New Jersey/In the Region - Weeding Out "Fake Farmers" - NYTimes.com THOSE selling freshly laid eggs, organic herbs, Christmas trees, or any other homegrown products in New Jersey may soon have to redouble their efforts if they want to protect the drastically reduced property taxes they pay by using their land for farming. Last month a State Senate panel approved legislation that would raise the bar for farm operators who sought to qualify for a farmland tax exemption. The new minimum gross income that a farmer would have to earn selling products for the first five acres would be $1,000 a year - twice the previous threshold. For each additional acre the amount in sales remains at $5. The bill, now before the Budget and Appropriations Committee, also stipulates more training for tax assessors and recommends the development of guidelines on what constitutes a farm. The new standards come in response to persistent public assertions that the state's Farmland Assessment Program, which began in 1964, has become more of a tax shelter for wealthy individuals and corporations than a means to preserve farmland. "Over time, what's happened is that people recognized what an amazing tax discount the farm assessment provided," said Senator Jennifer Beck, a Republican from Red Bank who is sponsoring the bill. And they began to use it to skirt having to pay property tax. The abuse started to take over the program, and it became clear there were an awful lot of fake farmers. The farm tax discount, which can run as high as 98 percent, applies to lands being farmed and not to houses, barns, pools or sheds on one's property. Some of New Jersey's best-known residents are included among those frequently cited as "fake farmers": Jon Bon Jovi, who raises honeybees on his Middletown property; Bruce Springsteen, who leases part of his Colts Neck land to an organic farmer; the publisher Malcolm Forbes Jr., who raises cattle on 450 acres in Bedminster; and Jon Runyan, the former N.F.L. star and a freshman Republican congressman who raises miniature donkeys and sells firewood off his 23-acre Mount Laurel estate. Worse yet, said Jeff Tittel, the director of the New Jersey chapter of the Sierra Club, are the developers and corporations that own large tracts on which some level of agricultural activity makes them eligible for the farmland tax exemption. "The biggest farmers in New Jersey are developers," said Mr. Tittel, who doesn't support the new bill because he doesn't think it goes far enough. They buy property during a bust for a low price, then they use the Farmland Assessment to land-bank it, sitting on it until the next boom, when they can build. New Jersey's Farmland Assessment Act penalizes properties that no longer qualify as farmland, requiring owners to pay the market-rate tax for the year a property becomes ineligible, as well as for the two previous years. Some states have stiffer penalties in such cases; in Pennsylvania, for instance, back taxes plus interest must be paid on the previous seven years. Other states require higher revenue thresholds and bigger tracts to qualify for farm tax rates: in New York, qualifying farmers must earn $10,000 per seven acres. Senator Beck said changing the minimum size of a farm and the rollback provisions in New Jersey would require a voter referendum. Brian Schilling, a specialist in agricultural policy at Rutgers Cooperative Extension, is unequivocal in his support of a tax differential system for farmers. "Without farmland assessment," he said, "we wouldn't have any viable agricultural activity in this state." But he acknowledged that "enforcement of the law is not always as rigid as it could be." The state Division of Taxation offers local tax assessors a handbook and seminars on the Farmland Assessment program, but better guidelines would be welcome, said Patricia Wright, who oversees the program. "The Department of Agriculture could give more guidance on what is or is not a farm," said Ms. Wright, a property tax administrator with the tax division, "but it needs to come from them. They are the farmers; we are the tax people. New Jersey has about 982,000 acres of farmland, according to Ms. Wright, who added that 10 years ago it had 1.1 million. In a 2008 study, Mr. Schilling's department looked at the potential impact of raising the revenue threshold on state farmlands and local tax coffers. A $10,000 threshold would remove about 398,000 acres of farmland from eligibility for the farmland assessment, while raising $51 million in new taxes. A $1,000 minimum would make 47,378 acres ineligible, while adding $2 million in taxes. But Mr. Schilling noted that imposing the $1,000 threshold wouldn't mean losing as much farmland as those numbers suggest, because "I fully would expect every landowner to find every way possible to increase productivity to generate $1,000 and meet the new threshold." According to Richard Motyka, a tax assessor in seven towns in Warren and Passaic Counties, doubling the threshold will not present much of a challenge for those currently eligible for the exemption. "Going from $500 to $1,000?" he said. That's just a stroke of a pen. It's not very hard to buy a book of receipts. Over the years, Mr. Motyka has challenged many who have claimed to be running farm operations, only to lose most of his challenges in court. "I'm a little jaded," he said. I just sign off on them unless you're outright doing nothing. The bar is so low, it's not worth fighting. But then there are the real farmers: people like Ryck Suydam, who runs a 300-acre farm in Somerset, which his family has worked since 1713. Without the Farmland Assessment Act, the 51-year-old farmer says, "my own farm would have been sold a generation ago. If we had been taxed at what it is zoned for - single-family houses - we would not have been able to afford it. Mr. Suydam, a vice president of the New Jersey Farm Bureau, says most of his group's membership supports the new bill as a way to weed out abusers of the assessment program. "Those of us who do production agriculture are not too worried about the new threshold," he said. If you're not grossing $1,000, you're not trying too hard.