An Act To Ensure That Municipalities Refund Amounts Collected in Excess of Tax Liens
Maine Legislature, Session 125, LD 0764
Committee: State and Local Government
Sponsors: McCLELLAN, BLACK, DOW, DUNPHY, HARMON
Amends: 36 MRSA §949

Legislative Document 
No. 764 
H.P. 571 
House of Representatives, March 1, 2011 
An Act To Ensure That Municipalities Refund Amounts Collected 
in Excess of Tax Liens 
Reference to the Committee on State and Local Government suggested and ordered printed. 
HEATHER J.R. PRIEST 
Clerk 
Presented by Representative McCLELLAN of Raymond. 
Cosponsored by Representatives: BLACK of Wilton, DOW of Waldoboro, DUNPHY of 
Embden, HARMON of Palermo. 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1.  36 MRSA §949 is enacted to read: 
§949.  Disbursement of excess funds 
A municipality that obtains title to residential real estate under the operation of this 
article shall disburse to the former owner the excess of any funds as provided in this 
section. 
1.  Definitions.  As used in this section, unless the context otherwise indicates, the 
following terms have the following meanings. 
A.  "Excess of any funds" means the amount obtained for the disposition of 
residential real estate less: 
(1)  All tax liens imposed on the residential real estate by the municipality, 
including interest; 
(2)  Fees for recordation and discharge of the lien, as established by Title 33, 
section 751, plus $13; 
(3)  The fee established in section 943 for sending a notice if the notice is actually 
sent, including certified mail, return receipt requested fees; 
(4)  Any court costs; 
(5)  All expenses incurred in disposing of the residential real estate; and 
(6)  Any property taxes that would have been assessed on the property while the 
property was held by the municipality within 180 days of foreclosure. 
B.  "Former owner" means a party named on a tax lien mortgage at the time of the 
levy of a tax lien or that party's successors, heirs or assigns. 
2.  Time and form of return; notice.  Within 30 days of the disposition of 
residential real estate or 180 days of foreclosure, whichever is earlier, a municipality shall 
mail by certified mail, return receipt requested, to the former owner's last known address, 
notice of the excess of any funds.  The notice must include an itemized statement 
showing the amount for which the real estate was sold and all deductions made from that 
amount.  The notice also must include directions for the redemption of the excess of any 
funds, including the hours of operation of the clerk of the municipality. 
3.  Escrow; failure to redeem.  A municipality shall hold the excess of any funds in 
escrow for 36 months for the benefit of the former owner.  The municipality shall pay 
immediately the excess of any funds upon the personal appearance of the former owner or 
a legal representative of the former owner.  If the former owner or a legal representative 
of the former owner fails to appear personally within 36 months of the date notice is 
provided under subsection 2, the excess of any funds must be paid to the Treasurer of 
State to be credited to the General Fund. 
4.  Failure to dispose of residential real estate.  If a municipality does not dispose 
of residential real estate within 180 days of foreclosure, the excess of any funds is 
determined by subtracting from the fair market value of the real estate at the time of 
foreclosure, as determined by an independent appraisal, the costs specified in subsection 
1, paragraph A and the cost of the appraisal performed pursuant to this subsection. 
5.  Unorganized territory.  The obligations of a municipality under this section 
apply to the State with regard to property in the unorganized territory. 
SUMMARY 
Under current law, if a municipality forecloses on a parcel of real estate for failure to 
pay taxes owed on that real estate, the municipality is under no obligation to return any 
funds that exceed the amount owed in taxes after the sale of the property. 
This bill requires a municipality that forecloses on residential real estate to return the 
excess funds, after subtracting the tax lien, interest, fees for recording the lien, costs of 
mailing notice, court costs, taxes that would have been assessed while the property was 
held by the municipality and any other expenses incurred in disposing of the real estate.  
Notice of the availability of the excess funds must be provided to the former owner 
within 30 days of sale of the real estate or 180 days of the foreclosure, whichever is 
sooner.  If the former owner fails to claim the excess funds within 36 months after notice 
of the availability of excess funds, the municipality must remit the excess funds to the 
Treasurer of State for credit to the General Fund.