An Act To Amend the Municipal Tree Growth Reimbursement Formula
Maine Legislature, Session 123, LD 2274
Committee: Taxation

Legislative Document 
No. 2274 
H.P. 1639 
House of Representatives, March 25, 2008 
An Act To Amend the Municipal Tree Growth Reimbursement 
Formula 
Reported by Representative PIOTTI of Unity for the Joint Standing Committee on Taxation 
pursuant to Joint Order, H.P. 1595. 
Reference to the Committee on Taxation suggested and ordered printed under Joint Rule 
218. 
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MILLICENT M. MacFARLAND 
Clerk 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1. 36 MRS A §578, sub-§l, as amended by PL 2007, c. 438, §16, is further 
amended to read: 
1. 
Organized areas. 
The municipal assessors or chief assessor of a primary 
assessing area shall adjust the State Tax Assessor's 100% valuation per acre for each 
forest type of their county by whatever ratio, or percentage of current just value, is 
applied to other property within the municipality to obtain the assessed values. Forest 
land in the organized areas, subject to taxation under this subchapter, must be taxed at the 
property tax rate applicable to other property in the municipality. 
The State Tax Assessor shall determine annually the amount of acreage in each 
II 
municipality that is classified and taxed in accordance with this subchapter. 
Each 
municipality is entitled to annual payments distributed in accordance with this section 
from money appropriated by the Legislature if it submits an annual return in accordance 
with section 383 and if it achieves the minimum assessment ratio established in section 
327. The State Tax Assessor shall pay any municipal claim found to be in satisfactory 
form by August 1 st of the year following the submission of the annual return. The f3eF 
a€re municipal reimbursement appropriation is calculated on the basis of 90% of the per 
acre tax revenue lost as a result of this subchapter. For purposes of this section, the tax 
lost is the tax that would have been assessed, but for this subchapter, on the classified 
forest lands if they were assessed according to the undeveloped acreage valuations used 
in the state valuation then in effect, or according to the current local valuation on 
undeveloped acreage, whichever is less, minus the tax that was actually assessed on the 
same lands in accordance with this subchapter, and adjusted for the aggregate municipal 
savings in required educational costs attributable to reduced state valuation. 
A 
municipality that fails to achieve the minimum assessment ratio established in section 327 
loses 10% of the reimbursement provided by this section for each one percentage point 
the minimum assessment ratio falls below the ratio established in section 327. 
A municipality may not receive a reimbursement payment under this section that would 
exceed an amount determined by calculating the tree growth tax loss less the municipal 
savings in educational costs attributable to reduced state valuation. 
The State Tax 
Assessor shall adopt rules necessary to implement the provisions of this section. Rules 
adopted pursuant to this subsection are routine technical rules for the purposes of Title 5, 
chapter 375, subchapter 2-A. 
C. The State Tax Assessor shall distribute reimbursement under this section to each 
municipality in proportion to the product of the reduced tree growth valuation of the 
municipality multiplied by the property tax burden of the municipality. For purposes 
of this paragraph, unless the context otherwise indicates, the following terms have the 
following meanings. 
(1) 
"Property tax burden" means the total real and personal property taxes 
assessed in the most recently completed municipal fiscal year, except the taxes 
assessed on captured value within a tax increment financing district, divided by 
the latest state valuation certified to the Secretary of State. 
(2) 
"Undeveloped land" means rear acreage and unimproved nonwaterfront 
acreage that is not: 
(a) Classified under the laws governing current use valuation set f0l1h in 
chapter 105, subchapter 2-A, 10 or IO-A; 
(b) A base lot; or 
(c) Waste land. 
(3) "Average value of undeveloped land" means the per acre undeveloped land 
valuations used in the state valuation then in effect, or according to the current 
local valuation on undeveloped land as determined for state valuation purposes, 
whichever is less. 
(4) "Reduced tree growth valuation" means the difference between the average 
value of undeveloped land times the total number of acres classified as forest 
land under this SUbchapter. 
SUMMARY 
This bill amends in 2 ways the law regarding the distribution of reimbursement to the 
municipalities to partially cover the property tax losses they experience as a result of the 
tree growth tax program. 
First, the bill adjusts the statewide appropriation for 
reimbursement purposes to reflect the education subsidy impacts of tree growth 
enrollments, rather than adjusting each municipality's individual reimbursement as is 
done under the current system. Second, the bill establishes each municipality's share of 
the total municipal reimbursement appropriation on the basis of 3 data inputs: 
1. The number of acres enrolled in the program in the municipality; 
2. The difference between the tree growth acreage rates and the local or regional 
undeveloped acreage; and 
3. The municipality's full value mill rate.