On April 15, 2013, the Farmland Assessment Act of 1964, N.J.S.A. 54:4-23.1 (the “Act”) was amended imposing new requirements for farmland assessment beginning in tax year 2015 The Act provides for property tax exemptions up to 98% for a landowner that uses the property for farming and meets the eligibility requirements of the Act. In order to be eligible for farmland assessment, the land in question must be “actively devoted to agricultural or horticultural use” and not less than five acres of the land must be devoted to 1) the production of crops; 2) livestock or their products; and/or 3) forest products under a woodlot management plan. N.J.S.A. 54:4-23.2. The Act also requires a minimum income imputed from the farming activities in order for the property to be eligible for farmland assessment. Id.
The Amendment increased the threshold income generated from farming activities for the first five acres of land farmland from an average of $500 per year during the two year period immediately preceding the tax year in question to $1000 per year for such period in order for land to be eligible for farmland assessment. In addition, the Amendment requires the State Board of Agriculture and the Department of Agriculture to develop guidelines based on generally accepted Agricultural and Horticultural practices for use by tax assessors in determining whether a use is considered Agricultural or Horticultural under the Act. Once those guidelines are developed, they will be submitted to the Division of Taxation for review, approval and adoption of regulations consistent with the approved guidelines. The Farmland Evaluation Committee established by the Amendment is required to review the minimum income threshold and may make any increases it deems appropriate at least every three years. The Amendment also requires on-site inspections to be conducted at least every three years by the tax assessors and heightened continuing education standards for tax assessors, including a specific course related to farmland assessment. The Amendment also requires a narrative and sketch to be provided with any application related to less than 7 acres of farmland. Lastly, the Amendment imposes a penalty of up to $5,000 for any gross and intentional misrepresentations made by a landowner on any application for farmland assessment.