An Act To Make the Homestead Property Tax Exemption More Flexible for Municipalities and Remain Revenue Neutral for the State
Maine Legislature, Session 125, LD 0838
Committee: Taxation
Sponsors: CHASE, COLLINS, HARMON, KNIGHT, KUMIEGA, PILON
Amends: 36 MRSA §683, 36 MRSA §685

Legislative Document 
No. 838 
H.P. 635 
House of Representatives, March 3, 2011 
An Act To Make the Homestead Property Tax Exemption More 
Flexible for Municipalities and Remain Revenue Neutral for the 
State 
Reference to the Committee on Taxation suggested and ordered printed. 
HEATHER J.R. PRIEST 
Clerk 
Presented by Representative CHASE of Wells. 
Cosponsored by Senator COLLINS of York and 
Representatives: HARMON of Palermo, KNIGHT of Livermore Falls, KUMIEGA of Deer 
Isle, PILON of Saco. 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1.  36 MRSA §683, sub-§1, as amended by PL 2009, c. 213, Pt. YYY, §1 
and affected by c. 652, Pt. A, §63, is further amended to read: 
1.  Exemption amount.  Except for assessments for special benefits, and except as 
provided in subsection 1-B, the just value of $10,000 $5,000 of the homestead of a 
permanent resident of this State who has owned a homestead in this State for the 
preceding 12 months is exempt from taxation.  In determining the local assessed value of 
the exemption, the assessor shall multiply the amount of the exemption by the ratio of 
current just value upon which the assessment is based as furnished in the assessor's 
annual return pursuant to section 383.  If the title to the homestead is held by the 
applicant jointly or in common with others, the exemption may not exceed $10,000 of the 
just value of the homestead the value provided in this section and subsection 1-B, if 
applicable, but may be apportioned among the owners who reside on the property to the 
extent of their respective interests.  A municipality responsible for administering the 
homestead exemption has no obligation to create separate accounts for each partial 
interest in a homestead owned jointly or in common. 
Sec. 2.  36 MRSA §683, sub-§1-B is enacted to read: 
1-B.  Local option exemption.  A municipality may by ordinance add to the value of 
the exemption established by subsection 1.  The just value of the homestead exemption 
established by local option may not exceed 200% of the dollar value of the exemption 
established in subsection 1.  No amount of the tax revenue lost to the municipality by 
reason of the local option exemption authorized by this subsection may be reimbursed by 
the State pursuant to section 685. 
Sec. 3.  36 MRSA §685, sub-§2, as amended by PL 2005, c. 2, Pt. F, §4 and 
affected by §5, is further amended to read: 
2.  Entitlement to reimbursement by the State; calculation.  A municipality that 
has approved homestead exemptions under this subchapter may recover from the State 
50% 100% of the taxes lost by reason of the exemptions provided in subsection 1 upon 
proof in a form satisfactory to the bureau.  The bureau shall reimburse the Unorganized 
Territory Education and Services Fund for 50% 100% of taxes lost by reason of the 
exemption provided in subsection 1. 
Sec. 4.  Legislative finding.  The Legislature finds that the municipally adopted 
portion of the homestead property tax exemption authorized by this Act is not a statutory 
property tax exemption or credit for purposes of the Constitution of Maine, Article IV, 
Part Third, Section 23 and that state reimbursement for property tax revenue loss under 
that provision is not required. 
SUMMARY 
This bill amends the law governing the homestead property tax exemption by 
reducing the exemption from $10,000 to $5,000 and providing that the State must 
reimburse municipalities for 100% of the exemption rather than 50%.  The bill also 
authorizes municipalities by ordinance to add a local level of exemption of up to 200% of 
the state-required exemption.  State reimbursement is not required for a locally adopted 
exemption.