Assembly Commerce, Economic Development and Agriculture Committee Statement to Assembly, No. 4229 (June 3, 2024)

Summary

Assembly Commerce, Economic Development and Agriculture Committee statement to Assembly, No. 4229, with committee amendments, State of New Jersey, dated June 3, 2024. The committee reports favorably and with committee amendments Assembly Bill No. 4229, which as amended would require the New Jersey Economic Development Authority (NJEDA), in consultation with the Department of Agriculture, to develop and administer a beginning farmer loan program. The statement says the program would facilitate acquisitions of agricultural land, agricultural improvements or depreciable agricultural property by beginning farmers, under loan agreements with the NJEDA. The committee amendments require the NJEDA to establish by rule or regulation the maximum net worth for “low or moderate net worth.”

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ASSEMBLY COMMERCE, ECONOMIC DEVELOPMENT AND
           AGRICULTURE COMMITTEE

                           STATEMENT TO

                      ASSEMBLY, No. 4229
                          with committee amendments



       STATE OF NEW JERSEY
                              DATED: JUNE 3, 2024

           The Assembly Commerce, Economic Development and
      Agriculture Committee reports favorably, and with committee
      amendments, Assembly Bill No. 4229.
           As amended by the committee, this bill would require the New
      Jersey Economic Development Authority (NJEDA), in consultation
      with the Department of Agriculture, to develop and administer a
      beginning farmer loan program to facilitate the acquisition, by
      beginning farmers, of agricultural land or agricultural improvements
      (i.e., improvements, buildings, structures, or fixtures that are suitable
      for use in farming and located on agricultural land), or of depreciable
      agricultural property (i.e., personal property that is suitable for use in
      farming and for which an income tax deduction for depreciation is
      allowable under federal law). Under the bill, a “beginning farmer” is
      defined as a person with a low or moderate net worth, as determined
      by the NJEDA, who wishes to engage in farming and has never farmed
      before, who has engaged in farming in the State for 10 years or less as
      of the effective date of this act, or who qualifies as a first-time farmer
      pursuant to 26 U.S.C. s.147(c)(2).
           To qualify for and receive a loan under the beginning farmer loan
      program, an applicant would need to:
           (1) establish that the applicant is a beginning farmer, as defined in
      the bill, and is a material and substantial participant in farming
      activities;
           (2) be a resident of the State;
           (3) propose to use the loan moneys to engage in the purchase of
      agricultural land, agricultural improvements, or depreciable
      agricultural property located in the State;
           (4) have sufficient education, training, or experience to engage in
      the type of farming for which the loan is sought;
           (5) if the loan is for the acquisition of agricultural land, have
      access to adequate working capital, farm equipment, machinery, or
      livestock;
           (6) if the loan is for the acquisition of depreciable agricultural
      property, have access to adequate working capital or agricultural land;
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    (7) use the agricultural land, agricultural improvements, and
depreciable agricultural property purchased with the loan moneys only
for farming activities conducted by, or under the direction of, the
beginning farmer; and
    (8) satisfy any other criteria established by the authority.
    The bill requires that an NJEDA-approved loan to a beginning
farmer be issued pursuant to a loan agreement executed between the
beginning farmer and the NJEDA. The loan agreement is to provide
for the loan to bear interest at rates and terms deemed appropriate by
the NJEDA, and may contain any other terms and conditions deemed
by the NJEDA to be appropriate for the bill’s purposes. The authority
would further be authorized, either by regulation or through the terms
of the loan agreement, to establish terms governing the incidence of
default by a beginning farmer loan recipient. The bill also authorizes
the NJEDA, at any time, to require a beginning farmer loan recipient
to submit an audited financial statement in order to ensure the
beginning farmer’s continued viability. Lastly, the bill authorizes the
NJEDA to participate in, or cooperate with, programs operated by the
United States Department of Agriculture Consolidated Farm Service
Agency, the Federal Land Bank, or any other federal or State agency,
for the purposes of administering the beginning farmer loan program.

COMMITTEE AMENDMENTS:
    The committee amended the bill to:
    (1) clarify that, in order to be eligible to receive a loan under the
beginning farmer loan program, an applicant must first establish their
status as a beginning farmer, as defined by the bill;
    (2) revise the definition of “beginning farmer” to mean a person
with a low or moderate net worth, as determined by the NJEDA, who
wishes to engage in farming and has never farmed before, who has
engaged in farming in the State for 10 years or less as of the effective
date of this act, or who qualifies as a first-time farmer pursuant to 26
U.S.C. s.147(c)(2);
    (3) delete the existing definition of “low or moderate net worth,”
which provided for the term to be defined pursuant to Department of
Agriculture rule or regulation, and, instead, require the NJEDA to
establish, by rule or regulation, the maximum net worth that may be
used to establish that a person has “low or moderate net worth,” as
necessary to qualify as a “beginning farmer” under the bill’s
provisions;
    (4) insert a new definition of “beginning farmer loan program”;
and
    (5) make other technical changes to ensure clarity.


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