LEGISLATIVE FISCAL ESTIMATE
[First Reprint]
SENATE, No. 3279
STATE OF NEW JERSEY
220th LEGISLATURE
DATED: AUGUST 3, 2023
SUMMARY
Synopsis: Revises method for appraisals of farmland to be acquired for farmland
preservation purposes.
Type of Impact: Annual State and local expenditure increases.
Agencies Affected: State Agriculture Development Committee and local governments.
Office of Legislative Services Estimate
Fiscal Impact Annual
State Expenditure Increase Indeterminate
Local Expenditure Increase Indeterminate
 The Office of Legislative Services (OLS) concludes that there would be a one-time expenditure
increase by the State for the first year to develop the Statewide farmland preservation formula
required by the bill. The State Agriculture Development Committee estimates a one-time
expenditure increase of between $500,000 and $1 million for a qualified appraisal firm to
develop this formula.
 The OLS determines the bill would result in an increase in the cost for the State and local
governments to purchase fee simple title to, and development easements on, farmland. The
OLS cannot quantify this estimated increase because it cannot predict how many development
easements or titles will be acquired and the cost of acquiring those easements and titles.
BILL DESCRIPTION
This bill would establish a new process for the determination of the value of farmland, and fee
simple titles to and development easements on farmland, to be acquired for farmland preservation
purposes by the State Agriculture Development Committee, a local government unit, or a
qualifying tax exempt nonprofit organization using, in whole or in part, constitutionally dedicated
Corporation Business Tax monies deposited into the Preserve New Jersey Farmland Preservation
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
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Fund, the Garden State Farmland Preservation Trust Fund, or any other State monies provided for
farmland preservation purposes. This process would be used in addition to the appraisal processes
in current law.
Under the bill, the committee would adopt a formula, to be known as the “Statewide Farmland
Preservation Formula,” that includes:
(a) conducting or analyzing a sufficient number of fair market value appraisals of agricultural
lands within the municipality in which the land is located, or the surrounding market area, or both;
(b) considering farmland and development easement values in counties and municipalities
reasonably contiguous to, but outside of, the municipality in which the land to be acquired is
located;
(c) considering the importance of preserving agricultural lands in the municipality and county
in which the land is located;
(d) considering the status and value of natural resources in the municipality and county in
which the land is located, and in counties and municipalities that are reasonably contiguous to, but
outside of, the municipality and county in which the land is located;
(e) considering such other relevant factors as may be necessary to increase participation in the
farmland preservation program by owners of agricultural lands located in the municipality and
county in which the land is located, including, but not limited to, the rate of inflation, the quality
of the agricultural soils, the size of the agricultural lands to be acquired, and the risk of conversion
of the land from productive agriculture to nonagricultural use; and
(f) providing additional value for the proximity of agricultural lands located adjacent to
preserved agricultural lands, lands preserved for recreation and conservation purposes, aquifer
recharge areas, lands subject to development or conservation easements, and lands whose
conversion to nonagricultural use would lead to conflicting land uses, including, but not limited
to, utility and roadway rights-of-way, military bases, and airports and associated airspace.
The State Agriculture Development Committee would be required adopt rules and regulations
to establish the Statewide Farmland Preservation Formula.
In addition, the bill would amend the Garden State Preservation Trust Act concerning how
value is to be calculated when the value of the farmland to be acquired is determined based upon
the value of any pinelands development credits allocated to the parcel pursuant to the Pinelands
Protection Act and the pinelands comprehensive management plan adopted pursuant thereto.
Under this bill, that value would include consideration of the rate of inflation.
A landowner would be provided with the values determined pursuant to these different
methods and the higher of the values would be used as the basis for negotiation with the landowner
with respect to the acquisition price.
FISCAL ANALYSIS
EXECUTIVE BRANCH
The OLS has not received a fiscal note from the Executive for this bill. However, the State
Agriculture Development Committee provided informal information to the OLS that the bill would
result in a one-time expenditure increase in order to develop the Statewide farmland preservation
formula. According to the committee, it would need to hire a qualified appraisal firm to assist in
the evaluation and development of the formula. The committee noted that it previously hired a
qualified appraisal firm to develop the Pinelands formula pursuant to the Garden State Preservation
Trust Act. The development of the formula would likely cost between $500,000 and $1 million
and would take up to a year to develop.
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The State Agriculture Development Committee also expects there would be an increase in the
cost of purchasing development easements or fee simple titles as a result of this bill. The
committee believes that the increase in values could range between 25 and 50 percent. It should
be noted that this is a very preliminary estimate, and the committee emphasized it would not know
the impact of the Statewide farmland preservation formula until it gets deep into the evaluation
process with the appraisal firm.
OFFICE OF LEGISLATIVE SERVICES
The OLS concludes that there will be a one-time expenditure increase by the State for the first
year to develop the Statewide farmland preservation formula required by the bill. As previously
noted, the State Agriculture Development Committee estimates there would be a one-time
expenditure increase of between $500,000 and $1 million to develop the formula by a qualified
appraisal firm. Also of note, the committee previously hired a qualified appraisal firm to develop
a Pinelands formula pursuant to the Garden State Preservation Trust Act.
The OLS determines the bill would result in an increase in the cost for the State and local
governments to purchase farmland for preservation purposes or to purchase a development
easement. The OLS notes that following the Statewide farmland preservation formula required by
the bill will increase the cost and time necessary for the State and local governments to perform
an appraisal, pursuant to the new formula, of farmland or an appraisal of a development easement
in order to offer a landowner a purchase price for the farmland or for the easement. However, the
OLS cannot quantify this estimated increase because it cannot predict how many development
easements will be acquired and how much farmland will be purchased and the cost of acquiring
the farmland or the easements.
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.).


Statutes affected:
Introduced: 13:8C-38, 13:8C-50