Bill Text: NJ A5522 | 2018-2019 | Regular Session | Introduced
Bill Title: "County Urban Agricultural Development Zone Act."
Spectrum: Partisan Bill (Democrat 4-0)
Status: (Introduced - Dead) 2019-06-06 - Introduced, Referred to Assembly Agriculture and Natural Resources Committee [A5522 Detail]
Download: New_Jersey-2018-A5522-Introduced.html
Sponsored by:
Assemblyman HERB CONAWAY, JR.
District 7 (Burlington)
Assemblyman ERIC HOUGHTALING
District 11 (Monmouth)
Assemblyman BENJIE E. WIMBERLY
District 35 (Bergen and Passaic)
SYNOPSIS
"County Urban Agricultural Development Zone Act."
CURRENT VERSION OF TEXT
As introduced.
An Act establishing urban agricultural development zones and supplementing Title 54 of the Revised Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. This act shall be known and may be cited as the "County Urban Agricultural Development Zone Act."
2. As used in this act:
"Agricultural or horticultural use" means farming or horticulture in all their respective branches including, but not limited to, the cultivation and tillage of soil, the production, cultivation, growing, and harvesting of any agricultural or horticultural products, the raising of domestic livestock, bees, fur-bearing animals, dairy-producing animals, and poultry, agricultural or horticultural education, the sale of products by retail or farm stands, and any practices performed by a farmer or on a farm in conjunction with farming operations.
"Assessor" means the municipal tax assessor appointed pursuant to the provisions of chapter 9 of Title 40A of the New Jersey Statutes.
"Urban agricultural development zone" means an urban area of a county encompassing qualified real property that has been designated by the governing body of the county as part of an urban agricultural development zone pursuant to section 3 of this act.
"Qualified real property" means a parcel of real property less than five acres in size that is abandoned, underutilized, or vacant, including, but not limited to, an abandoned, underutilized, or vacant plot of land or a building, which can be used for agricultural or horticultural purposes to produce agricultural or horticultural products through aquaculture, aquaponics, or hydroponics, by roof-top farming, or through the use of greenhouses, high tunnels, or other structures beneficial for the production of agricultural or horticultural products.
3. a. The governing body of a county shall, in consultation with the county agriculture board and the Department of Agriculture, identify areas in the county that are urban and appropriate to be designated as urban agricultural development zones because they encompass one or more qualified real properties within the urban agricultural development zone. The governing body of the county shall by ordinance or resolution, as appropriate, designate urban agricultural development zones and list the qualified real properties within the designated urban agricultural development zones and the municipalities in which the qualified real properties are located. The designation of an urban agricultural development zones shall be consistent with the permitted use of those properties pursuant to the "Municipal Land Use Law," P.L.1975, c.291 (C.40:55D-1 et seq.).
b. Prior to designating any property as a qualified real property, the county shall ensure that the property can be safely used for the production of agricultural or horticultural products by the testing of the soil and the water at a certified laboratory to certify its permissible use for agricultural or horticultural production. The county shall apply to the Department of Environmental Protection, the Department of Agriculture, or the Department of Health for certification necessary to use the real property for the production of agricultural or horticultural products.
c. The Department of Environmental Protection, the Department of Agriculture, and the Department of Health, respectively, shall adopt as necessary, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), rules and regulations establishing the certification process and procedures for compliance with the provisions of subsection b. of this section.
4. a. The governing body of a municipality in which a county has designated an urban agricultural development zone shall, by ordinance, provide for an exemption from real property taxes for qualified real property in the designated urban agricultural development zone.
b. The ordinance shall include:
(1) A property tax exemption term of ten years except that a tax exemption may be extended up to fifteen years, at the municipality's option, if the use of the real property for agricultural or horticultural purposes is determined to be dependent on the tax exemption and if its use for such purposes is sufficiently beneficial to the municipality and its residents to merit an extension;
(2) The application procedure for an exemption authorized pursuant to this act;
(3) The method of computing payments in lieu of real property taxes pursuant to subsection b. of section 6 of this act;
(4) An approval method for exemption applications by the assessor or by ordinance on a per application basis; and
(5) A requirement that
(a) the qualified real property within the urban agricultural development zone shall be dedicated to use for agricultural or horticultural purposes,
(b) the owner of the property enter into a memorandum of agreement or administrative consent order pursuant to subsection c. of this section with the Department of Agriculture concerning the use of the qualified real property for agricultural or horticultural use, and,
(c) the Department of Environmental Protection, Department of Agriculture, and the Department of Health, as applicable, have determined that the qualified real property is suitable for agricultural or horticultural use.
c. The Department of Agriculture and the owner of qualified real property shall enter into a memorandum of agreement or administrative consent order required to be submitted pursuant to paragraph (5) of subsection b. of this section to provide that the owner of the property shall maintain the use of the qualified real property in the urban agricultural development zone for agricultural or horticultural purposes during the time period for which the real property tax exemption is given.
5. a. No property tax exemption shall be granted pursuant to this act, except upon written application filed with the assessor of the taxing district wherein the qualified real property is located, and approved by the governing body by resolution or ordinance or by the assessor, as required by the enabling ordinance. An application for an exemption shall be on a form prescribed by the Director of the Division of Taxation, in the Department of the Treasury, and provided for the use of applicants by the governing body of the municipality constituting the taxing district.
b. An application for an exemption may be approved by a governing body if the application is consistent with the provisions of the enabling ordinance. A governing body shall not grant an exemption unless the owner of the property enters into a memorandum of agreement or administrative consent order pursuant to subsection c. of section 4 of this act. An exemption shall take effect upon the approval by the governing body and shall be recorded and made a permanent part of the official tax records of the taxing district, which record shall contain a notice of the termination date of the exemption. The owner of the property shall deliver a copy of the approved exemption application to the Division of Local Government Services in the Department of Community Affairs.
6. a. Each approved property tax exemption shall be evidenced by a financial agreement between the municipality and the applicant. The financial agreement shall be prepared by the applicant and shall be consistent with the requirements in the enabling ordinance. The agreement shall provide for the applicant to annually pay to the municipality an amount in lieu of real property taxes, to be computed pursuant to subsection b. of this section. With the approval of the governing body, the agreement may be assigned to a subsequent owner of the qualified property.
b. Payments in lieu of real property taxes shall be computed as a portion of the real property taxes otherwise due, according to the following schedule:
(1) In the first tax year following execution of a memorandum of agreement or administrative consent order, no payment in lieu of taxes otherwise due;
(2) In the second tax year following execution of a memorandum of agreement or administrative consent order, an amount not less than 10% of taxes otherwise due;
(3) In the third tax year following execution of a memorandum of agreement or administrative consent order, an amount not less than 20% of taxes otherwise due;
(4) In the fourth tax year following execution of a memorandum of agreement or administrative consent order, an amount not less than 30% of taxes otherwise due;
(5) In the fifth tax year following execution of a memorandum of agreement or administrative consent order, an amount not less than 40% of taxes otherwise due;
(6) In the sixth tax year following execution of a memorandum of agreement or administrative consent order and all the subsequent tax years thereafter until the tax year in which the exemption expires, an amount not less than 50% of the taxes otherwise due;
(7) In the tax year in which the exemption shall expire, the full amount of the assessed real property taxes, taking into account the value of the real property in its current use, shall be due.
c. For the purposes of this section, the amount of "taxes otherwise due" shall be determined by using the assessed valuation of the qualified real property in the urban agricultural development zone at the time of the approval by the assessor of the exemption, regardless of any improvement made to the qualified real property thereafter and as if the designation of the urban agricultural development zone had not occurred.
d. Notwithstanding any other provision in this act, if at any time the governing body of a municipality finds that a memorandum of agreement or administrative consent order providing for the use of the property for agricultural or horticultural use has been terminated, or that a condition imposed by ordinance adopted pursuant to section 4 of this act is not met, the period of the property tax exemption shall end.
7. The payments required pursuant to section 6 of this act shall be made in quarterly installments according to the same schedule as real property taxes are due and payable. Failure to make the payments shall result in the termination of the exemption. In addition to the remedy set forth herein, the requirements imposed pursuant to section 6 of this act shall be enforced in the same manner as is provided for real property taxes pursuant to Title 54 of the Revised Statutes.
8. a. Receipts of retail sales of agricultural or horticultural products produced on qualified real property in an urban agricultural development zone, except retail sales of alcoholic beverages defined in the "Alcoholic beverage tax law," R.S.54:41-1 et seq. and of cigarettes as defined in the "Cigarette Tax Act," P.L.1948, c.65 (C.54:40A-1 et seq.), made by a seller certified pursuant to subsection b. of this section from a qualified real property in an urban agricultural development zone, shall be exempt to the extent of 50% of the tax imposed under the "Sales and Use Tax Act," P.L.1966, c.30 (C.54:32B-1 et seq.).
b. A seller of agricultural or horticultural products produced on qualified real property in an urban agricultural development zone, where the seller is the owner or operator of a qualified real property in an urban agricultural development zone, may apply to the Director of the Division of Taxation in the Department of the Treasury for certification pursuant to this section. The director shall certify a seller if the director finds that:
(1) the seller owns or leases and regularly produces agricultural or horticultural products on qualified real property in an urban agricultural development zone for the purpose of making retail sales, that items are regularly exhibited and offered for retail sale at that location, and that the place of business is not utilized primarily for the purpose of catalogue or mail order sales. The certification under this section shall remain in effect during the time the qualified real property maintains its designation as such. However, the director may revoke a certification granted pursuant to this section if the director determines that the seller no longer complies with the provisions of this section; and
(2) the qualified real property is used for the purposes for which it was designated as a qualified real property pursuant to section 3 of this act.
c. The Director of the Division of Taxation in the Department of the Treasury shall promulgate rules and regulations as may be necessary to effectuate the provisions of this section.
d. To be eligible to provide a sales tax exemption under this section a seller shall demonstrate to the satisfaction of the Director of the Division of Taxation that the seller will make available fresh produce, plants, or other farm products to the residents of the municipality.
e. A seller shall annually
certify to the Director of the Division of Taxation that it qualifies as a
certified seller under subsection b. of this section. A seller who fails to
supply the annual certification or data in the certification shall be subject
to a civil penalty of up to ten times the benefits received. The penalty shall
be collected in a civil action 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 section.
9. This act shall take effect immediately.
STATEMENT
This bill directs the governing body of the county, in consultation with the county agriculture board and the Department of Agriculture, to establish urban agricultural development zones in urban areas of the county and designate within municipalities within those zones qualified real property to receive property tax exemptions. "Qualified real property" is defined under the bill as any parcel of real property less than five acres in size that is abandoned, underutilized, or vacant, including, but not necessarily limited to, an abandoned, underutilized, or vacant plot of land or a building, which can be used for agricultural or horticultural purposes to produce agricultural or horticultural products through aquaculture, aquaponics, or hydroponics, by roof-top farming, or through the use of greenhouses, high tunnels, or other structures beneficial for the production of agricultural or horticultural products.
The bill also establishes requirements for municipalities and property owners to enter into a financial agreement for the schedule of payments in lieu of taxes established in the bill.
Finally, the bill provides for a 50% reduction of sales tax collected from the sale of agricultural or horticultural products produced on the qualified real property.
