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Eustace Bill to Provide Incentive for Farmers to Donate Surplus to Area Food Banks Clears Assembly Panel

(TRENTON) – An Assembly panel on Thursday approved legislation on Thursday sponsored by Assemblyman Tim Eustace to provide corporation business tax and gross income tax credits for value of certain donations made to food banks by commercial farm operators.

“We’ve all heard the saying “Good food should never go to waste,'” said Eustace (D-Bergen, Passaic). “With this bill, we can provide an incentive that will encourage operators of commercial farms to donate surplus crops of fruits and vegetables to local area food banks. Not only will farmers have to waste less food but this will help to increase the amount and diversity of fresh, healthy foods available for distribution in area food banks.”

Under the bill (A-1760), commercial farm operators who make donations of fruits or vegetables fit for human consumption to a food bank located in this state during tax periods beginning on or after January 1, 2017 but before January 1, 2022 are allowed to claim a credit that can be used to reduce the commercial farm operator’s liability for tax.

The bill provides that the amount of the credit is equal to 10% of the wholesale value of the fruits and vegetables donated to the food bank during the tax period of the donation, as determined using a quantity-weighted average of comparable wholesale sales of similar fruits or vegetables made by the commercial farm operator during the month of the donations or, if no comparable sales are made, the overall average price paid for similar fruits and vegetables at the nearest regional market during the month of the donation.

“Donation of surplus food will also reduce the current level of unmarketable but perfectly edible produce that goes unharvested or that is harvested but becomes waste because it fails to meet quality or appearance criteria but is still good for consumption,” continued Eustace, who is the Environment Committee chair.
The bill requires commercial farm operators claiming credit to obtain a written statement from the food bank to substantiate each donation of fruits or vegetables.

In addition, the bill directs the Director of the Division of Taxation in the Department of Treasury to prepare an annual report on the utilization of the credits provided by the bill. The annual report must document how the credits are used by farm operators in each year of the five-year period for which credits are allowed.

The bill was released by the Assembly Environment and Solid Waste Committee. It will now go to the Assembly Speaker for further consideration.