S. 1511: An Act to Relative to the Taxation of Forest, Farm and Recreation Land

Current Massachusetts law provides for a reduction in property tax assessments for land that is voluntarily maintained in active forestry (Chapter 61), productive agriculture or horticulture (Chapter 61A), or open space and recreational (Chapter 61B) uses. These three programs, while currently protecting hundreds of thousands of acres, have several loopholes that have reduced their effectiveness. In particular, the town’s right of first refusal (ROFR) option to purchase "Chapter lands" when they are proposed for development is vaguely described and has recently been litigated. (Trust for Public Lands v. Farmer, 1995) Earlier attempts to amend the Chapter programs have failed in large part due to disagreement over significant modifications to the programs.

S. 1511, the consensus bill, is the result of a year of negotiations between state agencies, landowner associations, land trusts, and assessors. The goal of this Task Force was not to address all aspects of the Chapter programs which could possibly be improved, rather it was to recognize consensus on the few areas of the Chapter programs which everyone agrees need immediate improvement.

Specifically, S. 1511, the consensus bill, does the following:

1. Improves the uniformity across the three chapters

• The time period for paying roll-back taxes is set at 5 years for 61B and 5 years once the initial 10 year certification period is complete for 61 to match the 5 year time period under 61A.
• Administrative corrections, such as payment of recording fees and no assessment of taxes less than $10 are made for all three programs.

1. Improves the clarity of the right of first refusal process

• Clearly states the landowners’ and the municipalities’ responsibilities under the Right of First Refusal Process, in accordance with recent litigation. (See back of page.)
• Specifies that roll-back taxes shall be paid on converted portions of land when acquired by the state or a non-profit through an assignment of the ROFR.

1. Improves the effectiveness of the programs by closing loopholes

• Extends the ROFR provisions for two years following withdrawal from the programs.
• Improves DEM oversight of forestry land under 61A.
• Conveyance tax will be due on 61A and 61B lands if they are converted within 10 years of an otherwise exempt sale.

Other changes to the Chapter programs will be proposed, but these do not reflect a consensus and should not impede enactment of S. 1511. Swift enactment of S. 1511, the consensus bill, without amendments is critical to improving implementation of the Commonwealth’s current-use taxation programs to preserve forestry, agriculture, and open space.

Right of First Refusal Process:

The section of current law presently causing the greatest difficulty is the right of first refusal (ROFR) option which the municipality has to meet the purchase price of Chapter lands which are being converted to other uses. The consensus bill changes this section to close loopholes and reflect the interpretation in Trust for Public Lands v. Farmer. As stated in S. 1511, the process to be followed is outlined below:

1. landowner and buyer sign Purchase and Sale agreement (P&S);
1. landowner notifies town boards and state agency of intent to sell, includes full copy of P&S (all terms and conditions, no contingencies, just chapter land, fixed consideration, include any side agreements on non-chapter land). The 120 day clock does not start until this complete notice has been deposited in US mail;
1. within 30 days, town must notify landowner if notice was insufficient to start the clock;
1. town provides landowner either: notice of exercise, notice of assignment, or notice of non-exercise (all to be recorded, and accompanied by a proposed P&S if notice of exercise);
1. if assigned, assignee must notify landowner of intent to exercise or not, including a proposed P&S. If assigned, must retain 50% in conservation use;
1. within the 120 days, town and assignee have the right to enter the property for inspecting;
1. if town or assignee exercise, they must execute the purchase within 60 days unless otherwise agreed in writing with landowner;
1. no sale can be consummated unless 120 days has expired or notice of non-exercise recorded and, in any event, no sale if terms differ from original P&S reviewed by town.