ASSEMBLY COMMUNITY DEVELOPMENT AND WOMEN'S AFFAIRS COMMITTEE

STATEMENT TO

[First Reprint]

ASSEMBLY, No. 3899

with committee amendments

STATE OF NEW JERSEY

DATED:  JANUARY 16, 2025

      The Assembly Community Development and Women's Affairs Committee reports favorably and with committee amendments Assembly Bill No. 3899 (1R).

      As amended, this bill creates a pilot program that provides a tax credit against the corporation business tax and the gross income tax based on the value of certain donated fruits and vegetables.  Specifically, the tax credit is available to commercial farm operators who donate fruits or vegetables that are fit for human consumption to a charitable organization located in this State during the first three tax periods beginning on or after January 1 of the year next following the date of the bill’s enactment.  The amount of the credit is equal to 50 percent of the wholesale value of the fruits or vegetables donated, but not to exceed the value of $5,000 during each tax period.  However, if a commercial farm operator is unable to claim any portion of the credit otherwise permitted for a tax period, the unused credits can be carried forward for the earliest available use during the next five tax periods following the period for which the credits were allowed.

      Under the bill, a commercial farm operator is required to obtain a written statement from the charitable organization before claiming the tax credit.  In addition to certain other information, this statement is to specify the variety, grade, and quantity of the donated fruits and vegetables and the wholesale value of the fruits and vegetables, as provided by the commercial farm operator.  The bill requires the Secretary of Agriculture to prepare a written statement form for use by individuals authorized to accept donations on behalf of the charitable organization.

      The bill also requires the Secretary of Agriculture, in consultation with the Director of the Division of Taxation in the Department of the Treasury (director), to prepare an annual report on the utilization of the credits provided on or before December 1 beginning in the year next following the first year in which the utilization of tax credits is permitted pursuant to the bill.  In addition to certain requirements for each annual report required by the bill, the Secretary of Agriculture is to provide recommendations in the final report as to whether: (1) the allowance of tax credits pursuant to the bill’s provisions should be continued; and (2) the percentage of the wholesale value of the fruits or vegetables donated to a charitable organization used to determine amounts of tax credits should be increased, and if so, to what percentage.

      The aggregate value of tax credit amounts awarded under the bill’s provisions is limited to $100,000 in any fiscal year.

COMMITTEE AMENDMENTS:

      The committee amended the bill to:

      (1) require the Secretary of Agriculture to establish and publish the wholesale value of fruits and vegetables for the purpose of calculating the tax credit;

      (2) require the Secretary of Agriculture to develop a form for the written statement used by individuals authorized to accept donations on behalf of the charitable organization;

      (3) require commercial farm operators to submit the written statement received from a charitable organization to the Department of Agriculture in order to claim the tax credits authorized by the bill;

      (4) provide that the Secretary of Agriculture, in consultation with the Director of the Division of Taxation would be responsible for preparing an annual report regarding the utilization of the tax credits;

      (5) remove the requirement for the Director of the Division of Taxation to testify before a legislative committee if the director fails to prepare an annual report; and

      (6) revise the effective date to clarify that the bill would apply to taxable years and privilege periods beginning on and after January 1 of the year next following the date of enactment.