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 The OLS notes that to the extent that there are violations of the bill’s provisions, the
Department of Environmental Protection will see increased revenues associated with collecting
fines in the following amounts: $100 for a first violation, $500 for a second violation, and
$1,000 for a third and subsequent violation.
 The bill permits the Department of Environmental Protection to bring a civil action against a
person found to be in violation of a provision of the bill in the Superior Court. This may result
in an increase in costs to the State.
BILL DESCRIPTION
This bill requires the disclosure of lead-contaminated drinking water hazards to tenants of
residential units, prohibits landlords from obstructing the replacement of lead service lines, and
establishes certain requirements for the testing of residential rental units for lead drinking water
hazards.
This bill would require the Department of Health, in consultation with the Department of
Community Affairs and the Department of Environmental Protection, to develop a notice
concerning the health risks associated with lead in drinking water, including protective measures
for minimizing exposure to lead in drinking water. The notice would be periodically updated as
deemed necessary by the Commissioner of Health and made available to the public by the
Department of Health and the Department of Community Affairs.
The bill would also require the Department of Community Affairs, in consultation with the
Department of Health and the Department of Environmental Protection, to prepare a model “Lead
In Drinking Water Disclosure” statement. The model notice would be made available to the public
by the Department of Community Affairs and the Department of Health.
The bill would require a public community water system to, upon request by a residential
customer, perform a test for lead. A system would be required to perform up to one test per year
for a customer, unless a test result exceeds the lead action level. If a test exceeds the lead action
level, a customer may request a test every 60 days for the presence of lead until two consecutive
tests fall at or below the lead action level. The system would be required to provide the results of
every test authorized by the bill to the customer. The system would not be permitted to charge a
customer a fee for the test. A system regulated by the Board of Public Utilities would be permitted
to petition the board to include in the system’s rate base the reasonable costs of testing. A system
not regulated by the Board of Public Utilities would be authorized to include in the system’s rates
the reasonable costs of testing.
FISCAL ANALYSIS
EXECUTIVE BRANCH
None received.
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OFFICE OF LEGISLATIVE SERVICES
The OLS determines that the bill will result in an indeterminate annual cost increase to local
units that operate a public community water system associated with conducting tests of lead levels
in drinking water as may be requested by residential customers.
While the bill does not exempt public community water systems from testing drinking water
for lead in owner-occupied units that were constructed after 1986, it may be unlikely for these
customers to request testing as the federal government prohibited the use of leaded pipe and solder
in 1986. Rental units that have been determined not to be serviced by a lead service line, and
seasonal rental units, are exempted from testing requirements. Based on the American Community
Survey 1-Year Estimates, there are approximately 2,688,931 homes in the State that were built
before 1987. At the United States Environmental Protection Agency’s estimated rate of $15 to
$100 per test, public community water systems may experience an aggregate cost increase of up
to $268,893,100 if each of the estimated 2,688,931 homes built prior to 1987: (1) is eligible
pursuant to the bill; and (2) requests testing. This estimate does not include the cost of potential
repeated tests, which are required by the bill in a case where the results of a lead test exceed the
action level; the OLS is unable to predict the percentage of initial tests that will result in exceeded
lead action levels and potential subsequent testing. This estimate is an aggregate number for all
public community water systems, including those that are privately owned and those owned by
local governments. However, the OLS is unable to estimate the number of residential units built
before 1987 which are: (1) seasonal rental units; (2) serviced by a service line that is not a lead
service line; (3) owned by customers; or (4) resided in by tenants who will not request a test.
To the extent that a public community water system operated by a local unit chooses, and is
approved, to adjust its rate base collected from customers to offset costs associated with conducting
drinking water testing as required by the bill, the public community water system will see an
increase in revenues. The OLS is unable to estimate how many customers are served by public
community water systems that are operated by local units and therefore the extent of potential
fiscal impacts on local units as a result of the bill. However, the OLS notes that the State has 561
active public community water systems and the Board of Public Utilities regulates approximately
13 privately-owned water companies in the State.
In addition, to the extent there are violations of the bill’s provisions, including with respect to
landlords’ responsibilities to their tenants pursuant to the bill, the Department of Environmental
Protection will see increased revenues associated with collecting fines in the following amounts:
$100 for a first violation, $500 for a second violation, and $1,000 for a third and subsequent
violation. Penalties would be enforced in the Superior Court, which may result in increased costs
to the State.
The Department of Health, in consultation with the Department of Environmental Protection
and the Department of Community Affairs, would be required to develop a notice that provides
customers information concerning health risks associated with lead in drinking water. This notice
would be periodically updated as deemed necessary by the Commissioner of Health and made
available to the public by the Department of Health and the Department of Community Affairs.
The Department of Community Affairs would also be required to prepare a model “Lead In
Drinking Water Disclosure” statement for landlords to provide to tenants with information
concerning certain lead in drinking water risks associated with the rental property, and make this
information available to the public in conjunction with the Department of Health. The bill also
requires public community water systems to provide the results of every drinking water test
conducted pursuant to the bill to the customer. These responsibilities may result in increased
administrative costs to the three departments as well as to local units that operate a public
community water system.
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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.).


Statutes affected:
Introduced: 58:12A-43