SENATE ENVIRONMENT AND ENERGY COMMITTEE

STATEMENT TO

SENATE, No. 3287

with committee amendments

STATE OF NEW JERSEY

DATED:  JANUARY 13, 2025

      The Senate Environment and Energy Committee reports favorably and with committee amendments Senate Bill No. 3287.

This bill provides for a gross income tax deduction for amounts paid to taxpayers in exchange for their sale of certain real property interests for conservation purposes.  The New Jersey gross income tax provides a deduction for a charitable, qualified conservation contribution of real property interests for land preservation purposes modeled on the similar federal income tax deduction which covers full land interest sales and restricted land use easements.  But land interest sales in New Jersey to various conservation programs for which a purchase price is paid to the New Jersey taxpayer can result in taxable gains for those New Jersey sellers who need to garner some investment income from these sales.  To allow a deduction for these transfers with preservation or conservation restrictions on the real estate can prevent developers from buying up environmentally valuable land in this State and benefit both the taxpayer and the residents of the State at large.

      The bill will allow the deductions for both parts of some mixed transfers referred to as bargain sales in which there is both a charitable donation aspect and a cash purchase payment for less than the land’s fair market value (FMV).  The donation value is the difference between the FMV and the cash payment.  In a bargain sale, a real estate owner is both a seller (for the cash portion) and a donor (for the donated portion) of the real estate interest.  The bill will also allow a deduction for full market value sales to conservation organization which include certain governmental programs and non-profit run preservation programs.  These programs will include but not be limited to those run by a governmental unit, charitable trust, foundation or charitable non-profit organization that participates in a Green Acres program, Blue Acres program, farmland preservation program, historic preservation program, the Highlands Transfer Development Rights Program, a park or forestry or an open space and recreation space preservation or conservation program or a wildlife, hunting or fishing conservation and restoration program.

COMMITTEE AMENDMENTS:

      The amendments to the bill correct a typographical error.