New Jersey-2010-SCR79-Introduced

A Concurrent Resolution proposing to amend Article VIII, Section I, paragraph 1 of the Constitution of the State of New Jersey.

Be It Resolved by the Senate of the State of New Jersey (the General Assembly concurring):

1. The following proposed amendment to the Constitution of the State of New Jersey is agreed to:

PROPOSED AMENDMENT

Amend Article VIII, Section I, paragraph 1 to read as follows:

l. (a) Property shall be assessed for taxation under general laws and by uniform rules. All real property assessed and taxed locally or by the State for allotment and payment to taxing districts shall be assessed according to the same standard of value, except as otherwise permitted herein, and such real property shall be taxed at the general tax rate of the taxing district in which the property is situated, for the use of such taxing district.

(b) The Legislature shall enact laws to provide that the value of land, not less than 5 acres in area, which is determined by the assessing officer of the taxing jurisdiction to be actively devoted to agricultural or horticultural use and to have been so devoted for at least the 2 successive years immediately preceding the tax year in issue, shall, for local tax purposes, on application of the owner, be that value which such land has for agricultural or horticultural use.

Any such laws shall provide that when land which has been valued in this manner for local tax purposes is applied to a use other than for agriculture or horticulture it shall be subject to additional 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 and assessed as otherwise provided in this Constitution, in the current year and in such of the tax years immediately preceding, not in excess of [2] 6 such years in which the land was valued as herein authorized ; except that it shall be subject to the additional taxes only in the current year and in such of the tax years immediately preceding, not in excess of 2 such years in which the land was valued as herein authorized, if the land has been owned by the same person, or by an immediate family member or members of that person as defined by the Legislature, or by the estate of the person or immediate family member or members, continuously for more than 7 years at the time of the change in use .

Such laws shall also provide for the equalization of assessments
of land valued in accordance with the provisions hereof and for the assessment and collection of any additional taxes levied thereupon and shall include such other provisions as shall be necessary to carry out the provisions of this amendment.

(cf: Article VIII, Section I, paragraph 1 amended effective December 5, 1963)

2. When this proposed amendment to the Constitution is finally agreed to pursuant to Article IX, paragraph 1 of the Constitution, it shall be submitted to the people at the next general election occurring more than three months after the final agreement and shall be published at least once in at least one newspaper of each county designated by the President of the Senate, the Speaker of the General Assembly and the Secretary of State, not less than three months prior to the general election.

3. This proposed amendment to the Constitution shall be submitted to the people at that election in the following manner and form:

There shall be printed on each official ballot to be used at the general election, the following:

a. In every municipality in which voting machines are not used, a legend which shall immediately precede the question as follows:

If you favor the proposition printed below make a cross (X), plus (+), or check (a) in the square opposite the word "Yes." If you are opposed thereto make a cross (X), plus (+) or check (a) in the square opposite the word "No."

b. In every municipality the following question:

CONSTITUTIONAL AMENDMENT TO REVISE FARMLAND ASSESSMENT ROLL-BACK TAX

YES

Shall the proposed amendment to Article VIII, Section I, paragraph 1 of the State Constitution, agreed to by the Legislature, (1) authorizing the Legislature to increase the number of years for which the roll-back property tax is collected when agricultural or horticultural land receiving preferential property tax treatment is converted to other uses, from a maximum of two years, plus the current year, to a maximum of six years, plus the current year, and (2) providing that the number of years for which the roll-back property tax is collected shall continue to be a maximum of two years, plus the current year, if the land has been owned by the same person, or by an immediate family member or members of that person as defined by the Legislature, or by the estate of the person or immediate family member or members, continuously for more than seven years at the time of the change in use?

		INTERPRETIVE STATEMENT
	NO	Currently, certain land that is used as farmland can qualify for a reduced property tax assessment. The purpose of granting that reduction in property taxes is to help keep land in farming. However, when that land ceases to be used as farmland and instead is used for another purpose such as development, the Constitution, as implemented by statutory law, requires that the property taxes that were saved in the current year and in the two immediately preceding years be paid. This is commonly referred to as the farmland assessment roll-back tax. This proposed amendment to the State Constitution would permit the Legislature to increase that roll-back tax period to six years (plus the current year) but the Legislature would not be permitted to increase the roll-back tax period from two years (plus the current year) for farmland owned by the same person or his or her immediate family, or their estate, for more than seven continuous years at the time of the change in use.

STATEMENT

This proposed constitutional amendment would revise the roll-back tax period for farmland assessment.

Under current law, land that is used as farmland qualifies for a reduced property tax assessment. If that land ceases to be used as farmland and instead is used for another purpose such as development, the Constitution, as implemented by statutory law, requires that the property taxes that were saved in the current year and for the two years before the land ceased to be used as farmland be paid. This is commonly referred to as the farmland assessment roll-back tax. This proposed amendment to the State Constitution would permit the Legislature to increase that roll-back tax period to six years (plus the current year) but the Legislature would not be permitted to increase the roll-back tax period from two years (plus the current year) for farmland owned by the same person or his or her immediate family, or their estate, for more than seven continuous years at the time of the change in use.

The purpose of this proposed constitutional amendment is to help ensure that farmland assessment is utilized properly for its intended purpose of facilitating the retention of as much farmland as possible in agricultural production, so that agriculture, as practiced by true farmers, may continue to exist and thrive as an industry in a rapidly developing state such as New Jersey. The farmland assessment program was never intended to serve as a property tax break for land speculators to the financial detriment of other property taxpayers in a community, as is often the case now. This proposed constitutional amendment will help correct that divergence from the original intent by significantly increasing the roll-back tax due when farmland is developed or otherwise used for other than agricultural (or horticultural) purposes.

It has been over 40 years since the creation of the farmland assessment program. Therefore, given the many changes in land use that have occurred in the State over that period, it is necessary and entirely appropriate at this time to revise and update the program to reflect current knowledge about its benefits and impacts.

This proposed constitutional amendment is one of the recommendations of the Joint Legislative Committee on Constitutional Reform and Citizens Property Tax Constitutional Convention set forth in its final report in 2006. Passage of this amendment will help reduce the unintended subsidization through the farmland assessment program of land speculators and developers who engage in "land banking," while also allowing municipalities to capture more revenue and slow the State's loss of farmland.