"End Data Center Tax Credits Act"; reduces tax credits available for Next New Jersey Program.*

A5165 1R

[First Reprint]

ASSEMBLY, No. 5165

STATE OF NEW JERSEY

222nd LEGISLATURE

�

INTRODUCED JUNE 1, 2026

Sponsored by:

Assemblyman� ANDREW MACURDY

District 21 (Middlesex, Morris, Somerset and Union)

Assemblyman� BALVIR SINGH

District 7 (Burlington)

Assemblywoman� ANNETTE QUIJANO

District 20 (Union)

Co-Sponsored by:

Assemblymen Bailey, Walker and Assemblywoman Brennan

SYNOPSIS

����� "End Data Center
Tax Credits Act"; reduces tax credits available for Next New Jersey
Program.

CURRENT VERSION OF TEXT

���� As reported by the Assembly State and Local
Government Committee on June 23, 2026, with amendments.

��

An Act

1
[
concerning tax
credit incentives for energy storage and cost relief to ratepayers
]

reducing the availability of tax credits for the
Next New Jersey Program
1
,
designated as the "End Data Center Tax Credits Act,"
1
and
1

amending
1
[
various parts
of the statutory law, and supplementing P.L.2025, c.136 and Title 54A of the
New Jersey Statutes
]

P.L.2020, c.156
1
.

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

�����
1.�� Section
98 of P.L.2020, c.156 (C.34:1B-362) is amended to read as follows:

���� 98. a. The combined value of
all tax credits awarded under the "Historic Property Reinvestment
Act," sections 2 through 8 of P.L.2020, c.156 (C.34:1B-270 through
34:1B-276); the "Brownfields Redevelopment Incentive Program Act,"
sections 9 through 19 of P.L.2020, c.156 (C.34:1B-277 through 34:1B-287); the
"New Jersey Innovation Evergreen Act," sections 20 through 34 of
P.L.2020, c.156 (C.34:1B-288 through 34:1B-302); the "Food Desert Relief
Act," sections 35 through 42 of P.L.2020, c.156 (C.34:1B-303 through
34:1B-310); the "New Jersey Aspire Program Act," sections 54 through
67 of P.L.2020, c.156 (C.34:1B-322 through 34:1B-335); the "Emerge Program
Act," sections 68 through 81 of P.L.2020, c.156 (C.34:1B-336 et al.);
section 6 of P.L.2010, c.57 (C.34:1B-209.4); the "Cultural Arts Incentives
Program Act," P.L.2023, c.197 (C.34:1B-383 et al.); the "Next New
Jersey Program Act," P.L.2024, c.49 (C.34:1B-394 et al.); P.L.2025, c.111
(C.55:14K-106 et al.);
[
and
]

1
and
1

the "Next New Jersey Manufacturing Program Act," P.L.2025, c.123
(C.34:1B-403 et al.)
1
[
; and the
"End Data Center Tax Credits Act," P.L. , c. (C. )
(pending before the Legislature as this bill)
]
1
shall not exceed an
overall cap of $11.5 billion over a nine-year period, subject to the conditions
and limitations set forth in this section.� Of this $11.5 billion, $2.5 billion
shall be reserved for transformative projects approved under the Aspire Program.

���� b. (1) The total value of tax
credits awarded under any constituent program of the "New Jersey Economic
Recovery Act of 2020," P.L.2020, c.156 (C.34:1B-269 et al.); the
"Cultural Arts Incentives Program Act," P.L.2023, c.197 (C.34:1B-383
et al.); the "Next New Jersey Program Act," P.L.2024, c.49
(C.34:1B-394 et al.), P.L.2025, c.111 (C.55:14K-106 et al.); and the �Next New
Jersey Manufacturing Program Act,� P.L.2025, c.123 (34:1B-403 et al.) shall be
subject to the following limitations, except as otherwise provided in
subsection c. of this section:

���� (a)�� for tax credits awarded
under the "Historic Property Reinvestment Act," sections 2 through 8
of P.L.2020, c.156 (C.34:1B-270 through 34:1B-276), the total value of tax
credits annually awarded during each of the first six years of the nine-year
period shall not exceed $50 million;

���� (b) (i) for tax credits
awarded under the "Brownfields Redevelopment Incentive Program Act,"
sections 9 through 19 of P.L.2020, c.156 (C.34:1B-277 through 34:1B-287), the
total value of tax credits annually awarded during each of the first six years
of the nine-year period shall not exceed $50 million and the total value of tax
credits awarded over the entirety of the nine-year period shall not exceed
$100,000,000;

���� (ii) from the tax credits made
available to the "Brownfields Redevelopment Incentive Program Act,"
sections 9 through 19 of P.L.2020, c.156 (C.34:1B-277 through 34:1B-287), the
sum of $200,000,000 in tax credits shall be allocated to the New Jersey Housing
and Mortgage Finance Agency, established pursuant to P.L.1983, c.530
(C.55:14K-1 et seq.), which tax credits shall be sold through competitive
auctions conducted pursuant to sections 3 through 7 of P.L.2025, c.111
(C.55:14K-106 through 55:14K-110).� All proceeds of the tax credit auctions
shall be used by the New Jersey Housing and Mortgage Finance Agency for the
purposes authorized in subsection b. of section 4 of P.L.2025, c.111
(C.55:14K-107).� Notwithstanding any provision of law or regulation to the
contrary, the tax credits reallocated to the New Jersey Housing and Mortgage
Finance Agency shall not be subject to any requirements or conditions of the
"New Jersey Economic Recovery Act of 2020," P.L.2020, c.156
(C.34:1B-269 et al.), as amended or supplemented;

���� (c)�� for tax credits awarded
under the "New Jersey Innovation Evergreen Act," sections 20 through
34 of P.L.2020, c.156 (C.34:1B-288 through 34:1B-302), the total value of tax
credits annually awarded during each of the first six years of the nine-year
period shall not exceed $60 million and the total value of tax credits awarded
over the entirety of the nine-year period shall not exceed $300,000,000;

���� (d)�� for tax credits awarded
under the "Food Desert Relief Act," sections 35 through 42 of
P.L.2020, c.156 (C.34:1B-303 through 34:1B-310), the total value of tax credits
annually awarded during each of the first six years of the nine-year period shall
not exceed $40 million;

���� (e)�� for tax credits awarded
under the "Cultural Arts Incentives Program Act," P.L.2023, c.197
(C.34:1B-383 et al.), the total value of tax credits awarded during the
nine-year period shall not exceed $1,200,000,000;

���� (f)�� for tax credits awarded
under the "New Jersey Aspire Program Act," sections 54 through 67 of
P.L.2020, c.156 (C.34:1B-322 through 34:1B-335), and the "Emerge Program
Act," sections 68 through 81 of P.L.2020, c.156 (C.34:1B-336 et al.), not
including tax credits awarded for transformative projects, the total value of
tax credits annually awarded during each of the first six years of the
nine-year period shall not exceed $1.1 billion.� If the authority awards tax
credits in an amount less than the annual limitation, then the uncommitted
portion of the annual limitation shall be made available for qualified offshore
wind projects awarded under section 6 of P.L.2010, c.57 (C.34:1B-209.4),
pursuant to subparagraph (h) of this paragraph, projects awarded a tax credit
pursuant to the "Next New Jersey Program Act," P.L.2024, c.49
(C.34:1B-394 et al.), pursuant to subparagraph (k) of this paragraph, projects
awarded a tax credit pursuant to the �Next New Jersey Manufacturing Program
Act,� P.L.2025, c.123 (C.34:1B-403 et al.), pursuant to subparagraph (l) of
this paragraph, cultural arts institutions awarded a tax credit pursuant to the
�Cultural Arts Incentives Program Act,� P.L.2023, c.197 (C.34:1B-383 et al.),
pursuant to subparagraph (l) of this paragraph, or New Jersey studio partners,
New Jersey film-lease production companies, and taxpayers, other than New
Jersey studio partners and New Jersey film-lease production companies awarded
under sections 1 and 2 of P.L.2018, c.56 (C.54:10A-5.39b and C.54A:4-12b), pursuant
to subparagraph (i) of this paragraph and subsection d. of this section.�
During each of the first six years of the nine-year period, the authority shall
annually award tax credits valuing no greater than $715 million for projects
located in the northern counties of the State, and the authority shall annually
award tax credits valuing no greater than $385 million for projects located in
the southern counties of the State under the "New Jersey Aspire Program
Act," sections 54 through 67 of P.L.2020, c.156 (C.34:1B-322 through
34:1B-335), and the "Emerge Program Act," sections 68 through 81 of
P.L.2020, c.156 (C.34:1B-336 et al.).� If during any of the first six years of
the nine-year period, the authority awards tax credits under the "New Jersey
Aspire Program Act," sections 54 through 67 of P.L.2020, c.156
(C.34:1B-322 through 34:1B-335), and the "Emerge Program Act,"
sections 68 through 81 of P.L.2020, c.156 (C.34:1B-336 et al.), in an amount
less than the annual limitation for projects located in northern counties or
southern counties, as applicable, the uncommitted portion of the annual
limitation shall be available to be deployed by the authority in a subsequent
year, provided that the uncommitted portion of tax credits shall be awarded for
projects located in the applicable geographic area, except that (i) after the
completion of the third year of the nine-year period, the authority may deploy
50 percent of the uncommitted portion of tax credits for any previous year
without consideration to the county in which a project is located; and (ii)
after the completion of the sixth year of the nine-year period, the authority
may deploy all available tax credits, including the uncommitted portion of the
annual limitation for any previous year, without consideration to the county in
which a project is located;

���� (g)�� except as provided in
subparagraph (j) of this paragraph, for tax credits awarded for transformative
projects under the "New Jersey Aspire Program Act," sections 54
through 67 of P.L.2020, c.156 (C.34:1B-322 through 34:1B-335), the total value of
tax credits awarded during the nine-year period shall not exceed $2.5 billion.�
The total value of tax credits awarded for transformative projects in a given
year shall not be subject to an annual limitation, except that the total value
of tax credits awarded to any transformative project shall not exceed $400
million;

���� (h)�� from the tax credits
made available, pursuant to subparagraph (f) of this paragraph, to the
"New Jersey Aspire Program Act," sections 54 through 67 of P.L.2020,
c.156 (C.34:1B-322 through 34:1B-335), and the "Emerge Program Act,"
sections 68 through 81 of P.L.2020, c.156 (C.34:1B-336 et al.), not including
tax credits awarded for transformative projects, an amount not to exceed
$350,000,000 shall be made available for qualified offshore wind projects
awarded a credit pursuant to section 6 of P.L.2010, c.57 (C.34:1B-209.4) during
the first three years of the nine-year period;

���� (i)��� beginning in fiscal
year 2023, from the tax credits made available, pursuant to subparagraph (f) of
this paragraph, to the "New Jersey Aspire Program Act," sections 54
through 67 of P.L.2020, c.156 (C.34:1B-322 through 34:1B-335), and the "Emerge
Program Act," sections 68 through 81 of P.L.2020, c.156 (C.34:1B-336 et
al.), not including tax credits awarded for transformative projects, additional
amounts shall be made available for New Jersey studio partners, New Jersey
film-lease production companies, and taxpayers, other than New Jersey studio
partners and New Jersey film-lease production companies pursuant to sections 1
and 2 of P.L.2018, c.56 (C.54:10A-5.39b and C.54A:4-12b);

���� (j)��� beginning in fiscal
year 2024, from the tax credits made available, pursuant to subparagraph (f) of
this paragraph, to the "New Jersey Aspire Program Act," sections 54
through 67 of P.L.2020, c.156 (C.34:1B-322 through 34:1B-335) and the "Emerge
Program Act," sections 68 through 81 of P.L.2020, c.156 (C.34:1B-336 et
al.), not including tax credits awarded for transformative projects, an amount
not to exceed $500,000,000 may be annually transferred for the award to
transformative projects under the "New Jersey Aspire Program Act,"
sections 54 through 67 of P.L.2020, c.156 (C.34:1B-322 through 34:1B-335),
provided that: (i) the remaining allocation of tax credits otherwise available
for transformative projects, pursuant to subparagraph (g) of this paragraph, is
less than $1,000,000,000; and (ii) the authority board determines that the
transfer of tax credits is warranted based on such criteria as the authority
deems appropriate, which may include the criteria set forth in paragraph (2) of
this subsection.� If a transfer of tax credits is made pursuant to this
subparagraph, the authority shall award no greater than 65 percent of the tax
credits transferred pursuant to this subparagraph to transformative projects
located in the northern counties of the State and no greater than 35 percent of
the tax credits transferred pursuant to this subparagraph to transformative
projects located in the southern counties of the State;

���� (k) beginning in fiscal year
2025, from the tax credits made available, pursuant to subparagraph (f) of this
paragraph, to the "New Jersey Aspire Program Act," sections 54
through 67 of P.L.2020, c.156 (C.34:1B-322 through 34:1B-335) and the "Emerge
Program Act," sections 68 through 81 of P.L.2020, c.156 (C.34:1B-336 et
al.), but not including tax credits awarded for transformative projects, an
amount not to exceed
[
$500,000,000
]

$250,000,000

shall be made available for projects awarded a tax credit pursuant to the
"Next New Jersey Program Act," P.L.2024, c.49 (C.34:1B-394 et al.);

���� (l)� once the tax credits
allocated for competitive auctions conducted pursuant to sections 3 through 7
of P.L.2025, c.111 (C.55:14K-106 through 55:14K-110) pursuant to
subsubparagraph (ii) of subparagraph (b) of this paragraph are exhausted, from
the tax credits made available, pursuant to subparagraph (f) of this paragraph,
to the "New Jersey Aspire Program Act," sections 54 through 67 of
P.L.2020, c.156 (C.34:1B-322 through 34:1B-335) and the "Emerge Program
Act," sections 68 through 81 of P.L.2020, c.156 (C.34:1B-336 et al.), but
not including tax credits awarded for transformative projects, the sum of
$300,000,000 shall be made available to the New Jersey Housing and Mortgage
Finance Agency, established pursuant to P.L.1983, c.530 (C.55:14K-1 et seq.),
which tax credits shall be sold through� competitive auctions conducted
pursuant to sections 3 through 7 of P.L.2025, c.111 (C.55:14K-106 through
55:14K-110).� The amount made available pursuant to this subparagraph shall be
allocated in annual installments, each of which is not to exceed the cap set
forth in paragraph (3) of subsection a. of section 4 of P.L.2025, c.111
(C.55:14K-107), as needed to conduct auctions pursuant to that section.� All
proceeds of the tax credit auctions shall be used by the New Jersey Housing and
Mortgage Finance Agency for the purposes authorized in subsection b. of section
4 of P.L.2025, c.111 (C.55:14K-107).� Notwithstanding any provision of law or
regulation to the contrary, the tax credits reallocated to the New Jersey Housing
and Mortgage Finance Agency shall not be subject to any requirements or
conditions of the "New Jersey Economic Recovery Act of 2020,"
P.L.2020, c.156 (C.34:1B-269 et al.), as amended or supplemented; and

���� (m)� beginning in fiscal year
2026, from the tax credits made available, pursuant to subparagraph (f) of this
paragraph, to the "New Jersey Aspire Program Act," sections 54
through 67 of P.L.2020, c.156 (C.34:1B-322 through 34:1B-335) and the "Emerge
Program Act," sections 68 through 81 of P.L.2020, c.156 (C.34:1B-336 et
al.), but not including tax credits awarded for transformative projects, an
amount not to exceed $500,000,000 shall be made available for projects awarded
a tax credit pursuant to the �Next New Jersey Manufacturing Program Act,�
P.L.2025, c.123 (C.34:1B-403 et al.) and an amount not to exceed $500,000,000
shall be made available for cultural arts institutions awarded a tax credit
pursuant to the �Cultural Arts Incentives Program Act,� P.L.2023, c.197
(C.34:1B-383 et al.). In accordance with the provisions of subsection g. of
section 5 of P.L.2025, c.123 (C.34:1B-407), $100,000,000 of the tax credits
made available to the �Next New Jersey Manufacturing Program Act,� P.L.2025,
c.123 (C.34:1B-403 et al.) pursuant to this subparagraph shall be reserved
exclusively for eligible businesses that are clean energy product
manufacturers.

����
1
[
(n)���������� beginning
in fiscal year 2027, from the tax credits made available, pursuant to
subparagraph (f) of this paragraph, to the "New Jersey Aspire Program
Act," sections 54 through 67 of P.L.2020, c.156 (C.34:1B-322 through
34:1B-335) and the "Emerge Program Act," sections 68 through 81 of
P.L.2020, c.156 (C.34:1B-336 et al.), but not including tax credits awarded for
transformative projects, an amount not to exceed $250,000,000 shall be made
available for the purposes of the "End Data Center Tax Credits Act,"
P.L. ,
c. (C. )
(pending before the Legislature as this bill), including an amount not to
exceed $125,000,000 for tax credits awarded to energy storage projects pursuant
to section 4 of P.L. ,
c. (C. )
(pending before the Legislature as this bill), except as otherwise provided in
this subparagraph.� If the balance of tax credits claimed pursuant to section 6
of P.L. ,
c. (C. )
(pending before the Legislature as this bill) is less than $125,000,000, the
remaining balance of tax credits, as certified by the State Treasurer, shall be
available for the purposes of section 4 of P.L. ,
c. (C. )
(pending before the Legislature as this bill).� After the completion of the
nine-year period, any uncommitted balance of tax credits available for the
purposes of P.L. ,
c. (C. )
(pending before the Legislature as this bill) shall remain available for the
purposes of section 4 of P.L. , c. (C. )
(pending before the Legislature as this bill).
]
1

���� (2)�� The authority may in any
given year determine that it is in the State's interest to approve an amount of
tax credits in excess of the annual limitations set forth in paragraph (1) of
this subsection, but in no event more than $200,000,000 in excess of the annual
limitation, upon a determination by the authority board that such increase is
warranted based on specific criteria that may include:

���� (i)��� the increased demand
for opportunities to create or retain employment and investment in the State as
indicated by the volume of project applications and the amount of tax credits
being sought by those applications;

���� (ii)�� the need to protect the
State's economic position in the event of an economic downturn;

���� (iii)� the quality of project
applications and the net economic benefit to the State and municipalities
associated with those applications;

���� (iv)� opportunities for
project applications to strengthen or protect the competitiveness of the State
under the prevailing market conditions;

���� (v)�� enhanced access to
employment and investment for underserved populations in distressed
municipalities and qualified incentives tracts;

���� (vi)� increased investment and
employment in high-growth technology sectors and in projects that entail
collaboration with education institutions in the State;

���� (vii)� increased development
proximate to mass transit facilities;

���� (viii)� any other factor
deemed relevant by the authority.

���� c.���� In the event that the
authority in any year approves projects for tax credits in an amount less than
the annual limitations set forth in paragraph (1) of subsection b. of this
section, then the uncommitted portion of the annual limitation shall be available
to be deployed by the authority in future years for projects under the same
program, provided however, that in no event shall the aggregate amount of tax
credits approved be in excess of the overall cap of $11.5 billion, and in no
event shall the uncommitted portion of the annual limitation for any previous
year be deployed after the conclusion of the nine-year period.

���� d.��� Notwithstanding the
provisions of any other law to the contrary, the uncommitted balance of the
total value of tax credits authorized for award by the authority pursuant to
subparagraph (f) of paragraph (1) of subsection b. of this section to the
"New Jersey Aspire Program Act," sections 54 through 67 of P.L.2020,
c.156 (C.34:1B-322 et seq.), and the "Emerge Program Act," sections
68 through 81 of P.L.2020, c.156 (C.34:1B-336 et al.), shall be made available
for tax credits allowed to New Jersey studio partners, New Jersey film-lease
production companies, and taxpayers, other than New Jersey studio partners and
New Jersey film-lease production companies pursuant to sections 1 and 2 of
P.L.2018, c.56 (C.54:10A-5.39b and C.54A:4-12b).� The value of tax credits,
including tax credits allowed through the granting of tax credit transfer
certificates, made available to New Jersey studio partners, New Jersey
film-lease production companies, and taxpayers, other than New Jersey studio
partners and New Jersey film-lease production companies pursuant to this
subsection shall be as follows:

���� (1)�� in fiscal year 2023,
$250,000,000 for New Jersey studio partners and $250,000,000 for New Jersey
film-lease production companies;

���� (2)�� in fiscal year 2024,
$250,000,000 for New Jersey studio partners and $250,000,000 for New Jersey
film-lease production companies; and

���� (3)�� in fiscal year 2025,
$250,000,000 for New Jersey studio partners, $250,000,000 for New Jersey
film-lease production companies, and $300,000,000 for taxpayers, other than New
Jersey studio partners and New Jersey film-lease production companies.

���� If the value of tax credits,
including tax credits allowed through the granting of tax credit transfer
certificates, approved to New Jersey studio partners and New Jersey film-lease
production companies in any fiscal year pursuant to this subsection is less
than the cumulative total amount of tax credits permitted to be approved in
that fiscal year, the authority shall certify the amount of the remaining tax
credits available for approval to each such category in that fiscal year and
shall increase the cumulative total amount of tax credits permitted to be
approved for New Jersey studio partners and New Jersey film-lease production
companies in the subsequent fiscal year by the certified amount remaining for
each such category from the prior fiscal year.

(cf: P.L.2025, c.127, s.10)

����
1
[
2. Section 1
of P.L.2025, c.136 (C.48:3-121.2) is amended to read as follows:

���� 1.��� As used in P.L.2025,
c.136 (C.48:3-121.2 et al.):

���� �Accredited capacity� means
the amount of capacity, measured in megawatts of unforced capacity, that an
eligible project can contribute toward New Jersey�s capacity needs or bid into
the base residual auction.

���� �Base residual auction� means
the same as that term is defined in section 3 of P.L.1999, c.23 (C.48:3-51).

���� �Board� means the Board of
Public Utilities.

���� �Capacity Interconnection
Rights� means the same as that term is defined in PJM�s Open Access
Transmission Tariff or in any successor document.

���� �Decision Point I� means the
same as that term is defined in PJM�s Open Access Transmission Tariff or in any
successor document.

���� �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 the State.

���� �Eligible project� means a
transmission-scale energy storage system that meets the criteria for an
incentive award pursuant to P.L.2025, c.136 (C.48:3-121.2 et al.).

���� �Energy storage� means a
device that is capable of absorbing energy from the grid or from a generation
resource located behind the same point of interconnection as the device;
storing it for a period of time using mechanical, chemical, or thermal processes;
and, thereafter, discharging the energy back to the grid or directly to an
energy-using system to reduce the use of power from the grid.�

���� �Energy storage capacity�
means the measure of the energy capacity in megawatt-hours of a
transmission-scale energy storage system.�

���� �Energy storage program� means
a program designed to encourage the growth of energy storage capacity in the
State in order to strengthen storage capacity for the electric grid.� �Energy
storage program� includes the board�s Successor Solar Incentive Program,
including the Competitive Solar Incentive Program; the program established
pursuant to P.L.2025, c.136 (C.48:3-121.2 et al.); and the board�s Garden State
Energy Storage Program.

���� �Garden State Energy Storage
Program� or �GSESP� means the final form of the energy storage program
currently under development by the board and outlined in the board�s November
2024 straw proposal, or the program�s replacement or successor.�

���� �Generation Interconnection
Agreement� means the same as that term is defined in PJM�s Open Access
Transmission Tariff or in any successor document.�

���� �Incentive award� means a set
of payments awarded by the board for an eligible project, which payments are
conditioned upon the completion and commercial operation of the eligible
project in compliance with P.L.2025, c.136 (C.48:3-121.2 et al.) and any conditions
required by the board.� An �incentive award� shall be a fixed series of annual
payments to be issued over the 15-year award period; based on the maximum
usable installed capacity of an eligible project, which is measured in dollars
per megawatt, or on the energy storage capacity of an eligible project, which
is measured in dollars per megawatt-hour; and paid upon commercial operation of
the eligible project, unless the board provides for an alternative payment
timeline.� An �incentive award� is subject to any conditions imposed by the
board, including, but not limited to, satisfactory up-time performance
metrics.� An �incentive award� may include, at the discretion of the board, a
performance-based adjustment based on the availability of the eligible project
or the benefits created through the commercial operation of the eligible
project, provided that the board shall confirm the reliability of any proposed
metrics on which to base a performance-based adjustment prior to being used in
the calculation of an incentive award.�
An "incentive award" may
include, at the discretion of the board, an award of tax credits approved pursuant
to section 4 of P.L. , c. (C. )
(pending before the Legislature as this bill), which award of tax credits may
constitute part or all of the incentive award.

���� �Installed capacity� means the
nameplate output of an eligible project, measured in megawatts of alternating
current (MW AC), that is available to the electric grid.�

���� �Interconnection Service
Agreement� means the same as that term is defined in PJM�s Open Access
Transmission Tariff or in any successor document.�

���� �Phase I System Impact Study�
means the same as that term is defined in PJM�s Open Access Transmission Tariff
or in any successor document.�

���� �PJM� means �PJM
Interconnection, L.L.C.� or �PJM,� as those terms are defined in section 3 of
P.L.1999, c.23 (C.48:3-51).�

���� �Readiness Deposit� means the
same as that term is defined in PJM�s Open Access Transmission Tariff or in any
successor document.

���� �Subsequent tranche� means
additional energy storage procurement administered pursuant to section 4 of
P.L.2025, c.136 (C.48:3-121.5).�

���� �Tranche 1� means the initial
procurement for the energy storage program established pursuant to section 2 of
P.L.2025, c.136 (C.48:3-121.3).�

���� �Tranche 2� means the second
procurement for the energy storage program established pursuant to section 2 of
P.L.2025, c.136 (C.48:3-121.3).�

���� �Transmission-scale energy
storage system� means an energy storage system, with an installed capacity of
at least 5 MW AC, that is interconnected with the PJM Transmission Network and
situated inside a Transmission Zone in New Jersey or is otherwise located in
New Jersey and qualified to provide energy, capacity, or ancillary services in
the wholesale markets established by PJM.�

���� �Unforced capacity� means the
same as that term is defined in PJM�s Reliability Assurance Agreement or in any
successor document.

(cf: P.L.2025, c.136, s.1)
]
1

����
1
[
3. Section 2
of P.L.2025, c.136 (C.48:3-121.3) is amended to read as follows:

���� 2. a. (1) The Board of Public
Utilities shall establish a program to procure and provide incentive awards for
the development of transmission-scale energy storage systems with a reasonable
likelihood of successful and timely completion.� The board shall solicit
applications for the program established pursuant to this section in an initial
Tranche 1 and in Tranche 2, pursuant to paragraph (2) of this subsection.� The
board may place an eligible project that does not receive an incentive award
for Tranche 1 or Tranche 2 on a waiting list and consider the eligible project
for an incentive award during a subsequent tranche.�

���� (2)�� By no later than June
30, 2026, the board shall approve incentive awards for eligible projects
totaling at least 1,000 MW AC in installed capacity.� However, at least 350 MW
AC of the 1,000 MW AC procurement goal shall be approved in incentive awards
for eligible projects in Tranche 1 by no later than December 31, 2025.� If the
board is unable to procure all 1,000 MW AC in installed capacity in Tranche 1,
the board shall approve incentive awards for eligible projects in Tranche 2,
provided that all incentive awards in Tranche 2 are awarded by no later than
June 30, 2026.�

���� b.��� To qualify for an
incentive award in Tranche 1 or Tranche 2 pursuant to this section, a
transmission-scale energy storage system shall:

���� (1) not participate in any
other energy storage program, except for the GSESP, to the extent that the
energy storage program established pursuant to P.L.2025, c.136 (C.48:3-121.2 et
al.) is incorporated into the GSESP;

���� (2) have an anticipated
commercial operations date of no later than December 31, 2030, unless the board
permits an exception;

���� (3) meet the following project
maturity requirements, as applicable:�

���� (a) a transmission-scale
energy storage system applying for an incentive award in Tranche 1 shall have
entered the PJM interconnection process and, at the time of application, have a
fully executed Generation Interconnection Agreement or Interconnection Service
Agreement through PJM, have a completed Surplus Interconnection Study through
PJM, or have notified PJM of intent to transfer existing Capacity
Interconnection Rights associated with a deactivating generation station;

���� (b) a transmission-scale
energy storage system applying for an incentive award in Tranche 2 shall have
entered the PJM interconnection process and, at the time of application, have a
fully executed Generation Interconnection Agreement or Interconnection Service
Agreement through PJM, have a completed Surplus Interconnection Study through
PJM, have been studied by PJM in a Phase I System Impact Study and have paid a
Decision Point I Readiness Deposit to PJM, or have notified PJM of intent to
transfer existing Capacity Interconnection Rights associated with a
deactivating generation station; and

���� (c) if a transmission-scale
energy storage system fulfils the project maturity requirements established
pursuant to subparagraph (a) or subparagraph (b) of this paragraph by
completing a Surplus Interconnection Study or by notifying PJM of intent to
transfer existing Capacity Interconnection Rights associated with a
deactivating generation station, then the transmission-scale energy storage
system shall also have obtained the associated Capacity Interconnection Rights
through PJM; and

���� (4) meet any other eligibility
criteria the board may establish through board order or rulemaking.�

���� c.���� Any application for an
incentive award issued in Tranche 1 or Tranche 2 pursuant to this section shall
include:�

���� (1) evidence reasonably
satisfactory to the board of site control;

���� (2) evidence reasonably
satisfactory to the board that an applicant has or will obtain all required
permits, which evidence shall include an execution plan to obtain all required
permits;

���� (3) evidence reasonably
satisfactory to the board that the applicant has submitted all interconnection
applications and initial application fees necessary to obtain permission from
the appropriate electric public utility or grid operator to operate the transmission-scale
energy storage system;

���� (4) evidence reasonably
satisfactory to the board of the applicant�s financial means to construct the
transmission-scale energy storage system and ability to obtain revenues through
electricity markets or non-ratepayer funding, including, but not limited to,
energy arbitrage, ancillary services, and capacity revenues in PJM;

���� (5) evidence reasonably
satisfactory to the board of the status of the transmission-scale energy
storage system in the PJM interconnection process;

���� (6) assurances reasonably
satisfactory to the board that the transmission-scale energy storage system
will adhere to any safety requirements, standards, or measures that the board
deems appropriate as well as to any nationally recognized minimum safety requirements,
including, but not limited to, appropriate laboratory testing, and will comply
with all manufacturers� installation requirements, applicable laws,
regulations, codes, licensing, and permit requirements;

���� (7) a statement describing the
transmission-scale energy storage system�s alignment with State and regional
transmission and resource adequacy planning goals and demonstrating the
transmission-scale energy storage system�s coordination with PJM and the appropriate
electric public utility;

���� (8) an application fee as set
by the board; and

���� (9) any other information
required by the board.�

���� d.��� The board shall review
Tranche 1 and Tranche 2 applications consistently with the requirements of this
section.� At its discretion, the board may instruct an applicant on curing
minor defects in a Tranche 1 or Tranche 2 application.� The board shall evaluate
each application based on the bid prices of the requested incentive awards.�
The board may appropriately compare bid prices, at the board�s discretion,
based on the measure of a transmission-scale energy storage system�s installed
capacity, energy storage capacity, or expected accredited capacity.� The board
may also consider other factors such as:�

���� (1) project maturity and
likelihood of success;

���� (2) whether the project has
completed non-ministerial permits;

���� (3) whether the project is
proposed by an applicant with experience in energy storage development,
construction, and finance; and

���� (4) whether the project
promotes redevelopment, community benefits, brownfield redevelopment, or
existing or former fossil fuel plant replacement or provides demonstrated
benefits to environmental justice in communities where a transmission-scale
energy storage system is proposed to be located.�

���� e.���� Any board order issued
pursuant to P.L.2025, c.136 (C.48:3-121.2 et al.) shall be binding and
enforceable.� Any such board order shall:�

���� (1) define the eligible
project receiving an incentive award and the eligible project�s installed
capacity;

���� (2) define the incentive
award, including a payment schedule for the 15-year award period of the
incentive award, which term shall commence no earlier than the commercial
operations date of an eligible project and during which term an eligible
project shall receive an annual incentive award on each anniversary of the
first payment date;

���� (3) determine the amount of
funding to be allocated for payment of the incentive award beginning in the
fiscal year in which the eligible project commences commercial operations;

���� (4) include a participation
fee as the board may require from the developer;

���� (5) require, for an eligible
project awarded an incentive award, a pre-development security not to exceed
$100,000 per megawatt and not to exceed in total $10,000,000;

���� (6) outline the conditions
under which the board may, in the event of a developer�s failure to operate an
eligible project by the deadline stated in the board order or to meet deadlines
included in the board order, revoke an incentive award or retain some or all of
the pre-development security;

���� (7) provide that receipt of an
incentive award for an eligible project shall be contingent on achievement of
baseline performance requirements, including, but not limited to, availability
for dispatch in a minimum number of hours per year, as determined by the
board.� The board may use the PJM Equivalent Forced Outage Rate or another
metric determined appropriate by the board to measure energy storage
availability.� The board order shall require that the developer report data for
the purpose of this paragraph at regular intervals and shall provide for a
reduction of an incentive award in proportion to the number of hours of
required availability that is unmet by the eligible project; and

���� (8) require a developer to
provide additional information to the board during the term of the incentive
award, as the board may reasonably require.� The board may set additional
requirements at its discretion, including, but not limited to, a requirement
that the developer report major development and construction milestones to the
board, maintain financial security throughout the term of the incentive award,
or any other requirement the board determines necessary to ensure continued
progress and operational viability of an eligible project.�

���� f.���� The board may amend an
order issuing an incentive award pursuant to this section solely to
:
�change
the funding source of the incentive award
[
.
]
; or
include an award of tax credits approved pursuant to section 4 of
P.L. ,
c. (C. )
(pending before the Legislature as this bill), which award of tax credits may either
supplement an existing incentive award or, with the consent of the developer,
replace the funding source for a portion of the incentive award amount.
� Any
incentive award for an eligible project and the conditions for receiving
funding pursuant to this section shall remain effective for the full duration
of the award period specified in the board order issuing the incentive award,
notwithstanding any change to the funding source of the incentive award.

���� g. (1) Notwithstanding the
provisions of the �Administrative Procedure Act,� P.L.1968, c.410 (C.52:14B-1
et seq.), or any other law or rule to the contrary, the board shall permit
applications for Tranche 1 without regard to the publication status of the
rules and regulations to be issued pursuant to P.L.2025, c.136 (C.48:3-121.2 et
al.), by no later than September 30, 2025.�

���� (2) The board shall accept
Tranche 1 applications for a maximum of 60 days after the beginning of the
formal application period for Tranche 1.� Within 60 days following the closure
of the Tranche 1 application period, the board shall:�

���� (a) evaluate projects in
accordance with this section, any rules or regulations proposed pursuant to
P.L.2025, c.136 (C.48:3-121.2 et al.), and any application requirements and
eligibility criteria approved pursuant to this subsection; and

���� (b) select eligible projects
to receive an award.�

���� h.��� An incentive award shall
be conditioned upon a developer�s compliance with the board order determining
the incentive award and with any conditions the board shall reasonably require.

(cf: P.L.2025, c.136, s.2)
]
1

����
1
[
4. (New
section) a. For the purposes of this section:

���� "Board" means the
Board of Public Utilities.

���� "Energy storage
program" means a program designed to encourage the growth of energy
storage capacity in the State in order to strengthen storage capacity for the
electric grid. �"Energy storage program" includes, but is not limited
to, the board�s Successor Solar Incentive Program, including the Competitive
Solar Incentive Program; the program established pursuant to P.L.2025, c.136 (C.48:3-121.2
et seq.); and the board�s Garden State Energy Storage Program.

���� "Energy storage
project" means the construction or enhancement of an energy storage system
for which a developer is eligible to receive an incentive award pursuant to an
energy storage program.

���� "Energy storage
system" means a distributed energy storage system or a transmission-scale
energy storage system.

���� "Incentive award"
means the award approved by the board to the developer of an energy storage
project, including, but not limited to, a grant or a tax credit approved
pursuant to this section.

���� b.��� From the tax credits
previously made available for the "Next New Jersey Act," P.L.2024,
c.49 (C.34:1B-394 et al.) and reallocated for the purposes of
P.L. ,
c. (C. )
(pending before the Legislature as this bill) pursuant to section 98 of
P.L.2020, c.156 (C.34:1B-362), the Board of Public Utilities may approve the
award of tax credits to the developer of an energy storage project, which award
may constitute all or part of an incentive award for an energy storage project.�
Notwithstanding any provision of law, rule, or regulation limiting the
cumulative value of awards otherwise available for a project under an energy
storage program, the board may issue an additional incentive award in the form
of tax credits pursuant to this section.� Except as otherwise provided in
subparagraph (n) of paragraph (1) of subsection b. of section 98 of P.L.2020,
c.156 (C.34:1B-362), the cumulative amount of tax credits the board may award
pursuant to this section shall not exceed $125,000,000.

���� c.���� A developer may apply a
tax credit awarded pursuant to this section against a State tax liability due
pursuant to the "Corporation Business Tax Act (1945)," P.L.1945,
c.162 (C.54:10A-1 et seq.), the "New Jersey Gross Income Tax Act,"
N.J.S.54A:1-1 et seq., sections 2 and 3 of P.L.1945, c.132 (C.54:18A-2 and C.54A:18A-3),
section 1 of P.L.1950, c.231 (C.17:32-15), or N.J.S.17B:23-5 for the current
tax period, as of the date the tax credit is approved.� A developer may carry
forward an unused credit resulting from the limitations of this section, if
necessary, for use in any of the seven tax periods next following the tax
period for which the credit is awarded.

���� d.��� The Director of the
Division of Taxation shall prescribe the order of priority of the application
of the credits awarded under this section and any other credits allowed by
law.� The amount of a 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,
together with any other credits allowed by law, shall not reduce the tax
liability of the purchaser 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
amount of the tax credit applied under this section against the tax otherwise
due under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et
seq., for a taxable year, when taken together with any other payments, credits,
deductions, and adjustments allowed by law shall not reduce the tax liability
of the taxpayer to an amount less than zero.

���� e.���� (1) A business entity
that is classified as a partnership for federal income tax purposes shall not
be allowed a tax credit pursuant to this section directly, but the amount of
tax credit of a taxpayer in respect of a distributive share of entity income,
shall be determined by allocating to the taxpayer that proportion of the tax
credit acquired by the entity that is equal to the taxpayer's share, whether or
not distributed, of the total distributive income or gain of the entity for its
taxable year ending within or with the taxpayer's taxable year.

���� (2)�� A New Jersey S
Corporation shall not be allowed a tax credit pursuant to this section
directly, but the amount of tax credit of a taxpayer in respect of a pro rata
share of S Corporation income, shall be determined by allocating to the
taxpayer that proportion of the tax credit acquired by the New Jersey S
Corporation that is equal to the taxpayer's share, whether or not distributed,
of the total pro rata share of S Corporation income of the New Jersey S
Corporation for its privilege period ending within or with the taxpayer's
taxable year.
]
1

����
1
[
5. (New
section) a. A taxpayer may apply to the Director of the Division of Taxation
for a tax credit transfer certificate in lieu of the taxpayer being allowed any
amount of the tax credit awarded pursuant to section 4 of
P.L. , c. (C. )
(pending before the Legislature as this bill) against the tax liability of the
taxpayer.� The tax credit transfer certificate, upon receipt thereof by the
taxpayer from the director, may be sold or assigned, in full or in part, to any
other taxpayer that may have a tax liability under the "Corporation
Business Tax Act (1945)," P.L.1945, c.162 (C.54:10A-1 et seq.), the
"New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., sections 2
and 3 of P.L.1945, c.132 (C.54:18A-2 and C.54A:18A-3), section 1 of P.L.1950,
c.231 (C.17:32-15), or N.J.S.17B:23-5, in exchange for private financial
assistance to be provided by the purchaser or assignee to the taxpayer that has
applied for and been granted the tax credit.� The tax credit transfer
certificate provided to the taxpayer shall include a statement waiving the
taxpayer's right to claim that amount of the tax credit that the purchaser has
elected to sell or assign.

���� b.��� The taxpayer shall not
sell or assign a tax credit transfer certificate allowed under this section for
consideration received by the taxpayer of less than 80 percent of the
transferred credit amount before considering any further discounting to present
value which shall be permitted.� The tax credit transfer certificate issued to
a taxpayer by the director shall be subject to any limitations and conditions
imposed on the application of State tax credits pursuant to section 4 of
P.L. ,
c. (C. )
(pending before the Legislature as this bill) and any other terms and
conditions that the Director of the Division of Taxation may prescribe.

���� c.���� The transferee or
assignee may first use the credit against tax liabilities for the tax period
for which it was issued, for the tax period in which it was issued, or in any
of the next seven succeeding tax periods, without the need to amend the return
for the year for which the credit was issued.

����
d.��� A
transferee or assignee of a tax credit transfer certificate pursuant to this
section shall not make any subsequent transfers, assignments, or sales of the
tax credit transfer certificate.
]
1

����
1
[
6. (New
section) a. For the purposes of this section:

���� "Director" means the
Director of the Division of Taxation in the Department of the Treasury.

���� "Electric public
utility" means a public utility, as that term is defined in R.S.48:2-13, that
distributes electricity to end users.

���� "Residential electric
customer" means a residential customer of an electric public utility.

���� b.��� For the taxable year in
which P.L. ,
c. (C. )
(pending before the Legislature as this bill) becomes effective, a taxpayer who
is a residential electric customer with a gross income of $55,000 or less shall
be allowed a credit in the amount of $100 against the tax otherwise due for the
taxable year under the "New Jersey Gross Income Tax Act,"
N.J.S.54A:1-1 et seq.

���� c.���� The order of priority
of the application of the credit allowed pursuant to this section, and any
other credits allowed against the tax imposed pursuant to N.J.S.54A:1-1 et seq.
for a taxable year, shall be as prescribed by the director.
]
1

����
1
[
7. (New
section) a. Notwithstanding the provisions of the "Administrative
Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.) to the contrary, the
Board of Public Utilities may adopt, immediately, upon filing with the Office
of Administrative Law, such rules and regulations as the board deems necessary
to implement the provisions of P.L. ,
c. (C. )
(pending before the Legislature as this bill), which regulations shall be
effective for a period not to exceed 180 days from the date of the filing.�
Thereafter, the board shall amend, adopt, or readopt the regulations in
accordance with the requirements of the "Administrative Procedure
Act," P.L.1968, c.410 (C.52:14B-1 et seq.).

���� b.��� The State Treasurer shall
adopt, pursuant to the "Administrative Procedure Act," P.L.1968,
c.410 (C.52:14B-1 et seq.), such rules and regulations as are necessary to
implement the provisions of P.L. , c. (C. )
(pending before the Legislature as this bill).
]
1

����
1
[
8.
]
�
2.
1
��� This
act shall take effect immediately.