SENATE BUDGET AND APPROPRIATIONS COMMITTEE

STATEMENT TO

[First Reprint]

SENATE, No. 1181

with Senate committee amendments

STATE OF NEW JERSEY

DATED: JUNE 13, 1996

      The Senate Budget and Appropriations Committee reports favorably Senate Bill No. 1181 (1R) with amendments.

      Senate Bill No. 1181 (1R), as amended, increases a number of fees imposed for the filing of various documents with the Law Division of the Superior Court in civil actions and increases the number of Superior Court judges from 406 to 416. In addition, the bill specifies the purposes for which this additional revenue is to be appropriated annually.

      The bill specifies that an amount equal to 95 percent of the additional revenue representing the increase in the fees is to be appropriated annually to the Department of Community Affairs for a grant to Legal Services of New Jersey to provide legal assistance for poor persons in civil matters under a contract with the Department of Community Affairs, and to the Judiciary to pay for the salaries, fringe benefits and staff costs of 10 additional judges.

      An amount equal to the remaining 5 percent of the additional revenue representing the increase in the fees is to be appropriated annually to the Department of State for allocation in equal amounts to the three law schools in the State (Rutgers- Newark Law School, Rutgers - Camden Law School, and Seton Hall Law School) for clinical programs that provide free legal representation for poor persons.

      The bill requires that such an appropriation be a supplement to, and not a replacement of, funds appropriated in a fiscal year from other sources for the same purposes. The increase in the fees will be deposited into a revolving, non-lapsing fund created by the bill and the State Treasurer will have an audit performed on the fund biennially. The bill also requires an annal report on the fund.

      The bill will take effect 40 days following enactment.

COMMITTEE AMENDMENTS

      The amendments adopted by the committee:

      * Prohibit the use of the additional revenues collected under the bill to replace appropriations from other sources for the same purposes. These funds will be a supplement to other funding.

      * Require the additional revenues to be deposited into a non-lapsing, revolving fund by the State Treasurer.

      * Require a biennial audit of the fund.

      * Require an annual report by the State Treasurer to the Legislature on the use of the moneys in the fund.

       The committee also made a technical amendment to the bill to correct its title so that it properly reflects the contents of the bill.

FISCAL IMPACT

      According to the Administrative Office of the Courts (AOC), this bill will raise approximately $11.5 million in Fiscal Year 1997, and $11 annually in Fiscal Years 1998 and 1999. This estimate assumes that the number of court filings will not decrease as a result of the higher fees. However, filings did decrease by 15 percent in Fiscal Year 1992 after special civil fees were increased, according to the AOC. In addition, it should be noted that given the delayed effective date in the bill, the increase may not be effective for the entire Fiscal Year of 1997.

      For Fiscal Year 1997, it is anticipated that approximately $8 million may be appropriated as a grant to Legal Services of New Jersey as a result of this bill. Currently, the Governor's Fiscal Year 1997 budget recommends an appropriation of $2.5 million for Fiscal Year 1997 from General Fund revenues for a grant through the Department of Community Affairs for the State Legal Services Office.       It is also anticipated that approximately $3 million may be appropriated to the Judiciary for the costs of salaries, fringe benefits and staff for 10 additional Superior Court judges as a result of this bill. It is anticipated that approximately $575,000 may be appropriated to the Department of State for the three law schools in the State as a result of this bill. Each may receive approximately $191,000 annually.

      Finally, the AOC states that it will incur a one-time cost of $20,000 to reprogram data processing equipment and an additional on-going expense pf $13,000 for a part-time clerk to monitor reports and allocate fees.