An Act To Enable Municipalities To Establish Municipal Land Banks Funded by Local Option Real Estate Transfer Taxes
Maine Legislature, Session 123, LD 0761
Committee: Taxation
Sponsors: RECTOR, BEAUDETTE, EBERLE, KOFFMAN, LORING, PINGREE, SAMSON

Legislative Document 
No. 761 
H.P.582 
House of Representatives, February 13,2007 
An Act To Enable 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 
1J1~ 
frl· 7!!t2C~ 
MILLICENT M. MacFARLAND 
Clerk 
Representatives: BEAUDETTE of Biddeford, EBERLE of South Portland, KOFFMAN of Bar 
Harbor, LORING of the Penobscot Nation, PINGREE of North Haven, SAMSON of Auburn. 
Printed on recyc led paper 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1. 30-A MRSA c. 157, sub-c. 6 is enacted to read: 
SUBCHAPTER 6 
MUNICIPAL LAND BANKS 
§3301. 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 under this 
section 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 4661. 
2. Land bank account. A municipality establishing a municipal land bank under 
this section shall maintain a separate account to receive all tax revenue collected under 
Title 36, section 4662, subsection 3. A municipality may accept money from other public 
and private sources for deposit in the municipal land bank account. Interest accrued by 
money deposited into the account must be credited to the account. All deposits into the 
municipal land bank account may be used only for the purposes permitted 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 established pursuant to 
subsection 2 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 within the municipality; and 
(3) 
Protecting the physical, historical, social or economic character of the 
community, including working waterfront; and 
B. Any other purposes that are incidental to the purposes permitted under paragraph 
A, including administrative and land maintenance costs. 
Page I - 123LR1937(Ol)-1 
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 as 
defined in section 4301, subsection 3. 
5. Public hearine required. 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 remaining money in the municipal land bank account established pursuant to 
subsection 2 must be applied to reduce any bonded indebtedness or obligations incurred 
II 
to effectuate the purposes ofthis subchapter. 
Sec. 2. 36 MRSA c. 712-A is enacted to read: 
CHAPTER 712-A 
MUNICIPAL REAL ESTATE TRANSFER TAX 
IS 
§4661. Adoption of municipal real estate transfer tax 
A municipality that has approved the establishment of a municipal land bank 
pursuant to Title 30-A, chapter 157, subchapter 6 may impose a municipal real estate 
transfer tax on a transferee of real estate according to the procedure and limitations of this 
chapter. 
1. 
Referendum required. A municipality may impose a municipal 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 subsequentlv be amended or repealed by a 
referendum vote conducted in the same manner. 
2. 
Rate of tax. 
The referendum question under subsection I must specify the 
proposed transfer tax rate, which may not exceed 1.5% of the taxable base of the property 
subject to the tax. 
3. Liability. A transferee of real property is liable for payment of the municipal real 
estate transfer tax. 
4. 
Information. 
A transferee of real property must provide the following 
information to the municipality: 
A. A copy of the deed or other instrument evidencing the transfer, if any, and an 
affidavit signed under oath or under the pains and penalties of perjury by the 
transferee or the transferee's legal representative attesting to the true and complete 
purchase price; or 
B. The basis, if any, upon which the transfer is claimed to be exempt in whole or in 
part from the municipal real estate transfer tax. 
§4662. 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 subtracted by a municipality if the larger amount is specified in the referendum 
question posed pursuant to section 4661, subsection I. 
2. Exemptions. 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 acquiring 
a property to be used as the transferee's primary residence within that same 
municipality; 
C. A transfer in which the transferee has not previously held an interest in a principal 
residence; and 
D. A transfer in which the property acquired 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. 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. 
Payment of the municipal real estate transfer tax is due no later than the date established 
by chapter 711-A for payment ofthe state real estate transfer tax. 
The municipal tax collector shall deposit all revenue received from the municipal real 
estate transfer tax in the municipal land bank account in accordance with Title 30-A, 
chapter 157, subchapter 6. 
4. Municipal authority. A municipality may adopt provisions necessary for the 
proper administration of a real estate transfer tax, including provisions concerning the 
deterrriination 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 7l1-A. 
The 
municipality may, when necessary, secure payment of the tax and any related penalties or 
interest in accordance with section 552. 
"35 
SUMMARY 
This bill authorizes municipalities to impose a municipal real estate transfer tax and a 
land bank program. Approval for both the tax and the land bank must be obtained by 
referendum. This bill places restrictions on the tax rate and uses of the tax.