An Act To Encourage Inclusionary Zoning in Municipalities by Increasing Revenue Sharing
Maine Legislature, Session 130, LD 1257
Committee: Taxation
Sponsors: LOOKNER, ARFORD, BAILEY, GRAMLICH, KESSLER, MORALES, RIELLY
Amends: 30-A MRSA §5681

Legislative Document
No. 1257
H.P. 923
House of Representatives, March 26, 2021
An Act To Encourage Inclusionary Zoning in Municipalities by 
Increasing Revenue Sharing
Received by the Clerk of the House on March 24, 2021.  Referred to the Committee on 
Taxation pursuant to Joint Rule 308.2 and ordered printed pursuant to Joint Rule 401.
ROBERT B. HUNT
Clerk
Presented by Representative LOOKNER of Portland.
Cosponsored by Representatives: ARFORD of Brunswick, BAILEY of Gorham, GRAMLICH 
of Old Orchard Beach, KESSLER of South Portland, MORALES of South Portland, RIELLY 
of Westbrook.
Be it enacted by the People of the State of Maine as follows:
Sec. 1.  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.  To increase the availability of affordable housing, it is necessary to encourage the 
expansion of inclusionary zoning.
Sec. 2.  30-A MRSA §5681, sub-§2, ¶G is enacted to read:
G.  "Inclusionary zoning" means municipal planning ordinances applicable to 
residential and mixed-use zones that are classified by the State as urban and that 
encourage affordable housing in at least 25% of the areas located in residential or 
mixed-use zones within the municipality and designated for residential housing by 
policies, including, but not limited to, allowing greater density in development of 
residential housing units, permitting workforce housing development, reducing 
minimum lot sizes, allowing for accessory dwelling units and reducing the percentage 
of neighborhoods zoned for single-family dwellings.
Sec. 3.  30-A MRSA §5681, sub-§2, ¶H is enacted to read:
H.  "Affordable housing" means housing:
(1)  With rental or leasing cost to the renter or lessee that is no more than 30% of 
the average monthly income of a renter or lessee earning no more than 80% of the 
median income for the municipality where the housing is located;
(2)  That is located near existing roads, electric service, sewer lines and other basic 
utilities;
(3)  That occupies a lot size that does not exceed 5,500 square feet; and
(4)  That is certified by the Maine State Housing Authority as meeting the 
conditions of this paragraph.
Sec. 4.  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 Local 
Government Fund.  To provide additional support for municipalities experiencing a higher-
than-average property tax burden, there is established the Disproportionate Tax Burden 
Fund.  To encourage municipal inclusionary zoning, there is established the Inclusionary 
Zoning Fund.
Sec. 5.  30-A MRSA §5681, sub-§4-C is enacted to read:
4-C.  Distribution of Inclusionary Zoning Fund.  The Treasurer of State shall 
transfer the balance in the Inclusionary Zoning Fund on the 20th day of each month.  Money 
in the Inclusionary Zoning Fund must be distributed to each municipality with inclusionary 
zoning in proportion to the population of the municipality compared to the total population 
of all municipalities with inclusionary zoning.
Sec. 6.  30-A MRSA §5681, sub-§5-D is enacted to read:
5-D.  Transfer to Inclusionary Zoning Fund.  No later than the 10th day of each 
month, the State Controller shall transfer to the Inclusionary Zoning Fund 0.25% 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.
SUMMARY
This bill creates an additional level of state-municipal revenue sharing to provide 
additional resources to municipalities with inclusionary zoning to increase the availability 
of affordable housing.