12. (New section) Notwithstanding any other provision of P.L.1995, c.157, or any rule or regulation adopted pursuant thereto, to the contrary, the New Jersey Motor Vehicle Commission, the Department of Law and Public Safety, the Department of Transportation, and any local or State law enforcement officer are authorized to include in a roadside inspection of a diesel bus, diesel-powered motor vehicle, heavy-duty diesel truck or other diesel-powered motor vehicle as defined pursuant to section 2 of P.L.1995, c.157 (C.39:8-60), an inspection of the vehicle for compliance with the requirements of the fine particle diesel emissions reduction program, established pursuant to P.L. , c. (C. ) (now before the Legislature as this bill), including, but not limited to, verifying records maintained on the vehicle pursuant to section 7 of P.L. , c. (C. ) (now before the Legislature as this bill), the installation of the required retrofits, or the use of the required fuel in the vehicle. Information concerning the compliance of the vehicle with the requirements of the fine particle diesel emissions reduction program established pursuant to P.L. , c. (C. ) (now before the Legislature as this bill) shall be forwarded to the Department of Environmental Protection.

    13. (New section) The Department of Environmental Protection, the Department of Law and Public Safety, and the Department of Transportation, and the New Jersey Motor Vehicle Commission are authorized to take whatever action is necessary to enforce the requirements of the fine particle diesel emissions reduction program established pursuant to P.L. , c. (C. ) (now before the Legislature as this bill), which actions shall include, but need not be limited to, inspection of the regulated on-road diesel vehicles in regulated fleets at the place of business of the owner or wherever the owner, operator, or lessee of a regulated fleet houses the regulated on-road diesel vehicles and regulated off-road diesel equipment in the regulated fleet. The inspection may include, but is not necessarily limited to, verifying records maintained on the vehicle pursuant to section 7 of P.L. , c. (C. ) (now before the Legislature as this bill), the installation of the required retrofits, or the use of the required fuel in the vehicle. Information concerning the compliance of the vehicle with the requirements of the fine particle diesel emissions reduction program established pursuant to P.L. , c. (C. ) (now before the Legislature as this bill) shall be forwarded to the Department of Environmental Protection.

    14. (New section) a. The Department of Environmental Protection, the New Jersey Motor Vehicle Commission, the Department of Law and Public Safety, and the Department of Transportation shall each review any rules and regulations each department or the commission have adopted pursuant to P.L.1995, c.157 (C.39:8-59 et al.) for the implementation and enforcement of the periodic inspection program and roadside inspection program for diesel buses, heavy duty diesel trucks, and other diesel-powered motor vehicles, established pursuant to P.L.1995, c.157 (C.39:8-59 et al.). Each department and the commission shall revise these rules and regulations, wherever appropriate, to ensure the proper coordination with and, if appropriate, integration of, these programs with the implementation and enforcement of the fine particle diesel emissions reduction program established pursuant P.L. , c. (C. ) (now before the Legislature as this bill). The revisions may include, but shall not necessarily be limited to, establishing a training and certification program for persons who install best available retrofit technologies onto regulated on-road diesel vehicles and persons who test emissions or make emissions-related repairs on the vehicles, and requiring only persons trained and certified under the program to undertake the installation of best available retrofit technologies onto regulated on-road diesel vehicles or test emissions or make emissions-related repairs on the vehicles, as applicable.

    b. As part of the review and revision required under subsection a. of this section, the Department of Environmental Protection shall adopt, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.) and as part of the rules and regulations adopted pursuant to section 3 of P.L.1995, c.157 (C.39:8-61), rules and regulations establishing exhaust emissions standards and test methods for regulated on-road diesel vehicles that have complied with the provisions of P.L. , c. (C. ) (now before the Legislature as this bill).

    15. (New section) No later than three years after the effective date of P.L. , c. (C. ) (now before the Legislature as this bill), the Department of Transportation shall adopt, pursuant to the "Administrative Procedures Act," P.L.1968, c.410 (C.52:14B-1 et seq.), any rules or regulations necessary for the enforcement of the provisions of P.L. , c. (C. ) (now before the Legislature as this bill), including, but not limited to, a penalty schedule for violations, that are consistent with the rules and regulations adopted by the Department of Environmental Protection pursuant to section 4 of P.L. , c. (C. ) (now before the Legislature as this bill).

    16. (New section) No later than three years after the effective date of P.L. , c. (C. ) (now before the Legislature as this bill), the New Jersey Motor Vehicle Commission shall adopt, pursuant to the "Administrative Procedures Act," P.L.1968, c.410 (C.52:14B-1 et seq.), any rules or regulations necessary for the enforcement of the provisions of P.L. , c. (C. ) (now before the Legislature as this bill), including, but not limited to, a penalty schedule for violations, that are consistent with the rules and regulations adopted by the Department of Environmental Protection pursuant to section 4 of P.L. , c. (C. ) (now before the Legislature as this bill).

    17. (New section) No later than three years after the effective date of P.L. , c. (C. ) (now before the Legislature as this bill), the Department of Law and Public Safety shall adopt, pursuant to the "Administrative Procedures Act," P.L.1968, c.410 (C.52:14B-1 et seq.), any rules or regulations necessary for the enforcement of the provisions of P.L. , c. (C. ) (now before the Legislature as this bill), including, but not limited to, a penalty schedule for violations, that are consistent with the rules and regulations adopted by the Department of Environmental Protection pursuant to section 4 of P.L. , c. (C. ) (now before the Legislature as this bill).

    18. (New section) The Department of Education, in consultation with the Department of Environmental Protection, the Department of Health and Human Services, and the New Jersey Motor Vehicle Commission, shall adopt, pursuant to the "Administrative Procedures Act," P.L.1968, c.410 (c.52:14B-1 et seq.), rules and regulations concerning the idling and queuing of school buses and enforcement of violations thereof, and minimizing the exposure of children to fine particle and other diesel emissions, that are consistent with the rules and regulations adopted by the Department of Environmental Protection pursuant to section 4 of P.L. , c. (C. ) (now before the Legislature as this bill).

    19. (New section) The Department of Law and Public Safety, in consultation with local law enforcement, the Department of Education, the Department of Environmental Protection, the Department of Transportation, and the New Jersey Motor Vehicle Commission, shall adopt, pursuant to the "Administrative Procedures Act," P.L.1968, c.410 (c.52:14B-1 et seq.), any rules or regulations necessary to facilitate and ensure the enforcement of the rules and regulations adopted pursuant to section 18 of P.L. , c. (C. ) (now before the Legislature as this bill).

    20. (New section) a. On or after January 1, 2010, the Department of Environmental Protection, in conjunction with the Department of Education, the Department of Health and Senior Services, the Department of Transportation, and the New Jersey Motor Vehicle Commission, shall examine the progress and the efficacy of the programs required pursuant to P.L. , c. (C. ) (now before the Legislature as this bill). The Department of Environmental Protection shall determine the need for, the environmental and health benefits from, and the feasibility of, further regulation of diesel-powered vehicles and equipment operated in the State and the use of best available retrofit technology by vehicles or equipment in addition to those required pursuant to P.L. , c. (C. ) (now before the Legislature as this bill), and the reduction of fine particle emissions from these vehicles and equipment that could be attained by increased or revised regulation.

    b. No later than January 1, 2011, the Department of Environmental Protection shall submit its findings to the Governor and the Legislature, with any recommendations for legislation that may be required to address the findings.

    21. (New section) There is created in the Department of Environmental Protection a special nonlapsing fund to be known as the "Diesel Risk Mitigation Fund," hereinafter referred to as "the fund," for the purposes of financing any costs to any local government unit incurred by complying with the requirements of P.L. , c. (C. ) (now before the Legislature as this bill), and administrative costs incurred by the Department of Environmental Protection in the establishment and implementation of P.L. , c. (C. ) (now before the Legislature as this bill). The department shall administer the fund with whatever moneys are deposited in the fund and made available to it by law. The department shall establish criteria and procedures for the allocation of moneys in the fund to eligible entities for eligible costs.

    22. (New section) a. Receipts from sales of technology, other than fuel, purchased to comply with retrofits required for regulated diesel vehicles or regulated off-road diesel equipment in a regulated fleet retrofit plan or supplement thereto, approved pursuant to section 4 of P.L. , c. (C. ) (now before the Legislature as this bill), are exempt from the tax imposed under the "Sales and Use Tax Act," P.L.1966, c.30 (C.54:32B-1 et seq.).

    b. The Treasurer shall adopt rules and regulations, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), in consultation with the Commissioner of Environmental Protection, necessary to implement this section, including rules and regulations specifying the sales of devices and equipment for retrofitting that qualify for the exemption provided under subsection a. of this section.

    23. Section 4 of P.L.1945, c.162 (C.54:10A-4) is amended to read as follows:

    4. For the purposes of this act, unless the context requires a different meaning:

    (a) "Commissioner" or "director" shall mean the Director of the Division of Taxation of the State Department of the Treasury.

    (b) "Allocation factor" shall mean the proportionate part of a taxpayer's net worth or entire net income used to determine a measure of its tax under this act.

    (c) "Corporation" shall mean any corporation, joint-stock company or association and any business conducted by a trustee or trustees wherein interest or ownership is evidenced by a certificate of interest or ownership or similar written instrument, any other entity classified as a corporation for federal income tax purposes, and any state or federally chartered building and loan association or savings and loan association.

    (d) "Net worth" shall mean the aggregate of the values disclosed by the books of the corporation for (1) issued and outstanding capital stock, (2) paid-in or capital surplus, (3) earned surplus and undivided profits, and (4) surplus reserves which can reasonably be expected to accrue to holders or owners of equitable shares, not including reasonable valuation reserves, such as reserves for depreciation or obsolescence or depletion. Notwithstanding the foregoing, net worth shall not include any deduction for the amount of the excess depreciation described in paragraph (2)(F) of subsection (k) of this section. The foregoing aggregate of values shall be reduced by 50% of the amount disclosed by the books of the corporation for investment in the capital stock of one or more subsidiaries, which investment is defined as ownership (1) of at least 80% of the total combined voting power of all classes of stock of the subsidiary entitled to vote and (2) of at least 80% of the total number of shares of all other classes of stock except nonvoting stock which is limited and preferred as to dividends. In the case of investment in an entity organized under the laws of a foreign country, the foregoing requisite degree of ownership shall effect a like reduction of such investment from the net worth of the taxpayer, if the foreign entity is considered a corporation for any purpose under the United States federal income tax laws, such as (but not by way of sole examples) for the purpose of supplying deemed paid foreign tax credits or for the purpose of status as a controlled foreign corporation. In calculating the net worth of a taxpayer entitled to reduction for investment in subsidiaries, the amount of liabilities of the taxpayer shall be reduced by such proportion of the liabilities as corresponds to the ratio which the excluded portion of the subsidiary values bears to the total assets of the taxpayer.

    In the case of banking corporations which have international banking facilities as defined in subsection (n), the foregoing aggregate of values shall also be reduced by retained earnings of the international banking facility. Retained earnings means the earnings accumulated over the life of such facility and shall not include the distributive share of dividends paid and federal income taxes paid or payable during the tax year.

    If in the opinion of the commissioner, the corporation's books do not disclose fair valuations the commissioner may make a reasonable determination of the net worth which, in his opinion, would reflect the fair value of the assets, exclusive of subsidiary investments as defined aforesaid, carried on the books of the corporation, in accordance with sound accounting principles, and such determination shall be used as net worth for the purpose of this act.

    (e) (Deleted by amendment, P.L.1998, c.114.)

    (f) "Investment company" shall mean any corporation whose business during the period covered by its report consisted, to the extent of at least 90% thereof of holding, investing and reinvesting in stocks, bonds, notes, mortgages, debentures, patents, patent rights and other securities for its own account, but this shall not include any corporation which: (1) is a merchant or a dealer of stocks, bonds and other securities, regularly engaged in buying the same and selling the same to customers; or (2) had less than 90% of its average gross assets in New Jersey, at cost, invested in stocks, bonds, debentures, mortgages, notes, patents, patent rights or other securities or consisting of cash on deposit during the period covered by its report; or (3) is a banking corporation, a savings institution, or a financial business corporation as defined in the Corporation Business Tax Act.

    (g) "Regulated investment company" shall mean any corporation which for a period covered by its report, is registered and regulated under the Investment Company Act of 1940 (54 Stat. 789), as amended.

    (h) "Taxpayer" shall mean any corporation, and any partnership required, or consenting, to report or to pay taxes, interest or penalties under this act. "Taxpayer" shall not include a partnership that is listed on a United States national stock exchange.

    (i) "Fiscal year" shall mean an accounting period ending on any day other than the last day of December on the basis of which the taxpayer is required to report for federal income tax purposes.

    (j) Except as herein provided, "privilege period" shall mean the calendar or fiscal accounting period for which a tax is payable under this act.

    (k) "Entire net income" shall mean total net income from all sources, whether within or without the United States, and shall include the gain derived from the employment of capital or labor, or from both combined, as well as profit gained through a sale or conversion of capital assets.

    For the purpose of this act, the amount of a taxpayer's entire net income shall be deemed prima facie to be equal in amount to the taxable income, before net operating loss deduction and special deductions, which the taxpayer is required to report, or, if the taxpayer is classified as a partnership for federal tax purposes, would otherwise be required to report, to the United States Treasury Department for the purpose of computing its federal income tax, provided however, that in the determination of such entire net income,

    (1) Entire net income shall exclude for the periods set forth in paragraph (2)(F)(i) of this subsection, any amount, except with respect to qualified mass commuting vehicles as described in section 168(f)(8)(D)(v) of the Internal Revenue Code as in effect immediately prior to January 1, 1984, which is included in a taxpayer's federal taxable income solely as a result of an election made pursuant to the provisions of paragraph (8) of that section.

    (2) Entire net income shall be determined without the exclusion, deduction or credit of:

    (A) The amount of any specific exemption or credit allowed in any law of the United States imposing any tax on or measured by the income of corporations;

    (B) Any part of any income from dividends or interest on any kind of stock, securities or indebtedness, except as provided in paragraph (5) of subsection (k) of this section;

    (C) Taxes paid or accrued to the United States, a possession or territory of the United States, a state, a political subdivision thereof, or the District of Columbia, or to any foreign country, state, province, territory or subdivision thereof, on or measured by profits or income, or business presence or business activity, or the tax imposed by this act, or any tax paid or accrued with respect to subsidiary dividends excluded from entire net income as provided in paragraph (5) of subsection (k) of this section;

    (D) (Deleted by amendment, P.L.1985, c.143.)

    (E) (Deleted by amendment, P.L.1995, c.418.)

    (F) (i) The amount by which depreciation reported to the United States Treasury Department for property placed in service on and after January 1, 1981, but prior to taxpayer fiscal or calendar accounting years beginning on and after the effective date of P.L.1993, c.172, for purposes of computing federal taxable income in accordance with section 168 of the Internal Revenue Code in effect after December 31, 1980, exceeds the amount of depreciation determined in accordance with the Internal Revenue Code provisions in effect prior to January 1, 1981, but only with respect to a taxpayer's accounting period ending after December 31, 1981; provided, however, that where a taxpayer's accounting period begins in 1981 and ends in 1982, no modification shall be required with respect to this paragraph (F) for the report filed for such period with respect to property placed in service during that part of the accounting period which occurs in 1981. The provisions of this subparagraph shall not apply to assets placed in service prior to January 1, 1998 of a gas, gas and electric, and electric public utility that was subject to the provisions of P.L.1940, c.5 (C.54:30A-49 et seq.) prior to 1998.

    (ii) For the periods set forth in subparagraph (F)(i) of this subsection, any amount, except with respect to qualified mass commuting vehicles as described in section 168(f)(8)(D)(v) of the Internal Revenue Code as in effect immediately prior to January 1, 1984, which the taxpayer claimed as a deduction in computing federal income tax pursuant to a qualified lease agreement under paragraph (8) of that section.

    The director shall promulgate rules and regulations necessary to carry out the provisions of this section, which rules shall provide, among others, the manner in which the remaining life of property shall be reported.

    (G) (i) The amount of any civil, civil administrative, or criminal penalty or fine, including a penalty or fine under an administrative consent order, assessed and collected for a violation of a State or federal environmental law, an administrative consent order, or an environmental ordinance or resolution of a local governmental entity, and any interest earned on the penalty or fine, and any economic benefits having accrued to the violator as a result of a violation, which benefits are assessed and recovered in a civil, civil administrative, or criminal action, or pursuant to an administrative consent order. The provisions of this paragraph shall not apply to a penalty or fine assessed or collected for a violation of a State or federal environmental law, or local environmental ordinance or resolution, if the penalty or fine was for a violation that resulted from fire, riot, sabotage, flood, storm event, natural cause, or other act of God beyond the reasonable control of the violator, or caused by an act or omission of a person who was outside the reasonable control of the violator.

    (ii) The amount of treble damages paid to the Department of Environmental Protection pursuant to subsection a. of section 7 of P.L.1976, c.141 (C.58:10-23.11f), for costs incurred by the department in removing, or arranging for the removal of, an unauthorized discharge upon failure of the discharger to comply with a directive from the department to remove, or arrange for the removal of, the discharge.

    (H) The amount of any sales and use tax paid by a utility vendor pursuant to section 71 of P.L.1997, c.162.

    (I) Interest paid, accrued or incurred for the privilege period to a related member , as defined in section 5 of P.L.2002, c.40 (C.54:10A-4.4), except that a deduction shall be permitted to the extent that the taxpayer establishes by clear and convincing evidence, as determined by the director, that: (i) a principal purpose of the transaction giving rise to the payment of the interest was not to avoid taxes otherwise due under Title 54 of the Revised Statutes or Title 54A of the New Jersey Statutes, (ii) the interest is paid pursuant to arm's length contracts at an arm's length rate of interest, and (iii)(aa) the related member was subject to a tax on its net income or receipts in this State or another state or possession of the United States or in a foreign nation, (bb) a measure of the tax includes the interest received from the related member, and (cc) the rate of tax applied to the interest received by the related member is equal to or greater than a rate three percentage points less than the rate of tax applied to taxable interest by this State.

    A deduction shall also be permitted if the taxpayer establishes by clear and convincing evidence, as determined by the director, that the disallowance of a deduction is unreasonable, or the taxpayer and the director agree in writing to the application or use of an alternative method of apportionment under section 8 of P.L.1945, c.162 as a corporation for federal income tax purposes, and any state or federally chartered building and loan association or savings and loan association.

    (d) "Net worth" shall mean the aggregate of the values disclosed by the books of the corporation for (1) issued and outstanding capital stock, (2) paid-in or capital surplus, (3) earned surplus and undivided profits, and (4) surplus reserves which can reasonably be expected to accrue to holders or owners of equitable shares, not including reasonable valuation reserves, such as reserves for depreciation or obsolescence or depletion. Notwithstanding the foregoing, net worth shall not include any deduction for the amount of the excess depreciation described in paragraph (2)(F) of subsection (k) of this section. The foregoing aggregate of values shall be reduced by 50% of the amount disclosed by the books of the corporation for investment in the capital stock of one or more subsidiaries, which investment is defined as ownership (1) of at least 80% of the total combined voting power of all classes of stock of the subsidiary entitled to vote and (2) of at least 80% of the total number of shares of all other classes of stock except nonvoting stock which is limited and preferred as to dividends. In the case of investment in an entity organized under the laws of a foreign country, the foregoing requisite degree of ownership shall effect a like reduction of such investment from the net worth of the taxpayer, if the foreign entity is considered a corporation for any purpose under the United States federal income tax laws, such as (but not by way of sole examples) for the purpose of supplying deemed paid foreign tax credits or for the purpose of status as a controlled foreign corporation. In calculating the net worth of a taxpayer entitled to reduction for investment in subsidiaries, the amount of liabilities of the taxpayer shall be reduced by such proportion of the liabilities as corresponds to the ratio which the excluded portion of the subsidiary values bears to the total assets of the taxpayer.

    In the case of banking corporations which have international banking facilities as defined in subsection (n), the foregoing aggregate of values shall also be reduced by retained earnings of the international banking facility. Retained earnings means the earnings accumulated over the life of such facility and shall not include the distributive share of dividends paid and federal income taxes paid or payable during the tax year.

    If in the opinion of the commissioner, the corporation's books do not disclose fair valuations the commissioner may make a reasonable determination of the net worth which, in his opinion, would reflect the fair value of the assets, exclusive of subsidiary investments as defined aforesaid, carried on the books of the corporation, in accordance with sound accounting principles, and such determination shall be used as net worth for the purpose of this act.

    (e) (Deleted by amendment, P.L.1998, c.114.)

    (f) "Investment company" shall mean any corporation whose business during the period covered by its report consisted, to the extent of at least 90% thereof of holding, investing and reinvesting in stocks, bonds, notes, mortgages, debentures, patents, patent rights and other securities for its own account, but this shall not include any corporation which: (1) is a merchant or a dealer of stocks, bonds and other securities, regularly engaged in buying the same and selling the same to customers; or (2) had less than 90% of its average gross assets in New Jersey, at cost, invested in stocks, bonds, debentures, mortgages, notes, patents, patent rights or other securities or consisting of cash on deposit during the period covered by its report; or (3) is a banking corporation, a savings institution, or a financial business corporation as defined in the Corporation Business Tax Act.

    (g) "Regulated investment company" shall mean any corporation which for a period covered by its report, is registered and regulated under the Investment Company Act of 1940 (54 Stat. 789), as amended.

    (h) "Taxpayer" shall mean any corporation, and any partnership required, or consenting, to report or to pay taxes, interest or penalties under this act. "Taxpayer" shall not include a partnership that is listed on a United States national stock exchange.

    (i) "Fiscal year" shall mean an accounting period ending on any day other than the last day of December on the basis of which the taxpayer is required to report for federal income tax purposes.

    (j) Except as herein provided, "privilege period" shall mean the calendar or fiscal accounting period for which a tax is payable under this act.

    (k) "Entire net income" shall mean total net income from all sources, whether within or without the United States, and shall include the gain derived from the employment of capital or labor, or from both combined, as well as profit gained through a sale or conversion of capital assets.

    For the purpose of this act, the amount of a taxpayer's entire net income shall be deemed prima facie to be equal in amount to the taxable income, before net operating loss deduction and special deductions, which the taxpayer is required to report, or, if the taxpayer is classified as a partnership for federal tax purposes, would otherwise be required to report, to the United States Treasury Department for the purpose of computing its federal income tax, provided however, that in the determination of such entire net income,

    (1) Entire net income shall exclude for the periods set forth in paragraph (2)(F)(i) of this subsection, any amount, except with respect to qualified mass commuting vehicles as described in section 168(f)(8)(D)(v) of the Internal Revenue Code as in effect immediately prior to January 1, 1984, which is included in a taxpayer's federal taxable income solely as a result of an election made pursuant to the provisions of paragraph (8) of that section.

    (2) Entire net income shall be determined without the exclusion, deduction or credit of:

    (A) The amount of any specific exemption or credit allowed in any law of the United States imposing any tax on or measured by the income of corporations;

    (B) Any part of any income from dividends or interest on any kind of stock, securities or indebtedness, except as provided in paragraph (5) of subsection (k) of this section;

    (C) Taxes paid or accrued to the United States, a possession or territory of the United States, a state, a political subdivision thereof, or the District of Columbia, or to any foreign country, state, province, territory or subdivision thereof, on or measured by profits or income, or business presence or business activity, or the tax imposed by this act, or any tax paid or accrued with respect to subsidiary dividends excluded from entire net income as provided in paragraph (5) of subsection (k) of this section;

    (D) (Deleted by amendment, P.L.1985, c.143.)

    (E) (Deleted by amendment, P.L.1995, c.418.)

    (F) (i) The amount by which depreciation reported to the United States Treasury Department for property placed in service on and after January 1, 1981, but prior to taxpayer fiscal or calendar accounting years beginning on and after the effective date of P.L.1993, c.172, for purposes of computing federal taxable income in accordance with section 168 of the Internal Revenue Code in effect after December 31, 1980, exceeds the amount of depreciation determined in accordance with the Internal Revenue Code provisions in effect prior to January 1, 1981, but only with respect to a taxpayer's accounting period ending after December 31, 1981; provided, however, that where a taxpayer's accounting period begins in 1981 and ends in 1982, no modification shall be required with respect to this paragraph (F) for the report filed for such period with respect to property placed in service during that part of the accounting period which occurs in 1981. The provisions of this subparagraph shall not apply to assets placed in service prior to January 1, 1998 of a gas, gas and electric, and electric public utility that was subject to the provisions of P.L.1940, c.5 (C.54:30A-49 et seq.) prior to 1998.

    (ii) For the periods set forth in subparagraph (F)(i) of this subsection, any amount, except with respect to qualified mass commuting vehicles as described in section 168(f)(8)(D)(v) of the Internal Revenue Code as in effect immediately prior to January 1, 1984, which the taxpayer claimed as a deduction in computing federal income tax pursuant to a qualified lease agreement under paragraph (8) of that section.

    The director shall promulgate rules and regulations necessary to carry out the provisions of this section, which rules shall provide, among others, the manner in which the remaining life of property shall be reported.

    (G) (i) The amount of any civil, civil administrative, or criminal penalty or fine, including a penalty or fine under an administrative consent order, assessed and collected for a violation of a State or federal environmental law, an administrative consent order, or an environmental ordinance or resolution of a local governmental entity, and any interest earned on the penalty or fine, and any economic benefits having accrued to the violator as a result of a violation, which benefits are assessed and recovered in a civil, civil administrative, or criminal action, or pursuant to an administrative consent order. The provisions of this paragraph shall not apply to a penalty or fine assessed or collected for a violation of a State or federal environmental law, or local environmental ordinance or resolution, if the penalty or fine was for a violation that resulted from fire, riot, sabotage, flood, storm event, natural cause, or other act of God beyond the reasonable control of the violator, or caused by an act or omission of a person who was outside the reasonable control of the violator.

    (ii) The amount of treble damages paid to the Department of Environmental Protection pursuant to subsection a. of section 7 of P.L.1976, c.141 (C.58:10-23.11f), for costs incurred by the department in removing, or arranging for the removal of, an unauthorized discharge upon failure of the discharger to comply with a directive from the department to remove, or arrange for the removal of, the discharge.

    (H) The amount of any sales and use tax paid by a utility vendor pursuant to section 71 of P.L.1997, c.162.

    (I) Interest paid, accrued or incurred for the privilege period to a related member , as defined in section 5 of P.L.2002, c.40 (C.54:10A-4.4), except that a deduction shall be permitted to the extent that the taxpayer establishes by clear and convincing evidence, as determined by the director, that: (i) a principal purpose of the transaction giving rise to the payment of the interest was not to avoid taxes otherwise due under Title 54 of the Revised Statutes or Title 54A of the New Jersey Statutes, (ii) the interest is paid pursuant to arm's length contracts at an arm's length rate of interest, and (iii)(aa) the related member was subject to a tax on its net income or receipts in this State or another state or possession of the United States or in a foreign nation, (bb) a measure of the tax includes the interest received from the related member, and (cc) the rate of tax applied to the interest received by the related member is equal to or greater than a rate three percentage points less than the rate of tax applied to taxable interest by this State.

    A deduction shall also be permitted if the taxpayer establishes by clear and convincing evidence, as determined by the director, that the disallowance of a deduction is unreasonable, or the taxpayer and the director agree in writing to the application or use of an alternative method of apportionment under section 8 of P.L.1945, c.162 as a corporation for federal income tax purposes, and any state or federally chartered building and loan association or savings and loan association.

    (d) "Net worth" shall mean the aggregate of the values disclosed by the books of the corporation for (1) issued and outstanding capital stock, (2) paid-in or capital surplus, (3) earned surplus and undivided profits, and (4) surplus reserves which can reasonably be expected to accrue to holders or owners of equitable shares, not including reasonable valuation reserves, such as reserves for depreciation or obsolescence or depletion. Notwithstanding the foregoing, net worth shall not include any deduction for the amount of the excess depreciation described in paragraph (2)(F) of subsection (k) of this section. The foregoing aggregate of values shall be reduced by 50% of the amount disclosed by the books of the corporation for investment in the capital stock of one or more subsidiaries, which investment is defined as ownership (1) of at least 80% of the total combined voting power of all classes of stock of the subsidiary entitled to vote and (2) of at least 80% of the total number of shares of all other classes of stock except nonvoting stock which is limited and preferred as to dividends. In the case of investment in an entity organized under the laws of a foreign country, the foregoing requisite degree of ownership shall effect a like reduction of such investment from the net worth of the taxpayer, if the foreign entity is considered a corporation for any purpose under the United States federal income tax laws, such as (but not by way of sole examples) for the purpose of supplying deemed paid foreign tax credits or for the purpose of status as a controlled foreign corporation. In calculating the net worth of a taxpayer entitled to reduction for investment in subsidiaries, the amount of liabilities of the taxpayer shall be reduced by such proportion of the liabilities as corresponds to the ratio which the excluded portion of the subsidiary values bears to the total assets of the taxpayer.

    In the case of banking corporations which have international banking facilities as defined in subsection (n), the foregoing aggregate of values shall also be reduced by retained earnings of the international banking facility. Retained earnings means the earnings accumulated over the life of such facility and shall not include the distributive share of dividends paid and federal income taxes paid or payable during the tax year.

    If in the opinion of the commissioner, the corporation's books do not disclose fair valuations the commissioner may make a reasonable determination of the net worth which, in his opinion, would reflect the fair value of the assets, exclusive of subsidiary investments as defined aforesaid, carried on the books of the corporation, in accordance with sound accounting principles, and such determination shall be used as net worth for the purpose of this act.

    (e) (Deleted by amendment, P.L.1998, c.114.)

    (f) "Investment company" shall mean any corporation whose business during the period covered by its report consisted, to the extent of at least 90% thereof of holding, investing and reinvesting in stocks, bonds, notes, mortgages, debentures, patents, patent rights and other securities for its own account, but this shall not include any corporation which: (1) is a merchant or a dealer of stocks, bonds and other securities, regularly engaged in buying the same and selling the same to customers; or (2) had less than 90% of its average gross assets in New Jersey, at cost, invested in stocks, bonds, debentures, mortgages, notes, patents, patent rights or other securities or consisting of cash on deposit during the period covered by its report; or (3) is a banking corporation, a savings institution, or a financial business corporation as defined in the Corporation Business Tax Act.

    (g) "Regulated investment company" shall mean any corporation which for a period covered by its report, is registered and regulated under the Investment Company Act of 1940 (54 Stat. 789), as amended.

    (h) "Taxpayer" shall mean any corporation, and any partnership required, or consenting, to report or to pay taxes, interest or penalties under this act. "Taxpayer" shall not include a partnership that is listed on a United States national stock exchange.

    (i) "Fiscal year" shall mean an accounting period ending on any day other than the last day of December on the basis of which the taxpayer is required to report for federal income tax purposes.

    (j) Except as herein provided, "privilege period" shall mean the calendar or fiscal accounting period for which a tax is payable under this act.

    (k) "Entire net income" shall mean total net income from all sources, whether within or without the United States, and shall include the gain derived from the employment of capital or labor, or from both combined, as well as profit gained through a sale or conversion of capital assets.

    For the purpose of this act, the amount of a taxpayer's entire net income shall be deemed prima facie to be equal in amount to the taxable income, before net operating loss deduction and special deductions, which the taxpayer is required to report, or, if the taxpayer is classified as a partnership for federal tax purposes, would otherwise be required to report, to the United States Treasury Department for the purpose of computing its federal income tax, provided however, that in the determination of such entire net income,

    (1) Entire net income shall exclude for the periods set forth in paragraph (2)(F)(i) of this subsection, any amount, except with respect to qualified mass commuting vehicles as described in section 168(f)(8)(D)(v) of the Internal Revenue Code as in effect immediately prior to January 1, 1984, which is included in a taxpayer's federal taxable income solely as a result of an election made pursuant to the provisions of paragraph (8) of that section.

    (2) Entire net income shall be determined without the exclusion, deduction or credit of:

    (A) The amount of any specific exemption or credit allowed in any law of the United States imposing any tax on or measured by the income of corporations;

    (B) Any part of any income from dividends or interest on any kind of stock, securities or indebtedness, except as provided in paragraph (5) of subsection (k) of this section;

    (C) Taxes paid or accrued to the United States, a possession or territory of the United States, a state, a political subdivision thereof, or the District of Columbia, or to any foreign country, state, province, territory or subdivision thereof, on or measured by profits or income, or business presence or business activity, or the tax imposed by this act, or any tax paid or accrued with respect to subsidiary dividends excluded from entire net income as provided in paragraph (5) of subsection (k) of this section;

    (D) (Deleted by amendment, P.L.1985, c.143.)

    (E) (Deleted by amendment, P.L.1995, c.418.)

    (F) (i) The amount by which depreciation reported to the United States Treasury Department for property placed in service on and after January 1, 1981, but prior to taxpayer fiscal or calendar accounting years beginning on and after the effective date of P.L.1993, c.172, for purposes of computing federal taxable income in accordance with section 168 of the Internal Revenue Code in effect after December 31, 1980, exceeds the amount of depreciation determined in accordance with the Internal Revenue Code provisions in effect prior to January 1, 1981, but only with respect to a taxpayer's accounting period ending after December 31, 1981; provided, however, that where a taxpayer's accounting period begins in 1981 and ends in 1982, no modification shall be required with respect to this paragraph (F) for the report filed for such period with respect to property placed in service during that part of the accounting period which occurs in 1981. The provisions of this subparagraph shall not apply to assets placed in service prior to January 1, 1998 of a gas, gas and electric, and electric public utility that was subject to the provisions of P.L.1940, c.5 (C.54:30A-49 et seq.) prior to 1998.

    (ii) For the periods set forth in subparagraph (F)(i) of this subsection, any amount, except with respect to qualified mass commuting vehicles as described in section 168(f)(8)(D)(v) of the Internal Revenue Code as in effect immediately prior to January 1, 1984, which the taxpayer claimed as a deduction in computing federal income tax pursuant to a qualified lease agreement under paragraph (8) of that section.

    The director shall promulgate rules and regulations necessary to carry out the provisions of this section, which rules shall provide, among others, the manner in which the remaining life of property shall be reported.

    (G) (i) The amount of any civil, civil administrative, or criminal penalty or fine, including a penalty or fine under an administrative consent order, assessed and collected for a violation of a State or federal environmental law, an administrative consent order, or an environmental ordinance or resolution of a local governmental entity, and any interest earned on the penalty or fine, and any economic benefits having accrued to the violator as a result of a violation, which benefits are assessed and recovered in a civil, civil administrative, or criminal action, or pursuant to an administrative consent order. The provisions of this paragraph shall not apply to a penalty or fine assessed or collected for a violation of a State or federal environmental law, or local environmental ordinance or resolution, if the penalty or fine was for a violation that resulted from fire, riot, sabotage, flood, storm event, natural cause, or other act of God beyond the reasonable control of the violator, or caused by an act or omission of a person who was outside the reasonable control of the violator.

    (ii) The amount of treble damages paid to the Department of Environmental Protection pursuant to subsection a. of section 7 of P.L.1976, c.141 (C.58:10-23.11f), for costs incurred by the department in removing, or arranging for the removal of, an unauthorized discharge upon failure of the discharger to comply with a directive from the department to remove, or arrange for the removal of, the discharge.

    (H) The amount of any sales and use tax paid by a utility vendor pursuant to section 71 of P.L.1997, c.162.

    (I) Interest paid, accrued or incurred for the privilege period to a related member , as defined in section 5 of P.L.2002, c.40 (C.54:10A-4.4), except that a deduction shall be permitted to the extent that the taxpayer establishes by clear and convincing evidence, as determined by the director, that: (i) a principal purpose of the transaction giving rise to the payment of the interest was not to avoid taxes otherwise due under Title 54 of the Revised Statutes or Title 54A of the New Jersey Statutes, (ii) the interest is paid pursuant to arm's length contracts at an arm's length rate of interest, and (iii)(aa) the related member was subject to a tax on its net income or receipts in this State or another state or possession of the United States or in a foreign nation, (bb) a measure of the tax includes the interest received from the related member, and (cc) the rate of tax applied to the interest received by the related member is equal to or greater than a rate three percentage points less than the rate of tax applied to taxable interest by this State.

    A deduction shall also be permitted if the taxpayer establishes by clear and convincing evidence, as determined by the director, that the disallowance of a deduction is unreasonable, or the taxpayer and the director agree in writing to the application or use of an alternative method of apportionment under section 8 of P.L.1945, c.162 (C.54:10A-8); nothing in this subsection shall be construed to limit or negate the director's authority to otherwise enter into agreements and compromises otherwise allowed by law.

    A deduction shall also be permitted to the extent that the taxpayer establishes by a preponderance of the evidence, as determined by the director, that the interest is directly or indirectly paid, accrued or incurred to (i) a related member in a foreign nation which has in force a comprehensive income tax treaty with the United States, provided however that the taxpayer shall disclose on its return for the privilege period the name of the related member, the amount of the interest, the relevant foreign nation, and such other information as the director may prescribe or (ii) to an independent lender and the taxpayer guarantees the debt on which the interest is required.

    (3) The commissioner may, whenever necessary to properly reflect the entire net income of any taxpayer, determine the year or period in which any item of income or deduction shall be included, without being limited to the method of accounting employed by the taxpayer.

    (4) There shall be allowed as a deduction from entire net income of a banking corporation, to the extent not deductible in determining federal taxable income, the eligible net income of an international banking facility determined as follows:

    (A) The eligible net income of an international banking facility shall be the amount remaining after subtracting from the eligible gross income the applicable expenses;

    (B) Eligible gross income shall be the gross income derived by an international banking facility, which shall include, but not be limited to, gross income derived from:

    (i) Making, arranging for, placing or carrying loans to foreign persons, provided, however, that in the case of a foreign person which is an individual, or which is a foreign branch of a domestic corporation (other than a bank), or which is a foreign corporation or foreign partnership which is controlled by one or more domestic corporations (other than banks), domestic partnerships or resident individuals, all the proceeds of the loan are for use outside of the United States;

    (ii) Making or placing deposits with foreign persons which are banks or foreign branches of banks (including foreign subsidiaries) or foreign branches of the taxpayers or with other international banking facilities;

    (iii) Entering into foreign exchange trading or hedging transactions related to any of the transactions described in this paragraph; or

    (iv) Such other activities as an international banking facility may, from time to time, be authorized to engage in;

    (C) Applicable expenses shall be any expense or other deductions attributable, directly or indirectly, to the eligible gross income described in subparagraph (B) of this paragraph.

    (5) Entire net income shall exclude 100% of dividends which were included in computing such taxable income for federal income tax purposes, paid to the taxpayer by one or more subsidiaries owned by the taxpayer to the extent of the 80% or more ownership of investment described in subsection (d) of this section and shall exclude 50% of dividends which were included in computing such taxable income for federal income tax purposes, paid to the taxpayer by one or more subsidiaries owned by the taxpayer to the extent of 50% or more ownership of investment, such ownership of investment calculated in the same manner as the 80% or more of ownership of investment is calculated as described in subsection (d) of this section.

    (6) (A) Net operating loss deduction. There shall be allowed as a deduction for the privilege period the net operating loss carryover to that period.

    (B) Net operating loss carryover. A net operating loss for any privilege period ending after June 30, 1984 shall be a net operating loss carryover to each of the seven privilege periods following the period of the loss. The entire amount of the net operating loss for any privilege period (the "loss period") shall be carried to the earliest of the privilege periods to which the loss may be carried. The portion of the loss which shall be carried to each of the other privilege periods shall be the excess, if any, of the amount of the loss over the sum of the entire net income, computed without the exclusions permitted in paragraphs (4) and (5) of this subsection or the net operating loss deduction provided by subparagraph (A) of this paragraph, for each of the prior privilege periods to which the loss may be carried.

    (C) Net operating loss. For purposes of this paragraph the term "net operating loss" means the excess of the deductions over the gross income used in computing entire net income without the net operating loss deduction provided for in subparagraph (A) of this paragraph and the exclusions in paragraphs (4) and (5) of this subsection.

    (D) Change in ownership. Where there is a change in 50% or more of the ownership of a corporation because of redemption or sale of stock and the corporation changes the trade or business giving rise to the loss, no net operating loss sustained before the changes may be carried over to be deducted from income earned after such changes. In addition where the facts support the premise that the corporation was acquired under any circumstances for the primary purpose of the use of its net operating loss carryover, the director may disallow the carryover.

    (E) Notwithstanding the provisions of this paragraph (6) of subsection (k) of this section to the contrary, for privilege periods beginning during calendar year 2002 and calendar year 2003, no deduction for any net operating loss carryover shall be allowed. If and only to the extent that any net operating loss carryover deduction is disallowed by reason of this subparagraph (E), the date on which the amount of the disallowed net operating loss carryover deduction would otherwise expire shall be extended by two years.

    Provided, that this subparagraph (E)shall not restrict the surrender or acquisition of corporation business tax benefit certificates pursuant to section 1 of P.L.1997, c.334 (C.34:1B-7.42a) and shall not restrict the application of corporation business tax benefit certificates pursuant to section 2 of P.L.1997, c.334 (C.54:10A-4.2).

    (7) The entire net income of gas, electric and gas and electric public utilities that were subject to the provisions of P.L.1940, c.5 (C.54:30A-49 et seq.) prior to 1998, shall be adjusted by substituting the New Jersey depreciation allowance for federal tax depreciation with respect to assets placed in service prior to January 1, 1998. For gas, electric, and gas and electric public utilities that were subject to the provisions of P.L.1940, c.5 (C.54:30A-49 et seq.) prior to 1998, the New Jersey depreciation allowance shall be computed as follows: All depreciable assets placed in service prior to January 1, 1998 shall be considered a single asset account. The New Jersey tax basis of this depreciable asset account shall be an amount equal to the carryover adjusted basis for federal income tax purposes on December 31, 1997 of all depreciable assets in service on December 31, 1997, increased by the excess, of the "net carrying value," defined to be adjusted book basis of all assets and liabilities, excluding deferred income taxes, recorded on the public utility's books of account on December 31, 1997, over the carryover adjusted basis for federal income tax purposes on December 31, 1997 of all assets and liabilities owned by the gas, electric, or gas and electric public utility as of December 31, 1997. "Books of account" for gas, gas and electric, and electric public utilities means the uniform system of accounts as promulgated by the Federal Energy Regulatory Commission and adopted by the Board of Public Utilities. The following adjustments to entire net income shall be made pursuant to this section:

    (A) Depreciation for property placed in service prior to January 1, 1998 shall be adjusted as follows:

    (i) Depreciation for federal income tax purposes shall be disallowed in full.

    (ii) A deduction shall be allowed for the New Jersey depreciation allowance. The New Jersey depreciation allowance shall be computed for the single asset account described above based on the New Jersey tax basis as adjusted above as if all assets in the single asset account were first placed in service on January 1, 1998. Depreciation shall be computed using the straight line method over a thirty-year life. A full year's depreciation shall be allowed in the initial tax year. No half-year convention shall apply. The depreciable basis of the single account shall be reduced by the adjusted federal tax basis of assets sold, retired, or otherwise disposed of during any year on which gain or loss is recognized for federal income tax purposes as described in subparagraph (B) of this paragraph.

    (B) Gains and losses on sales, retirements and other dispositions of assets placed in service prior to January 1, 1998 shall be recognized and reported on the same basis as for federal income tax purposes.

    (C) The Director of the Division of Taxation shall promulgate regulations describing the methodology for allocating the single asset account in the event that a portion of the utility's operations are separated, spun-off, transferred to a separate company or otherwise desegregated.

    (8) In the case of taxpayers that are gas, electric, gas and electric, or telecommunication public utilities as defined pursuant to subsection (q) of this section, the director shall have authority to promulgate rules and issue guidance correcting distortions and adjusting timing differences resulting from the adoption of P.L.1997, c.162 (C.54:10A-5.25 et al.).

    (9) Notwithstanding paragraph (1) of this subsection, entire net income shall not include the income derived by a corporation organized in a foreign country from the international operation of a ship or ships, or from the international operation of aircraft, if such income is exempt from federal taxation pursuant to section 883 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.883.

    (10) Entire net income shall exclude all income of an alien corporation the activities of which are limited in this State to investing or trading in stocks and securities for its own account, investing or trading in commodities for its own account, or any combination of those activities, within the meaning of section 864 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.864, as in effect on December 31, 1998. Notwithstanding the previous sentence, if an alien corporation undertakes one or more infrequent, extraordinary or non-recurring activities, including but not limited to the sale of tangible property, only the income from such infrequent, extraordinary or non-recurring activity shall be subject to the tax imposed pursuant to P.L.1945, c.162 (C.54:10A-1 et seq.), and that amount of income subject to tax shall be determined without regard to the allocation to that specific transaction of any general business expense of the taxpayer and shall be specifically assigned to this State for taxation by this State without regard to section 6 of P.L.1945, c.162 (C.54:10A-6). For the purposes of this paragraph, "alien corporation" means a corporation organized under the laws of a jurisdiction other than the United States or its political subdivisions.

    (11) No deduction shall be allowed for research and experimental expenditures, to the extent that those research and experimental expenditures are qualified research expenses or basic research payments for which an amount of credit is claimed pursuant to section 1 of P.L.1993, c.175 (C.54:10A-5.24) unless those research and experimental expenditures are also used to compute a federal credit claimed pursuant to section 41 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.41.

    (12) (A) Notwithstanding the provisions of subsection (k) of section 168 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.168, and subsection (b) of section 1400L of the federal Internal Revenue Code of 1986, 26 U.S.C. s.1400L, for property acquired after September 10, 2001 and before September 11, 2004, the depreciation deduction otherwise allowed pursuant to section 167 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.167, shall be determined pursuant to the requirements and limitations of section 168 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.168, and section 280F of the federal Internal Revenue Code of 1986, 26 U.S.C. s.280F, as if that subsection (k) and that section 1400L were not in effect.

    (B) The director shall prescribe the rules and regulations necessary to carry out the provisions of this paragraph, including, among others, those for determining the adjusted basis of the acquired property for the purposes of the "Corporation Business Tax Act (1945)", P.L.1945, c.162.

    (13) (A) There shall be allowed as a deduction from entire net income the cost of the purchase and installation of any technology, except fuel, required to be purchased, installed or used pursuant to P.L. , c. (C. )(now before the Legislature as this bill) for the first privilege period in which the purchase and installation occur.

    (B) Notwithstanding the provisions of section 167 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.167, to the contrary, no depreciation on any technology may be deducted for any privilege period following the purchase of the technology for which a deduction was taken pursuant to subparagraph (A) of this paragraph.

    (l) "Real estate investment trust" shall mean any corporation, trust or association qualifying and electing to be taxed as a real estate investment trust under federal law.

    (m) "Financial business corporation" shall mean any corporate enterprise which is (1) in substantial competition with the business of national banks and which (2) employs moneyed capital with the object of making profit by its use as money, through discounting and negotiating promissory notes, drafts, bills of exchange and other evidences of debt; buying and selling exchange; making of or dealing in secured or unsecured loans and discounts; dealing in securities and shares of corporate stock by purchasing and selling such securities and stock without recourse, solely upon the order and for the account of customers; or investing and reinvesting in marketable obligations evidencing indebtedness of any person, copartnership, association or corporation in the form of bonds, notes or debentures commonly known as investment securities; or dealing in or underwriting obligations of the United States, any state or any political subdivision thereof, or of a corporate instrumentality of any of them. This shall include, without limitation of the foregoing, business commonly known as industrial banks, dealers in commercial paper and acceptances, sales finance, personal finance, small loan and mortgage financing businesses, as well as any other enterprise employing moneyed capital coming into competition with the business of national banks; provided that the holding of bonds, notes, or other evidences of indebtedness by individual persons not employed or engaged in the banking or investment business and representing merely personal investments not made in competition with the business of national banks, shall not be deemed financial business. Nor shall "financial business" include national banks, production credit associations organized under the Farm Credit Act of 1933 or the Farm Credit Act of 1971, Pub.L. 92-181 (12 U.S.C. s.2091 et seq.), stock and mutual insurance companies duly authorized to transact business in this State, security brokers or dealers or investment companies or bankers not employing moneyed capital coming into competition with the business of national banks, real estate investment trusts, or any of the following entities organized under the laws of this State: credit unions, savings banks, savings and loan and building and loan associations, pawnbrokers, and State banks and trust companies.

    (n) "International banking facility" shall mean a set of asset and liability accounts segregated on the books and records of a depository institution, United States branch or agency of a foreign bank, or an Edge or Agreement Corporation that includes only international banking facility time deposits and international banking facility extensions of credit as such terms are defined in section 204.8(a)(2) and section 204.8(a)(3) of Regulation D of the board of governors of the Federal Reserve System, 12 CFR Part 204, effective December 3, 1981. In the event that the United States enacts a law, or the board of governors of the Federal Reserve System adopts a regulation which amends the present definition of international banking facility or of such facilities' time deposits or extensions of credit, the Commissioner of Banking and Insurance shall forthwith adopt regulations defining such terms in the same manner as such terms are set forth in the laws of the United States or the regulations of the board of governors of the Federal Reserve System. The regulations of the Commissioner of Banking and Insurance shall thereafter provide the applicable definitions.

    (o) "S corporation" means a corporation included in the definition of an "S corporation" pursuant to section 1361 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.1361.

    (p) "New Jersey S corporation" means a corporation that is an S corporation; which has made a valid election pursuant to section 4 of P.L.1993, c.173 (C.54:10A-5.22); and which has been an S corporation continuously since the effective date of the valid election made pursuant to section 4 of P.L.1993, c.173 (C.54:10A-5.22).

    (q) "Public Utility" means "public utility" as defined in R.S.48:2-13.

    (r) "Qualified investment partnership" means a partnership under this act that has more than 10 members or partners with no member or partner owning more than a 50% interest in the entity and that derives at least 90% of its gross income from dividends, interest, payments with respect to securities loans, and gains from the sale or other disposition of stocks or securities or foreign currencies or commodities or other similar income (including but not limited to gains from swaps, options, futures or forward contracts) derived with respect to its business of investing or trading in those stocks, securities, currencies or commodities, but "investment partnership" shall not include a "dealer in securities" within the meaning of section 1236 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.1236.

    (s) "Savings institution" means a state or federally chartered building and loan association, savings and loan association, or savings bank.

    (t) "Partnership" means an entity classified as a partnership for federal income tax purposes.

(P.L.2002, c.40, s.3.)

    24. (New section) a. Notwithstanding the provisions of N.J.S.54A:5-1 or any other law to the contrary, for the purposes of determining the amount of a category of income pursuant to N.J.S.54A:5-1, all the expenses for the purchase, installation, and use of any technology, except for fuel, required pursuant to P.L. , c. (C. ) (now before the Legislature as this bill) shall be deductible for the taxable year in which the technology is purchased.

    b. Notwithstanding the provisions of R.S.54A:5-1 for calculating gross income, no deduction shall be allowed for the depreciation of the technology for which expenses were deducted pursuant subsection a. of this section.

    25. R.S.39:4-8 is amended to read as follows:

    R.S.39:4-8. a. Except as otherwise provided in this section, no ordinance or resolution concerning, regulating or governing traffic or traffic conditions, adopted or enacted by any board or body having jurisdiction over highways, shall be of any force or effect unless the same is approved by the Commissioner of Transportation, according to law. The commissioner shall not be required to approve any [such] ordinance, resolution or regulation, unless, after investigation by [him, the same shall appear] the commissioner, the ordinance, resolution or regulation is determined to be in the interest of safety [and], the expedition of traffic on the public highways , and protection of public health.

    b. In the case of totally self-contained streets under municipal jurisdiction which have no direct connection with any street in any other municipality, or in the case of totally self-contained streets under county jurisdiction which have no direct connection with any street in any other county, the municipality or county may, by ordinance or resolution, as appropriate, without the approval of the Commissioner of Transportation, designate parking restrictions, no passing zones, mid-block crosswalks and crosswalks at intersections, except that in the case of any streets under municipal jurisdiction, the municipality may, by ordinance, designate reasonable and safe speed limits and in the case of totally self-contained streets under county jurisdiction which have no direct connection with any street in any other county, the county may, by ordinance or resolution, as appropriate, designate reasonable and safe speed limits, and erect appropriate signs, designate any intersection as a stop or yield intersection and erect appropriate signs and place longitudinal pavement markings delineating the separation of traffic flows and the edge of the pavement, provided that the municipal or county engineer shall, under [his] seal as a licensed professional engineer, certify to the municipal or county governing body, as appropriate, that any designation or erection of signs or placement of markings: (1) has been approved by [him] the municipal or county engineer after investigation by [him] the engineer of the circumstances, (2) appears to [him] the engineer to be in the interest of safety and the expedition of traffic on the public highways and (3) conforms to the current standards prescribed by the Manual of Uniform Traffic Control Devices for Streets and Highways, as adopted by the Commissioner of Transportation.

    A certified copy of the adopted ordinance or resolution, as appropriate, shall be transmitted by the clerk of the municipality or county, as appropriate, to the commissioner within 30 days after the date of adoption, together with a copy of the engineer's certification; a statement of the reasons for the engineer's decision; detailed information as to the location of streets, intersections and signs affected by any designation or erection of signs or placement of markings; and traffic count, accident and speed sampling data, when appropriate. The commissioner, at [his] the discretion of the commissioner , may invalidate the provisions of the ordinance or resolution within 90 days after the date of receipt of the certified copy if [he] the commissioner reviews it and finds that the provisions of the ordinance or resolution are inconsistent with the Manual of Uniform Traffic Control Devices for Streets or Highways; are inconsistent with accepted engineering standards; are not based on the results of an accurate traffic and engineering survey; [or] place an undue traffic burden or impact on streets in an adjoining municipality or negatively affect the flow of traffic on the State highway system ; or adversely affects the protection of the public health.

    Nothing in this subsection shall allow municipalities to designate any intersection with any highway under State or county jurisdiction as a stop or yield intersection or counties to designate any intersection with any highway under State or municipal jurisdiction as a stop or yield intersection.

    c. Subject to the provisions of R.S.39:4-138, in the case of any street under municipal or county jurisdiction, a municipality or county may, without the approval of the Commissioner of Transportation, do the following:

    By ordinance or resolution:

    (1) prohibit or restrict general parking;

    (2) designate restricted parking under section 1 of P.L.1977, c.309 (C.39:4-197.6);

    (3) designate time limit parking;

    (4) install parking meters.

    By ordinance, resolution or regulation:

    (1) designate loading and unloading zones and taxi stands;

    (2) approve street closings for periods up to 48 continuous hours; and

    (3) designate restricted parking under section 1 of P.L.1977, c.202 (C.39:4-197.5);

    Nothing in this subsection shall allow municipalities or counties to establish angle parking or to reinstate or add parking on any street, or approve the closure of streets for more than 48 continuous hours, without the approval of the Commissioner of Transportation.

    d. A municipality or county may, by ordinance or resolution, as appropriate, in any street under its jurisdiction, install or place an in-street pedestrian crossing right-of-way sign at a marked crosswalk or unmarked crosswalk at an intersection. The installation shall be subject to guidelines that shall be issued by the Commissioner of Transportation after consultation with the Director of the Office of Highway Traffic Safety in the Department of Law and Public Safety. The guidelines shall be aimed at ensuring safety to both pedestrians and motorists including, but not limited to, the proper method of sign installation, dimensions, composition of material, proper placement points and maintenance. A certified copy of the adopted ordinance or resolution shall be transmitted to the commissioner within 30 days of adoption. The commissioner, at [his] the discretion of the commissioner, may invalidate the provisions of the ordinance or resolution within 90 days of receipt of the certified copy if [he] the commissioner reviews it and finds that the provisions of the ordinance or resolution are inconsistent with the guidelines issued pursuant to this subsection. A claim against the State or a municipality or county for damage or injury under this subsection for a wrongful act or omission shall be dismissed if the municipality or county is deemed to have conformed to the guidelines required hereunder.

    e. A municipality or county may, by resolution, in any street under its jurisdiction, designate stops, stations or stands for omnibuses. The designation shall be subject to guidelines that shall be issued by the Commissioner of Transportation. The guidelines shall be aimed at ensuring safety to both pedestrians and motorists including, but not limited to, the proper method of sign installation, dimensions, composition of material, proper placement points and maintenance , and the protection of the public health. A certified copy of the adopted resolution shall be transmitted to the commissioner within 30 days after the date of adoption. The commissioner, at [his] the discretion of the commissioner, may invalidate the provisions of the ordinance or resolution within 90 days after the date of receipt of the certified copy if [he] the commissioner reviews it and finds that the provisions of the ordinance or resolution are inconsistent with the guidelines issued pursuant to this subsection. A claim against the State or a municipality or county for damage or injury under this subsection for a wrongful act or omission shall be dismissed if the municipality or county is deemed to have conformed to the guidelines required hereunder.

    f. A municipality or county may, by resolution, designate routes for diesel-powered trucks and vehicles and restrict idling and queuing on certain streets or in certain areas on any street under its jurisdiction. The designation may entail minimizing congestion from diesel-powered vehicles and the excessive idling of these vehicles outside of schools, hospitals, or other locations that people with sensitive or compromised immune systems are known to frequent, and protecting residents of the municipality or county from unnecessary or prolonged exposure to emissions from diesel-powered vehicles. A certified copy of the adopted resolution shall be transmitted to the commissioner within 30 days after the date of adoption. The commissioner, at the discretion of the commissioner, may invalidate the provisions of the ordinance or resolution within 90 days after the date of receipt of the certified copy if the commissioner reviews it and finds that the provisions of the ordinance or resolution are inconsistent with public safety, expedition of traffic on the public highways, or protection of the public health.

(cf: P.L.2001, c.342, s.2.)

    26. Section 4 of P.L.1966, c.16 (C.26:2C-8.4) is amended as follows:

    4. [Such] Except as otherwise required pursuant to P.L. , c. (C. ) (now before the Legislature as this bill) or other laws, codes, rules, and regulations concerning motor vehicles registered in the State, the codes, rules and regulations shall establish standards and requirements for control of air contaminants which can reasonably be attained by properly functioning motor vehicles without the addition of any air pollution control devices, systems, or engine modifications provided such vehicles were not manufactured with pollution control devices, systems or engine modifications in accordance with the "Motor Vehicle Air Pollution Control Act" (77 Stat. 392, 42 U.S.C. 1857) , the federal "Clean Air Act," 42 U.S.C. s.7401 et seq., and any subsequent federal laws controlling air contaminants from motor vehicles.

(cf: P.L.1966, c.16, s.4.)

    27. Section 2 of P.L.1966, c.15 (C.39:3-70.2) is amended to read as follows:

    2. Any person who operates a motor vehicle or owns a motor vehicle which [he] the person permits to be operated, upon the public highways of this State which emits smoke and other air contaminants in excess of standards adopted by the [Air Pollution Control Commission] Department of Environmental Protection shall be liable to a penalty of not less than [$25.00] $250 nor more than [$100.00] $1,000 per day, per vehicle which shall be enforced in accordance with the provisions of chapter 5 of Title 39 of the Revised Statutes and P.L., c. (C. )(now pending before the Legislature as this bill).

(cf: P.L.1966, c.15, s.2)

    28. Section 6 of P.L.1995,c.157 (C.39:8-64) is amended to read as follows:

    6. a. The commission, in consultation with the Department of Environmental Protection and the Department of Transportation and with the approval of the Attorney General, shall establish and implement a periodic inspection program and a roadside enforcement program to implement the standards and test methods adopted pursuant to section 3 of [this act] P.L.1995, c.157 (C.39:8-61). These programs shall be designed to measure exhaust emissions [and] to inspect emission control apparatus and related items on diesel buses, heavy-duty diesel trucks, and other diesel-powered motor vehicles, and to confirm compliance of on-road diesel vehicles from regulated fleets under P.L. c. (C. ) (now before the Legislature is this bill) with the provisions of that law. The programs shall include, at a minimum, diesel buses and heavy-duty diesel trucks subject to the rules and regulations adopted pursuant to section 3 of [this act] P.L.1995, c.157 (C.39:8-61); provided that the commission, in consultation with the Department of Transportation, may exempt vehicles from either program for good cause, which may include that vehicles belonging to an exempted class are, by law, subject to emissions testing in another program. The commission, in consultation with the Department of Environmental Protection and with the approval of the Attorney General, may, by rule or regulation, expand the periodic inspection program and the roadside enforcement program to include other diesel-powered motor vehicles that are subject to the rules and regulations adopted pursuant to section 3 of [this act] P.L.1995, c.157 (C.39:8-61), and shall expand the periodic inspection program and the roadside enforcement program to include regulated on-road diesel vehicles that are subject to the fine particle diesel emissions reduction program established pursuant to P.L. ,c. (c. ) (now before the Legislature as this bill). The commission, in consultation with the Commissioner of Transportation, may, by rule or regulation, impose upon every owner and lessee of a diesel bus, heavy-duty diesel truck, or other diesel-powered motor vehicle subject to periodic inspection the obligation to have the vehicle periodically inspected in a manner determined by the commission in consultation with the Commissioner of Transportation, to effect repairs or to abstain from operating or to limit the operation of a rejected vehicle or a vehicle overdue for inspection, and may take other action necessary or appropriate for implementation of the periodic inspection program. The commission, in consultation with the Commissioner of Transportation, may, by rule or regulation, impose upon every owner and lessee of a diesel bus, heavy-duty diesel truck, or other diesel-powered motor vehicle subject to roadside inspection the obligation to abstain from operating or to limit the operation of a vehicle that has been tested and found to be in violation of the rules and regulations adopted pursuant to section 3 of [this act] P.L.1995, c.157 (C.39:8-61) or the provisions of P.L. ,c. (C. ) (now before the Legislature is this bill), or to effect repairs, and may take other action necessary or appropriate for implementation of the roadside enforcement program. A school bus, as defined pursuant to R.S.39:1-1, shall be exempt from the roadside enforcement program. However, nothing in this subsection allowing or mandating exemptions from the periodic inspection program or the roadside enforcement program shall be construed to limit any other enforcement actions permitted by law.

    b. The commission shall exercise all authority, including but not limited to administrative, implementation, enforcement, and penalty authority, in connection with the periodic inspection program for diesel buses and the roadside enforcement program for diesel buses that are under the jurisdiction of the commission pursuant to Titles 27 and 48 of the Revised Statutes or any other law, rule, or regulation. The commission shall consult with the Department of Environmental Protection and the Department of Transportation in conducting the periodic inspection program for diesel buses and the roadside enforcement program for diesel buses that are under the jurisdiction of the commission. Any periodic inspection that may be required pursuant to [this act] P.L.1995, c.157 (C.39:8-59 et al.) for a diesel bus under the jurisdiction of the commission shall be conducted only in conjunction with any periodic safety inspection required for that diesel bus pursuant to law, rule, or regulation. Any suspension of registration privileges with respect to diesel buses for a violation of [this act] P.L.1995, c.157 (C.39:8-59 et al.) or any rule or regulation adopted pursuant thereto shall be implemented by the commission.

(cf: P.L.2003, c.13, s.79)

    29. Section 9 of P.L.1995, c.157 (39:8-67) is amended to read as follows:

    9. The Superintendent of the State Police, in consultation with and subject to the approval of the Attorney General, shall provide State Police officers to assist the commission in conducting the roadside enforcement program and the pilot roadside enforcement program. The State Police officers shall have authority to direct diesel buses, heavy-duty diesel trucks, or other diesel-powered motor vehicles from the roadway for the purpose of inspection, and shall perform other police duties necessary for or helpful to the implementation of the programs. The State Police officers shall maintain records of these inspections and shall forward the information concerning the number of inspections, and the type of violations and the number of each to the Department of Environmental Protection.

(cf: P.L.2003, c.13, s.82)

    30. Section 11 of P.L.1995, c.157 (39:8-69) is amended to read as follows:

    11. a. The commission, in consultation with the Department of Transportation and after appropriate inquiry and investigation, shall issue licenses to operate diesel emission inspection centers to as many qualified and properly equipped persons, including owners or lessees of diesel buses, heavy-duty diesel trucks, or other diesel-powered motor vehicles, as the commission determines shall be necessary to conduct periodic inspections. A licensee shall inspect and pass or reject a diesel bus, heavy-duty diesel truck, or other diesel-powered motor vehicle presented to the licensee for inspection. Passing shall indicate that the licensee or the licensee's employee has inspected the diesel bus, heavy-duty diesel truck, or other diesel-powered motor vehicle as prescribed by the commission and has found that the vehicle conforms to the standards established by law and rule or regulation ,including but not limited to, the provisions of P.L. ,c. (C. ) (now before the Legislature as this bill) and any rules or regulations adopted pursuant thereto consultation with the Department of Transportation and with the approval of the Attorney General, may establish by rule or regulation adopted pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.) an application fee for the licensing of diesel emission inspection centers, which fee shall not exceed $250 per year.

    b. For the purpose of documenting compliance with periodic inspection requirements, the commission shall furnish official inspection forms to licensed diesel emission inspection centers. The commission shall require each diesel emission inspection center and each owner or lessee of a diesel bus, heavy-duty diesel truck, or other diesel-powered motor vehicle subject to periodic inspection to keep such records and file such reports regarding these inspections as the commission shall deem necessary. The commission may conduct such audits or inspections of these centers as the commission deems appropriate , and shall forward information concerning the number of inspections, and the type of violations and the number of each to the Department of Environmental Protection.

    c. The commission may deny, suspend or revoke a diesel emission inspection center license or refuse renewal thereof for cause, including, but not limited to, one or more of the following:

    (1) Violation of any provision of [this act] P.L.1995, c.157 (C.39:8-59 et al.) or of any rule or regulation adopted pursuant thereto; or

    (2) Fraud or misrepresentation in securing a license or in the conduct of the licensed activity; or

    (3) Conviction of a crime demonstrating that the applicant or licensee is unfit; or

    (4) Improper, negligent, or fraudulent inspection of a diesel bus, heavy-duty diesel truck, or other diesel-powered motor vehicle; or

    (5) Other good cause.

    d. In addition to any other civil or criminal penalties that may be applicable, a person licensed by the commission to operate a diesel emission inspection center who commits fraud or misrepresentation in securing a license or in the conduct of the licensed activity or who improperly or negligently or fraudulently conducts an inspection of a diesel bus, heavy-duty diesel truck, or other diesel-powered motor vehicle shall be liable for a civil penalty of $1,500. In addition to any other civil or criminal penalties that may be applicable, a person licensed by the commission to operate a diesel emission inspection center who otherwise violates any provision of [this act] P.L.1995, c.157 (C.39:8-59 et al.) or of any rule or regulation adopted pursuant thereto shall be liable for a civil penalty of $500.

(cf: P.L.2003, c.13, s.84)

    31. Section 17 of P.L.1995, c.157 (39:8-75) is amended to read as follows:

    17. a. There is established in the General Fund a separate, nonlapsing, dedicated account to be known as the "Commercial Vehicle Enforcement Fund." The Commercial Vehicle Enforcement Fund shall be administered by the commission. All fees and other monies collected pursuant to [this act] P.L.1995, c.157 (C.39:8-59 et al.) or any rule or regulation adopted pursuant thereto shall be forwarded to the State Treasury for deposit into the Commercial Vehicle Enforcement Fund account. The commission shall receive 40 percent of this fund annually, which monies shall be considered revenue of the commission. The Department of Environmental Protection shall receive 11 percent of this fund annually for the administrative costs of the department associated with the periodic inspection program and the roadside enforcement program established pursuant to section 6 of P.L.1995, c.157 (C.39:8-64), and the fine particle diesel emissions reduction program established pursuant to P.L. , c. (C. ) (now before the Legislature as this bill). All remaining fees and other monies deposited in the Commercial Vehicle Enforcement Fund account shall be used to fund the costs of administering the programs and activities of the Department of Law and Public Safety, the Department of Transportation, and the commission [and the Department of Environmental Protection] established or specified in [this act] P.L.1995, c.157 (C.39:8-59 et al.), P.L. , c. (C. ) (now before the Legislature as this bill), and in subsection f. of R.S.39:3-20, subject to the approval of the Director of the Division of Budget and Accounting in the Department of the Treasury.

    b. A municipality may be eligible for periodic grants from the fund in such amounts as the commission, in consultation with the Commissioner of Transportation, may determine pursuant to rule or regulation to subsidize costs of prosecuting and trying actions pursuant to [this act] P.L.1995, c.157 C.39:8-59 et al.).

(cf: P.L.2003, c.13, s.106)

    32. (New section) a. No on-road diesel vehicle or off-road diesel equipment may operate in the State with any fuel other than ultra-low sulfur diesel fuel, as defined by the Department of Environmental Protection and the United States Environmental Protection Agency.

    b. No diesel fuel other than ultra-low sulfur diesel fuel, as defined by the Department of Environmental Protection and the United States Environmental Protection Agency, may be sold in the State.

    c. The Department of Environmental Protection, in consultation with the New Jersey Motor Vehicle Commission, the Department of Law and Public Safety, and the Attorney General, shall adopt, pursuant to the "Administrative Procedures Act," P.L.1968, c.410 (C.52:14B-1 et seq.), rules and regulations necessary for the implementation of this section.

    33. There is hereby appropriated from the General Fund to the "Diesel Risk Mitigation Fund," established pursuant to section 21 of P.L. , c. (C. ) (now before the Legislature as this bill), a sum in the amount of $24,000,000 for the purposes set forth in that section.

    34. This act shall take effect immediately, except for section 32 which shall take effect one year after the date of enactment.

STATEMENT

    This bill establishes a program to reduce fine particle emissions from certain vehicles and equipment powered by diesel engines and the exposure of the public to these emissions, relieve congestion of diesel truck traffic in residential neighborhoods, and examine and establish policies to minimize the exposure of children to diesel emissions.

    This bill prohibits the operation in the State of any regulated on-road diesel vehicle that is not in compliance with the provisions of the bill concerning regulated fleets, and, on or after January 1, 2009, the operation in the State of any regulated off-road equipment or any diesel apportioned vehicle that does not comply with the provisions of the bill and the rules and regulations establishing the fine particle diesel emissions reduction program. The bill also prohibits the operation of any on-road diesel vehicle or off-road diesel equipment with fuel other than ultra-low sulfur diesel fuel, and prohibits the sale of any diesel fuel other than ultra-low sulfur diesel fuel, as of one year after the date of enactment of this bill.

    The bill also creates a fund to finance the retrofitting required under the bill, and appropriates $24 million from the General Fund to the fund. The monies in the fund would be used to finance the county and municipal costs and administrative costs incurred by the Department of Environmental Protection (DEP) in connection with the requirements and implementation of the program established by the bill.

    Specifically, the bill directs the DEP and the Department of Health and Senior Services to develop and implement a public education and outreach program, to inform the public about the public health risks associated with fine particle emissions and other pollution from vehicles and equipment powered by diesel engines. The bill further directs the DEP to adopt rules and regulations, no later than nine months after the effective date of the bill, to establish and implement a fine particle diesel emissions program, with an overall goal of the program to be a 20-percent reduction of emissions from regulated on-road diesel vehicles and regulated off-road diesel equipment over the ten years after the date of enactment of the bill.

    The program established by the rules and regulations would require that best available retrofit technologies be installed on and used by:

    (1) Regulated fleets of commercial buses, sanitation vehicles, school buses with diesel engines, diesel apportioned vehicles registered, or with in-jurisdiction miles, in the State, and on-road diesel vehicles greater than 14,000 pounds gross vehicle weight that are types and classes of vehicles equivalent to the regulated diesel apportioned vehicles whether apportioned vehicles or some other class of vehicle;

    (2) Diesel apportioned vehicles registered, or with in-jurisdiction miles, in the State that may not be part of a regulated fleet; and

    (3) Off-road diesel equipment designated as regulated off-road diesel equipment under the rules and regulations.

    The bill also directs the DEP to consult with the Department of Education, the New Jersey Motor Vehicle Commission, and the Department of Transportation concerning the provisions that would affect school buses, and with the New Jersey Motor Vehicle Commission and the New Jersey Transit Corporation concerning the provisions that would affect commercial buses. Furthermore, the DEP is directed to develop and implement a public outreach program to notify and inform the owners, operators, and lessees affected by the requirements of the bill about the requirements and how to comply, including notification of owners, operators, and lessees of unregistered off-road diesel equipment and out-of-State companies that may provide off-road diesel equipment for operation in the State.

    Regulated fleets under the bill must have regulated fleet retrofit plans approved by DEP. The bill requires that each owner, operator, or lessee of a regulated fleet submit to the DEP, no later than six months after the effective date of the rules and regulations adopted pursuant to section 4 of the bill, an inventory of the on-road diesel vehicles in the fleet, an indication by the owner, operator, or lessee of the vehicles the owner, operator, or lessee believes are regulated on-road diesel vehicles, and a regulated fleet retrofit plan for the regulated on-road diesel vehicles in the fleet. Any owner, operator, or lessee of a regulated fleet who begins operating a regulated fleet after the effective date of the rules and regulations is required to submit the required materials no later than six months after the date on which the operation began.

    The bill directs the DEP to review, and approve or disapprove all parts of any submitted regulated fleet retrofit plan, or a supplement thereto, no later than one year after the submittal of the regulated fleet retrofit plan or the supplement, and provides for partial approval and disapproval by the department. The bill requires the owner, operator, or lessee of a regulated fleet to submit supplements to the regulated fleet retrofit plan on the annual anniversary of the date of the regulated fleet retrofit plan approval.

    The amendatory sections of the bill expand the current periodic inspection and roadside enforcement programs for diesel vehicles, established by P.L.1995, c.157 (C.39:8-58 et seq.) to include enforcement of the fine particle diesel emissions reduction program. These sections also provide an income tax deduction for the cost of the purchase and the installation of any technology, other than fuel, required by the bill, allow for the consideration of air pollution issues related to diesel emissions when setting and approving truck routes through counties and municipalities, and make other amendatory changes to incorporate the provisions of the bill into related current State laws and allow for the implementation of the program established by the bill. Finally, the bill amends the provision of P.L.1995, c.157 that established the "Commercial Vehicle Enforcement Fund" to provide that the DEP would receive 11 percent of the fund annually. The DEP has estimated that at least 11 percent of the diesel fleet in the State would be regulated under the bill. The current law provides that the "Commercial Vehicle Enforcement Fund" be used for administering the current diesel programs. The bill includes the fine particle diesel emissions reduction program under these programs.