LEGISLATIVE FISCAL ESTIMATE
ASSEMBLY, No. 4038
STATE OF NEW JERSEY
220th LEGISLATURE
DATED: JUNE 13, 2022
SUMMARY
Synopsis: Requires State Agriculture Development Committee to compensate
owners of preserved farmland for changes in regulations that increase cost
of business.
Type of Impact: State expenditure increase.
Agencies Affected: Department of Agriculture and State Agriculture Development
Committee.
Office of Legislative Services Estimate
Fiscal Impact Year 1 Year 2 Year 3
State Expenditure Increase Indeterminate
The Office of Legislative Services (OLS) finds that this bill will result in an indeterminate
State expenditure increase for payment of claims for lost revenue from owners of preserved
farmland. The OLS is unable to provide a precise monetary figure because it does not know
how the adoption of future rules, regulations, requirements, or restrictions would monetarily
affect the owners of preserved farmland and, therefore, how much compensation would be
required.
BILL DESCRIPTION
This bill would require the SADC, whenever it adopts rules or regulations pursuant to the
Administrative Procedure Act, or implements a new requirement or restriction upon an owner of
preserved farmland, to compensate the owner of the preserved farmland for any loss of income or
incremental costs incurred due to the new requirement or restriction.
The bill directs the SADC, within six months after the bill is enacted into law, to establish a
system to provide compensation to the owner of preserved farmland for any loss of income or
incremental costs incurred from the new requirement or restriction imposed by the SADC. The
system is to include a process by which the owner of preserved farmland may submit a claim, a
process by which the committee will evaluate claims received and provide a written determination
regarding a claim, and procedures that ensure that owners of preserved farmland are adequately
Office of Legislative Services Legislative Budget and Finance Office
State House Annex Phone (609) 847-3105
P.O. Box 068 Fax (609) 777-2442
Trenton, New Jersey 08625 www.njleg.state.nj.us
FE to A4038
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reimbursed in a timely manner for any loss of income or incremental costs incurred due to the
SADC’s action. The bill requires the SADC to submit the system to the State Board of Agriculture
for review and approval as fair and reasonable, and authorizes the State Board of Agriculture to
hire outside consultants for determining the appropriateness of any compensation formula
proposed by the SADC pursuant to the bill.
An affected landowner aggrieved by a determination of the SADC would be entitled to a
hearing in accordance with the provisions of the Administrative Procedure Act applicable to
contested cases.
In order to pay the costs of providing compensation to owners of preserved farmland pursuant
to the bill, the SADC would be required to include in the Department of Agriculture’s annual
appropriations request an amount sufficient to provide the compensation required by the bill.
FISCAL ANALYSIS
EXECUTIVE BRANCH
None received.
OFFICE OF LEGISLATIVE SERVICES
The OLS finds that this bill will result in an indeterminate State expenditure for payment for
claims for lost revenue from owners of preserved farmland.
According to the Department of Agriculture, there are currently 2,800 preserved farms
comprising 245,500 acres in 182 municipalities. The OLS is unable to provide a precise monetary
figure because it does not know how the adoption of future rules, regulations, requirements, or
restrictions would monetarily affect the owners of preserved farmland. The monetary loss to a
preserved farm owner will depend on each specific rule, regulation, requirement, or restriction
adopted by the SADC.
The OLS notes that the SADC will be required to perform the duties outlined in the bill such
as establishing a system to provide compensation to the owner of preserved farmland for any loss
of income or incremental costs incurred from the new requirement or restriction imposed by the
SADC, as well as providing a hearing to an affected landowner if requested. The OLS assumes
that these administrative duties can be subsumed within existing staff duties.
Section: Environment, Agriculture, Energy, and Natural Resources
Analyst: Neha Patel
Senior Fiscal Analyst
Approved: Thomas Koenig
Legislative Budget and Finance Officer
This legislative fiscal estimate has been produced by the Office of Legislative Services due to the
failure of the Executive Branch to respond to our request for a fiscal note.
This fiscal estimate has been prepared pursuant to P.L.1980, c.67 (C.52:13B-6 et seq.).