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

Summary

An Assembly Commerce, Economic Development and Agriculture Committee statement to Assembly, No. 4229, State of New Jersey, dated June 3, 2024, reporting the bill favorably with committee amendments. The bill would require the New Jersey Economic Development Authority, in consultation with the Department of Agriculture, to develop and administer a beginning farmer loan program for buying agricultural land, improvements or depreciable agricultural property. A "beginning farmer" is defined as a person with a low or moderate net worth who has never farmed, has farmed in the State for 10 years or less, or qualifies as a first-time farmer under federal law. Loans would be issued under loan agreements with interest at rates and terms the NJEDA deems appropriate.

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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;

(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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