An Act To Provide Equitable Property Tax Relief To Maintain Traditional· Communities
Maine Legislature, Session 124, LD 1463
Committee: Taxation
Sponsors: PERCY

FIRST REGULAR SESSIOr~-2009 
Legislative Document 
No. 1463 
H.P. 1015 
House of Representatives, Apri115, 2009 
An Act To Provide Equitable Property Tax Relief To Maintain 
Traditional· Communities 
Reference to the Committee on Taxation suggested and ordered printed. 
Presented by Representative PERCY of Phippsburg. 
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MILLICENT M. MacFARLAND 
Clerk 
Be it enacted by the People of the State of Maine as follows: 
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S~c. A-I. 30~A MRSA §S·2S0-I,sub-§16, as enacted by PL 2003, c·. 688, Pt. D, 
§2, is amended to read: 
16. Qualified business activity. "Qualified business. activity" means a business 
activity that is conducted within a Pine Tree Development Zone and is directly related to 
fil)ancial services, manufacturing, a natural resources support business as defined in 
section 5451, subsection 4 or a targeted technology business for which the business 
receives a·certificate from the commissioner pursuant to section 5250-0. 
Sec. A-2. 30-A MRSA c. 21S is enacted to read: 
CHAPTER 215 
NATURAL RESOURCES BUSINESS SUPPORT 
§5451. Definitions 
As used in this chapter, unless the context otherwise indicates, the following terms 
have the following meanings. 
1. Department. "Depm1ment" means the Department of Economic and Community 
Development. 
2. Natural resources business support arrangement. "Natural resources business 
support anangement" means an anangement that meets requirements established by the 
department by rule under which: 
A. The owner of a qualified natural resources business grants to a municipality a 
qualified easement; and· 
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B. 
The municipality obligates itself to make natural resources business suppOli 
payments. 
3; Natural resources business support payments. "Natural resources business 
support payments" means mmual payments by a municipality during the tern} of a 
qualified easement: 
A. 
In an amount up to 100% of the annual property taxes assessed by that 
municipality against land and buildings subject to a qualified easement up to the fair 
market value of the easement; and 
B. To the person against whom the property taxes are assessed. 
4. 
Natural resources ·support business. 
"Natural resources support business" 
means a business whose existence in a community makes a substantial contribution to the 
operation of natural resources-based economic activities including agriculture, fishing, 
forestry and ecotourism. 
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5. 
Qualified easement. 
"Qualified easement" means an easement heILbY-.f! 
municipality on qualified natural resources business land in that municipality that: 
A. Is designed to ensure that no development other than development related to 
natural resources support occurs on the qualified natural resources business land; and 
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B. Is limited to a term of not less than 20 years. 
6. 
Qualified natural resources business land. 
"Qualified natural resources 
business land" means land that is neceSSaIY for the operation of a natural resources 
business. 
§5452. Program established 
1. Program. In order to protect and support local natural resources businesses, 
preserve land for natural resources businesses and reduce the potential tax burdens from 
new development, a municipality may enter into natural resources business support 
aITangements with the owners of qualified natural resources business land. 
A. A natural resources business support arrangement must be approved by majority 
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vote of the municipality's legislative body. 
B. 
Unless approved by a. 2/3 vote of the municipality's legislative body, the 
municipality may not enter into natural resources business support an-arigements: 
(1) Affecting more than 3 % of the total annual valuation of taxable land in the 
municipality; and 
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(2) Affecting more than 1 % of the total annual valuation of taxable land in the 
municipality in any calendar year. 
2~ Effects of arrangement.· A natural resources business suppOli 3lTangementmay 
not diminish the eligibility of qualified natural resources business land for paliicipation in 
tax benefits under Title 36, chapter 105, subchapter 2-A or Title 36, chapter 105, 
subchapter 10 or for consideration under Title 5, Part lS-A by the Land for Maine's 
Future Board. 
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3. Nullification. A natural resources business support arrangement, once finally 
executed, is binding on the municipality.' A municipality may not cease to make 
payments under'the arrangement unless the land subject to the qualified easement is taken 
by eminent domain or state law otherwise authorizes the payments to cease. In the event 
that a municipality's obligation to make naturai resources business support payments 
ceases, the natural resources business support arrangement and the related qualified 
easement are void and may not be given effect and the municipality shall provide notice 
of this fact to the owner of the qualified natural resources business land and record that 
notice with the approptiate registry of deeds. 
PART B 
Sec. 8-1. 36 MRSA c. 908-A is enacted to read: 
CHAPTER 908-A 
MUNICIPAL OPTION DEFERRAL OF HOMESTEAD PROPERTY TAXES 
§6281. Municipal option 
A municipality may adopt municipal option deferral of homestead property taxes as 
provided in tills chapter by an ordinance that· must be approved by the voters of the . 
municipality in the same manner as for the election of municipal officers. An ordinance 
adopted under this chapter may include income-based limits on eligibility. 
§6282. Definitions 
As used in this chapter, unless the context otherwise indicates, the following terms 
have the following meanings. 
1. Homestead. "Homestead" means the owner-occupied principal dwelling, either 
real or personal property, owned by the taxpayer and lip to 10 contiguous acres upon 
which it is located. If the homestead is located in a multi-unit building, the homestead is 
the portion of the building actually used as the principal dwelling and its percentage of 
the value of the common elemeni' and of the value of the tax lot upon which it is built. 
The percentage is the value of the .mit consisting of the homestead compared to the total 
value of the building exclusive of the common elements, if any. 
2. Municipal income limit. "Municipal income limit" means the amount, if any, 
adopted by a municipal ordinance as the .maximum household income under which a 
homestead is eligible for deferral under this chapter. 
3. Tax-deferred property. "Tax-deferred property" means the property upon which 
taxes are deferred under this chapter. 
4. Taxes. "Taxes" or "property taxes" means ad valorem taxes, assessments, fees 
and charges entered on the assessment and tax roll. 
5. Taxpayer. "Taxpayer" means an individual who has -filed a claim for deferral 
under this chapter or individuals who have jointly filed a claim for deferral under this 
chapter. 
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§6283. Deferral oftax on.homesteadj joint election; age requirement; filing claim 
1. Filing claim. Subject to section 6284, an individual or 2 or more individuals 
jointly may elect to defer The property taxes on a homestead by filing a claim for deferral 
with the municipal assessor after January 1 st but no later than April 1 st of the first year in 
which deferral is claimed if: 
A. The individual, or each individual iIi the case of 2 or more individuals filing a 
claim jointly, is 65 years of age or older on April 1st of the year in which the claim is 
filed; 
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B. The individual or, in the case of 2 or more individuals filing a claim jointly, all the 
individuals together have household income, as defined in section 6201, subsection 7, 
of less than the municipal income limit for the calendar year immediately preceding 
the calendar year in which the claim is filed; and 
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C. The municipality in which the homestead is located has adopted an ordinance 
under section 6281. 
2. Property tax deferral. If a taxpayer is determined to be eligible to defer property 
taxes for any year by filing a claim for deferral under subsection I, property tax deferral 
has the effect of: 
A. 
Deferring the payment of the property taxes levied on the homestead for the 
municipal ·fiscal year beginning on or after April 1 st of that year; 
B. Continuing deferral of the payment by the taxpayer of any property taxes deferred 
under this chapter for previous years that have not become delinquent under section 
6291; and 
C. Continuing the deferral of the payment by the taxpayer of any future property 
taxes for as long as the provisions of section 6284 are met. 
3. Appeal. Any person aggrieved by the denial of a claim for deferral of homestead 
property taxes or disqualification from deferral of homestead property taxes may file an 
appeal with the State Board of Property Tax ReView as provided in chapter 10 l, 
subchapter 2-A. 
§6284. Property entitled to deferral 
In order to qualify for tax deferral under this chapter, the property must meet all of 
the following requirements when the claim is filed and thereafter as long as the pavment 
of taxes by the taxpayer is deferred. 
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1. Claimant's homestead. The property must be the homestead of the individual or 
individuals who file the claim for deferral, except for an individual required to be absent 
from the homestead by reason of health. 
2. Fee simple estate. The person claiming the deferral must, solely or together with 
the person's spouse, own the fee simple estate or be purchasing the fee simple estate 
under a recorded instmment of sale, or 2 or more persons must together own or be 
purchasing the fee simple estate with rights of survivorship under a recorded instmment 
ot'saleifall owners live in the homestead and ifi:lll owners apply for the deferral jointly. 
3. No prohibitions. There must be no prohibition to the deferral of property taxes 
contained in anv provision of federal law, mle or regulation applicable to a mortgage. 
trust deed, land sale contract or conditional sale contract for which the homestead is 
securitv. 
§6285. Claim forms; contents 
1. Administration. A taxpayer mav file a claim for deferral under this chapter in 
writing on a fom1 supplied bv the bureau and must: 
A. Describe the homestead; 
B. Establish eligibility for the deferral under the provisions of this chapter: and 
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C. Attach any infol111ation required by the bureau to show that the requireinents of 
section 6284 have been met. 
2-. Statement verification. The claim must contain a statement verified by a written 
declaration of the applicant that the statements contained in the claim .are true. 
§6286 •. State liens against tax-deferred property 
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1. Lien. The lien provided in section 552 continues for purposes of protecting the 
municipalitv's deferred tax interest in tax-deferred property.' When it is deternuned that 
one of the events set out in section 6290 has occurred and that a property is no longer 
eligible for property tax deferral under this chapter, the municipal assessor shall send 
notice by certified mail to the owner, or the owner's heirs or devisees, listing the total 
amount of deferred property taxes, including accrued interest and costs of all the years 
and demanding payment on or before April 30th ·of the year following the tax year in 
which t~e circumstances causing withdrawal from the provisions of tills chapter occur. 
When the circumstances listed in section 6290, subsection 4 occur, the amount of 
deferred taxes is due and payable 5 days before the date of removal of the property from 
the State. 
If the deferred tax liability of a property has not been satisfied by the April 30th demand 
date, the municipal assessor shall, within 30 days, record in the registry of deeds in the 
county where the real estate is located a tax lien certificate signed by the municipal 
assessor or bearing the ·municipal assessor's facsimile signature, setting forth the total 
amount of deferred tax liability, a description of the real estate on which the tax was 
deferred and an allegation that a tax lien is claimed on the real estate to secure payment of 
the tax, that a demand for payment of the tax has been made in accordance with this 
section and that the tax remains unpaid. 
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At the time of the recording of the' tax lien certificate in the registry of deeds, the 
municipal' assessor shall send by certified mail, return receipt requested, to each record 
holder of a mortgage on the real estate, to the holder's last lmown address, a true copy of 
the tax lien certificate. The cost to be paid by the property owner, or the owner's heirs or 
devisees, is the sum of the fees for recording and discharging of the lien as established by 
Title 33, section 751; plus $13. Upon redemption, the municipal assessor shall prepare 
and record a discharge of the tax lien mortgage. The lien described in section 552 is the 
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basis of tills tax lien mortgage procedure. 
The filing of the tax lien certificate, provided for in this section, in the registry of deeds 
creates a mortgage on the real estate to the municipality and has priority over all other 
mortgages, liens, attachments and encumbrances of any nature, and give's to the 
municipality all rights usually instant to a mortgage, except that the mortgagee does not 
have any right. of possession of the real estate until the right of redemption expires. 
Payments accepted during the redemption period may not interrupt or extend the 
redemption period or in any way affect the foreclosure procedures. 
2. Foreclosure. If the mortgage, including interest and costs, is not paid within 12 
months of the date on willch the certificate was filed in the registry of deeds, as provided 
in tills section, the mortgage is deemed foreclosed and the right of redemption expired. 
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3. Inventory. The filing of the certificate in the registry of deeds is sufficient notice 
of the existence of the mortgage. Whenever the municipality acquires title to real estate, 
the municipal assessor shall cause an inventory to be riiade of all· such real estate. The 
inventory must contain a description of the real estate, amount of accrued taxes by years 
and any information necessary to the administration and supervision of the real estate. 
4. Sale. The municipal assessor shall sell or shall convey any inventoried real estate, 
but shall in all cases of sales, except sales to former owners of the real estate, give public 
notice of the proposal to sell the real estate and shall ask for competitive bids and sell to 
the highest bidder with the right ofrejecting all bids. 
5. 
Foreclosure receipts. 
Following the sale by the municipal assessor of real 
property acquired through the tax lien cerlificate procedure outlined in this chapter, all 
claims of the municipality evolving from the homestead property tax deferral are 
satisfied, as well as any tax delinquencies relative to the property in question in the 
municipality where located. The residual amount resulting from the sale of the property 
is to be returned to the former owner or to the owner's heirs or devisees. 
§6287. Listing of tax-deferred property; interest accrual 
1. Tax-deferred property list. If eligibility for deferral of homestead property is 
established as provided in this chapter, the municipal assessor shall show on the current 
ad valorem assessment and tax roll which property is tax-deferred property by an entry, 
clearly designating that property as tax-deferred property, 
2. Interest. Interest shall accrue on the 'actual amount of taxes deferred by the 
municipality for the tax-deferred property at the rate of the higher of 6% per year or the 
municipal interest rate for unpaid taxes for the years for which taxes were deferred. 
§6288. Recording liens in county; recording constitutes notice of municipal lien 
1. Recording of liens. The municipal assessor shall record in the mortgage records 
of the county a list of tax-deferred properties of that municipality. The list must contain a 
description of the property as listed in the municipal valuation together with the name of 
the owner listed on the valuation. The list must be corrected annually to reflect the 
addition or deletion of tax-deferred properties as well as partial payments received. 
2. 
Notice of recording. 
The recording of the tax-deferred properties under 
subsection 1 is notice that the municipality claims a lien against those properties in the 
amount of the deferred taxes pius interest together with any fees paid to the county 
register of deeds in connection with the recording, release or satisfaction of the lien, even 
"though the amount of taxes, interest or fees is not listed. 
§6289. Annual notice to taxpayer 
1. Annual deferral notice. On or before December 15th of each year, the municipal 
assessor shall send a notice to each taxpayer who has claimed deferral of property taxes 
for the current tax year. The notice must: 
A. Inform the taxpayer that the property taxes have been deferred in the current year; 
B. Show the total amount of deferred taxes remaining unpaid since initial application 
Jor deferral and the interest accruing therein to November 15th of the current year; 
C. Inform the taxpayer that voluntary payment of the deferred taxes may be made at 
any time to the municipality; and 
D. Contain any other information that the municipal assessor considers necessary to 
facilitate administration of the homestead property tax deferral program under this 
chapter, including, but not limited to, the right of the taxpayer to submit any amount 
of money to reduce the total amounlofthe deferred taxes and interest. 
2. 
Notice mailed. The municipal assessor shall give the notice required under 
subsection 1 by mail sent to the residence address of the taxpayer as shown in the claim 
for deferral or as otherwise determined by the municipal assessor to be the correct address 
f the taxpayer. 
§6290. Events requiring payment of deferred tax and interest 
Subject to section 6292, all property taxes deferred under this chapter, including 
accrued interest, become payable as provided in section 6291 when: 
1. Death of claimant. The taxpayer who claimed deferral of collection of property 
taxes on the homestead dies or, if there was more than one claimant, the last survivor of 
the taxpayers who originally claimed deferral· of collection of property taxes under 
section 6283 dies; 
2. Sale of property. The property with· respect to which deferral of collection of 
taxes is claimed is sold, a contract to sell is entered into or a person other than the 
taxpayer or taxpayers who claimed the deferral becomes the owner of the property. 
3. Claimant moves. The tax-deferred property is no longer the homestead of the 
taxpayer or taxpayers who claimed the deferral, except in the case of a taxpayer required 
to be absent from that tax-deferred property by reason of health; or 
4. Removal of home. The tax-deferred property is a mobile or floating home and is 
moved out of the State. 
§6291. Time for payments; delinquencies 
Whenever a circumstance listed Llnder section 6290 occurs: 
1. Continuation of assessment year. The deferral of taxes for the assessment year 
in which the circumstance occurs continues for that assessment year; 
2. Deferred property taxes due. The amount of deferred property taxes, including 
accrued interest, for all years is due and payable to the bureau by April 30th of the year 
following the calendar year in which the circumstance occurs, except as provided in 
subsection 3 and section 6292; 
3. Out-of-state move. Notwithstanding the provisions of subsection 2 and section 
6294. when the circumstance listed in section 6290, subsection 4 occurs. [he amount of 
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defen-ed taxes is due and payable 5 days before the date of removal of the property from 
the State; and 
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4. Delinquency. If the amount falling due as provided in this section is not paid on 
the indicated due date or as extended under section 6294, that amount is deemed 
delinquent as of that date and the pf0peliy is subject to foreclosure as provided in section 
6286. 
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§6292. Election by spouse to continue tax deferral 
1. . Continuation by spouse. When one of the circumstances listed in section 6290, 
subsections 1 to 3 occurs, the spouse who did not or was not eligible to file a claim jointly 
with the taxpayer may continue the propertv in its deferred tax status by filing a claim 
within the time and in the manner provided under section 6283 if: 
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A. The spouse of the taxpayer is or will be 65 years of age or older not later than 6 
months fronl the day one of the circumstances listed in section 6290, subsections 1 to 
occurs; and 
B. 
The property is the homestead of the spouse of the taxpayer and meets the 
requirements of section 6284, subsection 2. 
2. Continuation of deferral by spouse. A spouse who does not meet the age 
requirements of subsection 1, paragraph A but is otherwise qualified to continue the 
property in its tax-deferred status under subsection 1 may continue the deferral of 
property· taxes deferred for 'previous years by filing a claim within the time and in the 
manner provided under section 6283. If a spouse eligible for and continuing the deferral 
of taxes previously deferred under this subsection becomes 65 years of-age prior to April 
st of any year, the spouse may elect to continue the deferral of taxes of previous years, 
under this subsection and may elect to defer the current assessment year's taxes on the 
homestead by filing a claim within the time and in the manner provided under section 
6283. Thereafter, payment of the taxes levied on the homestead and deferred under this 
subsection and payment of taxes levied on the homestead in the current assessment year 
and in future years may be deferred in the manner provided in and subj ect to this chapter. 
§6293. Voluntary payment of deferred tax and interest 
1. Payments. All payments of deferred taxes must be made to the municipal tax 
collector. 
2. Taxes and interest. Subj ect to subsection 3, all or part of the deferred taxes and 
accrued interest may at any time be paid to the municipal tax collector by: 
A. The taxpayer or'the spouse of the taxpayer; or 
B. The next of kin of the taxpayer, heir at law of the taxpayer, child of the taxpayer 
or any person having or claiming a legal or equitable interest in the property. 
3. Notice of payment. A person listed in subsection 2, paragraph B may make the 
payments under tlllS section only if no objection is made by the taxpayer within 30' days 
after the municipal tax collector deposits in the mail notice to the taxpayer of the fact that 
the payment has been tendered. 
4. Payment application. Any payment made under this section must be applied first 
against accrued interest and any remainder against the deferred taxes. This payment does 
not affect the deferred-tax status of the property. Unless otherwise provided by law, this 
payrrient does not give the person paying the taxes any interest in the property or any 
claim against the estate, in the absence of a valid agreement. 
5. Lien discharge. When the deferred taxes and accrued interest are paid in full 
under this section and the property is no longer subject to deferral, the municipal assessor 
shall prepare and record in the county in which the property is located a !ie.n discharge. 
§6294. Extension of time for payment upon death of claimant or spouse 
1. Payment extension. If the taxpayer who claimed· a homestead property tax 
defelTaI under this chapter dies or if a spouse who continued the deferral under section 
6292 dies, the municipal assessor may extend the time for payment of the deferred taxes 
and interest accruing with respect to the taxes becoming due and payable under section 
166291, subsection 2, if: 
A. The homestead property becomes property of an individual or individuals: 
(1) By inheritance or devise; or 
(2) 
If the individual or individuals are heirs or devisees in the course of 
settlement of the estate; 
B. An individual or individuals commence occupancy of the property as a principal 
residence on or before August 15th of the calendar year following the calendar year 
of death; or 
C. 
An individual or individuals make application to the municipal assessor for an 
extension of time for payment of the deferred taxes and interest prior to August 15th 
of the calendar year following the calendar year of the death. 
2. Extension terms. Subject to paragraph B, an extension granted under this section 
may not exceed 5 years after August 15th of the calendar year following the calendar year 
of. the death. The temlS and conditions under which the extension is granted must be in 
accordance with a written agreement entered into by the municipal assessor 'and the 
individual or individuals. 
An extension granted under this section tenninates immediately if: 
A. 
The homestead property is sold or otherwise transferred by any party to the 
extension agreement; 
B .. All of the heirs or devisees who are parties to the extension agreement cease to 
occupy the property as a principal residence; or 
C. The hom~stead property is a mobile or t10ating home and is moved out of the 
State. 
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3. Accrued interest. During the period of extension, and until paid, the deferred 
taxes continue to accrue interest in the same niariner and at the same rate as provided 
under section 6287, subsection 2. Interest may not accrue upon interest. 
§6295. Limitations 
The provisions of this chapter do not: 
1. Foreclosure. Prevent the collection, by foreclosure, of property taxes that become 
a lien against tax-deferred property; and 
2. Land provisions. Affect any provlslOn of any mortgage or other instrument 
relating to land requiring a person to pay property taxes. 
§6296. Deed or contract clauses preventing application for deferral prohibited; 
clauses void 
After the effective date of this chapter, it is unlawful for a mortgage trust deed or land 
sale contract to contain a clause or statement that prohibits the owner from applying for 
the benefits of the deferral of homestead propeliy taxes provided in this chapter. Any 
such clause or statement in a mortgage trust deed or land sale contract executed after the 
effective date of this chapter is void. 
SUMMARY 
This bill provides propeliy tax relief for the purpose of maintaining the State's 
traditional communities through 2 methods. 
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The first method allows municipalities to enter into arrangements with natural 
resources support businesses through which the business grants a time-limited easement 
to the municipality to limit the use of property to natural resources business support in 
ex~hange for payments from the municipality to alleviate a portion of the property tax 
burden. 
The 2nd method provides a system for municipalities to adopt an ordinance to permit 
persons 65 years of age or older to choose to defer property taxes on homesteads until the 
property is transferred in order to enable traditional families to remain in their homes 
despite increasing property values and taxes. Eligibility may be income-limited. 
The bill also extends Pine Tree Development Zone benefits to natural resources 
support businesses located in a Pine Tree Development Zone.