NEW LEGISLATION
ENACTED BY THE
121ST LEGISLATURE
SECOND SESSION
The following bills were signed by the Governor and became law on July 30, 2004, unless they were enacted as emergency legislation and become effective when signed by the Governor. The specific listed bills and resolves which are shown below are among those which Geoff Herman, Director of State and Federal Relations at MMA, presented for discussion to the attendees at the recent Maine Municipal Tax Collectors & Treasurers Conferences in May in Saco and Orono.
1957 – An Act to Implement the Recommendations of the
Committee to Study Compliance with Maine’s Freedom of Access Laws. (Reported by
Rep. Norbert of Portland for the Joint Standing Committee on Judiciary) Enacted; PL 2003, c. xx
This Act makes the following changes to Maine’s Freedom of Information Act, also known as Maine’s Right to Know Law. Pertinent to municipalities, the Act:
The Act also extends for another year the ad hoc committee that developed the set of recommendations that led to this Act, and charged that committee with reviewing a number of additional issues associated with the Freedom of Information Act, including the degree to which personal home contact information of governmental employees should be kept from public-record disclosure and the degree to which voicemail and e-mail are public records, etc.
1930 – An Act to Promote Intergovernmental Cooperation, Cost
Savings and Efficiencies. (Sponsored by Sen. Damon of Hancock County) Enacted;
PL 2003, c. xx
At the center of this Act is the creation of a permanent 17-member Intergovernmental Advisory Group (IAG). The membership of the IAG includes 2 legislators, 3 state agency or department heads, 3 county officials, 2 representatives from regional planning agencies, 3 municipal officials, 2 members representing school administrative units or special districts, and 2 private sector representatives, one from the non-profit sector and another from the for-profit sector. The Governor is responsible for appointing the non-legislative members to the group. The municipal and county members must be appointed from a list provided by Maine Municipal Association and Maine County Commissioners Association. The gubernatorial appointments must include at least three members from each of three regions defined in the Act. Region One includes Aroostook, Hancock, Penobscot, Piscataquis and Washington counties. Region Two includes Androscoggin, Franklin, Kennebec, Knox, Lincoln, Oxford, Sagadahoc, Somerset and Waldo counties. Region Three includes Cumberland and York counties.
The IAG is tasked with finding ways to reduce duplication and improve efficiencies in the delivery of governmental services; promote communication and cooperation between the entities delivering services; design and implement a process to allow the state to offer technical support, assistance and incentives to encourage regionalization; identify and create a best management practices database; prepare legislation and report the IAG’s findings annually to the State and Local Government Committee. The State Planning Office is responsible for staffing the IAG.
In addition to creating the IAG, the Act also accomplishes the following: 1) it repeals statutory references to salaries for county officials, location and minimum number of county commissioner meetings, and legislative delegation involvement in the county budget estimate process; 2) it authorizes the county commissioners to initiate a charter commission without receiving permission from the voters of the county (final adoption of the charter still requires approval from the voters in the county); 3) it authorizes a county that adopts a charter to develop its own budget process; and 4) it clarifies that municipalities, counties, school administrative units and state agencies are authorized to work together under the Interlocal Cooperation laws.
1780 – Resolve, to Promote Transparency in Budgeting.
(Sponsored by Rep. Colwell of Gardiner)
Passed; Resolves 2003, c. 133
This Resolve directs the Chief Information Officer, State Planning Office and the Department of Audit to create and determine the ongoing feasibility of a publicly accessible site on the Internet where municipalities and counties could voluntarily post their budgets. A representative of the Maine Municipal Association is also to take part in the development of the project. The group is required to report its findings and recommendations to the Joint Standing Committee on State and Local Government by January 14, 2005.
1746 – An Act to Provide Equity in Veterans’ Property Tax
Exemptions. (Sponsored by Rep. Thompson of China) (Mandate) Enacted; PL
2003, c. xx
Under current law a veterans’ property tax exemption is available to the widowed mother of a deceased veteran if the mother of the deceased veteran is 62 years of age or older. This Act expands that form of the veterans’ exemption to the deceased veteran’s widower father as well, as a matter of gender equity. This change will take effect with respect to the tax year beginning April 1, 2005.
1794 – An Act to Expand Maine’s Homestead Exemption for the
Blind. (Sponsored by Rep. Richardson of Brunswick) (Mandate) Enacted; PL
2003, c. xx
This Act expands the eligibility for the property tax exemption of the blind to property held in revocable living trust for the benefit of (and occupied by) residents of Maine who are legally blind. This change will take effect with respect to the tax year beginning April 1, 2005.
1804 – An Act to Clarify Property Eligible for Reimbursement
of Property Taxes under the Business Equipment Tax Reimbursement Program.
(Sponsored by Rep. Bowles of Sanford) Enacted; PL 2003, c. 625
This Act excludes gambling machines and Maine State Lottery machines from eligibility for property tax reimbursement under the Business Equipment Tax Reimbursement program (BETR).
1850 – Resolve, Regarding Legislative Review of Chapter 31:
Affordable Housing Development District – Recovery of Public Revenue, a Major
Substantive Rule of the Maine State Housing Authority. (Reported by Rep.
Sullivan of Biddeford for the Maine State Housing Authority) Emergency
Passed; Resolves 2003, c. 115 (3/24/04)
This emergency Resolve provides for final legislative review of a “major substantive rule” promulgated by the Maine State Housing Authority (MSHA). The rule, chapter 31: Affordable Housing Development District – Recovery of Public Review, would require municipalities that approve Tax Increment Financing (TIF) programs for affordable housing districts to unshelter the value of the housing district (thereby recognizing its full value for the purposes of calculating the municipality’s equalized state valuation) if and whenever the affordable housing districts fail to meet the several threshold definitions of affordability established in this new (2003) variation on TIF law. If the municipality does not properly unshelter the value of the affordable housing district, the rule authorizes the MSHA to recoup the subsidy and assessment benefits (including school funding, revenue sharing and county assessments that the municipality enjoyed because the property value was sheltered through the program.
1924 – An Act to Reduce the Cost of Local Government through
Increased State Education Funding and Provide Property Tax Relief. (Sponsored
by Sen. Douglass of Androscoggin County) Enacted; PL 2003, c. xx
This Act implements the Essential Programs and Services school funding model (EPS), including the mill rate expectation system that will control the distribution of state educational subsidy beginning in FY 06. The Act also directs school transportation and special education costs to be incorporated within the EPS modeling system by FY 06, which is the first year EPS is scheduled to go “on line.”
In addition, this Act commits the state to be financially supporting at least 55% of the costs of K-12 education (as measured by EPS) by the year 2010. Current law, which the Act replaces, committed the state to only a 50% share of the EPS model by that date. As importantly, the Act further establishes a generally equalized annual increase in the state financial commitment for each of the intervening years, beginning in FY 06. The so-called “straight line ramp.”
With respect to the implementation of the mill rate expectation system, the Act establishes that no municipality can be required to levy more than a certain mill rate for K-12 education purposes, provided the school budget is no larger than the amount identified as reasonably necessary by the EPS model. The maximum mill rate for FY 06 is set by this Act at no more than 9 mills, although in actual implementation it is estimated to be approximately 8 mills. The maximum mill rate for the year 2010 may not exceed 8 mills, and is estimated to be significantly less by that time.
It should be noted, however, that during the entire transition period from FY 06 to FY 2010, the “maximum mill rate expectation” will in almost all cases not be the maximized mill rate for education at the local level, because the state will not recognize the full EPS model until 2010. In FY 06, for example, the state will recognize only 84% of the EPS model, and in FY 07, only 88% of the model, and so on until FY 2010, when 100% of the EPS model will be recognized. Therefore, until FY 2010, the mill rate expectation system will only apply to a portion of the EPS model, and the municipality will have to pay for the remainder of the unrecognized school budget without any state support. In that sense, the “mill rate expectation,” which will be touted by some as a school spending “cap,” is a false cap.
That being said, under the mill rate expectation system, if the municipality can generate the EPS-identified school spending level at or below the defined mill rate expectation, the municipality, generally, would receive no state subsidy. If the municipality cannot generate the full EPS-recommended funding level, the state would provide what is necessary to fill out the EPS budget, as long as the municipalities levies the maximum mill rate expectation as its local share. If the school’s budget exceeds the EPS-identified budget, the municipality has to pay for that extra expenditure without any state support, as “local option” spending.
The Act provides that a minimum subsidy allocation system will be retained even for those school systems that may be otherwise “zeroed-out” by the mill rate expectation system. The Act also provides that the state will honor its previously arranged debt service commitments for approved new construction, even in the circumstance where a municipality is otherwise “zeroed-out” by the mill rate expectation system.
In conjunction with the “straight line” ramp-up in defined state financial commitment to education, the Act provides a mechanism to review both state and property tax support for K-12 education over time. A 6-member “Municipal Budget Analysis Committee” is created to begin reviewing in FY 07 the precise level of financial support and property tax support for public schools for at least two reasons: (1) to see if the state is meeting its minimum statutory funding commitments; and (2) to see if the increased state support for education is translating to reduced property tax demands for the schools. Benchmarks are established that suggest the property tax demand for education in each fiscal year beginning in FY 07 should be less than the property tax demand for education during the previous fiscal year.
1659 – An Act to Streamline the Time-share Rate Collection
Process. (Sponsored by Rep. Collins of Wells) Emergency Enacted; PL 2003, c.
526 (3/03/04)
This emergency Act allows sanitary districts to utilize the same methods of collecting their charges against time-share estates as municipalities are allowed to use with respect to the real estate taxes. Specifically, the Act allows a sanitary district to consolidate its charges against all the separate time-share estates and assess them against the managing entity.
1919 – An Act to Make Supplemental Appropriations and
Allocations for the Expenditures of State Government and to Change Certain
Provisions of the Law Necessary to the Proper Operations of State Government
for the Fiscal Years Ending June 30, 2004 and June 30, 2005. (Sponsored by Rep.
Brannigan of Portland) Enacted; PL 2003, c. xx
This Act is the follow-up supplemental budget to bring the state’s biennial FY 04-FY 05 budget back into balance with a focus on FY 05. This supplemental budget is designed to fill a $160 million hole in the biennial budget, created primarily by a combination of increased costs and reduced federal reimbursement in the state-federal Medicaid program. Pertinent to municipalities, this supplemental budget:
·
Establishes the state’s General Purpose Aid to
Education (GPA) appropriation for the upcoming fiscal year (FY 05) at $740.4
million. That represents an increase of just $10.8 million from the
current-year levels of state funding. Under conservative estimates, the increased
cost of providing K-12 educational services will grow by at least $60 million
between FY 04 and FY 05, so the $10.8 million increase in state funding
represents a minimum $55 million increase in property taxes.
·
Redesigns the $24 million “Circuit Breaker” property
tax and rent rebate program so that it will now be treated, at least
technically, as an income tax credit. This change will have the effect of
shifting the source of state revenue from which the Circuit Breaker benefits
are paid from a $24 million state appropriation to the unappropriated income
tax withholding revenue stream. The Circuit Breaker benefits will be rebated
from a state revenue source before it gets recognized in the state treasury.
Because of the change, there will be $24 million less in state income tax
revenue, and therefore $1.26 million less in state revenue sharing. That
reduction in Revenue Sharing that was otherwise projected to be distributed
under the “Revenue Sharing II” formula.
1879 – An Act to Amend the Boiler and Pressure Vessel Law.
(Sponsored by Sen. Martin of Aroostook County) Enacted; PL 2003, c. 597
This Act eliminates the legal requirement that low pressure steam boilers, hot water boilers and hot water supply boilers owned by schools, municipalities, water districts and other utilities need to be operated by licensed boiler operators.

