Office of Legislative Services
State House Annex
P.O. Box 068
Trenton, New Jersey 08625
Legislative Budget and Finance Office
Phone (609) 847-3105
Fax (609) 777-2442
www.njleg.state.nj.us
LEGISLATIVE FISCAL ESTIMATE
SENATE, No. 2951
STATE OF NEW JERSEY
221st LEGISLATURE
DATED: JULY 2, 2024
SUMMARY
Synopsis: Authorizes provision of monetary awards to whistleblowers who
report State tax law violations committed by employers in construction
industry.
Type of Impact: Increase in both State revenues and State expenditures.
Agencies Affected: Department of the Treasury.
Office of Legislative Services Estimate
Fiscal Impact Annual
State Revenue Increase Indeterminate
State Expenditure Increase Indeterminate
The Office of Legislative Services (OLS) determines that the bill will result in an indeterminate
increase in both State revenues and expenditures, the net effect of which will be dependent on
the extent to which any increase in revenue from enforcement activities offsets the increase in
expenditures driven by reward payments.
BILL DESCRIPTION
This bill requires the Department of the Treasury to provide monetary awards to
whistleblowers who report tax law violations committed by employers in the construction
industry.
Under the bill, if the department proceeds with an administrative or judicial action against
an employer in the construction industry and determines that the action is based on specific
and credible information brought to the department by an individual, the director is required
to provide that individual an award of at least 15 percent in most circumstances, but not more
than 30 percent, of the proceeds collected as a result of the action or from any settlement in
response to that action.
If the department determines that the claim for an award pursuant to the bill is brought by
an individual who planned and initiated the actions that led to the violation resulting in the FE to S2951
2
administrative or judicial action in which that individual is a party, the bill permits the
department to reduce the amount of the award. In addition, if such an individual is convicted
of criminal conduct arising from the individual’s role in the violation, then the department is
not permitted to provide an award to that individual. The following individuals are also
ineligible to receive an award under the bill: (1) an individual who obtained information
through the individual’s official duties as an employee of the Department of the Treasury; and
(2) an individual who filed a claim for an award based on information obtained from an
ineligible individual for the purpose of avoiding the rejection of the claim that would have
resulted if the claim was filed by the ineligible individual.
The bill protects any employee, as defined by the bill, from retaliatory action under the
provisions of the Conscientious Employee Protection Act.
FISCAL ANALYSIS
EXECUTIVE BRANCH
None received.
OFFICE OF LEGISLATIVE SERVICES
The OLS determines that the bill will result in an indeterminate increase in both State revenue
and expenditures. The bill provides incentives for employees of construction companies to report
tax violations, which may increase administrative and judicial penalties. While the payment of
rewards will generate an increase in State expenditures, to the extent that the potential rewards
provide an incentive for increased reporting of violations these costs may be mitigated by an
aggregate increase in successful administrative or judicial actions against construction companies.
The bill provides for awards of up to 30 percent of the proceeds connected to any case, subject
to the various restrictions outlined in the bill. In order to determine a range of potential outcomes,
OLS would need information on the historical annual level of related administrative and judicial
actions and determine what portion of the claims would be eligible for the various awards in
addition to an estimate of the increase in fines directly attributable to whistleblower activity in
future periods. Absent of this information, it is not possible to accurately forecast the potential
financial outcomes of the legislation.
Section: Commerce, Labor and Industry
Analyst: John Gaudioso
Assistant Fiscal Analyst
Approved: Thomas Koenig
Legislative Budget and Finance Officer
This legislative fiscal estimate has been produced by the Office of Legislative Services due to the
failure of the Executive Branch to respond to our request for a fiscal note.
This fiscal estimate has been prepared pursuant to P.L.1980, c.67 (C.52:13B-6 et seq.).