An Act To Set Fees for Services for Tax-exempt Property in Municipalities
Maine Legislature, Session 123, LD 1413
Committee: Taxation
Sponsors: BLANCHETTE, PERRY, BRAUTIGAM, GERZOFSKY, HARLOW, HOGAN, PERCY, SIMPSON, BRYANT, NUTTING
Amends: 36 MRSA §652

Legislative Document 
No. 1413 
H.P.996 
House of Representatives, March 14,2007 
An Act To Set Fees for Services for Tax-exempt Property in 
Municipalities 
Reference to the Committee on Taxation suggested and ordered printed. 
Presented by Representative BLANCHETTE of Bangor. 
Cosponsored by Senator PERRY of Penobscot and 
'77/~ frJ·711~ 
MILLICENT M. MacFARLAND 
Clerk 
Representatives: BRAUTIGAM of Falmouth, GERZOFSKY of Brunswick, HARLOW of 
Portland, HOGAN of Old Orchard Beach, PERCY of Phippsburg, SIMPSON of Auburn, 
Senators: BRYANT of Oxford, NUTTING of Androscoggin. 
Prulted nn ft!\:ycleJ paper 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1. 36 MRSA §652, sub-§l, ~, as enacted by PL 1977, c. 487, is amended 
to read: 
L. 
Service charges. 
1 
(1) The owners of certain institutional and organizational real property, which is 
otherwise exempt from state or municipal taxation, may be subject to service 
charges when these charges are calculated according to the actual cost of 
providing municipal services to that real property and to the persons who use that 
property. These services sfla.l.I. include, without limitation: 
(a) Fire protection; 
(b) Police protection; 
(c) 
Road maintenance and construction, traffic control, snow and Ice 
removal; 
(d) Water and sewer service; 
(e) Sanitation services; and 
(f) Any services other than education and welfare. 
(2) The establishment of service charges is not mandatory, but rather is at the 
discretion of the municipality in which the exempt property is located. The 
municipal legislative body shall determine those institutions and organizations on 
which service charges are to be levied by charging for services on any or all of 
the following classifications oftax exempt real property: 
(a) Residential properties currently totally exempt from property taxation, 
yet used to provide rental income. This classification sfla.l.I. does not include 
student housing or parsonages7; and 
(b) All other property exempt from taxation due to this section, other than 
property specified in paragraph G, that is owned or possessed by an 
institution that has assets with a taxable value of more than $10,000,000, but 
for the application of this section. 
If a municipality levies service charges in any of the classifications of this 
subparagraph, that municipality shall levy these service charges te on all 
institutions and organizations owning property in that classification. 
(3) With respect to the determination of service charges, appeals sfla.l.I. must be 
made in accordance with an appeals process to be provided for by municipal 
ordinance. 
(4) The collection of unpaid service charges sfla.l.I. must be carried out in the same 
manner as provided in Title 38, section 1208. 
(5) Municipalities shall use the revenues accrued from service charges to fund, 
as much as possible, the costs of those services. 
Those revenues must be 
considered property tax revenues for the purposes of section 661. 
Page J - 123LR1530(Ol )-1 
I 
(6) The total service charges levied by a municipality on any institution and 
organization under this section s-fial.I. m~'y not exceed 2% of the gross annual 
revenues of the organization. To qualify for this limItation the institution or 
organization shall file with the municipality an audit of the revenues of the 
organization for the year immediately prior to the year in which the service 
charge is levied. The municipal officers shall abate the service charge amount 
that is in excess of 2% of the gross annual revenues. 
(7) 
Municipalities shall adopt any necessary ordinances to carry out the 
provisions of this paragraph regarding service charges. 
SUMMARY 
This bill expands the authority of municipalities to adopt ordinances that govern the 
assessment of fees for municipal services provided to certain property tax-exempt 
institutions. Current law allows fees to be assessed against residential properties that are 
held by a tax-exempt institution but that are used to provide rental income. This bill 
allows a municipality to assess fees for services provided to a tax-exempt institution, 
other than houses of religious worship, that have assets with a taxable value of more than 
$10,000,000 if not for the property tax exemption. The service charges collected by the 
municipality must be treated as property tax revenue for the purpose of detennining the 
municipality's property tax levy limitation. 
Pag\; 2 - 123LRt530(OI)-1