Bill Text: NJ A3885 | 2024-2025 | Regular Session | Introduced
Bill Title: Imposes additional annual registration fee for electric vehicles; reduces rate of highway fuel taxes; authorizes DOT to conduct alternative revenue feasibility study.
Spectrum: Partisan Bill (Democrat 4-0)
Status: (Introduced) 2024-02-27 - Introduced, Referred to Assembly Transportation and Independent Authorities Committee [A3885 Detail]
Download: New_Jersey-2024-A3885-Introduced.html
Sponsored by:
Assemblywoman ANDREA KATZ
District 8 (Atlantic and Burlington)
Assemblywoman HEATHER SIMMONS
District 3 (Cumberland, Gloucester and Salem)
Assemblyman CODY D. MILLER
District 4 (Atlantic, Camden and Gloucester)
Co-Sponsored by:
Assemblymen Hutchison and Bailey
SYNOPSIS
Imposes additional annual registration fee for electric vehicles; reduces rate of highway fuel taxes; authorizes DOT to conduct alternative revenue feasibility study.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning the financing of transportation infrastructure in the State, supplementing chapter 3 of Title 39 of the Revised Statutes and P.L.1984, c.73, and amending P.L.2010, c.22 and P.L.1990, c.42.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. (New section) a. As used in this section:
"Chief administrator" means the Chief Administrator of the New Jersey Motor Vehicle Commission.
"Commercial electric vehicle" means any electric vehicle that is operated in interstate or intrastate commerce and used for the transportation of persons for hire, compensation or profit, or designed or used primarily for the transportation of property.
"Electric vehicle" means any motor vehicle that is propelled solely by an electric motor or energy storage device, which electric motor or energy storage device can be charged from an electricity supply external to the vehicle.
"Passenger electric vehicle" means any electric vehicle that is not a commercial electric vehicle.
b. In addition to any other motor vehicle registration fees imposed pursuant to the provisions of chapter 3 of Title 39 of the Revised Statutes, the chief administrator shall impose and collect an annual registration fee of $300 for each passenger electric vehicle during the fiscal year beginning on July 1, 2025, and each fiscal year thereafter;
c. In addition to any other motor vehicle registration fees imposed pursuant to the provisions of chapter 3 of Title 39 of the Revised Statutes, the chief administrator shall impose and collect an annual registration fee of $450 for each commercial electric vehicle during the fiscal year beginning July 1, 2025, and each fiscal year thereafter.
d. (1) In the case of a new passenger or commercial electric vehicle purchased or leased in the State, the fee shall be collected by the person required to collect the retail sales tax imposed on that motor vehicle pursuant to subsection a. of section 3 of P.L.1966, c.30 (C.54:32B-3). That person shall be personally liable for collecting, reporting, and remitting the fee in a manner prescribed by the chief administrator.
(2) In the case of a new passenger or commercial electric vehicle purchased or leased in a jurisdiction other than this State, the fee and any forms required by the chief administrator shall be remitted directly to the chief administrator. If the seller or lessor of the new passenger or commercial electric vehicle in that other jurisdiction is required to collect the retail sales tax imposed on that electric vehicle pursuant to subsection a. of section 3 of P.L.1966, c.30 (C.54:32B-3) and is authorized to apply for the issuance and filing of a certificate of ownership pursuant to R.S.39:10-11, that seller or lessor may collect, report, and remit the fee in a manner prescribed by the chief administrator.
e. All revenues derived from the fee imposed pursuant to this section shall be collected by the chief administrator and remitted to the State Treasurer for deposit into the Transportation Trust Fund Account, as required pursuant to section 20 of P.L.1984, c.73 (C.27:1B-20).
f. The chief administrator, in accordance with the provisions of the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), shall promulgate rules and regulations to effectuate the purposes of this section.
2. Section 3 of P.L.2010, c.22 (C.54:39-103) is amended to read as follows:
3. a. A tax is imposed on fuel used or consumed in this State as follows:
(1) Motor fuel:
(a) at the rate of [10.5] 7 cents per gallon for:
gasoline and
blended fuel that contains gasoline or that is intended for use as gasoline;
(b) at the rate of [13.5] 9 cents per gallon for:
diesel fuel,
blended fuel that contains diesel fuel or that is intended for use as diesel fuel, and
kerosene;
(2) Liquefied Petroleum Gas:
at the rate of one-half of the tax imposed under subsection a. of this section on gasoline, or [5.25] 3.5 cents per gallon;
(3) Aviation gasoline:
at the rate of 10.5 cents per gallon.
b. In addition to the tax, if any, imposed pursuant to subsection a. of this section a tax is imposed on aviation fuel for distribution to a general aviation airport at the rate of 2 cents per gallon.
c. The taxes imposed by this section are imposed on the consumer, but shall be precollected pursuant to the terms of the "Motor Fuel Tax Act," P.L.2010, c.22 (C.54:39-101 et seq.), for the facility and convenience of the consumer.
(cf: P.L.2010, c.79, s.2)
3. Section 3 of P.L.1990, c.42 (C.54:15B-3) is amended to read as follows:
3. a. (1) (a) There is imposed on each company which is engaged in the refining or distribution, or both, of petroleum products other than highway fuel and aviation fuel and which distributes such products in this State a tax at the rate of seven percent of its gross receipts derived from the first sale of petroleum products within this State, and there is imposed on each company which is engaged in the refining or distribution, or both, of highway fuel a tax at [the] a rate [of 12.85 percent], as [adjusted] determined pursuant to subsection c. of this section, of its gross receipts derived from the first sale of those products within this State.
(b) The applicable tax rate for gasoline, blended fuel that contains gasoline or is intended for use as gasoline, and liquefied petroleum gas, which are taxed as a highway fuel pursuant to subparagraph (a) of this paragraph, shall be converted to a cents-per-gallon rate, rounded to the nearest tenth of a cent, and adjusted quarterly by the director, effective on July 1, October 1, January 1, and April 1, based on the average retail price per gallon of unleaded regular gasoline in the State, as determined in the most recent survey of the retail price per gallon of gasoline that includes a Statewide representative random sample conducted by the Board of Public Utilities, Office of the Economist, or its successor.
(c) The cents-per-gallon rate determined pursuant to subparagraph (b) of this paragraph shall not be less than the rate determined for the average retail price per gallon of unleaded gasoline in the State on July 1, 2016.
(d) The applicable tax rate for diesel fuel, blended fuel that contains diesel fuel or is intended for use as diesel fuel, and kerosene, other than aviation grade kerosene, which are taxed as a highway fuel pursuant to subparagraph (a) of this paragraph, shall be converted to a cents-per-gallon rate, rounded to the nearest tenth of a cent, and adjusted quarterly by the director, effective on July 1, October 1, January 1, and April 1, based on the average retail price per gallon of number 2 diesel in the State, as determined in the most recent survey of retail diesel fuel prices that includes a Statewide representative random sample conducted by the Board of Public Utilities, Office of the Economist, or its successor.
Notwithstanding the provisions of subparagraph (a) of this paragraph to the contrary, for the period from the 2016 implementation date through December 31, 2016, no rate of tax shall be applied to diesel fuel, blended fuel that contains diesel fuel or is intended for use as diesel fuel, or kerosene, other than aviation grade kerosene; for the period from January 1, 2017 through June 30, 2017, the applicable rate for those fuels shall be 70 percent of the rate otherwise determined pursuant to subparagraph (a) of this paragraph, and for July 1, 2017 and thereafter the applicable rate for those fuels determined pursuant to subparagraph (a) of this paragraph.
(e) The cents-per-gallon rate determined pursuant to subparagraph (d) of this paragraph shall not be less than the rate determined for the average retail price per gallon of number 2 diesel in the State on July 1, 2016.
(f) The applicable tax rate for fuel oil determined pursuant to subparagraph (a) of this paragraph shall be converted to a cents-per-gallon rate, rounded to the nearest tenth of a cent, and adjusted quarterly by the director, effective on July 1, October 1, January 1, and April 1, to reflect the average price per gallon, without State or federal tax included, of retail sales of number 2 fuel oil in the State, as determined in the most recent survey of retail diesel fuel prices that included a Statewide representative random sample conducted by the Board of Public Utilities, Office of the Economist, or its successor.
(g) The cents-per-gallon rate determined pursuant to subparagraph (f) of this paragraph shall not be less than the rate determined for the average price per gallon, without State or federal tax included, of retail sales of number 2 fuel oil in the State on July 1, 2016.
(h) On and after the 10th day following a certification by the review council pursuant to subsection c. of section 19 of P.L.2016, c.57 (C.52:18A-257), no tax shall be imposed pursuant to this paragraph.
(2) (a) In addition to the tax, if any, imposed by paragraph (1) of this subsection, a cents-per-gallon tax is imposed on each company's gross receipts derived from the first sale of petroleum products within this State on gasoline, blended fuel that contains gasoline or that is intended for use as gasoline, liquefied petroleum gas, and aviation fuel at the rate of [four] 2.64 cents per gallon; and
(b) In addition to the tax, if any, imposed by paragraph (1) of this subsection, a cents-per-gallon tax is imposed on each company's gross receipts derived from the first sale of petroleum products within this State on diesel fuel, blended fuel that contains diesel fuel or is intended for use as diesel fuel, and kerosene, other than aviation grade kerosene, at the rate of four cents per gallon before July 1, 2017 and at the rate of [eight] 5.3 cents per gallon on and after July 1, 2017.
b. There is imposed on each company that imports or causes to be imported, other than by a company subject to and having paid the tax on those imported petroleum products that have generated gross receipts taxable under subsection a. of this section, petroleum products for use or consumption by it within this State a tax at the rate or rates, determined pursuant to subsection a. of this section, on the consideration given or contracted to be given and the gallonage for such petroleum products if the consideration given or contracted to be given for all such deliveries made during a quarterly period exceeds $5,000.
c. (1) For State fiscal years 2018 [through 2026] and each State fiscal year thereafter, the rate of tax imposed on highway fuel pursuant to subsection a. of this section shall be adjusted annually so that the total revenue derived from highway fuel shall not exceed the highway fuel cap amount calculated pursuant to this subsection.
(2) The State Treasurer shall [, on or before December 31, 2016,] determine the highway fuel cap amount as the sum of:
(a) the taxes collected for State Fiscal Year 2016 pursuant to paragraphs (1) and (2) of subsection a. of section 3 of P.L.2010, c.22 (C.54:39-103) on highway fuel[,] ;
(b) the amount derived from taxing the gallonage of highway fuel subject to motor fuel tax in State Fiscal Year 2016 at the rate of four cents per gallon[,] ; and
(c) the amount that would have been derived from taxing the gallonage of highway fuel subject to motor fuel tax in State Fiscal Year 2016 at the rate of 23 cents per gallon; except that
(d) during State Fiscal Years 2025 and each State Fiscal Year thereafter, the highway fuel cap amount shall be reduced by 33 percent of the amount otherwise calculated pursuant to this paragraph.
(3) On or before August 15 of each State Fiscal Year following State Fiscal Year 2017, the State Treasurer and the Legislative Budget and Finance Officer shall determine the total revenue derived from:
(a) the taxes collected for the prior State Fiscal Year pursuant to paragraphs (1) and (2) of subsection a. of section 3 of P.L.2010, c.22 (C.54:39-103) on highway fuel[,] ;
(b) the revenue that would be derived from imposing the tax pursuant to paragraph (2) of subsection a. of this section on highway fuel at the rate of [four] 2.64 cents per gallon[,] ; and
(c) the revenue derived from the taxation of highway fuel pursuant to paragraph (1) of subsection a. of this section.
(4) Upon consideration of the result of the determination pursuant to paragraph (3) of this subsection, and consultation with the Legislative Budget and Finance Officer, the State Treasurer shall determine the rate of tax to be imposed on highway fuel pursuant to subsection a. of this section that will result in revenue from:
(a) the taxes collected on highway fuel for the current State Fiscal Year pursuant to paragraphs (1) and (2) of subsection a. of section 3 of P.L.2010, c.22 (C.54:39-103)[,] ;
(b) the revenue derived from the tax imposed pursuant to paragraph (2) of subsection a. of this section on highway fuel at the rate of [four] 2.64 cents per gallon for the current State Fiscal Year[,] ; and
(c) the revenue derived from the taxation of highway fuel pursuant to paragraph (1) of subsection a. of this section equaling the highway fuel cap amount determined pursuant to paragraph (2) of this subsection, as adjusted pursuant to paragraph (5) of this subsection; and that rate shall take effect on October 1 of that year.
(5) If the actual revenue determined pursuant to paragraph (3) of this subsection exceeds the highway fuel cap amount determined pursuant to paragraph (2) of this subsection, then the highway fuel cap amount for the succeeding year shall be decreased by the amount of the excess in setting the rate pursuant to paragraph (4) of this subsection. If the actual revenue determined pursuant to paragraph (3) of this subsection is less than the highway fuel cap amount determined pursuant to paragraph (2) of this subsection, then the highway fuel cap amount for the succeeding year shall be increased by the amount of the shortfall in setting the rate pursuant to paragraph (4) of this subsection.
(cf: P.L.2016, c.57, s.14)
4. (New Section) The State shall annually appropriate from the General Fund, from the revenues collected under the "Sales and Use Tax Act," P.L.1966, c.30 (C.54:32B-1 et seq.) for deposit into the "Transportation Trust Fund Account," established pursuant to section 20 of P.L.1984, c.73 (C.27:1B-20), such amounts as are necessary to support all debt service obligations of the Transportation Trust Fund Authority that remain outstanding for the current year after all other dedicated resources have been exhausted, subject to the approval of the Director of the Division of Budget and Accounting in the Department of the Treasury.
5. (New section) Notwithstanding any provision of section 19 of P.L.2016, c.57 (C.52:18A-257) to the contrary, the amendments to section 3 of P.L.2010, c.22 (C.54:39-103) in section 2 of P.L. , c. (pending before the Legislature as this bill) shall not cause the review council to certify for the purposes of subparagraph (h) of paragraph (1) of subsection a. of section 3 of P.L.1990, c.42 (C.54:15B-3) to the director that the scheduled implementation of P.L.2016, c.57 (C.54:15B-13 et al.) has been impeded.
6. (New section) a. The Department of Transportation, in consultation with the Transportation Trust Fund Authority and the Office of Revenue and Economic Analysis in the Department of the Treasury, shall conduct a study and make recommendations concerning the dedication of alternative sources of revenue to the Transportation Trust Fund, which revenues may be necessary to offset future revenue reductions from the Motor Fuels Tax and the Petroleum Products Gross Receipts Tax due to the decreased consumption of gasoline, diesel, and other highway fuels. The purpose of this study shall be to identify one or more sources of revenue, other than the Motor Fuels Tax and the Petroleum Products Gross Receipts Tax, that may be relied upon to fund the Transportation Trust Fund in future years.
b. The department shall issue a written report of its findings and recommendations pursuant to subsection a. of this section. At a minimum, the report developed pursuant to this section shall:
(1) analyze the feasibility of dedicating alternative sources of revenue to the Transportation Trust Fund to ensure that any long-term reductions in revenue from the Motor Fuels Tax and Petroleum Products Gross Receipts Tax do not prevent the Transportation Trust Fund Authority from paying its debt service obligations and funding the State's transportation capital program. At a minimum, this analysis shall examine the potential implementation of:
(a) a mileage-based user fee;
(b) an additional registration fee imposed on the owners of all or some motor vehicles;
(c) a carbon or pollution tax;
(d) an additional tax or fee imposed on the electricity used to charge electric vehicles;
(e) an increased dedication of revenue from the Sales and Use Tax; and
(f) an increased dedication of revenue from the Corporation Business Tax; and
(2) make recommendations for the dedication of alternative sources of revenue, other than the Motor Fuels Tax and the Petroleum Products Gross Receipts Tax, to the Transportation Trust Fund.
c. No later than August 31, 2026, the department shall submit the report to the Governor and, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), to the Legislature. The department shall publish an electronic copy of the report on the department's official Internet website.
7. (New section) Notwithstanding any provision of the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.) to the contrary, the Director of the Division of Taxation in the Department of the Treasury shall adopt, immediately upon filing with the Office of Administrative Law and no later than the 30th day after the date of enactment of P.L. , c. (pending before the Legislature as this bill), such rules and regulations as the director deems necessary to implement the provisions of this act, which regulations may thereafter be amended by the director.
8. This act shall take effect on July 1, 2024.
STATEMENT
This bill would ensure greater tax fairness between the owners of gas powered vehicles and electric vehicles. Namely, the bill would establish an additional annual registration fee for electric vehicles, provide for a reduction in the State tax on highway fuels under both the Petroleum Products Gross Receipts (PPGR) Tax and the Motor Fuels Tax, and require the Department of Transportation to study and make recommendations concerning the dedication of alternative sources of revenue to the Transportation Trust Fund (TTF).
Additional Annual Registration Fee for Electric Vehicles
The bill first requires the Chief Administrator (chief administrator) of the New Jersey Motor Vehicle Commission to impose and collect an additional annual registration fee for each passenger and commercial electric vehicle in the State. Under the bill, the amount of the additional annual registration fee would be $300 for each passenger electric vehicle and $450 for each commercial electric vehicle during the fiscal years beginning on and after July 1, 2025. Notably, the bill requires all revenues derived from these additional registration fees to be collected by the chief administrator and remitted to the State Treasurer for deposit into the TTF.
Reduction of Highway Fuel Taxes
Next, the bill would enact a 33 percent reduction in the taxes imposed on highway fuels under both the Motor Fuel Tax and the Petroleum Products Gross Receipts Tax (PPGRT), collectively referred to as the "gas tax," beginning with State Fiscal Year 2025. The bill would also permanently extend the procedure by which the rate of tax imposed on highway fuels under the PPGRT is calculated. Currently, the Motor Fuel Tax is fixed at 10.5 cents for gasoline and 13.5 cents for diesel fuel, and the PPGR tax is set at 31.8 cents for gasoline and 35.8 cents for diesel fuel.
The Motor Fuel Tax on gasoline would be lowered from 10.5 cents to 7 cents per gallon, and the motor fuel tax on diesel would be lowered from 13.5 cents to 9 cents per gallon. The motor fuel tax on liquefied petroleum gas would likewise be lowered from 5.25 cents per gallon to 3.5 cents given that the tax rate for these products are set at one-half of the tax imposed on gasoline.
Under current law, the tax rate imposed on highway fuels under the PPGRT is annually adjusted by the State Treasurer to ensure that the State realizes a statutorily prescribed revenue target. All revenues collected are deposited into the TTF to support transportation infrastructure projects and debt service on transportation bonds. This annual adjustment mechanism is currently set to expire at the conclusion of State Fiscal Year 2026. This bill would permanently extend this annual adjustment mechanism.
The bill also reduces the rate of tax imposed on highway fuels under the PPGRT by lowering the statutorily prescribed revenue target, also referred to as the "highway fuel cap amount," by 33 percent. The highway fuel cap amount is based on State Fiscal Year 2016 sum of: (1) the taxes collected on the 12.48 percent and four cent tax rates for highway fuels taxes, (2) the amount derived from taxing the gallonage of highway fuel subject to the four cent motor fuel tax, and (3) the amount that would have been derived from taxing the gallonage of highway fuel subject to the motor fuel tax at a rate of 23 cents per gallon.
To ensure adequate funding for the TTF, the bill would require the State to annually appropriate from the General Fund such amounts as are necessary from the revenues collected under the "Sales and Use Tax Act," P.L.1966, c.30 (C.54:32B-1 et seq.) into the TTF to support all debt service obligations of the Transportation Trust Fund Authority's (TTFA) for the current year.
Alternative Revenue Feasibility Study
Finally, the bill requires the Department of Transportation (department), in consultation with the TTFA and the Office of Revenue and Economic Analysis in the Department of the Treasury, to study and make recommendations and a repot concerning the dedication of alternative sources of revenue to the TTF. These revenues may be necessary to offset future revenue reductions from the Motor Fuels Tax (MFT) and the Petroleum Products Gross Receipts Tax (PPGRT) due to the decreased consumption of gasoline, diesel, and other highway fuels. The purpose of this study will be to identify one or more sources of revenue, other than the Motor Fuels Tax and the Petroleum Products Gross Receipts Tax, that may be relied upon to fund the TTF in future years.
At a minimum, the report would be required to: (1) analyze the feasibility of dedicating alternative sources of revenue to the TTF; and (2) make recommendations for the dedication of alternative sources of revenue, other than the MFT and the PPGRT, to the TTF.
No later than August 31, 2026, the department is required to submit the report to the Governor and the Legislature as well as publish an electronic copy of the report on the department's official Internet website.
