NY State Senate Bill 2015-S4091

Senate Bill S4091

2015-2016 Legislative Session

Establishes, in the department of agriculture and markets, the matching enterprise grants for agriculture program to provide moneys to new farmers

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Archive: Last Bill Status - In Senate Committee Agriculture Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Actions

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 06, 2016	referred to agriculture
Jun 02, 2015	reported and committed to finance
Feb 26, 2015	referred to agriculture

Votes

- Jun 2, 2015 - Agriculture Committee Vote
  S4091
  
  13
  
  Aye
  
  0
  
  Nay
  
  0
  
  Aye with Reservations
  
  0
  
  Absent
  
  0
  
  Excused
  
  0
  
  Abstained
  - - Agriculture Committee Vote: Jun 2, 2015
      
      aye (13)
      
      Comrie
      
      Funke
      
      Gallivan
      
      Hamilton
      
      Montgomery
      
      O'Mara
      
      Panepinto
      
      Ranzenhofer
      
      Ritchie
      
      Serrano
      
      Seward
      
      Valesky
      
      Young

co-Sponsors

2015-S4091 (ACTIVE) - Details

Current Committee:: Senate Agriculture
Law Section:: Agriculture and Markets Law
Laws Affected:: Add §325-b, Ag & Mkts L; add §220-b, County L; amd §1405, Ins L; amd §1503, Tax L

2015-S4091 (ACTIVE) - Summary

Establishes, in the department of agriculture and markets, a matching enterprise grants for agriculture program to provide moneys to new farmers; provides a tax incentive to domestic life insurance companies to invest up to 1% of admitted assets in the purchase of agricultural land to be kept in agricultural production, which land is subject to a conservation easement and receives or is eligible to receive an agricultural assessment.

2015-S4091 (ACTIVE) - Sponsor Memo

                                BILL NUMBER:S4091

TITLE OF BILL:

An  act  to amend the agriculture and markets law, in relation to estab-
lishing the matching enterprise grants for agriculture program;  and  to
amend  the county law, the insurance law and the tax law, in relation to
providing an incentive to domestic life insurance companies to invest in
the purchase of agricultural land to be kept in agricultural production

Purpose:

To encourage the proliferation of small and traditional private  farming
enterprises by establishing a matching grant program for beginning farm-
ers  and  establishing an income tax deduction for life insurance compa-
nies that lend money to agricultural producers.

Summary of Provisions:

Section 1: Adds new section 325-b to the Agriculture and Markets Law  to
establish  a matching grant program within the Department of Agriculture
and Markets to be used for the purchase of equipment, structures,  live-
stock,  and  other  items  necessary  for the running of a farm. Defines
eligible farmers as those who own or have a long term lease (at least  5
years) upon a parcel of land of at least five acres where they engage in
agricultural  production  on at least a half-time basis and have done so

for at least one year but less than five.   Empowers the  Department  of
Agriculture and Markets to create guidelines and requirements for solic-
iting  grant  proposals  and  awarding  grants  and limits grants to not
exceed $10,000.

Section 2: Adds new section 220-b to the county law to offer a conserva-
tion easement, as defined under title three of article 49 of  the  envi-
ronmental conservation law, for property that is engaged in producing or
processing agricultural products.

Section  3:  Amends paragraph 3 of subsection (a) of section 1405 of the
insurance law to allow life insurers to invest  up  to  one  percent  of
admitted assets in obligations subject to the provisions of paragraph 17
subdivision (b) of section 1503 of the tax law.

Section  4:  Amends  subdivision  (b)  of section 1503 of the tax law to
allow the exclusion from taxable income of 30% of interest received by a
taxpayer on loans used to purchase or by people who have  purchased  not
more  than 50 acres of land which is Used in agricultural production. In
the event that the loan applies to more  than  50  acres  of  land,  the
deduction  will  apply  only to that ratio of the interest paid which is
equal to the ratio between 50 acres and the  total  area  of  land  upon
which interest is paid. Requires the land to be eligible for an agricul-
tural  assessment as well as subject to a conservation easement. Defines
the terms "agricultural assessment," "agricultural products," and  "land
used in agricultural production."

Section  5:  Allows  the  act  to  take  effect immediately, and applies
sections two, three, and four to taxable years  beginning  on  or  after
January 1 of the year in which the act shall have become law.

Justification:

Agriculture has traditionally been a leading industry in New York State,
and  continues  to be one of the largest sectors of the state's economy.
The value of agricultural  production  in  2012  was  over  5.7  billion
dollars,  and  the state Department of Agriculture and Markets estimates
that 23 percent of the state's land area, some 7 million acres, is  used
for  agricultural purposes. New York is also one of the largest agricul-
tural producers in the nation, ranking among  the  top  five  states  in
producing milk, apples, cherries, pears, sweet corn, onions, snap beans,
tomatoes,  pumpkins,  cucumbers, squash, cauliflower, and maple syrup in
2012.

Agriculture is also a valuable engine of economic  development  for  New
York  State.  For  many upstate areas, it is the single largest industry
and is critical to the community and  economic  health  of  the  region.
Furthermore,  New York City's large population necessitates a comparably
large need for agricultural products, meaning that New  York  farms  are
adjacent  to  one  of  the  largest  purchasers of their products on the
continent. To top this off, investment in  farms  is  one  of  the  most
stable  investments  in  economic development that the state can make; a
farmer will not pack up their business and  go  off  shore  for  cheaper
labor  or  tax incentives, and farmers cannot move their land to another
state. While there are some challenges to farming in NY there  are  also
some  real  advantages  like readily accessible water and proximity to a
huge food consuming population.

Large initial capital costs associated with the purchase of land, equip-
ment, and infrastructure required  to  open  or  expand  a  commercially
viable  farm  are  a  powerful  deterrent for young people interested in
agriculture, however. This has lead to a decline in the number of new or
family-operated farms, orchards, and vineyards operating throughout  the
state.  The long-term trend has been toward fewer, larger farms as aging
farmers pass away and retire, while fewer young people enter the  indus-
try  to  replace them. This can be seen in the average age of farmers in
New York State, which is now 57 years old, up from 56 last  year.  There
are two farmers aged 65 and older for every one under 35.

To  further  complicate  matters,  commercial  banks and Federal Housing
Administration loans had been the primary financing mechanisms  used  to
purchase  farm  land.  However, they have generally left the business of
lending money to farm operations, and it has become  substantially  more
difficult  for  farmers  to  get loans to buy the land and other capital
equipment that they need to start or expand a farm.

To address these issues, the  Agriculture  Resurgency  Program  takes  a
two-pronged approach. First is the creation of a matching grant fund for
young  and  beginning farmers. Those who own or lease five acres or more

of land and have been in operation for at least one year but  less  than
five  can  apply for matching funds of up to $10,000 for the purchase of
equipment, infrastructure, or buildings which are necessary for  a  farm
to  be  economically  viable. In doing so, the state will help alleviate
some of the high start-up capital costs  that  currently  disincentivize
people from entering the agricultural industry.

The  second  is to leverage private funding for the purchase of farmland
by incentivizing insurers to lend  to  farmers  and  potential  farmers.
Many  of  the farming-rich Midwest states have long adopted this stance,
and by allowing insurers a small tax deduction on loan interest received
from farmland loans, the State can follow their lead and  encourage  the
commercial  availability  of these loans. Further, once money is lent by
the insurer to the new farming operation, the  land  purchased  by  that
loan must remain in agriculture pursuant to a conservation easement that
is  filed  in the county clerk's office. Hence, these agricultural lands
must remain in agriculture as a condition on the continued  use  of  the
land in the future.

Legislative History:

New bill.

Fiscal Implications:

New  York  State  would  budget  $500,000 annually to the matching grant
program administered through the Department of Agriculture and  Markets.
The  loan  encouragement  program  would  have  an  impact on income tax
collected from life insurance providers.

Effective Date:

This bill shall take effect immediately. Sections two, three,  and  four
shall apply to taxable years beginning on or after January 1 of the year
in  which  this  act  shall  have  become law, provided that any and all
rules, regulations, and other measures necessary to implement  it  shall
be  promulgated  immediately,  and, if deemed necessary, on an emergency
basis.

2015-S4091 (ACTIVE) - Bill Text download pdf

                            
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  4091

                       2015-2016 Regular Sessions

                            I N  S E N A T E

                            February 26, 2015
                               ___________

Introduced  by  Sens.  VALESKY,  AVELLA, CARLUCCI, KLEIN, SAVINO -- read
  twice and ordered printed, and when printed to  be  committed  to  the
  Committee on Agriculture

AN  ACT  to amend the agriculture and markets law, in relation to estab-
  lishing the matching enterprise grants for agriculture program; and to
  amend the county law, the insurance law and the tax law,  in  relation
  to  providing  an  incentive  to  domestic life insurance companies to
  invest in the purchase of agricultural land to be kept in agricultural
  production

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section  1. The agriculture and markets law is amended by adding a new
section 325-b to read as follows:
  S 325-B. MATCHING ENTERPRISE GRANTS FOR AGRICULTURE. 1. THERE SHALL BE
ESTABLISHED IN THE DEPARTMENT A MATCHING ENTERPRISE GRANTS FOR  AGRICUL-
TURE  PROGRAM,  UNDER  WHICH  MATCHING GRANTS SHALL BE MADE AVAILABLE TO
ELIGIBLE FARMERS FOR THE PURCHASE OF  EQUIPMENT,  STRUCTURES,  LIVESTOCK
AND  OTHER  PERSONAL PROPERTY TO BE USED FOR THE AGRICULTURAL PRODUCTION
ACTIVITIES CONDUCTED BY SUCH FARMER.
  2. FOR THE PURPOSES OF THIS SECTION, AN "ELIGIBLE FARMER" SHALL  BE  A
PERSON  WHO  OWNS OR HAS A LONG TERM LEASE FOR, FOR A PERIOD OF NOT LESS
THAN FIVE YEARS, A PARCEL OF NOT LESS THAN FIVE ACRES OF LAND WITHIN THE
STATE, USED IN AGRICULTURAL  PRODUCTION,  AND  SUCH  PERSON  SHALL  HAVE
ENGAGED  IN  FARMING AND AGRICULTURAL PRODUCTION ON AT LEAST A HALF-TIME
BASIS UPON SUCH PARCEL OF LAND FOR NOT LESS THAN ONE YEAR, NOR MORE THAN
FIVE YEARS.
  3. GRANTS SHALL BE MADE AVAILABLE TO ELIGIBLE FARMERS UPON APPLICATION
TO THE DEPARTMENT BASED UPON SUCH REQUIREMENTS  AND  PRIORITIES  AS  THE
DEPARTMENT  SHALL  ESTABLISH FOR THE AWARDING OF GRANTS PURSUANT TO THIS
SECTION. THE DEPARTMENT SHALL REQUIRE THAT APPLICANTS FOR GRANTS PROVIDE
MATCHING FUNDS, WHICH ARE HELD BY THE ELIGIBLE FARMER, AND  NOT  INCLUDE

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD09173-02-5

S. 4091                             2

FUNDS  FROM ANY OTHER GRANT OR AWARD.  NO GRANT AWARDED TO AN INDIVIDUAL
ELIGIBLE FARMER PURSUANT TO  THIS  SECTION  SHALL  EXCEED  TEN  THOUSAND
DOLLARS.
  4. THE DEPARTMENT SHALL PROMULGATE SUCH RULES AND REGULATIONS AS SHALL
BE NECESSARY TO IMPLEMENT THE PROVISIONS OF THIS SECTION.
  S  2.  The county law is amended by adding a new section 220-b to read
as follows:
  S 220-B. CONSERVATION EASEMENTS IN CONNECTION WITH CERTAIN  LAND  USED
IN  AGRICULTURAL  PRODUCTION.    1.    NOTWITHSTANDING THE PROVISIONS OF
SUBDIVISION (B) OF SECTION TWO OF THIS CHAPTER, THE BOARD OF SUPERVISORS
OR COUNTY LEGISLATURE OF EVERY COUNTY  SHALL,  UPON  APPLICATION  FOR  A
CONSERVATION  EASEMENT  FILED WITH SUCH COUNTY, FOR PROPERTY WITHIN SUCH
COUNTY, NOT MORE THAN SIX MONTHS PRIOR TO THE CLOSE OF THE TAXABLE  YEAR
OR  THE YEAR NEXT SUCCEEDING SUCH YEAR, FOR WHICH A DEDUCTION IS OR WILL
BE SOUGHT TO BE CLAIMED BY A TAXPAYER PURSUANT TO PARAGRAPH SEVENTEEN OF
SUBDIVISION (B) OF SECTION FIFTEEN HUNDRED THREE OF THE TAX LAW,  ACCEPT
SUCH  APPLICATION  AND  OFFER  TO  PERMIT  A NOT-FOR-PROFIT CONSERVATION
ORGANIZATION OR PUBLIC BODY WITHIN SUCH COUNTY, WITHIN  WHOSE  TERRITORY
THE  SUBJECT  PROPERTY  IS  LOCATED,  OTHER THAN THE STATE, TO ACCEPT OR
UNDERTAKE TO ACCEPT A  CONSERVATION  EASEMENT  IN  CONNECTION  WITH  THE
ADMINISTRATION  OF  PARAGRAPH  SEVENTEEN  OF  SUBDIVISION (B) OF SECTION
FIFTEEN HUNDRED  THREE  OF  THE  TAX  LAW,  PERTAINING  TO  AGRICULTURAL
PRODUCTS  PRODUCED  OR  PROCESSED ON LAND IN AGRICULTURAL PRODUCTION AND
RECEIVING OR ELIGIBLE TO RECEIVE AN AGRICULTURAL ASSESSMENT.
  2. IN THE EVENT THAT AN APPLICATION FOR  A  CONSERVATION  EASEMENT  IS
SUBMITTED  TO  A  COUNTY LESS THAN SIX MONTHS PRIOR TO THE CLOSE OF SUCH
TAXPAYER'S TAXABLE YEAR, THE SIX-MONTH PERIOD PROVIDED FOR  IN  SUBDIVI-
SION  ONE  OF  THIS  SECTION  FOR  THE COUNTY TO SECURE A NOT-FOR-PROFIT
CONSERVATION ORGANIZATION OR PUBLIC  BODY  WITHIN  SUCH  COUNTY,  WITHIN
WHOSE  TERRITORY  THE SUBJECT PROPERTY IS LOCATED, OTHER THAN THE STATE,
TO TAKE AND ACCEPT SUCH CONSERVATION EASEMENT OR FOR THE  COUNTY  ITSELF
TO DO SO, SHALL APPLY AND RUN FROM THE DATE OF THE FILING OF SUCH APPLI-
CATION, AND THE CONSERVATION EASEMENT, IF TAKEN AND ACCEPTED WITHIN SUCH
LATTER SIX-MONTH PERIOD, SHALL BE DEEMED TO MEET THE REQUIREMENT FOR TAX
DEDUCTIBILITY  PURSUANT  TO  SAID  PROVISIONS OF SECTION FIFTEEN HUNDRED
THREE OF THE TAX LAW WITH RESPECT TO THE TIMELINESS OF  THE  APPLICATION
FOR AND TAKING AND ACCEPTING OF SUCH CONSERVATION EASEMENT.
  3.  FOR THE PURPOSES OF THIS SECTION, THE TERM "CONSERVATION EASEMENT"
HAS THE MEANING THEREOF WITHIN THE CONTEMPLATION OF TITLE THREE OF ARTI-
CLE FORTY-NINE OF THE ENVIRONMENTAL CONSERVATION LAW.
  S 3. Paragraph 3 of subsection (a) of section 1405  of  the  insurance
law is amended to read as follows:
  (3)  Obligations  secured  by  real property or interests therein. (A)
Obligations, or participations therein, secured by liens on real proper-
ty or interests therein located within the United States and not  eligi-
ble  under  paragraph  one  or  two of this subsection, provided that no
insurer making investments under the authority  of  this  section  shall
invest  in  or  loan  upon  the  security of any one property, under the
authority of this paragraph, more than thirty thousand  dollars  or  two
percent of admitted assets, whichever is the greater.
  (B)  NOTWITHSTANDING  ANY  PROVISION OF SUBPARAGRAPH (A) OF THIS PARA-
GRAPH TO THE CONTRARY, A DOMESTIC LIFE INSURER  MAY  INVEST  UP  TO  ONE
PERCENT  OF ITS ADMITTED ASSETS IN OBLIGATIONS SUBJECT TO THE PROVISIONS
OF PARAGRAPH SEVENTEEN OF SUBDIVISION (B)  OF  SECTION  FIFTEEN  HUNDRED
THREE OF THE TAX LAW.

S. 4091                             3

  S  4.  Subdivision  (b)  of  section 1503 of the tax law is amended by
adding a new paragraph 17 to read as follows:
  (17) ENTIRE NET INCOME SHALL NOT INCLUDE:
  (A)  THIRTY  PERCENT  OF INTEREST RECEIVED BY A TAXPAYER AS PAYMENT TO
THE TAXPAYER ON ACCOUNT OF INDEBTEDNESS INCURRED TO THE TAXPAYER FOR THE
PURCHASE OF, AND BY A PERSON WHO HAS PURCHASED:
  (I) FOR NOT MORE THAN FIFTY ACRES OF ONE OR MORE CONTIGUOUS PARCELS OF
LAND, WHICH LAND IS USED IN AGRICULTURAL PRODUCTION OR HAS BEEN IN AGRI-
CULTURAL PRODUCTION WITHIN THE PAST FIVE YEARS IN THE TAXPAYER'S TAXABLE
YEAR OF THE INCURRENCE OF SUCH INDEBTEDNESS OR THE YEAR NEXT  SUCCEEDING
SUCH YEAR.  IN THE EVENT SUCH INTEREST PAID IS FOR MORE THAN FIFTY ACRES
OF LAND, THE PROVISIONS OF THIS PARAGRAPH SHALL APPLY ONLY TO THAT RATIO
OF THE INTEREST PAID WHICH IS EQUAL TO THE RATIO BETWEEN FIFTY ACRES AND
THE TOTAL AREA OF LAND UPON WHICH THE INTEREST IS PAID;
  (II)  WHICH LAND HAS OR IS ELIGIBLE TO HAVE AN AGRICULTURAL ASSESSMENT
IN THE TAXPAYER'S TAXABLE YEAR OF THE INCURRENCE OF SUCH INDEBTEDNESS OR
THE YEAR NEXT SUCCEEDING SUCH YEAR;
  (III) WHICH LAND IS USED OR HAS BEEN USED IN THE PAST FIVE  YEARS  FOR
THE  CULTIVATION OF AGRICULTURAL PRODUCTS IN THE TAXPAYER'S TAXABLE YEAR
OF THE INCURRENCE OF SUCH INDEBTEDNESS OR THE YEAR NEXT SUCCEEDING  SUCH
YEAR; AND
  (IV)  WHICH LAND IS SUBJECT TO A CONSERVATION EASEMENT THAT LIMITS THE
USE OF SUCH LAND TO AGRICULTURAL PRODUCTION, WHICH CONSERVATION EASEMENT
IS IN COMPLIANCE WITH TITLE THREE OF ARTICLE FORTY-NINE OF THE  ENVIRON-
MENTAL  CONSERVATION  LAW AND SECTION TWO HUNDRED TWENTY-B OF THE COUNTY
LAW IN THE TAXPAYER'S TAXABLE YEAR OF THE  INCURRENCE  OF  SUCH  INDEBT-
EDNESS OR THE YEAR NEXT SUCCEEDING SUCH YEAR.
  (B)  FOR  THE PURPOSES OF THIS PARAGRAPH, THE FOLLOWING TERMS HAVE THE
FOLLOWING MEANINGS:
  (I) "AGRICULTURAL ASSESSMENT" HAS THE MEANING  THAT  IT  HAS  FOR  THE
PURPOSES OF ARTICLE TWENTY-FIVE-AA OF THE AGRICULTURE AND MARKETS LAW.
  (II) "AGRICULTURAL PRODUCTS" HAVE THE MEANINGS DEFINED THEREFOR BY THE
COMMISSIONER  OF  AGRICULTURE AND MARKETS IN REGULATIONS PROMULGATED FOR
THE PURPOSES OF THIS PARAGRAPH.
  (III) "LAND USED IN AGRICULTURAL PRODUCTION" HAS THE  MEANING  DEFINED
THEREFOR IN ARTICLE TWENTY-FIVE-AA OF THE AGRICULTURE AND MARKETS LAW.
  S  5.  This act shall take effect immediately, and sections two, three
and four of this act shall apply to taxable years beginning on or  after
January  first  of  the  year in which this act shall have become a law;
provided that any and all rules and regulations and any  other  measures
necessary  to  implement  any provision of this act shall be promulgated
and taken, respectively, immediately and, if  deemed  necessary,  on  an
emergency basis.

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Senate Bill S4091

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Sponsored By

David J. Valesky

Archive: Last Bill Status - In Senate Committee Agriculture Committee

co-Sponsors

Tony Avella

David Carlucci

Jeffrey D. Klein

Diane J. Savino

2015-S4091 (ACTIVE) - Details

2015-S4091 (ACTIVE) - Summary

2015-S4091 (ACTIVE) - Sponsor Memo

2015-S4091 (ACTIVE) - Bill Text download pdf

Comments