Committee advances change to Farmland Assessment Act to narrow rollback-tax triggers

The Senate Community and Urban Affairs Committee voted to amend and release S-3405, which revises provisions of the Farmland Assessment Act of 1966 governing rollback taxes and adds a hardship petition process for landowners.

Laura Thorney, executive director of the New Jersey Law Revision Commission, testified in support and summarized the commission’s 2022 recommendation to clarify when rollback taxes are triggered. Thorney told the committee that courts have previously required proof of an active conversion to a more intensive, non-agricultural use before rollback taxes are appropriate. She said the bill’s revised language makes clear "the cessation of agriculture or horticultural use does not by itself subject the taxpayer to rollback taxes in the absence of an active conversion to a non agricultural or non horticultural use."

The committee amendments would (1) permit an owner of land assessed under the Farmland Assessment Act to petition the tax assessor for a hardship exemption from rollback taxes; (2) require assessors to publish guidance on petition content and to distribute that guidance to owners at specified times; (3) allow assessors to condition approvals on continued proof of eligibility; and (4) set filing deadlines tied to any extensions granted by the assessor.

Support letters were entered from the New Jersey Chamber, the New Jersey Farm Bureau and other stakeholders. Committee members asked whether the new hardship-petition avenue would operate in addition to the bill’s clarifying language — Thorney said the amendments provide an ‘‘additional avenue’’ for taxpayers who do not fit the statutory exception. The measure was amended and released by unanimous recorded committee vote.

Committee members said the bill aligns statutory language with tax-court precedent described in Balmer v. Township of Holmdel and with guidance in the Division of Taxation’s handbook for assessors.