Sponsored by:
Assemblyman RONALD S. DANCER
District 12 (Burlington, Middlesex, Monmouth and Ocean)
SYNOPSIS
Provides corporation business tax and gross income tax credits to farmers who develop qualified native pollinator habitat on farms.
CURRENT VERSION OF TEXT
As introduced.
An Act providing tax credits to farmers who develop qualified native pollinator habitat on their farms and supplementing P.L.1945, c.162 (C.54:10A-1 et seq.) and Title 54A of the New Jersey Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. a. For privilege periods beginning on or after January 1 next following the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill), a taxpayer who is a farmer who develops qualified native pollinator habitat on one or more farms, and who meets the requirements of this section and the rules and regulations adopted pursuant thereto, shall be allowed a credit against the tax due pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5) in an amount equal to the reasonable costs expended for developing the qualified native pollinator habitat, up to $7,500.
b. (1) To qualify for the tax credit allowed pursuant to this section, the taxpayer shall apply for a certification from the secretary that certifies: (a) that the area developed is qualified native pollinator habitat; and (b) the amount of the tax credit. The application shall include a description of the qualified native pollinator habitat, its precise locations, the cost for developing it, appropriate documentation of that cost, and any other information as determined relevant by the department. Upon certification, the secretary shall submit a copy thereof to the taxpayer and the director. When filing a tax return that includes a claim for a credit pursuant to this section, the taxpayer shall include a copy of the certification issued by the secretary.
(2) The department may approve an application and issue a certification to a taxpayer that has previously been allowed a tax credit pursuant to this section, but in no case shall a taxpayer be approved and certified for more than $7,500 in total tax credits.
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 section 5 of P.L.1945, c.162 (C.54:10A-5) for a privilege period shall be as prescribed by the director. The amount of the credit applied pursuant to this section against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5) shall not reduce a taxpayer's tax liability for a privilege period to an amount less than the statutory minimum provided in subsection (e) of section 5 of P.L.1945, c.162 (C.54:10A-5). Any credit shall be valid in the privilege period in which the certification is approved and any unused portion thereof may be carried forward into the next 10 privilege periods or until depleted, whichever is earlier.
d. The secretary, 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 necessary to carry out the provisions of this section.
e. On or before January 31 of each year, the secretary shall submit a report to the Governor, the State Treasurer, and, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), the Legislature, on the effectiveness of the tax credit in developing qualified native pollinator habitat in the State.
f. As used in this section:
"Department" means the Department of Agriculture.
"Farm" means land and related operations used for producing agricultural or horticultural products, as determined by the department.
"Qualified native pollinator habitat" means an area of land developed as habitat beneficial for the feeding, nesting, and reproduction of native pollinators, such as bees, as determined by the department. "Qualified native pollinator habitat" shall utilize plants that are native to New Jersey.
"Reasonable cost" means the cost of developing qualified native pollinator habitat, including, but not necessarily limited to, the cost of seeds, plants, and the instillation thereof, determined to be reasonable by the department.
"Secretary" means the Secretary of Agriculture.
2. a. For taxable years beginning on or after January 1 next following the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill), a taxpayer who is a farmer who develops qualified native pollinator habitat on one or more farms, and who meets the requirements of this section and the rules and regulations adopted pursuant thereto, shall be allowed a credit against the New Jersey gross income tax due pursuant to N.J.S.54A:1-1 et seq. in an amount equal to the reasonable costs expended for developing the qualified native pollinator habitat, up to $7,500.
b. (1) To qualify for the tax credit allowed pursuant to this section, the taxpayer shall apply for a certification from the secretary that certifies: (a) that the area developed is qualified native pollinator habitat; and (b) the amount of the tax credit. The application shall include a description of the qualified native pollinator habitat, its precise locations, the cost for developing it, appropriate documentation of that cost, and any other information as determined relevant by the department. Upon certification, the secretary shall submit a copy thereof to the taxpayer and the director. When filing a tax return that includes a claim for a credit pursuant to this section, the taxpayer shall include a copy of the certification issued by the secretary.
(2) The department may approve an application and issue a certification to a taxpayer that has previously been allowed a tax credit pursuant to this section, but in no case shall a taxpayer be approved and certified for more than $7,500 in total tax credits.
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 pursuant to this section against the tax imposed pursuant to pursuant to N.J.S.54A:1-1 et seq. shall not reduce a taxpayer's tax liability for a taxable year to an amount less than zero. Any credit shall be valid in the taxable year in which the certification is approved and any unused portion thereof may be carried forward into the next 10 taxable years or until depleted, whichever is earlier.
d. A business entity that is classified as a partnership for federal income tax purposes shall not be allowed the credit directly under N.J.S.54A:1-1 et seq., but the amount of the credit of the taxpayer in respect of a distributive share of partnership income shall be determined by allocating to the taxpayer that proportion of the credit acquired by the partnership that is equal to the taxpayer's share, whether or not distributed, of the total distributive income or gain of the partnership for its taxable year ending within or with the taxpayer's taxable year.
A taxpayer that is a New Jersey S corporation shall not be allowed the credit directly under N.J.S.54A:1-1 et seq., but the amount of the 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 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 taxable year ending within or with the taxpayer's taxable year.
e. The secretary, 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 necessary to carry out the provisions of this section.
f. On or before January 31 of each year, the secretary shall submit a report to the Governor, the State Treasurer, and, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), the Legislature, on the effectiveness of the tax credit in developing qualified native pollinator habitat in the State.
g. As used in this section:
"Department" means the Department of Agriculture.
"Farm" means land and related operations used for producing agricultural or horticultural products, as determined by the department.
"Qualified native pollinator habitat" means an area of land developed as habitat beneficial for the feeding, nesting, and reproduction of native pollinators, such as bees, as determined by the department. "Qualified native pollinator habitat" shall utilize plants that are native to New Jersey.
"Reasonable cost" means the cost of developing qualified native pollinator habitat, including, but not necessarily limited to, the cost of seeds, plants, and the instillation thereof, determined to be reasonable by the department.
"Secretary" means the Secretary of Agriculture.
3. This act shall take effect immediately.
STATEMENT
This bill would provide corporation business tax and gross income tax credits to farmers who develop qualified native pollinator habitat on their farmers.
Specifically, for privilege periods and taxable years beginning on or after January 1 next following the effective date of this bill, a farmer who develops qualified native pollinator habitat on one or more farms, and who meets the requirements of this bill, would be allowed a credit against the corporation business tax or gross income tax in an amount equal to the reasonable costs expended for developing the qualified native pollinator habitat, up to $7,500. For the purposes of this bill, qualified native pollinator habitat means an area of land developed as habitat beneficial for the feeding, nesting, and reproduction of native pollinators, such as bees, as determined by the department. Qualified native pollinator habitat must utilize plants that are native to New Jersey.
To qualify for the credit, a farmer would have to apply for a certification from the Secretary of Agriculture that certifies: (1) that the area developed is qualified native pollinator habitat; and (2) the amount of the tax credit. The application would include a description of the qualified native pollinator habitat, its precise locations, the cost for developing it, appropriate documentation of that cost, and any other information the Department of Agriculture determines relevant. When filing a tax return that includes a claim for a credit pursuant to this bill, the farmer would have to include a copy of the certification issued by the Secretary of Agriculture.
Pollinators, such as bees, are extremely important to the agricultural industry. Approximately one-third of all crops grown depend on pollinators for reproduction. Recently, however, the survival of many pollinators has been threatened by, among other things, habitat loss. This bill would incentivize the planting of native pollinator habitat in and around agricultural land in order to help protect native pollinators.