Trenton— Legislation sponsored by Senator Jennifer Beck (R- Monmouth) and Senate President Steve Sweeney (R- Gloucester/Cumberland/Salem) to prevent abuse of the state’s farmland assessment law has cleared its first Assembly committee hearing today.
S-589, which was approved unanimously by the full Senate in June 2012, was approved by the Assembly Agriculture and Natural Resources Committee today.
The bill boosts the required threshold of sales derived from farming activity to $1000 per year from the current $500 in order to qualify for a farmland property tax assessment, and provide for a review of the properties every three years. The legislation also would require program applicants to submit evidence of agricultural sales and/or income to the Department of Agriculture, and require tax assessors to undergo training in farmland assessment as a condition of licensure.
“The current threshold of $500 in agricultural sales set forth in New Jersey’s farmland assessment law is woefully outdated and lends itself to abuse,” said Beck. “The purpose of this legislation is to modernize the law and ensure that only property owners who engage in true farming activity are able to take advantage of this significant tax break. The public gets rightly enraged when they hear cases like the one in Middletown, where a real estate developer paid just $31 on 10.5 acres of land for selling $600 worth of honey.”
Investigations by Gannett New Jersey Newspapers and the New Jersey State Auditor have shown that the farmland assessment program, which gives a 98% property tax break to qualifying properties, is frequently used as a tax shelter for land owners that do not actively cultivate their land and do only the minimum necessary to qualify for a farmland assessment. In many instances, property that would normally be assessed for tens or hundreds of thousands of dollars in property taxes have tax bills reduced to hundreds of dollars or less.
“Farmland assessments should be reserved for true farmers, not folks who find a way to sell a minimal amount of goods just to take advantage of a tax break,” said Sweeney. “Our state has a rich agricultural past. By closing the holes in the farmland assessment law, we do more to honor that past and protect the future of farming in New Jersey.”=
If approved by the full Assembly, the bill will head to Governor Christie’s desk.