HOUSE DOCKET, NO. 2589        FILED ON: 1/19/2017

HOUSE  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  No. 2618

The Commonwealth of Massachusetts

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PRESENTED BY:

Stephen Kulik

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To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
Court assembled:

The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:

An Act maintaining land in agriculture.

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PETITION OF:

HOUSE DOCKET, NO. 2589        FILED ON: 1/19/2017

HOUSE  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  No. 2618

The Commonwealth of Massachusetts

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In the One Hundred and Ninetieth General Court
(2017-2018)

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An Act maintaining land in agriculture.

Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:
 

SECTION 1.  The purpose of this act is to reduce the conversion of farmland out of agricultural use following the death of a farmland owner by reducing the tax burden on the heir(s) and to encourage a landowner’s heir(s) to maintain the property in agricultural use.

SECTION 2.  Section 1 of chapter 65C of the Massachusetts General Laws is hereby amended by deleting subsections (a) and (b) and inserting in its place the following:-

“(a) “Agricultural Use”, uses that meet the definitions of agricultural use as defined in section 1 of chapter 61A; horticultural uses as defined in section 2 of chapter 61A; or forestland with a forest management plan as defined in section 1 of chapter 61.

(b) ''Code'', the Internal Revenue Code of the United States, as amended and in effect on January first, nineteen hundred and seventy-five.

(c) ''Commissioner'', the commissioner of revenue.”

SECTION 3. Section 3 of chapter 65C is hereby amended by adding after subsection (d) the following:-

“(e)  In addition to the exemption provided in subsection (a) and the deductions provided in subsection (b) an estate that is approved by the commissioner of agriculture may elect to exempt from the value of the gross estate not more than 5 million dollars of real property that has either: been in agricultural use for the two years preceding the time of death; or 3 of the five years preceding the time of death provided that there has not also been any uses incompatible with the agricultural use of the property in any year that the property was not used for agriculture. 

unless the property is restricted by a non-development covenant that: is approved by the commissioner of agriculture, is for the purposes of maintaining the land in agricultural use; precludes non-agricultural development of the land, is recorded at the registry of deeds in the county(ies) or district(s) in which the property is located, and does not expire within 10 years after the date of death, then the commissioner shall forthwith cause to be recorded in the registry of deeds of the count(ies) or district(s) in which the property is situated a statement which shall constitute a lien upon the land covered by such election for such exemption under the provisions of this subsection (e). The statement shall name the owner or owners of record, the difference between the estate taxes paid under this election, and the estate taxes that would have otherwise been paid had the election not been made (the “savings”) and shall include a description of the land adequate for identification. Unless such a statement is recorded the lien shall not be effective with respect to a bona fide purchaser or other transferee without actual knowledge of such lien. Upon application by any record owner, such liens shall be released by the commissioner with respect to any property upon the facts being established by their records or by affidavits or otherwise that all assessments have been paid, or it being more than 10 years past the date of death, no assessment being due.  All recording fees paid pursuant to the provisions of this subsection whether for statements of liens, certificates, releases or otherwise shall be borne by the owner of record of the land.

Upon a change of use or a sale for a change of use, the landowner shall immediately notify the commissioner and the commissioner of agriculture of such sale or change of use and an assessment shall be due to the commonwealth.  Such assessment shall be calculated based on the date of a sale for a change of use, or based on the last date of use in agriculture as follows: 

If the change of use or sale is within 1 year of the time of death the assessment shall be 105 per cent of the savings;

If the change of use or sale is within 2 years, but more than 1 year from the time of death the assessment shall be 110 per cent of the savings;

If the change of use or sale is within 3 years, but more than 2 years from the time of death the assessment shall be 115 per cent of the savings;

If the change of use or sale is within 4 years, but more than 3 years from the time of death the assessment shall be 120 per cent of the savings;

If the change of use or sale is within 5 years, but more than 4 years from the time of death the assessment shall be 125 per cent of the savings;

If the change of use or sale is within 6 years, but more than 5 years from the time of death the assessment shall be 115 per cent of the savings;

If the change of use or sale is within 7 years, but more than 6 years from the time of death the assessment shall be 105 per cent of the savings;

If the change of use or sale is within 8 years, but more than 7 years from the time of death the assessment shall be 95 per cent of the savings;

If the change of use or sale is within 9 years, but more than 8 years from the time of death the assessment shall be 85 per cent of the savings;

If the change of use or sale is within 10 years, but more than 9 years from the time of death the assessment shall be 75 per cent of the savings; and

If the change of use or sale is after 10 years from the time of death, there shall be no assessment due.

Lack of agricultural use for less than 9 months shall not be considered a change of use. 

If a change of use or a sale for a change of use occurs only on a portion of such land then the assessment shall be prorated based on the proportional value of the property at the time of the sale or change of use.

Funds paid to the commonwealth pursuant to such assessments shall be deposited to the Agricultural Resolve and Security Fund and used to further the purposes of this act.

The commissioner, in consultation with the commissioner of agriculture may promulgate such rules and regulations and prescribe the use of such forms and procedures as the commissioner deems appropriate to and consistent with effectuation of the purposes of this chapter including but not limited to further determining agricultural use and valuing the proportional value of the property in the event of a partial sale or change of use.

Property restricted by an agricultural preservation restriction as defined by MGL chapter 184 section 31 and signed by the commissioner of agriculture shall be deemed to be restricted by a non-development covenant that: is approved by the commissioner of agriculture for the purposes of maintaining the land in agricultural use; precludes non-agricultural development of the land, and does not expire within 10 years after the date of death.