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

§5686.__Local Sales Tax Fund

1.__Fund established.__The Local Sales Tax Fund, referred to in this section as "the fund," is established for the purpose of sharing revenues from the state sales and use tax with counties and municipalities.

2.__Definitions.__As used in this section, unless the context otherwise indicates, the following terms have the following meanings.

A.__"General Fund sales tax ceiling" means $914,710,000.

B.__"Local sales tax share" means 20% of the amount determined by subtracting the General Fund sales tax ceiling from the amount of General Fund revenue under Title 36, Part 3 for a fiscal year, after the transfers required under section 5681, subsection 5.

3.__Transfers to fund.__Beginning in fiscal year 2005-06, at the close of each fiscal year, the State Treasurer shall transfer to the fund the local sales tax share.

4.__Distribution of fund.__Amounts transferred to the fund at the close of a fiscal year must be distributed by the State Treasurer, no later than October 1st, as follows:

A.__Fifty percent to municipalities in proportion to the percentage of revenue under Title 36, Part 3 collected in the municipality; and

B.__Fifty percent to counties in proportion to the percentage of revenue under Title 36, Part 3 collected in the county.

SUMMARY

This bill provides that 20% of General Fund sales tax revenue over a ceiling equal to the amount of General Fund sales tax revenue projected for fiscal year 2004-05 be transferred to the Local Sales Tax Fund and distributed 50% to municipalities and 50% to counties based on the percentage of overall sales tax collections in those jurisdictions.