Assembly Commerce and Economic Development Committee Statement to Assembly, No. 573 (October 20, 2022)

Summary

An Assembly Commerce and Economic Development Committee statement to the Assembly Committee Substitute for Assembly, No. 573, State of New Jersey, dated October 20, 2022, reporting the substitute favorably. The substitute would modify inspection standards under the "State Uniform Construction Code Act," requiring written notice at least 24 hours before a requested inspection and an inspection by the enforcing agency within three business days. If the enforcing agency cannot meet that timeframe and no other date is agreed, the person in charge of work could contract with a private on-site inspection agency authorized by the Department of Community Affairs (DCA). Municipal construction officials would submit an annual report on staffing and expenses, and DCA could require corrective action or issue penalties.

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ASSEMBLY COMMERCE AND ECONOMIC DEVELOPMENT COMMITTEE

STATEMENT TO

ASSEMBLY COMMITTEE
SUBSTITUTE FOR

ASSEMBLY,
No. 573

STATE
OF NEW JERSEY

DATED: OCTOBER
20, 2022

The Assembly Commerce and Economic Development
Committee reports favorably an Assembly Committee Substitute for Assembly Bill
No. 573.

This Assembly Committee Substitute would modify
certain standards for inspection processes under the "State Uniform
Construction Code Act."

Under the bill, the owner, agent, or other responsible
person in charge of work is required to notify an enforcing agency, in writing,
when the work is ready for a required inspection under the Uniform Construction
Code ("code"), at least 24 hours prior to the date and time the
inspection is requested. The enforcing agency is then required to perform an
inspection within three business days of the date for which the inspection is
requested. The bill further specifies that the owner, agent, or other
responsible person in charge of work may provide oral notice for inspections of
minor work projects.

The bill requires the owner, agent, or other
responsible person in charge of work to be present and prepared at the time of
any scheduled inspection, and specifies that absence at the time of inspection
is to be considered a failed inspection. The bill requires an enforcing agency
to inform, in writing, the owner, agent, or other responsible person in charge
of work if the enforcing agency is unable to meet the required timeframe. The
enforcing agency and the owner, agent, or other responsible person in charge of
work may agree to a date and time for a required inspection. The bill requires
the enforcing agency to commit the agreed upon inspection date to writing and
provide a copy of the written documentation to the owner, agent, or other
responsible person in charge of work. The bill specifies that if the enforcing
agency is unable to meet the required timeframe and the local enforcing agency
and the owner, agent, or other responsible person in charge of work are unable
to agree to a different inspection date, the owner, agent, or other responsible
person in charge of work may contract with a private on-site inspection agency,
authorized by the Department of Community Affairs ("DCA") to conduct
on-site inspections, to perform the required inspection or inspections. The
bill specifies that this includes a supplemental private on-site inspection
agency.

If the owner, agent, or other responsible person
elects to utilize an authorized private on-site inspection agency, the bill
requires that the owner, agent, or other responsible person notify the
enforcing agency in writing of the decision. The bill specifies that the
owner, agent, or other responsible person in charge of work may elect to
utilize the private on-site inspection agency to conduct all inspections on
associated blocks and lots, and all units encompassed in the project. The bill
also establishes certain conflict-of-interest requirements. If the enforcing
agency is required to provide any fee reconciliation to the owner as a result
of an inspection being completed by a private on-site inspection agency, the
bill requires that enforcing agency to perform the reconciliation at the
conclusion of the project.

The bill requires an enforcing agency to establish a
process for ensuring inspections are performed within three business days of a
requested inspection date, and specifies authorization of the use of
supplemental shared services agreements or the use of contracted private
on-site inspection agencies, including supplemental private on-site inspection
agencies.

The bill requires the Commissioner of Community
Affairs ("commissioner") to adopt rules and regulations to effectuate
the provisions of the bill, including rules which provide for: the use of
supplemental shared services agreements, the authorization of private on-site
inspection agency by the DCA to conduct on-site inspections, and the use of
private on-site inspection agencies by municipalities and enforcing agencies.
The bill requires that the rules and regulations allow an enforcing agency to:

(1) enter into supplemental shared service agreements
or contracts with a supplemental private on-site inspection agency to conduct
on-site inspections for the purpose of meeting all required inspection
timeframes.

(2) enter into agreements with private on-site
inspection agencies to conduct on-site inspections on a project-specific basis.

(3) authorize the owner, agent, or other authorized
person in charge of work to directly contract with an authorized private
on-site inspection agency to perform all inspections on a project-specific
basis.

The bill requires municipal construction officials to
submit an annual report detailing compliance with the code. The report is
required to include, at a minimum information related to the staffing, staff
titles, and expenses of the enforcing agency, in addition to any other
information required by the commissioner. The annual report is also required
to take into account projected work and agency resource needs for the next
budget year. The bill requires a municipality that enters into a contract for
supplemental services to provide a copy of the contract to DCA upon entering
into the contract. The bill requires that the municipal construction official
or enforcing agency maintain the above information, in addition to the
inspection log, municipal monthly activity reports, and the fee schedule and
make that information and documents available to DCA upon request.

The bill specifies that DCA may utilize the
information to determine appropriate staffing levels for the enforcing agency,
and if DCA determines that an enforcing agency has not maintained appropriate
staffing levels, DCA may require the municipality to take corrective actions to
ensure that the enforcing agency’s staffing needs are met. DCA may also take
corrective action, including the issuance of penalties, if a local enforcing agency
fails to maintain or provide the information or maintain appropriate staffing
levels.

The bill specifically allows the commissioner to
compel an enforcing agency to notify DCA of any instance where the enforcing
agency is unable to meet a deadline or other obligation, and to order
corrective action or issue penalties as necessary where an enforcing agency is
unable to meet its obligations under the "State Uniform Construction Code
Act." The bill also requires an enforcing agency that is unable to meet
its obligations under the "State Uniform Construction Code Act," to
promptly notify DCA, and allows DCA to take corrective action, including the
issuance of penalties, if an enforcing agency fails to meet its obligations.

The bill further permits inspections to be conducted
at times other than between the hours of 9 a.m. and 5 p.m. on business days, if
agreed upon by the owner and the relevant inspecting entity, whether the
enforcing agency, department, or private on-site inspection agency. Additionally,
the bill allows local contracting units to utilize competitive contracting for
the purpose of private on-site inspection agency services, as may be authorized
by rules and regulations adopted by DCA.

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