Relates to agricultural districts law improvements

The purpose of this bill is to amend the Agriculture and Markets Law (AML) to streamline the process for the creation, review and consolidation of agricultural districts; and repeal certain provisions of the law to improve efficiency, clarity and farmer protections. The bill also amends the Real Property Tax Law's (RPTL) property tax exemption for structures and buildings used exclusively in the raising and production for sale of agricultural or horticultural commodities to expressly include permanent and impermanent structures and buildings.

Summary of Provisions:

Section 1 of the bill amends AML § 16 to add a new subdivision 48 to authorize the Department to develop, and update, guidance and other information to assist local officials in creating, reviewing and consolidating agricultural districts; and assist the commissioner of taxation and finance to support training of assessors and any other local government officials who have responsibility for agricultural assessment and taxation.

Section 2 of the bill amends subdivision 3 of AML § 301 to clarify the definition of "farm woodland" as land used for the production of woodland products intended for sale.

Section 3 of the bill amends subdivision 11 of AML § 301, the definition of "farm operation," to the extent of renumbering of subdivisions "16" and "17" as subdivisions "17" and "18" and amends subdivision 12 of AML § 301, the definition of "agricultural data statement," to reflect the inclusion of the agricultural data statement provisions in the new § 305-b.

Section 4 of the bill renumbers subdivision "16" of AML § 301 as subdivision "17".

Section 5 of the bill renumbers subdivision "17" of AML § 301 as subdivision "18".

Section 6 amends AML § 303: (1) streamlining the process by removing the requirement of (a) county planning board review; (b) a DEC determination on a plan's consistency with environmental plans, policies and objectives; and (c) a public hearing; (2) requiring notice of the proposed district by posting on the county's website, in addition to the currently required newspaper publication, coupled with mail notice to affected municipalities, (3) modifying time periods so

as to conform to actual practice, and (4) establishing the district upon the certification of the Commissioner

Section 7 amends AML § 303-a (1) requiring the review of the agricultural district eight years after its creation and every eight years thereafter, (2) providing for the same notice provisions for the periodic review and public hearing as required for the initial plan proposal; (3) setting a 45-day deadline for the agricultural and farmland protection board's report; (4) granting the county legislative body the power to adopt any modification of the review plan it deems appropriate, (5) requiring the county legislative body to complete the review process within a year of the district's anniversary date, unless, upon the county legislature's request to the commissioner and for good cause, the commissioner grants an extension for up to six months; and (6) eliminating the DEC's review of the district's continuation

Section 8 amends the AML by adding a new § 303-c to establish the process for the consolidation of an existing agricultural district with one undergoing review under Section 303-a.

Section 9 repeals AML § 304, eliminating the provisions for the creation of agricultural districts for unique and irreplaceable lands.

Section 10 amends subdivision 1 of AML § 304-b to make a technical correction to remove a reference to "planning" to more accurately reflect the Department of Agriculture and Markets (Department) Agricultural and Farmland Protection Programs which go beyond planning grants.

Section 11 amends subparagraphs (ii) and (vi) of AML § 305(1) (d) to increase the penalty which a local assessing unit may impose if a landowner fails to notify the assessor about conversion of agricultural land to a non-agricultural use to $1,000 (from $500) and to increase the minimum payment amount which may be imposed by a local assessing unit for conversion to $500 (from $100.

Section 12 would repeal AML § 305(1) (e), which authorizes state assistance for districts created for unique and irreplaceable lands under AML § 304, because those districts would no longer be authorized due to the repeal of AML§ 304 under Section 5 of the bill This section also re-letters paragraph "f' as paragraph "e".

Section 13 would repeal AML § 305(4) (b) to remove the requirement for filing preliminary notices of intent to acquire specified amount of land from actively operated farms in the agricultural district, or undertake or support certain specified development activities within an agricultural district.

Section 14 amends paragraphs "c", "d", "e" and "f" of subdivision "4" of AML § 305 by relettering them as paragraphs "b", "c", "d" and "e"; removing references to final notices of intent; and providing that notice of a commissioner's public hearing be posted on the Department's website and sent by first class mail to affected municipalities, rather than through publication.

Section 15 reletters paragraphs "g", "h" and "h-1" of subdivision "4" of AML § 305 as paragraphs "f", "g" and "h".

Section 16 repeals subdivisions "2", "3" and "4" of AML § 305-a, in relation to agricultural data statements, as Section "16" of the bill adds this language in a new AML § 305-b.

Section 17 renumbers AML § 305-b as § 305-c and adds a new § 305-b, titled "Agricultural Data Statement" to adopt the language repealed in Section 15 of the bill.

Section 18 of the bill would amend subparagraph "iii" of paragraph "a" and subparagraph "iv" of paragraph "b" of AML § 306(2) to increase the penalty which a local assessing unit may impose if a landowner fails to notify the assessor about conversion of agricultural land to a non-agricultural use to $1,000 (from $500) and to increase the minimum payment amount which may be imposed by a local assessing unit for conversion to $500 (from $100).

Section 19 of the bill would amend AML § 307 to remove language granting authority to promulgate regulations for consolidation of agricultural districts because Section 7 of the bill (new AML § 303-c) establishes a process for the consolidation of existing agricultural districts.

Section 20 of the bill would amend AML § 309(6) to provide that the Advisory Council on Agriculture (ACA) shall meet at least one time per year.

Section 21 of the bill would amend Real Property Tax Law (RPTL) 483(2) to expressly provide that the term "structures and buildings" includes permanent and impermanent structures, including trellises and pergolas made of metal, string or wood.

Section 22 provides for an immediate effective date, except Section 6 shall only apply to the creation of any agricultural district pursuant to AML § 303 commenced after such effective date and Section 7 shall only apply to the review of any agricultural district pursuant to AML § 303-a commenced after the effective date.

Existing Law:

AML § 16 provides for various general powers of the Department.

AML § 301 defines terms for AML Article 25-AA, Agricultural Districts.

AML § 303 sets forth the process for Creation of Agricultural Districts.

AML § 303-a provides for Review of Agricultural Districts.

AML § 304 authorizes the Creation of Agricultural Districts for Unique and Irreplaceable Lands.

AML § 304-b requires reporting of agricultural district data to the Governor and the Legislature.

AML § 305 (Agricultural Assessments), among other things, sets forth various benefits for land in agricultural districts.

Subdivision 1 of AML § 305 provides for a maximum penalty of $500 for failing to notify an assessor about conversion of agricultural land to a non-agricultural use and authorizes a minimum payment of $100 for such conversion.

Paragraph e of subdivision 1 of AML § 305 provides for State assistance to localities for one-half of the tax loss that results from requests for agricultural assessments in agricultural district created under AML § 304.

Subdivision 4 of AML § 305 sets forth the requirements for filing preliminary and final notices of intent with the Commissioner and the County Agricultural and Farmland Protection Board.

Subdivisions 2, 3 and 4 of AML § 305-a require Agricultural Data Statements.

Subdivision 1 of AML § 306 (Agricultural Assessments - Lands Outside Agricultural Districts) provides for a maximum penalty of $500 for failing to notify an assessor about conversion of agricultural land to a non-agricultural use and authorizes a minimum payment of $100 for such conversion.

AML § 307 provides authority for regulations to implement AML Article 25-AA, Agricultural Districts.

Subdivision 6 of AML § 309 (Advisory Council on Agriculture ACA) requires that the ACA hold at least four meetings per year.

Subdivision 2 of RPTL § 483 sets forth various structures and buildings used by farms that are exempt from the real property tax for a period of 10 years from their construction or reconstruction.

Prior Legislative History:

This proposal was not approved for introduction in 2014.

Statement in Support:

The Agricultural Districts Law, enacted in 1971, has been amended many times to: (a) better protect farms and farmers; (b) facilitate the creation of agricultural districts: and (c) streamline the establishment and review process for county governments and Department staff. This bill is designed to streamline the creation, review and consolidation process and to repeal certain provisions that have created unnecessary delay or created inefficiencies.

Assistance to Counties with the Creation, Review and Consolidation of Agricultural Districts; and Support for Agricultural Assessment Training of Assessors

The proposed addition of subdivision 48 to AML § 16 acknowledges the assistance that the Department currently provides to counties and county agricultural and farmland protection boards with the

agricultural districts program as part of Department administration of AML Article 25-AA. The Department often receives calls from local assessors and the public concerning the agricultural assessment program. The Department has been charged by the NYS Advisory Council on Agriculture to participate in the agricultural assessment program, coordinate with the Department of Taxation and Finance as needed, and participate in the training of local government officials and the public on this very important program. While the Department is not statutorily required to provide such assistance, the Department makes every effort to further the understanding of these critical provisions of Article 25-AA, which help ensure that land stays in agricultural production and that farm operations continue to be viable The proposed amendment recognizes this role.

Farm Woodland and Agricultural Assessment

Under AML § 301(4) (d), up to 50 acres of "farm woodland" per parcel is eligible for an agricultural assessment. However, so long as the term "farm woodland" is defined in AML § 301(3) as "... land used for the production for sale of woodland products ..." some land in agricultural production may not be eligible for agricultural assessment. For example, timber and forest products are long-term products that do not produce annual revenue; especially if the woodland is being managed for saw timber production. Further, farm woodland is often used by farms to provide woodland products (such as posts and lumber for fencing and firewood for heating) for on-farm use.

Some assessors have denied farmers an agricultural assessment if they cannot show annual sales of woodland products. This proposed amendment would clarify that land used for the production of woodland products intended for sale is eligible for agricultural assessment.

Enhanced Ease in Creation and Review of Agricultural Districts

The proposed amendments remove impediments and inefficiencies in the creation and review process. Notice provisions have been updated to include notification by posting on the web in addition to mail notification of affected municipalities. The proposed amendments to AML § 303-eliminate the requirement for public hearings after the Commissioner's certification of the agricultural district proposal (A public hearing is still required before the county acts to adopt or reject the proposal as a plan.) Unrealistic time deadlines have been eliminated.

County planning boards would no longer have to provide a report as part of the process for the creation of agricultural districts The boards would still be consulted as part of the process, however.

As the Department of Environmental Conservation (DEC) has not been participating in the establishment or review of agricultural districts, the proposal removes the DEC from the process to enhance efficiencies In this regard, several years ago the Secretary of State was removed from the district creation and review processes for lack of participation.

The proposal designates an 8-year review period as no district created since the law was adopted in 1971 has selected the 12-or 20-year options.

As of July 1, 2013, 95 of the 238 districts (approximately 40%) were not timely in conducting the 8-year reviews of districts required by the AML. However, the 11 counties that have consolidated multiple districts into a single, county-wide agricultural district were all timely in the 8-year review process. These statistics evidence a need to help counties streamline how they create, review and consolidate agricultural districts, which these amendments seek to address.

Increased Penalties

AML §§ 305(1) and § 306 (2) require landowners to notify the assessor when land receiving an agricultural assessment is converted to a non-agricultural use and authorizes penalties and minimal payments for such conversions to be imposed on landowners who fail to notify the assessor of a conversion The penalties are established to ensure that the assessor is made aware of a conversion so that conversion payments, which compensate the locality for the prior benefits of agricultural assessments received, may be calculated and levied on the property.

Many assessing units do not levy these payments or penalties because the current statutory amounts are too small. Increased penalties and minimum payment amounts will encourage assessing units to levy the payments and penalties and help ensure that landowners comply with the law.

Property Tax Exemptions for Farming Structures

The proposed amendment of RPTL § 483(2) would make it clear that permanent and impermanent structures, including metal, string, or wood trellises and pergolas can qualify for the provisions a 10-year property tax exemption for structures and buildings used exclusively in the raising and production for sale of agricultural or horticultural commodities.

Although an opinion of the former State Board of Equalization and Assessment (Vol 3- Opns of Counsel SBEA No. 19) determined that that newly constructed vineyard trellises come within the meaning of "structures and buildings" for purposes of RPTL § 483(2), a statutory clarification that ensures consistent results is important for the hops producers and other farmers that use impermanent structures for production.

Budget Implications:

None.

Local Impact:

This bill would not impose a mandate on a county, city, town, village, school district or special district.

The resulting changes would provide no additional costs to municipal governments. The changes to the Agricultural Districts Law streamline the processes for creation, review and consolidation of agricultural districts; thereby responding to local entities surveyed by the Department. Thus, municipal governments should recognize cost savings over time from these modifications.

Effective Date:

The amendments take effect upon enactment, except Section 5 shall only apply to the creation of any agricultural district pursuant to AML 303 commenced after such effective date and Section 6 shall only apply to the review of any agricultural district pursuant to AML § 303-a commenced after the effective date.