An Act To Simplify Calculation of Legal Interest
Maine Legislature, Session 121, LD 1132
Committee: Judiciary
Sponsors: MILLS, NORBERT
Amends: 10 MRSA §1113, 10 MRSA §1114, 14 MRSA §1602-A

Legislative Document 
No. 1132 
H.P.835 
House of Representatives, March 4, 2003 
An Act To Simplify Calculation of Legal Interest 
Reference to the Committee on Judiciary suggested and ordered printed. 
Presented by Representative MILLS of Cornville. 
Cosponsored by Representative NORBERT of Portland . 
Printed on recycled paper 
/Jl~/J1.~ 
MILLICENT M. MacFARLAND 
Clerk 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1. 10 MRSA §1113, sub-§4, as enacted by PL 1993, c. 46L 
§l, is amended to read: 
4. 
Del.ayed payments. 
Except as otherwise agreed, if any 
progress or final payment to a contractor is delayed beyond the 
due date established in subsection 3, the owner shall pay the 
contractor interest on any unpaid balance due beginning on the 
21st day, at an interest rate equal to that specified in Title 
14, section l602-Ar-s~9see~i9B-6. 
Sec. 2. 10 MRSA §1114, sub-§4, as enacted by PL 1993, c. 46 L 
§l, is amended to read: 
4. 
De 1. ayed 
payments. 
Notwithstanding 
any 
contrary 
agreement, if any progress or final payment to a subcontractor or 
material supplier is delayed beyond the due date established in 
subsection 2 or 3, the contractor or subcontractor shall pay its 
subcontractor or material supplier interest on any unpaid balance 
due beginning on the next day, at an interest rate equal to that 
specified in Title 14, section l602-Ar-s~9see~i9B-6. 
Sec. 3. 14 MRS A §1602, sub-§l, as amended by PL 200L c. 47 L 
Pt. D, §13, is repealed and the following enacted in its place: 
1. 
Prejudgment interest: rate: avoidance. 
In all civil 
actions, except those actions involving a contract or note that 
contains a provision relating to interest. prejudgment interest 
must be assessed at a rate of 6%. 
The Supreme Judicial Court may 
review the prejudgment interest rate no more than once per year 
and, if there has been a substantial change in market interest 
rates, may order a 
change in the prejudgment interest rate to 
accurately reflect the market rate. 
If the 
Supreme Judicial 
Court orders a change in the prejudgment interest rate pursuant 
to this section, the rate must be roughly :0% of the rate set ig 
section l602-A. 
Prejudgment interest accrues from the time of notice of claim 
setting forth under oath the cause of action, served personally 
or by registered or certified mail upon the defendant until 
tl}~ 
date on which an order of judgment is entered. 
If no notice of 
claim has 
been given to 
the defendant, 
prejudgment interest 
accrues from the date on which the complaint is filed. 
If the 
prevailing party at any time requests and obtains a continuance 
for a period in excess of 30 days, interest must be suspended for 
the 
duration 
of 
the 
continuance. 
On 
petition 
of 
the 
nonprevailing party and on a 
showing of good cause, the trial 
court may order that interest awarded by this section be fully or 
partially waived. 
Page l-LR0834(1) 
to 
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Sec. 4. 14 MRSA §1602-A, first" as repealed and replaced by 
PL 1987, c. 646, §4, is repealed and the following enacted in its 
place: 
From and after the date of entry on an order of judgment, 
including the period of the pendency of an appeal, interest is 
allowed at a rate of 
10~. 
The Supreme Judicial Court may review 
the rate of interest after judgment no more than once per year 
and, if there has been a substantial change in market interest 
rates, 
may order 
a 
change 
of 
the 
rate 
in this 
section to 
accurately reflect the market rate. 
If the 
Supreme Judicial 
Court orders a change in the interest rate under this section, 
the rate must be roughly l67~ of the rate set in section 1602. 
Sec. 5. 14 MRSA §1602-A. sub-§I, as amended by PL 1989, c. 
502, Pt. B, §15, is repealed. 
Sec. 6. 14 MRS A §1602-A. sub-§2, as amended by PL 2001, c. 
471, Pt. D, §14, is repealed. 
Sec. 7. IS-A MRSA §3-S06, sub-§(d), as amended by PL 1997, c. 
202, §1, is further amended to read: 
(d) 
Unless otherwise provided in any judgment in another 
court entered against the personal representative, allowed claims 
bear prejudgment interest at the rate specified in Title 14, 
section 1502T-6~b6eetieH-±T-paEa~Eapa-A for the period commencing 
days after the time for original presentation of the claim has 
expired 
unless 
based 
on 
a 
contract 
making 
a 
provision 
for 
interest, in which case they bear interest in accordance wi th 
that provision. 
(1) 
Interest may not accrue on any allowed claims, however 
allowed, against an insolvent estate, except to the extent 
that 
insurance 
coverage 
or 
other 
nonprobate 
assets 
are 
available to pay the claim in full. 
This paragraph is 
effective for estates of decedents 
who 
die 
on or after 
October 1, 1997 . 
(2) 
To 
the 
extent 
that 
an 
allowed 
claim 
against 
an 
insolvent estate is secured by property, the value of which, 
as 
determined under 
section 3-809, 
is greater 
than the 
amount of the claim, the holder of the claim may receive 
interest 
on 
the principal 
amount 
of 
the 
claim 
and 
any 
reasonable fees ( 
costs or charges provided for 
under 
<:In 
agreement under which the claim arose. 
This paragraph 
lS 
effective for estates of decedents 
who 
die 
on or after 
October 1, 1997. 
SUMMARY 
This 
bill 
sets 
prejudgment 
interest 
rates 
at 
6% 
and 
post judgment interest rates at 10 0/0 for all court actions. 
This 
bill also allows the Supreme Judicial Court to review the rates 
once yearly and change the rates to accurately reflect market 
rates if interest rates substantially change, roughly keeping the 
6/10 ratio of prejudgment interest rates to post judgment interest 
rates. 
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