3. Effect on state valuation. The Fifty percent of the just value of homesteads exempt under this subchapter must be included in the annual determination of state valuation under sections 208 and 305.

4. Property tax rate. The Fifty percent of the value of homestead exemptions under this subchapter must be included in the total municipal valuation used to determine the municipal tax rate. The municipal tax rate as finally determined may be applied to only the taxable portion of each homestead qualified for that tax year.

Sec. F-4. 36 MRSA §685, sub-§2, as enacted by PL 1997, c. 643, Pt. HHH, §3 and affected by §10, is amended to read:

2. Entitlement to reimbursement by the State; calculation. A municipality that has approved homestead exemptions under this subchapter may recover from the State 100% 50% of the taxes lost by reason of the exemptions upon proof in a form satisfactory to the bureau. The bureau shall reimburse the Unorganized Territory Education and Services Fund for 100% 50% of taxes lost by reason of the exemption.

Sec. F-5. Retroactive application. This Part applies retroactively to property tax valuations determined on or after April 1, 2005.

PART G

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

C. "Annual growth ceiling" for fiscal year 2000-01 means the amount certified by the Treasurer of State by September 1, 2000 as the amount transferred to the Local Government Fund in fiscal year 1999-00 2005-06 means $100,000,000. For subsequent fiscal years, "annual growth ceiling" must be determined by the State Tax Assessor by September 1st annually and means the annual growth ceiling adjusted by the lower of the increase for the previous fiscal year in the Consumer Price Index or the increase in receipts from the taxes imposed under Title 36, Parts 3 and 8. The annual growth ceiling may not be less than the annual growth ceiling for the previous year.