An Act To Increase Business Investment, Provide Expanded Property Tax Relief to Low-income ~nd Moderate-income Homeowners and Cap Local and County Spending
Maine Legislature, Session 121, LD 1923
Committee: Taxation
Sponsors: STANLEY, LEMOINE, McCORMICK, PERRY, TARDY, WOODBURY
Amends: 36 MRSA §662, 20-A MRSA §13, 36 MRSA §383, 36 MRSA §507, 36 MRSA §6201-A, 36 MRSA §6207, 36 MRSA §6209, 36 MRSA §6210, 36 MRSA §6218, 36 MRSA §6219

Legislative Document 
No. 1923 
S.P.759 
In Senate, March 10, 2004 
An Act To Increase Business Investment, Provide Expanded 
Property Tax Relief to Low-income ~nd Moderate-income 
Homeowners and Cap Local and County Spending 
Reference to the Committee on Taxation suggested and ordered printed. 
Presented by Senator STANLEY of Penobscot. (GOVERNOR'S BILL) 
Cosponsored by Representative LEMOINE of Old Orchard Beach and 
JOY J. O'BRIEN 
Secretary of the Senate 
Representatives: McCORMICK of West Gardiner, PERRY of Bangor, TARDY of Newport, 
WOODBURY of Yarmouth. 
Printed on recycled paper 
Be it enacted by the People of the State of Maine as follows: 
PART A 
Sec. A-I. 36 MRSA §662 is enacted to read: 
§662. 
Business egyipment 
1. 
Eligible business egyipment exempt. 
Eligible business 
equipment is exempt from all taxation under this Part, except 
chapters 111 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 It 2004 
and BETR-expired property. 
"Eligible business equipment" 
includes, 
without 
limitation, 
repair 
parts, 
replacement 
parts, 
replacement 
equipment, 
additions, 
accessions 
and 
accessories to other qualified business property that first 
beCame taxable under this Part on or before April 1, 2004 if 
the part, addition, equipment, accession or accessory would, 
in the absence of this section, first be subject to taxation 
under this Part after April It 2004. 
"Eligible business 
equipment" also includes inventory parts. 
"Eligible business equipment" does not include: 
(1) 
Office furniture, including, without limitation, 
tables, chairs, desks, bookcases, filing cabinets and 
modular office partitions; 
(2) 
Lamps and lighting fixtures: 
(3) 
Property owned or used by an excluded person: and 
(4) 
Telecommunications personal property subject to 
the tax imposed by section 457. 
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 service 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-A; 
(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 
eguipment, 
additions, 
accessions 
and 
accessories 
on 
hand but 
not 
in service 
and 
stocks 
or 
inventories of repair parts, replacement parts, replacement 
eguipment, additions, accessions and accessories on hand but 
not in service and other machinery and eguipment on hand for 
future use but not in service if acguired after April L 
2004, regardless of when placed in service. 
E. 
"Qualified business property" 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 
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 progress 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. 
"Qualified business property" also includes all property 
that is affixed or attached to a building or other real 
estate if the property is used primarily to further 
a 
particular trade or business activity taking place in that 
building 
or 
on 
that 
real 
estate. 
"Qualified 
business 
property" does not include components or attachments to a 
building if they are used primarily to serve the building as 
a building, regardless of the particular trade or activity 
taking place in or on the building. 
"Qualified business 
property" also does not include land improvements if they 
are used primarily to further the use of the land as land, 
regardless of the particular trade or business activity 
taking place in or on the land. 
In the case of construction 
in progress 
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 pursuant to this subsection. 
A. 
Exemption 
for 
certain energy facilities 
under 
this 
section is limited as follows. 
(1) 
The exemption provided by this section does not 
apply to a natural gas pipeline, including pumping or 
compression stations, 
storage depots 
and appurtenant 
facilities used in the transportation, delivery or sale 
of natural gas, but not including 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 213 
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 distrlbution y,tility" 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. 
B. 
Pollution 
control 
facilities 
that 
are 
entitled 
to 
exemption pursuant to section 656, subsection 1, paragraph E 
are not entitled to an exemption under this section, except 
if: 
(1) 
The property is entitled to an exemption under 
section 656, subsection 1, 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 prior 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 
Environmental 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 
State Tax Assessor or assessor denies an exemption on the 
ground 
that 
the 
property 
in 
question 
is 
entitled 
to 
exemption under section 656, subsection 1, paragraph E and 
the taxpayer appeals the denial, the State Tax Assessor or 
assessor 
shall, 
at 
the 
taxpayer's 
reguesL 
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 1, 
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 
State Assessor or assessor shall allow the exemption under 
this section, but only for the year in guestion. 
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 of the taxing jurisdiction may require 
the taxpayer to sign the form and make oath to its truth. 
The assessor of the taxing jurisdiction may require in writing 
that a taxpayer answer in writing all reasonable inquiries as to 
the property for which exemption is requested. 
A taxpayer has 30 
days from receipt of such an inquiry to respond. 
The answer to 
any such inquiry is not binding on the assessor. 
Upon written request, a taxpayer is entitled as a matter of right 
to a 30-day extension of any deadline imposed by this subsection 
and an additional extension of up to 60 days for good cause. 
Failure to comply with the provisions of this subsection on a 
timely basis, including any extensions of time, results in a 
penalty equal to $25,000 or 
10% of the taxes that would be 
imposed on the exempt property in the absence of the exemption, 
whichever is less, as long as the taxpayer complies with the 
provisions of this subsection by the October 1st following the 
April 1st exemption date or by the municipality's tax commitment 
date, whichever is earlier. 
The penalty amount is treated as 
property taxes and must be paid to the municipality as such. 
The 
assessor shall waive the penalty for good cause. 
A failure to 
comply with the provisions of this subsection by the 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. 
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 g;ualifies 
for such exemption. 
The local taxing jurisdiction shall file an 
annual certification for business eg;uipment exemptions by the 
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 the 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 
eg;uipment 
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 
reg;uired 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 1, 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 certify its 
decisions on these exemption appeals to the State Tax Assessor by 
ryecember 
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; appeal Py municipality. 
The State Tax 
Assessor may review exemption claims made under this section and 
may disg;ualify 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 aggrieved by a decision of the State Tax Assessor to 
disg;ualify a certified exemption after the exemption amount has 
been filed with the Secretary of State may 
seek 
review as 
provided by section 151. 
8. 
Rotice of decision by State Tax Assessor; 
apJ?eal by 
t~ayer. 
The 
State Tax 
Assessor shall 
send notice to the 
taxpayer, in the manner and of the type provided for in section 
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. 
Notwithstanding any other provision of law, if a taxpayer appeals 
a decision of the State Tax Assessor to disqualify an exemption 
and 
does 
not 
prevail 
in 
that 
appeal, 
the 
local 
taxing 
jurisdiction must issue a supplemental assessment with respect to 
the property at issue within 90 days after the appeal has been 
resolved in the State Tax Assessor's favor, and the taxpayer may 
not appeal that supplemental assessment except as to issues of 
valuation. 
9. 
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. A-2. Economic development and job creation. 
Savings to the 
State 
resulting 
from 
the 
establishment 
of 
a 
property 
tax 
exemption for business equipment and machinery under the Maine 
Revised Statutes, Title 36, section 662 must be used to establish 
a 
fund 
for 
economic 
development 
and 
job 
creation 
in 
municipalities affected by the exemption and in economically 
distressed communities. 
The Commissioner of Administrative and 
Financial Services shall establish a procedure for creation of 
the 
fund 
and 
identification 
of 
affected municipalities 
and 
distressed communities. 
PART B 
Sec. B-1. 20-A MRSA §13l0, sub-§6, as repealed and replaced by 
PL 2003, c. 212, §1, is amended to read: 
6. 
Enforcement. 
If a municipal treasurer fails to pay the 
installment due, or any part, on the dates required, to initiate 
collection procedures, the treasurer of the school administrative 
district may notify the municipal treasurer of the failure to 
pay. 
Interest accrues on each unpaid installment at the rate 
established under Title 36, section 186 beginning on the 60th day 
after the date the installment is due under subsection 4. 
If 
payment of an installment is not made within 60 days after the 
due date, the treasurer of the district may initiate an action in 
Superior Court to compel payment of the delinquent installment. 
The court shall determine the amount owed by the municipality to 
the district and shall order the municipal treasurer to pay all 
delinquent installments, accrued interest and any court costs and 
reasonable attorney's fees incurred by the district. 
To ensure 
prompt payment of the delinquent installments, 
the court may 
require that amounts due to the municipality from the State under 
Ti tIe 30-.\, section 5681 and Title 36, seetiaRs section 578 aRe 
a89 be paid to the district until the amount determined by the 
court 
is 
satisfied. 
The 
court 
shall 
promptly 
notify 
the 
disbursing state agency of the determination and direct the 
agency to make the required change in payee and the amounts to be 
paid. 
If additional funds are needed to satisfy the amount 
determined by the court to be paid to the district, the court may 
order the attachment or trustee process and sale of real or 
personal property owned by the municipality or the attachment of 
the municipality's bank accounts or require property tax payments 
to the municipality to be turned over to the court and may pay 
the amount owed the district from the proceeds and return any 
excess to the municipality. 
Sec. B·2. 20·A MRSA §1703, sub·§6, as repealed and replaced by 
PL 2003, c. 212, §2, is amended to read: 
6. 
Enforcement. 
If a municipal 
treas~rer fails to pay the 
installment due, or any part, on the dates required, to initiate 
collection procedures, 
the treasurer of the 
community school 
district may notify the municipal treasurer of the failure to 
pay. 
Interest accrues on each unpaid installment at the rate 
estabfished under Title 36, section 186 beginning on the 60th day 
after the date the installment is due under subsection 4. 
If 
payment of an installment is not made within 60 days after the 
due date, the treasurer of the district may initiate an action in 
Superior Court to compel payment of the delinquent installment. 
The court shall determine the amount owed by the municipality to 
the district and shall order the municipal treasurer to pay all 
delinquent installments, accrued interest and any court costs and 
reasonable attorney's fees incurred by the district. 
To ensure 
prompt payment of the delinquent installments, the court may 
require that amounts due to the municipality from the State under 
Title 30-.\, section 5681 and Title 36, seetiaRS section 578 aRe 
a89 be paid to the district until the amount determined by the 
court 
is 
satisfied. 
The 
court 
shall 
promptly 
notify 
the 
disbursing state agency of the determination and direct the 
agency to make the required change in payee and the amounts to be 
paid. 
If additional funds are needed to satisfy the 
amount 
determined by the court to be paid to the district, the court may 
order the attachment or trustee process and sale of real or 
personal property owned by the municipality or the attachment of 
the municipality's bank accounts or require property tax payments 
to the municipality to be turned over to the court and may pay 
the amount owed the district from the proceeds and return any 
excess to the municipality. 
Sec. B-3. 36 MRSA §383, sub-§4, as repealed and replaced by PL 
2001, c. 32, §l, is amended to read: 
4. 
Penalty for late filinq. 
If the complete return and 
lists required by this section are not filed on time, the State 
Tax Assessor shall impose a penalty to be deducted from state 
reimbursement due to the municipality or primary assessing area 
pursuant to the following programs in the following order of 
priority: 
A. 
Maine Tree Growth Tax Law, section 578; and' 
B. 
Veterans' property tax exemptions, section 653f-aBsi 
bT--Ma4Be-~~~~-~~~~~~-~~-e~em~~ieBr-6ee~ieB 
989T 
For a municipality or primary assessing area with a population of 
2,000 or less, the penalty is $50 for the first late day plus $10 
for each late day thereafter. 
For a municipality or primary 
assessing area with a population of more than 2,000, the penalty 
is $100 for the first late day plus $20 for each late day 
thereafter. 
Sec. B-4. 36 MRSA §507, as amended by PL 1997, c. 643, Pt. 
HHH, §2 and affected by §10, is further amended to read: 
§S07. Taxpayer information 
When 
a municipality issues a property tax bill to each 
taxpayer, each bill must contain a statement or calculation that 
demonstrates the amount or percentage by which the taxpayer's tax 
has been reduced by the distribution of state-municipal revenue 
sharingT-~~~-~~~~--~e~--~he-~~-~~~~--heme6~eas 
~Fe~eF~y-EaH-eHem~EieB and state aid for education. 
The property 
tax bill must contain a statement of the assessed value of a 
homesteadT-~~~~-a~~eF-~~~~~~-e~-~~~-Fe6iseB~ 
heme6Eeas-p£epe~Ey-~a~-~~~~-~~~~~~~-~he-eHem~EieB 
a~~lieQ-~~~~-hemesEeaQ. 
The State Tax Assessor shall annually 
provide each municipality with the 
amount of state-municipal 
revenue 
sharing 
and 
state 
aid 
for 
education 
subject 
to 
identification under this section. 
Each property tax bill issued by a municipality shall must 
clearly 
state 
the 
date 
interest 
will 
begin 
to 
accrue 
on 
delinquent taxes. 
Sec. B-S. 36 MRSA c.IOS, sub-c. 4-B, as amended, is repealed. 
Sec. B-6. 36 MRSA c. 907, as amended, is further amended by 
repealing the chapter headnote and enacting the following in its 
place: 
CHAPTER 907 
H(MESTEAD TAX CAP PROGRAM 
Sec. B-7. 36 MRSA §6201-A, as enacted by PL 1989, c. 534, Pt. 
A, §4, is amended to read: 
§6201-A. Short tit1e 
This chapter saaJ.J.--ae is known and may be cited as ,:,:,the 
!.!MaiRe-Resie.eRts-P!;'epe!;'ty Homestead Tax ~ 
Program." 
Sec. B-8. 36 MRSA §6207, sub-§§l and 2, as amended by PL 1997, 
c. 557, Pt. A, §3 and affected by Pt. G, §l, are further amended 
to read: 
1. 
Benefit 
calculation. 
For 
claimants 
representing 
a 
nonelderly household, the benefit is calculated as follows: 
A-I. 
Fifty percent of that portion of the benefit base that 
exceeds -4%- 3.5% but does not exceed 8% of income plus 100% 
of that portion of the benefit base that exceeds 
8% 
of 
income 
to 
a 
maximum 
payment 
of 
$lrQQQ 
$1,325 
for 
applications filed under this chapter beginning August L 
2004 and ending December 31, 2004 and $2,000 thereafter. 
2. 
Income 
eligibility. 
Single-member 
households 
with 
household incomes in excess of $6Br+QQ $75,000 and households 
with 2 or more members with a household income in excess of 
$4Q r QQQ $100,000 are not eligible for a benefit. 
Sec. B-9. 36 MRSA §6209, as amended by PL 1989, c. 508, §25, 
is further amended to read: 
§6209. 
Annual adjustment 
1. 
Household limitation adjustment. 
Beginning March 
1, 
1989, 
and annually thereafter, 
the State Tax 
Assessor 
shall 
determine 
the household income eligibility adjustment factor. 
That factor saa** must be multiplied by the income limitations in 
section 6206, applicable for the year prior to that for which 
relief is requested. 
The result saa** must be rounded to the 
nearest $100 and saa** must apply to the year for which relief is 
requested corresponding to the year on which the annualized cost 
of living adjustments were based. 
Beginning March 1, 1991 2005, 
the same procedure saa** must be employed to adjust the income 
limitation in section 6207, subsection 2. 
Sec. B·I0. 36 MRSA §6210, as amended by PL 1997, c. 557, Pte 
A, §4 and affected by Pt. G, §l, is further amended to read: 
§6210. 
Administration 
The State Tax Assessor shall make available suitable forms 
with instructions for claimants. The claim saa** must be in the 
form 
t=ae--S-t,.a.1;e.--'l!aiI-- .>.,ssesso-r--may--~~ese~i:ee prescribed by the 
assessor and saa** must be signed by the claimant. 
The State Tax Assessor shall include a checkoff to request 
an application for the Maiae-Resieeat=s-P~e~e~t=y Homestead Tax Cap 
Program on the individual income tax form. 
The assessor shall 
also provide for the option of filing an application for the 
Maiae-~1dent~-P£e~e~t=y Homestead Tax 
Cap Program using the 
telefile system established by the assessor. 
Sec. B·ll. 36 MRSA §6218, as enacted by PL 1989, c. 534, Pt. 
A, §10, is amended to read: 
§6218. 
Readability; application; instructions 
The application form and instructions used by applicants for 
assistance under the 
Maiae--&e-6-i-dent~-P~efle~t=y Homestead Tax ~ 
Program and its successor, if any, saa** must have a readability 
score, 
as determined by a 
recognized instrument for measuring 
adult literacy levels, equivalent to no higher than a 6th grade 
reading level. 
Sec. B·12. 36 MRSA §6219, as amended by PL 1997, c. 526, §14, 
is further amended to read: 
§6219. 
Outreach plan required 
The Bureau of Revenue Services shall develop and implement a 
plan of outreach to ensure that all eligible households are made 
aware of assistance available under the Maiae-Resieeat=s-P£epe£t=y 
Homestead Tax Cap Program and its successor, if any. 
Sec. B·13. 36 MRS A §6220, as amended by PL 1997, c. 668, §40 , 
is further amended to read: 
§6220. 
Coordination required 
The bureau shall seek the advice and cooperation of the 
Bureau 
of 
Elder 
and 
Adult 
Services; 
the 
Bureau 
of 
Family 
Independence; the Bureau of Child and Family Services; advocates 
for elderly and 
low-income 
individuals; 
and other interested 
agencies and organizations in developing the application form and 
instruction booklet for the MaiBe--&e-s-.i-dent-G--PFepeFty Homestead 
Tax Cap Program and the outreach plan required by section 6219. 
Sec. B·14. 
Application. 
That 
section 
of 
this 
Part 
that 
repeals 
the 
Maine 
Revised Statutes, 
Title 
36, 
chapter 
105, 
subchapter 4-B applies to property tax years beginning on or 
after April 1, 
2004. 
Those sections of this Part that amend 
Title 36, chapter 907 apply to applications required to be filed 
on or after August 1, 2004. 
Sec. 
B·15. 
Appropriations 
and 
allocations. 
appropriations and allocations are made. 
ADMINISTRATIVE AND FINANCIAL 
SERVICES, DEPARTMENT OF 
Homestead Property Tax 
Exemption Reimbursement 
The 
following 
Initiative: 
Deappropriates funds to reflect savings as a result 
of repealing the Maine Residents Property Tax Program. 
General Fund 
All Other 
2003-04 
$0 
2004-05 
($34,931, 664) 
General Fund Total 
$0 
($34,931,644) 
Sec. 
8·16. 
Appropriations and 
allocations. 
appropriations and allocations are made. 
ADMINISTRATIVE AND FINANCIAL 
SERVICES, DEPARTMENT OF 
Maine Residents Property 
Tax Proqram 
The 
following 
Initiative: 
Provides funds due to the increase in the number and 
amount of refunds as a result of increases in the maximum income 
eligibility 
criteria 
and 
maximum 
refund 
allowed 
under 
the 
Homestead Tax Cap Program. 
General Fund 
All Other 
General Fund Total 
2003-04 
$0 
$0 
Sec. B·17. 
Appropriations and 
allocations. 
appropriations and allocations are made. 
2004-05 
$24,920,771 
$24,920,771 
The 
following 
ADMINISTRATIVE ABD FIBAlfCIAL 
SERVICES, DEPAR7MERT OF 
Homestead Property Taz 
Ezemption Mandate Reimbursement 
Ini tiati ve: 
Provides funds to 
of the estimated local costs 
Residents Property Tax Program. 
reimburse municipalities for 
90~o 
incurred to terminate the Maine 
General Fund 
All Other 
General Fund Total 
PARTC 
2003-04 
$0 
$0 
Sec. C·l. 30·A MRSA c. 231 is enacted to read: 
CHAPTER 231 
LOCAL ABD COUNTY GOVERNMENT BUDGET CAP 
2004-05 
$190,000 
$190,000 
S6201. 
Definitions 
As 
used 
in this 
chapter, 
unless 
the 
context 
otherwise 
indicates, the following terms have the following meanings. 
1. 
Adjusted annual growth rate. 
"Adjusted annual growth 
rate" means the total dollar amount of the municipal or county 
budget approved by the pertinent local taxation authority for the 
prior fiscal 
year multiplied by 
one 
plus 
the 
average 
real 
personal 
income 
growth 
rate, 
plus 
the 
average 
forecasted 
inflation rate. 
2. 
Average forecasted inflation rate.· "Average forecasted 
inflation rate" means the average forecasted inflation rate as 
defined by Title 5, section 1664. 
3. 
Average real personal income growth rate. 
"Average 
real personal income growth rate" means the average real personal 
income 
growth 
rate 
as 
defined 
by 
Title 
5, 
section 
1665, 
subsection 1. 
4. 
County budget authority. 
"County 
budget 
authority" 
means the entity with authority under chapter 3 to approve the 
county budget. 
5. 
County tax appropriation. 
"County tax appropriation" 
means the appropriations budgeted by a municipality to meet its 
portion of the county tax assessed under section 706. 
6. Education appropriation. "Education appropriation" means 
the appropriations budgeted by a municipality to meet its local 
share of education funding established under Title 20 A, chapter 
606-B. 
7. 
Exceptional 
circumstances. 
"Exceptional 
circumstances" 
means an unforeseen condition or conditions regarding which the 
local taxation authority lacks discretion, authority 
or other 
means of control, including, but not limited to: 
A. 
Unfunded or under funded new state or federal mandates; 
B. 
Losses in state or federal revenues or other revenue 
sources; 
C. 
Citizens' 
initiatives 
or 
referenda 
that 
require 
increased municipal spending; 
D. 
Court 
orders 
or 
decrees 
that 
require 
additional, 
unbudgeted 
municipal resources to comply with the orders or 
decrees; and 
E. 
Sudden or significant increases in demand for existing 
municipal services that are not the result of municipal 
legislative 
body 
actions 
that 
increase 
eligibility 
or 
increase benefits. 
8. 
Local taxation authority. 
"Local taxation authority" 
means the legislative body of a municipality or the county budget 
authority. 
9. 
Municipal services appropriation. 
"Municipal services 
appropriation" means the total amount of money appropriated to 
pay for services, programs and public debt that is included in a 
municipality' 5 
annual 
budget. 
excluding 
the 
education 
appropriation, the county tax appropriation and allocation of the 
proceeds of any state or federal grant awarded on a competi ti ve 
basis. 
§6202. 
Local and county government growth rate management system 
1. 
Compliance 
with 
budget 
cap. 
Except 
as 
otherwise 
provided in subsection 
2, the budget adopted by a local taxation 
authority may not exceed the adjusted annual growth rate. 
2. 
Determination of compliance with adjusted anDual growth 
rate. 
Determination of whether a budget proposed for adoption by 
a local taxation authority exceeds the adjusted annual growth 
rate must be made as follows: 
A. 
The 
proposed 
municipal 
services 
appropriation 
is 
considered to comply with the annual adjusted growth rate if 
it is no greater than the municipal services appropriation 
for the previous fiscal year as adjusted by the average real 
personal income growth rate; and 
B. 
The proposed county budget is considered to comply with 
the 
annual 
adjusted 
growth 
rate 
if 
the 
total 
amount 
apportioned to municipalities 
under section 706 
for 
the 
fiscal year is no greater than the total amount apportioned 
to municipalities under section 706 for the prior fiscal 
year as adjusted by the average real personal income growth 
rate. 
For purposes of this chapter, each municipality's 
county tax appropriation is deemed to comply with the annual 
adjusted growth rate. 
3. 
Noncompliance 
due 
to 
exceptional 
circumstances; 
disclosure of information regarding noncompliance. 
The budget 
proposed for adoption by a local taxation authority may exceed 
the adjusted annual growth rate if: 
A. 
The proposed budget exceeds the adjusted annual growth 
rate due to exceptional circumstances; 
B. 
The following information is printed clearly near the 
title on the proposed budget document's initial page: 
(1) 
A statement that the proposed budget does not 
comply with the adjusted annual growth rate; and 
(2) 
A description of the exceptional circumstances 
that cause the proposed budget to exceed the adjusted 
annual growth rate; and 
C. 
The local taxation authority approves the exceeding of 
the adjusted annual growth rate by a vote on a 
separate 
article using the same process as that used for approving 
the budget. 
SUMMARY 
PART A 
Part A establishes a property tax exemption for property 
that would have been first subject to property tax after April 1, 
2004 
in the 
absence of 
this 
exemption. 
Property placed in 
service on or before April 1, 2004 will remain eligible for the 
Business Equipment Tax Reimbursement, or "BETR," program for the 
duration of the l2-year window for 
BETR 
program entitlement, 
after which it will be exempt. 
Property placed in service on or 
before April 1, 1995, the date after which property placed into 
service is eligible under BETR, will remain subject to property 
taxation as long as it continues to be otherwise subject to 
personal property taxation in the State. 
It establishes a procedure for the State Tax Assessor to 
value business equipment entitled to the personal property tax 
exemption. 
Continuing valuation of this class of property will 
be 
required 
in 
order 
to 
provide 
the 
required 
50'l-o 
state 
reimbursement to municipalities for lost property tax revenue. 
Valuation by the State Tax Assessor will help ensure uniform 
determinations of just value and relieve municipalities of the 
burden of continuing to value exempt property. 
It establishes a penalty for a taxpayer's failure to comply 
on a timely basis with reporting requirements. 
The penalty is 
set at $25,000 or 10"<> of the tax liability, whichever is less. 
The penalty may be waived for good cause. 
It 
requires 
the 
establishment 
of 
a 
fund 
for 
economic 
development and job creation in municipalities affected by the 
prospective property tax exemption for business equipment and 
machinery 
and 
in 
economically 
distressed 
communities. 
The 
savings to the State from the elimination of BETR reimbursement 
for business equipment and machinery put into service after the 
exemption will be used to create the fund. 
PART B 
Part B repeals the homestead property tax exemption program 
for property tax years beginning on or after April 1, 
2004, 
Page l6-LR278l(1) 
expands the Maine Residents Property Tax Program and renames the 
expanded 
property 
tax 
reimbursement 
"the 
Homestead 
Tax 
Cap 
Program" for applications required to be filed on or after August 
1, 
2004. 
The 
program is expanded 
by increasing the 
income 
eligibility requirements for nonelderly households to $75,000 for 
single-member households and to $100,000 for households with 2 or 
more members and by increasing the maximum allowable benefit from 
$1,000 to $1,325 for the fiscal year 2003-04 program and to 
$2,000 
thereafter. 
Under 
current 
law, 
the 
projected 
income 
limitations for the 2004 Maine Residents Property Tax Program, as 
adjusted 
for 
inflation, 
are 
projected 
to 
be 
$30,300 
for 
single-member households and $46,900 for households with 2 or 
more members. 
The new income limitations "{Quld be adjusted for 
inflation for program filing periods beginning after 2004. 
PART C 
Part C, which is modeled after the budget stabilization cap 
applicable to the State Government budget, establishes a cap on 
municipal and county government spending and promotes informed 
taxpayer decisions regarding municipal and county budgets. 
Each 
year, municipal and county budgets may not exceed the average 
real personal income growth rate, adjusted by inflation, except 
in 
exceptional 
circumstances. 
For 
a 
budget 
to 
exceed 
the 
adjusted annual 
growth rate, 
the municipal or 
county budget 
authority must state what exceptional circumstances require the 
cap to be exceeded and vote on a separate article to exceed the 
cap.