It is enacted by the General Assembly as follows:

SECTION 1. Section 44-5-42 of the General Laws in Chapter 44-5 entitled "Levy and Assessment of Local Taxes" is hereby amended to read as follows:

44-5-42. Exemption of farm machinery, livestock, and poultry. -- {ADD Exemption of certain farm property. -- ADD} (a) All farm machinery, including motor vehicles with farm registration plates shall be exempt from taxation. Provided, however, that any town or city shall be entitled to reimbursement by the state in an amount equal to the amount levied on the value of the farm machinery in excess of the value of ten thousand dollars ($10,000.00) based upon assessments on the 31st day of December 1982.

(b) Livestock and poultry which are actually and exclusively used in farming, when owned and kept in this state by any farmer or group of farmers operating as a unit, a partnership, or a corporation, a majority of the stock of which corporation is held by members of a family actively engaged in farm operations, shall be exempt from local property taxation; provided the principal means of livelihood of each farmer whether operating individually or as one of a group, partnership, or corporation shall be derived from the farming operation. Only one exemption shall be allowed to each farmer, group of farmers, partnership, or corporation.

{ADD (c) All real property including all real estate, buildings and improvements thereon which is not used for a personal residence and is actually and exclusively used in farming by a qualified farmer may be exempted from taxation by the town of Richmond. For purposes of this section, a qualified farmer is an individual, partnership or corporation who operates a farm and has filed a 1040F U.S. Internal Revenue form or similar document with the Internal Revenue Service, has a state of Rhode Island farm tax number, and has earned at least ten thousand dollars ($10,000) gross income on farm products in each of the preceding three (3) years, property defined as either farm, forest or open space land, pursuant to chapter 44-27. Any sale of exempted land, or portion thereof, shall incur at the time of sale a penalty of twice the total amount of taxes so exempted. The penalty so assessed shall be due and payable to the town of Richmond which would grant the exemption at the time of sale of the property. A sale of land to another qualified farmer or use according to this section shall be exempted from the penalty.

(d) Any taxpayer or owner which allows its real property to be used by a qualified owner in a manner consistent with use defined in subsection (c) herein may be eligible for the exemption established by this section for the duration of use by a qualified farmer. The tax assessor may prorate the exemption according to actual use. The tax assessor may require evidence of actual use, including, but not limited to, a lease, to substantiate the exemption. ADD}

SECTION 2. This act shall take effect on December 31, 1996.