N.J. Admin. Code § 18:15-6.1

Current through Register Vol. 56, No. 11, June 3, 2024

Section 18:15-6.1 - Actively devoted to agricultural or horticultural use defined

(a) Land, five acres in area, is considered to be actively devoted to agricultural or horticultural use when it is used for any of the purposes described in the Act and as set forth in N.J.A.C. 18:15-1.1 and 6.2 and:

1. The amount of gross sales of agricultural or horticultural products produced, any payments received under a soil conservation program, fees received for breeding, raising, or grazing livestock, income imputed to land used for grazing in the amounts determined by the State Farmland Evaluation Committee, and fees received for boarding, rehabilitating, or training livestock where the land under the boarding, rehabilitating, or training facilities is contiguous to land otherwise qualified for farmland assessment, have averaged at least $ 1,000 per year on the first five acres, $ 5.00 per acre per year on any additional acres of farmland other than woodland and wetland. Woodlands under an approved woodland management plan and wetlands, must have averaged $ 500.00 per year for the first five acres and $ 0.50 per acre per year on any additional acres constituting woodland and wetland during the two-year period immediately preceding the tax year in issue; or

2. There is clear evidence of anticipated yearly gross sales, payments, and fees of at least $ 1,000 per year on the first five acres, except for woodlands under a woodland management plan, for which there must be clear evidence of at least $ 500.00 per year for the first five acres, $ 5.00 per acre per year on any additional acres of farmland other than woodland and wetland and $ 0.50 per acre per year on any additional acres of woodland and wetland within a reasonable period of time.

(b) The gross sales, fees, payments, or income imputed to grazing land or payments may be from one or a combination of sources included in (a)1 above, except fees for boarding, rehabilitating, or training livestock must only be included where such use occurs on land contiguous to land under the same ownership, which otherwise qualifies for farmland assessment.

1. Examples are as follows:

i. Example 1: On a 10-acre parcel of land, six acres are devoted to growing crops and generate annual gross sales of $ 1,150. The remaining four acres are used for boarding horses and generate annual boarding fees of $ 8,500. Since the land used for boarding horses is contiguous to land five acres or more otherwise qualifying for farmland assessment, the fees from boarding may be included to meet the minimum gross income requirements and qualify the entire 10-acre parcel.

ii. Example 2: On a 10-acre parcel of land, 3.5 acres are devoted to growing crops and generate annual gross sales of $ 950.00. The remaining 6.5 acres are used for boarding horses and generate annual boarding fees of $ 10,500. None of the 6.5 acres is used for grazing horses. The land contiguous to the land used for boarding horses does not otherwise qualify for farmland assessment, both because it is not at least five acres in area and because it does not meet the minimum $ 1,000 income requirement for the first five acres. Therefore, the fees from boarding may not be included to meet the minimum gross income requirements, and the entire 10-acre parcel is not eligible for farmland assessment.

iii. Example 3: A 10-acre parcel of land is managed under a soil conservation program of the United States Department of Agriculture and receives an annual payment of $ 1,250. Since the payment meets the income requirement of $ 1,025 ($ 1,000 for the first five acres plus $ 5.00 for each acre above five), the entire 10 acres are eligible for farmland assessment.

iv. Example 4: On an 11.5-acre parcel of land, one-half acre is used with the house, and three acres are devoted to boarding and training horses, producing fees of $ 3,200. The remaining eight acres are utilized for grazing the boarded horses at an imputed value of $ 145.00 per acre. Income imputed to grazing is determined to be $ 1,160. Since the eight acres used for grazing has an imputed value of at least $ 1,000, they are eligible for farmland assessment. The three-acre portion used for boarding and training is also eligible because it is contiguous to land that otherwise qualifies for farmland assessment. The one-half acre under the house will not qualify for farmland assessment.

v. Example 5: Three horses and a pony are kept by an owner on his or her land for pleasure riding. The animals pasture on 14 acres, which have an imputed grazing value of $ 1,988. The imputed grazing value in this county is $ 142.00 per acre. Although grazing in and of itself is a qualified agricultural activity and the imputed grazing value exceeds the income requirements of $ 1,045 for qualification, the land would be ineligible for farmland assessment. The livestock are not raised for sale but are rather kept for personal use, and the livestock do not produce products for sale.

vi. Example 6: On a 10-acre parcel of land, one acre is used for residential dwelling, three acres are devoted to hay production, four acres are fenced pasture for boarded horses, one-half acre is for the boarding facility, and 1.5 acres are appurtenant woodland. One hundred twenty-five bales of hay with a value of $ 4.00 per bale generating $ 500.00 in value are produced annually and fed to the boarded horses. Income imputed to land for grazing of $ 144.00 per acre times four acres equals $ 576.00. As seven acres of land producing $ 1,076 in income is adjacent to the boarding facility, nine acres qualifies for farmland assessment.

vii. Example 7: On a seven-acre parcel, five acres are used by a farmer who plants soybeans in June for harvest in November for sale under contract the following July. Two acres are in permanent pasture for erosion control. The landowner needs to verify to the municipal assessor clear evidence of anticipated sales. The landowner upon request from the assessor provides a signed statement that the anticipated yield will be 30 bushels per acre at a contract price of $ 7.00 per bushel with a total value of production of $ 1,050 on the five acres. Since the land qualified for farmland assessment the two previous years and a minimum of five acres was in agricultural use with clear evidence of anticipated sales in excess of the $ 1,010 needed to qualify, the seven acres will meet the eligibility criteria for farmland assessment.

viii. Example 8: On a six-acre parcel, one-half acre is used as a residence, five acres are fenced for pasturing three boarded horses and one-half acre is used as equine facilities. Upon the municipal assessor's request for proof of agricultural or horticultural production for sale, the landowner provides the names of the owners of the horses, as well as the $ 800.00 per horse boarding fee and uses the imputed grazing values of $ 143.00 per acre as provided in the Report of the State Farmland Evaluation Committee. Since a minimum of five acres of pasture being utilized by three boarded horses has an imputed grazing value of $ 715.00, the agricultural income criteria for farmland assessment has not been met on those five acres. The income from boarding horses cannot be counted since it is not contiguous to land which otherwise qualifies for farmland assessment. The entire parcel is ineligible for farmland assessment.

ix. Example 9: A 20-acre parcel is enrolled in the United States Department of Agriculture's Conservation Reserve Program (CRP) and receives an annual rental from the Farm Service Agency of $ 1,150 per year. A requirement of the program is maintaining the land through annual mowing. The landowner in completing the FA-1 application, which shows the cropland as pastured, but land enrolled in a Federal government program must be categorized as cropland harvested. This 20-acre parcel meets the acreage and sales criteria of $ 1,075 for farmland assessment.

x. Example 10: A 15-acre parcel is primarily used to grow evergreens for sale as Christmas trees. Eight acres have been planted with evergreens in various stages of growth and harvest. An additional three acres are in cover crop for anticipated planting in the future. The balance of the parcel is appurtenant woodland. The grower practices clear-cutting rotation of Christmas trees as opposed to inter-planting trees after harvest. Using seven-by-seven foot spacing, 888 trees will fit on an acre of land. Harvest will take place starting the seventh year after planting. Proper production practices during the years leading up to harvest will provide clear evidence of anticipated sales. The requirement of a minimum of $ 1,000 in sales is cumulative and needs to be a minimum of $ 10,000 achieved for the seventh through 10th years to meet the gross income requirement for farmland assessment.

xi. Example 11: Three goats, 20 chickens, and a horse are being kept on a six-acre parcel. One-half acre is used with the residence. The parcel is fenced with five and one-half acres being reported as permanent pasture on the application for farmland assessment. Sales were not documented in the previous year. The parcel does not qualify for farmland assessment due to an insufficient number of livestock and poultry used for agricultural production and the lack of proof of sales of agricultural commodities produced from the land.

(c) The minimum gross sales for active devotion is calculated as $ 1,000 ($ 500.00 for woodlands under an approved woodland management plan) for the first five acres and $ 5.00 for each additional acre of agricultural/horticulture and $ 0.50 for each additional acre of woodlands/wetlands. Where a farm consists of more than five acres, the minimum income for active devotion may be produced from the whole property. A specific five-acre section of the farm does not need to be designated to produce $ 1,000 ($ 500.00 for woodlands under an approved woodland management plan) for the first five acres and $ 5.00 for each additional acre of agricultural/horticulture and $ 0.50 for each additional acre of woodlands/wetlands. Instead, the minimum income as calculated from the acreage and nature of those acres must come from the property as a whole without regard to which acre produces what amount of income, as long as the total produced on the property exceeds the minimum as calculated. However, appurtenant woodlands and wetlands cannot produce income to meet the gross sales requirement of active devotion.

Examples:

Example 1: On a 15-acre parcel, with one acre reserved for the homestead, six acres are devoted to growing tomatoes and generate annual gross sales of $ 700.00; six acres are devoted to growing hay and generate annual gross sales of $ 500.00; one acre is left fallow; and the remaining acre is appurtenant woodland. Since the total gross sales for the property equal $ 1,200, the farm exceeds the gross sales requirements for active devotion of $ 1,040.50 despite not having any particular five acres produce $ 1,000.

Example 2: On a 10-acre parcel of land, two acres are used for boarding horses which produce fees of $ 3,200 and the remaining eight acres are utilized for grazing the boarded horses at an imputed grazing value of $ 145.00 per acre. Income imputed to grazing is determined to be $ 1,160. Since the eight acres used for grazing have an imputed value for such use that exceeds the gross sales requirement for active devotion of $ 1,040 for those eight acres, it would qualify for farmland assessment, despite the income imputed to grazing on five acres being less than $ 1,000. The two-acre portion used for boarding and training is also eligible because it is contiguous to land that otherwise qualifies for farmland assessment.

Example 3: On an eight-acre parcel, one-half acre is used as a residence, seven acres are fenced for pasturing three boarded horses, and one-half acre is used as equine facilities. As proof of agricultural or horticultural production for sale, the landowner provides the names of the owners of the horses as well as the $ 800.00 per horse boarding fee and uses the imputed grazing values of $ 142.00 per acre as provided in the report of the State Farmland Evaluation Committee. Since seven acres of pasture being utilized by three boarded horses has an imputed grazing value of $ 994.00, the agricultural income criteria for farmland assessment has not been met on those seven acres, since the minimum gross sales for active devotion on seven acres would be $ 1,010. The income from boarding the horses cannot be counted since it is not contiguous to land which otherwise qualifies for farmland assessment. The entire parcel is ineligible for farmland assessment.

(d) Where a parcel is of mixed-use with both non-appurtenant woodlands under an approved woodland management plan and land in other agricultural/horticultural use, the gross sales minimum for the first five acres would be as follows:

1. A mixed-use property that has at least five acres in agricultural or horticultural use which are not non-appurtenant woodlands under an approved woodland management plan is required to produce a minimum of $ 1,000 per year for the first five acres.

2. A mixed-use property that has less than five acres in agricultural or horticultural use which are not non-appurtenant woodlands under an approved woodland management plan is required to produce a minimum of $ 500.00 per year for the first five acres.

3. Examples are as follows:

i. Example 1: On a 16-acre parcel of land, one acre is used with the residence, six acres are devoted to the raising of a flock of sheep, and nine acres are woodlands under an approved woodland management plan. Because there are six acres devoted to a non-woodlands agricultural use, the property exceeds the trigger of five such acres so as to have a gross sales minimum of $ 1,000 for the first five acres. The minimum gross sales for the property per year would be $ 1,009.50 ($ 1,000 for the first five acres devoted to the flock of sheep, $ 5.00 for the additional acre used for the sheep, plus nine x $ 0.50 for the acres under an approved woodland management plan).

ii. Example 2: On a 20.5-acre parcel of land, one-half acre is used as a residence, three acres are devoted to growing tomatoes, and 17 acres are woodlands under an approved woodland management plan. Because the property only has three acres devoted to a non-woodlands agricultural or horticultural use, the property does not trigger the $ 1,000 gross sales minimum for the first five acres, and remains at $ 500.00. The minimum gross sales for the property per year would be $ 521.00 ($ 500.00 for the first five acres of woodlands, three x $ 5.00 for the acres devoted to tomatoes, plus 12 x $ 0.50 for the additional woodland acres).

iii. Example 3: On an eight-acre parcel of land, one acre is used with the residence, four acres are devoted to growing ornamental plants, and three acres are woodlands under an approved woodland management plan. Since the property does not have five acres devoted to non-woodlands agricultural/horticultural use, it does not trigger the $ 1,000 income threshold. The gross sales minimum for the first five acres should be $ 500.00, despite there being more acres devoted to growing ornamental plants than to non-appurtenant woodlands. Since there are neither five acres devoted to non-woodlands agriculture nor five acres devoted to non-appurtenant woodlands, the first five acres necessary to qualify for farmland assessment must be a composite of the two. It is recommended to include all woodland acres under an approved woodland management plan as part of the first five acres needed for qualification. Thus, the minimum gross sales per year for the property would be $ 510.00 ($ 500.00 for the composite first five acres: that is, three acres of woodlands and two acres of ornamental plants, plus two x $ 5.00 for the two additional acres of ornamental plants.)

(e) Where the income requirements for farmland assessment are not met due to an injury, illness, or death of the person responsible for performing the income-producing activities necessary to meet the income eligibility requirements, the assessor shall, upon request by the owner of the land, exempt the owner from the income requirements.

1. In the case of injury or illness, the owner's written request shall be verified by a certification of a physician which must include a statement that the person was physically incapacitated and the period of time of the incapacitation.

2. In the case of death, the owner's or representative's written request shall be verified by a certified copy of the death certificate.

3. The assessor may only grant an exception once for a particular illness, injury, or death.

4. Application for exception to the gross sales requirement under the Act pursuant to this subsection may be made only upon completion of the forms prescribed by the Director, identified as Form FA-X. Copies of the form may be obtained, upon request, from the assessor of each taxing district who is required to provide said form for use by applicants.

5. Form FA-X is to be filed by the owner of the land by August 1 of the pre-tax year. In the case of multiple ownerships, except corporate co-owners, one of the owners may sign on behalf of the other co-owners, and such signer will be presumed to have authority to sign on behalf of the other owners. In the case of corporate owner or owners, the full name of the corporation must be provided on the application and accompanied by the signature and title of the corporate officer authorized to sign the application on its behalf.

(f) Land used for biomass, solar, or wind energy generation must be considered land in agricultural or horticultural use and may be eligible for valuation, assessment, and taxation pursuant to N.J.S.A. 54:4-23.1 et seq., provided that:

1. The property where the energy generation facility is located is part of an operating farm that will continue to operate as a farm in the tax year for which farmland assessment is being applied;

2. The energy generation facility constructed, installed, and operated on the land under the facility for which farmland assessment is sought, has received all approvals that may be required by law, where the interconnection is legally permissible, and where the energy generation facility and underlying farmland meet all other requisites for farmland assessment;

3. In the prior tax year, the acreage used for the biomass, solar, or wind energy generation facilities, structures, and equipment was valued, assessed, and taxed as land in agricultural or horticultural use;

4. The power or heat generated by the biomass, solar, or wind energy generation facilities, structures, and equipment is used to provide, either directly or indirectly but not necessarily exclusively, power or heat to the farm or agricultural or horticultural operations supporting the viability of the farm;

5. For property on which biomass, solar, or wind energy generation facilities, structures, and equipment have or will be constructed and used, the owner or operator shall have a conservation plan approved by the soil conservation district to account for the aesthetic, impervious coverage, and environmental impacts of the construction, installation, and operation of the biomass, solar, or wind energy generation facilities, structures, and equipment, including, but not necessarily limited to, water recapture and filtration;

6. Where solar energy generation facilities, structures, and equipment are installed, the property under the solar panels is used to the greatest extent practicable for the farming of shade crops or other plants capable of being grown under such conditions, or for pasture for grazing;

7. The amount of acreage devoted to energy generation facilities meets, but does not exceed, a ratio of one-to-five acres or portion thereof. In other words, for each "unit" of land devoted to energy generation, there are at least another five "units" of land devoted to agricultural and/or horticultural operations. The following table illustrates the ratio in terms of sample acreages:

Acreage Used for Renewable Energy on Farmland Assessment Acreage
Total Acres	*Maximum acres in	Minimum acres in
Solar/Wind/Biomass	Agriculture/Horticulture
5.25	0.25	5.00
5.60	0.60	5.00
6.00	1.00	5.00
7.00	1.19	5.81
8.00	1.36	6.64
9.00	1.53	7.47
10.00	1.70	8.30
15.00	2.55	12.45
25.00	4.25	20.75
50.00	8.50	41.50
59.00	10.00	49.00
60.00	10.00	50.00
100.00	10.00	90.00

*Ratio to calculate assessments: 1 part renewable energy to 5 parts of land devoted to agricultural or horticultural operations = 1/6 or .167 rounded to .17.

Must have greater than 5 acres to invest in renewable energy sources

8. Biomass, solar, or wind energy generation facilities, structures, and equipment are constructed or installed on no more than 10 acres of the farmland for which the owner of the property is applying for valuation, assessment, and taxation pursuant to the Act, and if power is being generated, no more than two megawatts of power are generated on the 10 acres or less:

i. Example 1: A landowner devotes 60 acres to agricultural or horticultural production that qualifies for farmland assessment. He converts 10 of those acres for use as a solar energy facility, which generates no more than two megawatts of power. The landowner is entitled to have all 60 acres receive farmland assessment.

ii. Example 2: A landowner devotes 120 acres to agricultural or horticultural production which qualifies for farmland assessment. He or she converts 20 of those acres for use as a solar energy facility. Because the landowner is entitled to have only 10 of the acres used for a solar energy facility under farmland assessment, he or she no longer qualifies for this assessment on the additional 10 acres that have been converted to the solar energy facility, and these 10 acres are subject to roll-back taxes. The landowner, however, continues to qualify for farmland assessment on the remaining 110 acres.

iii. Example 3: A landowner devotes 60 acres to agricultural or horticultural production that qualifies for farmland assessment. He converts 10 of those acres for use as a solar energy facility that generates three megawatts of power. None of the 10 acres qualifies for farmland assessment. Only the remaining 50 acres that is in agricultural or horticultural production qualifies for farmland assessment because the two megawatt power limit is exceeded. Roll-back is applied to the 10 acres;

9. For biomass energy generation, the owner of the property has obtained approval from the New Jersey Department of Agriculture pursuant to N.J.S.A. 4:1C-32.5;

10. If the energy generation facility is located in the Pinelands region, the construction, installation, and operation of the facility comply with the Comprehensive Management Plan;

11. If the land is permanently preserved under the State Farmland Preservation Program, the landowner must provide documentation that the project was approved by the State Agriculture Development Committee; and

12. No generated energy from any source is considered an agricultural or horticultural product and no income from any power or heat sold from the biomass, solar, or wind energy generation may be considered income for eligibility for valuation, assessment, and taxation of land pursuant to the Act, notwithstanding the provisions of the Act, or any rule promulgated pursuant thereto, to the contrary.

N.J. Admin. Code § 18:15-6.1

Amended by 49 N.J.R. 118(b), effective 1/3/2017