Senate Bill #364 (2021)

AN ACT RELATING TO TAXATION

Entitles dairy farms to the exemptions from taxation granted to farmland, forestland, or open space.

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Changes since original draft

  • 2021 – S 0364
  • 2021 – S 0364 SUBSTITUTE A
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  • LC001024
  • LC001024/SUB A
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  • S T A T E O F R H O D E I S L A N D
  • IN GENERAL ASSEMBLY
  • JANUARY SESSION, A.D. 2021
  • ____________
  • A N A C T
  • RELATING TO TAXATION
  • Introduced By: Senators Archambault, Euer, Lombardo, and Coyne
  • Date Introduced: February 25, 2021
  • Referred To: Senate Finance
  • It is enacted by the General Assembly as follows:
  • SECTION 1. Section 44-3-32.2 of the General Laws in Chapter 44-3 entitled "Property Subject to Taxation" is hereby amended to read as follows:
  • 44-3-32.2. Cities and towns – Tax exemption for farmland, forestland or open space land.
  • (a) Cities and towns in the state of Rhode Island may, by ordinance, exempt from taxation any real property situated in the town classified and utilized as farmland, forestland or open space land pursuant to the provisions of chapter 27 of this title. The amount of the exemption shall be provided for by ordinance. Cities and towns may, from time to time, by amendment to the ordinance, make those changes in the amount of exemption granted.
  • (b) Cities and towns in the state of Rhode Island shall exempt in full from taxation any real property situated in the city or town classified and utilized as dairy farmland pursuant to the provisions of chapter 27 of title 44.
  • (b) Cities and towns in the state of Rhode Island shall exempt in full from taxation real property utilized in the production of dairy products by a licensed dairy in Rhode Island, current and future, pursuant to the department of health rules and regulations, including cow, sheep and goat dairies. Said real property shall include, grazing land, cropland, outbuildings and any other facility used in the direct production and processing of dairy products.
  • (b)(c) Cities and towns of Rhode Island are authorized by ordinance to provide that any person who obtains an exemption pursuant to the ordinance to which the person is not entitled, by the filing or making of any false statement, or the proffering of any document or other writing known by the person to have been altered, forged, or to contain any false or untrue information, is liableforanamountequaltodoubletheamount ofreductionsintaxesresultingfromtheexemption, which amount is recoverable by the city or town in a civil action.
  • (c)(d) Cities and towns in the state of Rhode Island are authorized by ordinance to exempt from taxation any real property situated in the town classified and utilized as farmland on which the development rights have been sold or donated and will remain farmland in perpetuity. The amount of the exemption shall be provided for by ordinance. Cities and towns may, from time to time, by amendment to the ordinance, make those changes in the amount of exemption granted.
  • (c)(d) Cities and towns in the state of Rhode Island are authorized by ordinance to exempt from taxation any real property situated in the town classified and utilized as farmland on which the development rights have been sold or donated and will remain farmland in perpetuity. The amount of the exemption shall be provided for by ordinance. Cities and towns may, from time to time, by amendment to the ordinance, make those changes in the amount of exemption granted.
  • SECTION 2. Section 44-5-39 of the General Laws in Chapter 44-5 entitled "Levy and Assessment of Local Taxes" is hereby amended to read as follows:
  • 44-5-39. Land use change tax.
  • (a) After May15, 1980, when land classified as farm, dairyfarm, forest, or open space land and assessed and taxed under the provisions of § 44-5-12 is applied to a use other than as farm, dairy farm, forest, or open space, or when the land owner voluntarily withdraws that classification, it shall be subject to additional taxes, subsequently referred to as a land use change tax. The tax is at the following rate:
  • (1) Ten percent (10%) of the then fair market value of the land if the use is changed or classification is withdrawn during the first six (6) years of classification.
  • (2) Nine percent (9%) of the then fair market value of the land if the use is changed or classification is withdrawn during the seventh (7th) year of classification.
  • (3) Eight percent (8%) of the then fair market value of the land if the use is changed or classification is withdrawn during the eighth (8th) year of classification.
  • (4) Seven percent (7%) of the then fair market value of the land if the use is changed or classification is withdrawn during the ninth (9th) year of classification.
  • (5) Six percent (6%) of the then fair market value of the land if the use is changed or classification is withdrawn during the tenth (10th) year of classification.
  • (6) Five percent (5%) of the then fair market value of the land if the use is changed or classification is withdrawn during the eleventh (11th) year of classification.
  • (7) Four percent (4%) of the then fair market value of the land if the use is changed or classification is withdrawn during the twelfth (12th) year of classification.
  • (8) Three percent (3%) of the then fair market value of the land if the use is changed or classification is withdrawn during the thirteenth (13th) year of classification.
  • (9) Two percent (2%) of the then fair market value of the land if the use is changed or classification is withdrawn during the fourteenth (14th) year of classification.
  • (10) One percent (1%) of the then fair market value of the land if the use is changed or classificationiswithdrawnduringthefifteenth(15th)yearofclassification.Notaxshallbeimposed by the provisions of this section following the end of the fifteenth (15th) year of classification.
  • (b) Owners of land classified as farmland or dairy farmland who have held title to the land, and where the land has been farmed or used as a dairy farm for five (5) years previous to classification, are liable for a land use change tax of:
  • (1) Ten percent (10%) of the then fair market value of the land if the use is changed or classification is withdrawn during the first (1st) year of classification.
  • (2) Nine percent (9%) of the then fair market value of the land if the use is changed or classification is withdrawn during the second (2nd) year of classification.
  • (3) Eight percent (8%) of the then fair market value of the land if the use is changed or classification is withdrawn during the third (3rd) year of classification.
  • (4) Seven percent (7%) of the then fair market value of the land if the use is changed or classification is withdrawn during the fourth (4th) year of classification.
  • (5) Six percent (6%) of the then fair market value of the land if the use is changed or classification is withdrawn during the fifth (5th) year of classification.
  • (6) Five percent (5%) of the then fair market value of the land if the use is changed or classification is withdrawn during the sixth (6th) year of classification.
  • (7) Four percent (4%) of the then fair market value of the land if the use is changed or classification is withdrawn during the seventh (7th) year of classification.
  • (8) Three percent (3%) of the then fair market value of the land if the use is changed or classification is withdrawn during the eighth (8th) year of classification.
  • (9) Two percent (2%) of the then fair market value of the land if the use is changed or classification is withdrawn during the ninth (9th) year of classification.
  • (10) One percent (1%) of the then fair market value of the land if the use is changed or classification is withdrawn during the tenth (10th) year of classification. No tax shall be imposed by the provisions of this section following the end of the tenth year of classification.
  • SECTION 3. Section 44-27-3 of the General Laws in Chapter 44-27 entitled "Taxation of Farm, Forest, and Open Space Land" is hereby amended to read as follows:
  • 44-27-3. Classification of farmland. Classification of farmland or dairy farmland.
  • (a) An owner of land may file a written application with the director of environmental management, for its designation by the director as farmland or as dairy farmland. When the application is made and after a filing fee of ten dollars ($10.00) is paid, the director shall examine the land and, if the director determines that it is farmland or as dairy farmland, the director shall issue a certificate in his or her office, furnish a copy to the owner of the land, and file one copy in the office of the assessor of the city or town in which the land is located.
  • (b) When requested to do so by the assessor or whenever the director deems it necessary, the director of environmental management shall re-examine land designated by the director as farmland or as dairy farmland. If the director finds that this land is no longer farmland or dairy farmland, the director shall send a notice to the landowner that the landowner has thirty (30) days either to bring the land into compliance or to request a formal hearing before the director. If after the thirty (30) days or after the hearing, the director confirms that the land is no longer farmland or dairy farmland, the director shall issue a certificate canceling his or her designation of the land as farmland or dairy farmland, and shall furnish one copy to the owner and file one in the office of the assessor. Loss of designation by action of the director of environmental management makes the land subject to the land use change tax provided for in § 44-5-39.
  • (c)(1) An owner of land designated as farmland or dairy farmland by the director of environmental management may apply for its classification as farmland or dairy farmland on any assessment list of the city or town where it is located by filing a written application for that classification with the assessor of the city or town not earlier than thirty (30) days before nor later than thirty (30) days after the date of assessment, except that in years of revaluation not later than thirty (30) days after written notice of revaluation or in its absence after receipt of the tax bill, and if the director has not cancelled his or her designation of that land as farmland or dairy farmland as of a date at or prior to the date of the assessment, the assessor shall classify the land as farmland or dairy farmland and include it as farmland or dairy farmland on the assessment list.
  • (2) In order to maintain this classification, each year thereafter, the property owner shall submit to the assessor a certificate on a form prescribed by the assessor confirming that the land is still used in farming or dairy farming. The assessor shall in the first notification mail the forms by first class mail not later than the thirtieth of November and if a second notification is needed, it shall be mailed certified. Failure to submit the certificate by thirty (30) days after the date of assessment is construed as voluntary withdrawal of the classification, except that the assessor may waive this requirement for good cause.
  • (3) Notwithstandingtheprecedingsubsections, whenever the owner ofland designated and classified as farmland or dairy farmland is a municipal land trust, municipal conservation commission, or private nonprofit land trust, annual certification is not required, and the classification continues until the voluntary withdrawal of the classification by the owner, or the transfer of the land by the owner in fee simple.
  • (d) Application to the director of environmental management for designation as farmland or dairy farmland shall be made upon a form prescribed by the director and shall present a description of the land and any other information that he or she may require to aid the director in determining whether the land qualifies for that designation. An application to an assessor for classification of land as farmland or dairy farmland shall be made upon a form prescribed by the assessor and shall present a description of the land and the date of issuance by the director of environmental management of his or her certificate designating it as farmland or dairy farmland.
  • (e) Failure to file an application for classification of farmland or dairy farmland within the time limit prescribed in subsection (c) of this section and in the manner and form prescribed in subsection (d) of this section shall be construed as a waiver of the right to that classification on the assessment list.
  • (f) Any landowner aggrieved by: (1) the cancellation of a designation under subsection (b) of this section or the denial of an application, filed in accordance with the provisions of subsections (c) and (d) of this section, by the assessor of a city or town for a classification of land as farmland or dairy farmland; or (2) the use value assessment placed on land classified as farmland or dairy farmland by the assessor; has the right to file an appeal within ninety (90) days of receiving notice, in writing, of the denial or the use value assessment with the board of assessment review of the city or town. Should the city or town not have a board of assessment review, the city or town council reviews the appeal. The assessor shall be given the opportunity to explain either his or her refusal to classify the land or the assessment placed on the classified land. The board of review, or city or town council, shall also consider the testimony of the landowner and the city or town's planning board and conservation commission, if they exist. They shall also seek and consider the advice of the office of state planning, the department of environmental management, the dean of the college of resource development, and the conservation district in which the city or town is located.
  • (g)(1) The board of assessment review, or city or town council, shall not disturb the designation of the director issued pursuant to subsection (a) of this section, unless the tax assessor has shown by a preponderance of the evidence that that designation was erroneous.
  • (2) The board of assessment review, or city or town council, shall render a decision within forty-five (45) days of the date of filing the appeal. Decisions of the board of assessment review, or city or town council, may be appealed to the superior court pursuant to § 44-27-6.
  • SECTION 4. This act shall take effect upon passage.
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  • LC001024
  • LC001024/SUB A
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  • EXPLANATION
  • BY THE LEGISLATIVE COUNCIL
  • OF
  • A N A C T
  • RELATING TO TAXATION
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  • This act would entitle dairy farms to the exemptions from taxation granted to farmland, forestland, or open space.
  • This act would take effect upon passage. ======== LC001024 ========
  • This act would take effect upon passage. ======== LC001024/SUB A ========

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