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Bill

A 533

Eliminates Treasurer's authority to annually adjust petroleum products gross receipts tax.

2026-2027 Regular Session Introduced by Bob Auth and 4 co-sponsors

The bill transfers authority to set or adjust the petroleum products gross receipts tax rate from the State Treasurer to the Legislature, ending automatic annual adjustments.

Introduced, Referred to Assembly Transportation and Independent Authorities Committee
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Bill Summary · A 533

Summary of Bill A 533 (Session 222, New Jersey)

Purpose and Intent

  • This bill eliminates the State Treasurer’s unilateral authority to annually adjust the petroleum products gross receipts tax (PGR tax) after State Fiscal Year 2021.
  • Going forward, only the Legislature would have the authority to change the PGR tax rate; the Treasurer would be removed from automatic yearly adjustments used to meet revenue targets.

Background Context (as provided in the bill and statements)

  • Current law (P.L.1990, c.42 and related statute) requires annual adjustments to the PGR tax rates (via a “highway fuel cap” framework) so that total highway fuel revenue aligns with an annual cap amount.
  • The highway fuel cap amount is based on pre-determined calculations tied to 2016-era assumptions and revenue baselines, with adjustments made by the State Treasurer (in cooperation with the Legislative Budget and Finance Officer) to either raise or lower the rate to hit the cap.
  • The bill’s sponsor notes that the cap is approximately $2 billion and that the mechanism has effectively allowed annual rate adjustments to reach that cap.

Key Provisions

1) Change to Section 3 of P.L.1990, c.42 (C.54:15B-3)

  • The bill modifies the current framework governing gas/taxable petroleum products:
    • The existing structure that allows the State Treasurer to adjust rates annually (to meet the highway fuel cap) would be eliminated after State Fiscal Year 2021.
    • The determination and adjustment authority would be shifted to the Legislature, meaning legislative action would be required to change the petroleum products gross receipts tax rate.

2) Amendments to Section 19 of P.L.2016, c.57 (C.52:18A-257)

  • The bill amends the composition and duties of the “review council” (comprising the State Treasurer, the Legislative Budget and Finance Officer, and a third public member) that oversees broader fiscal impacts of P.L.2016, c.57.
  • The substantive effect relates to ongoing advisory and certification duties tied to implementation and delays, maintaining oversight but within the revised framework where the Legislature holds the key rate-setting power for PGR tax.

3) Effective Date

  • The act states it shall take effect immediately upon enactment.

Affected Parties and Impacts

  • State Legislature: Primary shift in authority. Lawmakers would need to pass a law to adjust the petroleum products gross receipts tax rate going forward.
  • State Treasurer and LBFO: The Treasurer’s annual adjustment authority would be removed after FY 2021; their role would no longer include automatic rate tuning to hit the highway fuel cap. The LBFO remains as part of the review framework, but the dynamic rate-setting power moves to the Legislature.
  • Petroleum Refiners/Distributors and Taxpayers: The substantive tax rates for petroleum products, highway fuel, and related taxes would require legislative action to change, potentially affecting revenue timing and price dynamics.
  • State Revenue/laboratories: Revenue forecasting and budgeting processes would hinge on enacted legislation rather than annual automatic adjustments.

Procedural and Timeline Aspects

  • Implementation Timeline: Immediate effect upon enactment for shifting authority away from the Treasurer; however, the bill sets a sunset-like boundary in practice to FY 2021 for the Treasurer’s current adjustment authority.
  • Ongoing Oversight: The existing review council provisions (from P.L.2016, c.57) are retained and would continue to perform advisory and monitoring duties, now in the context of a Legislature-driven rate-setting framework.

Practical Implications

  • The bill increases legislative control over the PGR tax rate, potentially reducing administrative or executive discretion in annual revenue balancing.
  • Fiscal predictability for the highway fuel cap and related revenues would depend on enacted legislation, rather than automatic annual adjustments.
  • Stakeholders (government finance offices, industry, and consumers) would experience rate changes only through legislative action, which could affect timing and predictability of fuel taxes.

Note: The bill’s language emphasizes the removal of the Treasurer’s annual adjustment authority and assigns the power to modify the petroleum products gross receipts tax to the Legislature, aligning tax-rate changes with legislative processes.

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

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