Sec. 1. 36 MRSA §4080 is enacted to read:

§4080.__Exemptions

1.__Definitions.__As used in this section, unless the context otherwise indicates, the following terms have the following meanings.

A.__"Eligible farmland" means a tract of land located in the State, including woodland and wasteland, of at least 5 contiguous acres on which a farming or agricultural activity has contributed to a gross annual farming income of at least $2,000 per year in either 1 of the 2 calendar years or 3 of the 5 calendar years preceding the death of the owner.__The farming or agricultural activity and the income derived from that activity may be earned by either the owner or lessee of the farmland.__For the purposes of this paragraph, "gross annual farming income" includes the value of commodities produced for consumption by the farm household.

B.__"Eligible timberland" means a tract of land of at least 10 acres used primarily for the growth of trees to be harvested for commercial use.__Otherwise eligible timberland may not be excluded from the provision of this section due to:

(1)__Public recreational use of the land;

(2)__A statutory or governmental restriction that prevents commercial harvesting of trees or requires a primary use of the land other than commercial harvesting;

(3)__A deed restriction, restrictive covenant or organizational charter that prevents commercial harvesting of trees or requires a primary use of the land other than commercial harvesting and was effective prior to January 1, 1982; or

(4)__Past or present mineral exploration on the land.

2.__Exemption.__The tax otherwise imposed by this chapter is reduced by the amount of the tax attributable to eligible farmland and eligible timberland included in the taxable estate, including eligible timberland and eligible farmland held by an entity to the extent that the value of the entity is included in the taxable estate.__If the value of a decedent's estate minus the value of eligible farmland and eligible timberland is below the amount that would incur federal estate tax, then no tax is owed under this chapter.