S2715

An Act establishing an electric public utility windfall surtax and supplementing P.L.1945, c.162 (C.54:10A-1 et seq.).

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. a. For the purposes of this section:

“Allocated taxable net income” means taxable net income as defined in subsection (w) of section 4 of P.L.1945, c.162 (C.54:10A-4).

“Electric public utility” means a public utility, as that term is defined in R.S.48:2-13, that transmits and distributes electricity to end users within this State.

“Taxpayer” means an electric public utility that is subject to tax as provided in the “Corporation Business Tax Act (1945),” P.L.1945, c.162 (C.54:10A-1 et seq.).

“Utility assistance program” means any current or successor State program that offers financial assistance for utility services to residential customers, including, but not limited to: the Winter Termination Program established pursuant to P.L.2021, c.317 (C.40A:5A-28 et al.); any utility assistance program supported through the “Universal Service Fund,” established pursuant to section 12 of P.L.1999, c.23 (C.48:6-30); the “Lifeline Credit Program,” established pursuant to P.L.1979, c.197 (C.48:2-29.15 et seq.); the “Tenants’ Lifeline Assistance Program,” established pursuant to P.L.1981, c.210 (C.48:2-29.30 et seq.); the “Low Income Home Energy Assistance Program,” established pursuant to 42 U.S.C. s.8621 et seq.; the “Low Income Household Water Assistance Program,” established pursuant to the “Consolidated Appropriations Act of 2021,” Pub.L. 116-260; the Payment Assistance for Gas and Electric program, administered pursuant to R.S.46:30B-74; and any other utility assistance program administered by the State.

b. In addition to the tax paid by each taxpayer determined pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5), each taxpayer that has allocated taxable net income in excess of $10,000,000 for privilege periods beginning on and after January 1 of the calendar year next following the effective date of P.L. , c. (pending before the Legislature as this bill) shall pay a surtax, to be known as the electric public utility windfall surtax, equal to 10 percent of the allocated taxable net income of the taxpayer. The electric public utility windfall tax shall be due and payable in accordance with section 15 of P.L.1945, c.162 (C.54:10A-15) and shall be administered pursuant to the provisions of P.L.1945, c.162 (C.54:10A-1 et seq.). Notwithstanding the provisions of any other law to the contrary, no credits shall be allowed against the electric public utility windfall surtax computed under this section except for credits for installment payments, estimated payments made with a request for an extension of time for filing a return, or overpayments from prior privilege periods.

c. Notwithstanding any other provision of law to the contrary, the gross amount of all revenues received by the State from the electric public utility windfall surtax pursuant to this section, except for amounts credited to the special account in the General Fund created pursuant to Article VIII, Section II, paragraph 6 of the New Jersey Constitution, shall be annually appropriated to the Board of Public Utilities for the purpose of funding utility assistance programs.

d. Notwithstanding any other provision of law to the contrary, the board shall not approve any rate increase or charge to ratepayers that includes the cost of compliance with this section.

2. This act shall take effect immediately and shall apply to privilege periods beginning on or after January 1 of the year next following the enactment of P.L. , c. (C. ) (pending before the Legislature as this bill).

STATEMENT

This bill imposes a 10 percent surtax, to be called the electric public utility windfall surtax, on electric public utilities with allocated taxable net income in excess of $10 million to fund vital utility assistance programs that annually serve hundreds of thousands of people in this State.

The bill defines “allocated taxable net income” to mean the same as the term “taxable net income” is defined in the “Corporation Business Tax Act,” N.J.S.A.54:10A-1 et seq. for purposes of calculating a taxpayer’s corporation business tax liability.

The electric public utility windfall surtax is to be imposed in addition to the taxpayer’s regular corporation business tax liability. No credits are to be allowed against the electric public utility windfall surtax, except for credits for installment payments, estimated payments made with a request for an extension of time for filing a return, or overpayments from prior privilege periods.

All revenues collected from the electric public utility windfall surtax, except for amounts constitutionally dedicated for open space, farmland, and historic preservation, are to be annually appropriated to the Board of Public Utilities (board) for the funding of utility assistance programs. The bill prohibits the board from approving any rate increase or charge to ratepayers that includes the cost of compliance with its provisions.

The board approved an increase in electricity rates, which will become effective in June 2025. According to the board, this increase will raise electricity bills by approximately 17 to 20 percent, depending on a ratepayer’s electric public utility. Electricity and gas are not luxuries; they are essential services powering homes, schools, medical devices, and transportation. As the cost of living continues to rise and many wages stagnate, New Jersey residents need protection from utility rate increases, which exacerbate the effects of inflation on consumers.

This bill aims to safeguard ratepayers by implementing regulatory measures that promote fairness and transparency in pricing. This bill is designed to ensure that excessive profits of electric public utilities are taxed and that the resulting revenues benefit utility assistance programs, without passing through the costs of compliance with the bill to ratepayers. This measure is a crucial step in addressing economic hardships and promoting fair electric public utility and gas public utility pricing. New Jersey families, individuals, and businesses deserve reliable, affordable energy without facing undue financial strain.