New Jersey Incentives and Laws

Last Updated October 2006

State Incentives

Zero Emissions Vehicle (ZEV) Tax Exemption

ZEVs sold, rented, or leased on or after May 1, 2004, are exempt from state sales and use tax. This exemption is not applicable to partial zero emission vehicles, which includes hybrid electric vehicles. For a list of qualifying ZEVs please see the New Jersey Department of the Treasury Web site (http://www.state.nj.us/treasury/). (Reference New Jersey Statutes 54:32B-8.55)

High Occupancy Vehicle (HOV) Lane Exemption

New Jersey Turnpike Authority (NJTA) allows hybrid electric vehicles (HEVs) and alternative fuel vehicles (AFVs) to travel in the NJTA’s HOV lanes. Permitted AFVs must operate on electricity, methanol, ethanol, natural gas, liquefied petroleum gas, hydrogen, coal derived liquid fuels, or fuels derived from biological materials. Any other federally approved AFVs are also permitted to utilize the NJTA’s HOV lanes. For a list of eligible HEVs please see the New Jersey Turnpike Authority Web site at http://www.state.nj.us/turnpike/index-hybrid.htm.

Alternative Fuel Vehicle (AFV) Rebate

New Jersey's AFV Rebate Program offers rebates to local government entities that convert vehicles to operate on alternative fuels or purchase original equipment manufacturer (OEM) AFVs. The rebate amounts, shown in the table below, can be used to cover the cost of converting a vehicle to operate on an alternative fuel or to cover the incremental cost of purchasing an OEM AFV, and vary according to the vehicle weight class and whether the vehicle is dedicated or bi-fuel. Hybrid electric vehicles (HEVs) also qualify for the rebates. Eligible entities include local governments, state colleges and universities, school districts, and governmental authorities. The $500,000 initial funding for this program was provided by a federal Congestion Mitigation and Air Quality (CMAQ) Improvement Program grant. To date, rebates totaling $876,500 have been awarded.

Point of Contact

Ellen Bourbon
Clean Cities Coordinator
New Jersey Clean Cities Coalition
Phone (609) 984-3058
Fax (609) 777-3336
ellen.bourbon@bpu.state.nj.us
 

Biodiesel Fuel Use Rebate

The Local Government Biodiesel Rebate Program currently has funding available to reimburse eligible local governments, state colleges and universities, school districts, and governmental authorities for the incremental costs of using biodiesel fuel in lieu of petroleum diesel.

Starting at the end of 2006, the Local Government Biodiesel Rebate Program will reimburse farmers for the incremental cost of using biodiesel fuel in their vehicles or for using a 5% blend of biodiesel in lieu of 100% petroleum heating oil.

Point of Contact

Ellen Bourbon
Clean Cities Coordinator
New Jersey Clean Cities Coalition
Phone (609) 984-3058
Fax (609) 777-3336
ellen.bourbon@bpu.state.nj.us
 

Alternative Fuel Infrastructure Rebate

The Local Government Alternative Fuel Infrastructure Program currently has funding available to reimburse eligible local governments, state colleges and universities, school districts, and governmental authorities for 50% of the cost of purchasing and installing refueling infrastructure for alternative fuels. Up to $50,000 is available per applicant. Eligible fuels include natural gas, propane, electricity, ethanol (E85) and hydrogen.

Point of Contact

Ellen Bourbon
Clean Cities Coordinator
New Jersey Clean Cities Coalition
Phone (609) 984-3058
Fax (609) 777-3336
ellen.bourbon@bpu.state.nj.us
 

State Laws and Regulations

Low Emission Vehicle (LEV) Sales Requirement

Beginning January 1, 2009, New Jersey will implement the California Low Emission Vehicle program. The program requires automakers that sell vehicles in New Jersey to sell or lease at least 40,000 hybrid electric vehicles and 128,000 LEVs per model year. Reference New Jersey Statutes 26:2C-8.15 to 8.21).

Low Emissions or Alternative Fuel Bus Acquisition Requirement

Beginning July 1, 2007, all buses purchased by the New Jersey Transit Corporation must be 1) equipped with improved pollution controls that reduce particulate emissions or 2) powered by a fuel other than conventional diesel. Qualifying vehicles include compressed natural gas vehicles, hybrid electric vehicles, fuel cell vehicles, vehicles operating on ultra low sulfur fuel or biodiesel, or vehicles operating on any other bus fuel approved by the U.S. Environmental Protection Agency. (Reference New Jersey Statutes 27:1B-22)

Advanced Technology Vehicle Task Force

New Jersey is committed to exceeding the alternative fuel vehicle (AFV) acquisition mandates for state government fleets (as defined by the Energy Policy Act of 1992) by 5% per year. In Model Year 2001 and thereafter, the vehicles acquired to fulfill this enhanced commitment must meet or exceed California Air Resources Board Ultra Low Emission Vehicle standards. An Advanced Technology Vehicle (ATV) Task Force was created in order to assist the Department of Treasury in coordinating AFV and ATV acquisition and placement, developing a refueling/recharging infrastructure to support AFV and ATV use by the state motor vehicle fleet, and creating an incentive program to defray the incremental costs of AFVs and ATVs for other public entities. (Reference Executive Order 94, 1999)

Reduced Alternative Fuels Tax

The tax paid upon the sale and use of liquefied petroleum gas and compressed natural gas when used as transportation fuel is half the tax paid for gasoline and diesel. (Reference New Jersey Statutes 54:39-27.1)

Idle Reduction Requirement

A diesel powered motor vehicle may not be allowed to operate for more than three consecutive minutes when the vehicle is not in motion, with the following exceptions: 1) a motor vehicle at the place of business where the vehicle is permanently assigned may idle for 30 consecutive minutes, and 2) a motor vehicle may idle for 15 consecutive minutes when the vehicle’s engine has been stopped for at least three hours. These provisions do not apply to the following: 1) a light-duty diesel vehicle; 2) a diesel bus while loading or unloading; 3) a vehicle stopped in a line of traffic; 4) a vehicle being inspected by a state or federal motor vehicle inspector; 5) an emergency vehicle in an emergency situation; 6) a vehicle being repaired or serviced; or 7) a vehicle needing auxiliary power for equipment or for climate control. Violators will be issued fines ranging from $100 to $200 for the first offense, and up to $3,000 for repeated offenses. (Reference New Jersey Administrative Code 7:27-14.2)

Utilities/Private Incentives

Natural Gas Vehicle (NGV) Technical Assistance

Public Service Electric and Gas Company will assist customers with NGV projects and provide emergency refueling access on a case-by-case basis.

Point of Contact

Dick Duffy
Gas Products Manager
Public Service Electric and Gas Company
Phone (973) 430-7664
Fax (973) 353-9225
richard.duffy@pseg.com
 

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