ASSEMBLY APPROPRIATIONS COMMITTEE

 

STATEMENT TO

 

SENATE, No. 679

 

STATE OF NEW JERSEY

 

DATED:  DECEMBER 10, 2018

 

      The Assembly Appropriations Committee reports favorably Senate Bill No. 679.

      This bill increases civil penalties for safety violations with respect to natural gas pipelines and distribution facilities and hazardous liquid underground pipeline and distribution facilities.

      Under current law, a violator is subject to a civil penalty of not more than $100,000 for each violation for each day that the violation persists, with the civil penalty not exceeding $1,000,000 for any related series of violations.  The bill changes current law to provide that a violator is subject to a civil penalty of not more than $200,000 for each violation for each day that the violation persists, with the civil penalty not exceeding $2,000,000 for any related series of violations.

      As reported, this bill is identical to Assembly Bill No. 2614, as also reported by the committee.

 

FISCAL IMPACT:

      The Office of Legislative Services (OLS) finds that the bill has the potential of increasing annual State revenue collections. The bill doubles the maximum civil penalties the Board of Public Utilities (BPU) is authorized to impose for safety violations with respect to natural gas pipelines and distribution facilities and hazardous liquid underground pipelines and distribution facilities. An increase in maximum penalty amounts, however, does not necessarily mean that the BPU will impose civil penalties in excess of the current limits in any given fiscal year after the bill takes effect. To that effect, the BPU reports that the average revenue from fines affected by the bill is approximately $1 million per year, but consists largely of minor violations where the fine amount would not change with larger maximum penalty amounts. In a year in which a major incident occurs, however, the revenue from that larger incident could be an additional $1 million or more under the bill relative to current law but those incidents are infrequent. Accordingly, the OLS cannot determine to what extent the bill will change BPU fine-setting decisions.