Capitol Report

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July 1, 2019

This is a status report provided by the New Jersey State Bar Association on recently passed and pending legislation, regulations, gubernatorial nominations and/or appointments of interest to lawyers, as well as the involvement of the NJSBA as amicus in appellate court matters.

Key bills land on governor’s desk; NJSBA raises concerns

As bills sailed through the Legislature last week, some raised concerns from New Jersey State Bar Association members regarding their practical impact on practitioners and litigants. It is now up to the governor to sign, veto or conditionally veto the bills.

Recovery of Expenses in Automobile Accidents

The governor is looking at two bills on the issue of the recovery of uncompensated medical expenses in a civil action for damages arising from an automobile accident. On May 23, the Legislature sent to the governor S-2432 (Scutari)/A-5371 (Downey), which would overturn a recent Supreme Court decision prohibiting the recovery of uncompensated medical expenses above the purchased personal injury protection limits in an automobile accident. In Haines v. Taft, 237 N.J. 271 (2019), the Supreme Court made inadmissible such expenses above the $15,000 personal injury protection (PIP) coverage, citing to the legislative history of New Jersey’s no-fault law. If the governor signs the bill, it would take effect immediately.

The NJSBA supported S-2432/A-5371 with amendments to ensure the PIP fee schedule applied to medical expenses and to prohibit balance billing by the insurance carriers. The bill on the governor’s desk does not include these amendments, but a “cleanup bill” was introduced on June 17, to address these issues. S-3963 (Scutari)/A-5639 (Downey), which was sent to the governor’s desk just three days after it was introduced, is intended to “supplant the provisions of Senate Bill No. 2432 upon the bill’s effective date for accidents occurring on or after August 1, 2019.” It clarifies the application of the PIP fee schedule and prohibition on balance billing. The bill includes additional provisions that contradict existing case law regarding the admissibility and recoverability of copayments, deductibles and expenses already paid by a health insurance provider. It also includes a provision for the recovery of attorney’s fees, which was not contemplated in the earlier bill.

The NJSBA supported the cleanup bill, insofar as it clarifies the application of the PIP fee schedule and prohibition on balance billing.

Industry groups and insurance carriers also remain concerned about the cleanup bill, including New Jersey Manufacturers, Allstate, and Insurance Council of New Jersey—all of which urged that the Aug. 1 effective date be changed to “effective immediately” to prevent two levels of recovery; the removal of the attorney fee language and prohibiting the recovery of copayments, deductibles and medical expenses paid by health insurance carriers (except in self-funded Employee Retirement Income Security Act (ERISA) plans, per federal law).  

Property Tax Installment Payments for Commercial Properties

The Legislature sent the governor a bill that would allow the repayment of excess property taxes following a successful tax appeal to be paid over a three-year period for nonresidential properties. S-2673 (Diegnan)/A-2004 (Karabinchak) was passed, primarily along party lines, to allow this arrangement for any nonresidential property owner who is due over $100,000. The bill does not permit the same three-year time period to apply for nonresidential property taxpayers who owe the municipality money following a successful reverse tax appeal. Such payment would be due and owing within 60 days, pursuant to existing case law.

The NJSBA opposed the bill, arguing that it is unnecessary, as most appeals are settled under similar payment arrangements. Assemblyman Robert Karabinchak testified that the bill would ameliorate the funding problems plagued by municipalities such as Atlantic City, which face large repayments in short periods of time, causing budgetary constraints, and burdens would fall on taxpayers. The association, along with a coalition of industry stakeholders, urged amendments to the bill, including clarification that the interest owed on the balance include the unpaid balance throughout the repayment period; that the same time period apply to reverse appeals; and that the threshold be increased to $1 million.