An Act To Provide Taxpayer Relief
Maine Legislature, Session 123, LD 1852
Committee: Appropriations and Financial Affairs
Sponsors: LANSLEY, NASS, CEBRA, MOORE, SA VIELLO, TARDY, VAUGHAN, COURTNEY
Amends: 5 MRSA §1507, 5 MRSA §1511, 5 MRSA §1523, 5 MRSA §1665, 5 MRSA §1710-F, 5 MRSA §13063-C, 5 MRSA §17253, 25 MRSA §1612, 30-A MRSA §706-A, 30-A MRSA §5721-A, 36 MRSA §7302, 37-B MRSA §745

Legislative Document 
No. 1852 
H.P. 1291 
House of Representatives, April 11,2007 
An Act To Provide Taxpayer Relief 
Reference to the Committee on Appropriations and Financial Affairs suggested and ordered 
printed. 
Presented by Representative LANSLEY of Sabattus. 
Cosponsored by Senator NASS of York and 
7J1~ 
/J7.7iI~ 
MILLICENT M. MacFARLAND 
Clerk 
Representatives: CEBRA of Naples, McDONOUGH of Scarborough, McLEOD of Lee, 
MOORE of Standish, SA VIELLO of Wilton, TARDY of Newport, VAUGHAN of Durham, 
Senator: COURTNEY of York. 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1. 5 MRSA §1507, next to last~, as amended by PL 2005, c. 519, Pt. VV, 
§ 1, is repealed. 
Sec. 2. 5 MRSA §1511, as amended by PL 2005, c. 519, Pt. VV, §2, is repealed. 
Sec. 3. 5 MRS A §1522 is enacted to read: 
§1522. Maine Budget Stabilization Fund 
1. Establishment. The Maine Budget Stabilization Fund, referred to in this section 
as "the fund," is established and must be administered for the purposes identified in this 
section. 
2. Transfers to fund; limits. The fund may receive transfers by the State Controller 
of unappropriated surplus at the close of a fiscal year as provided in section 2045 and any 
other funds identified by law. The fund may not exceed 10% of the total General Fund 
revenues received in the immediately preceding fiscal year and may not lapse, but 
remains in a continuing carrying account to carry out the purposes of this section. The 
limit at the close of a fiscal year is based on the total General Fund revenues received in 
the fiscal year being closed. 
3. 
Use of fund. 
The Legislature may authorize transfers, appropriatIOns and 
allocations from the fund only to fund the costs of State Government up to the 
expenditure limit calculated under section 2044 in years when state revenues are less than 
the amount necessary to finance the level of expenditures permitted under section 2044. 
4. Investment of funds; proceeds. The money in the fund may be invested as 
provided by law, with the earnings credited to the fund. At the close of every month 
during which the fund is at the 10% limitation described in subsection 2, the State 
Controller shall transfer the excess to the Tax Relief Reserve Fund established under 
section 2045. 
Sec. 4. 5 MRSA §1523 is enacted to read: 
§1523. Maine Highway Budget Stabilization Fund 
1. Establishment. The Maine Highway Budget Stabilization Fund, referred to in 
this section as "the fund," is established and must be administered for the purposes 
identified in this section. 
2. Transfers to fund; limits. The fund may receive transfers by the State Controller 
of unallocated Highway Fund surplus at the close of a fiscal year as provided in section 
2046 and any other funds identified by law. The fund may not exceed 10% of the total 
Highway Fund revenues received in the immediately preceding fiscal year and may not 
lapse, but remains in a continuing carrying account to carry out the purposes of this 
section. The limit at the close of a fiscal year is based on the total Highway Fund 
revenues received in the fiscal year being closed. 
3. 
Use of fund. 
The Legislature may authorize transfers, appropnatIOns and 
allocations from the fund only to fund the costs of the Highway Fund budget u..P.JQ.Jr~ 
expenditure limit calculated under section 2044 in years when Highway Fund revenues 
are less than the amount necessary to finance the level of expenditures permitted under 
section 2044. 
4. Investment of funds; proceeds. The money in the fund mav be invested as 
provided by law with the earnings credited to the fund. At the close of every month 
during which the fund is at the 10% limitation described in subsection 2, the State 
Controller shall transfer the excess to the Highway Fund Reserve Fund established under 
section 2046. 
1 
Sec. 5. 5 MRSA c. 142, as amended, is repealed. 
Sec. 6. 5 MRSA §1665, sub-§I, as amended by PL 2005, c. 601, §2, is further 
amended to read: 
1. Expenditure and appropriation requirements. On or before September 1 st of 
the even-numbered years, all departments and other agencies of the State Government 
and corporations and associations receiving or desiring to receive state funds under the 
provisions of law shall prepare, in the manner prescribed by the State Budget Officer, and 
submit to the officer estimates of their expenditure and appropriation requirements for 
each fiscal year of the ensuing biennium. The expenditure estimates must be classified to 
set forth the data by funds, organization units, character and objects of expenditure. The 
organization units may be subclassified by functions and activities, or in any other 
manner, at the discretion of the State Budget Officer. 
All departments and other agencies recei'o'ing or desiring to reeei'/e state fl:lRds from the 
Highway f'-l:lfld shall submit to the officer estimates of their expenditure and appropriatioA 
reql:lirements fur each fiscal year of the eAsl:ling biennil:lm that do not exceed the Highway 
Fl:lnd appropriation of the previol:ls fiscal year mHltiplied by one plHs the ayerage real 
personal income gro'Wth rate or 2.75%, whiehe'ler is less. The HighwU)' F\:Ind highway 
and bridge improyement acco\:lnts are exempt from this spending limitation. 
Sec. 7. 5 MRSA §1710-F, sub-§4, as amended by PL 2005, c. 2, Pt. A, §8 and 
affected by § 14, is repealed. 
Sec. 8. 5 MRSA c. 167 is enacted to read: 
CHAPTER 167 
TAX AND SPENDING LIMITATIONS 
§2041. Expenditure and revenue requirements; construction of chapter 
The following provisions of this section apply, notwithstanding any other provision 
of law. 
1. Expenditure limitations. Annual state and local expenditures may not exceed the 
limits provided in this chapter unless authorized by the procedures specified in this 
chapter. 
2. Revenue increases. An increase in revenue of the State may be adopted only as 
provided in section 2043. 
3. Construction. It is the intent of the Legislature that this chapter be interpreted 
liberally to restrain excess growth of state and local government. 
§2042. Definitions 
As used in this chapter, unless the context otherwise indicates, the following terms 
have the following meanings. 
1. Election officer. "Election officer" means: 
A. In a statewide, county or municipal election, the municipal registrar of voters; or 
B. In an election by the voters of a local district that is not a municipality, the official 
with responsibility for managing the list of voters of the local district. 
2. 
Increase in revenue. 
"Increase in revenue" means any legislation, local 
ordinance or tax levy that causes a net gain in revenue and: 
A. Enacts a new tax or fee; 
B. Increases the rate or expands the base of an existing tax or fee; 
C. Repeals or reduces any tax exemption, credit or refund; or 
D. Extends an expiring tax or fee increase. 
3. Inflation adjustment factor. "Inflation adjustment factor" means the increase in 
the Consumer Price Index for the most recently available calendar year as calculated by 
the United States Department of Labor, Bureau of Labor Statistics. 
4. 
Local district. 
"Local district" means any county, municipality or school 
administrative unit. 
5. 
Population adjustment factor. 
"Population adjustment factor" means the 
average annual percentage increase in population for the 3 most recent years for which 
data is available as determined annually by the Executive Department, State Planning 
Office statewide and for each municipality based on federal census estimates. 
The 
population adjustment factor may not be less than zero. 
6. Revenue. "Revenue" means taxes and fees collected by the State or a local 
district pursuant to the statutes of the State, including those collected under Title 36, Part 
2. It includes money received from the sale of goods and services only to the extent that 
the receipts exceed the cost of providing the goods or services. 
§2043. Approval of revenue increases 
1. Approval of increases. The following fonns of approval are required to adopt an 
increase in revenue: 
A. For an increase in revenue of the State: 
( I) The measure must be approved by a vote of 2/3 of all the members of each 
House of the Legislature; and 
(2) Except as provided in subsection 2, the measure must be approved by a 
majority of the voters as described in subsection 3. 
B. For an increase in revenue of a 10c .. 1 district the measure must be approved in the 
manner provided by Title 20-A, chapter 606-B for school administrative units, Title 
II 
30-A, section 706-A for counties and Title 30-A, section 572I-A for municipalities. 
2. Exceptions. Voter approval under subsection I, paragraph A, subparagraph (2) is 
not required if: 
A. Annual state revenue is less than annual payments on general obligation bonds, 
required payments related to pensions and final court judgments; or 
B. The measure is an emergency tax and the provisions of section 2049 are followed. 
For the purposes of this subsection, "emergency" does not include economic conditions, 
revenue shortfalls or district salary or fringe benefits increases. 
3. Approval by voters; emergency approval. The question of whether to adopt 
legislation to impose an increase in revenue of the State must be submitted to the voters 
for approval at the next general election as defined in Title 21-A, section I. 
If the 
Legislature detennines by a 2/3 vote that legislation to increase taxes or fees should take 
effect sooner than the next general election, the Legislature may provide for submission 
of the question to the voters at any regular or special election as defined in Title 21-A, 
section I. 
4. Revenue estimates. A measure submitted to the voters under subsection 3 must 
include an estimate of the amount to be raised by the measure for the first 4 fiscal years of 
its implementation. 
5. Notice. At least 30 days before an election required under subsection 3, the 
election officer shall mail at the least cost a titled notice or set of notices addressed to 
I 
"All Registered Voters" at each address of every active registered voter. Notices must 
include the following infonnation and may not include any additional infonnation: 
A. The election date, hours, ballot title and text and local election office address and 
telephone number; 
B. For each proposed revenue increase, the estimated or actual total of fiscal year 
spending for the current year and each of the past 4 years and the overall percentage 
and dollar change; and 
C. For the first full fiscal year of each proposed revenue increase, estimates of the 
maximum dollar amount of each increase and of fiscal year spending without the 
increase. 
Except by later voter approval, if an increase in revenue exceeds any estimate prepared 
under paragraph C for the same fiscal year, the tax increase is thereafter reduced in 
proportion to the amount of the excess, and the excess revenue that was collected must be 
refunded in the next fiscal year. 
Ballot questions for revenue increases must begin: 
"Shall (specify district) revenues be increased (amount of first or, if phased in, full fiscal 
year dollar increase) annually ... ?" 
6. Costs. The State shall reimburse municipalities for the costs of any election under 
this section and providing the notice required under subsection 5 if the election provides 
for. a state tax increase. 
§2044. Expenditure limitations 
1. State expenditure limitation. Beginning with the first fiscal year that begins 
after this section takes effect, the maximum annual percentage change in state fiscal year 
spending in the categories specified in this subsection equals the inflation adjustment 
factor plus the population adjustment factor and any increases attributable to measures 
approved under section 2043. 
This limitation must be calculated separately for the 
following categories: 
A. General Fund; 
B. Highway Fund; and 
C. Other Special Revenue Funds, for which separate individual limitations must be 
applied. 
2. Local expenditure limitation. Expenditure limits for local districts that are 
school administrative units are governed by Title 20-A, chapter 606-B; for local districts 
that are counties, by Title 30-A, section 706-A; and for local districts that are 
municipalities, by Title 30-A, section 572I-A. 
3. 
Exceptions. 
The following may not be counted In calculating expenditure 
limitations under subsection 1: 
A. Amounts returned to taxpayers as refunds of amounts exceeding the expenditure 
limitation in a prior year; 
B. Amounts received from the Federal Government; 
C. Amounts collected on behalf 0f another level of government; 
D. Pension contributions by employees and pension fund earnings; 
E. Pension and disability payments made to former government employees; 
F. Amounts received as grants, gifts or donations that must be spent for purposes 
specified by the donor; 
G. Amounts paid pursuant to a court award; or 
H. Reserve transfers or expenditures. 
4. Exceeding expenditure limitation. If state revenues are projected to exceed the 
expenditure limitations in this section, the amount of revenues exceeding the expenditure 
limitations may be spent if approved in the same manner as required for a revenue 
increase under section 2043. 
§2045. Transfers and refund of unappropriated General Fund surplus 
1. Fund created. The Tax Relief Reserve Fund, referred to in this section as "the 
fund," is created for the purposes set forth in this chapter. The fund may not lapse, but 
remains in a continuing carrying account to carry out the purposes of this section. 
0 
2. Transfer. At the close of each fiscal year, the State Controller shall identify the 
1 
amount of General Fund unappropriated surplus and make the following transfers: 
A. Eighty percent of the unappropriated surplus must be transferred to the fund; and 
B. Twenty percent of the unappropriated surplus must be transferred to the Maine 
Budget Stabilization Fund established in section 1522. 
3. Notification. By September 15th annually, the State Controller shall notify the 
Legislature and the State Tax Assessor of the amount in the fund as a result of the 
transfers required by subsection 2. 
4. 
Refund through legislative action. 
If the amount in the fund exceeds 
$25,000,000, the Legislature shall, by October 15th, enact legislation to provide for the 
refund to taxpayers of amounts in the fund. 
Refunds may take the form only of 
temporary or permanent broad-based tax credits, rebates or rate reductions. 
5. 
Refund in case of legislative inaction. 
If the Legislature does not enact 
legislation by October 15th to provide refunds pursuant to subsection 4, then the State 
Controller shall, by October 30th, notify the State Tax Assessor of the amount in the 
fund. 
The State Tax Assessor shall calculate a one-time bonus personal exemption 
refund. The amount of the personal exemption refund must be calculated by dividing the 
amount in the fund identified by the State Controller under subsection 3 by the number of 
personal exemptions claimed on income tax returns filed for tax years beginning in the 
previous calendar year and rounded down to the nearest $5 increment. The State Tax 
Assessor shall issue a refund by November 30th to a taxpayer who filed an income tax 
return by April 15th of the same calendar year based on the number of personal 
exemptions claimed on the taxpayer's return without regard to the taxpayer's tax liability 
for the year. 
§2046. Transfers and refund of unallocated Highway Fund surplus 
1. Fund created. The Highway Fund Reserve Fund, referred to in this section as 
"the fund," is created for the purposes set forth in this chapter. 
2. Transfer. At the close of each fiscal year, the State Controller shall identify the 
amount of Highway Fund unallocated surplus and make the following transfers: 
A. Eighty percent of the unallocated surplus must be transferred to the fund; and 
B. 
Twenty percent of the unallocated surplus must be transferred to the Maine 
Highway Budget Stabilization Fund established in section 1523. 
3. Notification. By September 15th annually, the State Controller shall notifY the 
Legislature of the amount in the fund as a result of the transfers required by subsection 2. 
4.· Refund through legislative action. If the amount in the fund exceeds 10% of 
Highway Fund expenditures for the previous fiscal year, the State Tax Assessor shall 
calculate, based on the amount in the fund, a proportional reduction in the taxes on motor 
fuels under Title 36, Part 5 to become effective the following January I st and remain in 
effect for one calendar year. 
II 
§2047. Revenues of Other Special Revenue Funds accounts 
By September 15th annually, each state agency that manages an Other Special 
Revenue Funds account shall submit an annual report to the Legislature identifYing 
revenues received in the preceding fiscal year that exceed the expenditure limitation 
established in section 2044 and any other uncommitted revenues received during the 
previous fiscal year and proposing a plan for refunding the amount identified that exceeds 
10% of the previous fiscal year's expenditure. 
§2048. Emergency taxes 
1. Emergency taxes permitted; conditions. The State may Impose emergency 
taxes only in accordance with this section: 
A. The tax must be approved for a specified time period by a 2/3 majority of the 
members of each House of the Legislature; 
B. 
Emergency tax revenue may be spent only after other available reserves are 
depleted and must be refunded 180 days after the emergency ends if not spent on the 
emergency; and 
C. 
The tax must be submitted for approval by the voters at the next statewide 
election. 
2. Absence of approval. If not approved by the voters as provided in this section, 
an emergency tax expires 30 days following the election. 
Sec. 9. 5 MRSA §13063-C, sub-§4, ~, as amended by PL 2005, c. 2, Pt. A, §9 
and affected by § 14, is further amended to read: 
B. 
Notwithstanding section 1585, any balance remaining in the program after July 
31, 2007 must be transferred to the Maine Budget Stabilization Fund as established in 
section +£2. 1522. 
Sec. 10. 5 MRSA §17253, sub-§3, as amended by PL 2005, c. 2, Pt. A, §10 and 
affected by § 14, is further amended to read: 
3. Components of unfunded liability contribution. The annual valuation report 
prepared by the actuary in accordance with section 17107 must include identification of 
the impact on the employer contribution rate of any excess General Fund revenues 
transferred to the Retirement Allowance Fund pursuant to section 1532. 
Sec. 11. 20-A MRSA §IS671-A, sub-§3, as amended by PL 2005, c. 2, Pt. D, 
§35 and affected by §§72 and 74 and c. 12, Pt. WW, § 18, is further amended to read: 
3. 
Exceeding maximum local cost share expectations; separate article. 
Beginning with the 2005-2006 school budget, the legislative body of a school 
administrative unit may adopt an additional local appropriation that exceeds the local cost 
share expectation established by section 15688, subsection 3-A, paragraph A only if that 
action is approved in a separate article by a vote of the school administrative unit's 
legislative body through the same process tflat by which the school budget is approved in 
that school administrative unit and in accordance with section 15690 and that action is 
approved by the voters at a referendum. If that additional appropriation causes the school 
administrative unit to exceed the maximum state and local spending target described in 
subsection 4, the requirements of subsection 5 apply. 
Sec. 12. 20-A MRSA §IS671-A, sub-§S, ~, as amended by PL 2005, c. 12, Pt. 
WW, §3 and affected by § 18, is further amended to read: 
B. 
In a municipality where the responsibility for final adoption of the school budget 
is vested by the municipal charter in a council, this paragraph applies, ex:ceflt tAat the 
fletition and referendum flro"lisions aflply only if tAe municiflal cAarter does not 
othef'Nise pro,t'ide for or flrohibit a petition and referendum flrocess with respect to 
the matters described in tAis paragraph. 
(1) A majority of the entire membership of the school board or committee must 
approve the additional amount in a regular budget meeting. 
(2) 
An article approving the additional amount must conform to the 
requirements of section 15690, subsection 3, paragraph B and be approved by a 
majority of the entire membership of the council in a vote taken in accordance 
with section 15690, subsection 5 or, if tAe council votes not to aflflro"le the 
artiele, and by a majority of voters voting in a referendum called pursuant to 
subparagraph (4). 
(3) If an article is appro)'ed by the council pursuant to subparagraph (2), the 
voters may petition for a referendum )'ote on the same article in accordance '''''ith 
subparagraph (4). If a petition is filed in accordance with subparagraph (4), the 
vote of the council is suspended pending the outcome of the referendum vote. 
Upon approval of the article by a majority of the "Ioters voting in that 
referendum, the article takes effect. If the article is not approved by a majority of 
the voters ,,'oting in that referendum, tAe article does not tal~e effect. Subsequent 
to the vote, the sCAool committee or board may again propose an additional 
amount, subject to tAe requirements oftAis section. 
(4) If a written petition, signed by at least 10% of tAe number of "Ioters yoting in 
the last gubernatorial election in the municiflalit)" requesting a "Iote on the 
I 
additional amount is submitted to the municipal officers v,rithin 30 days of the 
couf16il's vote pursuant to subparagraph (2), the article voted on by the council 
must be submitted to the legal voters in the next regular election or a special 
election called for the purpose. The election must be held 'Nithin 45 days of the 
submission of the petition. The election must be called, advertised and conducted 
according to the law relating to municipal elections, except that the registrar of 
voters is not required to prepare or the- elerk to post a new list of voters and 
absentee ballots must be prepared and made available at least 14 days prior to the 
date of the referendum. for the purpose of registration of voters, the registrar of 
voters must be in session the secular day preceding the election. The voters shall 
indieate by a cross or check mark placed against the word "Yes" or "No" their 
opinion on the article. The results must be declared by the municipal officers and 
entered upon the municipal records. 
Sec. 13. 25 MRSA §1612, sub-§7, as amended by PL 2005, c. 2, Pt. A, § 12 and 
affected by § 14, is repealed. 
Sec. 14. 30-A MRSA §706-A, sub-§7, as affected by PL 2005, c. 2, Pt. B, §4 and 
amended by c. 12, Pt. WW, § 10 and affected by §§ 13 and 14, is further amended to read: 
7. 
Process for exceeding county assessment limit. 
A county may exceed or 
increase the county assessment limit only if approved by a vote of a majority of all the 
members of both the county budget committee or county budget advisory committee and 
the county commissioners and if approved by the voters at a referendum. 
Unless a county charter otherwise provides or prohibits a petition and referendum 
process, if a written petition, signed by at least 10% of the number of voters ',roting in the 
last gubernatorial election in the count)', requesting a vote on the question of exceeding 
the county assessment limit is submitted to the cOlffity commissioners within 30 days of 
the commissioners' vote pursuant to this subsection, the article voted on by the 
commissioners must be submitted to the legal voters in the next regular election or a 
special election called for that purpose. The election must be held "'lithin 4 5 days of the 
submission of the petition. 
The election must be called, advertised and conducted 
according to the la'N relating to municipal elections,~t that the registrar of voters is 
not reql:lired to prepare or the clerk to post a new list of voters, the filing requirement 
contained in section 2528 does not apply and absentee ballots must be prepared and made 
ayailable at least 14 days prior to the date of the referendum. 
for the purpose of 
registration of voters, the registrar of voters must be in session the secular day preceding 
the election. The voters shall indicate by a cross or check mariE placed against the ... lord 
"Yes" or "No" their opinion on the article. The results must be declared by the coun!)' 
commissioners and entered upon the COHn!)' records. 
Sec. 15. 30-A MRSA §5721-A, sub-§7, ~, as affected by PL 2005, c. 2, Pt. C, 
§5 and amended by c. 12, Pt. WW, §12 and affected by §§15 and 16, is further amended 
to read: 
B. 
If the municipal budget is adopted by a town councilor city council, the property 
tax levy limit may be exceeded only if approved by a majority vote of all the elected 
members of the town councilor city council on a separate article that specifically 
identifies the intent to exceed the property tax levy limit and approved by the voters 
at a referendum. 
Unless a municipal charter otHerwise provides or prohibits a 
petition and referendum process, if a '!lritten petition, signed by at least 1 ()% of the 
number of voters '<'oting in the last gubernatorial election in the municipality, 
requesting a yote on the question of exceeding the property tax Ie'!)' limit is submitted 
to the municipal officers within 3{) days of the council's vote pursuant to this 
paragraph, tHe article voted on by tHe council must be submitted to the legal voters in 
tHe next regular election or a special election called for that purpose. THe election 
must be Held '!rithin 45 days of the submission of tHe petition. The election must be 
called, advertised and conducted according to tHe law relating to municipal elections, 
1 
except tHat the registrar of ,.roters is not required to prepare or the clerk to post a new 
list of '<'oters and absentee ballots must be prepared and made a'railable at least 14 
da)'s prior to the date of tHe referendum. For the purpose of registration of voters, tHe 
registrar of '<'oters must be in session the secular da)' preceding the election. The 
voters shall indicate by a cross or check mark placed against the 'Nord "Yes" or "No" 
their opinion on the article. The results must be declared b)' the municipal officers 
and entered upon the municipal records. 
Sec. 16. 36 MRS A §3321, sub-§5 is enacted to read: 
5. Voter approval. Beginning on the July 1st following the effective date of this 
subsection, a change in the rate of excise tax resulting from the adjustment required in 
subsection 1 may take effect only if approved by a majority of the voters at a regular or 
special election. 
Sec. 17. 36 MRSA §7302, sub-§2, as enacted by PL 2005, c. 2, Pt. H, §2, is 
amended to read: 
2. Indicators; annual report. 'Nith reference to Title 5, chapter 142; Title 20 A, 
section 15671, subsection 1; and Title 30 A, sections 706 A and 5721 A, the The State 
Planning Office shall develop and apply specific, quantifiable performance indicators 
against which the progress in achieving the tax burden reduction goals established in 
section 7301 can be measured. On January 15, 2006 and annually thereafter, the State 
Planning Office shall report to the Governor and to the joint standing committee of the 
Legislature having jurisdiction over taxation matters on the progress made by the State, 
counties, municipalities and school administrative units, respectively, in achieving the tax 
burden reduction goals. The report required by this subsection must be comprised of 4 
distinct parts reporting on the progress made by the State, municipalities, counties and 
school administrative units, respectively. The State Planning Office may also include in 
its report recommendations on alternative strategies to achieve the tax burden reduction 
goals established in section 7301 that reflect the best practices in this State, other states 
and other countries. 
Sec. 18. 37-B MRSA §745, sub-§4, as enacted by PL 2005, c. 634, § 13, IS 
amended to read: 
4. Fund balance. The fund's balance may not exceed $3,000,000. Any amount, 
including interest, that accrues in excess of $3,000,000 must be transferred by the State 
Controller to the Maine Budget Stabilization Fund, established in Title 5, section ~ 
1522. 
Sec. 19. Maine Budget Stabilization Fund. The Maine Budget Stabilization 
Fund established in the Maine Revised Statutes, Title 5, section 1522 is the successor in 
every way to the Maine Budget Stabilization Fund established under Title 5, section 
1532, which is repealed in this Act. All funds in the Maine Budget Stabilization Fund 
established under Title 5, section 1532 are transferred to the Maine Budget Stabilization 
Fund established in Title 5, section 1522 on the effective date ofthis Act. 
Sec. 20. Legislative intent; relationship to private and special laws. It is 
the intent of the Legislature that the provisions of this Act supersede any conflicting 
provisions of private and special law relating to the determination of revenue, fees and 
expenditures. 
Sec. 21. Application. This Act applies to fiscal years beginning on or after the 
effective date of this Act. 
SUMMARY 
This bill proposes to restrain the growth in state and local government by imposing 
expenditure limitations on state and local government and by requiring a procedure of 
voter approval of certain tax and fee increases. 
Under this bill, growth in annual expenditures of the General Fund, the Highway 
Fund and Other Special Revenue Funds are limited according to increases in population 
and inflation. For the General Fund and Highway Fund budgets, revenues exceeding the 
expenditure limitation must be distributed by directing 20% of that excess to a budget 
stabilization fund and 80% of that excess to a tax relief fund. The budget stabilization 
funds may be used only in years when revenues are not sufficient to fund the level of 
expenditure permitted by the growth limits. The tax relief funds must be used to provide 
tax relief through refunds proportional to individual income tax personal exemptions 
claimed in the previous tax year or a decrease in motor fuels taxes. For state agencies 
that manage Other Special Revenue Funds, the managers of those funds must report 
excess surpluses to the Legislature with a plan for refund of those revenues. 
State expenditure limits contained in this bill could be exceeded by a 2/3 vote of each 
House of the Legislature and approval by the voters. Local district expenditure limits 
could be exceeded by a majority vote of the voters of the local district. 
Under this bill, an increase in state revenue would be possible only by a 2/3 vote of 
each House of the Legislature and the approval of the voters.