A municipality may not receive a reimbursement payment under this subsection that exceeds an amount determined by calculating the farmland tax loss less the municipal savings in education costs attributable to reduced state valuation.

A. The farmland tax loss is the adjusted tax that would have been assessed, but for this subchapter, on the classified farmlands if they had been assessed according to the undeveloped acreage valuations used in the state valuation then in effect minus the tax that was actually assessed on the same lands in accordance with this subchapter.

In determining the adjusted tax that would have been assessed, the tax rate to be used is computed by adding the additional school support required by the modified state valuation attributable to the increased valuation of farmland to the original tax committed and dividing this sum by the modified total municipal valuation.__The adjusted tax rate is then applied to the valuation of farmland based on the undeveloped acreage valuations, adjusted by the certified ratio, to determine the adjusted tax.

B. The municipal savings in education costs is determined by multiplying the school subsidy index by the change in state valuation attributable to the use of the valuations determined in accordance with this subchapter on classified farmlands rather than their valuation using the undeveloped acreage valuations used in the state valuation then in effect.

Sec. 9. 36 MRSA §1109, sub-§2, as amended by PL 1987, c. 728, §7, is further amended to read:

2. Provisional classification. The owner of a parcel of land, including woodland and wasteland of at least 5 contiguous acres on which farming or agricultural activities have not produced the gross income required in section 1102, subsection 4, per year for one of the 2 or 3 of the 5 preceding calendar years, may apply for a 2-year provisional classification as farmland by submitting a signed schedule in duplicate, on or before April 1st of the year for which provisional classification is requested, identifying the land to be taxed hereunder under this subsection, listing the number of acres of each farmland classification, showing the location of the land in each classification and representing that the applicant intends to conduct farming or agricultural activities upon that parcel. Upon receipt of the schedule, the land shall must be provisionally classified as