LEGISLATIVE FISCAL ESTIMATE
[First Reprint]
SENATE, No. 217
STATE OF NEW JERSEY
221st LEGISLATURE
DATED: NOVEMBER 15, 2024
SUMMARY
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Synopsis: |
Prohibits sale and use of certain gas-powered leaf blowers; provides CBT credit for purchase of electric leaf blower that replaces gas-powered leaf blower. |
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Type of Impact: |
Multi-year State net revenue loss and cost increases; multi-year cost and revenue increases for local governments. |
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Agencies Affected: |
Department of Environmental Protection; Department of the Treasury; local governments. |
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Fiscal Impact |
Multi-Year |
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State Net Revenue Loss |
Indeterminate |
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State Cost Increase |
Indeterminate |
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Local Government Cost Increase |
Indeterminate |
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Local Government Revenue Increase |
Indeterminate |
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· The Office of Legislative Services (OLS) concludes that the bill will result in an indeterminate State net revenue loss over a multi-year period due to the corporation business tax credit provided to taxpayers for the purchase of electric leaf blowers to replace gas-powered leaf blowers.
· The OLS lacks the informational basis to project the number of businesses that will be claiming the tax credit because it is unclear how many businesses will have corporation business tax liabilities in excess of the statutory minimums to which the tax credit can be applied.
· The Department of Environmental Protection will incur some indeterminate amount of administrative costs to process tax credit applications. The State and local government law enforcement agencies will also incur an indeterminate amount of costs over a multi-year period to enforce the prohibition on gas-powered leaf blowers. The bill incentivizes the enforcement of the prohibition by permitting any penalty recovered to be retained by the enforcing government entity.
BILL DESCRIPTION
The bill prohibits the sale and use of certain gas-powered leaf blowers and provides a corporation business tax credit for the purchase of electric leaf blowers that replace gas-powered leaf blowers.
The bill prohibits the sale of gas-powered leaf blowers with two-stroke engines two years after the effective date and prohibits their use four years after the effective date. It also restricts the use of gas-powered leaf blowers with four-stroke engines in residential areas and during certain times of the year in non-residential areas.
The bill provides a corporation business tax credit for the purchase of electric leaf blowers to replace gas-powered leaf blowers. The amount of the credit cannot exceed 50 percent of the full cost of purchasing the electric leaf blower, including the cost of any batteries or charging equipment that may be required. The credit would be available for six taxable years beginning on or after January 1 following the effective date of the bill. A taxpayer may carry forward the tax credit for up to seven years if it cannot be utilized in the privilege period in which it was awarded.
Any commercial entity that violates the provisions of the bill would receive a warning for a first offense and would be subject to a civil penalty of not less than $500 nor more than $1,000 for each subsequent offense. Other persons would receive a warning for a first offense and would be subject to a civil penalty of $25 for each subsequent offense. In the case of a continuing violation, each day during which the violation continues would constitute a separate offense. The bill authorizes State and local law enforcement agencies to have the exclusive authority of enforcing the bill's provisions, and any penalties recovered would be retained by these enforcing agencies.
FISCAL ANALYSIS
EXECUTIVE BRANCH
None received.
OFFICE OF LEGISLATIVE SERVICES
The OLS concludes that the bill will result in an indeterminate State net revenue loss over a multi-year period due to the corporation business tax credit provided to taxpayers for the purchase of electric leaf blowers to replace gas-powered leaf blowers.
The magnitude of the revenue loss will depend on several factors, including the number of corporation business taxpayers that purchase electric leaf blowers to replace gas-powered models, the cost of electric leaf blowers and related equipment, and the tax liability of the businesses claiming the credit. The OLS, however, lacks the informational basis to project the number of businesses that will be claiming the tax credit because it is unclear how many businesses will have corporation business tax liabilities in excess of the statutory minimums to which the tax credit can be applied.
The Department of Environmental Protection will incur some indeterminate amount of administrative costs to process tax credit applications. The State and local government law enforcement agencies will also incur an indeterminate amount of costs over a multi-year period to enforce the prohibition on gas-powered leaf blowers. The bill incentivizes the enforcement of the prohibition by permitting any penalty recovered to be retained by the enforcing government entity.
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Section: |
Revenue, Finance, and Appropriations |
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Analyst: |
Assistant Fiscal Analyst |
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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.).