Authorizes County Agriculture Development Boards to establish program to receive and lease donated farmland to new farms, establishes gross income tax credit for farmers who donate land.

A4368

ASSEMBLY, No. 4368

STATE OF NEW JERSEY

222nd LEGISLATURE

�

INTRODUCED FEBRUARY 19, 2026

Sponsored by:

Assemblyman� ALEX SAUICKIE

District 12 (Burlington, Middlesex, Monmouth and Ocean)

Co-Sponsored by:

Assemblywoman Fantasia

SYNOPSIS

���� Authorizes County Agriculture Development Boards to
establish program to receive and lease donated farmland to new farms,
establishes gross income tax credit for farmers who donate land.

CURRENT VERSION OF TEXT

���� As introduced.

��

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;

����
(c) establish authorized
uses of the donated lands; and

���� (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.32 (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.