Expands duties of dept of Ag & Mkts regarding and authorizes an exemption for certain structures and buildings used in the operation of wineries and distilleries

Sections 2, 3, and 4: Amends Agriculture and Markets Law section 16 to increase the ability of the Department of Agriculture and Markets to encourage the local processing of New York produced fruits and to promote the marketing of such products.

Section 5: Amends the Agriculture and Markets Law section 283 to authorize the Commissioner of Agriculture and Markets to provide assistance to community based organizations seeking to purchase New York farm products and makes statute gender neutral.

Section 6: Amends the Agriculture and Markets Law section 284 to add fruit products and grappa to the list of items in statute.

Section 7: Amends the Agriculture and Markets Law section 285 to make such statute gender neutral.

Section 8: Amends the Agriculture and Markets Law section 285-b to authorize the Hudson Valley Agricultural Advisory Council to comment on proposals to increase the profitability of fanning and to preserve viable agricultural open spaces.

Section 9: Adds Real Property Tax Law section 483-e to provide a targeted exemption from real property taxes to those wineries that expand their production facilities. this provision exempts from taxation 50 percent of any increase in value of a wine production facility because of expansion or reconstruction of such facility for a period of no more than 10 years.

Section 10: Enacting clause.

Existing law

Under current law, there are a few targeted tax incentives to encourage the expansion of wine or distillery facilities in New York.

Justification

It is important to institute a targeted tax incentive to encourage the construction of new wineries and distillery facilities and to encourage the expansion of such existing facilities. Studies conducted by the New York State Task Force for Hudson Valley Fruit Growers demonstrated that for every $100,000 invested in new wine production facilities, that the facility increased its capacity to purchase on an annual basis by an additional $50,000 worth of grapes or other fruits. The production of wine is a business whose chief operating expense is the cost of growing or purchasing grapes. Therefore, encouraging a wine facility to invest $100,000 to expand its product will lead to the purchase of approximately $500,000 worth of grapes over a ten year period of time. This additional demand for the purchase of $500,000 worth of grapes is money that goes directly to growers. Instituting such a targeted tax incentive will dramatically increase the demand for New York produced grapes and thereby increase the number of vineyards in this state.

Legislative history

S.6010A/A.9538A of 2005-2006 S.537/A.1473 of 2007-2008

Fiscal implications

Minimal. The cost of the tax credit will be offset by the increased production of local grapes and increased tourism to wineries that have expanded.

Effective date

This act shall take effect immediately, and apply to assessment rolls on or after January first next succeeding the date on which it shall have become law.