Bill Text: NJ A4656 | 2022-2023 | Regular Session | Introduced
Bill Title: Provides up to five years for land used for new or experimental crops to meet farmland assessment income requirements.
Spectrum: Slight Partisan Bill (Democrat 3-1)
Status: (Introduced - Dead) 2022-09-22 - Introduced, Referred to Assembly Agriculture and Food Security Committee [A4656 Detail]
Download: New_Jersey-2022-A4656-Introduced.html
Sponsored by:
Assemblyman ROY FREIMAN
District 16 (Hunterdon, Mercer, Middlesex and Somerset)
Assemblywoman ELLEN J. PARK
District 37 (Bergen)
Assemblyman JOE DANIELSEN
District 17 (Middlesex and Somerset)
SYNOPSIS
Provides up to five years for land used for new or experimental crops to meet farmland assessment income requirements.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning farmland assessment income requirements for land cultivated for new or experimental crops, and amending and supplementing P.L.1964, c.48.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. (New section) a. The New Jersey Agricultural Experiment Station shall establish an application process to be used in certifying an appropriate exemption period for landowners cultivating new or experimental crops, as provided by subsection e. of section 5 of P.L.1964, c.48 (C.54:4-23.5), for the valuation, assessment, and taxation of land in agricultural or horticultural use under the "Farmland Assessment Act of 1964," P.L.1964, c.48 (C.54:4-23.1 et seq.). The appropriate exemption period shall be determined and certified by the New Jersey Agricultural Experiment Station for each new or experimental crop being cultivated by a landowner, based on the information available concerning the cultivation of the specific crop.
b. As part of the application process established pursuant to subsection a. of this section, a landowner cultivating a new or experimental crop on land devoted to agricultural or horticultural use shall submit to the New Jersey Agricultural Experiment Station, information and documentation identifying:
(1) the name of the new or experimental crop being cultivated on the land and the amount of land acreage being devoted to its cultivation;
(2) the date upon which cultivation of the new or experimental crop began;
(3) the estimated annual yield, per acre, of the new or experimental crop, once established;
(4) the date by which the crop is expected to be established and yield a harvest sufficient to meet the actual or anticipated gross sales, payments, fees, or imputed income requirements established pursuant to section 5 of P.L.1964, c.48 (C.54:4-23.5);
(5) the actual or anticipated annual eligible costs incurred by the landowner in cultivating the new or experimental crop, per acre;
(6) the anticipated annual gross sales, payments, fees, or imputed income from the cultivation of the new or experimental crop; and
(7) if appropriate, the significant economic investments to be made and significant economic risks to be assumed by the landowner in order to cultivate the new or experimental crop.
c. The New Jersey Agricultural Experiment Station shall determine and certify:
(1) the completeness and accuracy of the information and documentation submitted by the landowner pursuant to subsection b. of this section;
(2) the eligibility of the land and landowner for the exemption established pursuant to subsection e. of section 5 of P.L.1964, c.48 (C.54:4-23.5); and
(3) an appropriate exemption period, of up to five years, for each new or experimental crop being cultivated, based on the information available to New Jersey Agricultural Experiment Station concerning the cultivation of the specific crop.
d. Upon making the determinations and certifications required by subsection c. of this section, the New Jersey Agricultural Experiment Station shall issue documentation of the determinations and certifications to the applicant landowner, which shall be submitted, by the landowner, to the local tax assessor as part of the landowner's application for valuation, assessment, and taxation of land in agricultural or horticultural use, pursuant to section 5 of P.L.1964, c.48 (C.54:4-23.5).
e. If the exemption period certified pursuant to paragraph (3) of subsection c. of this section is for more than one year, the landowner shall, in each year following initial certification pursuant to paragraph (1) of subsection c. of this section, resubmit to the New Jersey Agricultural Experiment Station the documentation necessary to comply with the requirements of subsection b. of this section, which documentation shall be updated, in each such year of the certified exemption term, to reflect current data. Upon receipt and review of the updated documentation, the New Jersey Agricultural Experiment Station shall renew the certification, issued pursuant to paragraph (1) of subsection c. of this section, for the next year of the certified exemption term and issue, to the landowner, documentation of the certification's renewal, which shall be submitted, by the landowner, to the local tax assessor as part of the landowner's application for valuation, assessment, and taxation of land in agricultural or horticultural use, pursuant to section 5 of P.L.1964, c.48 (C.54:4-23.5).
f. The New Jersey Agricultural Experiment Station may require a landowner to revise and resubmit information or documentation, as necessary to make the certifications or renewals of certification required by this section.
g. As used in this section:
"Eligible costs" mean the same as the term is defined in subsection a. of section 14 of P.L.1964, c.48 (C.54:4-23.14).
"New or experimental crop" means the same as the term is defined in subsection e. of section 5 of P.L.1964, c.48 (C.54:4-23.5).
2. Section 5 of P.L.1964, c.48 (C.54:4-23.5) is amended to read as follows:
5. a. Except as otherwise provided in subsection d. or subsection e. of this section, land, five acres in area, shall be deemed to be actively devoted to agricultural or horticultural use when the amount of the gross sales of agricultural or horticultural products produced thereon, any payments received under a soil conservation program, fees received for breeding, raising, or grazing any livestock, income imputed to cropland pastured and permanent pasture land used for grazing in the amount determined by the State Farmland Evaluation Committee created pursuant to section 20 of P.L.1964, c.48 (C.54:4-23.20), and fees received for boarding, rehabilitating, or training any livestock where the land under the boarding, rehabilitating, or training facilities is contiguous to land which otherwise qualifies for valuation, assessment, and taxation under P.L.1964, c.48 (C.54:4-23.1 et seq.), have averaged at least $1,000 per year during the two-year period immediately preceding the tax year in issue, or there is clear evidence of anticipated yearly gross sales, payments, fees, and imputed income amounting to at least $1,000 within a reasonable period of time, or such amount as may be established by the State Farmland Evaluation Committee pursuant to this section. In the case of woodland subject to a woodland management plan pursuant to section 3 of P.L.1964, c.48 (C.54:4-23.3), the amount shall be at least $500[,] or such amount as may be established by the State Farmland Evaluation Committee pursuant to this section. Every three years, or sooner at the call of the Secretary of Agriculture or the Director of the Division of Taxation, the State Farmland Evaluation Committee shall review the minimum gross sales, payments, fees, and imputed income requirements, and anticipated yearly gross sales, payments, fees, and imputed income requirements, established in this section for the first five acres, and may, by rule or regulation adopted pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), raise the amounts of those minimums to such levels as the committee determines appropriate. Any increase made to the minimum gross sales, payments, fees, and imputed income requirements, and anticipated yearly gross sales, payments, fees and imputed income requirements, for the first five acres as authorized pursuant to this section shall not be enforced until the third tax year following adoption of the increase.
In addition, where the land is more than five acres in area, it shall be deemed to be actively devoted to agricultural or horticultural use when the amount of the gross sales of agricultural or horticultural products produced on the area above five acres, any payments received under a soil conservation program, fees received for breeding, raising, or grazing any livestock, income imputed to cropland pastured and permanent pasture land used for grazing in the amount determined by the State Farmland Evaluation Committee created pursuant to section 20 of P.L.1964, c.48 (C.54:4-23.20), and fees received for boarding, rehabilitating, or training any livestock where the land under the boarding, rehabilitating, or training facilities is contiguous to land which otherwise qualifies for valuation, assessment, and taxation under P.L.1964, c.48, have averaged at least $5.00 per acre per year during the two-year period immediately preceding the tax year in issue, or where there is clear evidence of anticipated yearly gross sales, payments, fees, and imputed income amounting to an average of at least $5.00 per year within a reasonable period of time[;], except in the case of woodland and wetland, where the minimum requirement shall be an average of $0.50 per acre on the area above five acres.
In addition, in order for land to be deemed to be actively devoted to agricultural or horticultural use, the activity and use must be consistent with the guidelines describing generally accepted agricultural and horticultural practices developed and adopted pursuant to subsection a. of section 1 of P.L.2013, c.43 (C.54:4-23.3d).
As used in this section, "livestock" shall not include dogs.
For the purposes of this section, the presence of an intervening public thoroughfare shall not preclude a finding of contiguity.
b. (1) Land previously qualified as actively devoted to agricultural or horticultural use under P.L.1964, c.48 (C.54:4-23.1 et seq.), but failing to meet the additional requirement on acreage above five acres, shall not be subject to the roll-back tax because of such disqualification, but shall be treated as land for which an annual application has not been submitted, provided that the land remains in agricultural or horticultural use.
(2) Land previously qualified as actively devoted to agricultural or horticultural use under P.L.1964, c.48 (C.54:4-23.1 et seq.), but failing to meet any increase in the minimum amount of gross sales, payments and fees received, and imputed income requirements, and anticipated yearly gross sales, payments, fees, and imputed income requirements, established pursuant to subsection a. of this section, shall not be subject to the roll-back tax because of such disqualification, but shall be treated as land for which an annual application has not been submitted, provided that the land remains in agricultural or horticultural use.
(3) Land qualified as actively devoted to agricultural or horticultural use as of the day before the date of enactment of P.L.2013, c.43 (C.54:4-23.3d et al.) due to the use of payments or other compensation received under a soil conservation program agreement with any agency of the federal government, but which payments or other compensation do not meet the minimum amounts required pursuant to subsection a. of this section as amended by P.L.2013, c.43 (C.54:4-23.3d et al.), shall continue to be deemed to be actively devoted to agricultural or horticultural use for purposes of valuation, assessment, and taxation under P.L.1964, c.48 until the end of the soil conservation program agreement period.
c. In determining the eligibility of land for valuation, assessment, and taxation pursuant to P.L.1964, c.48 (C.54:4-23.1 et seq.), the assessor of the taxing district in which the land is located shall, upon request by the owner of the land, exempt the owner from the income requirements of this section if the owner demonstrates to the satisfaction of the assessor that the failure to meet the income requirements was due to an injury, illness, or death of the person responsible for performing the activities which produce the income necessary to meet the income eligibility requirement of this section. The request of the owner shall be accompanied either by a certificate of a physician stating that the person was physically incapacitated or by a certified copy of the death certificate, as the case may be. The assessor may only grant an exemption once for a particular illness, injury, or death.
d. The gross sales, payments, fees, and imputed income received pursuant to the requirements of this section shall not apply to land that:
(1) is the subject of a forest stewardship plan approved by the Department of Environmental Protection pursuant to section 3 of P.L.2009, c.256 (C.13:1L-31) which is fully implemented[,]; and
(2) otherwise qualifies under the "Farmland Assessment Act of 1964," P.L.1964, c.48 (C.54:4-23.1 et seq.), for valuation, assessment and taxation as land in agricultural or horticultural use pursuant to section 3 of P.L.1964, c.48 (C.54:4-23.3).
e. (1) The gross sales, payments, fees, and imputed income received pursuant to the requirements of this section shall not apply to land that: (a) is cultivated for a new or experimental crop for an exemption period certified by the New Jersey Agricultural Experiment Station pursuant to subsection c. of section 1 of P.L. , c. (C. ) (pending before the Legislature as this bill); and (b) otherwise qualifies under the "Farmland Assessment Act of 1964," P.L.1964, c.48 (C.54:4-23.1 et seq.), for valuation, assessment, and taxation as land in agricultural or horticultural use, pursuant to section 3 of P.L.1964, c.48 (C.54:4-23.3). The provisions of this subsection shall apply to such land for the term of the certified exemption period, provided that the landowner annually provides the documentation required pursuant to subsection a. of section 14 of P.L.1964, c.48 (C.54:4-23.14).
(2) After the expiration of the exemption period certified pursuant to subsection c. of section 1 of P.L. , c. (C. ) (pending before the Legislature as this bill), land cultivated for a new or experimental crop that fails to meet the actual or anticipated gross sales, payments, fees, and imputed income requirements established pursuant to subsection a. of this section shall not be subject to the roll-back tax because of such disqualification, but shall be treated as land for which an annual application has not been submitted, provided that the land remains in agricultural or horticultural use.
(3) As used in this subsection, "new or experimental crop" means an agricultural or horticultural crop that is a newly developed hybrid, variety, or species of plant, tree, or other crop not extensively grown in the region or State, or an agricultural or horticultural crop that has not been previously cultivated by the landowner and the cultivation of which is undertaken by the landowner, for a significant economic investment or at significant economic risk, for the purposes of diversifying crops or otherwise enhancing the land's economic viability, and which agricultural or horticultural crop requires more than a year of cultivation to establish a yield sufficient to generate the actual or anticipated yearly gross sales, payments, fees, and imputed income necessary for the land on which it is grown to be deemed actively devoted to agricultural or horticultural use, pursuant to subsection a. of this section.
(cf: P.L.2013, c.43, s.2)
3. Section 14 of P.L.1964, c.48 (C.54:4-23.14) is amended to read as follows:
14. a. (1) Application for valuation, assessment, and taxation of land in agricultural or horticultural use under P.L.1964, c.48 (C.54:4-23.1 et seq.) shall be on a form prescribed by the Director of the Division of Taxation in the Department of the Treasury, in consultation with the State Board of Agriculture, and provided for the use of claimants by the governing bodies of the respective taxing districts. The form of application shall provide for the reporting of information pertinent to the provisions of Article VIII, Section 1, paragraph 1(b) of the Constitution, as amended, and P.L.1964, c.48 (C.54:4-23.1 et seq.). The form shall include a plain language recitation and explanation of the guidelines describing generally accepted agricultural and horticultural practices developed and adopted pursuant to subsection a. of section 1 of P.L.2013, c.43 (C.54:4-23.3d) that may be used by municipal tax assessors, county assessors, county tax administrators, and other appropriate local government officials to assist them in determining whether land may be deemed to be in agricultural use, horticultural use, or actively devoted to agricultural or horticultural use pursuant to the "Farmland Assessment Act of 1964," P.L.1964, c.48 (C.54:4-23.1 et seq.). The applicant shall include with the form of application, in a manner prescribed by the director, proofs of sales of agricultural or horticultural products, and of any other payments, fees, or imputed income received from the agricultural or horticultural use of the land, in the prior year, or clear evidence of anticipated yearly gross sales, payments, fees, or imputed income, amounting to at least $1,000 for the first five acres, or, in the case of woodland subject to a woodland management plan pursuant to section 3 of P.L.1964, c.48 (C.54:4-23.3), amounting to at least $500 for the first five acres, or, in either case, amounting to such sums as may be established by the State Farmland Evaluation Committee pursuant to subsection a. of section 5 of P.L.1964, c.48 (C.54:4-23.5).
(2) In the case of land that is the subject of a forest stewardship plan approved by the Department of Environmental Protection, pursuant to section 3 of P.L.2009, c.256 (C.13:1L-31), which is fully implemented, and which otherwise qualifies under the "Farmland Assessment Act of 1964," P.L.1964, c.48 (C.54:4-23.1 et seq.), for valuation, assessment, and taxation as land in agricultural or horticultural use pursuant to section 3 of P.L.1964, c.48 (C.54:4-23.3), no proofs required pursuant to this subsection of actual gross sales, payments, fees, or imputed income, or [of] clear evidence of anticipated yearly gross sales, payments, fees, or imputed income, need be included with the form or otherwise submitted. However, the applicant shall include documentation demonstrating implementation of the forest stewardship plan, including documentation of scheduled activities, a forest inventory, and yield parameters to document forest productivity[,] and inspections performed, in accordance with rules and regulations adopted for the forest stewardship program by the Department of Environmental Protection.
(3) In the case of a new or experimental crop cultivated on land pursuant to subsection e. of section 5 of P.L.1964, c.48 (C.54:4-23.5), no proofs required pursuant to this subsection of actual gross sales, payments, fees, or imputed income, or clear evidence of anticipated yearly gross sales, payments, fees, or imputed income, need be included with the form or otherwise submitted, provided that the applicant submits a copy of the initial or renewed certification issued by the New Jersey Agricultural Experiment Station for the land, pursuant to section 1 of P.L. , c. (C. ) (pending before the Legislature as this bill), together with documentation for the new or experimental crop, as certified by the New Jersey Agricultural Experiment Station, which documentation: (a) identifies the new or experimental crop being cultivated on the applicant's land; (b) identifies the total amount of land acreage being devoted to the cultivation of the new or experimental crop; (c) certifies that the eligible costs incurred by the landowner in cultivating and establishing the new or experimental crop amounted to at least $1,000 for the first five acres of cultivated land; (d) identifies the significant economic investments being made, and significant economic risks being assumed, by the landowner in order to cultivate the new or experimental crop, to the extent that such information is available; (e) identifies the estimated annual yield, per acre, of the new or experimental crop once established; and (f) identifies the date by which the new or experimental crop is expected to be established and yield a harvest sufficient to meet the actual or anticipated gross sales, payments, fees, or imputed income requirements of section 5 of P.L.1964, c.48 (C.54:4-23.5).
(4) As used in this subsection:
"Eligible costs" mean the costs required to be incurred by a landowner to cultivate and establish a new or experimental crop, including the costs of seeds, plants, trees, fertilizers, fuel for equipment necessary for the cultivation of the new or experimental crop, the hiring or training of employees necessary for the cultivation of the new or experimental crop, and any other costs that are determined, by the New Jersey Agricultural Experiment Station, to be essential for the cultivation of the new or experimental crop.
"New or experimental crop" means the same as the term is defined in subsection e. of section 5 of P.L.1964, c.48 (C.54:4-23.5).
b. A certification by the landowner that the facts set forth in the application are true may be prescribed by the director to be in lieu of a sworn statement to that effect. Statements so certified shall be considered as if made under oath and subject to the same penalties as provided by law for perjury.
In addition, for a gross and intentional misrepresentation on the application, the landowner shall be subject to a civil penalty of up to $5,000. Any such civil penalty may be imposed and collected by the municipality, the county, or the State, with costs, in a summary proceeding pursuant to the "Penalty Enforcement Law of 1999," P.L.1999, c.274 (C.2A:58-10 et seq.). The Superior Court and the municipal court shall have jurisdiction to enforce the provisions of the "Penalty Enforcement Law of 1999" in connection with this subsection. One-half of any civil penalties so collected by a municipality or county shall be dedicated and used by the municipality or county in administering and enforcing the provisions of the "Farmland Assessment Act of 1964," P.L.1964, c.48 (C.54:4-23.1 et seq.) in the municipality or county. The remaining one-half of any civil penalties so collected by a municipality or county shall be paid by the municipality or county to the State[,] and, together with any civil penalties so collected directly by the State, shall be dedicated and used by the Department of Agriculture and the Division of Taxation in administering and enforcing the provisions of P.L.1964, c.48 (C.54:4-23.1 et seq.).
c. Any landowner, except those who have submitted a woodland management plan or a forest stewardship plan pursuant to section 3 of P.L.1964, c.48 (C.54:4-23.3), who is an applicant for valuation, assessment, and taxation pursuant to P.L.1964, c.48 (C.54:4-23.1 et seq.) for lands not previously qualified under P.L.1964, c.48 shall submit with the application a map of land use classes and soil groups that conforms with standards established by the Division of Taxation in consultation with the State Board of Agriculture.
d. For any landowner whose farm management unit is less than seven acres in size, the landowner shall submit with the application form a narrative describing the agricultural or horticultural uses on the farm management unit, the number of acres that will be actively devoted to those uses, and a sketch of the location on the farm management unit of those uses. For the purposes of this subsection, "farm management unit" means a parcel or parcels of land, whether contiguous or noncontiguous, together with agricultural or horticultural buildings, structures, and facilities, producing agricultural or horticultural products[,] and operated as a single enterprise.
e. The director, after consultation with the State Board of Agriculture, shall include with each application a letter or other document explaining any changes to the law, rules, regulations, and guidelines on the valuation, assessment, and taxation of land pursuant to P.L.1964, c.48 (C.54:4-23.1 et seq.) [that] which have occurred in the prior tax year and which shall be newly in effect in the tax year for which the application is being submitted.
f. The director shall devise a form for the extension of filing time for the valuation application, which form shall include the name and address of the applicant, the reason for the extension, and a space for the approval or rejection of the assessor.
(cf: P.L.2013, c.43, s.4)
4. This act shall take effect immediately.
STATEMENT
This bill would amend the "Farmland Assessment Act of 1964," P.L.1964, c.48 (C.54:4-23.1 et seq.) (the Farmland Assessment Act) to exempt, from the law's income requirements, for a period of up to five years, land that is used to cultivate new or experimental crops. "New or experimental crop" is defined to mean an agricultural or horticultural crop that is a newly developed hybrid, variety, or species of plant, tree, or other crop not extensively grown in the region or State, or an agricultural or horticultural crop that has not been previously cultivated by the landowner and the cultivation of which is undertaken by the landowner, for a significant economic investment or at significant economic risk, for the purposes of diversifying crops or otherwise enhancing the land's economic viability, and which agricultural or horticultural crop requires more than a year of cultivation to establish a yield sufficient to generate the actual or anticipated yearly gross sales, payments, fees, and imputed income necessary for the land on which it is grown to be deemed actively devoted to agricultural or horticultural use, for the purposes of the Farmland Assessment Act.
The differential valuation for property tax purposes of land in agricultural or horticultural use, otherwise known as "farmland assessment," is authorized by Article VIII, Section I, paragraph 1 of the New Jersey Constitution. The Farmland Assessment Act implements this constitutional provision by allowing land in agricultural or horticultural use to be subject to reduced property taxes.
Under this bill, a landowner would be eligible for a term-limited exemption from the Farmland Assessment Act's minimum income requirements for land that: (1) is cultivated for a new or experimental crop; and (2) otherwise qualifies for farmland assessment under the Farmland Assessment Act. The New Jersey Agricultural Experiment Station would be responsible for identifying and certifying an appropriate exemption period, of up to five years, for these purposes.
To be eligible for an exemption under the bill, an applicant for farmland assessment would be required to apply to the New Jersey Agricultural Experiment Station for certification of an appropriate exemption period and submit that certification, or any renewal thereof, to the local tax assessor, together with documentation: (1) identifying the new or experimental crop being cultivated on the applicant's land; (2) identifying the total amount of acreage devoted to the cultivation; (3) certifying that the eligible costs incurred by the landowner in cultivating and establishing the new or experimental crop on the land amounted to at least $1,000 for the first five acres of cultivated land (eligible costs include the costs of seeds, plants, trees, fertilizers, the costs of fuel for equipment necessary for the cultivation of the new or experimental crop, the costs of hiring or training of employees necessary for the cultivation of the new or experimental crop, and any other costs that are determined, by the New Jersey Agricultural Experiment Station, to be essential for the cultivation of the new or experimental crop); (4) identifying the significant economic investments being made, and the significant economic risks being assumed, by the landowner in order to cultivate the new or experimental crop, to the extent that such information is available; (5) identifying the estimated annual yield, per acre, of the new or experimental crop once established; and (6) identifying the date by which the new or experimental crop is expected to be established and yield a harvest sufficient to meet the Farmland Assessment Act's actual or anticipated gross sales, payments, fees, or imputed income requirements.
Following the certification of an appropriate exemption period by the New Jersey Agricultural Experiment Station, the landowner receiving the exemption would be required to submit the certification to the local tax assessor with the landowner's farmland assessment application. If the certified exemption period is for more than one year, the landowner would be required to annually resubmit the information required for initial exemption, updated for the current year, and receive a renewal of certification, from the New Jersey Agricultural Experiment Station, in each year of the certified exemption period. The landowner would be required to file the initial or renewed certification with the Division of Taxation in the Department of the Treasury, in each year of the certified exemption period, as appropriate, in order to receive the exemption authorized by the bill for each such year.
