An Act To Simplify Calculation of Legal Interest
Maine Legislature, Session 121, LD 1132
House Amendment HA_B_H571 (House)
Amends: 10 MRSA §1113, 10 MRSA §1114, 14 MRSA §1502-D, 14 MRSA §1602, 14 MRSA §1602-A, 14 MRSA §7487, 14 MRSA §8115, 18-A MRSA §3, 22 MRSA §2172

HOUSE AMENDMENT "B· to H.P. 835, L.D. 1132, Bill, "An Act 
To Simplify Calculation of Legal Interest" 
Amend the bill by inserting after the title and before the 
enacting clause the following: 
. Emergency preamble. Whereas, Acts of the Legislature do not 
become effective until 90 days after adjournment unless enacted 
as emergencies; and 
Whereas, the unification of 
the District Court 
and 
the 
Superior Court became effective on January 1, 2001; and 
Whereas, since that date, 
there 
has 
been ambiguity 
and 
confusion 
regarding 
the 
proper 
methodology 
for 
calculating 
prejudgment and post-judgment interest; and 
Whereas, in the judgment of the Legislature, these facts 
create an emergency within the meaning of the Constitution of 
Maine 
and 
require 
the 
following 
legislation 
as 
immediately 
necessary for the preservation of the public peace, health and 
safety; now, therefore,' 
Further amend the bill by striking out everything after the 
enacting clause and before the summary and inserting in its place 
the following: 
. Sec. 1. 10 MRSA §1113, sub-§4, as enacted by PL 1993, c. 461, 
§l, is amended to read: 
4. 
Delayed payments. 
Except as otherwise agreed, if any 
progress or final payment to a contractor is delayed beyond the 
Page l-LR0834(14) 
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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 ±9Ga-AT-s~9see~ieB-a l602-C. 
Sec. 2. 10 MRSA §1114, sub-§4, as enacted by PL 1993, c. 461, 
§l, is amended to read: 
4. 
Delayed 
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 ±9Qa-AT-s~see~ieB-a l602-C. 
Sec. 3. 14 MRSA §1502-D, as amended by PL 1989, c. 360, is 
further amended to read: 
§1502-D. 
Taxing of costs; hearing 
The clerk shall set costs under section l502-B and interest 
under section ±9Ga l602-B to the extent they appear from the 
record. 
The prevailing party or the prevailing party's attorney 
may submit a bill of costs for all other costs or interest to the 
court not later than 10 days after entry of judgment and serve 
copies on all parties who have appeared and may be required to 
pay these costs. 
Any party required to pay all or any part of 
these 
costs, 
except 
a 
party 
who 
is defaulted 
and 
has 
not 
appeared, 
may, 
within 
days 
after 
the 
date 
of 
service, 
challenge any items of cost or interest and request review by the 
court. 
The prevailing party shall, within 10 
days after 
a 
challenge, submit to the court any vouchers or other records 
verifying any challenged items of cost or interest. 
Either side 
may request oral argument and submit affidavits and briefs. 
An 
evidentiary hearing on the reasonableness of costs or interest 
will be held only when the judge determines that there exists a 
substantial need for the hearing and the amount of challenged 
costs 
or interest are substantial. 
If the presiding 
judge 
determines that the imposition of costs will cause a significant 
financial hardship to any party, the judge may waive all or part 
of the costs with respect to that party. 
Sec. 4. 14 MRSA §1602, as amended by PL 2001, c. 471, Pte D, 
§13, is repealed. 
Sec. 5. 14 MRSA §1602-A, as amended by PL 2001, c. 471, Pt. 
D, §14, is repealed. 
Sec.6. 14 MRSA §§1602-B and 1602-C are enacted to read: 
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§1602-B. 
Interest before judgment 
1. 
In small claims. 
In small claims actions. prejudgment 
interest is not recoverable unless the rate of interest is based 
on a contract or note. 
2. 
On contracts and notes. 
In all civil and small claims 
actions involving a contract or note that contains a 
prov~s~on 
relating to interest. prejudgment interest is allowed at the rate 
set forth in the contract or note. 
3. 
other civil actions: rate. 
In civil actions other than 
those set forth in subsections 1 and 2. prejudgment interest is 
allowed at the one-year United States Treasury bill rate plus 3%. 
A. 
For purposes of this subsection. "one-year United States 
Treasury bill 
rate" 
means 
the 
weekly 
average 
one-year 
constant maturity Treasury yield. as published by the Board 
of Governors of the Federal Reserve System. for the last 
full week of the calendar year immediately prior to the year 
in which prejudgment interest begins to accrue. 
B. 
If the Board of Governors of the Federal Reserve System 
ceases 
to 
publi~h the 
weekly 
average 
one year 
constant 
maturity Treasury yield or it is otherwise unavailable. then 
the Supreme Judicial Court shall annually establish by rule 
a rate that most closely approximates the rate established 
in this subsection. 
4. 
Stated rate. 
When 
prejudgment interest is 
awarded 
pursuant to subsection 2 or 3. the applicable rate must be stated 
in the judgment. 
5. 
Accrual: 
suspension: 
waiver. 
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 the date on which an 
order of judgment is entered. 
If a notice of claim has not been 
given to the defendant. prejudgment interest accrues from the 
date on which the complaint is filed. 
In actions involving a 
contract or note that contains a provision relating to interest. 
the rate of interest is fixed as of the time the notice of claim 
is given or. if a notice of claim has not been given. as of 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 is 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. 
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6. 
Effect on post-judgment interest. 
This section does not 
affect 
post-judgment 
interest 
imposed 
by 
section 
1602-C. 
Prejudgment interest may not be added to the judgment amount in 
determining the sum upon which post-judgment interest accrues. 
7. 
Rate on accrual of interest prior to July 1, 
2003_ 
Notwithstanding subsection 3, for actions in which the interest 
begins to accrue, as determined pursuant to subsection 5, prior 
to July I. 
2003. 
the rate of prejudgment interest on civil 
actions other than those set forth in subsection 2 is as follows: 
A. 
If the judgment does not exceed $30. 000. the rate for 
prejudgment interest is 8%; and 
B. 
If the judgment exceeds $30,000, the rate of prejudgment 
interest is the one-year United States Treasury bill rate, 
as defined in subsection 3. plus 1~. 
§1602-C. 
Interest after judgment 
1. 
Rate. 
In 
all 
civil 
and 
small 
claims 
actions, 
post-judgment interest is allowed at a rate equal to: 
A. 
In actions involving a contract or note that contains a 
provision relating to interest. the rate set forth in the 
contract or note or the rate in paragraph Bt whichever is 
greater; and 
B. 
In all other 
actions. 
the 
one-year 
United 
States 
Treasury bill rate plus 6~. 
(1) 
For purposes of this paragraph. "one-year United 
States Treasury bill rate" means the weekly average 
one-year constant maturity Treasury yield. as published 
by 
the 
Board of 
Governors 
of 
the 
Federal 
Reserve 
System. for the last full week of the calendar year 
immediately prior to the year in which post-judgment 
interest begins to accrue. 
(2) 
If the Board of Governors of the Federal Reserve 
System ceases to publish the weekly average one-year 
constant maturity Treasury yield or it is otherwise 
unavailable. 
then the 
Supreme 
Judicial 
Court shall 
annually establish by rule a rate that most closely 
approximates the rate established in this paragraph. 
The applicable post-judgment interest rate must be stated in the 
judgment. except for judgments in small claims actions. 
2. 
Accrual; 
suspension; 
waiver. 
Post-jUdgment 
interest 
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accrues from and after the date of entry of judgment and includes 
the Eeriod of any aEEeal. 
In actions involving a contract or 
note that contains a Erovision relating to interest, the rate of 
interest is fixed as of the date of judgment. 
If the prevailing 
Earty at any time reguests and obtains a continuance for a period 
in excess of 30 days. interest is 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. 
Sec. 7. 14 MRSA §7487, as enacted by PL 1999, c. 109, §1, is 
amended to read: 
§7487. 
Interest 
A person who is awarded a money judgment in a small claims 
action is entitled to post-judgment interest in accordance with 
section ±eQ6-A 1602-C. 
Sec. 8. 14 MRSA §8115, sub-§2, as enac ted by PL 1977, c. 2 , 
§2, is amended to read: 
2. 
Subdivision's p1an for payment. In the event that a 
political subdivision has not procured insurance, the trial judge 
may accept a reasonable plan for the payment of the amount of the 
judgment. A payment plan saall ~ 
not exceed 5 yearsr and may 
include interest at the rate provided in section 1eQ6 1602-C. 
Sec. 9. 18-A MRSA §3-806, 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 
1eQ6r--&ubseOC-i-on--1r--pat"-aq.c~-A 1602-B for the period 
commencing 60 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 with 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, 
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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 an 
agreement under which the claim arose. 
This paragraph is 
effective for estates of decedents who die on or after 
October 1, 1997. 
Sec. 10. 22 MRSA §2172, sub-§3, 1fB, as enacted by PL 1991, c. 
837, Pt. A, §49, is amended to read: 
B. 
Licensees that are fined pursuant to this chapter are 
required to pay the department the amount of the penalties. 
If a licensee has not paid any collectible fine by the time 
of license renewal, the department may collect the fine by 
requiring payment prior to the processing of any license 
renewal application. 
An appeal of the department's decision 
to 
fine 
a 
licensee stays 
the collection of 
the 
fine. 
Interest accrues on a fine at the rate specified in Title 
14, 
section leG6 l602-B prior to the completion of any 
appeal. 
After the completion of any appeal process or after 
any appeal period has passed, interest accrues pursuant to 
Title 14, section leG6-A l602-C. 
Sec. 11. 22 MRS A §2498, sub-§3, 1fB, as enacted by PL 1991, c. 
591, Pt. J, §5, is amended to read: 
B. 
Licensees that are fined pursuant to this chapter are 
required to pay the department the amount of the penalties. 
If a licensee has not paid any collectible fines by the time 
of its license renewal, 
the department may collect such 
fines by requiring their payment prior to the processing of 
any 
license 
renewal 
application. 
An 
appeal 
of 
the 
department's 
decision 
to 
fine 
a 
licensee 
stays 
the 
collection of any fine. 
Interest must accrue on fines at a 
rate described in Title 14, section leG6 l602-B prior to the 
completion of any appeal. 
After the completion of 
any 
appeal 
process 
or after 
any appeal 
period has 
passed, 
interest must accrue pursuant to Title 14, section leG6-A 
l602-C. 
Sec. 12. 22 MRS A §7946, sub-§2, as amended by PL 1989, c. 747, 
§2, is further amended to read: 
2. 
Collection of penalties; 
interest. 
Long-term 
care 
facili ties that are fined pursuant to this chapter are required 
to pay the department the amount of the penalties. 
Penalties may 
be collected by the department by the offset of any reimbursement 
due the facility, or by any other method authorized by law. 
An 
appeal of the department's decision to penalize a long-term care 
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facility stays the collection of any penalties. 
All penalties 
are to be assessed for each day that the facility is or was out 
of compliance and are to be collected with interest accruing at 
the rate set by Title 14, section ±eQ6-A l602-C. 
An appeal of 
the department's decision to penalize a long-term care facility 
does not stay the assessment of any penalties or interest as long 
as the long-term care facility continues to be in violation of 
any requirement of section 7943. 
Sec. 13. Application. 
This Act applies to judgments entered 
on or after July 1, 2003. 
Emergency clause. 
In view of the emergency cited in the 
preamble, this Act takes effect July 1, 2003.' 
SUMMARY 
This amendment incorporates Committee Amendment "A," House 
Amendment "A" and Senate Amendment "B" except that this amendment 
amends 
the judicial rates of interest to equal the one-year 
United States Treasury bill rate for prejudgment interest and 
post-judgment interest rather than leaving them equal to the bank 
prime loan interest rate. 
This 
amendment 
retains 
the 
current 
interest 
rate 
for 
prejudgment interest for complaints filed prior to July 1, 2003, 
applying the new prejudgment interest rate only to complaints 
filed after July 1, 2003. 
This amendment also adds an application section to the bill, 
which applies to judgments entered on or after July 1, 2003. 
The amendment also provides an effective date of July 1, 
2003. 
SPONSORED BY: 
(Representative 'p~. 
TOWN: 
Cornville 
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