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Volume 8 - Opinions of Counsel SBEA No. 67

Opinions of Counsel index

Agricultural exemption (commitment) (conversion) - Agriculture and Markets Law, § 306; 9 NYCRR 194.9, 194.16:

The mere filing, without more, of a plan for subdivision of lands receiving an agricultural value exemption does not constitute a conversion to a non-agricultural use.

Land which becomes idle when it can no longer be used for agricultural production due to a municipal decision against restoring access loses the benefit of the agricultural value assessment but is not subject to a penalty for conversion.

A property owner filed with a town planning board a proposed subdivision plan for a portion of a larger parcel, which has been subject to an agricultural value assessment (Agriculture and Markets Law, §§305, 306; 9 NYCRR Part 194). The Planning Board rejected the plan due to lack of access to the entire area; a bridge that provided access had been destroyed and the Town authorities had already filed a certificate of abandonment of the highway.

Thereafter the Town’s Assessor informed the property owner that his application for a subdivision constituted a breach of commitment to agricultural production, and that he would be penalized pursuant to section 306(2) of the Agriculture and Markets Law.

There are two issues to be decided. The first is whether the filing of a proposed subdivision with the town planning board constituted a change of use, and therefore, a breach of commitment within the meaning of section 306(2) of the Agriculture and Markets Law. The other is whether land should be entitled to an agricultural value assessment when it can no longer be used for agricultural production due to a municipal decision against restoring access.

1. Breach of commitment

An owner of agricultural land located outside an agricultural district must file a commitment to continue to use land exclusively for agricultural production for the next eight years in order to obtain an agricultural value assessment (Agriculture and Markets Law, §306(1); 9 NYCRR 194.9(a)). Where committed land is converted to a use other than for agricultural production, that conversion constitutes a breach of commitment subjecting the land to a penalty tax equal to two times the taxes determined in the year after the breach of commitment (§306(2); 9 NYCRR 194.16(a)).

Whether or not land is used for agricultural production depends upon what is actually being done on the land. We have continually stated that a conversion within the meaning of section 306(2) requires an actual transformation or “change in form from one use to another” (6 Op.Counsel SBEA No. 66). Thus, we have said that a conveyance of committed land, without more, does not constitute a breach of commitment (id.). We have also stated that nonuse of property that has received the benefit of the agricultural value assessment will not entail imposition of the penalty, though the agricultural value assessment would not be available (id.; see also, 7 Op.Counsel SBEA No. 20).

Like the delivery of a deed, the filing of a proposed subdivision does not, by itself, change the use of the land. Therefore, it is our opinion that the mere filing of the plan did not constitute a conversion within the meaning of section 306(2).

2.  Involuntary conversion

As to the second issue, we note that the purpose of the agricultural value assessment program is to protect commercial farming from rising property values and incompatible ordinances that result from urban expansion (Agriculture and Markets Law, §300). It follows that where land cannot be used for agricultural production, the protection should cease; however, it also follows that no penalty should attach if the land is no longer useable for exempt purposes through no fault of the landowner. We believe this interpretation is consistent with those provisions of section 306(2) with respect to the effects of an “involuntary conversion” of lands to a non-agricultural use:

. . . Provided, however, that in the event that such land or any portion thereof is converted to a use other than agricultural production by virtue of oil or gas exploration, development, or extraction activity or by virtue of a taking by eminent domain or other involuntary proceeding, except a tax sale, such activity or involuntary conversion of such land or any portion thereof to uses other than agricultural production shall not constitute a breach of commitment. In the event the land involuntarily converted to a use other than agricultural production, or converted to oil or gas exploration, development, or extraction activity constitutes only a portion of a parcel described on the assessment roll, the assessor shall apportion the assessment, and enter the portion so converted as a separately assessed parcel on the appropriate portion of the assessment roll. The assessor shall adjust the agricultural value ceiling attributable to the portion of the parcel not subject to such conversion by subtracting the proportionate part of the agricultural value ceiling attributable to the portion so converted.

Thus, where there occurs an involuntary conversion contemplated by section 306(2), the affected area is no longer eligible to receive the benefit of the agricultural value assessment; it is not, however, made liable for any penalty for conversion. If the agricultural value assessment were to continue, it could do so indefinitely without any direct benefit to active commercial farming. Therefore, it is our opinion that land which lies idle due to the action (or inaction) of a municipality, is no longer entitled to receive the benefit of the agricultural value assessment.

August 1, 1985

Updated: