NY State Senate Bill 2023-S1680

Senate Bill S1680

2023-2024 Legislative Session

Provides a tax credit for sales or rentals of agricultural assets to beginning farmers; and establishes the duties of the commissioner of agriculture and markets with respect thereto

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Current Bill Status - In Senate Committee Investigations And Government Operations Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 03, 2024	referred to investigations and government operations
Jan 13, 2023	referred to investigations and government operations

co-Sponsors

2023-S1680 (ACTIVE) - Details

Current Committee:: Senate Investigations And Government Operations
Law Section:: Tax Law
Laws Affected:: Add §48, amd §§210-B & 606, Tax L; amd §16, Ag & Mkts L
Versions Introduced in 2021-2022 Legislative Session:: S6078

2023-S1680 (ACTIVE) - Summary

Provides a tax credit for sales or rentals of agricultural assets to beginning farmers; requires the commissioner of agriculture and markets to implement a plan for certification of eligible taxpayers with respect thereto.

2023-S1680 (ACTIVE) - Sponsor Memo

                                 
BILL NUMBER: S1680

SPONSOR: HINCHEY
 
TITLE OF BILL:

An act to amend the tax law, in relation to providing a tax credit for
sales or rentals of agricultural assets to beginning farmers; and to
amend the agriculture and markets law, in relation to establishing
duties of the commissioner of agriculture and markets with respect ther-
eto

 
PURPOSE OR GENERAL IDEA OF BILL:

To provide a tax credit for sales or rentals of agricultural assets to
beginning farmers and establish the duties of the commissioner of agri-
culture and markets

 
SUMMARY OF PROVISIONS:

Section 1: The title as the "New York farmland preservation act".

Section 2: Amends the tax law by adding a new section 45 for the purpose

of defining an owner of agricultural assets deemed eligible for the New
York farmland preservation act.

Section 3: Amends section 210-B of the Tax Law by adding a new subdivi-
sion 55 to establish a tax credit for owners of agricultural assets.

Section 4: Amends the tax law with the addition of a credit for owners
of agricultural assets and a definition of the credit amount.

Section 5: Amends section 606 of the tax law by adding a new subdivision
kkk to allow the application of a tax credit based on the taxpayer's
assessment for that year

Section 6: Amends the agriculture and markets law by amended by adding a
new subdivision 52 which would establishment a certification program In
which eligiblity is determined for the owners of agricultural assets
that are seeking a tax credit

Section 7: Effective date.

 
JUSTIFICATION:

The average age of a New York farmer is 65 years old and as older gener-
ations of farmers continue to retire, acres of farmland in our state are
at risk of irreplaceable lOss. Over 253,000 acres of New York% togrWul=
tural land were developed or =wetted betweriSi 2001 and 2016 because of
heightened development pressure alongside difficulty finding new or
beginning farmers willing to take Over the lend. This heitptened devel-
opment threatens the entire agricultural market, one Of the state's most
dominant industries, and jeopardizes our economy as well SS our local
food security.

The greatest barrier beginning farmers face is access to land and opera-
tional assets. The New York Farmland Preservation Act incentivizes older
farmers and non farming landowners to preserve`and protect land by
offering a tax credit for making both farmland and operational assets
available to beginning farmers. Black, indigenous, and other people of
color (BIPOC) have faced historic and ongoing discrimination and dispo-
session of land. This legislation recognizes the need for racial equity
in the next generation of farmers by providing an additional incentive
to landowners if they rent or sell farmland to a beginning farmer that
meets the definition of socially disadvantaged. By promoting the sale or
rental of farmland and agricultural assets from one generation to anoth-
er, the New York Farmland Preservation Mt ensures the continued
production of locally-sourced, fresh food and the expansion of new-terns
throughout New York State.

 
PRIOR LEGISLATIVE HISTORY:

01/11/22 S6078A - PRINT NUMBER 6078A

 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:

It is Unknown at this time how many farmers and farm owners would
participate in the program so the fiscal implications are left to be

 
EFFECTIVE DATE:
This act shall take effect immediately and shall apply to taxable years
beginning on or after January 1, 2024.

2023-S1680 (ACTIVE) - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   1680
 
                        2023-2024 Regular Sessions
 
                             I N  S E N A T E
 
                             January 13, 2023
                                ___________
 
 Introduced  by Sens. HINCHEY, KRUEGER -- read twice and ordered printed,
   and when printed to be committed to the  Committee  on  Investigations
   and Government Operations
 
 AN  ACT  to amend the tax law, in relation to providing a tax credit for
   sales or rentals of agricultural assets to beginning farmers;  and  to
   amend  the  agriculture  and  markets law, in relation to establishing
   duties of the commissioner of agriculture  and  markets  with  respect
   thereto
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. This act shall be known and may be cited as the  "New  York
 farmland preservation act".
   §  2.  The  tax  law  is amended by adding a new section 48 to read as
 follows:
   § 48. CREDIT FOR OWNERS OF AGRICULTURAL ASSETS. (A) GENERAL. A TAXPAY-
 ER THAT HAS BEEN  CERTIFIED  BY  THE  COMMISSIONER  OF  AGRICULTURE  AND
 MARKETS  AS  A  CERTIFIED OWNER OF AGRICULTURAL ASSETS SHALL BE ELIGIBLE
 FOR A CREDIT AGAINST THE TAX IMPOSED UNDER ARTICLE NINE-A OR  TWENTY-TWO
 OF THIS CHAPTER, PURSUANT TO THE PROVISIONS REFERENCED IN THIS SECTION.
   (B)  DEFINITIONS.  FOR  PURPOSES  OF THIS SECTION, THE FOLLOWING TERMS
 SHALL HAVE THE FOLLOWING MEANINGS:
   (1) "AGRICULTURAL ASSETS" SHALL  MEAN  AGRICULTURAL  LAND,  LIVESTOCK,
 FACILITIES, BUILDINGS, OR MACHINERY USED FOR FARMING.
   (2) "BEGINNING FARMER" MEANS A RESIDENT OF NEW YORK WHO:
   (I)  IS  SEEKING ENTRY, OR HAS ENTERED WITHIN THE LAST TEN YEARS, INTO
 FARMING;
   (II) INTENDS TO FARM LAND LOCATED WITHIN  THE  STATE  BORDERS  OF  NEW
 YORK;
   (III) IS NOT RELATED BY BLOOD OR MARRIAGE TO THE OWNER OF THE AGRICUL-
 TURAL  ASSETS  FROM  WHOM THE BEGINNING FARMER IS SEEKING TO PURCHASE OR
 RENT AGRICULTURAL ASSETS;

  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD05315-01-3

 S. 1680                             2
 
   (IV) IS NOT RELATED BY BLOOD OR MARRIAGE TO A PARTNER, MEMBER,  SHARE-
 HOLDER,  OR  TRUSTEE  OF  THE OWNER OF AGRICULTURAL ASSETS FROM WHOM THE
 BEGINNING FARMER IS SEEKING TO PURCHASE OR RENT AGRICULTURAL ASSETS;
   (V)  INTENDS  TO PROVIDE THE MAJORITY OF THE DAY-TO-DAY PHYSICAL LABOR
 OR MANAGEMENT OF THE FARM; AND
   (VI) MEETS THE ELIGIBILITY REQUIREMENTS FOR CERTIFICATION AS A  BEGIN-
 NING  FARMER  AS  DETERMINED  BY  THE  COMMISSIONER  OF  AGRICULTURE AND
 MARKETS.
   (3) "SOCIALLY DISADVANTAGED BEGINNING FARMER" MEANS A FARMER WHO IS  A
 MEMBER  OF  A  SOCIALLY  DISADVANTAGED GROUP AND MEETS THE DEFINITION OF
 BEGINNING FARMER AS DEFINED IN SECTION TWELVE HUNDRED  EIGHTY-FIVE-R  OF
 THE PUBLIC AUTHORITIES LAW.
   (4)  "SOCIALLY  DISADVANTAGED  GROUP" MEANS A GROUP WHOSE MEMBERS HAVE
 BEEN SUBJECTED TO RACIAL, ETHNIC, OR GENDER PREJUDICE BECAUSE  OF  THEIR
 IDENTITY AS MEMBERS OF A GROUP WITHOUT REGARD TO THEIR INDIVIDUAL QUALI-
 TIES. THESE GROUPS INCLUDE ALL OF THE FOLLOWING:
   (I) AFRICAN AMERICANS;
   (II) NATIVE INDIANS;
   (III) ALASKAN NATIVES;
   (IV) HISPANICS;
   (V) ASIAN AMERICANS; AND
   (VI) NATIVE HAWAIIANS AND PACIFIC ISLANDERS.
   (5) "FARM PRODUCT" SHALL HAVE THE SAME MEANING AS CROPS, LIVESTOCK AND
 LIVESTOCK  PRODUCTS  AS  DEFINED  IN  SUBDIVISION  TWO  OF SECTION THREE
 HUNDRED ONE OF THE AGRICULTURE AND MARKETS LAW.
   (6) "FARMING" MEANS THE ACTIVE USE, MANAGEMENT, AND OPERATION OF  REAL
 AND PERSONAL PROPERTY FOR THE PRODUCTION OF A FARM PRODUCT.
   (7)  "OWNER  OF AGRICULTURAL ASSETS" MEANS AN INDIVIDUAL, TRUST, PART-
 NERSHIP, OR BUSINESS ENTITY THAT:
   (I) IS THE OWNER IN FEE OF AGRICULTURAL LAND OR HAS LEGAL TITLE TO ANY
 OTHER AGRICULTURAL ASSET;
   (II) IS A NEW YORK STATE RESIDENT;
   (III) DERIVED AT LEAST FIFTY PERCENT  OF  THE  INDIVIDUAL'S,  TRUST'S,
 PARTNERSHIP'S OR BUSINESS ENTITY'S GROSS INCOME FROM FARMING IN AT LEAST
 FIVE OF THE PRECEDING FIFTEEN YEARS; AND
   (IV)  PROVIDED  THE  MAJORITY  OF  THE  DAY-TO-DAY  PHYSICAL LABOR AND
 MANAGEMENT OF A FARM IN AT LEAST FIVE OF THE  PRECEDING  FIFTEEN  YEARS.
 IF  THE  OWNER  IS  A  PARTNERSHIP  OR BUSINESS ENTITY, THE REQUIREMENTS
 OUTLINED IN SUBPARAGRAPHS (I), (II), (III) AND (IV)  OF  THIS  PARAGRAPH
 SHALL  BE  SATISFIED IF ANY PARTNER OR SHAREOWNER, OR ANY COMBINATION OF
 THE TWO, MEET THE REQUIREMENTS OF THIS PARAGRAPH.
   (8) "RENTAL AGREEMENT" MEANS A RENTAL AGREEMENT IN WHICH THE PRINCIPAL
 CONSIDERATION GIVEN TO THE OWNER OF AGRICULTURAL ASSETS IS  A  PREDETER-
 MINED PORTION OF THE PRODUCTION OF FARM PRODUCTS PRODUCED FROM THE RENT-
 ED  AGRICULTURAL  ASSETS AND WHICH PROVIDES FOR SHARING PRODUCTION COSTS
 OR RISK OF LOSS, OR BOTH.
   (C) COMPUTATION OF CREDIT. (1) AN OWNER  OF  AGRICULTURAL  ASSETS  MAY
 TAKE  A CREDIT FOR THE SALE OR RENTAL OF AGRICULTURAL ASSETS TO A BEGIN-
 NING FARMER.  THE CREDIT SHALL BE EQUAL TO THE GREATER OF:
   (I) FIVE PERCENT OF THE SALE PRICE OF THE AGRICULTURAL ASSET;
   (II) TEN PERCENT OF THE GROSS RENTAL INCOME  IN  EACH  OF  THE  FIRST,
 SECOND, AND THIRD YEARS OF A RENTAL AGREEMENT; OR
   (III)  FIFTEEN  PERCENT  OF  THE  CASH  EQUIVALENT OF THE GROSS RENTAL
 INCOME IN EACH OF THE FIRST, SECOND, AND THIRD YEARS OF A RENTAL  AGREE-
 MENT.
 S. 1680                             3
 
   (2)  AN OWNER OF AGRICULTURAL ASSETS MAY TAKE AN ADDITIONAL CREDIT FOR
 THE SALE OR RENTAL OF AGRICULTURAL ASSETS TO  A  SOCIALLY  DISADVANTAGED
 BEGINNING  FARMER.  THE  ADDITIONAL  CREDIT  SHALL BE THE CREDIT APPLIED
 UNDER PARAGRAPH ONE OF THIS SUBDIVISION PLUS AN ADDITIONAL TWO AND  ONE-
 HALF PERCENT.
   (3)  A  QUALIFYING RENTAL AGREEMENT INCLUDES CASH RENT OF AGRICULTURAL
 ASSETS OR A RENTAL AGREEMENT. THE AGRICULTURAL ASSET MUST BE  RENTED  AT
 PREVAILING COMMUNITY RATES AS DETERMINED BY THE COMMISSIONER OF AGRICUL-
 TURE. THE CREDIT MAY BE CLAIMED ONLY AFTER APPROVAL AND CERTIFICATION BY
 THE COMMISSIONER OF AGRICULTURE AND MARKETS.
   (4)  AN OWNER OF AGRICULTURAL ASSETS OR BEGINNING FARMER MAY TERMINATE
 A RENTAL AGREEMENT, FOR REASONABLE CAUSE. WITHIN FIFTEEN DAYS, THE OWNER
 OF AGRICULTURAL ASSETS MUST NOTIFY THE COMMISSIONER  OF  AGRICULTURE  IN
 WRITING OF SUCH TERMINATION. IF A RENTAL AGREEMENT IS TERMINATED WITHOUT
 THE FAULT OF THE OWNER OF AGRICULTURAL ASSETS, THE TAX CREDITS SHALL NOT
 BE RETROACTIVELY DISALLOWED. IF AN AGREEMENT IS TERMINATED WITH FAULT BY
 THE  OWNER  OF  AGRICULTURAL ASSETS, ANY PRIOR TAX CREDITS CLAIMED UNDER
 THIS SUBDIVISION BY THE OWNER OF AGRICULTURAL ASSETS SHALL BE DISALLOWED
 AND MUST BE REPAID TO THE COMMISSIONER OF TAXATION AND FINANCE.
   (D) CROSS-REFERENCES. FOR APPLICATION OF THE CREDIT  PROVIDED  FOR  IN
 THIS SECTION, SEE THE FOLLOWING PROVISIONS OF THIS CHAPTER:
   (1) ARTICLE 9-A: SECTION 210-B: SUBDIVISION 59.
   (2) ARTICLE 22: SECTION 606: SUBSECTIONS (I) AND (OOO).
   §  3. Section 210-B of the tax law is amended by adding a new subdivi-
 sion 59 to read as follows:
   59. TAX CREDIT FOR OWNERS OF AGRICULTURAL  ASSETS.  (A)  ALLOWANCE  OF
 CREDIT. A TAXPAYER SHALL BE ALLOWED A CREDIT, TO BE COMPUTED AS PROVIDED
 IN  SECTION FORTY-EIGHT OF THIS CHAPTER, AGAINST THE TAX IMPOSED BY THIS
 ARTICLE.
   (B) APPLICATION OF CREDIT. THE CREDIT ALLOWED UNDER  THIS  SUBDIVISION
 FOR  ANY  TAXABLE  YEAR MAY NOT REDUCE THE TAX DUE FOR SUCH YEAR TO LESS
 THAN THE AMOUNT PRESCRIBED  IN  PARAGRAPH  (D)  OF  SUBDIVISION  ONE  OF
 SECTION TWO HUNDRED TEN OF THIS ARTICLE. HOWEVER, IF THE AMOUNT OF CRED-
 IT  ALLOWED  UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR REDUCES THE TAX
 TO SUCH AMOUNT OR IF THE TAXPAYER OTHERWISE PAYS TAX BASED ON THE  FIXED
 DOLLAR  MINIMUM AMOUNT, ANY AMOUNT OF CREDIT THUS NOT DEDUCTIBLE IN SUCH
 TAXABLE YEAR WILL BE TREATED AS AN OVERPAYMENT OF TAX TO BE CREDITED  OR
 REFUNDED  IN  ACCORDANCE  WITH  THE  PROVISIONS  OF SECTION ONE THOUSAND
 EIGHTY-SIX  OF  THIS  CHAPTER.  PROVIDED,  HOWEVER,  THE  PROVISIONS  OF
 SUBSECTION  (C)  OF  SECTION  ONE  THOUSAND EIGHTY-EIGHT OF THIS CHAPTER
 NOTWITHSTANDING, NO INTEREST WILL BE PAID THEREON.
   § 4. Subparagraph (B) of paragraph 1 of subsection (i) of section  606
 of the tax law is amended by adding a new clause (1) to read as follows:
 (1) CREDIT FOR OWNERS OF             AMOUNT OF CREDIT UNDER
 AGRICULTURAL ASSETS UNDER            SUBDIVISION FIFTY-NINE OF
 SUBSECTION (OOO)                     SECTION TWO HUNDRED TEN-B
   §  5. Section 606 of the tax law is amended by adding a new subsection
 (ooo) to read as follows:
   (OOO) CREDIT FOR OWNERS OF AGRICULTURAL ASSETS.  (1) A TAXPAYER  SHALL
 BE  ALLOWED  A CREDIT, TO BE COMPUTED AS PROVIDED IN SECTION FORTY-EIGHT
 OF THIS CHAPTER, AGAINST THE TAX IMPOSED BY THIS ARTICLE.
   (2) APPLICATION OF CREDIT. IF THE AMOUNT OF CREDIT ALLOWED UNDER  THIS
 SUBSECTION  FOR  ANY  TAXABLE  YEAR  EXCEEDS THE TAXPAYER'S TAX FOR SUCH
 YEAR, THE EXCESS WILL BE TREATED AS AN OVERPAYMENT OF TAX TO BE CREDITED
 OR REFUNDED IN ACCORDANCE WITH THE PROVISIONS  OF  SECTION  SIX  HUNDRED
 S. 1680                             4
 
 EIGHTY-SIX  OF THIS ARTICLE, PROVIDED, HOWEVER, THAT NO INTEREST WILL BE
 PAID THEREON.
   §  6.  Section  16  of  the  agriculture and markets law is amended by
 adding a new subdivision 53 to read as follows:
   53. (A) ESTABLISH A PROGRAM FOR INITIAL  CERTIFICATION  OF  OWNERS  OF
 AGRICULTURAL  ASSETS  AND  BEGINNING FARMERS FOR PURPOSES OF ELIGIBILITY
 FOR A TAX CREDIT PURSUANT TO SECTION FORTY-EIGHT OF THE TAX LAW.
   (B) ADOPT, PROMULGATE AND IMPLEMENT RULES, REGULATIONS AND ORDERS WITH
 RESPECT TO APPLICATION FOR CERTIFICATION,  CONTINUED  QUALIFICATION  FOR
 CERTIFICATION AND TERMINATION OF CERTIFICATION OF OWNERS OF AGRICULTURAL
 ASSETS AND/OR BEGINNING FARMERS FOR PURPOSES OF ELIGIBILITY FOR SUCH TAX
 CREDIT.
   (C)  CERTIFY  RENTAL  AGREEMENTS  ENTERED  INTO BY CERTIFIED OWNERS OF
 AGRICULTURAL ASSETS AND BEGINNING FARMERS ARE FAIR AND AT RATES EQUAL TO
 THE MARKET VALUE OF THE FARM PRODUCT AS PROVIDED IN SECTION  FORTY-EIGHT
 OF  THE  TAX  LAW;  PROVIDED  THAT AGRICULTURAL ASSETS MUST BE RENTED AT
 PREVAILING COMMUNITY RATES AS DETERMINED BY THE COMMISSIONER.
   (D) NOTIFY THE COMMISSIONER OF TAXATION AND FINANCE  OF  ALL  APPROVED
 APPLICATIONS  AND  ALL  APPLICATIONS  FOR WHICH CERTIFICATION WAS SUBSE-
 QUENTLY TERMINATED BY THE COMMISSIONER.
   § 7. This act shall take effect immediately and shall apply to taxable
 years beginning on or after January 1, 2025.

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Senate Bill S1680

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Michelle Hinchey