On appeal from the Tax Court of New Jersey.
Milmed, Morton I. Greenberg and Furman. The opinion of the court was delivered by Milmed, P.J.A.D.
The single issue involved in this appeal is whether 39.45 acres of respondent's land in the Borough of Mountain Lakes (borough) was actively devoted to agricultural or horticultural use during the entire period of the calendar years 1976 and 1977 and thus eligible for farmland assessment for 1978 under the Farmland Assessment Act of 1964, N.J.S.A. 54:4-23.1 et seq. The borough denied respondent's application for farmland assessment for the tax year 1978 and assessed the land at $235,400.*fn1 On respondent's appeal to the Morris County Board of Taxation, that assessment was affirmed. Respondent's further appeal to the former Division of Tax Appeals was heard by the Division's successor, the Tax Court. The judge of the Tax Court who presided at the hearing determined that the land qualified for farmland assessment. Judgment was thereafter entered revising the land assessment downward to $900. The borough appeals. We reverse and remand for reinstatement of the initial assessment.
When respondent purchased 37 acres of the tract in 1965*fn2 the property was situated in a single-family residence zone. As a result of zoning changes, the land is now located partially in an economic development zone and partially in a residence zone. Throughout respondent's ownership of the property, forestry operations thereon were not a permitted use under the terms of the local zoning ordinance. Nonetheless, on May 1, 1975 respondent
entered into a forest management agreement with Eastern Forestry Service, Inc. (Eastern). The agreement, which was to remain in effect for ten years, provided for Eastern to implement and supervise a program for the development and marketing of timber on the property. The consulting forester for Eastern testified at the Tax Court hearing that in 1975 he made a survey of the property,
Through the efforts of the consulting forester, respondent, on January 31, 1976, entered into a contract with Circle Corporation of Newfoundland, Pennsylvania, (Circle) under which Circle paid respondent $2,600 for the right to cut and remove approximately 75,000 board feet of the timber that had been marked for sale. Early in February 1976 Circle began a logging operation on part of the property and began removing trees. During the same month the consulting forester marked trees on ten acres of the property which had been designated for a "silviculture" timber stand improvement project. The logging operation lasted 12 days. It was stopped as an unpermitted use by order of the borough manager on February 24, 1976. The order remained in effect until modified on March 18, 1977 when the borough manager informed the consulting forester that the borough had no objection to respondent's "proceeding with the silvicultural phase" of its program, i.e., the "felling [of] diseased and poorly-formed trees in [the] area, leaving standing approximately 100 trees per acre." Eastern was to notify the borough when this work was completed.
While the stop order remained in effect, no active forestry activities took place on the property. Eastern's consulting forester testified:
The only forestry related activity which occurred on the property while the stop order was in effect was an on-site inspection in August 1976 by a state forester and Eastern's consulting forester, during which the state official approved the ten-acre timber stand improvement project. Additionally, the consulting forester designated about four separate acres for reseeding. In October 1976 respondent applied to the United States Department of Agriculture for cost-sharing assistance in connection with the silviculture activities to be completed on the ten-acre parcel. The application was approved and respondent received $200 in cost-sharing funds. In 1977, 4,000 seedlings were planted over an area of about 5.2 acres and a second application for cost-sharing was filed in connection with another six-acre tract for timber stand improvement. Also in 1977, from 10 to 16 acres of the 39.45-acre tract were thinned in accordance with the silvicultural program, and respondent applied for and obtained certification of the tract "as a tree farm under the New Jersey tree farm system for the growing of timber as a crop."
After concluding that respondent had established its eligibility for farmland assessment for 1978, the judge of the Tax Court who heard the matter commented that he "need not consider the logging operation and the effect of the stop order on plaintiff's claim for farmland assessment." Later on in his letter opinion he properly observed:
The borough correctly contends that it had the authority to prohibit forestry operations entirely on plaintiff's [respondent's] property. Kinnelon v. South Gate Associates, 172 N.J. Super. 216 (App.Div.1980).*fn3
He nonetheless concluded that
The valuation, assessment and taxation of land under the Farmland Assessment Act of 1964 (the act), N.J.S.A. 54:4-23.1 et seq., is governed by the specific terms of that legislation, the rules and regulations promulgated pursuant thereto by the Director of the Division of Taxation (Director), N.J.A.C. 18:15-1.1 et seq., see N.J.S.A. 54:4-23.21, and the enabling constitutional amendment pursuant to which the legislation was enacted. N.J. Const. (1947) Art. VIII, § I, par. 1, as amended. Thus, by the clear terms of the constitutional amendment, the legislation and the Director's regulations, the qualifying land must, in the first instance: (1) be "actively devoted to agricultural or horticultural use" and (2) have "been so devoted for at least the 2 successive years ...