An Act To Reestablish the Municipal Revenue Sharing Program as a Compact between the State and Municipal Governments
Maine Legislature, Session 125, LD 0623
Committee: Taxation
Sponsors: SAVIELLO
Amends: 5 MRSA §13090-K, 21-A MRSA §1124, 23 MRSA §4210-B, 30-A MRSA §5681, 36 MRSA §1815, 36 MRSA §2559

Legislative Document 
No. 623 
S.P. 204 
In Senate, February 17, 2011 
An Act To Reestablish the Municipal Revenue Sharing Program as 
a Compact between the State and Municipal Governments 
Reference to the Committee on Taxation suggested and ordered printed. 
JOSEPH G. CARLETON, JR. 
Secretary of the Senate 
Presented by Senator SAVIELLO of Franklin. 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1.  5 MRSA §13090-K, sub-§2, as enacted by PL 2001, c. 439, Pt. UUUU, 
§1, is amended to read: 
2.  Source of fund.  Beginning July 1, 2003 and every July 1st thereafter, the State 
Controller shall transfer to the Tourism Marketing Promotion Fund an amount, as 
certified by the State Tax Assessor, that is equivalent to 5% of the 7% tax imposed on 
tangible personal property and taxable services pursuant to Title 36, section 1811, for the 
first 6 months of the prior fiscal year after the reduction for the transfer to the Irrevocable 
Local Government Trust Fund as described by Title 30-A, section 5681, subsection 5.  
Beginning on October 1, 2003 and every October 1st thereafter, the State Controller shall 
transfer to the Tourism Marketing Promotion Fund an amount, as certified by the State 
Tax Assessor, that is equivalent to 5% of the 7% tax imposed on tangible personal 
property and taxable services pursuant to Title 36, section 1811, for the last 6 months of 
the prior fiscal year after the reduction for the transfer to the Irrevocable Local 
Government Trust Fund.  The tax amount must be based on actual sales for that fiscal 
year and may not consider any accruals that may be required by law.  The amount 
transferred from General Fund sales and use tax revenues does not affect the calculation 
for the transfer to the Irrevocable Local Government Trust Fund. 
Sec. 2.  21-A MRSA §1124, sub-§2, ¶B, as amended by PL 2007, c. 443, Pt. B, 
§4, is further amended to read: 
B.  Two million dollars of the revenues from the taxes imposed under Title 36, Parts 
and 8 and credited to the General Fund, transferred to the fund by the State 
Controller on or before January 1st of each year, beginning January 1, 1999.  These 
revenues must be offset in an equitable manner by an equivalent reduction within the 
administrative divisions of the legislative branch and executive branch agencies.  
This section may not affect the funds distributed to the Irrevocable Local 
Government Trust Fund under Title 30-A, section 5681. 
Sec. 3.  23 MRSA §4210-B, sub-§7, as enacted by PL 2007, c. 677, §1, is 
amended to read: 
7.  Sales tax revenue.  Beginning July 1, 2009 and every July 1st thereafter, the State 
Controller shall transfer to the STAR Transportation Fund an amount, as certified by the 
State Tax Assessor, that is equivalent to 50% of the revenue from the tax imposed on the 
value of rental for a period of less than one year of an automobile pursuant to Title 36, 
section 1811 for the first 6 months of the prior fiscal year after the reduction for the 
transfer to the Irrevocable Local Government Trust Fund under Title 30-A, section 5681, 
subsection 5. Beginning on October 1, 2009 and every October 1st thereafter, the State 
Controller shall transfer to the STAR Transportation Fund an amount, as certified by the 
State Tax Assessor, that is equivalent to 50% of the revenue from the tax imposed on the 
value of rental for a period of less than one year of an automobile pursuant to Title 36, 
section 1811 for the last 6 months of the prior fiscal year after the reduction for the 
transfer to the Irrevocable Local Government Trust Fund. The tax amount must be based 
on actual sales for that fiscal year and may not consider any accruals that may be required 
by law. The amount transferred from General Fund sales and use tax revenues does not 
affect the calculation for the transfer to the Irrevocable Local Government Trust Fund. 
Sec. 4.  30-A MRSA §5681, sub-§1, as enacted by PL 1987, c. 737, Pt. A, §2 and 
Pt. C, §106 and amended by PL 1989, c. 6; c. 9, §2; and c. 104, Pt. C, §§8 and 10, is 
further amended to read: 
1.  Findings and purpose.  The Legislature finds that: 
A.    The principal problem of financing municipal services is the burden on the 
property tax; and 
B.    To stabilize the municipal property tax burden and to aid in financing all 
municipal services, it is necessary to provide funds from the broad-based taxes of 
State Government.; and 
C.  Actions of the Legislature that prevent these necessary funds from being used for 
their established purpose have the effect of raising property taxes, rather than broad-
based taxes, to balance the budget of State Government. 
Sec. 5.  30-A MRSA §5681, sub-§3, as amended by PL 2009, c. 213, Pt. S, §3 
and affected by §16, is further amended to read: 
3.  Revenue-sharing funds.  To strengthen the state-municipal fiscal relationship 
pursuant to the findings and objectives of subsection 1, there is established the 
Irrevocable Local Government Trust Fund., referred to in this section as "the trust fund."  
To provide additional support for municipalities experiencing a higher-than-average 
property tax burden, there is established the Disproportionate Tax Burden Fund. 
A.  The trust fund is established to create a stable source of revenue-sharing funds for 
local governments.  Funds transferred to the trust fund must be held in trust for the 
exclusive purpose of providing revenues to aid local governments and may not be 
encumbered for, or diverted to, other purposes. 
B.  The Treasurer of State, the State Controller, the Attorney General and a 
representative of a municipal government appointed by the Governor from a list of 
nominees provided by an association representing municipal governments serve as 
trustees of the trust fund. 
C.  The trustees of the trust fund shall jointly make the final decision on all matters 
pertaining to the management and administration of the trust fund. 
D.  The trustees of the trust fund shall make a written report regarding the status of 
the trust fund and any other matters relating to the trust fund to the joint standing 
committee of the Legislature having jurisdiction over appropriations and financial 
affairs on or before March 1st of each year. 
Sec. 6.  30-A MRSA §5681, sub-§4-A, as enacted by PL 1999, c. 731, Pt. U, §4, 
is amended to read: 
4-A.  Distribution of trust fund.  The Treasurer of State shall transfer the balance in 
the Local Government Fund trust fund on the 20th day of each month.  Money in the 
Local Government Fund trust fund must be distributed to each municipality in proportion 
to the product of the population of the municipality multiplied by the property tax burden 
of the municipality. 
Sec. 7.  30-A MRSA §5681, sub-§5, as amended by PL 2009, c. 213, Pt. S, §4 
and affected by §16, is further amended to read: 
5.  Transfers to funds.  No later than the 10th day of each month, the State 
Controller shall transfer to the Local Government Fund trust fund 5% of the receipts 
during the previous month from the taxes imposed under Title 36, Parts 3 and 8, and Title 
36, section 2552, subsection 1, paragraphs A to F and L, and credited to the General Fund 
without any reduction, except that the postage, state cost allocation program and 
programming costs of administering state-municipal revenue sharing may be paid by the 
Local Government Fund trust fund.  A percentage share of the amounts transferred to the 
Local Government Fund trust fund each month must be transferred to the 
Disproportionate Tax Burden Fund and distributed pursuant to subsection 4-B as follows: 
C.  For months beginning on or after July 1, 2009 but before July 1, 2010, 15%; 
D.  For months beginning on or after July 1, 2010 but before July 1, 2011, 16%; 
E.  For months beginning on or after July 1, 2011 but before July 1, 2012, 17%; 
F.  For months beginning on or after July 1, 2012 but before July 1, 2013, 18%; 
G.  For months beginning on or after July 1, 2013 but before July 1, 2014, 19%; and 
H.  For months beginning on or after July 1, 2014, 20%. 
Sec. 8.  36 MRSA §1815, sub-§2, as enacted by PL 1999, c. 477, §1, is amended 
to read: 
2.  Monthly transfer.  By the 20th day of each month, the assessor shall notify the 
State Controller and the Treasurer of State of the amount of revenue attributable to the tax 
collected under this Part in the previous month on sales occurring on the Passamaquoddy 
reservation at either Pleasant Point or Indian Township reduced by the transfer to the 
Irrevocable Local Government Trust Fund required by Title 30-A, section 5681.  When 
notified by the assessor, the State Controller shall transfer that amount to the 
Passamaquoddy Sales Tax Fund. 
Sec. 9.  36 MRSA §2559, as amended by PL 2009, c. 213, Pt. S, §13 and affected 
by §16, is further amended to read: 
§2559.  Application of revenues 
Revenues derived by the tax imposed by this chapter must be credited to a General 
Fund suspense account.  On or before the last day of each month, the State Controller 
shall transfer a percentage of the revenues received by the State Tax Assessor during the 
preceding month pursuant to the tax imposed by section 2552, subsection 1, paragraphs A 
to F and L to the Irrevocable Local Government Trust Fund as provided by Title 30-A, 
section 5681, subsection 5.  The balance remaining in the General Fund suspense account 
must be transferred to service provider tax General Fund revenue.  On or before the 15th 
day of each month, the State Controller shall transfer all revenues received by the 
assessor during the preceding month pursuant to the tax imposed by section 2552, 
subsection 1, paragraphs G to J to the Medical Care Services Other Special Revenue 
Funds account, the Other Special Revenue Funds Mental Health Services - Community 
Medicaid program, the Medicaid Services - Mental Retardation program and the Office 
of Substance Abuse - Medicaid Seed program within the Department of Health and 
Human Services. 
SUMMARY 
This bill restructures the Local Government Fund, which is the depository of the 
state-municipal revenue-sharing resources, as an irrevocable trust, and renames it the 
Irrevocable Local Government Trust Fund.