SENATE COMMUNITY AND URBAN AFFAIRS COMMITTEE

STATEMENT TO

SENATE, No. 3405

with committee amendments

STATE OF NEW JERSEY

DATED:  JANUARY 30, 2025

      The Senate Community and Urban Affairs Committee reports favorably and with committee amendments, Senate Bill No. 3405.

      As amended, this bill would revise the “Farmland Assessment Act of 1964” (act) to clarify that the mere cessation of agricultural or horticultural activity on land that is valued, assessed, and taxed as farmland under that law, will not subject the land to roll-back taxes unless an active conversion of the land to a non-agricultural or non-horticultural use takes place.  “Roll-back taxes” are the additional taxes assessed on a property that is no longer dedicated to agricultural or horticultural use.  The amount of roll-back taxes assessed on a property are the difference between the property taxes paid on the property as assessed for agricultural or horticultural use and the taxes that would have otherwise been due if the property had been taxed as other land within the taxing district.  These taxes are assessed for the tax year in which agricultural or horticultural use was discontinued and the two tax years preceding.

      The bill permits an owner of land that is subject to valuation, assessment, and taxation pursuant to the act to petition the assessor of the taxing district in which the land is located to request a hardship exemption from the provisions of the act relating to roll-back taxes, for land that is not actively devoted to agricultural or horticultural use, or that is applied to a use other than agricultural or horticultural use, which would otherwise be subject to roll-back taxes.  The bill requires the assessor to prepare guidance containing the assessor’s requirements for the contents of an owner’s hardship petition.  For all land within the taxing district that is subject to valuation, assessment, and taxation pursuant to the act as of the effective date of the bill, the bill requires the assessor to distribute the guidance to an owner of land at least 90 days prior to the date that an application under the act is due.  Thereafter, the bill requires the assessor to distribute the guidance to an owner of land no later than 30 days after the assessor’s decision to approve an application under the act.  In considering whether to grant a hardship petition, the bill requires the tax assessor to consider certain factors described in the bill, of which no one factor is to be dispositive.

      The bill provides a deadline for the hardship petition to be submitted, and specifies that the assessor may grant or deny the hardship petition, condition the assessor’s decision on the continued production of certain proofs or documents, and determine the length of the hardship exemption, if granted.

COMMITTEE AMENDMENTS:

      The committee amended the bill to:

      (1)  permit an owner of land that is subject to the act to petition the tax assessor to request a hardship exemption from the provisions of the act relating to roll-back taxes.

      (2)  require the tax assessor to prepare guidance containing the assessor’s requirements for the contents of an owner’s hardship petition;

      (3)  require the assessor, for all land subject to the act as of the effective date of the bill, to distribute the guidance to an owner of land at least 90 days prior to the date that an application under the act is due;

      (4)  require the assessor thereafter to distribute the guidance to an owner of land no later than 30 days after the assessor’s decision to approve an application under the act;

      (5)  provide that, in considering whether to grant a hardship petition, the tax assessor is to consider certain factors described in the bill, of which no one factor is to be dispositive.

      (6)  provide a deadline for the hardship petition to be submitted based upon whether an extension was granted by the tax assessor; and

      (7)  specify that the assessor may grant or deny the hardship petition, condition the assessor’s decision on the continued production of certain proofs or documents, and determine the length of the hardship exemption, if granted.