An Act To Encourage Local Affordable Housing, Open Space and Shore Access through a High Valuation Transfer Tax
Maine Legislature, Session 122, LD 1107
Committee: Taxation
Sponsors: PINGREE, DAMON, DUDLEY, KOFFMAN, PERCY, SMITH, WATSON, WOODBURY, MILLS
Amends: 36 MRSA §4641, 36 MRSA §4642

Legislative Document 
No. 1107 
H.P.760 
House of Representatives, March 1,2005 
An Act To Encourage Local Affordable Housing, Open Space and 
Shore Access through a High Valuation Transfer Tax 
Reference to the Committee on Taxation suggested and ordered printed. 
Presented by Representative PINGREE of North Haven. 
Cosponsored by Senator DAMON of Hancock and 
/!/~ 
/J7.7l/d£~ 
MILLICENT M. MacFARLAND 
Clerk 
Representatives: DUDLEY of Portland, KOFFMAN of Bar Harbor, PERCY of Phippsburg, 
PlOTT I of Unity, SMITH of Monmouth, WATSON of Bath, WOODBURY of Yarmouth, 
Senator: MILLS of Somerset. 
Printed nn recyded paper 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1. 36 MRSA §4641, sub-§§2-B to 2-D are enacted to read: 
2-B. 
El:i,gible mQAicipglity. 
"E]j.gib).e munid,pali ty" means 
a 
municipality 
or 
org_anized 
municipal 
township. 
"Eligible 
municipality" does not includeSl county or a subsidiary unit of 
government 
such 
as 
an 
unorganized 
township, 
village, 
special 
district or school district. 
2-C. 
Local opti9n :r;:eal 
e~t~te trap_sfer tax. 
"Local option 
real estate transfer tax" mecms 
the real estate transfer tax 
imposed by an eligible ~unicipality pursuant to section 4642. 
2-D. 
Participati~~ 
m~icjpality. 
municipality" means an eligiple municipality 
local option real estate transfer tax pursuant 
Sec. 2. 36 MRSA §4642 is enacted to read: 
"Participating 
that has imposed a 
to section 4642. 
§4642. Municipal local option real estate transfer tax 
1. 
IUlPositiQ~~~ cQ_lJ~ctiQ~~f lOJ;al 
QP-tio~~eal gstate 
transfer tax. 
An eligible municipality may impose a local option 
real estate transfer _tax on each 
Q.~e_d by which any real property 
the value of which is greater than $1,000,000 is transferred. 
The rate of tax may not exceed .2°0 of the value of the property 
transferred. 
The local option real estate transfer tax must be 
collected in the same 
mQ!u~er and at the same time as the tax 
collected pursuant to section 4641-B, 
subsection 1. 
The 
t~~ 
imposed pursuant to thiL_QuQsec,tion is in addition to the real 
estate transfer tax imposed pursuant to section 464l-A. 
2. 
Dete~i_pation ___ 
~~_~ym~nt 
~flministrative costs. 
Each month, 
the 
of 
glunicip~shaDU 
register of deeds shall 
identify the amount of revenue under thj,s section attributable to 
each participating munici-ll.Qli ty, 
based on the location of the 
property 
b~in-9-~ra.nJit!'tr_~eJJL_~l.lb_trQ~Lthe costs of administering 
this section and certify the net amount due each municipality to 
the county treasurer. 
Ea~h county treasurer shall, on or before 
the 10th day of each month, pay over to each municipality that 
municipality's 
share 
of 
the 
tax 
collected pursuant 
to 
this 
section. 
If the tax collected is not paid over by the 10th day 
of the month, the municipality may impose interest pursuant to 
section 186. 
The 
amount subtracted for the administration of 
this section may not exceed 2% of the total taxes collected under 
this section. 
3. 
U~~-..f_r_e:ve~u,e_._~a~pa~tjc;j,pati~~!li~ipal i ty 
deposit 
the 
revenue 
received pursuant 
to 
subsection 
segregated account. 
A municipality shall determine its 
Page l-LR1023 (1) 
shSll-l, 
in 
a 
annual 
budget 
and 
assessment 
without 
consideration 
of 
the 
amount 
received pursuant to subsection 2. 
Funds within the segregated 
account may be 
used only for 
the development of affordable, 
middle-income, senior or workforce housing or for the purchase of 
open space, shore access points or community working properties 
that are accessible to and available for use by the public, 
including providing grants for these purposes. 
Revenue generated 
pursuant to this section may not be used to supplant local funds. 
4. 
Effect on revenu~ sharing and other state-aid programs. 
Revenue received pursuant to subsection 2 may not be considered 
to be receipts from the taxes imposed under this Part for the 
purpose of transfers to the Local Government Fund under Title 
30-A, section 5681. 
Revenue received pursuant to subsection 2 
may not be used to reduce or eliminate any funding otherwise due 
L6 
the 
participating 
municipality 
under 
any 
provision 
of 
law 
providing aid to the participating municipality, including, but 
not limited to, aid to schools, roads, public assistance or jails. 
5. 
Referendum. 
The g;uestion of whether to impose a local 
option real estate transfer tax must be submitted to the legal 
voters of an eligible municipality that seeks to impose the local 
option real estate transfer tax. 
The petition process and the voting at elections held in cities 
and 
towns 
must 
be 
conducted in accordance 
with Title 
30-A, 
sections 2528, 
2529 and 2532 even if the municipality has not 
accepted the provisions of section 2528. 
The voting at elections 
held in municipalities must be conducted in accordance with Title 
.10 
2l-A. 
The municipal clerk shall make a return of the results, 
certify the results and send them to the Secretary of State. The 
Secretary of State shall forward the results to the register of 
deeds for that municipality. 
.16 
n 
1(1 
The 
local option sales 
and 
use 
tax 
may 
referendum 
conducted 
in 
the 
same 
manner 
adopting the tax under this section. 
be 
discontinued 
by 
as 
the 
referendum 
9. 
Effective date 
o~~ax~. __ ~T~h~e~~t~a~x~~a~u~t~h~o~r~i~z~e~d~~b~y~_t~h~i~s 
4() 
section takes effect 120 days after the municipal referendum vote 
under subsection 5 if it is accepted by a majority of the local 
voters voting at the election and the total number of votes cast 
eg;uals or exceeds 20% of the total number of votes cast in that 
municipality in the most recent gubernatorial election. 
')0 
SUMMARY 
This bill allows a municipality to 
real estate transfer tax of up to 
.2°'0 
impose a local option 
on property valued at 
$1,000,000 or more. 
Revenue from the tax, after the deduction of 
administrative costs, may be used by the levying municipality 
only for certain purposes, such as the development of affordable 
housing or the purchase of land for public use.