SENATE COMMUNITY AND URBAN AFFAIRS COMMITTEE

STATEMENT TO

SENATE, No. 1247

with committee amendments

STATE OF NEW JERSEY

DATED:  MARCH 26, 2018

      The Senate Community and Urban Affairs Committee reports favorably and with committee amendments Senate Bill No. 1247.

      This bill, as amended, authorizes additional connection fees for certain utilities operated by local governments and establishes certain credits and reductions for these fees.  The local government entities covered by the amended bill are: sewerage authorities under the “sewerage authorities law,” P.L.1946, c.138 (C.40:14A-1 et seq.); municipal authorities under the “municipal and county utilities authorities law,” P.L.1957, c.183 (C.40:14B-1 et seq.); and local units operating either a county or municipal sewerage facility or water supply facility under the “Municipal and County Sewerage Act,” N.J.S.40A:26A-1 et seq., and the “County and Municipal Water Supply Act,” N.J.S.40A:31-1 et seq., respectively.

      The amended bill allows new connection fees to be imposed for an addition, alteration, or change in use to certain connected properties that materially increases the level of use and imposes a greater demand on the utility system, but does not involve a new physical connection of the property to the system.  This additional fee is equal to the amount by which the increased use and demand on the utility system exceeds the use and demand that existed prior to the addition, alteration, or change in use.  Such additional fee does not take the place of fees for any new or additional connections.

      The amended bill also requires credits to be applied to connection fees charged for a reconnection of certain disconnected properties that were previously connected to the utility system.  If the reconnection does not require any new physical connection or does not increase the nature or size of the service or the number of services units, or does not expand the use of the utility system, the credit is equal to the amount of the new connection fee.  If the reconnection requires any of the foregoing, the credit is equal to the amount of any connection fee previously paid for the property.  If no connection fee was ever paid for the property, but all service charges due and owing on the property have been paid for at least 20 years, the credit is equal to the amount of the new connection fee.

      However, if no connection fee was ever paid for certain disconnected properties, a connection fee is to be charged in addition to any amount due and owing after application of a credit.  The amended bill provides for this fee to be equal to the lesser of: (1) 20 percent of the service charges that would have been paid based upon the usage for the last full year that the property was connected to the utility system for the period from the date of the disconnection from the utility system to the date of the new connection; or (2) the new connection fee.

      Lastly, the amended bill provides that the existing connection fee reductions for certain types of affordable housing serviced by sewerage authorities and municipal authorities is to be extended to all affordable housing, including affordable housing units in inclusionary projects.  The amended bill also newly establishes the same connection fee reductions for all affordable housing serviced by local units operating a county or municipal sewerage facility or water supply facility.

COMMITTEE AMENDMENTS:

      The committee amended the bill to clarify that the additional fee authorized under the bill for certain connected properties does not take the place of fees for any new construction of additional service units connected to the applicable utility system.