An Act To Implement the Recommendations of the Commission To Study the Protection of Farms and Farmland Pertaining to Taxation
Maine Legislature, Session 124, LD 0993
Committee: Taxation
Amends: 316 MRSA §1102, 36 MRSA §1122, 36 MRSA §5219-D

Legislative Document 
No. 993 
In Senate, March 12, 2009 
An Act To Implement the Recommendations of the Commission To 
Study the Protection of Farms and Farmland Pertaining to Taxation 
Reported by Senator NUTTING of Androscoggin for the Joint Standing Committee on 
Agriculture, Conservation and Forestry pursuant to Public Law 2007, chapter 649, section 11, 
subsection 6. 
Reference to the Committee on Taxation suggested and ordered printed under Joint Rule 
218. 
Printtd on recycled p:lpcr 
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JOY J. O'BRIEN 
Secretary of the Senate 
Be it enacted V:' the People of the State of Maine as follows: 
Sec. 1. 316 MRSA §1102, sub-§4, as amended by PL 1999, c. 731, Pt. Y, §1, is 
further amended to read: 
4. Farmland. "Farmland" means any tract or tracts of land, including woodland and 
wasteland, of at least 5 contiguous acres on which farming or agricultural activities have 
contributed to a gross annual farming income of at least $2,000 per year from the sales 
value of agricultural products as defined in Title 7, section 152, subsection 2 in one of the 
2, or 3 of the 5, calendar years preceding the date of application for classification. The 
farming or agricultural activity and income derived from that activity may be achieved by 
either the owner or a lessee of the land. 
Gross income as used in this section includes the value of commodities produced for 
consumption by the farm household. Any applicant for assessment under this subchapter 
bears the burden of proof as to the applicant's qualification. 
Sec. 2. 36 MRSA §1122 is enacted to read: 
§1122. Reimbursement for farmland classified under this subchapter 
1. Calculation of reimbursement. The State Tax Assessor shall determine annually 
the amount of acreage in each municipality that is classified as farmland and taxed in 
accordance with this subchapter. A municipality is entitled to annual payments distributed 
in accordance with this section from money appropriated by the Legislature if the 
municipality submits an annual return in accordance with section 383 and if the 
municipality achieves the minimum assessment ratio established in section 327. The State 
Tax Assessor shall pay any municipal claim found to be in satisfactory form by August 
st of the year following the submission of the annual return. The municipal 
reimbursement appropriation is calculated on the basis of 90% of the per acre tax revenue 
lost as a result of this subchapter. For purposes of this section, the tax lost is the tax that 
would have been assessed, but for this subchapter, on the classified farmlands if they 
were assessed according to the unclassified farmland values used in the state valuation 
then in effect or according to the current local valuation on unclassified farmland, 
whichever is less, minus the tax that was actually assessed on the same lands in 
accordance with this subchapter and adjusted for the aggregate municipal savings in 
required educational costs attributable to reduced state valuation. A municipality that fails 
to achieve the minimum assessment ratio established in section 327 loses 10% of the 
reimbursement provided by this section for each one percentage point the minimum 
assessment ratio falls below the ratio established in section 327. 
2. 
Administration. 
The State Tax Assessor shall adopt rules necessary to 
implement the provisions of this section. Rules adopted pursuant to this subsection are 
routine technical rules for the pumoses of Title 5, chapter 375, subchapter 2-A. 
A. The State Tax Assessor shall distribute reimbursement under this section to each 
municipality in proportion to the product of the reduced farmland valuation of the 
municipality multiplied by the property tax burden of the municipality. For pumoses 
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of this paragraph, unless the context otherwise indicates, the following terms have the 
following meanings. 
(1) 
"Average value of unclassified farmland" means the per acre farmland 
valuations used in the state valuation then in effect or according to the current 
local· valuation on unclassified farmland as determined for state valuation 
purposes, whichever is less. 
(2) 
"Property tax burden" means the total real and personal property taxes 
assessed in the most recently completed municipal fiscal year, except the taxes 
assessed on captured value within a tax increment financing district, divided by 
the latest state valuation celiified to the Secretary of State. 
(3) "Reduced farmland valuation" means the difference between the average 
value of unclassified farmland and the average value of classified farmland times 
the total number of acres classified as farmland under this subchapter. 
(4) 
"Unclassified farmland" means acreage actively used for agricultural 
purposes that is not: 
(a) Classified under the laws governing current use valuation set forth in this 
subchapter, subchapter 2-A or subchapter 10-A; 
(b) A base lot; or 
(c) Waste land. 
Sec. 3. 36 MRSA §5219-DD is enacted to read: 
§S219-DD. 
Credit for conservation or qualified conservation contribution of 
farmland 
1. Credit. A taxpayer who has qualified for and claimed on the taxpayer's federal 
income tax return, under Section 170 of the Code, a charitable deduction for a gift of 
farmland for conservation or for a qualified conservation contribution donated after 
January 1, 2009 on a qualified real property interest in farmland located in this State may 
claim a credit against the tax imposed by this Part for the applicable tax year in an 
amount equal to 15% of the total amount of the federal deduction attributable to the gift 
of farmland for conservation or to the qualified real property interest in farmland located 
in this State subject to the caps provided in subsection 6. 
2. 
Carry-forward. If the amount of the credit under this section exceeds the 
maximum credit that may be used in any particular taxable year as provided in subsection 
or 6, the excess credit may be carried forward to succeeding taxable years until all the 
credit is claimed. 
3. Refundability. The credit provided by this section is refundable up to 20% of the 
amount of the total credit for which the taxpayer is eligible in a taxable year for the 
qualified conservation contribution of farmland. 
4. Limitation. A gift or donation is eligible for a credit under this section only if it 
meets the requirements of rules adopted by the Commissioner of Agriculture, Food and 
Rural Resources under this subsection. The commissioner shall adopt rules, in 
consultation with the State Tax Assessor, by October 1, 2009. Rules adopted under this 
subsection are routine technical rules under Title 5, chapter 375, subchapter 2-A. 
5. Qualified appraisal. The fair market value of a qualified donation made pursuant 
to this section must be substantiated by a qualified appraisal prepared by a qualified 
appraiser as defined under applicable federal law and regulations applicable to charitable 
contributions. 
6. 
Maximum credit. 
The credit provided for in this section may not exceed 
$250,000 for a return filed under chapter 817 or 819 or $100,000 for other returns filed 
under this Part. 
Sec. 4. Application. This Act applies to tax years beginning on or after January 1, 
2009. 
SUMMARY 
This bill provides that amounts used to demonstrate eligibility under the farm and 
open space tax laws must be from the sale of agricultural products as defined in the 
Maine Revised Statutes, Title 7, section 152. It also provides for towns to be reimbursed 
90% of the revenue lost for farmland classified under the farm and open space tax laws. 
It also provides a transferable income tax credit for voluntary contributions of 
farmland for conservation and for conservation easements of farmland that qualifY as 
charitable donations under the federal income tax. The credit is equal to 15% of the value 
of the donation up to $250,000 for corporate donors and $100,000 for other donors. The 
credit is refundable up to 20% per year. 
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