VOLUME 46, ISSUE 13
ISSUE DATE: JULY 7, 2014
LAW AND PUBLIC SAFETY
DIVISION OF CONSUMER AFFAIRS
Proposed Amendments: N.J.A.C. 13:45A-17.5 and 17.14
Home Improvement Contractors
Initial and Renewal Applications
Authorized By: Steve C. Lee, Acting Director, Division of Consumer Affairs.
Authority: N.J.S.A. 56:8-152.
Calendar Reference: See Summary below for explanation of exception to calendar requirement.
Proposal Number: PRN 2014-110.
Submit written comments by September 5, 2014, to:
Steve C. Lee
New Jersey Division of Consumer Affairs
124 Halsey Street
P.O. Box 45027
Newark, NJ 07101
Or submitted electronically at: www.NJConsumerAffairs.gov/proposal/comment/.
The agency proposal follows:
Home improvement contractor registrations expire on December 31 of each year. The expiration date was based on the effective date of the Contractors' Registration Act, N.J.S.A. 56:8-136 et seq., which was December 31, 2005. The Division's experience indicates that there is an increase in the number of new applications for registration in February and March of each year, in anticipation of spring when the weather is more conducive to outdoor home improvement work. It is also the Division's experience that applications for reinstatement of registration increase in February and March. The Division proposes to change the expiration date to March 31, commencing with the first registration period that begins after the effective date of these proposed amendments.
Since Superstorm Sandy the Division has experienced an increase in the rate at which applications for registration as home improvement contractors are received by the Division, including a significant increase in the number of out-of-State contractors applying for registration. In 2012, the Division processed 5,129 new applications. The Division processed 6,907 new registrations in 2013. More time and effort is required to review applications of out-of-State contractors because information about them is less readily available than for in-State contractors. That, together with the increase in number of applications, has made it necessary for the Division to have some staff work overtime to process applications. The Division is proposing to amend N.J.A.C. 13:45A-17.14 to increase the application and renewal fees to defray additional costs. These fees have not increased since the Act became effective in 2005.
The Division has determined that the comment period for this notice of proposal shall be 60 days. Therefore, pursuant to N.J.A.C. 1:30-3.3(a)5, this notice is excepted from the rulemaking calendar requirement.
The proposed amendments will have a positive social impact on home improvement contractors. Some home improvement contractors allow their general liability insurance policies to lapse during the winter when the volume of home improvement work shrinks and do not renew their registration, but apply for reinstatement in February and March. Having an April 1 renewal date would allow contractors to renew on a timely basis and avoid the more cumbersome reinstatement process.
The proposed amendment changing the registration renewal date will have a positive economic impact on home improvement contractors who would otherwise allow their registrations to expire on December 31 and apply for reinstatement in February or March and pay a reinstatement fee, as well as the renewal fee. Under the proposed amendments, contractors could renew by March 31 and not incur the reinstatement fee. The proposed increase in the application and renewal fees will be borne by registered contractors, but some of the cost would be offset by not having to pay a reinstatement fee. There would be no economic impact on consumers with claims under a contractor's general liability insurance policy arising from home improvement work performed while the contractor's insurance was in effect. The proposed increase in the fees should have a minimal impact on consumers because the $ 15.00 or $ 20.00 increase would be spread among a contractor's customers.
Federal Standards Statement
A Federal standards analysis is not required because the proposed amendments are not subject to any Federal standards or requirements.
The Division does not anticipate that the proposed amendments will increase or decrease jobs in the State.
Agriculture Industry Impact
The proposed amendments will have no impact on the agriculture industry in the State.
Regulatory Flexibility Statement
There are approximately 44,000 contractors registered in New Jersey, not including any that are in the process of reinstating. If, for purposes of the Regulatory Flexibility Act, N.J.S.A. 52:14B-16 et seq., all registered home improvement contractors are considered "small businesses," then the following compliance requirements apply. The amendments change the dates of the beginning and end of a registration period and increases registration application and renewal fees. The proposed amendments do not impose reporting, recordkeeping, or other compliance requirements on small businesses, but do have an economic impact, as discussed in the Summary and the Economic Impact statements above.
Housing Affordability Impact Analysis
The proposed amendments will have an insignificant impact on affordable housing in New Jersey and there is an extreme unlikelihood that the amendments would evoke a change in the average costs associated with housing because the amendments concern the dates of the beginning and end of a registration period and the cost for renewal and initial registrations.
Smart Growth Development Impact Analysis
The proposed amendments will have an insignificant impact on smart growth and there is an extreme unlikelihood that the amendments would evoke a change in housing production in Planning Areas 1 or 2, or within designated centers, under the State Development and Redevelopment Plan in New Jersey because the amendments concern the dates of the beginning and end of a registration period and the cost for renewal and initial registrations.
Full text of the proposal follows (additions indicated in boldface thus; deletions indicated in brackets [thus]):
SUBCHAPTER 17. HOME IMPROVEMENT CONTRACTOR REGISTRATION
13:45A-17.5 Initial and renewal applications
(a)-(c) (No change.)
(d) The first registration period that begins (after the effective date of this amendment), shall expire on March 31 of the following year. Thereafter, a registration period shall commence on April 1 of each year and end on the following March 31.
[(d)] (e) (No change in text.)
(a) The Division shall charge the following non-refundable home improvement contractor registration fees:
1. Initial registration fee.......................................... $[90.00]110.00;
2. Renewal registration fee...................................... $[75.00]90.00;
3.-5. (No change.)