An Act To Change the Exclusion Amount under the Estate Tax and Provide Additional Funding for the Housing Opportunities for Maine Fund
Maine Legislature, Session 130, LD 1704
Committee: Taxation
Sponsors: TALBOT ROSS, CHIPMAN, COLLINGS, TERRY
Amends: 36 MRSA §4102, 36 MRSA §4119, 36 MRSA §4120, 36 MRSA §4121

Legislative Document
No. 1704
H.P. 1267
House of Representatives, May 13, 2021
An Act To Change the Exclusion Amount under the Estate Tax and 
Provide Additional Funding for the Housing Opportunities for 
Maine Fund
Received by the Clerk of the House on May 11, 2021.  Referred to the Committee on 
Taxation pursuant to Joint Rule 308.2 and ordered printed pursuant to Joint Rule 401.
ROBERT B. HUNT
Clerk
Presented by Representative TALBOT ROSS of Portland.
Cosponsored by Senator CHIPMAN of Cumberland and
Representatives: COLLINGS of Portland, TERRY of Gorham.
Be it enacted by the People of the State of Maine as follows:
Sec. 1.  36 MRSA §4102, sub-§5, as amended by PL 2017, c. 474, Pt. G, §1, is 
repealed and the following enacted in its place:
5.  Maine exclusion amount.  "Maine exclusion amount" means:
A.  For estates of decedents dying on or after January 1, 2013 but before January 1, 
2016, $2,000,000;
B.  For estates of decedents dying on or after January 1, 2016 but before January 1, 
2018, the basic exclusion amount determined for the calendar year in accordance with 
the Code, Section 2010(c)(3);
C.  For estates of decedents dying on or after January 1, 2018 but before January 1, 
2022, $5,600,000; and
D.  For estates of decedents dying on or after January 1, 2022, $1,000,000.
Sec. 2.  36 MRSA §4119, as amended by PL 2019, c. 607, Pt. D, §5, is further 
amended to read:
§4119.  Annual adjustments for inflation
Beginning in In 2018 and each year thereafter, 2019 and 2020, on or about September 
15th, for the estates of decedents who die during the succeeding calendar year, the assessor 
shall multiply the cost-of-living adjustment by the dollar amount contained in section 4102, 
subsection 5 applicable to estates of decedents dying on or after January 1, 2018 but before 
January 1, 2022. For the purposes of this section, the "cost-of-living adjustment" is the 
Chained Consumer Price Index for the 12-month period ending June 30th of the preceding 
calendar year divided by the Chained Consumer Price Index for the 12-month period 
ending June 30, 2017.  If the dollar amount, adjusted by the application of the cost-of-living 
adjustment, is not a multiple of $10,000, any increase must be rounded to the nearest 
multiple of $10,000.
Sec. 3.  36 MRSA §4120 is enacted to read:
§4120.  Additional exclusion amount for family farms, aquaculture, fishing and wood 
harvesting businesses
1.  Definitions.  As used in this section, unless the context otherwise indicates, the 
following terms have the following meanings.
A.  "Commercial agricultural production" means commercial production of crops, 
maple syrup, honey, plants, trees, compost and livestock.
B.  "Commercial aquacultural production" means the commercial production of 
cultured fish, shellfish or seaweed or other marine plants for human and animal 
consumption, including:
(1)  All cultivating activities occurring at hatcheries or nurseries, from the egg, 
larval or spore stages to the transfer of the product to a growing site; and
(2)  All cultivating activities occurring on water, from the receipt of fish, shellfish 
or seaweed or other marine plants from onshore facilities to the delivery of 
harvested products to onshore facilities for processing.
C.  "Commercial fishing" means attempting to catch fish or any other marine animals 
or organisms with the intent of disposing of them for profit or trade in commercial 
channels and does not include subsistence fishing for personal use, sport fishing or 
charter boat fishing when the vessel is used for carrying sport anglers to available 
fishing grounds.
D.  "Commercial wood harvesting" means the commercial severance and yarding of 
trees for sale or for processing into logs, pulpwood, bolt wood, wood chips, stud wood, 
poles, pilings, biomass or fuel wood or other products commonly known as forest 
products.
E.  "Depreciable machinery and equipment" means, except as otherwise provided by 
this paragraph, that part of the following machinery and equipment for which 
depreciation is allowable under the Code and repair parts for that machinery and 
equipment:
(1)  New or used machinery and equipment for use directly and primarily in 
commercial agricultural production, including self-propelled vehicles; attachments 
and equipment for the production of field and orchard crops; new or used 
machinery and equipment for use directly and primarily in production of milk, 
maple syrup or honey, animal husbandry and production of livestock, including 
poultry; new or used machinery and equipment used in the removal and storage of 
manure; and new or used machinery and equipment not used directly and primarily 
in commercial agricultural production, but used to transport potatoes from a truck 
into a storage location;
(2)  New or used watercraft, nets, traps, cables, tackle and related equipment 
necessary to and used directly and primarily in commercial fishing;
(3)  New or used watercraft, machinery or equipment used directly and primarily 
for commercial aquacultural production, including, but not limited to: nets; ropes; 
cables; anchors and anchor weights; shackles and other hardware; buoys; fish 
tanks; fish totes; oxygen tanks; pumping systems; generators; water-heating 
systems; boilers and related pumping systems; diving equipment; feeders and 
related equipment; power-generating equipment; tank water-level sensors; 
aboveground piping; water-oxygenating systems; fish-grading equipment; safety 
equipment; and sea cage systems, including walkways and frames, lights, netting, 
buoys, shackles, ropes, cables, anchors and anchor weights; and
(4)  New or used machinery and equipment for use directly and primarily in 
commercial wood harvesting, including, but not limited to, chainsaws, skidders, 
delimbers, forwarders, slashers, feller bunchers and wood chippers.
"Depreciable machinery and equipment" does not include a motor vehicle as defined 
in section 1752, subsection 7 or a trailer as defined in section 1752, subsection 19-A.
F.  "Family member" means, whether by blood or legal adoption, the decedent's: 
brother or sister or the spouse of a brother or sister; parent or grandparent or the spouse 
of a parent or grandparent; ancestor; or lineal descendant.
G.  "Farmland" means land that is or could be classified as farmland under chapter 105, 
subchapter 10 and includes personal property that is exempt from property tax under 
section 655, subsection 1, paragraph C, D, M or O.
2.  Additional exclusion amount.  Notwithstanding any provision of law to the 
contrary, an additional exclusion amount of up to $3,800,000 is allowed for farmland or 
depreciable machinery and equipment that is part of an estate of a decedent dying on or 
after January 1, 2022 that is transferred to a family member of the decedent.
3.  Requirements for additional exclusion; report.  In order to qualify for the 
additional exclusion from the estate tax pursuant to this section:
A.  The farmland or depreciable machinery and equipment must be transferred to a 
family member;
B.  For at least 5 years following the transfer, the farmland or depreciable machinery 
and equipment must remain the property of the family member to whom the farmland 
or depreciable machinery and equipment was transferred or, in the event of the death 
of that transferee, a family member of that transferee; and
C.  During the 5 years following the transfer:
(1)  The land transferred must continue to meet the requirements for classification 
as farmland under chapter 105, subchapter 10, except that the gross income 
requirements of section 1102, subsection 4 must be met for every year of the 5 
years following transfer; and
(2)  The depreciable machinery and equipment transferred must continue to be used 
for commercial agricultural production, commercial aquacultural production, 
commercial fishing or commercial wood harvesting for every year of the 5 years 
following transfer.
A family member to whom farmland or depreciable machinery and equipment is 
transferred who wishes to claim the additional exclusion under this section shall file a report 
annually for the 5 years following the transfer with the assessor certifying that the farmland 
or depreciable machinery and equipment continues to qualify for the additional exclusion.
4.  Failure to maintain requirements for additional exclusion.  If at any time during 
the 5 years following the decedent's death the farmland or depreciable machinery and 
equipment transferred does not meet the requirements of subsection 3, the owner of the 
farmland or depreciable machinery and equipment is subject to the applicable tax specified 
in this chapter based on the fair market value of the farmland or depreciable machinery and 
equipment as of the date of the decedent's death.
5.  Rules.  The assessor shall adopt routine technical rules pursuant to Title 5, chapter 
375, subchapter 2-A to implement this section, including determining the method of 
providing certification of qualification for the additional exclusion provided by this section.
Sec. 4.  36 MRSA §4121 is enacted to read:
§4121.  Distribution of revenue
On a monthly basis, the Treasurer of State shall credit 50% of the revenues generated 
by the reduction in the exclusion amount as described in section 4102, subsection 5, 
paragraph D and section 4120 beginning January 1, 2022 to the Maine State Housing 
Authority.  The Maine State Housing Authority shall deposit the funds received pursuant 
to this section in the Housing Opportunities for Maine Fund created in Title 30-A, section 
4853.
Sec. 5.  Racial equity assessment tool.  The Maine State Housing Authority in 
consultation with the Permanent Commission on the Status of Racial, Indigenous and 
Maine Tribal Populations, as described in the Maine Revised Statutes, Title 5, section 
25001, shall develop a racial equity assessment tool to use when evaluating funding for a 
project under the authority.  The authority shall report to the Joint Standing Committee on 
Labor and Housing on the development of this racial equity assessment tool no later than 
October 1, 2022.
SUMMARY
This bill reduces the exclusion amount, below which the Maine estate tax does not 
apply, to $1,000,000 from $5,600,000 for estates of decedents dying on or after January 1, 
2022 and removes the annual adjustment for inflation of that exclusion amount.  The bill 
creates an additional exclusion amount from the estate tax for family farms and aquaculture, 
fishing and wood harvesting businesses of up to $3,800,000.  This additional exclusion 
applies to farmland or depreciable machinery and equipment used in agriculture, 
aquaculture, fishing or wood harvesting that is inherited by a family member and remains 
in commercial use for 5 years following transfer.  The Treasurer of State must credit 50% 
of the revenue generated by the reduction in the exclusion amount beginning January 1, 
2022 to the General Fund and 50% the Maine State Housing Authority.  The Maine State 
Housing Authority must deposit the funds credited to it in the Housing Opportunities for 
Maine Fund.  The bill directs the Maine State Housing Authority in consultation with the 
Permanent Commission on the Status of Racial, Indigenous and Maine Tribal Populations 
to develop a racial equity assessment tool to use when evaluating project funding and report 
to the Joint Standing Committee on Labor and Housing on the development of this tool no 
later than October 1, 2022.