LEGISLATIVE FISCAL ESTIMATE
[First Reprint]
SENATE, No. 3333
STATE OF NEW JERSEY
220th LEGISLATURE
DATED: APRIL 4, 2023
SUMMARY
Synopsis: Prohibits water utility from taking certain actions if utility fails to
participate in Low Income Household Water Assistance Program.
Type of Impact: State cost and revenue increases; local cost increases; variable impacts
on local revenues.
Agencies Affected: Department of Community Affairs, Board of Public Utilities, Local
government water utilities.
Office of Legislative Services Estimate
Time-Limited Duration of the Low Income
Fiscal Impact Household Water Assistance Program
State Cost Increase Indeterminate
State Revenue Increase Indeterminate
Local Cost Increase Indeterminate
Local Revenue Impact Indeterminate
 The Office of Legislative Services (OLS) has determined that local government water utilities
will experience divergent revenue impacts depending on whether or not these utilities enter
into a vendor contract with the Department of Community Affairs and participate in the Low
Income Household Water Assistance Program (LIHWAP) due to the provisions of the bill.
These impacts are expected to occur from the bill’s effective date through September 30, 2023.
 Those utilities participating in the program will potentially experience an indeterminate
increase in revenues associated with receiving monies allocated to the State for LIHWAP by
the federal government. These utilities will receive payments for water and sewer services
rendered that they might not have otherwise collected due to customers’ inability to pay.
 Local government utilities not entering into vendor contracts with the department will likely
experience a revenue reduction under the bill because they would not receive LIHWAP
assistance allocated to the State nor would they be able to enforce liens or discontinue service
to compel customer payment on delinquent accounts.
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 bill also will result in an indeterminate increase in expenditures to the Department of
Community Affairs, the Board of Public Utilities, and local government water utilities to
provide the required customer notifications and undertake additional responsibilities required
by the bill.
 Local government water utilities may incur fines for taking certain enforcement actions against
customers in violation of the bill’s provisions or for failing to advertise eligibility for the
LIHWAP. The State may collect an indeterminate amount of revenue from these violations.
However, the OLS does not anticipate widespread, willful non-compliance with the provisions
of the bill.
BILL DESCRIPTION
This bill imposes certain temporary requirements on water service providers, including local
authorities, municipal utilities, and public utilities, concerning their participation in the Low
Income Household Water Assistance Program. Currently, the department uses federal funding to
administer the LIHWAP, which provides financial assistance toward the water and wastewater
bills of certain low-income households. As required under federal law, this financial assistance is
provided directly to the water service providers that service participating low-income households.
However, before the customers of a water service provider can receive assistance under the
program, the water service provider would need to enter into a vendor contract with the department
to participate in the program.
The bill provides that each water service provider would be required to enter into the vendor
contract and participate in the program. However, the bill stipulates that the vendor contract is not
to prohibit a water service provider from undertaking certain actions to collect on delinquent
accounts after September 30, 2023.
Before October 1, 2023, the bill provides that if a water service provider fails to enter into a
vendor contract with the DCA, or otherwise fails to allow customers to participate in the LIHWAP,
the water service provider is to be prohibited from: 1) discontinuing the water or wastewater
service of any residential customer for non-payment; and 2) in the case of a local authority or
municipal utility, from placing, selling, or enforcing a lien on real property for the unpaid balance
of the water or wastewater charges of any residential customer. A water service provider that
violates this prohibition is to be subject to a fine of $500 for each calendar day in which the water
or wastewater service is discontinued for non-payment.
Additionally, the bill requires each water service provider to advertise eligibility for the
LIHWAP in various ways. A water service provider that violates this requirement would be
subject to a fine of $100 for each instance.
The bill also requires the department and Board of Public Utilities to provide written notice to
water service providers concerning the provisions of this bill. If the department determines that
the water service provider has failed to enter into the required vendor contract or otherwise failed
to allow its customers to participate in the LIHWAP, the notice would be required to indicate, in a
clear and conspicuous manner, that the water service provider is prohibited from undertaking the
actions specified in the bill. The bill also requires separate notice to be provided when the
application period for the LIHWAP is terminated and the provisions of the bill no longer apply.
The bill also requires the department to provide written instructions to each water service
provider concerning the duties and responsibilities of the water service provider.
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Every 14 calendar days after the date of enactment until the LIHWAP is terminated, the
department would be required to provide written notice to each water service provider concerning
the status of every residential customer who applies for the LIHWAP. After a water service
provider has received this notice, the provider would be required to suspend any enforcement
actions against any residential customer who has been approved for the LIHWAP. Additionally,
if the water service provider receives notice after September 30, 2023 that a customer has been
approved for the LIHWAP, the water service provider would be required to waive any interest
assessed on the customer for the unpaid balance of water or wastewater charges during the period
after September 30, 2023 and before the date of receipt of the notice.
Under the bill, each water service provider would be required to provide a written notice, every
14 calendar days after the date of enactment until October 1, 2023, to the department concerning
the arrearages of residential customers.
The bill also requires the Department to submit reports detailing the operations of the LIHWAP
to the Legislature, which reports would be submitted within 30 days after the date of enactment
and every 45 days thereafter until October 1, 2023.
FISCAL ANALYSIS
EXECUTIVE BRANCH
None received.
OFFICE OF LEGISLATIVE SERVICES
The OLS has determined that local government water utilities will experience divergent
revenue impacts depending on whether or not they participate in the Low Income Household Water
Assistance Program due to the provisions of the bill. Water utilities participating in the program
will potentially experience an indeterminate increase in revenues associated with receiving monies
allocated to the State for LIHWAP by the federal government. These utilities will receive
payments for services rendered that they might not have otherwise collected due to customers’
inability to pay.
Total federal funding received by the State for LIHWAP is nearly $24 million, which must be
obligated by September 30, 2023 or any remaining funds revert to the federal government. As of
March 29, 2023, $12.5 million in federal LIHWAP funding has been paid by the department to
water and wastewater utilities on behalf of customers with delinquent accounts, while an additional
$1.2 million in funding has been committed. Some $10.2 million in federal funds remain available
in the LIHWAP program. This represents the maximum potential revenue increase under the bill
for local government water utilities participating in the program. The ultimate amount received
by local government water utilities participating in the program is likely to be less than $10.2
million available because customers of private utilities are also eligible to receive this assistance.
This analysis assumes that the payments received by local government water utilities under
LIHWAP are greater than they would have received had they been permitted to pursue alternative
collection techniques from delinquent customers. While federal LIHWAP funding is expected to
pay the accrued balances of delinquent customer accounts, a local government water utility may
forgo additional revenues they might have otherwise collected from interest charges.
Local government water utilities that do not enter into vendor contracts with the department to
permit their customers to participate in LIHWAP are expected to experience an indeterminate
decrease in revenues. These water utilities would not be eligible to receive any LIHWAP funding
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nor would they be permitted to pursue certain collection techniques to collect on delinquent bills,
such as discontinuing service or enforcing liens after the bill’s effective date through September
30, 2023.
The bill also will result in an indeterminate increase in expenditures to the Department of
Community Affairs, the Board of Public Utilities, and local government water utilities to provide
the required customer notifications and undertake other additional responsibilities required by the
bill. Local water utilities will incur fines for taking certain enforcement against customers in
violation of the bill’s provisions or for failing to advertise eligibility for the LIHWAP. The State
may collect an indeterminate amount of revenue from these violations. However, the OLS does
not anticipate widespread, willful non-compliance with the provisions of the bill.
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.).