S 8862

                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
                                   8862
                             I N  S E N A T E
                             January 12, 2026
                                ___________
 Introduced  by  Sen. HINCHEY -- read twice and ordered printed, and when
   printed to be committed to the Committee on Investigations and Govern-
   ment Operations
 AN ACT to amend the tax law, in relation to providing a tax  credit  for
   sales  or  rentals of agricultural assets to beginning farmers; and to
   amend the agriculture and markets law,  in  relation  to  establishing
   duties  of  the  commissioner  of agriculture and markets with respect
   thereto
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
   Section  1.  This act shall be known and may be cited as the "New York
 farmland preservation act".
   § 2. The tax law is amended by adding a new  section  50  to  read  as
 follows:
   § 50. CREDIT FOR OWNERS OF AGRICULTURAL ASSETS. (A) GENERAL. A TAXPAY-
 ER  THAT  HAS  BEEN  CERTIFIED  BY  THE  COMMISSIONER OF AGRICULTURE AND
 MARKETS AS A CERTIFIED OWNER OF AGRICULTURAL ASSETS  SHALL  BE  ELIGIBLE
 FOR  A CREDIT AGAINST THE TAX IMPOSED UNDER ARTICLE NINE-A OR TWENTY-TWO
 OF THIS CHAPTER, PURSUANT TO THE PROVISIONS REFERENCED IN THIS SECTION.
   (B) DEFINITIONS. FOR PURPOSES OF THIS  SECTION,  THE  FOLLOWING  TERMS
 SHALL HAVE THE FOLLOWING MEANINGS:
   (1)  "AGRICULTURAL  ASSETS"  SHALL  MEAN AGRICULTURAL LAND, LIVESTOCK,
 FACILITIES, BUILDINGS, OR MACHINERY USED FOR FARMING.
   (2) "BEGINNING FARMER" MEANS A RESIDENT OF NEW YORK WHO:
   (I) IS SEEKING ENTRY, OR HAS ENTERED WITHIN THE LAST TEN  YEARS,  INTO
 FARMING;
   (II)  INTENDS  TO  FARM  LAND  LOCATED WITHIN THE STATE BORDERS OF NEW
 YORK;
   (III) IS NOT RELATED BY BLOOD OR MARRIAGE TO THE OWNER OF THE AGRICUL-
 TURAL ASSETS FROM WHOM THE BEGINNING FARMER IS SEEKING  TO  PURCHASE  OR
 RENT AGRICULTURAL ASSETS;
   (IV)  IS NOT RELATED BY BLOOD OR MARRIAGE TO A PARTNER, MEMBER, SHARE-
 HOLDER, OR TRUSTEE OF THE OWNER OF AGRICULTURAL  ASSETS  FROM  WHOM  THE
 BEGINNING FARMER IS SEEKING TO PURCHASE OR RENT AGRICULTURAL ASSETS;
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD14274-02-6
 S. 8862                             2
   (V)  INTENDS  TO PROVIDE THE MAJORITY OF THE DAY-TO-DAY PHYSICAL LABOR
 OR MANAGEMENT OF THE FARM; AND
   (VI)  MEETS THE ELIGIBILITY REQUIREMENTS FOR CERTIFICATION AS A BEGIN-
 NING FARMER  AS  DETERMINED  BY  THE  COMMISSIONER  OF  AGRICULTURE  AND
 MARKETS.
   (3) "FARM PRODUCT" SHALL HAVE THE SAME MEANING AS CROPS, LIVESTOCK AND
 LIVESTOCK  PRODUCTS  AS  DEFINED  IN  SUBDIVISION  TWO  OF SECTION THREE
 HUNDRED ONE OF THE AGRICULTURE AND MARKETS LAW.
   (4) "FARMING" MEANS THE ACTIVE USE, MANAGEMENT, AND OPERATION OF  REAL
 AND PERSONAL PROPERTY FOR THE PRODUCTION OF A FARM PRODUCT.
   (5)  "OWNER  OF AGRICULTURAL ASSETS" MEANS AN INDIVIDUAL, TRUST, PART-
 NERSHIP, OR BUSINESS ENTITY THAT:
   (I) IS THE OWNER IN FEE OF AGRICULTURAL LAND OR HAS LEGAL TITLE TO ANY
 OTHER AGRICULTURAL ASSET;
   (II) IS A NEW YORK STATE RESIDENT;
   (III) DERIVED AT LEAST FIFTY PERCENT  OF  THE  INDIVIDUAL'S,  TRUST'S,
 PARTNERSHIP'S OR BUSINESS ENTITY'S GROSS INCOME FROM FARMING IN AT LEAST
 FIVE OF THE PRECEDING FIFTEEN YEARS; AND
   (IV)  PROVIDED  THE  MAJORITY  OF  THE  DAY-TO-DAY  PHYSICAL LABOR AND
 MANAGEMENT OF A FARM IN AT LEAST FIVE OF THE PRECEDING FIFTEEN YEARS.
   IF THE OWNER IS A PARTNERSHIP OR  BUSINESS  ENTITY,  THE  REQUIREMENTS
 OUTLINED  IN  SUBPARAGRAPHS  (I), (II), (III) AND (IV) OF THIS PARAGRAPH
 SHALL BE SATISFIED IF ANY PARTNER OR SHAREOWNER, OR ANY  COMBINATION  OF
 THE TWO, MEET THE REQUIREMENTS OF THIS PARAGRAPH.
   (6) "RENTAL AGREEMENT" MEANS A RENTAL AGREEMENT IN WHICH THE PRINCIPAL
 CONSIDERATION  GIVEN  TO THE OWNER OF AGRICULTURAL ASSETS IS A PREDETER-
 MINED PORTION OF THE PRODUCTION OF FARM PRODUCTS PRODUCED FROM THE RENT-
 ED AGRICULTURAL ASSETS AND WHICH PROVIDES FOR SHARING  PRODUCTION  COSTS
 OR RISK OF LOSS, OR BOTH.
   (C)  COMPUTATION  OF  CREDIT.  (1) AN OWNER OF AGRICULTURAL ASSETS MAY
 TAKE A CREDIT FOR THE SALE OR RENTAL OF AGRICULTURAL ASSETS TO A  BEGIN-
 NING FARMER.  THE CREDIT SHALL BE EQUAL TO THE GREATER OF:
   (I) FIVE PERCENT OF THE SALE PRICE OF THE AGRICULTURAL ASSET;
   (II)  TEN  PERCENT  OF  THE  GROSS RENTAL INCOME IN EACH OF THE FIRST,
 SECOND, AND THIRD YEARS OF A RENTAL AGREEMENT; OR
   (III) FIFTEEN PERCENT OF THE  CASH  EQUIVALENT  OF  THE  GROSS  RENTAL
 INCOME  IN EACH OF THE FIRST, SECOND, AND THIRD YEARS OF A RENTAL AGREE-
 MENT.
   (2) A QUALIFYING RENTAL AGREEMENT INCLUDES CASH RENT  OF  AGRICULTURAL
 ASSETS  OR  A RENTAL AGREEMENT. THE AGRICULTURAL ASSET MUST BE RENTED AT
 PREVAILING COMMUNITY RATES AS DETERMINED BY THE COMMISSIONER OF AGRICUL-
 TURE. THE CREDIT MAY BE CLAIMED ONLY AFTER APPROVAL AND CERTIFICATION BY
 THE COMMISSIONER OF AGRICULTURE AND MARKETS.
   (3) AN OWNER OF AGRICULTURAL ASSETS OR BEGINNING FARMER MAY  TERMINATE
 A RENTAL AGREEMENT, FOR REASONABLE CAUSE. WITHIN FIFTEEN DAYS, THE OWNER
 OF  AGRICULTURAL  ASSETS  MUST NOTIFY THE COMMISSIONER OF AGRICULTURE IN
 WRITING OF SUCH TERMINATION. IF A RENTAL AGREEMENT IS TERMINATED WITHOUT
 THE FAULT OF THE OWNER OF AGRICULTURAL ASSETS, THE TAX CREDITS SHALL NOT
 BE RETROACTIVELY DISALLOWED. IF AN AGREEMENT IS TERMINATED WITH FAULT BY
 THE OWNER OF AGRICULTURAL ASSETS, ANY PRIOR TAX  CREDITS  CLAIMED  UNDER
 THIS SUBDIVISION BY THE OWNER OF AGRICULTURAL ASSETS SHALL BE DISALLOWED
 AND MUST BE REPAID TO THE COMMISSIONER OF TAXATION AND FINANCE.
   (D)  CROSS-REFERENCES.  FOR  APPLICATION OF THE CREDIT PROVIDED FOR IN
 THIS SECTION, SEE THE FOLLOWING PROVISIONS OF THIS CHAPTER:
   (1) ARTICLE 9-A: SECTION 210-B: SUBDIVISION 63.
   (2) ARTICLE 22: SECTION 606: SUBSECTIONS (I) AND (UUU).
 S. 8862                             3
   § 3. Section 210-B of the tax law is amended by adding a new  subdivi-
 sion 63 to read as follows:
   63.  TAX  CREDIT  FOR  OWNERS OF AGRICULTURAL ASSETS. (A) ALLOWANCE OF
 CREDIT. A TAXPAYER SHALL BE ALLOWED A CREDIT, TO BE COMPUTED AS PROVIDED
 IN SECTION FIFTY OF THIS CHAPTER, AGAINST THE TAX IMPOSED BY THIS  ARTI-
 CLE.
   (B)  APPLICATION  OF CREDIT. THE CREDIT ALLOWED UNDER THIS SUBDIVISION
 FOR ANY TAXABLE YEAR MAY NOT REDUCE THE TAX DUE FOR SUCH  YEAR  TO  LESS
 THAN  THE  AMOUNT  PRESCRIBED  IN  PARAGRAPH  (D)  OF SUBDIVISION ONE OF
 SECTION TWO HUNDRED TEN OF THIS ARTICLE. HOWEVER, IF THE AMOUNT OF CRED-
 IT ALLOWED UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR REDUCES  THE  TAX
 TO  SUCH AMOUNT OR IF THE TAXPAYER OTHERWISE PAYS TAX BASED ON THE FIXED
 DOLLAR MINIMUM AMOUNT, ANY AMOUNT OF CREDIT THUS NOT DEDUCTIBLE IN  SUCH
 TAXABLE  YEAR WILL BE TREATED AS AN OVERPAYMENT OF TAX TO BE CREDITED OR
 REFUNDED IN ACCORDANCE WITH  THE  PROVISIONS  OF  SECTION  ONE  THOUSAND
 EIGHTY-SIX  OF  THIS  CHAPTER.  PROVIDED,  HOWEVER,  THE  PROVISIONS  OF
 SUBSECTION (C) OF SECTION ONE  THOUSAND  EIGHTY-EIGHT  OF  THIS  CHAPTER
 NOTWITHSTANDING, NO INTEREST WILL BE PAID THEREON.
   §  4. Subparagraph (B) of paragraph 1 of subsection (i) of section 606
 of the tax law is amended by adding a  new  clause  (liii)  to  read  as
 follows:
 (LIII) CREDIT FOR OWNERS OF          AMOUNT OF CREDIT UNDER
 AGRICULTURAL ASSETS UNDER            SUBDIVISION SIXTY-THREE OF
 SUBSECTION (UUU)                     SECTION TWO HUNDRED TEN-B
   §  5. Section 606 of the tax law is amended by adding a new subsection
 (uuu) to read as follows:
   (UUU) CREDIT FOR OWNERS OF AGRICULTURAL ASSETS.  (1) A TAXPAYER  SHALL
 BE ALLOWED A CREDIT, TO BE COMPUTED AS PROVIDED IN SECTION FIFTY OF THIS
 CHAPTER, AGAINST THE TAX IMPOSED BY THIS ARTICLE.
   (2)  APPLICATION OF CREDIT. IF THE AMOUNT OF CREDIT ALLOWED UNDER THIS
 SUBSECTION FOR ANY TAXABLE YEAR EXCEEDS  THE  TAXPAYER'S  TAX  FOR  SUCH
 YEAR, THE EXCESS WILL BE TREATED AS AN OVERPAYMENT OF TAX TO BE CREDITED
 OR  REFUNDED  IN  ACCORDANCE  WITH THE PROVISIONS OF SECTION SIX HUNDRED
 EIGHTY-SIX OF THIS ARTICLE, PROVIDED, HOWEVER, THAT NO INTEREST WILL  BE
 PAID THEREON.
   §  6.  Section  16  of  the  agriculture and markets law is amended by
 adding a new subdivision 53 to read as follows:
   53. (A) ESTABLISH A PROGRAM FOR INITIAL  CERTIFICATION  OF  OWNERS  OF
 AGRICULTURAL  ASSETS  AND  BEGINNING FARMERS FOR PURPOSES OF ELIGIBILITY
 FOR A TAX CREDIT PURSUANT TO SECTION FIFTY OF THE TAX LAW.
   (B) ADOPT, PROMULGATE AND IMPLEMENT RULES, REGULATIONS AND ORDERS WITH
 RESPECT TO APPLICATION FOR CERTIFICATION,  CONTINUED  QUALIFICATION  FOR
 CERTIFICATION AND TERMINATION OF CERTIFICATION OF OWNERS OF AGRICULTURAL
 ASSETS AND/OR BEGINNING FARMERS FOR PURPOSES OF ELIGIBILITY FOR SUCH TAX
 CREDIT.
   (C)  CERTIFY  RENTAL  AGREEMENTS  ENTERED  INTO BY CERTIFIED OWNERS OF
 AGRICULTURAL ASSETS AND BEGINNING FARMERS ARE FAIR AND AT RATES EQUAL TO
 THE MARKET VALUE OF THE FARM PRODUCT AS PROVIDED IN SECTION FIFTY OF THE
 TAX LAW; PROVIDED THAT AGRICULTURAL ASSETS MUST BE RENTED AT  PREVAILING
 COMMUNITY RATES AS DETERMINED BY THE COMMISSIONER.
   (D)  NOTIFY  THE  COMMISSIONER OF TAXATION AND FINANCE OF ALL APPROVED
 APPLICATIONS AND ALL APPLICATIONS FOR  WHICH  CERTIFICATION  WAS  SUBSE-
 QUENTLY TERMINATED BY THE COMMISSIONER.
   § 7. This act shall take effect immediately and shall apply to taxable
 years beginning on or after January 1, 2028.