S2066

An Act concerning interest deferral on late water and sewer bill payments, supplementing Title 48 of the Revised Statutes, and amending various parts of the statutory law.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. (New section) In the event that a payment owed to a water company for the sale and supply of water to a consumer is not paid when due, interest shall accrue, for which the consumer shall be liable, on any part of the amount that is due and payable and that remains unpaid for 30 days following the established payment due date, as identified on the consumer’s bill or other statement of water usage.

For the purposes of this section, “water company” shall mean a public utility, as that term is defined by R.S.48:2-13, or a municipally-operated utility, which is regulated by the Board of Public Utilities, and which public utility or municipally-operated utility is engaged in the sale and supply of water to consumers in the State; or a nonpublicly-owned, nonprofit water company.

2. R.S.48:13-14 is amended to read as follows:

R.S.48:13-14. [Such] Every sewerage company organized under the laws of this State may contract with property owners and others for the use of its system of sewerage for such price or rents and such restrictions as the company may think proper in accordance with approved tariffs filed with the Board of Public Utility Commissioners. In the event that a payment owed by a consumer to a sewerage company for the use of sewer services is not paid when due, interest shall accrue, for which the consumer shall be liable, on any part of the amount that is due and payable and that remains unpaid for 30 days following the established payment due date, as identified on the consumer’s bill or other statement of sewer service usage.

(cf: P.L.1962, c.198, s.163)

3. Section 21 of P.L.1946, c.138 (C.40:14A-21) is amended to read as follows:

21. (a) In the event that a service charge of any sewerage authority with regard to any parcel of real property [shall] is not [be] paid [as and] when due, and remains unpaid for 30 days following the established payment due date, as identified on the consumer’s bill or other statement of sewer service usage, interest shall accrue and be due to the sewerage authority on the unpaid balance at the rate of 1 1/2 % per month until such service charge, and the interest thereon, shall be fully paid to the sewerage authority.

(b) In the event that a service charge of any sewerage authority with regard to any parcel of real property owned by any person other than the State or an agency or subdivision thereof shall not be paid as and when due, the unpaid balance thereof and all interest accruing thereon shall be a lien on such parcel. Such lien shall be superior and paramount to the interest in such parcel of any owner, lessee, tenant, mortgagee or other person except the lien of municipal taxes and shall be on a parity with and deemed equal to the lien on such parcel of the municipality where such parcel is situate for taxes thereon due in the same year and not paid when due. Such lien shall not bind or affect a subsequent bona fide purchaser of such parcel for a valuable consideration without actual notice of such lien, unless the sewerage authority shall have filed in the office of the collector or other officer of said municipality charged with the duty of enforcing municipal liens on real property a statement showing the amount and due date of such unpaid balance and identifying such parcel, which identification may be sufficiently made by reference to the assessment map of said municipality. The information shown in such statement shall be included in any certificate with respect to said parcel thereafter made by the official of said municipality vested with the power to make official certificates of searches for municipal liens. Whenever such service charge and any subsequent service charge with regard to such parcel and all interest accrued thereon shall have been fully paid to the sewerage authority, such statement shall be promptly withdrawn or cancelled by the sewerage authority.

(c) In the event that a service charge of any sewerage authority with regard to any parcel of real property shall not be paid as and when due, the sewerage authority may, in its discretion, enter upon such parcel and cause the connection thereof leading directly or indirectly to the sewerage system to be cut and shut off until such service charge and any subsequent service charge with regard to such parcel and all interest accrued thereon shall be fully paid to the sewerage authority.

(d) In the event that a service charge of any sewerage authority with regard to any parcel of real property shall not be paid as and when due, the sewerage authority may, in accordance with section twenty-six of this act, cause the supply of water to such parcel to be stopped or restricted until such service charge and any subsequent service charge with regard to such parcel and all interest accrued thereon shall be fully paid to the sewerage authority. If for any [any] reason such supply of water shall not be promptly stopped or restricted as required by section twenty-six of this act, the sewerage authority may itself shut off or restrict such supply and, for that purpose, may enter on any lands, waters or premises of any county, municipality or other person. The supply of water to such parcel shall, notwithstanding the provisions of this subsection, be restored or increased if the State Department of Health, upon application of the local board of health or health officer of the municipality where such parcel is situate, shall after public hearing find and shall certify to the sewerage authority that the continuance of such stopping or restriction of the supply of water endangers the health of the public in such municipality.

(e) The collector or other officer of every municipality charged by law with the duty of enforcing municipal liens on real property shall enforce, with and as any other municipal lien on real property in such municipality, all service charges and the lien thereof shown in any statement filed with him by any sewerage authority pursuant to subsection (b) of this section, and shall pay over to the sewerage authority the sums or a pro rata share of the sums realized upon such enforcement or upon liquidation of any property acquired by the municipality by virtue of such enforcement.

(f) In the event that any service charge of a sewerage authority shall not be paid as and when due, the unpaid balance thereof and all interest accrued thereon, together with attorney's fees and costs, may be recovered by the sewerage authority in a civil action, and any lien on real property for such service charge and interest accrued thereon may be foreclosed or otherwise enforced by the sewerage authority by action or suit in equity as for the foreclosure of a mortgage on such real property.

(g) All rights and remedies granted by this act for the collection and enforcement of service charges shall be cumulative and concurrent.

(cf: P.L.1981, c.530, s.1)

4. Section 41 of P.L.1957, c.183 (C.40:14B-41) is amended to read as follows:

41. In the event that a service charge of any municipal authority with regard to any parcel of real property shall not be paid as and when due, interest shall accrue and be due to the municipal authority on the unpaid balance at the rate of 1 1/2% per month until such service charge, and the interest thereon, shall be fully paid to the municipal authority. In the event that a payment owed to a municipal authority for the sale and supply of water to a parcel of real property, or for the use of a sewerage system, is not paid when due, interest shall accrue, for which the consumer shall be liable, on any part of the amount that is due and payable and that remains unpaid for 30 days following the established payment due date, as identified on the consumer’s bill or other statement of water or sewage service usage.

(cf: P.L.1981, c.530, s.2)

5. R.S.40:62-83.1 is amended to read as follows:

40:62-83.1. Any municipality which, pursuant to law, furnishes a supply of water and sewerage service to the inhabitants of another municipality, may, if prompt payment of any water or sewer rent, or charges for work done or materials furnished for such services, is not made by any such inhabitant when due, discontinue the service so furnished to any such inhabitant in arrears until such arrears with interest and penalties shall be fully paid. In the event that a payment owed for water or sewer rent is not paid when due, interest shall accrue, for which the consumer shall be liable, on any part of the amount that is due and payable and that remains unpaid for 30 days following the established payment due date, as identified on the consumer’s bill or other statement of water or sewer service usage.

(cf: P.L.1952, c.324, s.1)

6. R.S.40:62-107 is amended to read as follows:

40:62-107. The governing body of any municipality owning its water and sewer systems and operating the same as one utility may fix a combination water and sewer rental, and in case prompt payment of [said] the combined rent is not made according to the regulations adopted by [said] the governing body cause [said] the water to be shut off from such houses, tenements, buildings or other premises so supplied and not to [turn the same] be turned on again until all arrears, with interest and penalties, shall be fully paid. Interest charges, for which a consumer shall be liable under this section, shall accrue on any part of the amount that is due and payable for combined water and sewer rental services and that remains unpaid for 30 days following the established payment due date, as identified on the consumer’s bill or other statement of combined water and sewer service usage.

(cf: R.S.40:62-107)

7. R.S.40:62-107.6 is amended to read as follows:

40:62-107.6. a. After any municipality shall have purchased a water distribution system pursuant to sections 40:62-107.4 and 40:62-107.5 of this title, the governing body of the municipality shall be authorized to operate the water distribution system as nearly as may be as a part of its own system, and any schedule of rates, rents, charges and penalties which the governing body shall thereafter fix shall be applicable to water users within both municipalities, and in the collection of all rates, rents, charges and penalties the municipality shall have all the rights and remedies that may apply to private water companies supplying water to municipalities of this State.

b. The governing body of a municipality that has purchased a water distribution system shall establish a rate structure that provides for uniform rates, rentals, or other service charges for water supply service and fire protection systems.

The governing body shall not impose standby fees or charges for any fire protection system to a residential customer served by a water service line of two inches or less in diameter.

Nothing in this section shall preclude the governing body of a municipality that has purchased a water distribution system from requiring separate dedicated service lines for fire protection. The governing body of a municipality that has purchased a water distribution system may require that fire service lines be metered. Nothing in this section shall alter the liability for maintenance and repair of service lines which exists on the effective date of P.L.2003, c.278.

c. In the event that a payment owed to a municipality for the sale and supply of water to a consumer in the same or an adjoining municipality is not paid when due, interest shall accrue, for which the consumer shall be liable, on any part of the amount that is due and payable and that remains unpaid for 30 days following the established payment due date, as identified on the consumer’s bill or other statement of water usage.

(cf: P.L.2003, c.278, s.3)

8. R.S.40:62-141 is amended to read as follows:

40:62-141. The owner of any house, tenement, building or lot shall be liable for the payment of the price or rent as fixed by the commission for the use of water by such owner or by the occupier, and for the installation, purchase price, repair and testing of any water meter or water meters, water service, water services, connections, appliances or parts, and renewals thereof furnished or made by the commission, in, upon or connecting with such house, tenement, building or lot, and the interest and penalties charged. In the event that a payment owed to the commission for the sale and supply of water to a house, tenement, building or lot is not paid when due, interest shall accrue, for which the owner shall be liable, on any part of the amount that is due and payable and that remains unpaid for 30 days following the established payment due date, as identified on the consumer’s bill or other statement of water usage.

The price or rent so fixed, and the other costs, expenses, interest and penalties shall be a lien upon such house, tenement, building or lot until the same shall be paid and satisfied, and shall be enforceable by an action at law in any competent court.

The commission shall notify the officers or board having charge of the collection of taxes in each municipality in which the commission shall supply water to any of the inhabitants of such municipality, that the commission is supplying water to such inhabitants, and requesting said officials or board to notify all persons applying for a certificate showing municipal or other liens against property in such municipality, that the applicant must apply to the commission to ascertain the amount of water rents or other charges due to the commission, which are by law made a lien upon the premises covered by the certificate.

The commission may require payment in advance for the use or rent of water furnished by it and for any work to be done or materials to be furnished.

(cf: R.S.40:62-141)

9. R.S.40:62-142 is amended to read as follows:

40:62-142. In case prompt payment of any water rent or rents, or for work done or materials furnished, is not made when due, the water may be shut off from such real estate, and shall not be again supplied thereto until the arrears with interest and penalties shall be fully paid. Interest charges applicable to overdue water rent payments shall be calculated in accordance with the provisions of R.S.40:62-141.

(cf: R.S.40:62-142)

10. This act shall take effect on the 60th day following the date of enactment.

STATEMENT

This bill would provide for the deferral of interest accrual on balances that are owed, but which are not promptly paid by consumers, for water and sewer services. The bill would affect the accrual of interest on late payments made to a number of different utility companies that sell and supply water, or that provide sewerage services to consumers in the State. These entities include public water and sewer utilities, nonprofit water companies, county sewerage authorities, and municipally-operated utilities such as municipal (water or sewer) utilities authorities and municipally-owned waterworks. The bill would provide, in particular, and with regard to each type of utility company, that when a payment for water or sewer services is owed by a consumer and is not paid when due, interest will accrue on only that part of the amount that is due and payable and that remains unpaid for 30 days following the established payment due date, as identified on the consumer’s bill or other statement of water or sewer service usage.

Current law applies inconsistent rules with regard to the accrual of interest on late water bill payments. Specifically, while the “County and Municipal Water Supply Act,” N.J.S. 40A:31-1 et seq., provides for the deferral of interest accrual for 30 days with regard to late water bill payments that are made by a consumer to a county or municipally-owned water supply facility (which facility is not in competition with a municipal utilities authority previously established), such interest deferral is not similarly authorized or required by law with regard to late water bill payments that are made by consumers to any of the types of water utility companies mentioned above. Similarly, no such interest deferral is authorized or required by law with regard to late sewer service bill payments. Accordingly, in order to bring consistency to this area of law, it is both reasonable and necessary to amend and supplement the law as it pertains to the payment of water and sewer rents owed to the various types of utility companies listed above, in order to ensure that all New Jersey consumers will be uniformly entitled to a 30-day grace period prior to the accrual of interest charges on late payments owed for water and sewer services.