HP0276, LD 401, item 1, An Act To Provide Local Sales Tax Increment Disbursements

An Act To Provide Local Sales Tax Increment Disbursements

Be it enacted by the People of the State of Maine as follows:

Sec. 1. 30-A MRSA §5686 is enacted to read:

§ 5686. Local sales tax increment disbursement

1. Local sales tax increment. Beginning with fiscal year 2015-16, the State Tax Assessor shall gather and maintain information that demonstrates the amount of revenue and the amount of local sales tax increment for each fiscal year that is attributable to each municipality and the unorganized territory under Title 36, Part 3. For the purposes of this section, "local sales tax increment" means 5% of the increase in revenue attributable to a municipality or the unorganized territory under Title 36, Part 3 over the amount attributable to the municipality or the unorganized territory in fiscal year 2015-16.

2. Transfers. Beginning with fiscal year 2016-17, the State Tax Assessor shall certify to the State Controller by September 30th annually the local sales tax increment amounts needed to make payments under this section. The State Controller shall, within 15 days after the certification, transfer those amounts to a local sales tax increment account, which must be established for this purpose.

3. Payments to municipalities and the unorganized territory. The Treasurer of State shall pay by October 1st annually to each municipality and the Unorganized Territory Education and Services Fund under Title 36, chapter 115 from the local sales tax increment account established pursuant to subsection 2 an amount equal to the local sales tax increment. If the local sales tax increment for a municipality or the unorganized territory is $0 or less, a payment may not be made for that fiscal year. The State Treasurer shall pay the amount due under this section and provide an accounting of the amount to the municipality or the fiscal administrator of the unorganized territory no later than 6 months after the end of that fiscal year. The amount received under this section by a municipality or the fund may not reduce or be reduced by any other revenue sharing or state aid received by the municipality or the fund. An amount received by a municipality or the fund under this section must be used by the municipality to reduce property tax revenues in that municipality in an amount equal to the amount received in the fiscal year that the revenue is received.

summary

This bill requires payments beginning in fiscal year 2016-17 to municipalities of an amount equal to 5% of the difference between the sales and use tax attributable to the municipality in a fiscal year and the comparable amounts for fiscal year 2015-16, referred to as the "local sales tax increment." If the amount of sales and use tax collected in a fiscal year in a municipality is below that collected in fiscal year 2015-16, then the municipality receives no payment. The amount received may not reduce any other state aid or revenue sharing received by that municipality, and the municipality must use the amount received to reduce property taxes by the same amount. The Unorganized Territory Education and Services Fund receives the same payment as municipalities and is subject to the same requirement to use the revenue to reduce property taxes.

HP0276 LD 401	Session - 126th Maine Legislature		LR 1095 Item 1
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