LEGISLATIVE FISCAL ESTIMATE
ASSEMBLY COMMITTEE SUBSTITUTE FOR
ASSEMBLY, No. 3712
STATE OF NEW JERSEY
220th LEGISLATURE
DATED: MAY 19, 2023
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: State revenue and cost increases; Local unit revenue and cost
increases.
Agencies Affected: Department of Health; Department of Community Affairs;
Department of Environmental Protection; Certain local units.
Office of Legislative Services Estimate
Fiscal Impact Annual
State Cost Increase Indeterminate
Potential State Revenue Increase Indeterminate
Local Cost Increase Up to $253,170,200
Local Revenue Increase Up to $253,170,200
 The Office of Legislative Services (OLS) has determined that the bill will result in a cost
increase of up to $253,170,200 per year 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.
 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 pursuant to 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 there are violations of the bill’s provisions, the Department
of Community Affairs 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.
BILL DESCRIPTION
The bill requires disclosure of lead drinking water hazards to tenants of residential units,
prohibits landlords from obstructing the replacement of lead service lines, and requires testing of
residential rental units for lead drinking water hazards at the request of customers.
The bill would require the Department of Health to develop a notice that provides consumers
information concerning the health risks associated with lead in drinking water. The notice would
be periodically updated 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 be required to prepare a model "Lead In Drinking Water Disclosure" statement that
may be used by landlords to provide notice to tenants as required by the bill. The model notice
would be required to be made available to the public by the Department of Community Affairs
and the Department of Health.
The bill directs a public community water system to, upon request by a residential customer,
test the customer's drinking water for the presence of lead using a laboratory certified for that
purpose. A community water system would be required to provide only one test each year upon
request by a residential customer, unless a test shows that the lead action level was exceeded. If a
test shows that the lead action level was exceeded, the public community water system would,
upon request by a customer, test the customer's drinking water every 60 days for the presence of
lead until two consecutive tests fall at or below the lead action level. The public community water
system would provide results of every test authorized by the bill to the customer.
A public community water system would not be required to comply with the requirements of
the bill to provide drinking water tests at the request of the customer for a residential unit that is
located in a residential rental property that is constructed after 1986 or serviced by a lead-safe
service line, or that is a seasonal rental unit.
A customer who requests a test for lead in drinking water would not be charged a fee by the
public community water system for the test. A public community water system not regulated by
the Board of Public Utilities would be authorized to include in the public community water
system’s rate base the reasonable costs of testing provided under the bill. A public community
water system that is a public utility, and regulated by the Board of Public Utilities, would be
permitted to petition the board to include in the public community water system’s rates the
reasonable costs of testing it provides to customers.
The bill provides that a person found in violation of a provision of the bill would be provided
with a written notice of the violation by the Department of Community Affairs and given 15 days
to cure the violation. If the person has not cured the violation after 15 days, the department would
be authorized to impose a penalty of $100 for a first violation, $500 for a second violation, and
$1,000 for a third and subsequent violation.
FISCAL ANALYSIS
EXECUTIVE BRANCH
None received.
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OFFICE OF LEGISLATIVE SERVICES
The OLS has determined that the bill will result in a cost increase of up to $253,170,200 per
year 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 banned the use of leaded pipe and solder in
new plumbing systems in 1986. According to American Community Survey 1-Year Estimates,
there are approximately 2,531,702 residential units in the State that were built before 1987.
Assuming that these residential units are serviced by public community water systems, each of
these units may be eligible for initial drinking water testing pursuant to the bill. According to the
United States Environmental Protection Agency, testing drinking water for the presence of lead
may cost between $20 and $100 per test. If each of the 2,531,702 units are eligible and requested
by customers to be tested for lead, public community water systems may experience a cost increase
of up to $253,170,200 per year. However, the OLS is unable to estimate the number of residential
rental units built before 1987 which are seasonal rental units, are serviced by a lead-safe service
line, or are owned by customers, or resided in by tenants, who will not request a test. The OLS is
also unable to predict the percentage of initial tests that will result in exceeded lead action levels,
and therefore, subsequent testing.
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. Additionally, public community water systems may be operated by private companies
or local units. 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 569 community
water systems, which provide water human consumption, and the Board of Public Utilities
regulates approximately 30 private, investor-owned water utilities in the State, and asserts that this
does not include municipal systems and municipal utilities authorities, which, combined, cover a
larger portion of 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 Community
Affairs 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 Department of Health, 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, which notice Department of Health
would be required to update periodically and make available to the public in conjunction with 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 be provided to the customer. These
responsibilities may result in increased administrative costs to the Department of Community
Affairs, the Department of Health, and the Department of Environmental Protection as well as to
local units that operate a public community water system.
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Section: Local Government
Analyst: Abigail Stoyer
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-42, 58:12A-43, 58:12A-46, 52:27D-437.16