New Bill Would Preserve Jersey’s Agricultural Heritage for Future Generations
In order to preserve New Jersey’s agricultural heritage for future generations of residents, Assemblywoman Celeste Riley is hoping to see new legislation she is sponsoring become law.
Specifically, the bill (A-4111) would establish a farmland preservation inheritance tax deduction program within the Department of Agriculture, which would be implemented and administered by the state Agriculture Development Committee.
“We earned our nickname as the Garden State for a reason, but we can’t take it for granted,” said Riley (D-Cumberland/Gloucester/Salem). “In the rapidly changing times we live in, we need to do all we can to preserve this legacy by helping future generations maintain agriculture production in our state.”
The bill’s aim is when land, or other assets that convey ownership interests in land suitable for agricultural production, is transferred by will, deed, state intestate laws, grant, bargain, sale, or gift made in contemplation of death.
The committee would be charged with identifying, evaluating and certifying transferees, distributees, and beneficiaries that have received land, or other assets that convey ownership interests in land, suitable for agricultural production by will, deed state intestate laws, grant, bargain, sale, or gift made in contemplation of death.
The committee would then enter into agreements and award tax deductions to certified land recipients that may be used to reduce or eliminate the transfer inheritance tax and the New Jersey estate tax due and payable in connection with the transfer of the land, or other assets that convey ownership interests in the land. In exchange, the recipients would be required to enroll the land in a farmland preservation program and establish a succession plan for the transfer of the ownership and managerial control of the land to the next succeeding generation.
“Jersey fresh corn, tomatoes, cranberries, blueberries – all of these things have become famous for their unparalleled goodness,” added Riley. “It would be a tragedy to see them become a relic of the past so it’s important to help farms, especially small family-owned establishments, continue to flourish in our state.”
The committee would also be charged with conducting an annual review of the agreements entered into and publish an annual report regarding implementation and administration of the program.
The tax deduction awarded to each certified recipient would be equal to the fair market value of the land, or other assets that convey ownership interests to the land, together with any improvements and additions made to the land.
The bill specifies that the deduction may be used to determine or re-determine the transfer inheritance and New Jersey estate tax due and payable in connection with the transfer of the land, or the transfer of the other assets the convey ownership interest in the land, suitable for agricultural production.
The bill does, however, cap the amount of any tax deduction awarded to each recipient at $5 million, and the aggregate amount of deductions awarded by the committee to all certified recipients in a calendar year cannot exceed $10 million.
The bill would also impose certain penalties if the land is withdrawn from the farmland preservation program prior to completion of the minimum eight-year period or if the recipient fails to establish a succession plan within the time permitted under the agreement. Some exceptions could be made in the event of death or other extenuating circumstances.
The bill has been referred to Assembly Agriculture and Natural Resources Committee where it awaits a hearing.