A6033

An Act concerning the donation of agricultural land to County Agriculture Development Boards, amending P.L.1983, c.32, and supplementing Title 54A of the New Jersey Statutes.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. Section 9 of P.L.1983, c.32 (C.4:1C-16) is amended to read as follows:

9. Every board may:

a. Develop an educational and informational program concerning farmland preservation techniques and recommended agricultural management practices to advise and assist municipalities, farmers and the general public with respect to the implementation of these techniques;

b. Provide assistance to farm operators concerning permit applications and information regarding the regulatory practices of State government agencies; and

c. Develop a program to receive lands donated by owners of commercial farms, and to grant or lease the donated lands to new farmers in the State.

(1) In establishing the program, each board shall:

(a) develop guidelines and procedures for the submission of applications and criteria for the evaluation of the applications;

(b) establish terms and conditions for the granting or leasing of lands under this subsection;

(d) establish a process to receive and certify applications for credits against the “New Jersey Gross Income Tax Act,” N.J.S.54A:1-1 et seq., pursuant to the provisions of section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill).

(2) To qualify to receive or lease lands under the program, a qualified applicant shall demonstrate to the board that the qualified applicant:

(a) is a new farmer who resides in New Jersey; and

(b) meets any other eligibility requirement that the board may deem appropriate.

(cf: P.L.1983, c.32, s.9)

2. (New section) a. As used in this section:

“Board” means a County Agriculture Development Board established pursuant to section 7 of P.L.1983, c.31 (C.4:1C-14).

“Commercial farm” means the same as the term is defined in section 3 of P.L.1983, c.31 (C.4:1C-3).

“Director” means Director of the Division of Taxation in the Department of the Treasury.

“Division” means the Division of Taxation in the Department of the Treasury.

b. For privilege periods beginning on or after the January 1 next following the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill), and subject to the limitations of subsection d. of this section, a taxpayer who is an owner of a commercial farm and who donates land to a board pursuant to a program established under subsection h. of section 8 of P.L.1983, c.32 (C.4:1C-15) shall be allowed a credit against the tax otherwise due under the “New Jersey Gross Income Tax Act,” N.J.S.54A:1-1 et seq., to be calculated as provided in paragraph (2) of this subsection.

(1) To qualify for the tax credit allowed pursuant to this section, a taxpayer shall apply to the board, in a form and manner determined by the board, for a certification that provides: (a) the location, area, and value of land to be donated; and (b) the amount of the tax credit calculated pursuant to paragraph (2) of this subsection. The board shall transmit a copy of any certification issued pursuant to this subsection to the taxpayer and the director.

(2) The amount of the credit authorized pursuant to this section shall not exceed the lesser of: (a) the value of the farmland, as determined by taking a pro rata share of the most recent assessed value of the commercial farm; or (b) $100,000. For the purposes of this paragraph, the pro rata share shall be calculated by dividing the acreage of the donated portion by the total acreage of the commercial farm and multiplying by the most recent assessed value of the farm.

c. The order of priority of the application of the credit allowed pursuant to this section, and any other credits allowed against the tax imposed pursuant to N.J.S.54A:1-1 et seq. for a taxable year, shall be as prescribed by the director. The amount of the credit applied under this section against the New Jersey gross income tax imposed pursuant to N.J.S.54A:1-1 et seq. for a taxable year, when taken together with any other payments, credits, deductions, and adjustments allowed by law, shall not reduce a taxpayer's tax liability to an amount less than zero. The amount of the tax credit otherwise allowable under this section which cannot be applied for the taxable year due to the limitations of this section or other provisions of N.J.S.54A:1-1 et seq. may be carried forward, if necessary, to the four taxable years following the taxable year for which the tax credit was allowed.

d. No tax credit shall be allowed pursuant to this section for any costs or expenses included in the calculation of any other tax credit or exemption granted pursuant to a claim made on a tax return filed with the director, or included in the calculation of an award of business assistance or incentive, for a period of time that coincides with the taxable year, for which a tax credit authorized pursuant to this section is allowed.

e. The value of tax credits provided by the director pursuant to this section shall not exceed a cumulative total of $100 million.

f. (1) A business entity that is classified as a partnership for federal income tax purposes shall not be allowed a tax credit pursuant to this section directly, but the amount of tax credit of a taxpayer in respect to distributive share of entity income, shall be determined by allocating to the taxpayer that proportion of the tax credit acquired by the entity that is equal to the taxpayer’s share, whether or not distributed, of the total distributive income or gain of the entity for its taxable year ending within or with the taxpayer’s taxable year.

(2) A New Jersey S Corporation shall not be allowed a tax credit pursuant to this section directly, but the amount of the tax credit of a taxpayer in respect of a pro rata share of S Corporation income, shall be determined by allocating to the taxpayer that proportion of the tax credit acquired by the New Jersey S Corporation that is equal to the taxpayer’s share, whether or not distributed, of the total pro rata share of S Corporation income of the New Jersey S Corporation for its privilege period ending within or with the taxpayer’s taxable year.

g. The board, in consultation with the director, shall adopt, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), rules and regulations as are necessary to implement the provisions of this section.

h. No later than five years after the effective date of this section, the division shall prepare and submit to the Governor, the State Treasurer, and, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), to the Legislature, a report that, at a minimum, summarizes the effectiveness of the tax credit in incentivizing the creation of new family farms in the State.

3. This act shall take effect immediately.

STATEMENT

This bill would authorize each County Agriculture Development Board (CADB) to establish a program to receive farmland donated by farmers and to grant or lease the farmland to new farmers.

The bill would direct CADBs who choose to establish a farmland donation program to develop certain minimum features of the program, including: guidelines and procedures for the submission of applications and criteria for the evaluation of the applications; terms and conditions for the granting or leasing of the donated lands; and authorized uses of the donated lands.

The bill would also create a tax credit under the “New Jersey Gross Income Tax Act,” N.J.S.54A:1-1 et seq. for the assessed value of land donated to a CADB by a farmer under the program. The maximum value for each tax credit would be $100,000 and the total value of all tax credits would be capped at $100 million.

The bill is intended to respond to one of the recommendations in “The Next Generation of Farming in New Jersey: Report on Cultivating the Future of Farming in the Garden State,” a report published by the State Agriculture Development Committee in March 2025.