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A05275 Summary:

A05275 Actions:

A05275 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
 submitted in accordance with Assembly Rule III, Sec 1(f)



 
BILL NUMBER: A5275
 
SPONSOR: Thiele

 
TITLE OF BILL:
 
An act to amend the tax law, in relation to granting an exclusion from
transfer taxes for certain farmland and land of conservation value
 
 
PURPOSE:
 
The proposed bill is intended to provide the owners and successors of
interest with a way to keep farmland and land of conservation value
intact.
 
 
SUMMARY OF PROVISIONS:
 
Amends various provisions of the Tax Law relating to the "Farmland and
Open Space Preservation Act of 2017"
 
 
JUSTIFICATION:

Federal and state estate tax policy has been one of the most significant
causes of the loss of farmland and natural lands in New York State. The
costs associated with maintaining farmland, especially in areas of high-
ly appreciated or valued land of conservation value, has resulted in the
selling and conversion to residential and commercial development. This
legislation is necessary in order to provide the owners and successors
of interest with a way to keep farmland and land of conservation value
intact in the face of onerous estate and transfer taxes, creating a
land-based incentive program for conservation.
 
 
LEGISLATIVE HISTORY:
 
2017: New Legislation
 
 
FISCAL IMPLICATIONS:
 
To be determined.
 
 
EFFECTIVE DATE:
This act shall take effect immediately.

A05275 Text:

 
                STATE OF NEW YORK
        ________________________________________________________________________
 
            S. 4256                                                  A. 5275
 
                               2017-2018 Regular Sessions
 
                SENATE - ASSEMBLY
 
                                    February 7, 2017
                                       ___________
 
        IN SENATE -- Introduced by Sen. LAVALLE -- read twice and ordered print-
          ed,  and  when  printed  to  be committed to the Committee on Investi-
          gations and Government Operations
 
        IN ASSEMBLY -- Introduced by M. of A. THIELE -- read once  and  referred
          to the Committee on Ways and Means

        AN  ACT  to amend the tax law, in relation to granting an exclusion from
          transfer taxes for certain farmland and land of conservation value
 
          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:
 
     1    Section  1.  This act shall be known and may be cited as the "farmland
     2  and open space preservation act of 2017".
     3    § 2. Section 951-a of the  tax  law  is  amended  by  adding  two  new
     4  subsections (g) and (h) to read to follows:
     5    (g)  The  term "farm operation" shall have the same meaning as defined
     6  in subdivision eleven of section three hundred one  of  the  agriculture
     7  and markets law.
     8    (h) The term "conservation easement" shall mean an easement, covenant,
     9  restriction, or other interest in real property acquired for the preser-
    10  vation  of agricultural lands used in bona fide agricultural production,
    11  pursuant to section two hundred forty-seven  of  the  general  municipal
    12  law.
    13    §  3.  Subsection  (a)  of  section  954 of the tax law, as amended by
    14  section 3 of part X of chapter 59 of the laws of 2014,  paragraph  3  as
    15  amended  by  section  2 of part BB of chapter 59 of the laws of 2015, is
    16  amended to read as follows:
    17    (a) General.-- The New York gross estate of a deceased resident  means
    18  his  or her federal gross estate as defined in the internal revenue code
    19  (whether or not a federal estate tax return is  required  to  be  filed)
    20  modified as follows:
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD07702-01-7
        S. 4256                             2                            A. 5275
 
     1    (1)  Reduced by the value of real or tangible personal property having
     2  an actual situs outside New York state.
     3    (1-a)  Reduced  by  the  value  of real property situated in the state
     4  which, on the date of the decedent's death was land used in support of a
     5  farm operation; upon which there was a conservation  easement;  or  upon
     6  which  there  was a covenant restricting the use of the land to agricul-
     7  tural or natural resource conservation purposes.
     8    (2) Increased by the amount  determined  under  section  nine  hundred
     9  fifty-seven  of  this  part  (relating  to limited powers of appointment
    10  created prior to September first, nineteen hundred thirty).
    11    (3) Increased by the amount of any taxable gift under section 2503  of
    12  the  internal  revenue  code  not  otherwise  included in the decedent's
    13  federal gross estate, made during the three year period  ending  on  the
    14  decedent's  date of death, but not including any gift made: (A) when the
    15  decedent was not a resident of New York state;  [or]  (B)  before  April
    16  first, two thousand fourteen; [or] (C) that is real or tangible personal
    17  property  having  an actual situs outside New York state at the time the
    18  gift was made[.]; (D) or that is real property used in support of a farm
    19  operation, subject to a conservation easement, or subject to a  restric-
    20  tive  covenant  as  described  in  paragraph  one-a  of this subsection.
    21  Provided, however that this paragraph shall not apply to the estate of a
    22  decedent dying on or after January first, two thousand nineteen.
    23    § 4. The tax law is amended by adding a new section 954-a to  read  as
    24  follows:
    25    §  954-a.  Additional tax if land used in support of a farm operation,
    26  subject to a conservation easement, or subject to a restrictive covenant
    27  as described in paragraph  one-a  of  subsection  (a)  of  section  nine
    28  hundred  fifty-four  of  this  part is no longer used for such purposes.
    29  (a) If, at any time after the decedent's death and before the  death  of
    30  the  heir,  the heir: (1) disposes of any interest in real property that
    31  is used in support of a farm operation, subject to a conservation  ease-
    32  ment,  or  subject  to  a restrictive covenant as described in paragraph
    33  one-a of subsection (a) of section nine hundred fifty-four of this  part
    34  and   the   person  acquiring  such  interest  is  not  subject  to  the
    35  restrictions on use described in paragraph one-a of  subsection  (a)  of
    36  section  nine hundred fifty-four of this part, or (2) the heir uses such
    37  land in any manner which violates the terms of such  restriction,  then,
    38  there is hereby imposed an additional estate tax.
    39    (b)  The amount of the additional tax imposed by this section shall be
    40  the amount equal to the excess of what would have been  the  estate  tax
    41  liability   but  for  the  reduction  provided  in  paragraph  one-a  of
    42  subsection (a) of section nine hundred fifty-four of this part.
    43    § 5. Section 982 of the tax law is amended by adding a new  subsection
    44  (a-1) to read as follows:
    45    (a-1) Farmland and conservation land exclusion. An amount equal to the
    46  adjusted  value  attributable to real property used in support of a farm
    47  operation, subject to a conservation easement, or subject to a  restric-
    48  tive  covenant  as  described  in  paragraph  one-a of subsection (a) of
    49  section nine hundred fifty-four of this article shall be a lien in favor
    50  of the state.
    51    § 6. This act shall take effect immediately.