An Act To Establish the Maine Land Bank and Community Preservation Program
Maine Legislature, Session 121, LD 0951
Committee: Taxation
Sponsors: PERCY, MAYO, ADAMS, JACKSON, KAELIN, LERMAN, PARADIS, PINGREE, SMITH, HATCH

Legislative Document 
No. 951 
H.P.708 
House of Representatives, February 25, 2003 
An Act To Establish the Maine Land Bank and Community 
Preservation Program 
Reference to the Committee on Taxation suggested and ordered printed. 
Presented by Representative PERCY of Phippsburg . 
Cosponsored by Senator MAYO of Sagadahoc and 
'/rj~frl.~ 
MILLICENT M. MacFARLAND' 
Clerk 
Representatives: ADAMS of Portland, JACKSON of Fort Kent, KAELIN of Winterport, 
LERMAN of Augusta, PARADIS of Frenchville, PINGREE of North Haven, SMITH of 
Monmouth, Senator: HATCH of Somerset. 
Printed on recycled paper 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1. 36 MRSA c. 105, sub-c.ll is enacted to read: 
SUBCHAPTER 11 
LONG-TERM OtINERSHIP TAX LAW 
S1131. 
Program established: definitions 
1. 
Program established. 
The Maine Land Bank and Community 
Preservation Program is established to provide an alternative 
means 
of calculating assessed values for purposes of levying 
property taxes for land held by owners who intend to maintain 
long-term 
ownership, 
family 
ownership 
or 
make 
a 
designat~ 
beguest. 
2. 
Definitions. 
As 
used in this subchapter, unless the 
context 
otherwise 
indicates, 
the 
following 
terms 
have 
the 
following meanings. 
A. 
"Direct relative" means parent, aunt, uncle, sibling, 
first cousin, 
niece, 
nephew or grandchild, 
by birth or 
adoption. 
B. 
"Program" 
means 
the 
Maine 
Land 
Bank 
and 
Community 
Preservation Program established in this subsection. 
C. 
"Classified land" means land for which an application 
under 
section 
1132 
has 
been 
accepted 
or 
for 
which 
classification has been certified. 
"Classified land" does 
not include any building or structure on the land or any 
other thing affixed to the land that would be considered 
real estate under section 551. 
Slll2. 
Application by owner 
The owner of any land may apply for taxation under this 
subchapter subject to the provisions of this section. 
1. 
Filing application. 
The 
owner shall file a written 
application with the assessor and a copy for recordation with the 
register 
of 
deeds 
for 
the 
jurisdiction in 
which 
the 
land 
potentially subject to taxation under the program exists. 
The 
application must be filed on or before March 1st for the land to 
be a classified land for the tax year beginning April 1st of the 
same year. 
2. 
Content. 
The application must be on a form prescribed 
by 
the 
State 
Tax 
Assessor, 
must 
clearly identify the 
land 
Page l-LR0297(1) 
potentially subject 
to 
taxation under 
the 
program 
and 
must 
include 
a 
statement that 
the 
owner 
has 
long term 
ownership 
intentions 
regarding that land. 
If there is more 
than one 
recorded owner of that land, 
each owner must file with the 
application written consent to elect taxation under the program. 
3. 
Determination. 
The assessor shall notify the landowner 
whether the application is accepted and the land is classified 
land or the application is denied. 
If the application is denied, 
the assessor shall state the reasons for the denial and provide 
the landowner an opportunity to conform to the requirements of 
this subchapter. 
4. 
Examination; 
information. 
The 
assessor 
or 
the 
assessor's authorized representative may enter and examine lands 
under this subchapter for 
tax purposes 
and 
may 
examine 
any 
information submitted by the owner or owners. 
Upon notice in 
writing by certified mail, return receipt requested, any owner or 
owners shall, within 
days of the receipt of the notice, 
respond to 
such written questions 
or interrogatories 
as 
the 
assessor considers necessary to obtain material information about 
those lands. 
If the assessor can not reasonably obtain the 
required 
material 
information 
regarding 
those 
lands 
through 
written questions or interrogatories, the assessor may require 
any owner or owners, upon notice in writing by certified mail, 
return receipt requested, or by such other method as provides 
actual notice, to appear before the assessor at such reasonable 
time and place as the assessor may designate and answer questions 
or interrogatories necessary to obtain material information about 
those lands. 
5. 
Owner obligation. 
The owner or owners shall report to 
the assessor any change in ownership of classified land. 
§1133. 
Valuations 
1. 
Base valuation. 
Except as otherwise provided, the base 
valuation for classified land for tax purposes is assessed value 
of the land adjusted to 100% using the state certified ratio for 
that year for the 5th year prior to acceptance to the program. 
A. 
If the land is not classified and the owner of the land 
applying for acceptance to the program has not owned the 
land for that 5-year period, but acquired the land under 
circumstances that would not be deemed a change of ownership 
under section 1135, subsection 1, paragraph a, subparagraph 
(1) 
to (8), 
and the current term of ownerShip plus the 
immediately preceding term of ownership is at least 5 years, 
then the 5-year look-back under this subsection applies in 
determining base valuation. 
B. 
If the owner applying for acceptance to the program has 
not owned the land for that 5-year period, and acquired the 
land 
under 
circumstances 
that 
constitute 
a 
change 
In 
ownership under section 1135, then the base valuation for 
classified land for tax purposes is the purchase price of 
the 
land 
only 
or, 
if 
the 
purchase 
price 
can 
not 
be 
accurately determined, 
the best estimate at fair market 
value of the land, which is the assessed value of comparable 
land 
in 
the 
municipality 
or 
unorganized 
territory 
as 
applicable, adjusted by the applicable certified assessment 
ratio. 
2. 
Program assessed value. 
The program assessed value for 
classified land for tax purposes is: 
A. 
For the first year under the program, the base valuation 
under subsection 1; and 
B. 
For 
subsequent 
years 
under 
the 
program, 
the 
base 
valuation 
as 
adjusted 
by 
any 
cumulative 
increases 
and 
decreases authorized under section 1134. 
3. 
Change 
in 
ownership. 
Base 
valuation 
and 
program 
assessed value under this section are subject to recalculation 
when there is a change in ownership pursuant to section 1135, 
subsection 2. 
§1134. 
Assessment adjustments 
1. 
Annual adjustments. 
The assessed value of classified 
land may be adjusted annually on April 1st, subject to this 
section. 
2. 
Increase assessment limited. 
The 
assessed value 
of 
classified land may not increase under the annual adjustment by 
more than the lower of: 
A. 
Two percent of the program assessed value of the prior 
year; or 
B. 
The percent change in the Consumer Price Index for all 
urban consumers. 
3. 
Decrease 
assessment 
authorized. 
Nothing 
in 
this 
subchapter prevents: 
A. 
An assessment based on less than a 100% valuation; or 
B. 
A decrease in the assessed value. 
If the Consumer Price Index decreases. then the assessed value 
must be decreased by the same or greater percentage. 
4. 
Assessments. 
Classified land must 
be 
taxed at the 
property tax rate applicable: 
A. 
To other property in the municipality if the land is in 
an organized area; or 
B. 
To other property in the unorganized territory if the 
land is in the unorganized territory. 
§1135. 
Change of ownership 
1. 
Change in ownership determined. 
A change of ownership 
A. 
For 
commercial 
properties, 
a 
change 
in 
controlling 
interest of 
the 
company 
owning 
the 
land as 
defined in 
federal tax code; and 
B. 
For all other properties. a transfer by sale or grant to 
a 
transferee by 
a 
transferor of all or any part of the 
transferor's legal 
or eguitable ownership interest in 
a 
property except for a transfer: 
(1) 
To a trustee for the beneficial use of the spouse 
of the transferor or the surviving spouse of a deceased 
transferor; 
(2) 
To the spouse of the transferor that takes effect 
upon the death of the transferor; 
(3) 
That 
creates. 
transfers 
or 
terminates, 
solely 
between spouses, any coowner's interest; 
(4) 
To one or more direct relatives of the transferor; 
(5) 
To any person by beguest; 
(6) 
That confirms or corrects a previous transfer made 
by 
a 
document that was 
recorded in the real estate 
records of the county in which the land is located; 
(7) 
For the purpose of guieting the title to real 
property or resolving a disputed location of a 
real 
property boundary; 
(8) 
To a revocable trust by the transferor with the 
transferor, 
the 
transferor's 
spouse 
or 
a 
direct 
relative of the transferor as beneficiary; or 
( 9 ) 
From a revocable trust described in subparagraph 
( 8 ) 
back 
to 
the 
settlor 
or 
trustor 
or 
to 
the 
beneficiaries of the trust. 
2. 
Effect. 
When there is a change in ownership: 
A. 
If the new owner does not apply for taxation under the 
program, 
the valuation reverts 
to fair market value 
as 
defined by the purchase price of the property less the 
resale value of the buildings located on the land or best 
estimate of fair market value of the land; or 
B. 
If the new owner applies for taxation under the program 
and if money changes hands during the change in ownership, 
the base valuation for the land subject to taxation under 
the program becomes the purchase price of the land or the 
current 
program 
assessed 
value 
under 
section 
1133, 
subsection 2, whichever is larger. 
§1136. 
Penalty for withdrawal; evasion 
1. 
Penalty imposed. 
When there is a change of ownership as 
determined under section 1135 or when a program participant opts 
to 
withdraw 
from 
the 
program, 
except 
when 
the 
change 
is 
occasioned by a transfer to the State or other entity holding the 
power 
of 
eminent 
domain, 
resulting 
from 
the 
exercise 
or 
threatened exercise of that power, a penalty upon the owner must 
be imposed that is the greater of: 
A. 
An 
amount egual 
to the 
taxes that would have 
been 
assessed on the first day of January for the 5 preceding tax 
years, or any lesser number of tax years starting with the 
year in which the land was first accepted under the program, 
preceding such withdrawal had that land been assessed in 
each of those years at its fair market value on the date of 
withdrawal less all taxes paid on that real estate over the 
preceding 5 years, and interest at the legal rate from the 
date 
or 
dates 
on 
which 
those 
amounts 
would 
have 
been 
payable; or 
B. 
An amount computed by mUltiplying the amount, if any, by 
which the fair market value of the land on the date of 
withdrawal exceeds the 100°" program-assessed value of the 
land on the preceding January 1st, by the following rates: 
• 
(1) 
If the land was subject to the program 10 years or 
less prior to the date of withdrawal, 30%; and 
(2) 
If the land was subject to the program for more 
than 10 years prior to the date of withdrawal, that 
percentage obtained by subtracting 1% from 30% for each 
full year beyond 10 years that the land was subject to 
the program prior to the date of withdrawal until a 
rate of 20% is reached. 
Fair market value at the time of withdrawal is the assessed value 
of comparable land in the municipality or unorganized territory, 
as applicable, adjusted by the applicable certified assessment 
ratio. 
2. 
Recording; title affected. 
When a penalty has been paid 
as reguired under subsection 1, the transaction must be recorded 
with the appropriate register of deeds. 
Until such time as the 
penalty is paid, the title is not considered to be clear and 
unencumbered. 
3. 
Evasion. 
A person who intentionally attempts to avoid 
or lower the penalty imposed by this section or who makes false 
statements in making an application under this subchapter is 
subject to prosecution under section l84-A. 
§1131. 
Application 
1. 
Buildings. etc. 
Any building, 
mobile home 
or other 
thing affixed to classified land and that would be considered 
real estate under 
section 
is subject to 
assessment 
and 
taxation in the same manner as if it were not on classified land. 
2. 
Change in land holdings. 
Each addition to or reduction 
in classified land or a portion of classified land is subject to 
this subchapter. 
3. 
Effect on other ~aws. Participation in the program does 
not preclude participation in other programs, such as, but not 
limited to, the Maine Tree Growth Tax Law or the farm and open 
space tax laws. 
Sec. 2. Statutory referendum procedure; submission at statewide 
election; form of question; effective date. 
This Act takes effect when 
approved only for the purpose of permitting its submission 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. 
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: 
"If an amendment to the Constitution of Maine is approved 
permi tting the Legislature to establish a different method 
of assessment of property taxes on land used for long-term 
ownership, do you favor ratifying the action of the 121st 
Legislature whereby it passed an Act establishing the Maine 
Land Bank and Community Preservation Program?" 
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 30 days after the 
date of the proclamation. 
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 
bill 
proposes 
to 
provide 
property 
tax 
relief 
to 
property owners in the State. 
Under the bill, a voluntary Maine 
Land 
Bank 
and 
Community Preservation Program is created for 
residential and nonresidential real estate. 
The program would 
apply to land only and not buildings. 
The base value of land 
would be determined by looking back 5 years to the assessed value 
of the land as adjusted by using the state-certified ratio for 
that 
year. 
The 
program 
would 
include 
provisions 
requiring 
adjustments or penalties in cases when there is a 
change in 
ownership other than to a family member or by designated bequest 
or the land is withdrawn from the program. 
The entire bill is 
subject to a statutory referendum and is conditional upon an 
amendment 
to 
the Constitution of 
Maine 
passing at 
the 
next 
statewide election. 
..