An Act To Amend the Property Tax Laws
Maine Legislature, Session 128, LD 1521
Committee: Taxation
Sponsors: HILLIARD, BICKFORD
Amends: 36 MRSA §652, 36 MRSA §1102, 36 MRSA §1106-A, 36 MRSA §1114, 36 MRSA §508, 36 MRSA §1482

Legislative Document
No. 1521
H.P. 1045
House of Representatives, April 25, 2017
An Act To Amend the Property Tax Laws
Submitted by the Department of Administrative and Financial Services pursuant to Joint 
Rule 204.
Reference to the Committee on Taxation suggested and ordered printed.
ROBERT B. HUNT
Clerk
Presented by Representative HILLIARD of Belgrade.
Cosponsored by Representative: BICKFORD of Auburn.
Be it enacted by the People of the State of Maine as follows: 
PART A 
Sec. A-1.  36 MRSA §652, sub-§1, ¶C, as amended by PL 2007, c. 627, §20, is 
further amended to read: 
C.  Further conditions to the right of exemption under paragraphs A and B are that: 
(1)  Any corporation claiming exemption under paragraph A must be organized 
and conducted exclusively for benevolent and charitable purposes.  For the 
purposes of this subsection, holding land primarily for conservation purposes or 
public access purposes is not a benevolent or charitable purpose; 
(2)  A director, trustee, officer or employee of an organization claiming 
exemption may not receive directly or indirectly any pecuniary profit from the 
operation of that organization, except as reasonable compensation for services in 
effecting its purposes or as a proper beneficiary of its strictly benevolent or 
charitable purposes; 
(3)  All profits derived from the operation of an organization claiming exemption 
and the proceeds from the sale of its property must be devoted exclusively to the 
purposes for which it is organized;  
(4)  The institution, organization or corporation claiming exemption under this 
section must file with the assessors upon their request a report for its preceding 
fiscal year in such detail as the assessors may reasonably require; 
(5)  An exemption may not be allowed under this section in favor of an 
agricultural fair association holding pari-mutuel racing meets unless it has 
qualified the next preceding year as a recipient of a stipend from the Stipend 
Fund provided in Title 7, section 86; 
(6)  An exemption allowed under paragraph A or B for real or personal property 
owned and occupied or used to provide federally subsidized residential rental 
housing is limited as follows:  Federally subsidized residential rental housing 
placed in service prior to September 1, 1993 by other than a nonprofit housing 
corporation that is acquired on or after September 1, 1993 by a nonprofit housing 
corporation and the operation of which is not an unrelated trade or business to 
that nonprofit housing corporation is eligible for an exemption limited to 50% of 
the municipal assessed value of that property. 
An exemption granted under this subparagraph must be revoked for any year in 
which the owner of the property is no longer a nonprofit housing corporation or 
the operation of the residential rental housing is an unrelated trade or business to 
that nonprofit housing corporation. 
(a)  For the purposes of this subparagraph, the following terms have the 
following meanings. 
(i)  "Federally subsidized residential rental housing"  means residential 
rental housing that is subsidized through project-based rental assistance, 
operating assistance or interest rate subsidies paid or provided by or on 
behalf of an agency or department of the Federal Government. 
(ii)  "Nonprofit housing corporation" means a nonprofit corporation 
organized in the State that is exempt from tax under Section 501(c)(3) of 
the Code and has among its corporate purposes the provision of services 
to people of low income or the construction, rehabilitation, ownership or 
operation of housing. 
(iii)  "Residential rental housing" means one or more buildings, together 
with any facilities functionally related and subordinate to the building or 
buildings, located on one parcel of land and held in common ownership 
prior to the conversion to nonprofit status and containing 9 or more 
similarly constructed residential units offered for rental to the general 
public for use on other than a transient basis, each of which contains 
separate and complete facilities for living, sleeping, eating, cooking and 
sanitation. 
(iv)  "Unrelated trade or business" means any trade or business whose 
conduct is not substantially related to the exercise or performance by a 
nonprofit corporation of the purposes or functions constituting the basis 
for exemption under Section 501(c)(3) of the Code. 
(b)  Eligibility of the following property for exemption is not affected by the 
provisions of this subparagraph: 
(i)  Property used as a nonprofit nursing home, residential care facility 
licensed by the Department of Health and Human Services pursuant to 
Title 22, chapter 1663 or a community living arrangement as defined in 
Title 30-A, section 4357-A or any property owned by a nonprofit 
organization licensed or funded by the Department of Health and Human 
Services to provide services to or for the benefit of persons with mental 
illness or mental retardation; 
(ii)  Property used for student housing; 
(iii)  Property used for parsonages; 
(iv)  Property that was owned and occupied or used to provide residential 
rental housing that qualified for exemption under paragraph A or B prior 
to September 1, 1993; or 
(v)  Property exempt from taxation under other provisions of law; and 
(7)  In addition to the requirements of subparagraphs (1) to (4), an exemption is 
not allowed under paragraph A or B for real or personal property owned and 
occupied or used to provide residential rental housing that is transferred or placed 
in service on or after September 1, 1993, unless the property is owned by a 
nonprofit housing corporation and the operation of the residential rental housing 
is not an unrelated trade or business to the nonprofit housing corporation. 
For the purposes of this subparagraph, the following terms have the following 
meanings. 
(a)  "Nonprofit housing corporation" means a nonprofit corporation 
organized in the State that is exempt from tax under Section 501(c)(3) of the 
Code and has among its corporate purposes the provision of services to 
people of low income or the construction, rehabilitation, ownership or 
operation of housing. 
(b)  "Residential rental housing" means one or more buildings, together with 
any facilities functionally related and subordinate to the building or 
buildings, containing one or more similarly constructed residential units 
offered for rental to the general public for use on other than a transient basis, 
each of which contains separate and complete facilities for living, sleeping, 
eating, cooking and sanitation. 
(c)  "Unrelated trade or business" means any trade or business whose conduct 
is not substantially related to the exercise or performance by a nonprofit 
organization of the purposes constituting the basis for exemption under 
Section 501(c)(3) of the Code. 
Sec. A-2.  36 MRSA §1102, sub-§5-B is enacted to read: 
5-B.  Land trust organization.  "Land trust organization" means a nonprofit entity 
organized under Section 501(c)(3) of the Code and established for purposes of land 
conservation. 
Sec. A-3.  36 MRSA §1106-A, sub-§2-A is enacted to read: 
2-A.  Valuation method for land owned by land trust organization.  
Notwithstanding any other provision of law to the contrary, an assessor shall reduce the 
ordinary assessed valuation of the land owned by a land trust organization that meets the 
requirements of this subsection by 90%, as adjusted by the municipality's certified ratio. 
An alternate method of valuation is not allowed. In order for land to qualify for this 
reduction, the following requirements must be met: 
A.  The land must be regularly and substantially accessible to the public in the same 
manner as described in subsection 3, paragraph C; 
B.  Public access to the land must be advertised broadly; 
C.  The land must meet the criteria specified in section 1109, subsection 3, paragraph 
C, J or K; and 
D.  The land must be permanently protected in the same manner as described in 
subsection 3, paragraph A. 
If the land meets all of the requirements of this subsection and the requirements set forth 
in subsection 3, paragraph B, that land is eligible for an additional 5% reduction in 
valuation. 
Land owned by a land trust organization on which any activity is conducted that is not 
directly related to requirements of this section, including the harvesting of trees, does not 
qualify for valuation reduction under this section. 
Sec. A-4.  36 MRSA §1114, as enacted by PL 1975, c. 726, §2, is repealed. 
Sec. A-5.  Application.  This Part applies to property tax years beginning on or 
after April 1, 2018. 
PART B 
Sec. B-1.  36 MRSA §508, sub-§1, as enacted by PL 2007, c. 627, §12, is 
amended to read: 
1.  Imposition.  A municipality may impose service charges on the owner of 
residential real property, other than student housing or parsonages, that is totally exempt 
from taxation under section 652 and that is used to provide rental income, other than 
property exempt under section 652, subsection 1, paragraph G.  Such service charges 
must be calculated according to the actual cost of providing municipal services connected 
to that real property and to the persons who use that property, and revenues derived from 
the charges must be used to fund, to the extent possible, the costs of those services or an 
estimate of that cost based on factors other than the value of the property. The municipal 
legislative body shall identify those institutions and organizations upon which service 
charges are to be levied. 
A municipality that imposes service charges on any institution or organization must 
impose those service charges on every similarly situated institution or organization.  For 
the purposes of this section, "municipal services" means all fire protection, police 
protection and snow removal services provided by a municipality other than education 
and welfare. 
Sec. B-2.  36 MRSA §508, sub-§2, as enacted by PL 2007, c. 627, §12, is 
amended to read: 
2.  Limitation.  The service charges authorized by subsection 1 may be levied only 
against an owner that has total real estate assets in the municipality with a just value of 
$10,000,000 or more. The total service charges levied by a municipality on any institution 
or organization under this section may not exceed 2% of the gross annual revenues of the 
institution or organization. In order to qualify for this the 2% limitation, the institution or 
organization must file with the municipality an audit of the revenues of the institution or 
organization for the year immediately prior to the year in which the service charge is 
levied. The municipal officers shall abate the portion of the service charge that exceeds 
2% of the gross annual revenues of the institution or organization. 
Sec. B-3.  Application.  This Part applies to property tax years beginning on or 
after April 1, 2018. 
PART C 
Sec. C-1.  36 MRSA §1482, sub-§1, ¶C, as amended by PL 2013, c. 263, §1, is 
further amended to read: 
C.  For the privilege of operating a motor vehicle or camper trailer on the public 
ways, each motor vehicle, other than a stock race car, or each camper trailer to be so 
operated is subject to excise tax as follows, except as specified in subparagraph (3), 
(4) or (5):  a sum equal to 24 18 mills on each dollar of the maker's list price for the 
first or current year of model, 17 1/2 16 mills for the 2nd year, 13 1/2 14 mills for the 
3rd year, 10 11.5 mills for the 4th year, 6 1/2 10 mills for the 5th year, 6 mills for the 
6th year and 4 mills for the 6th 7th and succeeding years.  The minimum tax is $5 for 
a motor vehicle other than a bicycle with motor attached, $2.50 for a bicycle with 
motor attached, $15 for a camper trailer other than a tent trailer and $5 for a tent 
trailer.  The excise tax on a stock race car is $5. 
(1)  On new registrations of automobiles, trucks and truck tractors, the excise tax 
payment must be made prior to registration and is for a one-year period from the 
date of registration. 
(2)  Vehicles registered under the International Registration Plan are subject to an 
excise tax determined on a monthly proration basis if their registration period is 
less than 12 months. 
(3)  For commercial vehicles manufactured in model year 1996 and after, the 
amount of excise tax due for trucks or truck tractors registered for more than 
26,000 pounds and for Class A special mobile equipment, as defined in Title 
29-A, section 101, subsection 70, is based on the purchase price in the original 
year of title rather than on the list price.  Verification of purchase price for the 
application of excise tax is determined by the initial bill of sale or the state sales 
tax document provided at point of purchase.  The initial bill of sale is that issued 
by the dealer to the initial purchaser of a new vehicle. 
(4)  For buses manufactured in model year 2006 and after, the amount of excise 
tax due is based on the purchase price in the original year of title rather than on 
the list price.  Verification of purchase price for the application of excise tax is 
determined by the initial bill of sale or the state sales tax document provided at 
point of purchase.  The initial bill of sale is that issued by the dealer to the initial 
purchaser of a new vehicle. 
(5)  For trucks or truck tractors registered for more than 26,000 pounds that have 
been reconstructed using a prepackaged kit that may include a frame, front axle 
or body but does not include a power train or engine and for which a new 
certificate of title is required to be issued, the amount of excise tax due is based 
on the maker's list price of the prepackaged kit. 
For motor vehicles being registered pursuant to Title 29-A, section 405, subsection 1, 
paragraph C, the excise tax must be prorated for the number of months in the 
registration. 
SUMMARY 
Part A specifies that holding land primarily for conservation or public access 
purposes is not a benevolent and charitable purpose, which is a condition necessary to 
obtaining an exemption from property tax.  This Part allows a land trust organization to 
enroll land owned by it in the open space tax law program, which would provide up to a 
95% reduction in the assessed value of that land as long as certain conditions are met.  
This Part also removes the 15,000-acre limit on the size of land that may be enrolled in 
the open space tax law program. 
Part B expands the authorization for municipal assessment of service charges for 
certain municipal costs against certain property exempt from property tax to remove the 
exemption for student housing and parsonages and to remove the limit on application of 
the charge to residential property used for rental income.  The service charges may be 
levied only against an owner that has total real estate assets in the municipality with an 
assessed value of $10,000,000 or more.  The existing cap of 2% of the gross annual 
revenues of the institution or organization is retained.  
Part C reduces the rate of the excise tax imposed on motor vehicles for the first and 
2nd year from 24 mills to 18 mills and 17 1/2 to 16 mills, respectively; and increases the 
excise tax for the 3rd, 4th, 5th and 6th year from 13 1/2 mills to 14 mills, 10 mills to 11.5 
mills, 6 1/2 mills to 10 mills and 4 mills to 6 mills, respectively.  After the 6th year, the 
mill rate reverts to 4 mills.