An Act To Fully Fund the Homestead Exemption (AFTER DEADLINE)
Maine Legislature, Session 122, LD 1625
Committee: Taxation
Sponsors: COWGER, BOWLES, CLUKEY, DAMON, DAVIS, HOBBINS, MARTIN, MITCHELL, SCHNEIDER, CLOUGH
Amends: 36 MRSA §683

Legislative Document 
No. 1625 
S.P.602 
In Senate, May 3,2005 
An Act To Fully Fund the Homestead Exemption 
(AFTER DEADLINE) 
Approved for introduction by a majority of the Legislative Council pursuant to Joint Rule 205. 
Reference to the Committee on Taxation suggested and ordered printed. 
Presented by Senator COWGER of Kennebec. 
Cosponsored by Representative BOWLES of Sanford and 
JOY J. O'BRIEN 
Secretary of the Senate 
Senators: CLUKEY of Aroostook, DAMON of Hancock, DAVIS of Piscataquis, HOBBINS of 
York, MARTIN of Aroostook, MITCHELL of Kennebec, SCHNEIDER of Penobscot, 
Representative: CLOUGH of Scarborough. 
Printed on recycled paper 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1. 36 MRSA §683, sub-§§3 and 4, as amended by PL 2005, c. 
2, Pt. F, §3 and affected by §5, are further amended to read: 
3. 
Effect on state valuation. 
just value of homesteads exempt under this subchapter must be 
included in the annual determination of state valuation under 
sections 208 and 305. 
4. 
Property tax rate. 
~if;t;}'--pe-,r-€-ent.-~f--t;ae The value of 
homestead exemptions under this subchapter must be included in 
the total municipal valuation used to determine the municipal tax 
rate. 
The municipal 
tax rate 
as finally determined may 
be 
applied to only the taxable portion of each homestead qualified 
for that tax year. 
Sec. 2. 36 MRS A §685, sub-§2, as amended by PL 2005, c. 2, Pt. 
F, §4 and affected by §5, is further amended to read: 
2. 
Entitlement to reimbursement by State; calculation. 
A 
municipa1i ty that has approved homestead exemptions under this 
subchapter may recover from the State eQ% 100% of the taxes lost 
by reason of the exemptions upon proof in a form satisfactory to 
the bureau. 
The bureau shall reimburse the Unorganized Territory 
Education and Services Fund for eQ% 100% of taxes lost by reason 
of the exemption. 
Sec. 
3. 
Appropriations 
and 
allocations. 
appropriations and allocations are made. 
ADMINISTRATIVE AND FINANCIAL SERVICES, 
DEPAR".l'MERT OF 
The 
Homestead Property Tax Exemption Reimbursement 
0886 
following 
Initiative: 
To increase the reimbursement to municipalities from 
50% to 100% of the increase in the homestead exemption to $13,000. 
GENERAL FUND 
All Other 
GENERAL FUND TOTAL 
2005-06 
$35,438,172 
$35,438,172 
2006-07 
$36,267,826 
$36,267,826 
Sec. 4. Retroactive application. 
This Act applies retroactively 
to property tax valuations determined on or after April 1, 2005. 
Page l-LR2265(1) 
SUMMARY 
Legislative Document 1, "An Act To Increase the State Share 
of Education Costs, Reduce Property Taxes and Reduce Government 
Spending at All Levels," which was signed into law as Public Law 
2005, chapter 2, increased the Maine resident homestead property 
tax exemption amount to $13,000 per permanent homestead but only 
provided 50% 
reimbursement to municipalities for the decreased 
property tax revenue. 
This 
bill 
instead 
increases 
the 
reimbursement 
to 
municipalities to 100%.