ASSEMBLY, No. 4502

STATE OF NEW JERSEY

221st LEGISLATURE

 

INTRODUCED JUNE 6, 2024

 


 

Sponsored by:

Assemblyman  ALEX SAUICKIE

District 12 (Burlington, Middlesex, Monmouth and Ocean)

 

 

 

 

SYNOPSIS

     Authorizes State, local, and nonprofit acquisition of fee simple titles to, and development easements on, farmland, in certain cases, for negotiated purchase prices exceeding appraised value thereof.

 

CURRENT VERSION OF TEXT

     As introduced.

  


An Act concerning the acquisition and pricing of fee simple titles to, and development easements on, farmland, supplementing Title 13 of the Revised Statutes, and amending various sections of the statutory law.

 

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

 

     1.    (New section)  a.  As used in this section:

     “Appraised value” means the highest dollar amount, determined pursuant to, and using the various valuation methods set forth in, subsection e. of section 8 of P.L.2016, c.12 (C.13:8C-50), which represents the monetary value of a farmland development easement that is proposed to be acquired under the State’s farmland preservation laws, and which amount is to be used as the starting point and basis for further pricing negotiations, between the proposed purchaser and the landowner, regarding the final purchase price to be paid for acquisition of the development easement.

     “Committee” means the State Agriculture Development Committee established pursuant to section 4 of the “Right to Farm Act,” P.L.1983, c.31 (C.4:1C-4).

     “Constitutionally dedicated moneys” means any constitutionally dedicated moneys, as defined in section 3 of P.L.1999, c.152 (C.13:8C-3), and any constitutionally dedicated CBT moneys, as defined in section 3 of P.L.2016, c.12 (C.13:8C-45).

     “County agriculture development board” means a county agriculture development board established pursuant to section 7 of P.L.1983, c.32 (C.4:1C-14).

     “Designated preservation area” means an area of land that is located within the designated boundaries of:  the Highlands preservation area, as delineated pursuant to subsection b. of section 7 of P.L.2004, c.120 (C.13:20-7); the pinelands preservation area, as delineated pursuant to subsection b. of section 10 of P.L.1979, c.111 (C.13:18A-11); or a municipally approved farmland preservation program area, as delineated pursuant to section 14 of P.L.1983, c.32 (C.4:1C-21).

     “Farmland preservation laws” means and includes the “Agricultural Retention and Development Act,” P.L.1983, c.32 (C.4:1C-11 et al.), the “Garden State Preservation Trust Act,” P.L.1999, c.152 (C.13:8C-1 et seq.), the “Preserve New Jersey Act,” P.L.2016, c.12 (C.13:8C-43 et seq.), any Green Acres bond act, as defined by section 3 of P.L.2016, c.12 (C.13:8C-45), any rules or regulations adopted pursuant thereto, and any other law, rule, or regulation that governs or provides funding for the acquisition, stewardship, maintenance, or transfer of farmland for preservation purposes.

     “Final, negotiated purchase price” or “negotiated purchase price” means the fixed dollar amount identified in the written terms of a proposed agreement of sale, as negotiated and agreed-to by the parties pursuant to subsection e. of section 8 of P.L.2016, c.12 (C.13:8C-50), which dollar amount represents the final, negotiated, and agreed-upon purchase price to be paid, by the purchaser to the landowner, for the acquisition of fee simple title to, or a development easement on, farmland owned thereby.

     “Hearing board” means the county agriculture development board or subregional agricultural retention board which oversees a hearing conducted pursuant to subsection d. of this section.

     “Local government unit” means a county, municipality, or other political subdivision of the State, or any agency, authority, or other entity thereof, including, but not limited to, a county agriculture development board or subregional agriculture retention board, which is authorized to acquire fee simple title to, or a development easement on, farmland pursuant to the State’s farmland preservation laws.

     “Proposed State or nonprofit purchaser” means the committee or a qualifying tax exempt nonprofit organization, which is proposing to acquire fee simple title to, or a development easement on, farmland pursuant to the State’s farmland preservation laws.

     “Qualifying tax exempt nonprofit organization” means the same as that term is defined in section 3 of P.L.1999, c.152 (C.13:8C-3).

     “Subregional agricultural retention board” means a subregional agricultural retention board established pursuant to section 10 of P.L.1983, c.32 (C.4:1C-17).

     b.  Except as otherwise provided by this section, whenever the committee, a local government unit, or a qualifying tax exempt nonprofit organization offers to purchase fee simple title to, or a development easement on, farmland pursuant to the State’s farmland preservation laws, the final, negotiated purchase price to be paid for the acquisition of such fee simple title or development easement shall be equal to or less than the appraised value thereof.

     c.     (1) Notwithstanding the provisions of subsection b. of this section or any other law, rule, or regulation to the contrary, whenever a local government unit offers to purchase fee simple title to, or a development easement on, farmland using constitutionally dedicated moneys in whole or in part, the final, negotiated purchase price to be paid thereby, for the acquisition of the fee simple title or development easement, may exceed the appraised value thereof, provided that the governing body of the county in which the relevant farmland is situated has first adopted an ordinance, in compliance with all public hearing and comment requirements applicable thereto, and in conformance with the requirements of paragraph (3) of this subsection, approving of the proposed acquisition, at such negotiated purchase price, based on the unique characteristics, qualities, or location of the land on which the fee simple title or development easement is to be acquired.

     (2)   Whenever a local government unit offers to purchase fee simple title to, or a development easement on, farmland at a final, negotiated purchase price that exceeds the appraised value thereof, the local government unit, prior to finalizing and executing the negotiated agreement of sale, shall provide a copy of such proposed and negotiated sales agreement to the governing body of the county in which the farmland is situated.

     (3)   Within 30 days after receipt, pursuant to paragraph (2) of this subsection, of a proposed and negotiated agreement of sale relating to the State or local acquisition of fee simple title to, or a development easement on, farmland, the governing body of the county shall review the proposed agreement of sale and adopt an ordinance approving or disapproving of the execution thereof and the acquisition of the fee simple title or development easement at the negotiated purchase price set forth therein.  Any such ordinance shall, at a minimum, include the following findings of fact:

     (a)   the location of the land on which the fee simple title or development easement is to be acquired, the local government unit proposing to engage in such acquisition, the reasons why such land is deemed to be suitable for agricultural and horticultural use and purposes, and the location and size of the fee simple title or development easement to be acquired thereon;

     (b)   the appraised value of the fee simple title or development easement to be acquired;

     (c)   the final, negotiated purchase price proposed to be paid for the acquisition of the fee simple title or development easement;

     (d)   the total dollar amount and percentage by which the final, negotiated purchase price of the title or easement, as identified under subparagraph (c) of this paragraph, exceeds the appraised value thereof, as identified under subparagraph (b) of this paragraph; and

     (e)   the unique characteristics, qualities, or location of the land on which the fee simple title or development easement is proposed to be acquired, including, but not limited to, its location within a designated preservation area, which the governing body of the county deems sufficient to justify and warrant the local government unit’s acquisition of the fee simple title or development easement, pursuant to the purchase and pricing exception established in paragraph (1) of this subsection, at a final, negotiated purchase price exceeding the appraised value thereof.

     d.    (1) Notwithstanding the provisions of subsection b. of this section or any other law, rule, or regulation to the contrary, whenever the committee or a qualified tax exempt nonprofit organization offers to purchase fee simple title to, or a development easement on, farmland using constitutionally dedicated moneys in whole or in part, the final, negotiated purchase price to be paid for the acquisition of such fee simple title or development easement may exceed the appraised value thereof, provided that the county agriculture development board or subregional agricultural retention board having jurisdiction over the relevant farmland, as appropriate, first holds a hearing on the matter, in compliance with all public hearing and comment requirements applicable thereto.

     (2)   Within 30 days after the conclusion of a hearing conducted pursuant to paragraph (1) of this subsection, the hearing board shall issue a hearing report containing the following information:

     (a)   the location of the land on which the fee simple title or development easement is to be acquired, the name of the proposed State or nonprofit purchaser, the basis upon which such land is deemed to be suitable for agricultural and horticultural use and purposes, and the location and size of the fee simple title or development easement to be acquired thereon;

     (b)   the appraised value of the fee simple title or development easement to be acquired;

     (c)   the final, negotiated purchase price proposed to be paid for the acquisition of the fee simple title or development easement;

     (d)   the total dollar amount and percentage by which the final, negotiated purchase price of the title or easement, as identified under subparagraph (c) of this paragraph, exceeds the appraised value thereof, as identified under subparagraph (b) of this paragraph; and

     (e)   the unique characteristics, qualities, or location of the land, including, but not limited to, its location within a designated preservation area, which have been cited by the proposed State or nonprofit purchaser, and by other members of the public, as sufficient basis upon which to justify and warrant the committee’s or nonprofit’s acquisition of the fee simple title or development easement, pursuant to the purchase and pricing exception established in paragraph (1) of this subsection, at a final, negotiated purchase price exceeding the appraised value thereof.

     (3)   At the conclusion of the requisite hearing, conducted pursuant to paragraph (1) of this subsection, the proposed State or nonprofit purchaser shall be immediately and statutorily authorized, pursuant to the purchase and pricing exception established in paragraph (1) of this subsection, to execute a finalized agreement of sale effectuating the acquisition, thereby, of such title or easement at a purchase price exceeding the appraised value thereof.  The authorization provided by this paragraph shall be applicable, regardless of whether the hearing board has issued its findings of facts on the matter, as required by paragraph (2) of this subsection.

     (4)   Within 30 days after the execution of a final, negotiated sales agreement pursuant to paragraph (3) of this subsection, the State or nonprofit purchaser shall provide a copy of the signed agreement of sale to the governing body of the county in which the farmland is situated.

     (5)   Nothing in this section shall be deemed to require a proposed State or nonprofit purchaser to obtain the approval of a hearing board, or the approval of the governing body of the county, in order to finalize and execute an agreement of sale as authorized pursuant to paragraph (3) of this subsection.

 

     2.  Section 24 of P.L.1983, c.32 (C.4:1C-31) is amended to read as follows:

     24.  a.  Any landowner applying to the board to sell a development easement pursuant to section 17 of P.L.1983, c.32 (C.4:1C-24) shall offer to sell the development easement at a price which, in the opinion of the landowner, represents a fair value of the development potential of the land for nonagricultural purposes, as determined in accordance with the provisions of the “Right to Farm Act,” P.L.1983, c.32 (C.4:1C-1 et seq.).

     b.    Any offer shall be reviewed and evaluated by the board and the committee in order to determine the suitability of the land for development easement purchase.  Decisions regarding suitability shall be based on the following criteria:

     (1)   Priority consideration shall be given, in any one county, to offers with higher numerical values obtained by applying the following formula:

     nonagricultural   -   agricultural   -   landowner's

     developmental value       value            asking price

---------------------------------------------------------------

                  nonagricultural   -   agricultural        

               development value         value           

     (2)   The degree to which the purchase would encourage the survivability of the municipally approved program in productive agriculture; and

     (3)   The degree of imminence of change of the land from productive agriculture to nonagricultural use.

     The board and the committee shall reject any offer for the sale of development easements which is unsuitable according to the above criteria and which has not been approved by the board and the municipality.

     c.     (1)  Two independent appraisals paid for by the board shall be conducted for each parcel of land so offered and deemed suitable.  The appraisals shall be conducted by independent, professional appraisers selected by the board and the committee from among members of recognized organizations of real estate appraisers.  The appraisals shall determine the current overall value of the parcel for nonagricultural purposes, as well as the current market value of the parcel for agricultural purposes.  The difference between the two values shall represent an appraisal of the value of the development easement. 

     (2)   If Burlington County or a municipality therein has established a development transfer bank pursuant to the provisions of P.L.1989, c.86 (C.40:55D-113 et seq.) or if any county or any municipality in any county has established a development transfer bank pursuant to section 22 of P.L.2004, c.2 (C.40:55D-158) or the Highlands Water Protection and Planning Council has established a development transfer bank pursuant to section 13 of P.L.2004, c.120 (C.13:20-13), the municipal average of the value of the development potential of property in a sending zone established by the bank may be the value used by the board in determining the value of the development easement. 

     (3)   If a development easement is purchased using moneys appropriated from the fund, the State shall provide no more than 80[%] percent, except 100[%] percent may be provided under emergency conditions specified by the committee pursuant to rules or regulations, of the cost of the appraisals conducted pursuant to this section.  The funding limits established pursuant to this subsection shall be applicable, regardless of whether the governing body of the county adopts an ordinance, pursuant to subsection c. of section 1 of P.L.    , c.    (C.        ) (pending before the Legislature as this bill), authorizing the acquisition of the development easement at a final, negotiated purchase price that exceeds the appraised value thereof.

     d.    Upon receiving the results of the appraisals, or in Burlington county or a municipality therein or elsewhere where a municipal average has been established under subsection c. of this section, upon receiving an application from the landowners, the board and the committee shall compare the appraised value, or the municipal average, as the case may be, and the landowner's offer and, pursuant to the suitability criteria established in subsection b. of this section:

     (1)   Approve the application to sell the development easement and rank the application in accordance with the criteria established in subsection b. of this section; or

     (2)   Disapprove the application, stating the reasons therefor.

     e.     Upon approval by the committee and the board, the secretary is authorized to provide the board, within the limits of funds appropriated therefor, an amount equal to no more than 80[%] percent, except 100[%] percent may be provided under emergency conditions specified by the committee pursuant to rules or regulations, of the purchase price of the development easement, as determined pursuant to the provisions of this section.  The board shall provide its required share and accept the landowner's offer to sell the development easement.  The acceptance shall cite the specific terms, contingencies and conditions of the purchase.

     f.     The landowner shall accept or reject the offer within 30 days of receipt thereof.  Any offer not accepted within that time shall be deemed rejected.

     g.    Any landowner whose application to sell a development easement has been rejected for any reason other than insufficient funds may not reapply to sell a development easement on the same land within two years of the original application.

     h.    [No development easement shall be purchased at a price greater than the appraised value determined pursuant to subsection c. of this section or the municipal average, as the case may be.] (Deleted by amendment, P.L.    , c.    (pending before the Legislature as this bill)

     i.     The appraisals conducted pursuant to this section [or], and the fair market value of land restricted to agricultural use, as determined pursuant to this section, shall not be used to increase the assessment and taxation of agricultural land pursuant to the "Farmland Assessment Act of 1964," P.L.1964, c.48 (C.54:4-23.1 et seq.).

     j. (1) In determining the suitability of land for development easement purchase, the board and the committee may also include as additional factors for consideration the presence of a historic building or structure on the land and the willingness of the landowner to preserve that building or structure, but only if the committee first adopts, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), rules and regulations implementing this subsection.  The committee may, by rule or regulation adopted pursuant to the "Administrative Procedure Act," assign any such weight it deems appropriate to be given to these factors.

     (2)   The provisions of paragraph (1) of this subsection may also be applied in determining the suitability of land for fee simple purchase for farmland preservation purposes as authorized by P.L.1983, c.31 (C.4:1C-1 et seq.), P.L.1983, c.32 (C.4:1C-11 et seq.), and P.L.1999, c.152 (C.13:8C-1 et seq.).

     (3) (a) For the purposes of paragraph (1) of this subsection: "historic building or structure" means the same as that term is defined pursuant to subsection c. of section 2 of P.L.2001, c.405 (C.13:8C-40.2).

     (b)   For the purposes of paragraph (2) of this subsection, "historic building or structure" means the same as that term is defined pursuant to subsection c. of section 1 of P.L.2001, c.405 (C.13:8C-40.1).

(cf: P.L.2004, c.120, s.44)

 

     3.    Section 1 of P.L.1999, c.180 (C.4:1C-43.1) is amended to read as follows: 

     1.    a.  There is established in the State Agriculture Development Committee a farmland preservation planning incentive grant program, the purpose of which shall be to provide grants to eligible counties and municipalities for farmland preservation purposes as authorized pursuant to this [act] section.

     b.    To be eligible to apply for a grant, a county or municipality shall:

     (1)   Identify project areas of multiple farms that are reasonably contiguous and located in an agriculture development area authorized pursuant to the "Agriculture Retention and Development Act," P.L.1983, c.32 (C.4:1C-11 et seq.);

     (2)   Establish an agricultural advisory committee.  In the case of a county, the county agriculture development board shall serve this function.  In the case of a municipality, members of a municipal agricultural advisory committee shall be appointed by the mayor with the consent of the municipal governing body, and the committee shall report to the municipal planning board.  A municipal agricultural advisory committee shall be composed of at least three, but not more than five, members who shall be residents of the municipality, with a majority of the members actively engaged in farming and owning a portion of the land they farm.  For the purposes of this paragraph, "mayor" shall mean the same as that term is defined pursuant to section 3.2 of P.L.1975, c.291 (C.40:55D-5);

     (3)   Establish and maintain a dedicated source of funding for farmland preservation pursuant to P.L.1997, c.24 (C.40:12-15.1 et seq.), or an alternative means of funding for farmland preservation, such as, but not limited to, repeated annual appropriations or repeated issuance of bonded indebtedness, which the State Agriculture Development Committee deems to be, in effect, a dedicated source of funding because of a demonstrated commitment on the part of the county or municipality; and

     (4)   In the case of a municipality, prepare a farmland preservation plan element pursuant to paragraph (13) of section 19 of P.L.1975, c.291 (C.40:55D-28) in consultation with the agriculture advisory committee established pursuant to paragraph (2) of this subsection.

     c.     In the event a municipality is seeking funding from the county toward the purchase of development easements, the municipality shall submit an application to the county agriculture development board.  In all other cases, a municipality shall submit its application directly to the State Agriculture Development Committee.

     d.    A municipality, in submitting an application to the county agriculture development board or the State Agriculture Development Committee as appropriate, or a county, in submitting an application to the State Agriculture Development Committee, shall outline a multi-year plan for the purchase of multiple farms in a project area and indicate its annual share of the estimated purchase price.  The municipality, in order to enhance its application, may submit its proposal jointly with one or more contiguous municipalities if the submission would result in the preservation of a significant area of reasonably contiguous farmland.  The application shall include, in the case of a municipality, a copy of the farmland preservation plan element prepared pursuant to paragraph (13) of section 19 of P.L.1975, c.291 (C.40:55D-28); an estimate of the cost of purchasing development easements on all of the farms in a designated project area, to be determined in consultation with the county agriculture development board or through an appraisal for the entire project area; and an inventory showing the characteristics of each farm in the project area which may include, but need not be limited to, size, soils and agricultural use.

     e.     The State Agriculture Development Committee shall make decisions regarding suitability for funding of development easement purchases for planning incentive grants based on whether the project area provides an opportunity to preserve a significant area of reasonably contiguous farmland that will promote the long term viability of agriculture as an industry in the municipality or county.  After the State Agriculture Development Committee has given approval to an application, the municipality or county shall submit two appraisals for each parcel for which funding is requested.  The appraisals shall be conducted pursuant to the provisions of section 24 of P.L.1983, c.32 (C.4:1C-31).  Approved funding shall be allocated by the municipality, the county and the State to each parcel in the project area under an agreement that commits each level of government to a specific payment in each of the years included in the plan for purchase.  Nothing in this [act] section shall be construed to require that any parcel in a project area receive a price per acre that is the same as any other parcel in that project area or that any parcel must be purchased with installment payments because other parcels in the project area are so purchased.

     f.     [Purchases] (1) The county or municipal acquisition of a development [easements] easement on farmland, as authorized pursuant to this [act] section, shall be [made with] effectuated only upon the approval of both the State Agriculture Development Committee and the municipality[,] and, in the event that county funds are [provided] used for such purposes, [with] upon the approval of the county agriculture development board.

     (2)   In addition to the ordinary approvals required pursuant to paragraph (1) of this subsection, the county or municipal acquisition of a development easement, in any case where the negotiated purchase price exceeds the appraised value thereof, shall be effectuated only upon the county governing body’s adoption of an ordinance, pursuant to section 1 of P.L.    , c.    (C.        ) (pending before the Legislature as this bill), approving of such acquisition.

     g.    If a county does not provide funding toward the purchase of the development easement, the State Agriculture Development Committee shall hold title to the development easement.

     h.    The State Agriculture Development Committee shall adopt, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), such rules and regulations as may be necessary to implement this [act] section, and shall establish ranking and funding criteria separately from, but similar to, those used in the program established pursuant to P.L.1983, c.32 (C.4:1C-11 et seq.), except that ranking and funding criteria shall be applied to the project area as a whole and not to individual parcels, and priority shall be given to those applications that utilize option agreements, installment purchases, donations, and other methods for the purpose of leveraging monies made available by P.L.1999, c.152 (C.13:8C-1 et al.).

(cf: P.L.1999, c.180, s.1)

 

     4.    Section 39 of P.L.1999, c.152 (C.13:8C-39) is amended to read as follows:

13:8C-39  Grant to qualifying tax exempt nonprofit organization for farmland.

     39.  a.  The committee may provide a grant to a qualifying tax exempt nonprofit organization for up to 50[%] percent of the cost of acquisition of (1) a development easement on farmland, provided that the terms of any such development easement shall be approved by the committee, or (2) fee simple title to farmland, which shall be offered for resale or lease with an agricultural deed restriction, as determined by the committee, and any proceeds received from a resale shall be dedicated for farmland preservation purposes and the State's pro rata share of any such proceeds shall be deposited in the Garden State Farmland Preservation Trust Fund to be used for the purposes of that fund.

     b.    The value of a development easement or fee simple title shall be established by two appraisals conducted on each parcel and certified by the committee.  The appraisals shall be conducted by independent professional appraisers selected by the qualifying tax exempt nonprofit organization and approved by the committee from among members of recognized organizations of real estate appraisers.

     c.     The appraisals shall determine the fair market value of the fee simple title to the parcel, as well as the fair market value of the parcel for agricultural purposes.  The difference between the two values shall represent an appraisal of the value of the parcel for nonagricultural purposes, which shall be the value of the development easement.

     d.    Any grant provided to a qualifying tax exempt nonprofit organization pursuant to this section shall not exceed 50[%] percent of the appraised value of the development easement, or of the fee simple title in the case of fee simple acquisitions, as determined pursuant to subsection e. of section 8 of P.L.2016, c.12 (C.13:8C-50), plus up to 50[%] percent of any costs incurred, including, but not limited to, the costs of surveys, appraisals, and title insurance.  The funding limits established pursuant to this subsection shall be applicable regardless of whether the qualifying tax exempt nonprofit organization proposes and is authorized, pursuant to the statutory qualification procedures set forth in subsection d. of section 1 of P.L.    , c.    (C.        ) (pending before the Legislature as this bill), to acquire the fee simple title or the development easement, as the case may be, at a final, negotiated purchase price that exceeds the appraised value thereof.

     e.     The appraisals conducted pursuant to this section [or], and the fair market value of land restricted to agricultural use, as determined pursuant to this section, shall not be used to increase the assessment and taxation of agricultural land pursuant to the "Farmland Assessment Act of 1964," P.L.1964, c.48 (C.54:4-23.1 et seq.).

     f.     To qualify to receive a grant pursuant to this section, the applicant shall:

     (1)   demonstrate that it has the resources to match the grant requested; and

     (2)   in the case of the acquisition of a development easement, agree not to convey the development easement except to the federal government, the State, a local government unit, or another qualifying tax exempt nonprofit organization, for farmland preservation purposes.

     g.  (1)  In deciding whether to award a grant to a qualifying tax exempt nonprofit organization pursuant to this section, the committee may also include as additional factors for consideration the presence of a historic building or structure on the land and the willingness of the landowner to preserve that building or structure, but only if the committee first adopts, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), rules and regulations implementing this subsection.  The committee may, by rule or regulation adopted pursuant to the "Administrative Procedure Act," assign any such weight it deems appropriate to be given to these factors.

     (2)   For the purposes of this subsection:  "historic building or structure," in the context of the grant program for qualifying tax exempt nonprofit organizations to acquire development easements on farmland for farmland preservation purposes, means the same as that term is defined pursuant to subsection c. of section 2 of P.L.2001, c.405 (C.13:8C-40.2); and "historic building or structure," in the context of the grant program for qualifying tax exempt nonprofit organizations to acquire fee simple titles to farmland for farmland preservation purposes, means the same as that term is defined pursuant to subsection c. of section 1 of P.L.2001, c.405 (C.13:8C-40.1).

(cf: P.L.2001, c.405, s.5)

     5.    Section 8 of P.L.2016, c.12 (C.13:8C-50) is amended to read as follows:

     8.    a.  The State Treasurer shall establish a fund to be known as the "Preserve New Jersey Farmland Preservation Fund" and shall deposit all moneys received pursuant to paragraph (3) of subsection a. of section 5 of P.L.2016, c.12 (C.13:8C-47), paragraph (2) of subsection a. of section 1 of P.L.2019, c.136 (C.13:8C-47.1), and any other moneys appropriated by law for deposit into the fund.

     Moneys in the fund shall be invested in permitted investments or shall be held in interest-bearing accounts in those depositories as the State Treasurer may select, and may be invested and reinvested in permitted investments or as other trust funds in the custody of the State Treasurer in the manner provided by law.  All interest or other income or earnings derived from the investment or reinvestment of moneys in the fund shall be credited to the fund.

     b.    (1) The moneys in the fund are specifically dedicated and shall be used for the same purposes as those set forth in section 37 of P.L.1999, c.152 (C.13:8C-37) and as provided in paragraph (2) of this subsection.

     (2)   Of the moneys deposited into the Preserve New Jersey Farmland Preservation Fund:  (a) in State fiscal year 2017 through and including State fiscal year 2019, up to three percent shall be allocated by the committee on an annual basis for stewardship activities; and (b) commencing in State fiscal year 2020 and annually thereafter, up to four percent shall be allocated by the committee on an annual basis for stewardship activities.

     (3)   Notwithstanding any provision of P.L.2016, c.12 (C.13:8C-43 et seq.) to the contrary, stewardship activities undertaken on farmland on which (a) the pinelands development credits have been acquired pursuant to P.L.1979, c.111 (C.13:18A-1 et seq.), and the pinelands comprehensive management plan adopted pursuant thereto, or the development rights have been acquired pursuant to a transfer of development rights program for the Highlands Region established pursuant to section 13 of P.L.2004, c.120 (C.13:20-13), and (b) there is deed restriction approved by the committee, shall be eligible for funding pursuant to paragraph (2) of this subsection.

     c.     Moneys in the fund shall not be expended except in accordance with appropriations from the fund made by law.  Any act appropriating moneys from the Preserve New Jersey Farmland Preservation Fund shall identify any particular project or projects to be funded by the moneys, and any expenditure for a project for which the location is not identified by municipality and county in the appropriation shall require the approval of the Joint Budget Oversight Committee, or its successor, except as permitted otherwise in accordance with the same exceptions as those specified in paragraph (2) of subsection b. of section 23 of P.L.1999, c.152 (C.13:8C-23).

     d.    Unexpended moneys due to project withdrawals, cancellations, or cost savings shall be returned to the fund.

     e.     [Notwithstanding] Except as otherwise provided by section 1 of P.L.    , c.    (C.        ) (pending before the Legislature as this bill), and notwithstanding the provisions of section 24 of P.L.1983, c.32 (C.4:1C-31) or section 38 of P.L.1999, c.152 (C.13:8C-38), or any rule or regulation adopted pursuant thereto, to the contrary, [when] whenever the committee, a local government unit, or a qualifying tax exempt nonprofit organization seeks to acquire a development easement on, or fee simple title to, farmland using, in whole or in part, monies deposited into the Preserve New Jersey Farmland Preservation Fund, the Garden State Farmland Preservation Trust Fund established pursuant to section 20 of P.L.1999, c.152 (C.13:8C-20), or any other State monies provided for farmland preservation purposes, the value of the development easement, or fee simple title, as applicable, shall be [determined by the following]:

     (1)   the value determined in accordance with the procedure set forth in section 24 of P.L.1983, c.32 (C.4:1C-31) or in accordance with the procedure set forth in section 39 of P.L.1999, c.152 (C.13:8C-39), as appropriate;

     (2)   [a] the value determined in accordance with a formula, to be known as the "Statewide Farmland Preservation Formula," which formula is established by rule or regulation adopted by the committee, pursuant to subsection f. of this section, and includes:

     (a)   conducting or analyzing a sufficient number of fair market value appraisals of agricultural lands within the municipality in which the land is located, or the surrounding market area, or both, as the committee deems appropriate to determine the value of the land for farmland preservation;

     (b)   considering farmland and development easement values in counties and municipalities reasonably contiguous to, but outside of, the municipality in which the land to be acquired is located, which in the sole opinion of the committee constitute reasonable farmland and development easement values for the purposes of this subsection;

     (c)   considering the importance of preserving agricultural lands in the municipality and county in which the land is located;

     (d)   considering the status and value of natural resources in the municipality and county in which the land is located, and in counties and municipalities that are reasonably contiguous to, but outside of, the municipality and county in which the land is located;

     (e)   considering such other relevant factors as may be necessary to increase participation in the farmland preservation program by owners of agricultural lands located in the municipality and county in which the land is located, including, but not limited to, the rate of inflation, the quality of the agricultural soils, the size of the agricultural lands to be acquired, and the risk of conversion of the land from productive agriculture to nonagricultural use; and

     (f)   providing additional value for the proximity of agricultural lands located adjacent to preserved agricultural lands, lands preserved for recreation and conservation purposes, aquifer recharge areas, lands subject to development or conservation easements, and lands whose conversion to nonagricultural use would lead to conflicting land uses, including, but not limited to, utility and roadway rights-of-way, military bases, and airports and associated airspace; and, if applicable,

     (3)   (a) in the case of property located in the pinelands area, and whenever the value of [a] the fee simple title or development easement [on farmland] that is proposed to be acquired is determined based upon the value of [any] pinelands development credits that have been allocated to the parcel, pursuant to P.L.1979, c.111 (C.13:18A-1 et seq.) and the pinelands comprehensive management plan adopted pursuant thereto, the value determined by the committee pursuant to subsection e. of section 38 of P.L.1999, c.152 (C.13:8C-38); or

     (b)   in the case of property located in the Highlands Region, the value determined pursuant to subsection j. of section 38 of P.L.1999, c.152 (C.13:8C-38).

     The landowner shall be provided with the values determined pursuant to paragraphs (1) and (2) of this subsection, and if applicable, the value determined pursuant to paragraph (3) of this subsection.  The higher of the values shall be utilized by the committee, a local government unit, or a qualifying tax exempt nonprofit organization as the basis for negotiation with the landowner with respect to the acquisition price.  A landowner may waive any of the requirements of this subsection and may agree to sell the lands for less than the values determined pursuant to this subsection.

     f.     Notwithstanding the provisions of the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.) to the contrary, the committee shall, immediately upon filing proper notice with the Office of Administrative Law, adopt rules and regulations to establish the "Statewide Farmland Preservation Formula" required pursuant to paragraph (2) of subsection e. of this section.  The rules and regulations adopted pursuant to this subsection shall be in effect for a period not to exceed three years after the date of the filing.  These rules and regulations shall thereafter be adopted, amended, or readopted by the committee in accordance with the requirements of the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.).

(cf: P.L.2023, c.245, s.2)

 

     6.    This act shall take effect immediately.

STATEMENT

 

     This bill would establish certain limited purchase and pricing exemptions within the context of the State’s existing farmland preservation laws.

     As a general rule, and as clarified in the bill, any farmland development easement that is proposed to be acquired by the State Agriculture Development Committee (SADC), or by a local government unit or qualifying tax exempt nonprofit organization, for farmland preservation purposes, is to be purchased for a price that is equal to, or less than, the easement’s appraised value, as determined in accordance with the appraisal procedures set forth in existing law, at subsection c. of section 8 of the “Preserve New Jersey Act,” P.L.2016, c.12 (C.13:8C-50).  The bill would establish certain exceptions to this general rule.  Specifically, the bill would authorize State, local, or nonprofit purchasers of fee simple title to, or of a development easement on, farmland to pay a final, negotiated purchase price therefor which is in excess of the title or easement’s appraised value, based on a determination that the title or easement is located on lands that are uniquely situated or are otherwise unique in character or quality, including, but not limited to, lands situated within a designated preservation area of the Pinelands or Highlands Regions of the State.

     Specifically, in any case where a local government unit is proposing to acquire fee simple title to, or a development easement on, farmland using constitutionally dedicated moneys in whole or in part, for a negotiated purchase price exceeding the appraised value thereof, the local government unit would be required, under the bill, to submit a copy of the proposed agreement of sale, to the governing body of the county in which the development easement is located, before the agreement is finalized and executed.  The governing body would then be required, within 30 days after receipt of such proposed agreement, to adopt an ordinance approving or disapproving the execution thereof and the acquisition of the title or easement, pursuant thereto, at the enhanced and negotiated price set forth therein.  Whenever the governing body of a county adopts an ordinance approving the execution of such agreement, the ordinance would be required to contain certain findings of fact, including, but not limited to, findings related to the location, size, and appraised value and proposed purchase price of the fee simple title or easement interests to be acquired, and findings identifying the unique characteristics, qualities, or location of the land on which the fee simple title or development easement is proposed to be acquired, including, but not limited to, its location within a designated preservation area, which the governing body of the county deems sufficient to justify and warrant the local government unit’s acquisition of the fee simple title or development easement, pursuant to the bill’s local purchase and pricing exception, at a final, negotiated purchase price exceeding the appraised value thereof.

     In any case where the State Agriculture Development Committee (committee) or a qualified tax exempt nonprofit organization is proposing to acquire fee simple title to, or a development easement on, farmland using constitutionally dedicated moneys in whole or in part, for a negotiated purchase price exceeding the appraised value thereof, the committee or nonprofit would be authorized to proceed with such transaction, provided that the county agriculture development board or subregional agricultural retention board having jurisdiction over the relevant farmland, as appropriate, has first held a hearing on the matter, in compliance with all public hearing and comment requirements applicable thereto.  Within 30 days after the conclusion of any such hearing, the hearing board would be required to issue a hearing report identifying certain findings of fact, including, but not limited to, findings related to the location, size, and appraised value and proposed purchase price of the fee simple title or easement interests to be acquired, and findings identifying the unique characteristics, qualities, or location of such land, including, but not limited to, its location within a designated preservation area, which have been cited by the proposed State or nonprofit purchaser, and by other members of the public, as sufficient basis upon which to justify and warrant the committee’s or nonprofit’s acquisition of the fee simple title or development easement at a final, negotiated purchase price exceeding the appraised value thereof. 

     The bill would specify that, at the conclusion of each such requisite hearing, the proposed State or nonprofit purchaser will be immediately and statutorily authorized to execute a finalized agreement of sale effectuating the acquisition, thereby, of such title or easement at a purchase price exceeding the appraised value thereof.  The authorization provided by the bill, in this regard, would be applicable regardless of whether the hearing board has issued its findings of facts on the matter, as required by the bill’s provisions.  Within 30 days after the execution of any such final, negotiated sales agreement, the State or nonprofit purchaser would be required to provide a copy of the signed agreement of sale to the governing body of the county in which the farmland is situated.  However, nothing in the bill’s provisions would be deemed to require such State or nonprofit purchaser to obtain the approval of a hearing board, or the approval of the governing body of the county, in order to finalize and execute such an agreement of sale following the conclusion of the hearing required by the bill.

     In addition to the foregoing changes, the bill would also amend section 8 of P.L.2016, c.12 (C.13:8C-50), which identifies the various alternative appraisal and valuation methods that may be used by State, local, and nonprofit purchasers to determine the fair market value of fee simple title to, or a development easement on, farmland that is proposed to be acquired thereby with farmland preservation moneys, in order to clarify the first optional valuation method that is authorized to be undertaken, for such purposes, thereunder.  This first valuation method currently includes the authorized use, for such purposes, of the valuation process, established at section 24 of P.L.1983, c.32 (C.4:1C-31), which is applicable in cases where farmland development easements are proposed to be acquired by county agriculture development boards.  The provisions of section 8 of P.L.2016, c.12 (C.13:8C-50), however, do not similarly authorize, or in any other way reference, the appraisal process previously established at section 39 of P.L.1999, c.152 (C.13:8C-39), which is applicable to the acquisition, by qualifying tax exempt nonprofit organizations, of fee simple titles to, or development easements on, farmland.  Accordingly, the bill would amend the law to clarify that either such pre-existing valuation method, respectively codified at C.4:1C-31 or at C.13:8C-39, as appropriate, may be used as the first alternative means of land valuation for the purposes of the multi-pronged appraisal process that is required to be undertaken, pursuant to section 8 of P.L.2016, c.12 (C.13:8C-50), to determine the fair market value of fee simple and lesser interests in farmland proposed to be acquired, in whole or in part, with funds dedicated for farmland preservation purposes.

     It is the sponsor’s intent to allow the State, local governments, and nonprofit organizations to negotiate a purchase price above the appraisal for the purchase of a development easement or fee simple title for farmland preservation purposes.  In many areas of the State, due to low appraisals, the loss of farmland to development has occurred because government entities cannot compete with offers by developers.  This bill will level the playing field for certain farmland preservation purchases while providing the public a transparent process.