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Bill

A 5347

Concerns certain motor vehicle related funding to certain municipalities.

2026-2027 Regular Session

Large municipalities exceeding 200,000 population and 15% growth can impose new taxes on parking and motor vehicle rentals to fund mass transit, redevelopment, and related costs.

Reported out of Assembly Committee, 2nd Reading
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Bill Summary · A 5347

Summary of Bill A-5347 (Session 222, New Jersey)

Purpose and intent

  • This bill modifies and clarifies how certain motor vehicle–related funding is distributed and used by municipalities, expanding eligibility and adjusting how revenues from specific taxes and penalties can be utilized. It aims to increase flexibility for large municipalities (population ≥ 200,000 and with a significant population increase since 2010) to fund mass transit infrastructure, operating costs, and related activities, as well as to adjust allocations from parking penalties and motor vehicle rental taxes.

Key provisions and changes

1) Mass transit access parking tax (N.J.S.40:48C-1.7)
- Eligibility to impose: Municipalities with population of 100,000+ may adopt a 3.5% mass transit access parking tax on fees for parking, garaging, or storing motor vehicles at public parking facilities (not applicable to parking at private dwellings or certain residential buildings).
- Use of tax revenues:
- General rule (non-large-population-exception municipalities): Revenues must be anticipated and appropriated in the municipal budget as dedicated revenue for capital improvements that enhance pedestrian access to mass transit (e.g., bridges, tunnels, platforms, walkways, elevators/escalators, etc.). Any remaining funds after capital projects in a fiscal year may be used for quality-of-life municipal projects.
- Large-population exception (municipalities with 200,000+ and >15% population increase since 2010–2020): Revenues may be used either for the capital-access purposes described above or for operating and administrative expenses related to mass transit facilitation.
- Interaction with other taxes: The parking tax can be imposed in addition to other surcharges or taxes, but not concurrently with a special event parking tax surcharge.

  • Exemptions for residents: Municipal ordinances may fully exempt residents from the tax or provide rebates/refunds for short-term parking and waive the tax for long-term parking with proof of residency.

2) Parking Offenses Adjudication Act – municipal court funding (N.J.S.39:4-139.9)
- Allocation of parking penalties:
- Current: $2 of each parking penalty designated to the municipal court.
- New for qualifying large municipalities: 10% of each parking penalty would be designated to the municipal court for operating costs related to administering the act, in addition to the standard budget. This amount is at the municipality’s sole discretion if the municipality has 200,000+ population and >15% growth since 2010–2020.
- Purpose of funds remains to support court operations associated with adjudicating parking offenses.

3) Local motor vehicle rental tax (N.J.S.40:48H-2)
- Eligibility to impose: Municipalities with population 200,000+ and >15% population growth since 2010–2020 may impose a local rental tax on motor vehicle rentals in any area of the municipality (not limited to a designated industrial zone), effectively broadening applicability beyond the previous 100,000+ population and airport-only restrictions.
- Tax rate: May not exceed 5% of the total rental fee (excluding taxes and surcharges).
- Use of tax proceeds:
- Proceeds may be deposited into a dedicated rental tax account and used for eligible purposes, which include redevelopment costs, subsidies, urban enterprise zones, bond issuances, and related planning and enforcement expenses.
- The bill defines “eligible purposes” to include redevelopment projects, planning, financing, subsidies, and costs of administration and enforcement, with the “industrial zone” portion limited to up to 50% of the municipality’s territory as identified by zoning or census data.
- Tax administration: The Director of the Division of Taxation can require collection similarly to other motor vehicle taxes, with revenues deposited into the municipality’s trust account dedicated to eligible purposes.

  • Definitions: The bill provides specific definitions for “industrial zone,” “eligible purposes,” “rental of motor vehicle,” and related terms to guide appropriation and administration.

Who is affected

  • Large municipalities (population ≥ 200,000) that have experienced a population increase >15% from 2010 to 2020 are targeted for expanded authority:
    • May impose the mass transit access parking tax and the rental motor vehicle tax (with specified rates and purposes).
    • May allocate parking penalty revenues at a higher percentage to fund municipal court operations.
  • Municipalities with 100,000+ population but not meeting the 200,000+ threshold or the 15% growth threshold are affected more narrowly, with parking tax revenue dedicated primarily to capital mass transit pedestrian access improvements (and potential quality-of-life uses if funds remain).
  • Municipalities with large airports and industrial zones may leverage the revised rental tax provisions for redevelopment and related expenses.

Timelines and effective date

  • Effective date: Immediate upon enactment.

Practical implications

  • Potentially increased revenue streams for mass transit-related infrastructure and municipal court operations in qualifying large, fast-growing municipalities.
  • Expanded authority to tax motor vehicle rentals in large municipalities, potentially supporting redevelopment and infrastructure projects.
  • Residents in municipalities with the new parking tax may receive exemptions or rebates for parking, subject to local ordinance design.
  • Administrative and reporting requirements will arise for trust accounts, allocation of revenues, and compliance with “eligible purposes” definitions.

If you’d like, I can provide a side-by-side comparison table of current law vs. proposed changes, or a plain-language FAQ based on this bill.

Compiled from official sources — confirm details with the bill’s official record.

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