A4645 1R

An Act establishing a beginning farmer loan program, and supplementing ¹[P.L.1974, c.80 (C.34:1B-1 et seq.)] Title 34 of the Revised Statutes¹.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. As used in ¹[P.L. , c. (C. ) (pending before the Legislature as this bill)] this act¹:

“Agricultural improvement” means any improvement, building, structure, or fixture ¹that is¹ suitable for use in farming ¹[which] and¹ is located on agricultural land.

“Agricultural land” means land suitable for use in farming.

“Authority” means the New Jersey Economic Development Authority ¹,¹ established pursuant to section 4 of P.L.1974, c.80 (C.34:1B-4).

“Beginning farmer” means a person with a low or moderate net worth ¹[that engages], as determined by the authority, pursuant to standards established by rule or regulation, who wishes to engage¹ in farming ¹[, or wishes to engage] and has never farmed before, who has engaged¹ in farming ¹in the State for 10 years or less as of the effective date of this act, or who qualifies as a first-time farmer pursuant to 26 U.S.C. s.147(c)(2)¹.

¹”Beginning farmer loan program” or “program” means the loan program established by the authority pursuant to this act.¹

¹[“Department” means the Department of Agriculture.]¹

“Depreciable agricultural property” means personal property ¹that is¹ suitable for use in farming ¹and¹ for which an income tax deduction for depreciation is allowable in computing federal income tax under the federal Internal Revenue Code.

“Farming” means the cultivation of land for the production of agricultural crops, the raising of poultry, the production of eggs, the production of milk, the production of fruit or other horticultural crops, grazing, the production of livestock, aquaculture, hydroponics, the production of forest products, or other activities designated by the ¹[department] Department of Agriculture,¹ pursuant to rules and regulations.

¹[“Low or moderate net worth” means a net worth that does not exceed the maximum allowable net worth established by the department pursuant to rules and regulations. The department shall determine the maximum allowable net worth in using data compiled by the National Agricultural Statistics Service in the United States Department of Agriculture.]¹

2. a. The New Jersey Economic Development Authority, in consultation with the Department of Agriculture, shall develop and administer a beginning farmer loan program to facilitate the acquisition of agricultural land, agricultural improvements, and depreciable agricultural property by beginning farmers.

b. ¹[(1)]¹ A beginning farmer seeking a loan pursuant to ¹[this section] the beginning farmer loan program¹ shall apply to the authority, in a form and manner ¹[as determined by the authority] prescribed thereby¹, and ¹[shall]¹ include ¹[such], in the application, all the¹ information ¹[as]¹ the authority ¹[determines is] deems to be¹ necessary ¹[in consideration of] to effectuate¹ the provisions ¹and purposes¹ of ¹[P.L. , c. (C. ) (pending before the Legislature as this bill)] this act¹.

¹[(2)] c.¹ In order to receive a loan ¹[from the authority pursuant to P.L. , c. (C. ) (pending before the Legislature as this bill)] under the beginning farmer loan program¹, the ¹[beginning farmer] applicant¹ shall ¹[meet the following requirements]¹:

¹[(a)] (1) establish that¹ the ¹applicant is a¹ beginning farmer ¹[shall], for the purposes of this act and the loan program established pursuant thereto, and is a material and substantial participant in farming activities;

(2)¹ be a resident of the State;

¹[(b) the] (3) propose to use the loan moneys to engage in the purchase of¹ agricultural land, agricultural improvements, or depreciable agricultural property ¹[the beginning farmer proposes to purchase shall be]¹ located in the State;

¹[(c) the beginning farmer shall] (4)¹ have sufficient education, training, or experience ¹to engage¹ in the type of farming for which the ¹[beginning farmer requests the]¹ loan ¹is sought¹;

¹[(d)] (5)¹ if the loan is for the acquisition of agricultural land, ¹[the beginning farmer shall]¹ have access to adequate working capital, farm equipment, machinery, or livestock;

¹[(e)] (6)¹ if the loan is for the acquisition of depreciable agricultural property, ¹[the beginning farmer shall]¹ have access to adequate working capital or agricultural land;

¹[(f) the beginning farmer shall materially and substantially participate in farming;

(g)] (7) use¹ the agricultural land ¹[and],¹ agricultural improvements ¹[shall], and depreciable agricultural property purchased with the loan moneys¹ only ¹[be used]¹ for farming ¹activities conducted¹ by, or under the direction of, the beginning farmer; and

¹[(h)] (8) satisfy¹ any other criteria established by the authority ¹[pursuant to rules and regulations]¹.

¹[(3)] d.¹ The authority shall review completed applications ¹for a beginning farmer loan¹ and approve ¹those¹ applications that meet the requirements of this ¹[section] act¹ and the rules and regulations adopted pursuant ¹[to section 3 of P.L. , c. (C. ) (pending before the Legislature as this bill)] thereto¹.

¹[c.] e.¹ A beginning farmer loan under this section shall be ¹[made] issued¹ pursuant to a loan agreement ¹[with] executed between the beginning farmer and¹ the authority¹[,]. The loan agreement¹ shall ¹provide for the loan to¹ bear interest at rates and terms deemed appropriate by the authority, and shall contain other terms and conditions ¹[considered] as may be deemed by the authority to be necessary and¹ appropriate ¹[by the authority that are consistent with] to effectuate¹ the purposes of ¹[P.L. , c. (C. ) (pending before the Legislature as this bill) and with] this act and¹ the rules and regulations adopted ¹[by the authority pursuant to section 3 of P.L. , c. (C. ) (pending before the Legislature as this bill)] pursuant thereto¹.

¹[d.] f.¹ The authority ¹[may]¹, in its discretion, ¹may, at any time,¹ require a ¹recipient of a¹ beginning farmer ¹[that receives a]¹ loan ¹[pursuant to P.L. , c. (C. ) (pending before the Legislature as this bill)]¹ to submit an audited financial statement to the authority in order to ensure the beginning farmer’s continued viability.

¹[e.] g.¹ The authority ¹[may]¹, either through the adoption of rules and regulations, or through the terms of the loan agreement ¹[made] executed¹ pursuant to subsection c. of this section, ¹may¹ establish terms ¹and conditions¹ governing the incidence of default by a ¹recipient of a¹ beginning farmer ¹[that receives a]¹ loan ¹[under the program administered pursuant to P.L. , c. (C. ) (pending before the Legislature as this bill)]¹.

¹[f.] h.¹ The authority may participate in, and cooperate with, programs of the Consolidated Farm Service Agency in the United States Department of Agriculture, ¹the¹ Federal Land Bank, or any other agency or instrumentality of the federal government, or with any program of any other State agency¹,¹ in the administration of the beginning farmer loan program.

3. The New Jersey Economic Development Authority, in consultation with the Department of Agriculture, shall adopt ¹rules and regulations¹, pursuant to the “Administrative Procedure Act,” P.L.1968, c.410 (C.52:14B-1 et seq.), ¹[rules and regulations] as¹ necessary to effectuate the purposes of ¹[P.L. , c. (C. ) (pending before the Legislature as this bill)] this act, including, but not limited to, rules and regulations establishing the maximum allowable net worth at which a person will be deemed to be a beginning farmer, for the purposes of this act, using data compiled by the National Agricultural Statistics Service in the United States Department of Agriculture¹.

4. This act shall take effect immediately.