New Jersey-2012-A3746-Amended

An Act providing a gross income or corporation business tax credit to property owners for vegetation management near electric utility lines, supplementing P.L.1945, c.162 (C.54:10A-1 et seq.) and chapter 4 of Title 54A of the New Jersey Statutes, and amending R.S.40:64-8.

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

1. (New section) a. A property owner shall be entitled to claim a credit against the State tax otherwise due under the "Corporation Business Tax Act," P.L.1945, c.162 (C.54:10A-1 et seq.), for the cost incurred by the property owner for any vegetation management work that is likely to prevent hazardous interactions between the vegetation and any distribution lines as defined by N.J.A.C.14:5-9.2, or other electric utility infrastructure located on the property. ¹[Such] The vegetation management¹ work shall consist of the trimming or removal of vegetation, or the prevention of vegetative growth through mechanical, manual, biological, or chemical methods, in order to maintain safe conditions around electric utility infrastructure, and ensure reliable electric service.

b. To be eligible for the tax credit described in subsection a. of this section, vegetation management work shall also meet the following conditions:

(1) The ¹vegetation management¹ work shall be performed by a contractor, as defined by N.J.A.C.14:5-9.2, by a shade tree commission pursuant to R.S.40:37-1 et seq. or R.S.40:64-1 et seq., by a Licensed Tree Expert, as defined by section 2 of the "Tree Experts and Tree Care Operators Licensing Act," P.L.2009, c.237 (C.45:15C-12), or by another party under the supervision of a Licensed Tree Expert;

(2) The ¹vegetation management¹ work shall be certified by the contractor, shade tree commission, or Licensed Tree Expert as constituting vegetation management work as described in subsection a. of this section. The cost of any other work that cannot be categorized ¹[in this way] as vegetation management work¹ may not be certified and shall not be eligible even if performed simultaneously under the same contract;

(3) The ¹vegetation management¹ work shall be performed either during the tax year in which the credit is claimed, or during the immediately preceding tax year, but a credit may not be awarded for the cost of the same ¹vegetation management¹ work during each tax year.

c. The amount of the credit applied under this section against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5), for a privilege period, when taken together with any other credits allowed against the tax imposed pursuant to that section shall not exceed 50¹[%] percent¹ of the tax liability otherwise due and shall not reduce the tax liability to an amount less than the statutory minimum provided in subsection (e) of section 5 of P.L.1945, c.162 (C.54:10A-5). The priority in which credits allowed pursuant to this section and any other credits shall be taken shall be determined by the Director of the Division of Taxation.

d. The Director of the Division of Taxation shall adopt, in accordance with the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), rules and regulations necessary to effectuate the provisions of this section.

2. (New section) a. A property owner shall be entitled to claim a credit against the State tax otherwise due under the "New Jersey Gross Income Tax Act," ¹[P.L.1976, c.47 (C.54A:1-1 et seq.)] N.J.S.54A:1-1 et seq.¹, for the cost incurred by the property owner for any vegetation management work that is likely to prevent hazardous interactions between the vegetation and any distribution lines as defined by N.J.A.C.14:5-9.2, or other electric utility infrastructure located on the property. ¹[Such] The vegetation management¹ work shall consist of the trimming or removal of vegetation, or the prevention of vegetative growth through mechanical, manual, biological, or chemical methods, in order to maintain safe conditions around electric utility infrastructure, and ensure reliable electric service.

b. To be eligible for the tax credit described in subsection a. of this section, vegetation management work shall also meet the following conditions:

c. The amount of the credits applied under this section for a taxable year, when taken together with any other credits allowed against the tax imposed pursuant to N.J.S.54A:1-1 et seq., shall not exceed 50¹[%] percent¹ of the taxpayer's liability for tax for the taxable year that bears the same proportional relationship to the total amount of such liability as the amount of the taxpayer's gross income, derived from New Jersey sources and attributable to the business or professional activity in which the taxpayer employs the qualified person during that taxable year, bears to the taxpayer's entire gross income for that year. Credits allowed pursuant to this section shall be taken only after the taxpayer has taken all credits allowed under section 2 of P.L.2000, c.80 (C.54A:4-7).

d. A partnership shall not be allowed a credit under this section directly, but the amount of credit of a taxpayer in respect of a distributive share of partnership income under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., shall be determined by allocating to the taxpayer that proportion of the credit acquired by the partnership that is equal to the taxpayer's share, whether or not distributed, of the total distributive income or gain of the partnership for its taxable year ending within or with the taxpayer's taxable year.

e. The Director of the Division of Taxation shall adopt, in accordance with the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), rules and regulations necessary to effectuate the provisions of this section.

3. R.S.40:64-8 is amended to read as follows:

40:64-8. Except as hereinafter provided the initial cost of all trees planted by the commission, the cost of planting the same, the cost of the posts and boxes or guards used for the protection thereof, and the cost of the removal of any tree or part thereof dangerous to public safety shall, if the commission shall so determine, in accordance with uniform rules and regulations promulgated for this purpose, be a charge upon the real estate in front of which such tree or trees shall be planted or removed as an improvement thereof. Such cost if it is so determined that it is to be paid by the owner shall, unless paid directly to the commission be certified by it to the collector of taxes of the municipality, shall thereupon become and be a lien upon said real estate, shall be included in the next tax bill rendered to the owner or owners thereof, and be collected in the same manner as other taxes against that property.

If a property owner is charged under this section for work, any portion of which is likely to prevent hazardous interactions between vegetation and distribution lines or other electric utility infrastructure, as described in subsection a. of section 1 of P.L. , c. (C. ) (pending before the Legislature as this bill), then the portion of the charge constituting that preventative work shall be certified by the shade tree commission pursuant to paragraph (2) of subsection b. section 1 of P.L. , c. (C. ) (pending before the Legislature as this bill).

The provisions of this section shall not apply to:

a. A planting to replace a tree or trees theretofore planted by the commission;

b. A planting in connection with Arbor Day exercises or other educational demonstration.

(cf: P.L.1958, c.42, s.6)

4. This act shall take effect immediately and shall first apply to taxable years beginning January 1 next occurring after the effective date of this act.