An Act To Encourage Long-term Holding of Maine Timberland and Sustainable Forest Management
Maine Legislature, Session 122, LD 1305
Committee Amendment CA_A_H403 (House)
Amends: 36 MRSA §5122

COMMITTEE AMENDMENT "A. to H.P. 902, L.D. 1305, Bill, "An 
Act 
To 
Encourage 
Long-term 
Holding 
of 
Maine 
Timberland 
and 
Sustainable Forest Management" 
Amend 
the bill by striking out all of 
section 
and 
inserting in its place the following: 
. Sec. 3. 36 MRSA §5122, sub-§2, 1fU is enacted to read: 
U. 
For income tax years beginning on or after January 1, 
2015, 
the gain attributable to the sale of sustainably 
managed, 
eligible 
timberlands 
as 
calculated 
in 
this 
paragraph. 
(1) 
As 
used in this paragraph, unless the context 
otherwise 
indicates, 
the 
following 
terms 
have 
the 
following meanings. 
(a) 
"Commercial 
harvesting" 
or 
"commercially 
harvested" means the harvesting of forest products 
that have commercial value. 
(b) 
"Eligible timberlands" means land of at least 
acres located in the State and used primarily 
for 
the 
growth 
of 
trees 
to 
be 
commercially 
harvested. 
Land that would otherwise be included 
within this definition may not be excluded because 
of: 
(i) 
Use 
of the land for multiple public 
recreation activities; 
(ii) 
Statutory or governmental restrictions 
that prevent commercial harvesting of trees 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT ,~, to H.P. 902, L.D. 1305 
or reguire a primary use of the land other 
than commercial harvesting: 
(iii) 
Deed 
restrictions. 
restrictive 
covenants 
or 
organizational 
charters 
that 
prevent 
commercial 
harvesting of trees 
or 
reguire 
a 
primary use of land other than 
commercial harvesting and that were effective 
prior to January I. 1982: 
or 
(iv) 
Past 
or 
present 
multiple 
use 
for 
mineral exploration. 
(d 
"Forest products that have commercial value" 
means 
logs. 
pulpwood. 
veneer. 
bolt wood. 
wood 
chips. stud wood. poles. pilings. biomass. fuel 
wood. 
Christmas 
trees. 
maple 
syrup. 
nursery 
products used for ornamental purposes. 
wreaths. 
bough material or cones or other seed products. 
(d) 
"Sustainably managed" means: 
(i) 
A forest management and harvest plan. as 
defined in section 573. subsection 3-A. has 
been prepared for the eligible timberlands 
and has been in effect for the entire time 
period used to compute the 
amount of the 
subtraction 
modification 
under 
this 
paragraph: and 
Oil 
The 
taxpayer has 
received a written 
statement from a licensed forester certifying 
that. 
as 
of 
the 
time 
of 
the 
sale. 
the 
eligible timberlands 
have 
been 
managed 
in 
accordance with the plan under subdivision 
(i) during that period. 
(2) 
To the extent they are included in the taxpayer I s 
federal adjusted gross income. the following amounts 
must be subtracted from federal adjusted gross income: 
(a) For eligible timberlands held by the taxpayer 
for at least a lO-year period 
beginning on or 
after January L 
2005 but less than an ll-year 
period beginning on or after January I. 2005. 1/15 
of the gain recognized on the sale of the eligible 
timberlands: 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT ,J!t" to H.P. 902, L.D. 1305 
(b) For eligible timberlands held by the taxpayer 
for at least an II-year period 
beginning on or 
after January 
L 
2005 but less than a 
12-year 
period beginning on or after January 1, 2005, 2/15 
of the gain recognized on the sale of the eligible 
timberlands; 
(c) 
For eligible timberlands held by the taxpayer 
for at least a. 
-year period 
beginning on or 
after January 1, 
2005 but less than a 
13-year 
period beginning on or after January 1, 2005, liS 
of the gain recognized on the sale of the eligible 
timberlands; 
(d) 
For eligible timberlands held by the taxpayer 
for at least a 13-year period 
beginning on or 
after January 1, 
2005 but less than a 
14-year 
period beginning on or after January 1, 2005, 4/15 
of the gain recognized on the sale of the eligible 
timberlands: 
(e) 
For eligible timberlands held by the taxpayer 
for at least a 14-year period 
beginning on or 
after January 1, 
2005 but less than a 
IS-year 
period beginning on or after January 1, 2005, 1/3 
of the gain recognized on the sale of the eligible 
timberlands: 
(f) 
For eligible timberlands held by the taxpayer 
for at least a 
IS-year period 
beginning on or 
after January 1, 
2005 but less than a 
16-year 
period beginning on or after January 1, 2005, 2/5 
of the gain recognized on the sale of the eligible 
timberlands: 
(g) 
For eligible timberlands held by the taxpayer 
for at least a 16-year period 
beginning on or 
after January 1, 
2005 but less than a 
17-year 
period beginning on or after January 1, 2005. 7/15 
of the gain recognized on the sale of the eligible 
timberlands; 
(h) 
For eligible timberlands held by the taxpayer 
for at least a 
-year period 
beginning on or 
after January L 
2005 but less than an 18-year 
period beginning on or after January I. 2005, 8/15 
of the gain recognized on the sale of the eligible 
timberlands; 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT ,~, to H.P. 902. L.n. 1305 
(i) 
For eligible timberlands held by the taxpayer 
for at least an 18-year period 
beginning on or 
after January 1, 
2005 but less than a 
19-year 
period beginning on or after January 1, 2005, 3/5 
of the gain recognized on the sale of the eligible 
timberlands: 
(j) 
For eligible timberlands held by the taxpayer 
for at least a 19-year period 
beginning on or 
after January 1, 
2005 but less than a 
20-year 
period beginning on or after January 1, 2005, 2/3 
of the gain recognized on the sale of the eligible 
timberlands: 
(k) 
For eligible timberlands held by the taxpayer 
for at least a 
20-year period 
beginning on or 
after January 1, 
2005 but less than a 
21-year 
period beginning on or after January 1, 
2005, 
11/15 of the gain recognized on the sale of the 
eligible timberlands: 
(1) 
For eligible timberlands held by the taxpayer 
for at least a 
21-year period 
beginning on or 
after January 1, 
2005 but less than a 
22-year 
period beginning on or after January 1, 2005, 4/5 
of the gain recognized on the sale of the eligible 
timberlands: 
(m) 
For eligible timberlands held by the taxpayer 
for at least a 
22-year period 
beginning on or 
after January 
L 
2005 but less than a 
23-year 
period beginning on or after January 1, 
2005, 
13/15 of the gain recognized on the sale of the 
eligible timberlands: 
(n) 
For eligible timberlands held by the taxpgyer 
for at least a 
23-year period 
beginning on or 
after January 1, 
2005 but less than a 
24-year 
period beginning on or after January 
1, 
2005, 
14115 of the gain recognized on the sale of the 
eligible timberlands: or 
(0) 
For eligible timberlands held by the taxpgyer 
for at least a 
24-year period 
beginning on or 
after January 1, 2005, all of the gain recognized 
on the sale of the eligible timberlands. 
(3) 
Taxpayers claiming this credit must attach a sworn 
statement from a forester licensed pursuant to Title 
32, 
chapter 
that the 
timberlands 
for which the 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT ,,~, to H.P. 902, L.D. 1305 
credit is claimed have been managed sustainably. 
For 
the purposes of this subparagraph, "sustainab1y" means 
that the timberlands for which the credit is claimed 
have been managed to protect soil productivity and to 
maintain 
or 
improve 
stand productivity 
and 
timber 
quality: known occurrences of threatened or endangered 
species 
and 
rare or 
exemplary natural 
communities: 
significant wildlife habitat 
and essential wildlife 
habitat: and water quality, wetlands and riparian zones. 
Upon request of the State Tax Assessor, the Director of 
the 
Bureau 
of 
Forestry 
within 
the 
Department 
of 
Conservation 
may 
provide 
assistance 
in 
determining 
whether timberlands for which the credit is claimed 
have 
been managed 
sustainably. 
When 
assistance is 
requested under this subparagraph, the director or the 
director's 
designee 
may 
enter 
and 
examine 
the 
timberlands for the purpose of determining whether the 
timberlands have been managed sustainably. 
In the case of timberlands owned by an entity that is 
treated as a pass-through entity for income tax purposes, 
the land must be treated as eligible timberland if ownership 
and use of the land by the pass-through entity satisfies the 
requirements 
of 
this 
paragraph. 
If 
the 
owner 
of 
the 
eligible timberlands is an S corporation, the taxpayer must 
subtract the owner's pro rata share of the gain. 
If the 
owner 
of 
the 
timberlands 
is 
a 
partnership 
or 
limited 
liability company taxed as a partnership, the taxpayer must 
subtract the taxpayer's distributive share of the gain, 
subject to 
the percentage 
limitations provided in this 
paragraph. 
This modification may not reduce Maine taxable income to 
less than zero. 
To the extent this modification results in 
Maine taxable income that is less than zero for the taxable 
year, the excess negative modification amount may be carried 
forward and applied as a subtraction modification for up to 
taxable years. 
The entire amount of the excess negative 
modification must be carried to the earliest of the taxable 
years to which, by reason of this subsection, the negative 
modification may be carried and then to each of the other 
taxable years to the extent the unused negative modification 
is not used for a prior taxable year. 
Earlier carry-forward 
modifications 
must 
be 
used 
before 
newer 
modifications 
generated in later years.' 
Further amend the bill by striking out all of section 6 and 
inserting in its place the following: 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "fJ,,, to H.P. 902, L.D. 1305 
'Sec. 6. 36 MRSA §S200-A, sub-§2, F is enacted to read: 
P. 
For income tax years beginning on or after January 1, 
2015, 
the gain attributable to the sale of sustainably 
managed, eligible timberlands as calculated pursuant to this 
paragraph. 
(1) 
As 
used in this paragraph, unless the context 
otherwise 
indicates, 
the 
following 
terms 
have 
the 
following meanings. 
(a) 
"Commercial 
harvesting" 
or 
"commercially 
harvested" means the harvesting of forest products 
that have commercial value. 
(b) 
"Eligible timberlands" means land of at least 
acres located in the State and used primarily 
for 
the 
growth 
of 
trees 
to 
be 
commercially 
harvested. 
Land that would otherwise be included 
within this definition may not be excluded because 
.Qll 
(i) 
Use 
of the land for multiple public 
recreation activities: 
(ii) 
Statutory or governmental restrictions 
that prevent commercial harvesting of trees 
or require a primary use of the land other 
than commercial harvesting: 
(iii) 
Deed 
restrictions, 
restrictive 
covenants 
or 
organizational 
charters 
that 
prevent 
commercial 
harvesting of trees 
or 
require 
a 
primary use of land other than 
commercial harvesting and that were effective 
prior to January 1, 1982: or 
(iv) 
Past 
or 
present 
multiple 
use 
for 
mineral exploration. 
(c) 
"Forest products that have commercial value" 
means 
logs. 
pulpwood, 
veneer, 
bolt wood. 
wood 
chips, stud wood, poles. pilings, biomass, fuel 
wood, 
Christmas 
trees, 
maple 
syrup, 
nursery 
products used for ornamental purposes, 
wreaths, 
bough material or cones or other seed products. 
(d) 
"Sustainably managed" means: 
(i) 
A forest management and harvest plan, as 
defined in section 573, subsection 3-A, has 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT ,,~, to B,P, 902, L.D. 1305 
been prepared for the eligible timberlands 
and has been in effect for the entire time 
period used to 
compute the 
amount of the 
subtraction 
modification 
under 
this 
paragraph; and 
(ii) 
The 
taxpayer has 
received a 
written 
statement from a licensed forester certifying 
that, 
as 
of 
the 
time 
of 
the 
sale, 
the 
eligible 
timberlands 
have 
been 
managed 
in 
accordance with the plan under subdivision 
(i) during that period. 
(2) 
To the extent included in the taxpayer I s taxable 
income under the laws of the United States, the taxable 
income of the taxpayer under the laws of the United 
States must be decreased by: 
(a) For eligible timberlands held by the taxpayer 
for at least a 
10-year period 
beginning on or 
after January 1. 
2005 but less than an ll-year 
period beginning on or after January 1, 2005, 1/15 
of the gain recognized on the sale of the eligible 
timberlands; 
(b) For eligible timberlands held by the taxpayer 
for at least an 11 year period 
beginning on or 
after January 1. 
2005 but less than a 
12-year 
period beginning on or after January 1, 2005, 2/15 
of the gain recognized on the sale of the eligible 
timberlands; 
(c) 
For eligible timberlands held by the taxpayer 
for at least a 
12-year period 
beginning on or 
after January 1, 
2005 but less than a 
13-year 
period beginning on or after January 1, 2005, liS 
of the gain recognized on the sale of the eligible 
timberlands; 
(d) 
For eligible timberlands held by the taxpayer 
for at least a 
l3-year period 
beginning on or 
after January 1, 
2005 but less than a 
l4-year 
period beginning on or after January 1, 2005, 4/15 
of the gain recognized on the sale of the eligible 
timberlands; 
(e) 
For eligible timberlands held by the taxpayer 
for at least a 
l4-year period 
beginning on or 
after January 1. 
2005 but less than a 
IS-year 
period beginning on or after January 1, 2005, 1/3 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT ·It .. to H.P. 902, L.n. 1305 
of the gain recognized on the sale of the eligible 
timberlands; 
(f) 
For eligible timberlands held by the taxpayer 
for at least a 
IS-year period 
beginning on or 
after January I. 
2005 but less than a 
l6-year 
period beginning on or after January I. 2005. 2/5 
of the gain recognized on the sale of the eligible 
timberlands; 
(g) 
For eligible timberlands held by the taxpayer 
for at least a 16-year period 
beginning on or 
after January I. 
2005 but less than a 
year 
period beginning on or after January I. 2005. 7/15 
of the gain recognized on the sale of the eligible 
timberlands; 
(h) 
For eligible timberlands held by the taxpayer 
for at least a 17-year period 
beginning on or 
after January 1. 
2005 but less than an l8-year 
period beginning on or after January I. 2005. 8/15 
of the gain recognized on the sale of the eligible 
timberlands; 
(i) 
For eligible timberlands held by the taxpayer 
for at least an l8-year period 
beginning on or 
after January I. 
2005 but less than a 
19-year 
period beginning on or after January I. 2005. 3/5 
of the gain recognized on the sale of the eligible 
timberlands; 
(j) 
For eligible timberlands held by the taxpayer 
for at least a 19-year period 
beginning on or 
after January I. 
2005 but less than a 
20-year 
period beginning on or after January 1, 2005. 2/3 
of the gain recognized on the sale of the eligible 
timberlands; 
(k) 
For eligible timberlands held by the taxpayer 
for at least a 
20-year period 
beginning on or 
after January 1. 
2005 but less than a 
year 
period beginning on or after January I. 
2005, 
11/15 of the gain recognized on the sale of the 
eligible timberlands; 
(1) 
For eligible timberlands held by the taxpayer 
for at least a 2l-year period 
beginning on or 
after January I. 
2005 but less than a 
year 
period beginning on or after January I. 2005. 4/5 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT .. ~ 
.. to H.P. 902, L.D. 1305 
of the gain recognized on the sale of the eligible 
timberlands: 
(m) 
For eligible timberlands held by the taxpayer 
for at least a 
22-year period 
beginning on or 
after January 1, 
2005 but less than a 
23-year 
period beginning on or after January 
1, 
2005, 
13/15 of the gain recognized on the sale of the 
eligible timberlands: 
en) 
For eligible timberlands held by the taxpayer 
for at least a 
year period 
beginning on or 
after January 1, 
2005 but less than a 
24-year 
period beginning on or after January 
1, 
2005, 
14/15 of the gain recognized on the sale of the 
eligible timberlands: or 
(0) 
For eligible timberlands held by the taxpayer 
for at least a 
year period 
beginning on or 
after January 1, 2005, all of the gain recognized 
on the sale of the eligible timberlands. 
(3) 
Taxpayers claiming this credit must attach a sworn 
statement from a forester licensed pursuant to Title 
32, 
chapter 
that the timberlands 
for which the 
credit is claimed have been managed sustainably. 
For 
the purposes of this subparagraph, "sustainably" means 
that the timberlands for which the credit is claimed 
have been managed to protect soil productivity and to 
maintain 
or 
improve 
stand 
productivity 
and 
timber 
quality: known occurrences of threatened or endangered 
species 
and 
rare or 
exemplary natural 
communities: 
significant wildlife habitat 
and essential wildlife 
habitat: and water quality, wetlands and riparian zones. 
Upon request of the State Tax Assessor, the Director of 
the 
Bureau 
of 
Forestry 
within 
the 
Department 
of 
Conservation 
may 
provide 
assistance 
in 
determining 
whether timberlands for which the credit is claimed 
have 
been managed 
sustainably. 
When 
assistance is 
requested under this subparagraph, the director or the 
director's 
designee 
may 
enter 
and 
examine 
the 
timberlands for the purpose of determining whether the 
timberlands have been managed sustainably. 
In the case of timberlands owned by an entity that is 
treated as a pass-through entity for income tax purposes, 
the land must be treated as eligible timberland if ownership 
and use of the land by the pass through entity satisfies the 
requirements 
of 
this 
paragraph. 
If 
the 
owner 
of 
the 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT ,I/- .. to H.P. 902, L.D. 1305 
eligible timberlands is an S corporation. the taxpayer must 
subtract the owner's pro rata share of the gain. 
If the 
owner 
of 
the 
timberlands 
is 
a 
partnership 
or 
limited 
liability company taxed as a partnership. the taxpayer must 
subtract the taxpayer's distributive share of the gain. 
subject to 
the 
percentage 
limitations 
provided in this 
paragraph. 
This modification may not reduce Maine taxable income to 
less than zero. 
To the extent this modification results in 
Maine taxable income that is less than zero for the taxable 
year, the excess negative modification amount may be carried 
forward and applied as a subtraction modification for up to 
taxable years. 
The entire amount of the excess negative 
modification must be carried to the earliest of the taxable 
years to which, by reason of this subsection, the negative 
modification may be carried and then to each of the other 
taxable years to the extent the unused negative modification 
is not used for a prior taxable year. 
Earlier carry-forward 
modifications 
must 
be 
used 
before 
newer 
modifications 
generated in later years.' 
SUMMARY 
This amendment adds a requirement that eligible timberlands 
be sustainably managed. 
This amendment also provides that the 
amount of the deduction increases incrementally over a IS-year 
period beginning after the 10th year of ownership. 
FISCAL ~OTE REQUIRED 
(See attached) 
COMMITTEE AMENDMENT 
• 
Approved: 05/16/05 :;:t;,ac:.. 
LD 1305 
LR 1758(02) 
An Act To Encourage Long-term Holding of Maine Timberland and Sustainable Forest Management 
Fiscal Note for Bill as Amended by Committee Amendment ,{}" 
Committee: Taxation 
Fiscal Note Required: Yes 
Fiscal Note 
Future biennium revenue decrease - General Fund 
Fiscal Detail and Notes 
This bill will reduce General Fund revenue beginning in fiscal year 2014-15. 
LRI758(2) - Fiscal Note - Page 1 of 1