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S 3405

Authorizes the comptroller to audit local development corporations

2025 Regular Session Introduced by Leroy Comrie

S.3405 clarifies that ceasing farming alone won’t trigger roll-back taxes unless land is converted, and creates a hardship petition for exemptions on farmland-assessed property.

REFERRED TO CORPORATIONS, AUTHORITIES AND COMMISSIONS
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Bill Summary · S 3405

Summary — S.3405

Title: Authorizes the comptroller to audit local development corporations (note: bill text concerns farmland assessment / roll-back taxes)
Bill No.: S 3405 | Sponsor: Sen. Leroy Comrie
Introduced: June 6, 2024 — Status: Reported out of Senate Community & Urban Affairs Committee with amendments (1/30/2025); referred to Budget & Appropriations; referred to Corporations, Authorities and Commissions (1/27/2025)
Effective date: Immediately if enacted

Purpose

S.3405 amends the Farmland Assessment Act of 1964 to (1) clarify that simply stopping farming activity does not by itself trigger roll-back taxes unless the land is actively converted to a non‑agricultural use, and (2) create a local hardship‑petition process allowing farmland-assessed owners to request exemption from roll-back taxes under specified circumstances.

Key provisions

  • Clarifies roll-back trigger: The “mere cessation” of agricultural or horticultural activity will not subject farmland-assessed parcels to roll-back taxes unless there is an active conversion to a non‑agricultural or non‑horticultural use.
  • Defines roll-back taxes: The additional tax equals the difference between taxes paid under farmland assessment and taxes that would have been due if the land had been assessed as other land, computed for the current tax year (year of change) and the two immediately preceding tax years.
  • Hardship petition process:
    • Owners of land assessed under the Act may petition the local tax assessor for a hardship exemption from roll-back taxes for land not actively farmed or used otherwise.
    • Assessors must prepare guidance on petition contents and distribute it: for all qualifying land as of the bill’s effective date, at least 90 days before the due date for farmland applications; thereafter, no later than 30 days after the assessor approves an application under the Act.
    • Petition deadline: on or before August 1 (or September 1 if the assessor granted an extension) of the year immediately preceding the tax year for which valuation is sought.
    • Assessors may grant or deny petitions, condition approval on continued documentation, and set the duration of any exemption.

Factors for assessor consideration

No single factor is dispositive. Factors include:
- Nature and duration of the hardship;
- Owner’s intent to return land to agricultural use;
- Relevant case law;
- Actual current use of the property;
- Owner’s agricultural‑related actions in the tax year and two preceding years.

Fiscal impact

Office of Legislative Services (OLS) estimate:
- Annual local government revenue loss: Indeterminate (likely fewer properties subject to roll-back taxes).
- Potential local administrative cost increases: Indeterminate (processing petitions and providing guidance).
Magnitude depends on number/size of affected parcels and how assessors exercise discretion.

Who is affected

  • Primary: owners of land enrolled under New Jersey’s Farmland Assessment Act.
  • Secondary: local governments (counties and municipalities) that collect roll-back taxes and administer assessments.

Legislative context & notes

  • Committee amendments added the hardship petition process, guidance/distribution requirements, and factors for consideration.
  • Statement cites alignment with a 1981 NJ Tax Court decision (Jackson Twp. v. Paolin) limiting roll-back imposition for owners who stop farming due to age/disability.
  • Companion Assembly bill: A4465. Prior-session related bills: S7444, S1373, S506, S3794, S1850.

Compiled from official sources — confirm details with the bill’s official record.

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