Sec. 1. 30-A MRSA §5681, sub-§2, ¶¶C and D, as enacted by PL 1999, c. 731, Pt. U, §1, are repealed.

Sec. 2. 30-A MRSA §5681, sub-§2, ¶E, as enacted by PL 1999, c. 731, Pt. U, §1, is amended to read:

E. "Disproportionate tax burden" means the total real and personal property taxes assessed in the most recently completed municipal fiscal year, except the taxes assessed on captured value within a tax increment financing district, divided by the latest state valuation certified to the Secretary of State and reduced by .01 .0125.

Sec. 3. 30-A MRSA §5681, sub-§5, as repealed and replaced by PL 1999, c. 731, Pt. U, §5, is amended to read:

5. Transfers to funds. On the last day of each month, beginning July 31, 2000, the Treasurer of State shall transfer to the Local Government Fund an amount equal to 5.1% of the receipts from the taxes imposed under Title 36, Parts 3 and 8 and credited to the General Fund without any reduction. Any amounts transferred to the Local Government Fund in excess of the annual growth ceiling must be transferred to the Disproportionate Tax Burden Fund. On the last day of each month, beginning September 30, 2001, the Treasurer of State shall transfer to the Disproportionate Tax Burden Fund an amount equal to 0.5% of the receipts from the taxes imposed under Title 36, Parts 3 and 8 and credited to the General Fund without any reduction.

SUMMARY

This bill increases the amount of funds that will be set aside for revenue sharing through the Disproportionate Tax Burden Fund, "Revenue Sharing 2." An additional 0.5% of sales and income tax collections will be transferred to the Disproportionate Tax Burden Fund. This bill also eliminates the annual growth ceiling on the transfers to the Local Government Fund that are distributed through the original revenue-sharing formula. Distributions under the original revenue-sharing formula, as a result of the elimination of the annual growth ceiling, would remain at the full 5.1% of sales and income taxes. This bill also increases the tax burden level that is considered disproportionate from the current threshold of 10 mils to 12.5 mils.