Imposes 10 percent electric public utility windfall surtax on taxpayers with allocated taxable net income in excess of $10 million under CBT.

A4698

ASSEMBLY, No. 4698

STATE OF NEW JERSEY

222nd LEGISLATURE

�

INTRODUCED MARCH 16, 2026

Sponsored by:

Assemblywoman� VERLINA REYNOLDS-JACKSON

District 15 (Hunterdon and Mercer)

SYNOPSIS

���� Imposes 10 percent electric public utility windfall
surtax on taxpayers with allocated taxable net income in excess of $10 million
under CBT.

CURRENT VERSION OF TEXT

���� As introduced.

��

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.