An Act To Reestablish State-municipal Revenue-sharing as a Compact between the State and Municipal Governments
Maine Legislature, Session 126, LD 0940
Committee: Appropriations and Financial Affairs
Sponsors: ALFOND, EVES, BOYLE, GRATWICK, KATZ, LACHOWICZ, LANGLEY, SAVIELLO, KNIGHT, MAKER
Amends: 5 MRSA §1667-B, 5 MRSA §13090-K, 21-A MRSA §1124, 30-A MRSA §5681, 36 MRSA §699, 36 MRSA §700-A, 36 MRSA §1815, 36 MRSA §2559

Legislative Document 
No. 940 
S.P. 317 
In Senate, March 7, 2013 
An Act To Reestablish State-municipal Revenue-sharing as a 
Compact between the State and Municipal Governments 
Reference to the Committee on Appropriations and Financial Affairs suggested and ordered 
printed. 
DAREK M. GRANT 
Secretary of the Senate 
Presented by President ALFOND of Cumberland. 
Cosponsored by Speaker EVES of North Berwick and 
Senators: BOYLE of Cumberland, GRATWICK of Penobscot, KATZ of Kennebec, 
LACHOWICZ of Kennebec, LANGLEY of Hancock, SAVIELLO of Franklin, 
Representatives: KNIGHT of Livermore Falls, MAKER of Calais. 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1.  5 MRSA §1667-B, sub-§§3 and 4, as amended by PL 2011, c. 655, Pt. 
K, §1, are further amended to read: 
3.  Legislative review.  Excluding the State - Municipal Revenue Sharing program, 
Other Special Revenue Funds account, the Irrevocable Disproportionate Tax Burden 
Trust Fund program, Other Special Revenue Funds account in the Office of the Treasurer 
of State and accounts when allotting funds to pay death benefits pursuant to Title 25, 
chapter 195-A, allotment of the funds under subsection 1 is subject to review by the joint 
standing committee of the Legislature having jurisdiction over appropriations and 
financial affairs; 
4.  30-day wait.  Excluding the State - Municipal Revenue Sharing program, Other 
Special Revenue Funds account, the Irrevocable Disproportionate Tax Burden Trust Fund 
program, Other Special Revenue Funds account in the Office of the Treasurer of State 
and accounts when allotting funds to pay death benefits pursuant to Title 25, chapter 
195-A, allotment of the funds under subsection 1 does not take effect until 30 days after 
the approval by the Governor; and 
Sec. 2.  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. 3.  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. 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 the necessary funds under paragraph B 
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.  To provide additional support for 
municipalities experiencing a higher-than-average property tax burden, there is 
established the Irrevocable Disproportionate Tax Burden Trust Fund.  The trustees of the 
trust funds, referred to in this subsection as "the trustees," are the Treasurer of State, the 
State Controller, the Attorney General and a representative of municipal governments 
appointed by the Governor from a list of nominees provided by a statewide association 
representing municipal governments. 
A.  The trust funds established under this subsection are established to create a stable 
source of revenue-sharing funds for municipal governments.  Funds transferred to the 
trust funds must be held in trust for the exclusive purpose of providing revenues to 
aid municipal governments and may not be encumbered for, or diverted to, other 
purposes. 
B.  The trustees shall determine all matters pertaining to the management and 
administration of the trust funds. 
C.  By March 1st annually the trustees shall submit a report to the joint standing 
committee of the Legislature having jurisdiction over appropriations and financial 
affairs regarding the status of the trust funds and detailing transfers to and 
distributions from the trust funds over the previous calendar year. 
Sec. 6.  30-A MRSA §5681, sub-§§4-A and 4-B, as enacted by PL 1999, c. 731, 
Pt. U, §4, are amended to read: 
4-A.  Distribution of Irrevocable Local Government Trust Fund.  The Treasurer 
of State shall transfer the balance in the Irrevocable Local Government Trust Fund on the 
20th day of each month.  Money in the Irrevocable Local Government 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. 
4-B.  Distribution of Irrevocable Disproportionate Tax Burden Trust Fund.  The 
Treasurer of State shall transfer the balance in the Irrevocable Disproportionate Tax 
Burden Trust Fund on the 20th day of each month.  Money in the Irrevocable 
Disproportionate Tax Burden Trust Fund must be distributed to each municipality in 
proportion to the product of the population of the municipality multiplied by the 
disproportionate 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 Irrevocable Local Government 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 Irrevocable Local Government Trust Fund.  A percentage share of the 
amounts transferred to the Irrevocable Local Government Trust Fund each month must be 
transferred to the Irrevocable Disproportionate Tax Burden Trust 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.  30-A MRSA §5681, sub-§5-C, as amended by PL 2011, c. 380, Pt. I, §1, 
is further amended to read: 
5-C.  Transfers to General Fund.  For the months beginning on or after July 1, 
2009, $25,383,491 in fiscal year 2009-10, $38,145,323 in fiscal year 2010-11, 
$40,350,638 in fiscal year 2011-12 and $44,267,343 in fiscal year 2012-13 from the total 
transfers pursuant to subsection 5 must be transferred to General Fund undedicated 
revenue.  The amounts transferred to General Fund undedicated revenue each fiscal year 
pursuant to this subsection must be deducted from the distributions required by 
subsections 4-A and 4-B based on the percentage share of the transfers to the Irrevocable 
Local Government Trust Fund pursuant to subsection 5.  The reductions in this subsection 
must be allocated to each month proportionately based on the budgeted monthly transfers 
to the Irrevocable Local Government Trust Fund as determined at the beginning of the 
fiscal year. 
Sec. 9.  36 MRSA §699, sub-§2, as enacted by PL 2005, c. 623, §1, is amended to 
read: 
2.  Intent.  It is the intent of the Legislature to fund fully transfers to the Irrevocable 
Disproportionate Tax Burden Trust Fund under section 700-A, subsection 1 and 
reimbursements under the business equipment tax reimbursement program under section 
6652, subsection 4, paragraph B. 
Sec. 10.  36 MRSA §700-A, as enacted by PL 2005, c. 623, §1, is amended to 
read: 
§700-A.  Additional municipal compensation 
1.  Transfers to Irrevocable Disproportionate Tax Burden Trust Fund.  Pursuant 
to section 699, subsection 2 and in order to provide additional compensation to 
municipalities affected by property tax exemptions provided under this subchapter, the 
Treasurer of State shall make the following transfers as provided in section 700-B to the 
Irrevocable Disproportionate Tax Burden Trust Fund established in Title 30-A, section 
5681, subsection 3: 
A.    In fiscal year 2009-10, $2,000,000; 
B.    In fiscal year 2010-11, $2,500,000; 
C.    In fiscal year 2011-12, $3,000,000; 
D.    In fiscal year 2012-13, $3,500,000; and 
E.    In fiscal year 2013-14 and subsequent fiscal years, $4,000,000. 
Sec. 11.  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. 12.  36 MRSA §2559, as amended by PL 2011, c. 542, Pt. A, §141, 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 - Adult Developmental Services program and 
the Office of Substance Abuse - Medicaid Seed program within the Department of Health 
and Human Services. 
Sec. 13.  Effective date.  This Act takes effect July 1, 2015. 
SUMMARY 
Beginning July 1, 2015, this bill restructures 2 funds that are the depositories of state-
municipal revenue-sharing resources prior to distribution to municipalities as irrevocable 
trusts and renames the funds.