An Act Enabling Municipalities To Establish Municipal Land Banks Funded by Local Option Real Estate Transfer Taxes
Maine Legislature, Session 122, LD 0115
Committee: Taxation
Sponsors: RECTOR, BOWEN, KOFFMAN, MAZUREK, PINGREE, PIOTTI, SA VIELLO, WOODBURY, PERRY

Legislative Document 
No.11S 
H.P.91 
House of Representati ves, January 11, 2005 
An Act Enabling Municipalities To Establish Municipal Land Banks 
Funded by Local Option Real Estate Transfer Taxes 
Reference to the Committee on Taxation suggested and ordered printed. 
Presented by Representative RECTOR of Thomaston. 
Cosponsored by Senator SA V AGE of Knox and 
11/~ 
1n.7Tld£~ 
MILLICENT M. MacFARLAND 
Clerk 
Representatives: BOWEN of Rockport, KOFFMAN of Bar Harbor, MAZUREK of Rockland, 
PINGREE of North Haven, PIOTTI of Unity, SA VIELLO of Wilton, WOODBURY of 
Yarmouth, Senator: PERRY of Penobscot. 
Printed on recycled paper 
Be it enacted by the People of the State of Maine as follows: 
Sec. I. 30-A MRS A c.I57. sub-c. 6 is enacted to read: 
SUBCHAPTER 6 
MUNICIPAL LAND BANKS 
§330l. Establishment of municipal land bank 
A municipality 
may 
establish 
a 
municipal 
land 
bank 
in 
accordance with this section. 
1. 
Referendum required. 
A municipal 
land bank 
may 
be 
established only with approval by a referendum vote conducted in 
accordance with section 2528. 
Once established, 
a 
referendum 
vote conducted in a similar manner is required to alter or repeal 
provisions pertaining to the land bank. 
The municipal land bank 
may be approved as a separate measure or as part of a referendum 
adopting a municipal real estate transfer tax under Title 36, 
section 4641-0. 
2. 
Land 
bank 
account. 
A 
municipality 
establishing 
9-
municipal land bank shall maintain a separate account to receive 
all 
tax 
revenue 
collected 
under 
Title 
36, 
section 
4641-F, 
subsection 4. 
A municipality may accept money from other publi~ 
and private 
sources 
for 
deposit 
in 
the municipal 
land bank 
account. 
Interest accrued by money deposited into the accourtt 
must be credited to the account. 
All deposits into the municipal 
land bank account may be used only for the purposes permi tteq 
under this subchapter. 
3. Advisory board. 
A municipality that has established a 
municipal land bank under this section shall create an advisory 
board, 
in 
accordance 
with 
this Title, 
to 
review 
and 
make 
recommendations 
on proposed acquisitions using money 
from the 
land bank account. 
4. 
Use of funds. 
Funds in a municipal land bank account 
are restricted to the following uses: 
A. 
Acquiring 
interest 
in 
or 
managing 
land within 
the 
municipality for the purposes of: 
(1) 
Conserving land or maritime resources; 
(2) 
Maintaining 
or 
improving 
opportunities 
for 
recreation 
and 
environmental 
education 
wi thin 
the 
municipality; and 
(3) 
Protecting the physical, 
historical, 
social or 
economic character of the community; and 
B. 
Any other purposes that are incidental to the purposes 
permitted under paragraph A, 
including administrative and 
land maintenance costs. 
A municipality 
may 
not 
acquire interest in land 
under 
this 
subchapter 
for 
purposes 
that 
are 
inconsistent 
with 
goals 
established in that municipality's comprehensive plan. 
5. 
Public hearing reqJ,lired. 
Interests or rights in real 
property may 
not be 
acquired under this subchapter until 
a 
public hearing is held and budget authority approved pursuant to 
this Title. 
A municipality may enter into a conditional purchase 
agreement prior to a public hearing and budget approval. 
6. 
Termination. 
Upon dissolution of a municipal land bank 
established 
under 
this 
section, 
any 
rema1n1ng 
money 
in 
the 
municipal land bank account must be applied to reduce any bonded 
:i.~nd~btedness or obligations incurred to effectuate the 
purpos~es 
of this subchapter. 
Sec. 2. 36 MRSA c. 711-B is enacted to read: 
CHAPTER 711-B 
MUNICIPAL REAL ESTATE TRANSFER TAX 
S4641-0. 
Adoption of municipal real estate transfer tax 
A 
municipality that has 
approved the establiQhment of 
a 
municil2al 
land 
bank 
l2ur suant 
to 
Title 
30-A, 
chapter 
157,-
su!2chaQter 
may 
impose 
a 
real 
estate 
transfer 
tax 
on 
a 
trgnsferee 
of 
real 
estate 
according 
to 
the 
procedure 
and 
limitations of this chapter. 
1. 
Referendum 
required. 
A 
municipality 
may 
impose 
a 
municiQal real estate transfer tax if such a tax is approved by a 
referendum vote conducted in accordance with Title 30-A, section 
2528. 
The 
tax may subsequently be 
amended or repealed by 
a 
referendum vote conducted in the same manner. 
2. 
Rate of tax. 
The referendum question under subsection ~ 
must spe~ 
the PU2Posed ~ransfer tax rate, which may not exceed 
1.5% of the taxable base of the property subject to the tax. 
3. 
Notification to register of deeds. 
A municipality shall 
notify 
the 
register 
of 
deeds 
of 
the 
county 
in 
which 
the 
municipality is located at lElast 60 days prior to the effective 
date of a municipal real estate transfer tax. 
A municipality 
shall notify the register of deeds of the county in which the 
municipality is located upon repeal of a municipal real estate 
transfer tax and the effectiye date of that repeal. 
4. 
Liability. 
A transferee of real property is liable for 
payment of the transfer tax. 
§464l-P Determination and collection of tax 
1. 
Taxable base. 
The base to which the municipal real 
estate transfer tax under this chapter applies is the declared 
value of the property under section 4641-D, except that if the 
property subject to the tax is the primary residence of the 
transferee, an amount not less than $50,000 must be subtracted 
from the base. 
An amount more than $50,000 may be sulL~~py 
a 
municipality 
if 
the 
larger 
amount 
is 
specified 
in 
the 
referendum guestion. 
Z. 
E:a::emptions. 
The following transfers are not subject to 
a municipal real estate transfer tax: 
A. 
A transfer that is exempt from the state real estate 
transfer tax under section 4641-C; 
B. 
A transfer in which the transferee is a resident of the 
municipality and is acguiring a property to be used as the 
transferee's 
primary 
residence 
within 
that 
same 
municipality; and 
C. 
A transfer in which the property acguired is contiguous 
to the transferee's primary residence or place of business 
for 
the 
purpose 
of 
enlarging 
that 
property 
for 
the 
transferee's occupancy or existing business activities. 
3. 
Action 
by 
register 
of 
deeds. 
Within 
days 
of 
recording a transfer of real property within a municipality with 
a municipal real estate transfer tax in effect. the register of 
deeds of the county in which the municipality is located shall 
notify that municipality of the transfer. 
The register shall 
provide the following information to the municipality: 
A. 
The name and address of the transferee; 
B. 
The 
location of 
the 
real 
property 
subject 
to 
the 
transaction; 
C. 
The effective date of the transaction; and 
D. 
The value of the real property as set forth in the 
declaration of value prescribed by section 4641-D. 
~. 
Collection 
and 
deposit. 
A 
municipal 
real 
estate 
transfer tax imposed under this chapter must be paid to the tax 
collector in the municipality in which the real estate is located. 
Notwithstanding notification provisions in subsection 3, payment 
of the municipal real estate transfer tax is due no later than 
the date established by chapter 7l1-A for payment of the state 
real estate transfer tax. 
The municipal tax collector 
shall deposit all revenue receive<;l 
from the municipal real estate transfer tax in the municipal land 
bank 
account 
in 
accordance 
with 
Title 
30-A, 
chapter 
157, 
subchapter 6. 
5. 
Municipal 
authority. 
A 
municipality 
may 
adopt 
provisions necessary for 
the proper administration of 
a 
real 
estate 
transfer 
tax, 
including 
provisions 
concerning 
the 
determination of the tax, the imposition of interest on payments 
and the penalties for failing to comply with the tax provisions. 
To the extent possible, provisions to administer this chapter 
must be identical to corresponding provisions in chapter 7ll-A. 
The municipality may, when necessary, secure payment of the tax 
and any related penalties or interest in accordance with section 
552. 
SUMMARY 
This bill authorizes municipalities to impose 
a municipal 
real estate transfer tax. 
It requires a municipality to approve 
such a tax and establishment of a land bank program through the 
municipal referendum process. 
It places restrictions on the tax 
rate and uses of the tax.