The "Green Building Tax Credit Act" is designed to promote the construction and retrofitting of environmentally friendly buildings in New Jersey by offering tax credits for qualifying expenses incurred by taxpayers. The act specifies that "allowable costs" can include various construction and rehabilitation expenses, capped at $280 per square foot, with the potential for a 10 percent increase by the Department of Community Affairs (DCA) on two occasions within seven years. Taxpayers can receive a credit of 4.0 percent of these allowable costs, with additional percentages based on the building's certification level under the LEED Green Building Rating System. The act also establishes an application process requiring taxpayers to secure a credit reservation certificate and an eligibility certificate from the DCA.

Furthermore, the act mandates the DCA, in collaboration with the Department of Environmental Protection (DEP), to adopt green building standards within one year of the act's effective date, covering energy efficiency, building materials, water efficiency, and indoor air quality. It includes specific requirements for waste reduction, mandating that at least 30 percent of waste by volume be diverted from the waste stream, and for stormwater management in developments on parcels of four acres or more. The total tax credits available are capped at $20 million for the first fiscal year and $50 million for each of the following six years, with any unused credits rolling over to future years. Eligible taxpayers can apply a maximum of 20 percent of their total tax credit in any given tax year.