A4378

An Act concerning farmland assessment, supplementing P.L.1999, c.278 (C.54:1-35.25b et al.), amending P.L.1986, c.201, 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. Within six months of the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill), the Department of Community Affairs shall develop and offer certification courses to tax assessors and other interested individuals on the valuation, assessment, and taxation for farmland assessment pursuant to P.L.1964, c.48 (C.54:4-23.1 et seq.).

b. Completion of a certification course offered pursuant to this section by individuals subject to the provisions of section 1 of P.L.1999, c.278 (C.54:1-35.25b), shall not be construed as fulfilling the certification, continuing education, and training requirements of that section.

c. The Department of Community Affairs shall issue a certificate of completion to a tax assessor who completes a certification course offered pursuant to this section.

2. (New section) a. Within 12 months of the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill), the Division of Taxation in the Department of the Treasury shall design and implement an Internet-based application portal through which taxpayers may apply for valuation, assessment, and taxation under P.L.1964, c.48 (C.54:4-23.1 et seq.). The Division of Taxation shall make the Internet-based application available to each municipality upon implementation. The Internet-based application portal designed and implemented pursuant to this section shall conform to the requirements set forth in section 14 of P.L.1964, c.48 and allow applicants to:

(1) identify:

(a) the parcels of land for which valuation, assessment, and taxation under P.L.1964, c.48 (C.54:4-23.1 et seq.) are sought;

(b) the owners of such parcels;

(d) whether the parcels are subject to a woodland management plan, pursuant to section 3 of P.L.1964, c.48 (C.54:4-23.3), or forest stewardship plan approved by the Department of Environmental Protection pursuant to section 3 of P.L.2009, c.256 (C.13:1L-31); and

(e) the agricultural or horticultural products being produced on the parcels;

(2) certify the gross sales derived from each agricultural or horticultural product being produced on the parcels;

(3) certify compliance with a woodland management plan or forest stewardship plan, if applicable;

(4) attach supporting documentation in an electronic format, required for the proper execution of the State’s farmland assessment laws, rules, regulations, protocols, standards, or procedures;

(5) certify the accuracy of the information submitted through the Internet-based application portal; and

(6) permit the tax assessor and, where applicable, the Department of Agriculture and Department of Environmental Protection, to review the submissions for compliance with P.L.1964, c.48 (C.54:4-23.1 et seq.) and other applicable laws and regulations.

b. Notwithstanding the provisions of section 14 of P.L.1964, c.48 (C.54:4-23.14) or any law or regulation to the contrary, once an Internet-based application portal is made available pursuant to this section, applicants may utilize the Internet-based application portal to determine the eligibility of land for valuation, assessment, and taxation under P.L.1964, c.48 (C.54:4-23.1 et seq.) and to apply for valuation, assessment, and taxation under P.L.1964, c.48 (C.54:4-23.1 et seq.). Beginning August 1 of the second year following implementation of the Internet-based application portal, the Division of Taxation may require that all applications for valuation, assessment, and taxation under P.L.1964, c.48 (C.54:4-23.1 et seq.) be submitted through the Internet-based application portal.

3. Section 2 of P.L.1986, c.201 (C.54:4-23.3a) is amended to read as follows:

2. a. Upon receipt of a copy of an application and accompanying information pursuant to section 3 of P.L.1964, c.48 (C.54:4-23.3), the Commissioner of the Department of Environmental Protection shall acknowledge receipt of such to both the applicant and the assessor of the taxing district in which the land is situated.

b. The commissioner shall provide for a review of the application for compliance with subsection a. of section 3 of P.L.1964, c.48 (C.54:4-23.3). The application review shall include an on-site inspection of the property during one of the first three years in which applications are received [,] for land that is 10 acres or greater in area and not less frequently than once every three years following the first inspection, and once every two years in which applications are received for land that is less than 10 acres in area.

c. The commissioner shall notify the assessor of the taxing district, in writing, of his findings of compliance or noncompliance of each applicant with subsection a. of section 3 of P.L.1964, c.48 (C.54:4-23.3). If the commissioner indicates to the assessor a finding of compliance, the assessor may, upon his own determination that the property is otherwise qualified for valuation, assessment and taxation, as provided in P.L.1964, c.48 (C.54:4-23.1 et seq.), approve or disapprove the application. If the commissioner indicates to the assessor that the applicant is not in compliance, the assessor shall disapprove the application. The assessor's approval or disapproval shall be transmitted to the applicant as in the case of other applications for valuation, assessment and taxation, as provided in P.L.1964, c.48 (C. 54:4-23.1 et seq.).

d. In the event that the commissioner does not give timely notice to the assessor of his findings after review of the application, as timely notice is prescribed by rules and regulations adopted by the Director of the Division of Taxation, pursuant to section 3 of this amendatory and supplementary act, the assessor may approve or disapprove the application as in the case of other applications not subject to provisions of this amendatory and supplementary act.

e. As used in this section, “on-site inspection” means an inspection consisting of the superficial observation by the assessor of the land identified in the owner’s application for assessment pursuant to P.L.1964, c.48 (C.54:4-23.1 et seq.), including, but not limited to, a physical survey of the land or visual examination of the land via drone footage.

(cf: P.L.1986, c.201, s.2)

4. Section 8 of P.L.1964, c.48 (C.54:4-23.8) is amended to read as follows:

8. When land which is in agricultural or horticultural use and is being valued, assessed and taxed under the provisions of P.L.1964, c.48 (C.54:4-23.1 et seq.), is applied to a use other than agricultural or horticultural, it shall be subject to additional taxes, hereinafter referred to as roll-back taxes, in an amount equal to the difference, if any, between the taxes paid or payable on the basis of the valuation and the assessment authorized hereunder and the taxes that would have been paid or payable had the land been valued, assessed and taxed as other land in the taxing district, in the current tax year (the year of change in use) and in such of the [two] three tax years immediately preceding, in which the land was valued, assessed and taxed as herein provided.

If the tax year in which a change in use of the land occurs, the land was not valued, assessed and taxed under P.L.1964, c.48 (C.54:4-23.1 et seq.), then such land shall be subject to roll-back taxes for such of the [two] three tax years, immediately preceding, in which the land was valued, assessed and taxed hereunder.

Notwithstanding the provisions of any law, rule, or regulation to the contrary, land which is valued, assessed and taxed under the provisions of P.L.1964, c.48 (C.54:4-23.1 et seq.) and is acquired by the State, a local government unit, a qualifying tax exempt nonprofit organization, or the Palisades Interstate Park Commission for recreation and conservation purposes shall not be subject to roll-back taxes. As used in this section, "acquired," "local government unit," "qualifying tax exempt nonprofit organization," and "recreation and conservation purposes" mean the same as those terms are defined pursuant to section 3 of P.L.1999, c.152 (C.13:8C-3).

In determining the amounts of the roll-back taxes chargeable on land which has undergone a change in use, the assessor shall for each of the roll-back tax years involved, ascertain:

(a) The full and fair value of such land under the valuation standard applicable to other land in the taxing district;

(b) The amount of the land assessment for the particular tax year by multiplying such full and fair value by the county percentage level, as determined by the county board of taxation in accordance with section 3 of P.L.1960, c.51 (C.54:4-2.27);

(c) The amount of the additional assessment on the land for the particular tax year by deducting the amount of the actual assessment on the land for that year from the amount of the land assessment determined under (b) hereof; and

(d) The amount of the roll-back tax for that tax year by multiplying the amount of the additional assessment determined under (c) hereof by the general property tax rate of the taxing district applicable for that tax year.

(cf: P.L.2001, c.312, s.2)

5. Section 13 of P.L.1964, c.48 (C.54:4-23.13) is amended to read as follows:

13. Eligibility of land for valuation, assessment and taxation under this act shall be determined for each tax year separately. Application shall be submitted by the owner to the assessor of the taxing district in which such land is situated on or before August 1 or September 1, if an extension of time has been granted by the assessor under section 6 of P.L.1964, c.48 (C.54:4-23.6), of the year immediately preceding the tax year for which such valuation, assessment and taxation are sought. If the application is filed by delivery through the mails or a commercial courier or messenger service, compliance with the time limit for filing shall be established if there is satisfactory evidence that it was committed for delivery to the United States Postal Service or the courier or messenger service within the time allowed for filing. In the case of a courier or messenger service, the application shall be received by the tax assessor of the taxing district within three days after the statutory filing date. An application once filed with the assessor for the ensuing tax year may not be withdrawn by the applicant after August 1 or after September 1, in cases where an extension of time for filing the application has been granted by the assessor, of the pretax year.

If a change in use of the land occurs between August 1 and December 31 of the pretax year, either the assessor or the county board of taxation shall deny or nullify such application and, after examination and inquiry, shall determine the full and fair value of said land under the valuation standard applicable to other land in the taxing district and shall assess the same, according to such value. If, notwithstanding such change of use, the land is valued, assessed and taxed under the provisions of this act in the ensuing year, the assessor shall enter an assessment, as an added assessment against such land, in the "Added Assessment List" for the particular year involved in the manner prescribed in P.L.1941, c.397 (C.54:4-63.1 et seq.). The amount of the added assessment shall be in an amount equal to the difference, if any, between the assessment imposed under this act and the assessment which would have been imposed had the land been valued and assessed as other land in the taxing district. The enforcement and collection of additional taxes resulting from any additional assessments so imposed shall be as provided by said chapter. The additional assessment imposed under this section shall not affect the roll-back taxes, if any, under section 8 of this act.

The application review shall include an on-site inspection of the land at least once every three years for land that is 10 acres or greater in area and once every two years for land that is less than 10 acres in area. The municipality may impose a fee for an on-site inspection of not more than $25, except that contiguous and non-contiguous parcels of land owned by the same owner would be subject to a single fee.

As used in this section, “on-site inspection” means an inspection consisting of the superficial observation by the assessor of the land identified in the owner’s application for assessment pursuant to P.L.1964, c.48 (C.54:4-23.1 et seq.), including, but not limited, to a physical survey of the land or visual examination of the land via drone footage.

(cf: P.L.1995, c.276, s.5)

6. Section 14 of P.L.1964, c.48 (C.54:4-23.14) is amended to read as follows:

14. a. Application for valuation, assessment and taxation of land in agricultural or horticultural use under P.L.1964, c.48 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. 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).

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 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 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.

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. 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 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.

g. Within six months of the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill), the director shall establish and maintain a toll-free telephone hotline, that shall be available, at a minimum, on weekdays between 9:00 a.m. and 5:00 p.m., through which individuals may report suspected violations of this section. The director shall review the reports received and shall investigate each report and take action as necessary to enforce the requirements established pursuant to P.L.1964, c.48 (C.54:4-23.1 et seq.). The director shall take appropriate steps to publicize the hotline.

(cf: P.L.2013, c.43, s.4)

7. This act shall take effect immediately.

STATEMENT

This bill requires the Department of Community Affairs, within six months of the bill’s effective date, to develop and offer certification courses for tax assessors on the valuation, assessment, and taxation for farmland assessment pursuant to the “Farmland Assessment Act of 1964” P.L.1964, c.48 (C.54:4-23.1 et seq.). The bill also requires the Division of Taxation (division), within 12 months of the bill’s effective date, to create an online application portal for landowners whose property is assessed, valued, and taxed under the “Farmland Assessment Act of 1964” and prescribes certain information farmland assessment applicants are to provide.

Under the bill, the on-site inspection requirement for farmland assessment applicants would be modified from once every three years to every other year for land under 10 acres in area. Additionally, the bill would increase the roll-back taxes to include taxes that would have been paid or would have been payable had the land been valued, assessed, and taxed as other land in the taxing district to three tax years immediately preceding the current tax assessment. Finally, the bill requires the division, within six months of the bill’s effective date, to establish and maintain a hotline for individuals to report suspected intentional application misrepresentations by landowners who receive farmland assessment.

In 1964, the New Jersey Senate held a public hearing on the proposed constitutional amendment to allow for farmland assessment. One of the major concerns raised at the time was the possibility of abuse by certain landowners. However, after over 60 years since the farmland assessment program was instituted in the State, this still remains a concern. While the farmland assessment program has been a success in saving thousands of acres from development and providing locally grown food and commodities to our residents, it is worth increasing oversight to ensure that the taxpayer is not taken advantage of.