An Act To
Maine Legislature, Session 121, LD 1372
Committee Amendment CA_A_H594 (House)
Amends: Title 26, Section 5002, 36 MRSA §690, 36 MRSA §6201, 36 MRSA §6207, 36 MRSA §662, 36 MRSA §6651, 36 MRSA §6654, 5 MRSA §13090-K, 36 MRSA §1811, 36 MRSA §1752, 28-A MRSA §1652, 28-A MRSA §1703, 36 MRSA §4365, 36 MRSA §4365-E, 36 MRSA §4365-F, 36 MRSA §4366-A, 36 MRSA §4366-D, 36 MRSA §4403, 30-A MRSA §5657

COMMITTEE AMENDMENT "/Jr,, to 1. B. 3 , L. D. 
72 , 
Enact the School Finance and Tax Reform Act of 2003" 
"An Act To 
Amend the bill by striking out everything after the enacting 
clause and before the summary and inserting in its place the 
following: 
'PART A 
Sec. A·l. 36 MRSA c.l05, sub·c.l·A is enacted to read: 
SUBCHAPTER I-A 
PROPERTY TAX CONTRIBUTION TO PUBLIC EDUCATION 
§521. 
Definitions 
As 
used in this subchapter, unless the context otherwise 
indicates, the following terms have the following meanings. 
1. 
Full value mill rate expectation. 
"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 9rade 12. 
"Funding public education from kindergarten to grade 12" means 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT .. A.. to I. B . 3, L. D. 1372 
the cost of funding essential programs and services as described 
in Title 20-A, chapter 606-B. 
§522. State and local share of funding public education from 
kindergarten to grade 12 
Notwithstanding Title 
20-A, 
chapter 
606-B. 
this 
section 
establishes 
the 
state 
and 
local 
shares 
of 
funding 
public 
education from kindergarten to grade 12. 
1. 
State share. 
Beginning with fiscal year 2004-2005. the 
state share of funding public education from kindergarten to 
grade 12 is 550.0. 
2. 
Maximum 
full 
value 
mill 
rate 
expectation. 
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 I. 2004. 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 must be 
calculated under subsection 3 and may not exceed 9 mills. 
For a 
municipality that assesses property at a percentage other than 
1000.0 
of just value. 
the 
maximum mill rate calculated under 
subsection 3 must be adjusted. in the process of assessment and 
prior 
to 
commitment. 
to 
the 
mill 
rate 
that 
generates 
the 
eguivalent revenue that would be collected if the municipality 
were assessing property at 1000.0 of just value. 
3. 
Calculation of full value mill rate expectation. 
For 
property tax years beginning on or after April 
1, 
2004, 
the 
Commissioner of Education shall calculate the full value mill 
rate expectation that is required to fund 
a 
local share of 
funding public education from kindergarten to grade 12 equal to 
45°'b. 
§S23. Exceeding mill rate expectations; 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 if that action is approved 
by the voters of the school administrative unit by referendum or 
the 
referendum validation process 
authorized by Title 
20-A. 
sections l305-B and 1701-B and the voters are properly notified 
as reguired by Title 20-A. section 15617 or Title 30-A, section 
2523 or 2551, as applicable. 
Sec. A·2. Basis for funding costs of education from kindergarten to 
grade 12. 
Notwithstanding any other provision of law, beginning 
in 
fiscal 
year 
2004-05, 
funding 
of 
the 
costs 
of 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to LB. 3, L.D. 1372 
public education from kindergarten to grade 12 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. A-3. Application. 
This Part applies to property tax 
years beginning on or after April 1, 2004. 
PARTB 
Sec. B-1. 36 MRSA §690 is enacted to read: 
§690. 
Repeal 
A homestead property tax exemption under this subchapter is 
not authorized for property tax years based on the status of 
property on or after April 1. 2004. 
This subchapter is repealed 
January 1. 2005. 
PARTC 
Sec. C-l. 36 MRSA §6201, sub-§lI-A, as amended by PL 1999, c. 
401, Pt. R, §l and affected by §2, is further amended to read: 
II-A. 
Rent 
constitutinq 
property 
taxes 
accrued 
for 
nonelderly household. 
"Rent constituting property taxes accrued 
for 
nonelderly household" 
means 
13% 
2Qo~ of 
the 
gross 
rent 
actually paid in cash or its equivalent in any tax year by a 
claimant and the claimant's household solely for the right of 
occupancy of their Maine homestead in the tax year and which rent 
constitutes the basis, in the succeeding calendar year, 
of a 
claim for relief under this chapter by the claimant. 
Sec. C-2. 36 MRSA §6207, sub-§§1 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. 
~~:Et;y--pe-r-oent--e:E The benefit eg:uals that portion of 
the benefit base that exceeds 4% a~t-4ee5-~-~-~~-ef 
~Be9me-~~-k~~~-B~-~~-pett;~eB-~--t;h&-~Re~4t-~-t;Rat; 
eHeeeas-8% of income to a maximum payment of $lrggg $3,000. 
2. 
Income 
eliqibility. 
household incomes in excess of 
with 2 or more members with a 
Single-member 
households 
with 
$69r+GG $40,000 and households 
household income in excess of 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "~,, to I.B. 3, L.D. 1372 
$4G T GGG $65.000 are not eligible for a benefit. 
Sec. C·3. Application. 
This 
Part 
applies 
to 
claims 
for 
reimbursement filed after July 31, 2004. 
PARTD 
Sec. D·l. 36 MRSA §662 is enacted to read: 
§662. 
Business equipment 
1. 
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. 
"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 I. 2003. 
"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 I. 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 
L 
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 L 
2003. 
"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; and 
(3) 
Property owned or used by an excluded person. 
B. 
"Excluded person" means: 
(1) 
A public utility as defined in Title 35-A, section 
102, subsection 13; 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT" A" to I.E. 3, L.D. 1372 
(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-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. 
C. 
"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. 
D. 
"Oualified 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 
COMMITTEE AMENDMENT 
CQMMITTEE AMENDMENT ·4" to LB. 3, L.D. 1372 
depreciated. 
"Qualified business property" also includes 
a11 property 
that is affixed or attached to a building or other real 
estate if it 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 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 used primarily to further the 
use of the land as land, regardless of the particular trade 
or business activities 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 as follows. 
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 distribution utility" has 
the same meaning as defined in Title 35-A, section 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT ,/f" to LB. 3, L.D. 1372 
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 
that such property is entitled to exemption under this 
section 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 
reguired 
application for certification to the Commissioner of 
Environmental Protection prior to April 1st. 
The exemption under this section continues for property that 
meets the reguirements of subparagraphs 
( I) • 
(2) and 
( 3) 
only until the certification for exemption under section 
656, subsection L 
paragraph E has been granted. 
If the 
assessor denies an exemption on the ground that the property 
in guestion is entitled to exemption under section 656, 
subsection I. 
paragraph 
E 
and the taxpayer 
appeals 
the 
denial, the assessor shall, at the taxpayer's reguest, allow 
the taxpayer UJ? 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 l. 
paragraph 
E. 
If 
the 
taxpayer 
timely 
produces 
such 
a 
statement or otherwise demonstrates that the property is not 
exempt under section 656, subsection L 
paragraph E, 
the 
assessor shall allow the exemption under this section. 
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 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT .. 1/ .. to I.B. 3, L.D. 1372 
State and the form must be made ayai1able to taxpayers prior to 
April 1st. 
The assessor may reguire the taxpayer to sign the 
form and make oath to its truth. 
The assessor may reg:uest in writing that taxpayers answer in 
writing all reasonable ing:uiries as to the nature, situation and 
value 
of the property for which exemption is reguested. 
A 
taxpayer has 60 days from receipt of such inguiries 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 
prov~s~ons of this subsection on a 
timely basis. including any extensions of time. results in a 
penal ty eg:ual to the lesser of $5,000 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 penalty 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 disgualifies the property involved from 
exemption for that tax year. 
All notices and reg:uests provided 
pursuant 
to 
this 
subsection 
must 
conspicuously 
state 
the 
consequences of the taxpayer I s failure to respond to the notice 
or reguest 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 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 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT .. A.. to 1. B. 3, L . D. 13 72 
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 
required 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 12004-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 
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 disgualify 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 disgualify 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 disgualify 
an exemption. 
The taxpayer may seek reconsideration pursuant to 
section 151 of the State Tax Assessor I s decision to disgualify 
any exemption claimed by the taxpayer. 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to I.B. 3, L.D. 1372 
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. D-2. 36 MRSA §6651, sub-§l, as amended by PL 2001, c. 
396, §43, is further amended to read: 
1. 
Eligible property. 
"Eligible property" means qualified 
business property first placed in service in the State, or 
consti tuting construction in progress commenced in the State, 
after April 1, 1995, but does not include any property that is 
exempt from property tax under section 662. 
"Eligible property" 
includes, without limitation, repair parts, 
replacement parts, 
additions, accessions and accessories to other qualified business 
property placed in service on or before April 1, 1995 if the 
part, 
addition, 
accession or 
accessory 
is 
first 
placed 
in 
service, or constitutes construction in progress, in the State 
after April 1, 1995, but does not include any property that is 
exempt from property tax under section 662. 
"Eligible property" 
also includes inventory parts. 
Sec. D-3. 36 MRSA §6654, as amended by PL 2001, c. 714, Pt. 
BB, §1 and affected by §4, is further amended to read: 
§6654. 
Claim for reimbursement 
A person entitled to reimbursement of property taxes paid 
with respect to eligible property pursuant to section 6652 may 
file a claim for reimbursement with the State Tax Assessor. 
The 
reimbursement claim must be filed with the State Tax Assessor on 
or after August 1st and on or before the following December 31st 
for property taxes paid during the preceding calendar year for 
which no previous reimbursement pursuant to this chapter has been 
made. 
For good cause, the State Tax Assessor may at any time 
extend the time for filing a claim for reimbursement for a period 
not exceeding 60 days from the original due date. 
An application 
for 
reimbursement may not be filed after February 29, 
2016. 
Except as otherwise provided, the claim must be accompanied by 
the statement obtained by the claimant pursuant to section 6653. 
If the claimant requests reimbursement of an amount of tax that 
differs 
from 
the 
amount 
of 
tax 
specified for 
the eligible 
property in the statement provided by the assessor or assessors 
of the taxing jurisdiction, the claimant must attach to the claim 
form an explanation of the reasons for that difference and the 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT ,A" to 1. B. 3, L. D. 1372 
State 
Tax 
Assessor 
shall 
determine 
the 
correct 
amount 
of 
reimbursement to which the claimant is entitled, taking into 
consideration both the statement from the assessor or assessors 
and the taxpayer's explanation. 
If, for any reason, the claimant 
is unable to obtain the statement specified in section 6653 from 
the assessor or assessors within the time specified in section 
6653, the claimant must attach to the claim form an explanation 
of the 
amount of 
reimbursement 
requested and the State Tax 
Assessor shall process the claim without that statement. 
PART E 
Sec. E·l. 30·A MRS A §S681, sub·§2, tE, as enacted by PL 1999, 
c. 731, Pt. U, §1, is amended to read: 
E. 
"Disproportionate tax burden" means the total real and 
personal 
property 
taxes 
assessed 
in the 
most 
recently 
completed municipal fiscal year for the purpose of funding 
the portion of the municipal budget that does not include 
the cost of funding public education from kindergarten to 
grade 12, except the taxes assessed on captured value within 
a tax increment financing district, divided by the latest 
state valuation certified to the Secretary of State and 
reduced by .01. 
Sec. E·2. Application. 
This Part applies to distributions 
from the Disproportionate Tax Burden Fund made after June 30, 
2004. 
PARTF 
Sec. F·l. 36 MRSA c. 216 is enacted to read: 
CHAPTER 216 
LIMITED LOCAL OPTION SALES AND USE TAX 
§1871. 
Definitions 
As 
used 
in this chapter. 
unless 
the 
context otherwise 
indicates. the following terms have the following meanings. 
1. 
Capital project. 
"Capital project" 
means 
a 
major, 
permanent or long-lived improvement. including, but not limited 
to, the acquisition or development of land and structures and 
related equipment, that would be properly chargeable to a capital 
asset account, 
as distinguished from current expenditures and 
ordinary maintenance expenses. 
Page ll-LR2021(2) 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT ,~" to I. B. 3 , L . D • 1372 
2. 
Eligible municipality. 
"Eligible municipality" means: 
A. 
A regional service district established pursuant to 
Title 3Q-A, chapter 112: and 
B. 
A municipality that has demonstrated to the satisfaction 
of the assessor that it has adopted administrative and other 
service-delivery practices 
that achieve 
cost 
savings 
in 
operating funds related to administrative services and that 
the money saved has been directed for property tax relief. 
3. 
Municipal clerk. 
"Municipal clerk" means the clerk of 
an eligible municipality. 
4. 
Municipal 
referen(l,..um"""-,."--_'~'M,,-,u...,n~J.,,,",· c ....... 
il:'p-"'a""l~ .... 
r""'e..."f-'"e~r--"e .... 
n~d...,um"""-_" ---,m,-"e"-,a...,n~s",----",,a 
referendum conducted pursuant to this chapter by an eligible 
municipality. 
5. 
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 1 % local option sales tax 
on transactions that are otherwise subject to the tax imposed by 
this Part. together with a local option use tax of an additional 
1% on storage, use or other consumption that is otherwise subject 
to the tax imposed by this Part. 
Any tax imposed under this 
chapter 
must 
receive 
certification 
by 
the 
Commissioner 
of 
Economic and Community Development pursuant to section 1875. 
2. 
Collection and remittance: 
administration by State. 
Retailers that collect the 1% sales and use 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 and us~ 
approved by the voters of an eligible municipality pursuant to 
section 1874 is effective on the first day of the first full 
calendar guarter that begins more than 60 days after the date on 
which the assessor receives from the Commissioner of Economic and 
Community Development certification of the local option sales and 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT ·A .. to LB. 3, L.D. 1372 
use tax pursuant to section 1875. 
If the effective date provided 
by 
this 
subsection does 
not 
allow 
the 
assessor 
to provide 
retailers with at least 60 days' notice of the imposition of the 
tax. the effective date is the beginning of the next succeeding 
calendar Quarter: however. a tax imposed pursuant to this chapter 
may not take effect prior to July I. 2004. 
4. 
Expiration of tax. 
A local option sales and use tax 
imposed pursuant to this chapter expires on the first day of the 
calendar Quarter that begins after the earliest of the following 
dates: 
A. 
The end of the month during which the time period for 
the tax specified in the municipal referendum expires: 
B. 
The end of the 3rd month following the month during 
which 
the 
revenue 
limit 
specified 
in 
the 
municipal 
referendum is reached; 
C. 
The end of the 3rd month after the municipal clerk 
forwards to the assessor certification of the discontinuance 
of the local option sales and use tax as a result of a 
referendum vote conducted in accordance with the provisions 
of this chapter; and 
D. 
Five years from the effective date of the tax. 
If the expiration date provided by this subsection does not allow 
the assessor to provide retailers with at least 60 days' notice 
of 
the 
expiration of 
the 
tax. 
the expiration date is 
the 
beginning of the next succeeding calendar guarter. 
§1873. 
Eligible capital projects 
The 1% sales and use tax authorized by this chapter may be 
adopted only for the purpose of financing one or more eligible 
capital projects that have a regional impact. 
Property acguired 
pursuant to an eligible ca,pital project must be 
owned by 
a 
governmental body or regional nonprofit organization. 
Only the 
following types of projects are eligible for financing under this 
chapter: 
1. 
Visitor 
facilities. 
A 
capital 
project 
that 
will 
generate 
regional 
economic 
activity 
or 
attract 
and 
support 
visitors to a region, including, but not limited to, a convention 
and conference center, an industrial park for regional employers, 
an aguarium, the repair and replacement of downtown facilities, a 
regional land conservation or recreation project and a sports 
arena; 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT ll .. to LB. 3, L.D. 1372 
2. 
Educational facilities. 
A capital project involving 
construction or renovation that will enhance regional educational 
opportunities, 
including, 
but 
not 
limited 
to, 
a 
regional 
vocational center and a high school serving a regional service 
district established pursuant to Title 30-A, chapter 112. 
An 
educational facility project may not be 
financed unless the 
school 
administrative 
unit establishes 
and 
complies 
with 
a 
maintenance and capital improvement program as required under 
Title 20-A. 
section 4001 
and 
a 
facility maintenance plan as 
required under Title 20-A. section 15905. subsection 6; 
3. 
Public infrastructure. 
A capital project that will 
provide utility or transportation services to more 
than one 
municipality. 
including, 
but 
not 
limited 
to, 
a 
regional 
wastewater treatment system, a regional solid waste facility, a 
transit facility, a bikeway, a parking garage and an arterial or 
collector road; 
4. 
Environmental projects. 
A capital project that will 
restore or protect a natural environmental system including, but 
not limited to. 
the restoration or preservation of 
a 
beach, 
wetland or river system and the acquisition of land with regional 
environmental significance; and 
5. 
Affordable 
housing. 
A 
capital 
project 
for 
the 
construction of affordable housing, as defined by the Maine State 
Housing Authority. 
§1874. 
Referendum process 
1. 
Generally. 
The 
question 
of 
whether 
to 
impose 
or 
discontinue a 
limited local option sales and use 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 30-A, chapter 112 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 
30-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 2l-A. 
The voting at 
elections held by a regional service district must be conducted 
in accordance with the provisions of Title 30-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 30~ 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 
Page l4-LR202l(2) 
COMMITTEE AMENDMENT 
COMMI TTEE AMENDMENT "~,, to I. B. 3, L. 0 • 1372 
send them to the Secretary of State, the Commissioner of Economic 
and Community Development and the assessor. 
2. 
Concurrent levies prohibited. 
Only one local option 
sales and use tax may be levied in an eligible municipality at 
one time. 
3. 
Form of ballots. 
Ballots for guestions of local option 
sales and use taxes must be as provided in this subsection. 
A. 
Ballots on the question of whether to impose the local 
option sales and use tax must read substantially as follows: 
"Do you favor the (enactment of) (extension of) a 1% local 
option sales and use tax to be imposed in (name of eligible 
municipality) 
for 
a 
period of time not to exceed (time 
period) 
in 
order 
to 
raise 
$ 
for 
the 
purpose[sJ of (purpose)?" 
The voters shall indicate their opinion by a cross or check 
mark placed against the word "Yes" or "No." 
B. 
If an eligible municipality is to issue 
a 
debt in 
conjunction with the purpose for which the tax is to be 
imposed, the term of the debt may not exceed 10 years, and 
the 
debt 
is 
a 
general 
obligation 
of 
the 
eligible 
municipality that proposes to impose the tax. 
In such cases 
the ballot must also have written or printed thereon the 
following: 
"If imposition of the tax is approved by the voters, this 
vote also constitutes approval of the issuance of general 
obligation debt of 
(name of eligible municipality) in a 
principal amount not to exceed $ 
for 
the purpose stated aboye." 
C. 
Ballots on the guestion of whether to discontinue the 
tax must read substantially as follows: 
"Do you favor discontinuing by (target date of repeal) the 
1% local option sales and use tax that has been in place in 
(name of eligible municipality) since (original effective 
date of tax) even if the sum of $ 
originally 
authorized 
by 
referendum 
vote 
dated 
(date 
of 
original 
referendum vote approving adoption of the tax) has not been 
raised?" 
The voters shall indicate their opinion by a cross or check 
mark placed against the word "Yes" or "No." 
Page l5-LR202l(2) 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to I. B. 3, L. D. 13 72 
§1875. 
Certification of Commissioner of Economic and Community 
Deyelopment 
1. 
Commissioner of Economic and CODlllUnity Development to 
certify local option sales and use tax. 
An eligible municipality 
must obtain from 
the Commissioner of Economic 
and 
Community 
Development a certification that the capital project or projects 
to be financed by the proposed local option sales and use tax has 
a regional impact and is an eligible project under section 1873. 
The commissioner may not certify a local option sales and use tax 
unless the commissioner finds that the project or projects for 
which the tax was proposed will directly serve residents of the 
eligible municipality and visitors and workers from communities 
other than the eligible municipality in which the improvement is 
located. 
A project does not provide a regional benefit if it is 
primarily local in nature and serves a single municipality. with 
only 
incidental 
or 
indirect 
benefit 
to 
residents 
of 
that 
municipality and visitors and workers from other communities. or 
is a type of project that is routinely funded out of the local 
property 
tax. 
The 
Department 
of 
Economic 
and 
Community 
Development may adopt rules to implement this section. 
Rules 
adopted under this section are routine technical rules pursuant 
to Title 5. chapter 375, subchapter 2-A. 
2. 
Commissioner to notify assessor. 
The Commissioner of 
Economic 
and Community Development shall notify the assessor 
whenever the commissioner certifies a local option sales and use 
tax pursuant to this section. 
§1876. 
Distribution of revenues 
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 and use taxes adopted 
pursuant to this chapter. including tax. interest and penalties, 
net of refunds. credits and other appropriate adjustments. 
The 
assessor shall determine the amount of such revenues attributable 
to each eligible municipality and subtract 2%. 
which must be 
credited to the Local Option Sales Tax Fund, established in the 
Department of Administrative and Financial Services. Bureau of 
Revenue Services. 
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 
j;,Leasurers of the net amounts certified by the assessor under 
this subsection. 
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. 
Page l6-LR202l(2) 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to I.B. 3, L.D. 1372 
§1877. 
Use of proceeds by eligible municipality 
The revenue raised by the adoption of a local option sales 
and use tax must be held by the eligible municipality in a 
segregated account. 
Revenue from that account may be expended 
only for the purpose or purposes specified in the referendum on 
the adoption of the tax. or to pay general obligation debt issued 
for the approved purpose or purposes. 
If the proceeds exceed the 
maximum amount specified in the referendum for the financing of 
the capital project or projects. 
they must be 
placed in 
a 
designated 
fund 
that 
may 
be 
used only 
for 
the 
purpose 
of 
maintaining the project or projects once completed. 
PARTG 
Sec. G-l. 36 MRS A §5219-S, as amended by PL 2003, c. 20, Pt. 
GG, §1, is further amended to read: 
§52l9-S. 
Earned income credit 
A taxpayer is allowed a refundable credit against the taxes 
otherwise due under this Part equal to 
5% ~ of the federal 
earned income credit for the same taxable year, except that for 
tax years 
beginning in 2003, 
2004 
and 
2005, 
the applicable 
percentage is 4.92% instead of 5%. 
~he-€~eQ~~-~~-~~-~he 
s~a~e-~ne9ffie-~aH-~9-less-~haB-seF9T 
Sec. G-2. 
Application. 
This 
Part 
applies 
to 
tax 
years 
beginning on or after January 1, 2005. 
PARTH 
Sec. H-l. 5 MRSA §13090-K., sub-§2, as amended by PL 2001, c. 
439, Pt. UUUU, §1, is further amended to read: 
2. 
Source of fund. 
Beginning July 1, 2003 and every July 
1st thereafter, 
the 
State Controller shall transfer to 
the 
Tourism Marketing Promotion Fund an amount, as certified by the 
State Tax Assessor, that is equivalent to 5'1f. of the 7% 
~aH and 
15'1f. 
taxes 
imposed on tangible personal property and taxable 
services pursuant to Title 36, section 1811, for the first 6 
months of the prior fiscal year after the reduction for the 
transfer to the Local Government Fund as described by Title 30-11., 
section 5681, subsection 5. 
Beginning on October 1, 
2003 and 
every October 1st thereafter, the State Controller shall transfer 
to the Tourism Marketing Promotion Fund an amount, as certified 
by the State Tax Assessor, that is equivalent to 5% of the 7% 6aH 
and 15°'1> taxes imposed on tangible personal property and taxable 
Page l7-LR202l(2) 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT .. A 
.. to LB. 3, L.D. 1372 
services pursuant to Title 36, section 1811, 
for the last 6 
months of the prior fiscal year after the reduction for the 
transfer to the Local Government Fund. 
The tax amount must be 
based on actual sales for that fiscal year and may not consider 
any accruals that may be required by law. 
The amount transferred 
from General Fund sales and use tax revenues does not affect the 
calculation for the transfer to the Local Government Fund. 
Sec. B·2. 36 MRSA §1811, first 1[, as amended by PL 2001, c. 
439, Pt. TTTT, §2 and affected by §3, is further amended to read: 
A tax is imposed on the value of all tangible personal 
property and taxable services sold at retail in this State. 
The 
rate of tax is 
7~ on the value of liquor sold in licensed 
establishments as defined in Title 28-A, section 2, subsection 
15, 
in accordance with Title 
28-A, 
chapter 
43; 
7~ except, 
effective July L 
2004, 
10'10 on the value of rental of living 
quarters in any hotel, rooming house or tourist or trailer camp; 
10'\ except, effective July L 
2004, 
20°1> on the value of rental 
for a period of less than one year of an automobile; 7,\ on the 
value of prepared food; 
and 
5% fi on the value of all other 
tangible 
personal 
property 
and 
taxable 
services. 
Value 
is 
measured by the sale price, except as otherwise provided. 
Sec. B·3. Effective date. 
This Part takes effect May 1, 2004. 
PART I 
Sec. 1·1. 36 MRSA §1752, sub·§I.B is enacted to read: 
I-B. 
Amusement 
and recreation services. 
"Amusement and 
recreation 
services" 
means 
the 
following 
services 
provided 
through a retail sale in this State to a member of the public or 
through a private club that charges a fee for membership or right 
of access: 
an amusement, recreational. exhibitive, cultural or 
athletic activity: a rental of personal property for amusement or 
recreation: 
and 
a 
purchase 
of 
membership 
in 
a 
social 
organization. 
Donations to charity and dues to labor unions are 
not amusement and recreation services. 
Sec. 1·2. 36 MRSA §1752, sub-§17-A, 1JJ, as enacted by PL 1999, 
c. 790, Pt. A, §46, is amended to read: 
J. 
Prepaid calling arrangements; aBB 
Sec. 1-3. 36 MRSA §1752, sub-§17-A, 1JK, as amended by PL 2003, 
c. 390, §8, is further amended to read: 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT .t1" to I.B. 3, L.D. 1372 
K. 
Rental of furniture, audio media and audio equipment 
pursuant to a rental-purchase agreement as defined in Title 
9-A, section 11-105T~ 
Sec. 1-4. 36 MRSA §1752, sub-§17-A, 1IL is enacted to read: 
L. 
Amusement and recreation services. 
Sec.I-5. Effective date. This Part takes effect July 1, 2004. 
PARTJ 
Sec. J-l. 30-A MRS A c.112 is enacted to read: 
CHAPTER 112 
REGIONAL SERVICE DISTRICTS 
§2111. 
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 
similar cost savings. 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 municipalities' ability to fund public 
education. 
Sec. J-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 30-A, chapter 112. 
The Joint Standing Committee on State and Local Government shall 
review this legislation. 
PARTK 
Sec. K-l. 28-A MRSA §1652, sub-§l, as repealed and replaced by 
PL 1987, c. 342, §116, is amended to read: 
1. 
Excise tax on malt liquor. An excise tax is imposed on 
the privilege of manufacturing and selling malt liquor. wine and 
low-alcohol spirits products in the State. The Maine manufacturer 
or importing wholesale licensee shall pay an excise tax of 
~9¢ 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "~,, to LB. 3, L.D. 1372 
Fe~-~~~~&-~~-~~&-lJ~~e~-~~-iB-~~-State 1.5¢ for each 
10th of an ounce of 100'lo alcohol sold in the State in malt 
beverages, hard cider, wine, sparkling wine, fortified wine and 
low-alcohol spirits products. 
Sec. K-2. 28-A MRSA §1652, sub-§2, as amended by PL 1997, c. 
767, §4, is repealed. 
Sec. K·3. 28-A MRSA §1703, sub-§3, as amended by PL 1997, c. 
767, §6, is further amended to read: 
3. 
Amount of premium. 
The premium imposed by subsections 1 
and 2 is: 
AT---~-~e~~~--~~-~~~-9B-~~~-mal~--9&~~~&-~-hare 
eieer-s9~a-iB-the-StateT 
A-1. 
Two cents for each ounce of 100'lo alcohol sold in the 
State in malt beyerages, hard cider, wine, sparking wine, 
fortified wine and low-alcohol spirits products; and 
BT---~hi~~y--~e~~~--~--~1~~-~-~~~--wi&&r--9taeF--thaB 
sFar*~iB~-wiBeT-s9~a-iB-the-Statet 
bT--~~~~~-~~-FeF-~~~~-a~l-~~~~~~~-aBa 
a~~-~~~-~~-wJRe-~~-~~--~&&-~~~-a&a-~~-~ew-a~e9h9~ 
SFi~its-p~ea~€~~-~~~-a-Fe~S9&-lJ€eRGea-~~~~~-wi&&-~9F 
e9BsQmFti9B-9&-9F-9~~-th9-Fremisest-aBa 
D. 
One dollar and twenty-five cents per proof gallon as the 
term proof gallon is defined in the United States Code, 
Title 26, Section 5002, on all spirits sold in the State. 
Sec. K-4. Effective date. 
This Part takes effect July 1, 2004. 
PARTL 
Sec. L-l. 36 MRSA §4365, as amended by PL 2001, c. 439, Pte 
SSSS, §1 and affected by §4, is further amended to read: 
§4365. 
Rate of tax 
A tax is imposed on all cigarettes imported 
or held in this State by any person for sale at 
mills for each cigarette. 
Payment of the tax 
the 
affixing 
of 
stamps 
to 
the 
packages 
cigarettes. 
If 
an 
individual 
purchases 
in 
unstamped packages containing cigarettes in a 
into this State 
the rate of - 4+ 
is evidenced by 
containing 
the 
anyone 
month 
quantity greater 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "~,, to I. B. 3, L.D. 1372 
than 2 cartons from a person other than a licensed distributor or 
dealer, the tax may be assessed directly against the purchaser by 
the State Tax Assessor within 3 years from the date of the 
purchase. 
Sec. L-2. 36 MRSA §4365-E, as enacted by PL 2001, c. 439, Pt. 
SSSS, §2, is repealed. 
Sec. L-3. 36 MRSA §4365-F is enacted to read: 
§4365-F. 
Application of cigarette tax rate increase effective 
July 1, 2004 
The following provisions apply to cigarettes held for resale 
on July 1, 2004. 
1. 
Stamped rate. 
Cigarettes stamped at the rate of 50 
mills per cigarette and held for resale after June 30, 2004 are 
subject to tax at the rate of 75 mills per cigarette. 
2. 
Liability. 
A person possessing cigarettes for resale is 
liable for the difference between the tax rate of 75 mills per 
cigarette and the tax rate of 50 mills per cigarette in effect 
before July 1, 
2004. 
Stamps 
indicating payment 
of the 
tax 
imposed by this section must be affixed to all packages of 
cigarettes held for resale as of July 1, 
2004, 
except that 
cigarettes held in vending machines 
as of that date do 
not 
require that stamP, 
3. 
Vending machines. 
Notwithstanding any other provision 
of this chapter, it is presumed that all cigarette vending 
machines are filled to capacity on July L 
2004 and that the tax 
imposed by this section must be reported on that basis. 
A credit 
against this inventory tax must be allowed for cigarettes stamped 
at the rate of 75 mills per cigarette placed in vending machines 
before July 1, 2004. 
4. 
P~ent. 
Payment of the tax imposed by this section 
must be made to the State Tax Assessor by October 1, 
2005, 
accompanied by forms prescribed by the assessor. 
Sec. L-4. 36 MRSA §4366-A, sub-§2, "B and C, as enacted by PL 
2001, c. 439, Pt. SSSS, §3, are amended to read: 
B. 
For stamps at the face value of 47 mills sold prior to 
July 1, 2002, 2.16%; aBa 
c. 
For stamps at the face value of 47 mills sold on or 
after July 1, 2002, 2.03%TL 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT .. A" to 1. B. 3, L. D. 1372 
Sec. L-5. 36 MRSA §4366-A, sub-§2, 1l1lD and E are enacted to 
read: 
D. 
For stamps at the face value of 65 mills sold prior to 
July 1, 2004, 1.62%; and 
E. 
For stamps at the face value of 65 mills sold on or 
after July 1, 2004, 1.52%. 
Sec. L-6. 36 MRSA §4366-D, as enacted by PL 2001, c. 450, Pt. 
D, §l, is repealed. 
Sec. L-7. 36 MRSA §4403, sub-§§ 1 and 2, as amended by PL 1989, 
c. 588, Pt. D, §4, are further amended to read: 
1. 
Smokeless tobacco. 
A tax is imposed on all smokeless 
tobacco, including chewing tobacco and snuff, at the rate of 50% 
of the wholesale sales price beginning October 1, 1989; 55% of 
the wholesale sales price beginning January 1, 1991; aREl 62% of 
the wholesale sales price beginning July 1, 1991: and 77.5% of 
the wholesale sales price beginning July 1, 2004. 
2. 
Other tobacco. 
A tax is imposed on cigars, pipe tobacco 
and other tobacco intended for smoking at the rate of 13% of the 
wholesale sales price beginning October 1, 
1989; 
14% of the 
wholesale sales price beginning January 1, 1991; aBEl 16% of the 
wholesale sales price beginning July 1, 1991; and 20% of the 
wholesale sales price beginning July 1, 2004. 
Sec. L-S. Effective date. 
That section of this Act that amends 
the Maine Revised Statutes, Ti tIe 36, section 4365 takes effect 
July 1, 2004. 
PARTM 
Sec. M-l. 30-A MRSA §5657 is enacted to read: 
§5657. 
Budget limitation 
A municipality may not adopt a budget that requires spending 
for purposes other than funding the cost of public education for 
kindergarten to grade 
that exceeds the budget for 
those 
purposes in the previous fiscal year multiplied by one plus the 
average real personal income growth, 
as defined in Title 5, 
section 1665, subsection 1, plus the average forecasted inflation 
rate, as defined in Title 5, section 1664. 
This limitation does 
not apply if the budget results in a mill rate for purposes other 
than funding the cost of public education for kindergarten to 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "~,, to I.B. 3, L.D. 1372 
grade 12 that does not exceed the mill rate for those purposes in 
the previous year. 
PARTN 
Sec. N-l. Contracting for sheriff services. 
By February 3, 2004, 
the Joint Standing Committee on State and Local Government shall 
report to the Second Regular Session of the 121st Legislature a 
bill 
that 
requires 
municipalities 
without 
full-time 
law 
enforcement services to contract with the county sheriff for law 
enforcement services on a fee basis that approximates the cost of 
the sheriff services provided to the municipality. 
PART 0 
Sec. 
0-1. 
Appropriations 
and 
allocations. 
appropriations and allocations are made. 
ADMINISTRATIVE AND FINANCIAL SERVICES, 
DEPARTMENT OF 
Homestead Property Tax Exemption 
Reimbursement 
0886 
The 
following 
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 
($34,931,664) 
($34,931,664) 
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 
2004-0~ 
$51, 520,000 
$51,520,000 
Initiative: 
Provides 
funds 
for 
Tax 
Examiner 
positions 
effective July 1, 2004 and other related costs associated with an 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT itA It to 1. B. 3, L. D. 1372 
increase in the number of applications for the Maine Residents 
Property Tax Program. 
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 
(2.000) 
$92,270 
182,913 
$275,183 
Initiative: 
Provides funds for 3 Claims Administration positions 
and related costs associated with property valuation and property 
tax exemption reimbursement. 
General Fund 
2003-04 
2004-05 
Positions - Legislative Count 
(0.000) 
(3.000) 
Personal Services 
$0 
$165,786 
All Other 
88,500 
General Fund Total 
$0 
$254,286 
Revenue Services - Bureau of 0002 
Initiative: 
Appropriates one-time funds to be deposited in the 
Maine Revenue Services' Other Special Revenue program to support 
the start-up costs associated with a limited local option sales 
and use 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 and use 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 
\ 
2003-04 
(0.000) 
$0 
a 
$0 
2004-05 
(3.000) 
$134,696 
821, 865 
$956,561 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to 1. B • 3, L. D. 13 72 
ADMINISTRATIVE AND FINANCIAL SERVICES, 
DEPARTMENT OF 
DEPARTMENT TOTALS 
GENERAL FUND 
OTHER SPECIAL REVENlJE FUNDS 
DEPARTMENT TOTAL -
ALL FUNDS 
EDUCATION, DEPARTMENT OF 
General Purpose Aid for Local 
Schools 
0308 
2003-04 
$0 
$0 
$0 
2004-05 
$18,074,366 
$956,561 
$19,030,927 
Initiative: 
Provides funds for the additional cost for the State 
to fund 
55'1t. of K-12 public education utilizing the Essential 
Programs and Services model. 
General Fund 
2003-04 
2004-05 
All Other 
$0 
$233,943,102 
General Fund Total 
$0 
$233,943,102 
EDUCATION, DEPARTMENT OF 
DEPARTMENT TOTALS 
2003-04 
2004-05 
GENERAL FUND 
$0 
$233,943,102 
DEPARTMENT TOTAL -
ALL FUNDS 
$0 
$233,943,102 
SECTION TOTALS 
2003-04 
2004-05 
GENERAL FUND 
$0 
$252,017,468 
OTHER SPECIAL REVENlJE FUNDS 
956,561 
SECTION TOTAL -
ALL FUNDS 
$0 
$252,974,029 
PART P 
Sec. pool. Intent of the Legislature; competing measure. 
It is the 
intent of the Legislature that this Act be interpreted as 
a 
competing measure within the meaning of the Constitution of 
Maine, Article IV, Part Third, Section 18 with Initiated Bill 3, 
Legislative Document 1372 of the 121st Legislature, "An Act To 
Enact the School Finance Act of 2003." 
Sec. P .. 2. Statutory referendum procedure; submission at statewide 
election; 
form 
of 
question; 
effective 
date. 
This 
Act 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A.. to I. B. 3, L • D . 1372 
must be submitted to the legal voters of the State at a statewide 
election held on the 
Tuesday 
following the first Monday of 
November following passage of this Act as a 
competing measure 
with Initiated Bill 3, Legislative Document 1372 of the l2lst 
Legislature, "An Act To Enact the School Finance Act of 2003." 
The municipal officers of this State shall notify the inhabitants 
of their respective cities, towns and plantations to meet, in the 
manner prescribed by law for holding a statewide election, to 
vote on the acceptance or rejection of this Act by voting on the 
following question: 
"Do you want the State to pay 55% of the cost 
education, 
lower 
property 
taxes 
and 
promote 
development through comprehensive tax reform and 
government efficiency?" 
of public 
economic 
increased 
The legal voters of each city, town and plantation shall 
vote by ballot on this question and designate their choice by a 
cross or check mark placed wi thin a corresponding square below 
the word "Yes" or "No." 
The ballots must be received, sorted, 
counted and declared in open ward, town and plantation meetings 
and returns made to the Secretary of State in the same manner as 
votes for members of the Legislature. 
The Governor shall review 
the returns and, if it appears that a majority of the legal votes 
are cast in favor of the Act, the Governor shall proclaim that 
fact without delay, and the Act takes effect in accordance with 
the Constitution of Maine, Article IV, Part Third, Section 19. 
The Secretary of State shall prepare and furnish to each 
city, town and plantation all ballots, returns and copies of this 
Act necessary to carry out the purposes of this referendum.' 
SUMMARY 
This amendment replaces the bill and is intended to be a 
competing measure to be submitted with the initiated bill to the 
voters in November 2004. 
Part A establishes the essential programs and services model 
as the basis for funding public education from kindergarten to 
grade 12 and requires that the State provide 55% of the full 
costs of essential programs and services beginning in fiscal year 
2004-05. 
Part B repeals the homestead property tax exemption after 
the April 1, 2004 property tax year. 
Part C expands the Maine Residents Property Tax Program by 
increasing benefits available to renters, 
raising the 
income 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "ft" to 1. B . 3, L. D. 13 72 
eligibility levels and lowering the tax-to-income ratio factor in 
the formula calculating benefits. 
It also raises the maximum 
benefit from $1,000 to $3,000. 
Part D establishes a property tax exemption for eligible 
business equipment first placed in service after April 1, 2003 
and requires the State to reimburse municipalities for 50% of the 
revenue lost as a result of the exemption as required by the 
Constitution of Maine, Article IV, Part Third, Section 23. 
Part E amends the formula for distribution of the portion of 
revenue sharing that constitutes the Disproportionate Tax Burden 
Fund 
by 
providing 
that 
the 
distribution will 
be 
made 
to 
municipalities based upon their relative share of the portion of 
the noneducation municipal budget that exceeds 10 mills. 
Part F establishes a 1% limited option local sales tax that 
may be adopted by local referendum 
for 
years to fund or 
maintain certain capital projects. 
Part G increases the earned income credit to 
30'1-0 of the 
federal credit and makes it refundable. 
Part H increases the sales tax to 15% on lodging, 
20°-0 on 
automobile rentals and 6% on all sales currently taxed at 5%. 
Part I extends the sales tax to amusements and recreation 
services. 
Part J expresses the legislative purpose for the adoption 
of 
regional 
service 
districts 
and 
directs 
the 
Executive 
Department to submit legislation to carry out this purpose. 
Part K increases taxes on beer and wine and changes the 
method of calculating the tax. 
Part L 
increases cigarette taxes to $1. 30 per pack and 
tobacco products taxes to 77.5% for smokeless tobacco and 20% for 
other tobacco. 
Part M establishes a budget limitation for municipalities 
that limits growth to the increase in average real personal 
income and average forecasted inflation; however, those limits 
may be exceeded if the limitation does not result in a mill rate 
that is higher than the previous year. 
Part 
N 
requires 
the 
joint 
standing 
committee 
of 
the 
Legislature having jurisdiction over state and local government 
matters 
to 
report 
out 
a 
bill that requires municipalities 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT .. (f, to LB. 3, L.D. 1372 
without full-time law enforcement services to contract with the 
county sheriff for law enforcement services. 
Part 0 makes appropriations to carry out the purposes of the 
Act. 
Part P establishes the procedure for submitting the Act as a 
competing measure to the bill. 
FISCAL .\OTE REQt:lRED 
(See attached) 
COMMITTEE AMENDMENT 
Net Cost (Savings) 
General Fund 
Appropriations/Allocations 
General Fund 
Other Special Revenue Funds 
Revenue 
General Fund 
Other Special Revenue Funds 
Fiscal Detail and Notes 
Referendum Costs 
Approved: x:xJx:xJ03 ~ac.. 
Office of Fiscal and Program Review 
LD 1372 
An Act to Enact the School Finance Act of 2003 
LR2021(02) 
Fiscal Note for Bill as Amended by Committee Amendment" " 
Committee: Taxation 
Fiscal Note Required: Yes 
Fiscal Note 
2003-04 
($22,924,981 ) 
$0 
$0 
$22,924,981 
$1,169,174 
MonthlY ear Election Type 
Nov-03 
General 
2004-05 
$22,625,916 
$252,017,468 
$956,561 
$229,391,552 
$8,653,035 
Question 
Initiated Bill 
Projections 
2005-06 
($6,047,435) 
$205,022,280 
$269,389 
$211,069,715 
$8,885,927 
Length 
Standard 
Projections 
2006-07 
($19,296,314) 
$197,880,468 
$282,859 
$217,176,781 
$9,262,558 
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 
appropri~tion of $8,000 or more may be required. 
The implementation of this amended bill is contingent upon voter approval as a competing measure to the original 
initiated bill. If approved by the voters, this bill would result in net General Fund savings in the 2004-2005 biennium of 
$299,065. 
LR2021(2) - Fiscal Note - Page 1 of2 
General Fund Summary - Costs (Savings) 
2003-04 
2004-05 
2005-06 
2006-07 
Increase Sales Tax to $.06 (eff. 5/1104) 
(22,924,981 ) 
(I 29,130,000) 
(135,099,000) 
(141,601,000) 
Sales Tax on Amusements (eff. 7/1104) 
(28,256,546) 
(29,021,367) 
(29,868 ~14) 
Sales Tax on Lodging to 10% (eff. 7/1104) 
(14,543,805) 
(15,286,784) 
(16,09 
J) 
Sales Tax on Auto Rental to 20% (7/1104) 
(4,002,882) 
(4,240,404) 
(4,489,728) 
Individual Income Tax - Homestead Repeal 
191,318 
954,636 
957,290 
Earned Income Tax Credit 
- Non-refundable portion 
772,296 
3,864,806 
3,921,118 
- Refundable portion 
5,397,153 
27,347,714 
29,352,166 
Sales Tax on Cigarette Tax 
(94,885) 
(95,116) 
(95,492) 
Cigarette Tax to $1.50 (Eff. 7/1/04) 
(39,412,000) 
(39,182,000) 
(38,950,000) 
Liquor Excise and Premium Tax 
(20,312,201) 
(20,312,201) 
(20,312,201) 
Repeal Homestead Exemption 
(34,931,664) 
(35,384,300) 
(36,105,037) 
Expand Circuit Breaker Program 
51,520,000 
55,900,000 
60,350,000 
Business Equipment Tax Reimbursement 
(8,763,692) 
(21,064,966) 
Municipal Property Tax Exemption Reimb. 
5,842,000 
12,095,000 
Maine Revenue Services Admin. Costs 
1,486,030 
442,542 
464,670 
Net Approp\Deapprop to fund EPS @ 55% 
233,943,102 
186,985,730 
182,140,801 
(See below for additional detail ofEPS or Essential Program and Services) 
Net General Fund Cost (Savings) 
(22,924,981 ) 
22,625,916 
(6,047,435) 
(19,296,314) 
Net Biennium General Fund Cost (Savings) 
($299,065) 
Increase (Decrease) of Transfers to Other Special Revenue Funds: 
Local Government Fund 
$1,169,174 
$8,653,035 
$7,881,927 
$8,21 ~.£58 
Tourism Marketing Promotion Fund 
$0 
$0 
$1,004,000 
$1,05 
J 
Projections 
Projections 
2003-04 
2004-05 
2005-06 
2006-07 
Total Appropriation Needed to Fund 55% of total 
state and local cost ofK-12 public education based on 
$959,761,043 
$957,231,042 
$975,240,940 
Essential Programs and Services model 
Estimated General Fund appropriation needed to fund 
K-12 education based on current funding model 
$725,817,941 
$770,245,312 
$793,100,139 
(assumes 6% growth per year) 
Additional appropriation required to fund 55% of 
total state and local cost ofK-12 public education 
$233,943,102 
$186,985,730 
$182,140,801 
based on Essential Programs and Services model 
This bill provides for a new method of determining the state and local share of funding the cost ofK-12 public 
education beginning in fiscal year 2004-05. This bill utilizes the Essential Programs and Services model, as proposed in 
LD 1623, An Act to Implement School Funding Based on Essential Programs and Services, as the basis for determining 
the total cost ofK-12 public education. However, this bill differs from LD 1623 in two ways: first, it requires funding 
for 100% of the total state and local operating cost allocation based on the EPS model rather than applying the 
transition percentages provided in LD 1623. Second, it requires the'state to contribute 55% of the total state and local 
cost ofK-12 public education beginning in fiscal year 2004-05 rather than increasing its contribution to 50% by fiscal 
year 2009-10. 
LR2021(2) - Fiscal Note - Page 2 of2