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Brousseau v. Millstone Township

March 10, 1997

WILLIAM AND FRANCES BROUSSEAU, PLAINTIFFS,
v.
MILLSTONE TOWNSHIP, DEFENDANT.



The opinion of the court was delivered by: Rimm

Opinion

This is a local property tax matter involving the recent amendments in N.J.S.A. 54:4-23.3 and N.J.S.A. 54:4-23.5 to the Farmland Assessment Act of 1964, N.J.S.A. 54:4-23.1 to -23.23, hereafter "the Act." The amendments were effective December 15, 1995. L. 1995, c. 276, § 9. The amendments have been variously referred to as the "horse-farm amendments," because, although they refer to "livestock" generally, they were essentially meant to benefit "the growing equine sector of agriculture" in New Jersey. Governor Whitman, Conditional Veto Message to Senate Bill 1746, September 28, 1995.

The property which is the subject of this litigation is designated as Block 39.01, Lot 14.01 on the tax map of defendant municipality, Millstone Township. For the tax year 1995, the property was assessed as follows:

Land $181,000

Improvements 147,000

Total $328,000.

The taxpayers were dissatisfied with the assessment, and they filed a petition of appeal with the Monmouth County Board of Taxation seeking a reduction. By a judgment dated June 21, 1995, the Monmouth County Board of Taxation affirmed the original assessment. The judgment also provides as follows: "Memorandum explaining basis for judgment: Farmland Denied For 1995 Boarding Horses." Plaintiffs then filed a timely complaint in the Tax Court challenging the assessment. *fn1

The subject property consists of a total of 13.06 acres. Plaintiffs concede that one acre is the curtilage on which their home is located and that it does not qualify for farmland assessment. They claim, however, that the remaining 12.06 acres are to be assessed as farmland. The 12.06 acres consist of eight acres of permanent pasture land; two acres used as a training area; and 2.06 acres of woodland, which the municipality has stipulated is appurtenant woodland. The two acres used for training have a riding rink, a dressage area, and a six-stall barn. As of October 1, 1994, the eight acres of permanent pasture were used for grazing horses.

There is no dispute between the parties as to the income requirements under N.J.S.A. 54:4-23.5 nor as to the required number of years of activity under N.J.S.A. 54:4-23.2. The sole issue in the case involves statutory interpretation.

Prior to its amendment in December 1995, N.J.S.A. 54:4-23.3 provided, in pertinent part as follows:

Land shall be deemed to be in agricultural use when devoted to the production for sale of plants and animals useful to man, including but not limited to; forages and sod crops; grains and feed crops; dairy animals and dairy products; poultry and poultry products; livestock, including beef cattle, sheep, swine, horses, ponies, mules or goats, including the breeding and grazing of any or all such animals ; bees and apiary products; fur animals; trees and forest products; . . . .

[Emphasis added.]

In pertinent part, N.J.S.A. 54:4-23.3 now provides as follows, with the amendment underlined:

Land shall be deemed to be in agricultural use when devoted to the production for sale of plants and animals useful to man, including but not limited to; forages and sod crops; grains and feed crops; dairy animals and dairy products; poultry and poultry products; livestock, including beef cattle, sheep, swine, horses, ponies, mules or goats, including the breeding, boarding, raising, rehabilitating, training or grazing of any or all of such animals, except that "livestock" shall not include dogs ; bees and apiary products; fur animals; trees and forest products; . . . .

Prior to the recent amendment, N.J.S.A. 54:4-23.5, in pertinent part, read as follows:

Land, five acres in area, shall be deemed to be actively devoted to agricultural or horticultural use when the gross sales of agricultural or horticultural products produced thereon together with any payments received under a soil conservation program have averaged at least $500.00 per year during the 2-year period immediately preceding the tax year in issue, or there is clear evidence of anticipated yearly gross sales and such payments amounting to at least $500.00 within a reasonable period of time.

In addition, where the land is more than five acres in area, it shall be deemed to be actively devoted to agricultural or horticultural use when the gross sales of agricultural or horticultural products produced on the area above five acres together with any payments received under a soil conservation program have averaged at least $5.00 per acre per year during the 2-year period immediately preceding the tax year in issue, or there is clear evidence of anticipated yearly gross sales and such payments amounting to an average of at least $5.00 per year within a reasonable period of time; . . . .

In pertinent part, N.J.S.A. 54:4-23.5 now provides as follows, with the amendment underlined:

Land, five acres in area, shall be deemed to be actively devoted to agricultural or horticultural use when the amount of the gross sales of agricultural or horticultural products produced thereon, any payments received under a soil conservation program, fees received for breeding, raising or grazing any livestock, income imputed to land used for grazing in the amount determined by the State Farmland Evaluation Advisory Committee created pursuant to section 20 of P.L.1964, c.48 (C. 54:4-23.20), and fees received for boarding, rehabilitating or training any livestock where the land under the boarding, rehabilitating or training facilities is contiguous to land which otherwise qualifies for valuation, assessment and taxation under this act, have averaged at least $500.00 per year during the 2-year period immediately preceding the tax year in issue, or there is clear evidence of anticipated yearly gross sales and such payments amounting to at least $500.00 within a reasonable period of time.

In addition, where the land is more than five acres in area, it shall be deemed to be actively devoted to agricultural or horticultural use when the amount of the gross sales of agricultural or horticultural products produced on the area above five acres, any payments received under a soil conservation program, fees received for breeding, raising or grazing any livestock, income imputed to land used for grazing in the amount determined by the State Farmland Evaluation Advisory Committee created pursuant to section 20 of P.L.1964, c.48 (C.54:4-23.20), and fees received for boarding, rehabilitating or training any livestock where the land under the boarding, rehabilitating or training facilities is contiguous to land which otherwise qualifies for valuation, assessment and taxation under this act, have averaged at least $5.00 per acre per year during the 2-year period immediately preceding the tax year in issue, or there is clear evidence of anticipated yearly gross sales and such payments amounting to an average of at least $5.00 per year within a reasonable period of time; . . . .

The legislation thereby amended the definition of "agricultural use" in N.J.S.A. 54:4-23.3 to include the "grazing" of livestock as an agricultural use by itself. The legislation also amended the income requirements of N.J.S.A. 54:4-23.5 which can now be satisfied by "fees received for boarding rehabilitating or training any livestock where the land under the boarding, rehabilitating or training facilities is contiguous to land which otherwise qualifies for valuation, assessment and taxation" as farmland.

The municipality asserts that plaintiffs are not entitled to farmland assessment qualification because their property is not "contiguous to land which otherwise qualifies for valuation, assessment and taxation under this Act," citing the current language of N.J.S.A. 54:4-23.5. The municipality interprets this language to mean that plaintiffs' entire property must be contiguous to land which would otherwise qualify for farmland assessment under the Act before its current amendments and which land is owned by plaintiffs. The municipality does not challenge plaintiffs' right to have their property assessed as farmland for any other reason.

The taxpayers, on the other hand, in support of their position that they are entitled to farmland assessment for the entire 12.06 acres, argue that the municipality's interpretation of the language on which it relies is not indicative of the legislative intent to provide tax relief to the owners of horse farms. They say that the statute does not mean that a horse farmer has to also own, and have contiguous to the area claimed to be a horse farm, at least another five acres actively devoted to agricultural or horticultural use as defined before the horse-farm amendments. They also argue that the eight acres used for grazing horses as of October 1, 1994, and which they characterize as permanent pasture, qualify on their own for farmland assessment under the recent amendments to the Act. In plaintiffs' view, because the two-acre area used for training and boarding horses is contiguous to the eight acres of pasture land, the two-acre area also qualifies for farmland assessment under the amended versions of N.J.S.A. 54:4-23.3 and N.J.S.A. 54:4-23.5. Plaintiffs also submit that the remaining 2.06 acres qualify as appurtenant woodland by the municipality's stipulation.

Prior to the December 15, 1995 amendments of the Act, the grazing of horses for a fee did not qualify as an agricultural use for purposes of farmland assessment. Dowd v. Howell Tp., 15 N.J. Tax 720 (App. Div. 1996). In Dowd, the plaintiff taxpayer sought farmland qualification for his property under the version of N.J.S.A. 54:4-23.3 that was in effect prior to December 15, 1995, contending that, grazing horses for a fee met the statute's definition of "agricultural use." Rejecting that argument and denying farmland ...


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