An Act To Increase Affordable Housing and Reduce Property Taxes through an Impact Fee on Vacant Residences
Maine Legislature, Session 130, LD 1337
Committee: Taxation
Sponsors: KESSLER, CHIPMAN, BRENNAN, CLOUTIER, GERE, HYMANSON, MORALES, OSHER, STOVER
Amends: 36 MRSA §507

Legislative Document
No. 1337
H.P. 988
House of Representatives, March 30, 2021
An Act To Increase Affordable Housing and Reduce Property Taxes 
through an Impact Fee on Vacant Residences
Reference to the Committee on Taxation suggested and ordered printed.
ROBERT B. HUNT
Clerk
Presented by Representative KESSLER of South Portland.
Cosponsored by Senator CHIPMAN of Cumberland and
Representatives: BRENNAN of Portland, CLOUTIER of Lewiston, GERE of Kennebunkport, 
HYMANSON of York, MORALES of South Portland, OSHER of Orono, STOVER of 
Boothbay.
Be it enacted by the People of the State of Maine as follows:
Sec. 1.  36 MRSA §507, sub-§5 is enacted to read:
5.  Residential property.  The municipality shall include with each bill that applies to 
residential property, as defined in section 4961, subsection 5, a notice prepared by the State 
Tax Assessor regarding the residential vacancy impact fee under chapter 727.  The State 
Tax Assessor shall prepare and furnish to the assessor of each municipality a sufficient 
number of notices to be included with bills as required by this subsection or a digital copy 
of the notice to be reproduced by the municipality.  The notice must be no more than one 
page in length, consist of the declaration required under section 4963, describe the property 
to which the residential vacancy impact fee applies and include information regarding the 
process for obtaining further information from the State Tax Assessor and for paying the 
impact fee.  The notice must also give the property owner the ability to apply for the Maine 
resident homestead property tax exemption under subchapter 4-B.
Sec. 2.  36 MRSA c. 727 is enacted to read:
CHAPTER 727
RESIDENTIAL VACANCY IMPACT FEE
§4961.  Definitions
As used in this chapter, unless the context otherwise indicates, the following terms 
have the following meanings.
1.  Fee year.  "Fee year" means the 12-month period to which the fee under this chapter 
applies as defined by the State Tax Assessor under section 4963, subsection 7.
2.  Impact fee.  "Impact fee" means the residential vacancy impact fee imposed 
pursuant to section 4962.
3.  Owner.  "Owner" means a person who owns residential property.
4.  Permanent residence.  "Permanent residence" has the same meaning as in section 
681, subsection 3.
5.  Residential property.  "Residential property" means a structure or portion of a 
structure that is designed to be used as a permanent residence.  "Residential property" does 
not include the land on which the structure is located.
6.  Vacant.  "Vacant" means property that has not been occupied by a permanent 
resident, as defined under section 681, subsection 4, for at least 180 days cumulatively 
during the calendar year preceding the date by which a declaration must be filed under 
section 4963, subsection 2.
§4962.  Residential vacancy impact fee imposed
For fee years beginning in or after 2021, a residential vacancy impact fee is imposed 
annually on owners of residential property that is vacant at the rate of 0.5% of the equalized 
assessed value of the residential property.
A cooperative housing corporation that is the owner of residential property is subject 
to the impact fee under this chapter based on the portion of the property owned by the 
corporation that is not occupied by permanent residents.  The impact fee is calculated based 
on the value of units of residential property in the cooperative property that are not occupied 
by permanent residents.
§4963.  Administration
1.  Information from municipalities.  Each municipal assessor shall provide the State 
Tax Assessor, with the assessor's annual return under section 383, subsection 3, a list of 
each residential property within the municipality during the previous fee year including the 
valuation of the residential property and the mailing address of the owner and any other 
information required by the State Tax Assessor to administer this chapter.
2.  Information from residential property owners.  Each owner of residential 
property shall file an annual declaration with the State Tax Assessor for each unit of 
residential property owned indicating whether during the fee year the unit was:
A.  The permanent residence of the owner;
B.  The permanent residence of another person; or
C.  Not a permanent residence.
If a residential property contains more than one unit that is a permanent residence, the 
owner shall provide the information required under paragraphs A to C for each unit in the 
property.
3.  Notification of potential impact fee responsibility.  At least 90 days before the 
date that impact fees under this chapter are due, the State Tax Assessor shall notify each 
owner identified on lists provided by municipalities under subsection 1 that the owner may 
be required to pay the fee assessed under this chapter.  
If, by the date that impact fees are due under this chapter, the owner provides information 
to the State Tax Assessor that satisfies the assessor that the owner is not subject to the fee, 
no fee is due under this chapter.  If the owner does not provide any information or the 
information provided does not satisfy the assessor that the owner is not subject to the fee, 
the owner is required to pay the fee, although the State Tax Assessor must first, before 
imposing the impact fee, exhaust any means by which information can be verified using 
already available information.
4.  Exemptions.  The following owners are exempt from the fee imposed under this 
chapter:
A.  The owner of residential property that is exempt from property tax under sections 
and 652 is exempt from the impact fee under this chapter; 
B.  The owner of residential property that changed ownership during a year to which 
the fee applies, including a change due to the death of an owner;
C.  The owner of residential property who demonstrates to the satisfaction of the State 
Tax Assessor that the property is not habitable for at least 3 months during the fee year, 
including, but not limited to, a seasonal camp or property that is affected by natural 
disaster or environmental hazard;
D.  The owner of residential property who is a recipient of any federal or state public 
assistance program based on income;
E.  The owner of residential property who, based on the owner's most recent Maine 
income tax filing, has earned less than 150% of the area median income based on the 
most recent data from the United States Census for the Portland-South Portland 
metropolitan area;
F.  The owner of residential property that is in active development or construction 
during the fee year;
G.  The owner of residential property where a licensed day care for children operates; 
and
H.  The owner of residential property that is held in a trust established by a deceased 
parent or guardian for the benefit of a minor child.
5.  Due date.  The impact fee due under this chapter must be paid by July 1st  following 
the fee year for which the fee is imposed.
6.  Appeal.  An owner who disagrees with a determination by the State Tax Assessor 
under this chapter may appeal under the provisions of chapter 7.
7.  Schedule. The State Tax Assessor shall by rule establish a schedule for the filing of 
information and other processes necessary for administration of the impact fee under this 
chapter.  Rules under this subsection are major substantive rules pursuant to Title 5, chapter 
375, subchapter 2-A.
8.  Application of revenue.  The Treasurer of State, following reduction of the cost of 
administering this chapter, including the cost of reimbursing municipalities for state-
mandated costs under Title 30-A, section 5685 shall deposit:
A.  Fifty percent of impact fee revenue collected under this chapter to the Housing 
Opportunities for Maine Fund created in Title 30-A, section 4853, to be used to fund 
affordable housing activities; and 
B.  Fifty percent of the impact fee revenue collected under this chapter to the Local 
Government Fund created in Title 30-A, section 5681, subsection 3 to be used to 
reimburse municipalities for a portion of the cost of the Maine resident homestead 
property tax exemption under chapter 105, subchapter 4-B.
§4964.  Annual reporting; evaluation
1.  Annual reports.  The following reports are required on or before March 15th of 
each year:
A.  The State Tax Assessor shall file a report with the Office of Program Evaluation 
and Government Accountability for the immediately preceding calendar year, referred 
to in this subsection as "the report year," that contains the following information:
(1)  The total number for the State of owners of residential property that is subject 
to the impact fee under this chapter for the report year and the total for each 
municipality where residential property is located;
(2)  The total amount of impact fee revenue received for the report year and the 
total for each municipality where residential property is located; and
(3)  The amount of impact fee revenue transferred to the Housing Opportunities 
for Maine Fund and to the Local Government Fund;
B.  The Maine State Housing Authority shall file a report with the Office of Program 
Evaluation and Government Accountability the expenditures of impact fee revenue 
during the preceding calendar year by the Housing Opportunities for Maine Fund 
created in Title 30-A, section 4853 for activities to fund affordable housing, the extent 
to which affordable housing has increased as a result of the impact fee revenue and the 
location by municipality of affordable housing that has received funding under this 
chapter during the calendar year; and
C.  The Treasurer of State shall file a report with the Office of Program Evaluation and 
Government Accountability providing the amount of impact fee revenue distributed to 
municipalities as reimbursement for the Maine resident homestead property tax 
exemption under chapter 105, subchapter 4-B.
2.  Evaluation; specific public policy objective; performance measures.  The impact 
fee established by this chapter is subject to ongoing legislative review in the same manner 
as a tax expenditure under Title 3, chapter 37.  In developing evaluation parameters to 
perform the review, the Office of Program Evaluation and Government Accountability, the 
Legislature's government oversight committee and the joint standing committee of the 
Legislature having jurisdiction over taxation matters shall consider:
A.  That the specific public policy objective of the impact fee is to increase the program 
activity of the Housing Opportunities for Maine Fund created in Title 30-A, section 
4853 and to increase municipal revenue to reimburse municipalities for revenue lost as 
a result of the Maine resident homestead property tax exemption under chapter 105, 
subchapter 4-B and the availability of affordable housing in the State;
B.  Performance measures that include the extent to which affordable housing has 
increased as a result of the impact fee; and
C.  An analysis of impacts on municipal revenue due to increases in the Maine resident 
homestead property tax exemption under chapter 105, subchapter 4-B compared to 
impact fee revenue received by municipalities from the Local Government Fund under 
Title 30-A, section 5681, subsection 3.
The Office of Program Evaluation and Government Accountability shall provide a report 
of its evaluation of the impact fee established by this chapter in accordance with Title 3, 
section 999.
Sec. 3.  Analysis; report.   By the December 1st following the first full year after 
imposition of the residential vacancy impact fee under the Maine Revised Statutes, Title 
36, chapter 727, the State Tax Assessor shall analyze the implementation, collection and 
enforcement of the residential vacancy impact fee and submit a report to the joint standing 
committee of the Legislature having jurisdiction over taxation matters identifying the 
amount of impact fee revenue collected and distributed, the degree of compliance with the 
payment of the fee and any difficulties encountered in implementation, collection and 
enforcement of the fee, including any recommendations for legislative changes.  The 
committee may submit a bill to the next regular session of the Legislature related to the 
report.
SUMMARY
This bill creates a residential vacancy impact fee for certain vacant residential property.  
The revenue from the impact fee is distributed to the Housing Opportunities for Maine 
Fund to be used to fund affordable housing activities and to the Local Government Fund to 
be used to reimburse municipalities for the Maine residents homestead property tax 
exemption.  The bill also requires the impact fee to be evaluated by the Office of Program 
Evaluation and Government Accountability in the same manner as are tax expenditures.