Sec. 4. 36 MRSA §1112, 3rd ¶, as amended by PL 1989, c. 748, §6, is further amended to read:

A penalty may not be assessed at the time of a change of use from the farmland or horticultural land classification of land subject to taxation under this subchapter to the open space classification of land subject to taxation under this subchapter. A penalty may not be assessed upon the withdrawal of open space land from taxation under this subchapter if the owner applies for and is accepted for classification as timberland under subchapter II-A. There also is no penalty imposed when land classified as timberland is accepted for classification as open space land. A penalty may not be assessed upon withdrawal of open space land from taxation under this subchapter, or from timberland taxation under subchapter II-A, if the owner applies for and is accepted for classification as farmland or horticultural land under this subchapter. The recapture penalty for withdrawal from farmland or horticultural land classification within 10 years of after a transfer from either open space tax classification or timberland tax classification is the same imposed on withdrawal from the prior tax classification, open space or tree growth. The recapture penalty for withdrawal from farmland classification more than 10 years after such a transfer will be the regular farmland or horticultural land recapture penalty provided for in this section. In the event a penalty is later assessed under subchapter II-A, the period of time that the land was taxed as farmland, horticultural land or as open space land under this subchapter must be included for purposes of establishing the amount of the penalty.

SUMMARY

Under current law, farmland eligible for valuation based on current use must be "of at least 5 contiguous acres." This restriction excludes much farmland devoted to ornamental horticulture. This bill eliminates the acreage restriction in the definition of farmland to expand the amount of farmland subject to taxation under the farmland and open space tax laws. This bill also changes the recapture penalties imposed on farmland or horticultural land that is disqualified from this classification after less than 5 years of being classified as farmland or horticultural land. The new recapture penalty is the same as that imposed on farmland classified as such for 5 or more