SENATE COMMERCE COMMITTEE

STATEMENT TO

ASSEMBLY, No. 426

STATE OF NEW JERSEY

DATED: MAY 2, 1996

      The Senate Commerce Committee reports favorably Assembly Bill No. 426.

      This bill requires the Commissioner of the Department of Community Affairs to approve alternate fire suppression system warranty security programs which meet certain standards and may be used by sellers of fire suppression systems in lieu of the warranty program established by the commissioner pursuant to section 7 of P.L.1983, c.383 (C.52:27D-198). These alternate programs would be similar to those allowed under "The New Home Warranty and Builder's Registration Act," P.L.1977, c.467 (C.46:3B-1 et seq.). These alternate programs are required to provide the same coverage and financial security of the warranty program established by the commissioner. The commissioner may revoke or suspend the approval for such an alternate program if it no longer provides the same coverage and financial security of the warranty program established by the commissioner. The bill also requires that the Commissioner of Community Affairs keep records on the applicants for such alternate programs, and make those records available to the public for inspection. In addition, a seller of fire suppression systems warranted under an alternate plan must disclose that fact to a purchaser and a subsequent purchaser while the system is under warranty. The purchaser of a system warranted under an alternate program will not be permitted to make a claim for defects against the plan established by the commissioner, but will be limited to making all claims against the approved alternate plan.