PLEASE NOTE: Legislative Information cannot perform research, provide legal advice, or interpret Maine law. For legal assistance, please contact a qualified attorney.
Amend the bill by striking out everything after the enacting clause and inserting the following:
‘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 G, §1, is repealed and the following enacted in its place: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, 2020, $5,600,000; and
 
D.  For estates of decedents dying on or after January 1, 2020, $2,000,000 and any additional exclusion amount allowed under section 4120.
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 in 2018
Beginning inIn 2018 and each year thereafter, 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, 2020. 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, 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, 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 where 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, chain saws, 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, 2020 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. Appropriations and allocations. The following appropriations and allocations are made.
 
ADMINISTRATIVE AND FINANCIAL SERVICES, DEPARTMENT OF
 
Revenue Services, Bureau of 0002
 
Initiative: Provides funding for one Tax Section Manager position, one Senior Tax Examiner position, 3 Tax Examiner positions and related costs to process and audit additional estate tax returns.

GENERAL FUND	2019-20	2020-21	
POSITIONS - LEGISLATIVE COUNT	0.000	5.000	
Personal Services	$0	$269,697	
All Other	$0	$30,169	
			
GENERAL FUND TOTAL	$0	$299,866	
 
’
Amend the bill by relettering or renumbering any nonconsecutive Part letter or section number to read consecutively.
 
SUMMARY
This amendment creates an additional exclusion amount from the estate tax for family farms, 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.
This amendment also makes a technical correction to the law that ends the annual adjustment for inflation of the exclusion amount for tax years after 2019 and includes appropriations for administrative costs.
FISCAL NOTE REQUIRED
(See attached)