Maine Legislature, Session 121, LD 1629
Committee Amendment CA_A_H587 (House)
Committee: State and Local Government shall review this legislation
Amends: 36 MRSA §662, 36 MRSA §685

COMMITTEE 
AMENDMENT "A " to 
H.P. 
1209, 
L.D. 
1629, 
"RESOLUTION, Proposing a Competing Measure under the Constitution 
of Maine To Create Municipal Service Districts To Reduce the Cost 
of 
Local 
Government, 
To 
Provide Property Tax 
Relief 
and 
To 
Increase Economic Competitiveness" 
Amend 
the 
resolution 
by 
striking 
out 
the 
title 
and 
substituting the following: 
'RESOLUTION, Proposing a Competing Measure under the Constitution 
of Maine To Create Regional Service Districts To Reduce the Cost 
of Local Government, 
To Provide Property Tax Relief and To 
Increase Economic Competitiveness' 
Further amend the resolution by striking out Part A and Part 
B and inserting in their place the following: 
'PART A 
Sec. A·l. 30·A MRSA c. 112 is enacted to read: 
CHAPTER 112 
REGIONAL SERVICE DISTRICTS 
§2l11. 
Purpose 
The purpose of this chapter is to enhance the ability of 
municipalities to cooperate and consolidate on a basis of mutual 
advantage in the efficient and effective exercise of municipal 
obligations and home-rule authority pursuant to this Part through 
voluntary 
creation 
of 
and 
delegation 
to 
regional 
service 
districts or through other cooperative agreements that achieve 
Page l-LR2165(2) 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT ·A" to H.P. 1209, L.D. 1629 
similar cost sayings. including, but not limited to. cooperative 
agreements with county governments. 
The goal and results of 
cooperation and consolidation are to achieve significant property 
tax relief and to increase municipa1ities'ability to fund public 
education. 
Sec. A-2. Legislation and review. 
By 
January 2, 
2004. 
the 
Executive 
Department shall present legislation to 
the Joint 
Standing Committee on State and Local Government to carry out the 
purpose of the Maine Revised Statutes, Title 3D-A, chapter 112. 
The Joint Standing Committee on State and Local Government shall 
review this legislation. 
PARTB 
Sec. B-1. 36 MRSA c.IOS, sub-c. I-A is enacted to read: 
SUBCHAPTER I-A 
PROPERTY TAX COlITRIBQTIOlf TO PUBLIC EDUCATIQH 
§52I. 
Definitions 
As 
used in this subchapter, unless the context otherwise 
indicates. the following terms have the following meanings. 
1. 
Full value mill rate e~ctation. "Full value mill rate 
expectation" means the maximum property tax rate that may be 
applied to the value of property for the purpose of funding 
public education from kindergarten to grade 12. 
2. 
Funding public education from kindergarten to grade 12. 
"Funding public education from kindergarten to grade 12" means 
the co~t of funding essential programs and services as described 
in Title 20-A. chapter 606-5. 
§522. Maximum mill rates established 
1. 
Maximum 
full 
value 
mill 
rate 
e~ctatioD. 
Notwithstanding Title 20-A. chapter 606-B. with respect to the 
assessment of any property taxes for property tax years beginning 
on or after April 1. 2005, this section establishes the full 
value mill rate expectations that may be applied to the value of 
property 
for 
the 
purpose 
of 
funding 
public 
education 
from 
kindergarten to grade 12. 
For 
a 
municipality that assesses 
property at a percentage other than 100'\, of just value, the 
maximum mill rate calculated under subsection 2 must be adjusted. 
in the process of assessment and prior to commitment. to the mill 
rate 
that 
generates 
the 
equivalent 
revenue 
that 
would 
be 
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collected if the municipality were assessing property at 100% of 
just value. 
2. 
Calculation of full value mill rate e;q»ectation. 
For 
property tax years beginning on or after April 1, 
2005, 
the 
Commissioner of Education shall calculate the full value mill 
rate expectation that is required to fund the local share of 
funding public education from kindergarten to grade 12 according 
to the following schedule. 
A. 
For the 2005 property tax year, the full value mill rate 
expectation is the amount necessary to result in a 
51~ local 
share in fiscal year 2005-06. 
B. 
For the 2006 property tax year, the full value mill rate 
expectation is the amount necessary to result in a 
49.5% 
local share in fiscal year 2006-07. 
C. 
For the 2007 property tax year, the full value mill rate 
expectation is the amount necessary to result in a 48% local 
share in fiscal year 2007-08. 
D. 
For the 2008 property tax year, the full value mill rate 
expectation is the amount necessary to result in a 
46.5% 
local share in fiscal year 2008-09. 
E. 
For the 2009 property tax year and subsequent years, the 
full value mill rate expectation is the amount necessary to 
result in a 45% local share in fiscal year 2009-10. 
§S23. Exceeding mill rate e~ctations; referendum process 
The legislative body of a school administrative unit, 
as 
defined in Title 20-A, 
section 1, 
subsection 26, 
may 
adopt 
property tax rates that exceed the adjusted full value mill rate 
expectation established by section 522. 
Sec. B-2. Basis for funding costs of education from kindergarten to 
grade 12. 
Notwithstanding any other provision of law, beginning 
in 
fiscal 
year 
2005-06, 
funding 
public 
education 
from 
kindergarten to grade 
12, 
as 
defined in the 
Maine 
Revised 
Statutes, Title 36, section 521, must be based on the cost of 
providing essential programs and services as described in the 
Maine Revised Statutes, Title 20-A, chapter 606-B. 
Sec. B·3. Savings from school construction bond refinancing and 
unexpended balance. 
Notwithstanding any other provision of law, 
at the close of fiscal year 2003-04 and fiscal year 2004-05 the 
Commissioner of Education shall allocate any unexpended funds 
from 
General 
Purpose 
Aid 
for 
Local 
Schools, 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT "A" to H.P. 1209, L.D. 1629 
including those funds resulting from the refinancing of school 
construction bonds, to the General Purpose Aid for Local Schools 
in subsequent years. 
These funds may not be expended in fiscal 
year 2003-04 or fiscal year 2004-05 but must be carried forward. 
These funds may be allotted in fiscal year 2005-06 by financial 
order upon the recommendation of the State Budget Officer and 
approval of the Governor.' 
Further amend the resolution in Part C by striking out all 
of sections 1 to 13 and inserting in their place the following: 
, Sec. C-l. 36 MRSA §662 is enacted to read: 
§662. 
Business equipment 
I. 
Eligible business equipment exempt. 
Eligible business 
equipment is exempt from all taxation under this Part, except 
chapters III and 112. 
2. 
Definitions. 
As 
used 
in this section, 
unless 
the 
context 
otherwise 
indicates, 
the 
following 
terms 
have 
the 
following meanings. 
A. 
"BETR-expired property" means property that was eligible 
for property tax reimbursement under chapter 915, but is no 
longer eligible for such reimbursement due to the fact that 
reimbursements have been made for the entire length of time 
for which reimbursements were allowed under section 6652, 
subsection 1. 
B. 
"Eligible business equipment" means qualified business 
property that. in the absence of this section, would first 
be Subject to taxation under this Part after April L 
2003 
and BETR-expired property. 
"Eligible business equipment" 
includes, 
without 
limitation, 
repair 
parts, 
replacement 
parts, 
additions, 
accessions 
and 
accessories 
to 
other 
qualified business property that first became taxable under 
this Part on or before April 1, 2003 if the part, addition, 
accession or 
accessory 
would, 
in 
the 
absence 
of 
this 
section, first be subject to taxation under this Part after 
April 1. 2003. 
"Eligible business equipment" also includes 
inventory parts for qualified business property that, in the 
absence of this section, would first be subject to taxation 
under this Part after April 1, 2003. 
"Eligible business equipment" does not include: 
(I) 
Office furniture, 
including, without limitation, 
tables, chairs, desks, bookcases, filing cabinets and 
modular office partitions; 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT "A" to H.P. 1209, L.D. 1629 
(2) 
Lamps and lighting fixtures; and 
(3) 
Property owned or used by an excluded person. 
C. 
"Excluded person" means; 
(1) 
A public utility as defined in Title 35-A, section 
102, subsection 13; 
(2) 
A person that provides radio paging services as 
defined in Title 35-A, section 102, subsection 15; 
(3) 
A person that provides mobile telecommunications 
services 
as 
defined 
in Title 
35-A. 
section 
102. 
subsection 9-Aj 
(4) 
A cable television company as defined in Title 
30-A. section 2001. subsection 2; 
(5) 
A person that provides 
satellite-based direct 
television broadcast services; or 
(6) 
A person that provides multichanneL multipoint 
television distribution services. 
D. 
"Inventory parts" includes repair parts. 
replacement 
parts. 
replacement 
equipment. 
additions. 
accessions 
and 
accessories 
on 
hand 
but 
not 
in service 
and 
stocks 
or 
inventories of repair parts. replacement parts. replacement 
equipment. additions, accessions and accessories on hand but 
not in service and other machinery and equipment on hand for 
future use but not in service if acquired after April 1. 
2003. regardless of when placed in service. 
E. 
"Qualified business pr<?perty" means tangible personal 
property that; 
(1) 
Is used or held for use exclusively for a business 
purpose by the person in possession of it or. in the 
case of construction in progress or inventory parts, is 
intended to be used 'exclusively for a business purpose 
by the person who will possess that property; and 
(2) 
Either; 
(a) 
Was subject to an allowance for depreciation 
under the Code on April 1st of the property tax 
year 
for 
which 
a 
claim 
for 
exemption 
under 
subsection 4 is filed. or would have been subject 
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to an allowance for depreciation under the Code as 
of that date but for the fact that the property 
has been fully depreciated; or 
(b) 
In the case of construction in prolJress or 
inventory parts, would be subject under the Code 
to an allowance for depreciation when placed in 
service or would have been subject to an allowance 
for depreciation under the Code as of that date 
but for the fact that the property has been fully 
depreciated. 
"Oualified business property" also includes all property 
that is affixed or attached to a buildinIJ or other real 
estate if it is used primarily to further a particular trade 
or business activity takinIJ place in that buildinIJ or on 
that real estate. 
"Qualified business property" does not 
include components or attachments to a 
buildinlJ if used 
primarily to serve the building as a buildinlJ. reIJardless of 
the particular trade or activity takinIJ place in or on the 
building. 
"Oualified business 
property" 
also 
does 
not 
include land improvements if used primarily to further the 
use of the land as land, reIJardless of the particular trade 
or business activities taking place in or on the land. 
In 
the case of construction in prolJress or inventory parts, the 
term "used" means intended to be used. 
"Qualified business 
property" also does not include any vehicle registered for 
on-road use on which a tax assessed pursuant to chapter III 
has been paid or any watercraft registered for use on state 
waters on which a tax assessed pursuant to chapter 112 has 
been paid. 
3. 
Additional 
limitations. 
The 
exemptions 
provided 
pursuant to this section are limited as follows. 
A. 
Exemption 
for 
certain enerllY facilities 
under this 
section is limited as follows. 
(1) 
The exemption provided by this section does not 
apply to a natural gas pipeline, includinIJ pumping or 
compression stations, storage depots 
and appurtenant 
facilities used in the transportation, delivery or sale 
of natural gas but not inc1udinIJ a pipeline that is 
less than a mile in length and is owned by a consumer 
of natural gas delivered through the pipeline. 
(2) 
The exemption provided in this section does not 
apply to property used to produce or transmit energy 
primarily for sale. 
Energy is primarily for sale if 
during the immediately preceding property tax year 2/3 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT 'A" to H.P. 1209, L.D. 1629 
or more of the useful energy is directly or indirectly 
sold 
and 
transmitted 
through 
the 
facilities 
of 
a 
transmission and distribution utility. 
(3) 
For purposes of this paragraph. unless the context 
otherwise 
indicates. 
the 
following 
terms 
have 
the 
following meanings. 
(a) 
"Transmission and distribution utility" has 
the Same meaning as defined in Title 35-A. section 
102. subsection 20-B. 
(b) 
"Useful energy" is energy in any form that 
does not include waste heat. efficiency losses. 
line losses or other energy dissipation. 
.8. 
Pollution 
control 
facilities 
that 
are 
entitled 
to 
exemption pursuant to section 656. subsection I. paragraph E 
are not entitled to an exemption under this section. except 
that such property is entitled to exemption under this 
section if: 
(l) 
The property is entitled to an exemption under 
section 656. subsection I. paragraph E but has not yet 
been certified for exemption under that 'paragraph; 
(2) 
The property has been placed in service after the 
December 1st immediately preceding April 1st of the tax 
year for which the exemption is sought but pr ior to 
April 1st of the property tax year for which the 
exemption is sought; and 
(3) 
The 
taxpayer 
has 
submitted 
the 
required 
application for certification to the Commissioner of 
Enyironmental Protection prior to April 1st. 
The exemption under this section continues for property that 
meets the requirements of subparagraphs (1). 
(2) and 
(3 ) 
only until the certification for exemption under section 
656. subsection 1. paragraph E has been granted. 
If the 
assessor denies an exemption on the ground that the property 
in question is entitled to exemption under section 656. 
subsection I. 
paragraph E and the taxpayer 
appeals 
the 
denial. the assessor shall. at the taxpayer's request. allow 
the taxpayer up to one year to obtain a statement from the 
Commissioner of Environmental Protection that the property 
at issue is not exempt under section 656. 
subsection I. 
paragraph 
E. 
If 
the 
taxpayer 
timely 
produces 
such 
a 
statement or otherwise demonstrates that the property is not 
exempt under section 656. subsection 1. paragraph E. 
the 
assessor shall allow the exemption under this section. 
COMMITTEE AMENDMENT 
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4. 
Reporting. 
On 
or before June 1st of each year, 
a 
taxpayer claiming an exemption under this section shall file a 
report with the assessor of the taxing jurisdiction in which the 
property would otherwise be subject to taxation. 
The report must 
identify the property for which exemption is claimed and must be 
made on a form prescribed by the State Tax Assessor or substitute 
form approved by the State Tax Assessor. 
The State Tax Assessor 
shall furnish copies of the form to each municipality in the 
State and the form must be made available to taxpayers prior to 
April 1st. 
The assessor may require the taxpayer to sign the 
form and make oath to its truth. 
The assessor may request in writing that taxpayers answer in 
writing all reasonable inquiries as to the nature, situation and 
value of the property for 
which exemption is requested. 
A 
taxpayer has 60 days from receipt of such inquiries to respond. 
The assesSor may at any time grant an extension of the time 
periods for action provided for in this subsection. 
Upon written 
request, a taxpayer is entitled to a 30-day extension of time as 
a matter of right and additional extensions for good cause, it 
being the intent that extensions be granted liberally to avoid 
forfeiture of the exemption. 
Failure to comply with the provl.sl.ons of this subsection on a 
timely basis, including any extensions of time, 
results in a 
penalty equal to the lesser of S5,OOO or 10, of the taxes that 
would be imposed on the exempt property in the absence of the 
exemption as long as the taxpayer complies with the provisions of 
this 
subsection before 
October 1st following 
the 
April 
1st 
exemption date. 
The penal ty amount is treated as property taxes 
and must be paid to the municipality as such. 
The penalty may be 
waived by the assessor for good cause. 
A failure to comply with 
the provisions of this subsection by October 1st following the 
April 1st exemption date disqualifies the property involved from 
exemption for that tax year. 
All notices and requests provided 
pursuant 
to 
this 
subsection 
must 
conspicuously 
state 
the 
consequences of the taxpayer's failure to respond to the notice 
or request in a timely manner. 
If an exemption has already been granted and the State Tax 
Assessor then determines that the property is not entitled to 
exemption, a supplemental assessment must be made within 3 years 
of the original assessment date with respect to the property in 
compliance with section 713, without regard to the limitations 
contained in that section regarding the justification necessary 
for a supplemental assessment. 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT "A" to H.P. 1209, L.D. 1629 
5. 
Local 
review. 
Reports 
properly 
filed 
pursuant 
to 
subsection 4 must be reviewed by the assessor with whom they are 
filed. 
A 
taxing 
jurisdiction 
is 
not 
entitled 
to 
state 
reimbursement pursuant to section 661 with respect to property 
entitled to exemption under this section unless the assessor 
certifies to the State Tax Assessor that the property qualifies 
for such exemption. 
The local taxing jurisdiction shall file an 
annual 
certification 
for 
business 
equipment 
exemptions 
by 
November 1st following the April 1st exemption date or 30 days 
after commitment of taxes, whichever is later, but in no event 
later than 120 days following November 1st following the April 
1st exemption date. 
All exemptions certified by the local 
taxing jurisdiction must be applied in calculating the taxable 
valuation 
of 
property 
in 
that 
jurisdiction, 
unless 
the 
jurisdiction determines that the property is not entitled to 
exemption and provides a corrected certification to the State Tax 
Assessor. 
6. 
State valuation. 
The State Tax Assessor shall annually 
determine the value of property that is exempt pursuant to this 
section 
based 
upon 
the 
business 
equipment 
exemption 
certifications 
filed 
by 
local 
taxing 
jurisdictions 
under 
subsection 5. 
The State Tax Assessor shall use the valuation of 
exempt 
property 
so 
determined 
to 
compute 
the 
reimbursement 
reguired by section 661 arising from property tax exemptions. 
The State Tax Assessor shall establish a uniform methodology to 
be 
used 
in determining the 
just value 
of certified exempt 
property. 
The 
valuations 
of 
certified 
exempt 
property 
as 
determined by the State Tax Assessor must be reported to local 
taxing jurisdictions no later than July 1st following receipt of 
the certified reports. 
The valuations determined may be appealed 
in 
the 
same 
fashion 
as 
provided 
for 
the 
state 
valuation 
determined in accordance with section 305. subsection I. with the 
exception that 
the State Board of Property 
Tax 
Review. 
as 
established by Title 5. 
section l2004-B, 
subsection 6, 
must 
render its decision no later than November 15th following the 
date on which the appeal is taken. 
The board must Qertify its 
decisions on these exemption appeals to the State Tax Assessor by 
December 
1st of 
the year 
following 
the 
application of 
the 
exemption. 
The valuations of exempt property must be filed with 
the Secretary of State by December 10th following the year of 
exemption. 
7. 
State 
review. 
The 
State 
Tax 
Assessor 
may 
review 
exemption claims made under this section and may disqualify any 
exemption certified under subsection 5 within a 
2-year period 
from the date of the local tax jurisdiction certification. 
In a 
case in which a local taxing jurisdiction has already received 
reimbursement, the excess reimbursement may be offset against the 
next 
reimbursement 
payment. 
A 
local 
taxing 
jurisdiction 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT "A" to H.P. 1209. L.D. 1629 
aggrieved by a decision of the State Tax Assessor to disqualify a 
certified exemption after the exemption amount has been filed 
with the Secretary of State may seek review as provided by 
section 151. 
The assessor shall send notice to the taxpayer, in 
the manner and of the type provided for in section 151 in the 
case of a reconsideration decision. of any decision to disqualify 
an exemption. 
The taxpayer may seek reconsideration pursuant to 
section 151 of the State Tax Assessor's decision to disqualify 
any exemption claimed by the taxpayer. 
8. 
Legislative 
findings. 
The 
Legislature 
finds 
that 
encouragement of the growth of capital investment in this State 
is in the public interest and promotes the general welfare of the 
people of the State. 
The Legislature further finds that the high 
cost of owning qualified business property in this State is a 
disincentive to the growth of capital investment in this State. 
The Legislature further finds that the tax exemption set forth in 
this 
section 
is 
a 
reasonable 
means 
of 
overcoming 
this 
disincentive and will encourage capital investment in this State. 
Sec. C-2. 36 MRS A §6207, sub-§I, ~A-l, as amended by PL 1997, 
c. 557, Pt. A, §3 and affected by Pt. G, §1, is further amended 
to read: 
A-I. 
P:H~y Eighty percent of that portion of the benefit 
base that exceeds 4~-~~-~-&&~-eHeeee-~~~--~~-p~us 
*QQ~-e~-~~~~~-&~-~he-Beae~~~-~~~~~&-g~ 3% 
of income to a maximum payment of $1,000.' 
Further amend the resolution in Part C by striking out all 
of section 17 and inserting in its place the following: 
'Sec. C-17. Application. 
Those sections of this Part that 
amend 
the 
Maine 
Revised 
Statutes, 
Title 
36, 
section 
6207, 
subsection 1, paragraph A-I 
and subsection 2 
apply to Maine 
Residents Property Tax Program applications filed after July 31. 
2004. ' 
Further amend the resolution in Part D by striking out all 
of sections 1 and 2 and inserting in their place the following: 
'Sec. D-l. 36 MRSA c. 216 is enacted to read: 
CHAPTER 216 
LIMITED LOCAL OPTION SALES TAX 
SI87l, 
Definitions 
Page lO-LR2l65(2) 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT "A" to H.P. 1209,L.D. 1629 
As 
used 
in this 
chapter. 
unless 
the 
context otherwise 
indicates. the following terms have the following meanings. 
1. Eligible municipality. 
"Eligible municipality" means: 
A. 
A regional service district established pursuant to 
Title 30-A. chapter 112: or 
B. 
A municipality that is a service center community as 
defined in Title 30-A. section 4301. 
2. 
Municipal clerk. 
"Municipal clerk" means the clerk or 
comparable official of an eligible municipality. 
3. 
Municipal referendum. 
"Municipal referendum" means 
a 
referendum conducted pursuant to this chapter by an eligible 
municipality. 
4. 
Municipal treasurer. 
"Municipal treasurer" means the 
treasurer of an eligible municipality. 
§1872. 
Authority to impose local tax; administration 
1. 
Generally. 
The 
legislative 
body 
of 
an 
eligible 
municipality 
may. 
if 
the 
legal 
voters 
of 
the 
eligible 
municipality give their approval in a referendum vote conducted 
pursuant to section 1874. and subject to the other requirements 
of this chapter. impose an additional l' local option sales tax 
on one or more of the following categories of retail sales that 
are otherwise subject to the tax imposed by section 1811: 
A. 
Rental 
for 
a 
period of less 
than 
one 
year 
of 
an 
automobile; 
B. 
Rental of living quarters in any hotel, rooming house or 
tourist or trailer camp: 
C. 
Sales of prepared food: and 
D. 
All other retail sales. 
2. 
Collection and remittance; 
administration by State. 
Retailers that collect the l'\. sales tax adopted by an eligible 
municipality pursuant to this chapter shall transfer the revenue 
from that tax at the time and in the manner required by chapter 
219. 
Taxes imposed pursuant to this chapter are administered by 
the 
assessor 
and 
are 
subject 
to 
the 
interest, 
penalty 
and 
administrative provisions of Parts 1 and 3. 
3. 
Effective date of tax. 
A local 
option sales 
tax 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT "A" to H.P. 1209, L.D. 1629 
approved by the voters of an eligible municipality pursuant to 
section 1874 is effective on the first day of the first full 
calendar quarter that begins more than 50 days after the date on 
which the assessor receives notification from the municipal clerk 
that the voters have approved a 
local limited sales tax and 
identifying the categories of retail sales to which the tax 
applies. 
If the effective date provided by this subsection does 
not allow the assessor to provide retailers with at least 50 
days' notice of the imposition of the tax. the effective date is 
the beginning of the next succeeding calendar quarter. 
A tax 
imposed pursuant to this chapter may not take effect prior to 
July It 2004. 
4. 
Ezpiration of tax. 
A local option sales tax imposed 
pursuant to this chapter expires on the first day of the calendar 
quarter that begins 5 years after the date the tax is first 
imposed unless renewed by the municipality for an additional 5 
years in the same manner as required under this chapter for 
adoption of the tax. 
§lB73. 
Application of revenues 
The 
1~ sales tax authorized by this chapter must be applied 
to fund the portion of the budget of the eligible municipality 
that is not spent to fund public education from kindergarten to 
grade 12 as defined in chapter lOS. subchapter I-A. 
SIB74. 
Referendum process 
1. 
Generally. 
The question of whether to impose. renew or 
discontinue a limited local option sales tax must be submitted in 
a referendum to the legal voters of the eligible municipality and 
approved by a majority of those voting. 
The petition process and 
the voting at an election held by a town or plantation that is 
not part of a regional service district under Title 3Q-A. chapter 
must be conducted in accordance with Title 30-A. sections 
2528. 2529 and 2532 even if the town or plantation in question 
has not accepted the provisions of Title 3D-A. section 2528. 
The 
voting at elections held by municipalities. other than towns and 
plantations that are not part of a regional service district. 
must be conducted in accordance with the provisions of Title 
21-A. 
The 
voting at elections held by 
a 
regional 
service 
district must be conducted in accordance with the provisions of 
Title 3D-A. chapter 112. 
A referendum conducted pursuant to this 
section must take place at a general election with a turnout 
equal 
to 
or 
greater 
than 
3D~ of 
the 
votes 
cast 
in 
that 
municipality in the last gubernatorial election. 
The municipal 
clerk shall prepare the required ballots. make a return of the 
results. certify those results and send them to the Secretary of 
State and the assessor. 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT 'A" to H.P. 1209, L.D. 1629 
2. 
Concurrent levies prohibited. 
Only one local option 
sales tax may be levied in an eligible municipality at one time. 
3. 
Fo~ of ballots. 
Ballots for questions of local option 
sales taxes must be as provided in this subsection. 
A. 
Ballots on the question of whether to impose or renew 
the 
local 
option sales 
tax 
must 
read substantially as 
follows; 
"Do you favor the (enactment of) (renewal of) a 
1'lo local 
option sales tax to be imposed on (categories of sales to be 
taxed) in (name of eligible municipality) for 5 years in 
order to fund the portion of the budget of (name of eligible 
municipality) that is not spent to fund public education?" 
The voters shall indicate their opinion by a cross or check 
mark placed against the word "Yes" or "No." 
B. 
Ballots on the question of whether to discontinue the 
tax must read substantially as follows: 
"Do you favor discontinuing by (target date of repeal) the 
1'lo local option sales tax that has been in place in (name of 
eligible municipality) 
since (original effective date of 
tax)?" 
The voters shall indicate their opinion by a cross or check 
mark placed against the word "Yes" or "No." 
§1875. 
Distribution of revenues 
1.. 
Reservation of revenues; fund. 
Beginning on the 15th 
day of the 2nd month following the month in which a tax adopted 
pursuant to this chapter first becomes effective, and on the 15th 
day of each month thereafter. the assessor shall identify the 
amount of revenues that have been collected pursuant to local 
option sales taxes adopted pursuant to this chapter. including 
tax, interest and penalties, net of refunds. credits and other 
appropriate adjustments. 
The assessor shall deposit 17% of the 
amount collected into the Local Option Sales Tax Fund, referred 
to in this section as "the fund." established in the Department 
of 
Administrative 
and 
Financial Services. 
Bureau 
of 
Revenue 
Services. 
2. 
Use of revenue. 
Revenue in the fund must be used for 
the following purposes. 
COMMITTEE AMENDMENT 
'i\~;} 
.•. ~ . 
. . 
',' 
COMMITTEE AMENDMENT 'A" to H.P. 1209, L.D. 1629 
A. 
Two percent of the revenues collected under this chapter 
must be applied to offset the cost of administering this 
chapter. 
B. 
Fifteen percent of the revenues collected under this 
chapter and deposited in the fund must be used to fund 
expansions of benefits under the Maine Residents Property 
Tax Program as established in chapter 907. 
The assessor 
shall, 
by January 15th annually, 
certify to 
the 
joint 
standing committee of the Legislature having jurisdiction 
over taxation matters the amount available in the fund to 
increase benefits under the Maine Residents Property Tax 
Program. 
The committee may report out legislation designed 
to expand the Maine Residents Property Tax Program within 
the amounts that are available in the fund. 
3. 
Pa;rments to eligible municipalities. 
The remaining 83% 
of revenue collected under this chapter must be returned to the 
eligible municipality where 
the 
revenue 
was 
collected. 
The 
assessor shall certify to the Treasurer of State the net· amount 
due each eligible municipality. 
The Treasurer of State shall 
make monthly payments to municipal treasurers of the net amounts 
certified by the assessor under this subsection. 
4. 
No traD§fer to the Local Government Fund. 
Revenues 
collected pursuant to taxes imposed under this chapter do not 
constitute receipts from the taxes imposed under this Part for 
purposes of transfers to the Local Government Fund under Title 
30-A, section 5681. 
§1877. 
Use of proceeds by eligible municipality 
The revenue raised by the adoption of a local option sales 
tax under this chapter must be held by the eligible municipality 
in a segregated account. 
Reyenue in that account may be expended 
only 
for 
the 
purpose 
of 
funding 
costs 
of 
the 
eligible 
municipality 
other 
than 
funding 
public 
education 
from 
kindergarten to grade 12. 
PARTE 
Sec. E·I. 36 MRSA §685, sub-§2, as enacted by PL 1997, c. 643, 
Pt. HHH, §3 and affected by §10, is amended to read: 
2. 
Entitlement to reimbursement by the State; calculation. 
A municipality that has approved homestead exemptions under this 
subchapter may recover from the State 1QQ% ~ 
of the taxes lost 
by reason of the exemptions upon proof in a form satisfactory to 
the bureau. 
The bureau shall reimburse the Unorganized Territory 
Education and Services Fund for 1Q9% 50% of taxes lost by reason 
of the exemption.' 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT 'A" to H.P. 1209, L.D. 1629 
Further amend the resolution in Part E in section 2 by 
striking out all of the question (page 50, lines 21 to 23 in 
L.D.) and inserting in its place the following: 
, "Do you want the State to pay 
55~ of the annual cost of 
public education and lower property taxes through government 
spending reform?" , 
Further amend the resolution in Part E by inserting after 
section 2 the following: 
'Sec. E·3. 
Transfer of funds. 
Notwithstanding 
any 
other 
provision of law, the State Controller shall transfer $1,167,341 
from the General Purpose Aid for Local Schools account in the 
Department 
of 
Education 
to 
the 
General 
Fund 
unappropriated 
surplus no later than June 30, 2005. 
Sec. 
E·4. 
Appropriations 
and 
allocations. 
appropriations and allocations are made. 
The 
following 
ADMINISTRATIVE AND FINANCIAL SERVICES, DEPARTMENT OF 
Homestead Property Tax Exemption Reimbursement 
0886 
Initiative: 
Deappropriates funds due to a reduction in homestead 
exemption reimbursement. 
General Fund 
All Other 
General Fund Total 
Maine Residents Property Tax Program 
0648 
2003-04 
$0 
$0 
2004-05 
($17,465,832) 
($17,465,832) 
Initiative: 
Appropriates funds required due to the expansion of 
the Maine Residents Property Tax Program. 
General Fund 
All Other 
General Fund Total 
Revenue Services - Bureau of 
0002 
2003-04 
$0 
$0 
2004-05 
$17,157,143 
$17,157,143 
Initiative: 
Provides 
funds 
for 
Tax 
Examiner 
positions 
effective July 1, 2004 and other related costs associated with an 
increase in the number of applications for the Maine Residents 
Property Tax Program. 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT ·A .. to H.P. 1209, L.D. 1629 
General Fund 
2003-04 
2004-05 
positions - Legislative Count 
(0.000) 
(2.000) 
Personal Services 
$0 
$92,270 
All Other 
172,913 
General Fund Total 
$0 
$265,183 
Revenue Services - Bureau of 
0002 
Initiative: 
Provides funds for 3 Claims Administration positions 
and related costs associated with property valuation and property 
tax exemption reimbursement. 
General Fund 
Positions - Legislative Count 
Personal Services 
All Other 
General Fund Total 
Revenue Services - Bureau of 
0002 
2003-04 
(0.000) 
$0 
o 
$0 
2004-05 
(3.000) 
$165,786 
88,500 
$254,286 
Initiative: 
Appropriates one-time funds to be deposited in Maine 
Revenue Services' Other Special Revenue program to support the 
start-up costs associated with a limited local option sales tax. 
General Fund 
All Other 
General Fund Total 
Revenue Services - Bureau of 
0002 
2003-04 
$0 
$0 
2004-05 
$956,561 
$956,561 
Initiative: 
Allocates funds for the additional costs associated 
with administering a limited local option sales tax, including 
funds 
for 
computer 
programming 
and 
software 
development. 
Position count is authorized to establish one Senior Tax Examiner 
position, 
one Taxpayer Assistance Specialist position and one 
Clerk II position. 
Other Special Revenue Funds 
Positions - Legislative Count 
Personal Services 
All Other 
Other Special Revenue Funds Total 
ADMINISTRATIVE AND FINANCIAL SERVICES, 
DEPARi"MENT OF 
DEPARTMENT TOTALS 
2003-04 
2004-05 
(0.000) 
(3.000) 
$0 
$134,696 
821,865 
$0 
$956,561 
2003-04 
2004-05 
COMMITTEE AMENDMENT 
~·.~.~:ty, 
"'~ 
.' 
COMMITTEE AMENDMENT 't\" to H.P. 1209, L.D. 1629 
GENERAL FUND 
O'l'BER SPECIAL REVENUE FUNDS 
DEPAR'IMENT "lUrAL -
ALL FUNDS 
$0 
o 
$0 
$1,167,341 
$56,561 
$2,123,902' 
Further amend the resolution by relettering or renumbering 
any 
nonconsecutive 
Part 
letter 
or 
section 
number 
to 
read 
consecutively. 
SUMMARY 
This amendment strikes Part A and Part B of the resolution, 
which provided 
the details of 
a 
municipal 
service district 
concept, and in their place expresses the legislative purpose for 
the 
adoption of 
regional 
service 'districts 
and directs 
the 
Executive Department to submit legislation by January 2, 2004 to 
carry out this purpose. 
The legislation will be reviewed by the 
Joint Standing Committee on State and Local Government. 
This 
amendment 
provides 
new 
language 
establishing 
the 
essential programs and services model for funding education as 
the 
basis 
for 
the 
calculation of 
a 
full 
value mill 
rate 
expectation identifying the state and local share of the cost of 
providing essential programs and services beginning in fiscal 
year 2005-06. 
The state share increases from 49~ in fiscal year 
2005-06 to 
55~ in fiscal year 2009-10. 
Funds to assist in 
increasing the state share of education funding would be obtained 
from 
refinancing 
school 
construction debt 
and 
from 
General 
Purpose Aid to Local Schools carry-over. 
The 
amendment 
changes 
the conditions 
for 
adoption of 
a 
limited local option sales tax by a regional service district or 
a community service center. 
The tax would be 
l~ and could be 
imposed on rental of automobiles, sales of meals, 
lodging or 
other sales subject to the state sales tax or any combination of 
those sales or rentals. 
The provisions authorizing a use tax are 
stricken. 
The tax is limited to 5 years but may be renewed. 
The 
municipal share of revenues from the tax would be 
83~ and could 
be used only to fund the municipal side of the budget. 
Of the 
remaining 17~ ,of revenues, which would be deposited in the Local 
Option Sales Tax Fund, 
2~ would be used to pay the administrative 
costs of the State and 
l5~ would be used to expand the Maine 
Residents 
Property 
Tax 
Program. 
The 
amendment 
retains 
the 
expansions 
of 
the 
Maine 
Residents 
Property 
Tax 
Program 
to 
additional taxpayers and maintains the current maximum benefit of 
$1,000. 
The amendment also makes minor miscellaneous changes to 
prov1s10ns establishing 
a 
property tax exemption for certain 
business property. 
Page l7-LR2l65(2) 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT 'A" to H.P. 1209, L.D. 1629 
The 
amendment 
strikes 
the 
prov1s10n 
of 
the 
resolution 
repealing the homestead property tax exemption and substitutes a 
reduction 
in state 
reimbursement 
to 
municipalities 
for 
the 
exemption to 50% of revenue loss as required by the Constitution 
of Maine, Article IV, Part Third, Section 23. 
The savings from 
the change in reimbursement to municipalities is used to expand 
the Maine Residents Property Tax Program. 
The 
amendment 
also 
changes 
the question that would be 
presented to the voters for the competing measure. 
FISCAL NOTE REQUIRED 
(See attached) 
COMMITTEE AMENDMENT 
Approved: 06112/03 frac 
Office of Fiscal and Program Review 
LD 1629 
RESOLUTION, Proposing a Competing Measure und~r the Constitution of Maine 
to Create Municipal Service Districts to Reduce the Cost of Local Government, to 
Provide Property Tax Relief and to Increase Economic Competitiveness 
LR 2165(02) 
Fiscal Note for Bill as Amended by Committee Amendment" " 
Committee: Taxation 
Fiscal Note Required: Yes 
Majority Report 
Fiscal Note 
Projections 
Projections 
2003-04 
2004-05 
2005-06 
2006-07 
Net Cost (Savings) 
General Fund 
$0 
$0 
($ 1 8,870,434) 
$17,155,577 
Appropriations/Allocations 
General Fund 
$0 
$1,167,341 
($18,870,434) 
$17,155,577 
Other Special Revenue Funds 
$0 
$956,561 
$269,389 
$282,859 
Transfers 
General Fund 
$0 
$1,167,341 
$0 
$0 
Referendum Costs 
MonthNear 
Election Type 
Question 
Length 
Nov-03 
General 
Referendum 
Lengthy 
The Secretary of State's budget includes sufficient funds to accommodate one ballot of average length for the general election in 
November 2003. If the number or size of the referendum questions increases the ballot length, an additional appropriation of 
$8,000 or more may be required. 
Fiscal Detail and Notes 
The implementation oftbis bill is contingent upon approval by the voters. If approved by the voters, this bill has the following 
impact. 
Projections 
Projections 
General Fund Summary 
2003-04 
2004-05 
2005-06 
2006-07 
Homestead Reimb. from 100% to 50% 
$0 
($17,465,832) 
($17,692,150) 
($18,052,519) 
Expand Circuit Breaker Program 
$0 
$17,157,143 
$18,328,692 
$19,290,364 
Business Equipment Tax Reimbursement 
$0 
$0 
($8,763,692) 
($21,064,966) 
Municipal Property Tax Exemption Reirnb. 
$0 
$0 
$5,842,000 
$12,095,000 
Maine Revenue Services Administrative Costs 
$0 
$1,476,030 
$432,042 
$453,645 
Net Approp\Deapprop to fund EPS 
$0 
$0 
$ 
(17,017,327) $ 
24,434,053 
Transfer from Dept. ofEdue. to General Fund 
$0 
($1,167,341) 
$0 
$0 
LR2165(2) - Fiscal Note - Page I of3 
Net General Fund Cost (Savings) 
$0 
$0 
($18,870,434) 
$17,155,577 
This bill reduces homestead exemption reimbursement to 50% resulting in General Fund savings of $17,465,832 in fiscal year 
2004-05. It also includes a General Fund appropriation of$17,157,143 in fiscal year 2004-05 for the Maine Residents Property 
Tax program for the costs associated with expanding the circuitbreaker program. 
Limiting Business Equipment Tax Reimbursement (BETR) to property placed in service on or before April 1, 2003 will result in 
General Fund savings beginning in fiscal year 2005-06. Establishing a property tax exemption for certain property placed in 
service after April 1, 2003 will result in General Fund costs beginning in fiscal year 2005-06 due to the 50% reimbursement 
requirement. 
This bill also provides for a 1 % limited local option sales tax. The revenue associated with this provision can not be estimated at 
this time and will depend on the number and size of the municipalities that elect to impose this tax. 
This bill also includes General Fund appropriations of $1,476,030 in tiscal year 2004-05 for Maine Revenue Services for the 
additional costs associated with administering these provisions and a transfer from the Department ofEducationof$1,167,341 to 
offset a portion of these costs in fiscal year 2004-05. 
This bill provides for a new method of determining the state and local share of funding the cost of K -12 public education 
beginning in fiscal year 2005-06. This bill includes the Essential Programs and Services model, as proposed jn LD 1623, An 
Act to Implement School Funding Based on Essential Programs and Services, as the basis for determining the total cost of K-12 
public education. However, this bill differs from LD 1623 in that it requires the State's share to increase to 55% by fiscal year 
2009-10 versus the 50% requirement in LD 1623. This bill provides for the calculation of a maximum local mill rate 
expectation to be used to determine the state and local share of the cost of funding K-12 education. The Department of 
Education estimates the maximum local mill rate to be 8.83 mills in fiscal year 2005-06. 
This bill also requires the Department of Education to reserve any unexpended funds in the General Purpose Aid for Local 
Schools program in fiscal years 2003-04 and 2004-05 and any savings from the refmancing of school construction bonds and 
use those funds to partially offset the cost of increasing the State's contribution of funding the cost ofK-12 public education 
beginning in fiscal year 2005-06. The Department of Education estimates the savings to be $6,100,000 through fiscal year 2004-
05. 
The following table provides estimates for the total State and Local Operating cost of funding education based on the Essential 
Programs and Services model and compares the total State and Local cost of funding K-12 education based on the EPS model, 
adjusted for the transition percentage, with the total State and Local cost of funding education based on the current model. The 
table also provides a comparison of the General Fund appropriations that are estimated to be needed to fund the state's share of 
the cost of funding K-12 education based on the State's contribution reaching 55% in fiscal year 2009-10. 
Total State & Local Operating 
Cost allocation based on EPS 
model (100%) 
EPS Transition Percentage 
Adjusted Total Operating 
Allocation based on EPS model 
State and Local Cost to Fund K-12 Public Education 
Essential Programs and Services vs. Current Model 
Base Year 
2003-04* 
2004-05* 
Projections 
2005-06 
Projections 
2006-07 
$ 1,256,951,694 
$ 1,260,260,954 
$ 1,270,125,664 
$ 1,285,714,652 
80.82% 
82.00% 
84.00% 
88.00% 
$ 1,015,868,359 
$ 1,033,413,982 
$ 1,066,905,558 
$ 1,131,428,894 
LR2165(2) - Flscal Note - Page 2 of3 
, 
Total State & Local cost based 
on EPS funding model (includes 
program costs, debt service and 
adjustments) 
Total State & Local cost based 
on current funding formula 
(includes program costs, debt 
service and adjustments) 
Net Increase (Decrease) in 
Allocation 
State Share Targets to fund K-12 
education based on EPS model 
Estimated General Fund 
appropriation needed to fund K-
education based on EPS 
model 
Estimated General Fund 
appropriation needed to fund K-
education based on current 
funding model (assumes 6% 
growth per year) 
Net General Fund Appropriation 
(Deappropriation) required to 
fund EPS model vs. current 
funding fonnula 
$ 1,467,457,416 
$ 1,518,173,106 
$ 1,537,199,970 
$ 1,618,879,589 
$ 1,467,408,432 
$ 1,503,862,194 
$ 1,543,887,175 
$ 1,589,697,612 
$ 
48,984 
$ 
14,310,912 
$ 
(6,687,205) $ 
29,181,977 
49.89% 
47.81% 
49.00% 
50.50% 
$ 
753,227,985 
$ 
817,534,192 
$ 
770,245,312 
$ 
793,100,139 
$ 
(17,017,327) $ 
24,434,053 
* No adjustment in fiscal year 2003-04 and fiscal year 2004-05 
LR1165(2) - Fiscal Note - Page 3 00