An Act To Improve the Administration of State-Municipal Revenue Sharing
Maine Legislature, Session 123, LD 2276
Committee: Taxation
Amends: 30-A MRSA §5681, 30-A MRSA §6204, 30-A MRSA §6206

Legislative Document 
No. 2276 
H.P. 1641 
House of Representatives, March 26, 2008 
An Act To Improve the Administration of State-Municipal Revenue 
Sharing 
Reported by Representative PIOTTI of Unity for the Joint Standing Committee on Taxation 
pursuant to Joint Order, H.P. 1594. 
Reference to the Committee on Taxation suggested and ordered printed under Joint Rule 
218. 
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1J7.17l1!£~ 
MILLICENT M. MacFARLAND 
Clerk 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1. 30-A MRS A §5681, sub-§2, as amended by PL 2007, c. 437, § 1 and 
affected by §22, is further amended to read: 
2. Definitions. As used in this section, unless the context otherwise indicates, the 
following terms have the following meanings. 
A. 
"Population" means the population as determined by the latest Federal Decennial 
Census or the population as determined and certified by the Department of Health 
and Human Services, whichever is later. 
For the purposes of this section, the 
Department of Health and Human Services shall determine the popUlation of each 
municipality at least once every 2 years. 
For the purposes of the distributions 
required by this section, beginning July 1, 2009, "population" means the most current 
population data available as of the January 1 st prior to the fiscal year of distribution. 
B. 
"Property tax burden" means the total real and personal property taxes assessed 
in the most reeently eompleted municipal fiscal year pertaining to the latest state 
valuation, 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. 
C. 
"Annual growth ceiling" for fiscal year 2005-06 means $100,000,000. 
For 
subsequent fiscal years, "annual growth ceiling" must be determined by the State Tax 
Assessor by September I st annually and means the annual growth ceiling for the 
previous fiscal year adjusted by the lower of the percentage change for the previous 
fi.s€a.l calendar year in the Consumer Price Index compared to the fi.s€a.l calendar year 
immediately preceding the previous fi.s€a.l calendar year and the percentage change in 
receipts for the previous fiscal year from the taxes imposed under Title 36, Parts 3 
and 8 and Title 36, section 2552, subsection I, paragraphs A to F and credited to the 
General Fund compared to the fiscal year immediately preceding the previous fiscal 
year. The annual growth ceiling may not be less than the annual growth ceiling for 
the previous year. 
D. 
"Consumer Price Index" means the average over a 12-month period ending.JuRe 
J.()tfl December 31st annually of the National Consumer Price Index, not seasonally 
adjusted, published monthly by the United States Department of Labor, Bureau of 
Labor Statistics designated as the "National Consumer Price Index for All Urban 
Consumers - United States City Average." 
E. 
"Disproportionate tax burden" means the total real and personal property taxes 
assessed in the most reeently eompleted municipal fiscal year pertaining to the latest 
state valuation, 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 and reduced by .01. 
Sec. 2. 30-A MRSA §5681, sub-§5-B, as amended by PL 2007, c. 240, Pt. NNN, 
§ I, is further amended to read: 
Page) - 123LR3563(OI)-1 
5-B. Fund for the Efficient Delivery of Local and Regional Services. For the 
months beginning on or after July 1, 2004 until June 30, 2009, and before the 
distributions required by subsections 4-A and 4-B, 2% of all receipts transferred each 
month pursuant to subsection 5 must be deposited in the Fund for the Efficient Delivery 
of Local and Regional Services, as established in subsection 3,..--aHd. 
For the months 
during each fiscal year beginning on or after July 1, 2009, and before the distributions 
required by subsections 4-A and 4-B, $500,000 of the receipts transferred during the 
fiscal year pursuant to subsection 5 must be deposited in the Fund for the Efficient 
Delivery of Local and Regional Services. The funds so deposited must be distributed to 
those municipalities and counties that can demonstrate significant and sustainable savings 
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in the cost of delivering local and regional governmental services through collaborative 
approaches to service delivery, enhanced regional delivery systems, the consolidation of 
administrative services, the creation of broad-based purchasing alliances or the execution 
of interlocal agreements. An)' amOl:mts transferred to tHe Fund for tHe Efficient Delivery 
IS 
of Local and Regional Services in excess of $500,000 in any fiscal year must be 
transferred to General Fund undedicated revenue. 
Sec. 3. 30-A MRSA §S681, sub-§8 is enacted to read: 
8. 
Posting of revenue sharing projections. 
For the purpose of assisting 
municipalities in a timely manner in their budget development process and in the 
determination of their property tax levy limits as required by section 5721-A, the 
Treasurer of State shall post no later than April 15th of each year on the Treasurer of 
State's website the projected revenue sharing distributions as required by this section 
according to the most recently issued state revenue forecasts issued by the Revenue 
Forecasting Committee pursuant to Title 5, chapter 151-B for the subsequent fiscal year 
beginning on July 1st. 
Sec. 4. 30-A MRSA §S721-A, sub-§4, as amended by PL 2005, c. 683, Pt. I, §2, 
is further amended to read: 
4. Adjustment for new state funding. If the State provides net new funding to a 
municipality for existing services funded in whole or in part by the property tax levy, 
other than required state mandate funds pursuant to section 5685 that do not displace 
current property tax expenditures, the municipality shall lower its property tax levy limit 
in that year in an amount equal to the net new funds. For purposes of this subsection, 
"net new funds" means the amount of funds received by the municipality from the State 
in that fiscal during the most recently completed calendar year, with respect to services 
funded in whole or in part by the property tax levy, less the product of the following: the 
amount of such funds received in the prior fu€.al calendar year multiplied by one plus the 
growth limitation factor described in subsection 3. 
"Net new funds" refers to state-
municipal revenue sharing and does not include changes in state funding for general 
assistance under Title 22, section 4311 or in state funding under the Urban-Rural 
Initiative Program under Title 23, section \803-B if those changes are the result of the 
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operation of the formula for calculation of state funding under that section but does 
include changes in funding that are the result of a statutory change in the formula for 
calculation of state funding under that section. 
If the calculation required by this 
subsection reveals that the municipality received a net reduction in funding, the 
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municipality is authorized to adjust its property tax levy limit in an amount equal to the 
net reduction of funds. For the purpose of determining if there was a net reduction in 
funding, the municipality may consider only those funds that are net new funds. For 
purposes of this subsection, "net reduction in funding" means the amount of funds 
received by the municipality from the State during the calendar year immediately 
preceding the most recently completed calendar year less the amount of such funds 
received in the most recently completed calendar year. If the calculation required by this 
subsection yields a positive value, that value may be added to the municipality's property 
tax levy limit. If a municipality receives net new funds in any fiscal year for which its 
property tax levy limit has not been adjusted as provided in this subsection, the 
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municipality shall adjust its property tax levy limit in the following year in an amount 
equal to the net new funds. 
Sec. 5. 
30-A MRSA §6204, 2nd ~, as enacted by PL 2005, c. 266, §2, is 
amended to read: 
Grant funds may not be used for reimbursement of costs or expenses incurred prior to 
an award from the fund. A maximum of 10% of the value of grant funds available during 
.any year may be awarded for planning grants. 
Sec. 6. 
30-A MRSA §6206, 2nd ~, as enacted by PL 2005, c. 266, §2, IS 
amended to read: 
The department may shall require an eligible applicant to provide matching funds for 
a planning grant in an amount not to e]weed 50% of not less than the total grant award 
requested, as determined by the department in accordance with a request for proposals 
issued under section 6209, and may give preference or priority to an eligible applicant 
whose proposal provides matching funds. 
SUMMARY 
This bill clarifies and changes the timing of the various data inputs that in 
combination determine each municipality's share of the state-municipal revenue sharing 
distribution, including municipal population, full-value mill rates and consumer price 
indices, so that the Treasurer of State can post the projected revenue sharing distribution 
in a timely manner for the purposes of municipal budget development. The bill also 
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requires the Treasurer of State to post the revenue sharing projections on the Treasurer of 
State's website no later than April 15th of each year. 
This bill also makes several changes to laws related to state-municipal revenue 
sharing as it relates to the Fund for the Efficient Delivery of Local and Regional Services 
and the system of calculating a municipality's property tax levy limit. This bill: 
1. 
Permanently establishes 
legislative practice by dedicating $500,000 of state-
municipal revenue sharing funds each year to the Fund for the Efficient Delivery of Local 
and Regional Services rather than 2% of receipts of the Local Government Fund as 
originally enacted; 
2. Changes the administration of the Local Government Efficiency Fund to require 
dollar-for-dollar matching requirements for planning grants and limits the overall 
distribution of planning grants in any year to no more than 10% of all grants as measured 
by value; 
3. Clarifies with respect to the calculation of a municipality's property tax levy limit 
that "net new funds" refers to municipal revenue sharing and that the net new funding 
analysis applies to the previous calendar year's receipts rather than current projected fiscal 
year receipts; and 
4. Allows "net new funds" adjustments to the property tax levy limit to operate either 
as a negative or a positive adjustment in response to revenue sharing increases or 
decreases.