S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   8452
 
                        2021-2022 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             November 17, 2021
                                ___________
 
 Introduced  by M. of A. LUPARDO -- read once and referred to the Commit-
   tee on Ways and Means
 
 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  45  to  read  as
 follows:
   § 45. 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.
                                                            LBD08317-03-1
 A. 8452                             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.
 A. 8452                             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, INCLUDING 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 55.
   (2) ARTICLE 22: SECTION 606: SUBSECTIONS (I) AND (NNN).
   §  3. Section 210-B of the tax law is amended by adding a new subdivi-
 sion 55 to read as follows:
   55. 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-FIVE 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 (xlvi) to read as
 follows:
 (XLVI) CREDIT FOR OWNERS OF          AMOUNT OF CREDIT UNDER
 AGRICULTURAL ASSETS UNDER            SUBDIVISION FIFTY-FIVE OF
 SUBSECTION (NNN)                     SECTION TWO HUNDRED TEN-B
   § 5. Section 606 of the tax law is amended by adding a new  subsection
 (nnn) to read as follows:
   (NNN)  CREDIT FOR OWNERS OF AGRICULTURAL ASSETS.  (1) A TAXPAYER SHALL
 BE ALLOWED A CREDIT, TO BE COMPUTED AS PROVIDED IN SECTION FORTY-FIVE 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
 A. 8452                             4

 OR REFUNDED IN ACCORDANCE WITH THE  PROVISION  OF  SECTION  SIX  HUNDRED
 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 52 to read as follows:
   52. (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-FIVE 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-FIVE
 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, 2023.