Concerns certain motor vehicle related funding to certain municipalities.

S4514

SENATE, No. 4514

STATE OF NEW JERSEY

222nd LEGISLATURE

�

INTRODUCED JUNE 24, 2026

Sponsored by:

Senator� RAJ MUKHERJI

District 32 (Hudson)

Senator� ANGELA V. MCKNIGHT

District 31 (Hudson)

Assemblyman� WILLIAM B. SAMPSON, IV

District 31 (Hudson)

Assemblyman� JERRY WALKER

District 31 (Hudson)

Co-Sponsored by:

Assemblyman Onyema

SYNOPSIS

���� Concerns certain motor vehicle related funding to
certain municipalities.

CURRENT VERSION OF TEXT

���� As introduced.

��

An Act

concerning certain motor vehicle related funding
to certain municipalities and amending various parts of the statutory law.� �

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

���� 1.� Section 1 of P.L.2019,
c.289 (C.40:48C-1.7) is amended to read as follows:

���� 1.� a.� Any municipality with
a population of 100,000 or greater according to the most recent American
Community Survey five-year estimate by the United States Census Bureau may
adopt an ordinance imposing a mass transit access parking tax of three and one-half
percent on fees for the parking, garaging, or storing of motor vehicles at
public parking garages, lots, or facilities only.� No such parking tax shall be
imposed on the parking, garaging, or storing of motor vehicles at a parking
lot, garage, or facility that is part of a private single or multi-family
dwelling, or a condominium building, a cooperative building, or an apartment
building.

���� b.�
[
All
]

(1)� Except in a municipality
with a population of 200,000 or greater that experienced a population increase
of more than 15 percent between the 2010 and 2020 federal decennial censuses,
the
parking taxes collected pursuant to this section shall be anticipated
and appropriated in the municipal budget as dedicated revenue pursuant to
N.J.S.40A:4-39 for the exclusive purpose of funding or financing capital
improvements for pedestrian access to mass transit stations, including, but not
limited to, the construction of bridges, tunnels, platforms, walkways,
elevators, escalators, and stairways directly related to mass transit
pedestrian accessibility; provided, however, that any parking tax revenues
remaining after all the budgeted mass transit pedestrian access capital
improvement expenditures have been used in a fiscal year may be used to fund
quality of life projects within the municipality.

����
(2)� In a municipality with
a population of 200,000 or greater that experienced a population increase of
more than 15 percent between the 2010 and 2020 federal decennial censuses, the
parking taxes collected pursuant to this section shall be appropriated for
either the purposes authorized pursuant to paragraph (1) of this subsection, or
operating and administrative expenses related to the facilitation of mass
transit.�

���� c.� The parking tax authorized
by this section may be collected in addition to a surcharge collected pursuant
to section 3 of P.L.2013, c.284 (C.40:48C-1.6) or a tax collected pursuant to
subsection a. of section 6 of P.L.1970, c.326 (C.40:48C-6), but the parking tax
authorized by this section shall not be collected whenever a special event
parking tax surcharge is collected pursuant to subsection b. of section 6 of
P.L.1970, c.326 (C.40:48C-6).

���� d.� An ordinance adopted
pursuant to subsection a. of this section shall exempt residents of the
municipality from the full amount of the three and one-half percent parking
tax.� The exemption shall be implemented as follows:

���� (1) �For short-term parking, a
resident may apply to the municipality for a rebate of the total three and
one-half percent parking tax charged as provided in the ordinance; and

���� (2) �For long-term parking, a
parking facility operator shall not charge a resident the three and one-half
percent parking tax upon a display of proof of residence as provided in the
ordinance.

(cf: P.L.2021, c.348, s.1)

���� 2.� Section 8 of P.L.1985,
c.14 (C.39:4-139.9) is amended to read as follows:

���� 8.� a.� Out of each parking
penalty assessed and disbursed to the municipality where a failure to appear
notice was issued under these provisions, $2.00 shall be designated and
distributed to the municipal court by the municipality to provide for the
court�s

operating costs to administer this act.�
In a municipality with a population
of 200,000 or greater that experienced a population increase of more than 15
percent between the 2010 and 2020 federal decennial censuses, of each parking
penalty assessed and disbursed to the municipality where a failure to appear
notice was issued under these provisions, 10 percent shall be designated and
distributed to the municipal court by the municipality to provide for the
court�s operating costs to administer P.L.1985, c.14 (C.39:4-139.2 et seq.) and
shall be allocated at the municipality�s sole discretion.
� These funds
shall be in addition to the municipal court's normal budget allocation but in
no event shall exceed those additional costs to the court incurred as a result
of
[
this
act
]

P.L.1985,
c.14 (C.39:4-139.2 et seq.)
.�

���� b.� If a respondent defaults
in the payment of a fine, penalty or costs, or of an installment, the court may
require the respondent to show cause why the default should not be treated as a
civil contempt and may issue a summons or order to show cause or a bench
warrant of arrest for the respondent's appearance.� The officers of a
corporation or the partners, directors or officers of an association may be
held in contempt upon a default by the corporation or association.

(cf: P.L.1989, c.137, s.1)

���� 3.� Section 20 of P.L.2009,
c.90 (C.40:48H-2) is amended to read as follows:

���� 20.� a. A municipality having
a population in excess of 100,000 and within which is located a commercial
airport which provides for a minimum of 10 regularly scheduled commercial
airplane flights per day, or a municipality in which any portion of such an
airport is located, by ordinance, may impose a tax on the rental of motor
vehicles on such rental transactions that occur within a designated industrial
zone of the municipality.�
[
Such
tax
]
�
A
municipality with a population of 200,000 or greater that experienced a population
increase of more than 15 percent between the 2010 and 2020 federal decennial
censuses, by ordinance, may impose a tax on the rental of motor vehicles on
such rental transactions that occur within the municipality, regardless of the
zoning designation of the location of a transaction.� A tax imposed pursuant to
this subsection
shall be imposed on the person, corporation, or other legal
entity that is permitted the use of a motor vehicle that it does not own for a
period of time that is less than one year, in exchange for the payment of a
fee, and shall be collected on behalf of the municipality by the person
collecting such rental fee, in accordance with such procedures as shall be
established in the ordinance imposing the tax.

���� The local motor vehicle rental
tax rate imposed under an ordinance adopted pursuant to this section shall not
exceed five percent of the total amount of the fee charged for the rental of
the motor vehicle, excluding any taxes and surcharges.� After the adoption of
an ordinance, a municipality may subsequently amend the ordinance from time to
time to adjust the boundaries of the industrial zone or, subject to the
provisions of section 26 of P.L.2009, c.90 (C.40:48H-8), to modify the tax
rate; however, the modified rate shall not exceed five percent of the total
amount of the fee charged for the rental of the motor vehicle, excluding any
taxes and surcharges.

���� An ordinance establishing a
local motor vehicle rental tax, or modifying the rate of that tax, shall take
effect on the first day of the month immediately following the date on which
the ordinance becomes legally in force and effect.

���� b.��� As used in this section:

���� "Eligible purposes"
means (1) the payment or reimbursement of costs of any "redevelopment
project" or other undertaking in furtherance of a "redevelopment
plan" in any "area in need of redevelopment" or "area in
need of rehabilitation" within the municipality (including, but not
limited to, redevelopment projects and undertakings located within the
industrial zone), as such terms are defined in the "Local Redevelopment
and Housing Law", P.L.1992, c.79 (C.40A:12A-1 et al.), (2) the making of
municipal subsidies or contributions as authorized by P.L.1992, c.79, (3) the
payment or reimbursement, within or relating to any urban enterprise zone
located within the municipality, of such costs as are enumerated in the
definition of "project" as contained in subsection c. of section 29
of P.L.1983, c.303 (C.52:27H-88), without reference to the zone assistance fund
or the zone development corporation, (4) the payment of bonds issued for any of
the foregoing purposes, (5) planning, evaluation, negotiation, and other preliminary
expenses relating to any of the foregoing purposes, and (6) costs of
administration and enforcement, including costs and expenses of the
municipality incurred in collecting the tax.

���� "Industrial zone"
means such portion or portions of the municipality, which may be identified by
reference to zoning districts, census tracks, or both, not exceeding in the
aggregate 50 percent of the territory of the municipality, as is determined by
the municipality to be an area having, or intended to have, predominantly
industrial, port, airport, and related uses.

���� "Motor vehicle"
means any automobile, truck, van, bus, or similar conveyance that is intended
primarily for passenger (as distinct from cargo) use, and meeting the
requirements of the State for operation on public roads.

���� "Rental of motor
vehicle" means any contract or agreement by which a person, corporation,
or other legal entity is permitted the use of a motor vehicle that it does not
own for a period of time that is less than one year in exchange for the payment
of a fee.� A rental transaction is deemed to occur at the location at which
such person, corporation, or other legal entity takes possession of the motor
vehicle.

���� "Rental tax account"
means the dedicated trust account established by a municipality pursuant to
subsection c. of this section.

���� "Tax proceeds" means
amounts collected pursuant to any tax imposed pursuant to sections 19 through
27 of P.L.2009, c.90 (C.40:48H-1 et seq.).

���� c.��� The Director of the
Division of Taxation in the Department of the Treasury may require, by
regulation, that all taxes collected pursuant to sections 19 through 27 of
P.L.2009, c.90 (C.40:48H-1 et seq.) be collected in the same manner as
surcharges are collected under section 28 of P.L.2009, c.90 (C.40:48G-2).
Except as provided hereinafter, revenues that are collected and distributed
back to the municipality shall be deposited into a trust account established by
the municipality and dedicated exclusively to the purpose of funding one or
more eligible purposes.� Revenues that are collected during tax years� 2015
through 2017 for distribution back to a municipality having a population in
excess of 270,000, according to the 2010 federal decennial census, may be
deposited into the current fund of that municipality and may, to the extent not
already allocated for eligible purposes, be used to reduce the appropriation
for "cash deficit of preceding year" pursuant to N.J.S.40A:4-42, or
to address its operational deficit identified at the beginning of the local
budget year or through the annual financial statement.� In tax year 2018 and
thereafter, up to 50 percent of the revenues annually collected may be
deposited into the current fund and used to reduce the appropriation for
"cash deficit for preceding year" or to address its operational
deficit, and the remainder shall be deposited into the municipality's trust
account for eligible purposes.� In the case of any assignment pursuant to
section 23 of P.L.2009, c.90 (C.40:48H-5), the terms of such assignment shall
include the agreement of the municipality to enforce collection of the taxes in
such manner as provided therein, and may provide for direct payment of all or a
portion of the tax proceeds to a bond trustee.� In addition to tax proceeds,
there shall be deposited into the rental tax account such other moneys as may,
from time to time, be directed by law to be deposited therein.

(cf: P.L.2015, c.171, s.1)

���� 4. �This act shall take effect
immediately.�

STATEMENT

���� This bill modifies the
municipal distribution requirements and rates for certain motor vehicle related
funding.�

���� The bill amends the mass
transit access parking tax imposed pursuant to section 1 of P.L.2019, c.289
(C.40:48C-1.7).� In addition to the existing authorities permitted for the use
of revenues from this tax, this bill permits a municipality with a population
of 200,000 or greater that experienced a population increase of more than 15
percent between the 2010 and 2020 decennial censuses to impose this tax, and use
these revenues for operating and administrative expenses related to the
facilitation of mass transit.�

���� The bill also amends �The
Parking Offenses Adjudication Act,� P.L.1985, c.14 (C.39:4-139.2 et seq.).�
Currently, $2 of each parking penalty assessed, when a failure to appear notice
has been issued, is distributed to the municipal court.� This bill changes this
$2 amount for a qualifying municipality to an allocation of 10 percent of each
penalty.� The bill also provides the municipality with sole discretion in
determining how to allocate the funds if the municipality has a population of
200,000 or greater and experienced a population increase of more than 15
percent between the 2010 and 2020 decennial censuses.�

���� The bill also amends section
20 of P.L.2009, c.90 (C.40:48H-2) to permit a municipality with a population of
200,000 or greater that experienced a population increase of more than 15
percent between the 2010 and 2020 decennial censuses to collect a rental car
tax regardless of the presence of a major airport.� Currently this tax may only
be imposed in a municipality with a population of over 100,000 where a major
airport is located.� The bill also removes a restriction providing that the tax
may only be imposed on transactions that occur within a designated industrial
zone of the municipality if the municipality has a population of 200,000 or
greater and experienced a population increase of more than 15 percent between
the 2010 and 2020 decennial censuses.�

���� This bill is to take effect
immediately.