Sec. I-1. 36 MRSA §4641, sub-§§1-A and 2-A are enacted to read:
1-A. Controlling interest. "Controlling interest" means the following.
A. In the case of a corporation, "controlling interest" means either 50% or more of the total combined voting power of all classes of stock of the corporation entitled to vote or 50% or more of the capital, profits or beneficial interest in the voting stock of the corporation.
B. In the case of a partnership, association, trust or other entity, "controlling interest" means 50% or more of the capital, profits or beneficial interest in the partnership, association, trust or other entity.
C. For purposes of the tax imposed by section 4641-A, subsection 2, all acquisitions of persons acting in concert are aggregated for purposes of determining whether a transfer or acquisition of a controlling interest has taken place. The State Tax Assessor shall adopt standards by rule to determine when persons are acting in concert. Rules adopted pursuant to this paragraph are routine technical rules as defined in Title 5, chapter 375, subchapter II-A. In adopting a rule for this purpose, the assessor shall consider the following:
(1) Persons must be treated as acting in concert when they have a relationship with each other such that one person influences or controls the actions of another through common ownership; and
(2) When persons are not commonly owned or controlled, they must be treated as acting in concert only when the unity with which the purchasers have negotiated and will consummate the transfer of ownership interests supports a finding that they are acting as a single entity. If the acquisitions are completely independent, with each purchaser buying without regard to the identity of the other purchasers, the acquisitions must be considered separate acquisitions.
2-A. Real property. "Real property" means land or anything affixed to land. "Real property" includes, but is not limited to, improvements such as buildings, mobile homes other than stock-in-trade, lines of electric light and power companies and pipelines and other things constructed or situated on land when the owner of the improvements is not the landowner.
Sec. I-2. 36 MRSA §4641, sub-§3, as amended by PL 1999, c. 478, §3, is further amended to read:
3. Value. "Value" means the amount of the actual consideration therefor for real property, except that in the case of a gift, or a contract or deed with nominal consideration or without stated consideration, or in the case of the transfer of a controlling interest in an entity with a fee interest in real property when the consideration for the real property cannot be determined, "value" is to be based on the estimated price a property will bring in the open market and under prevailing market conditions in a sale between a willing seller and a willing buyer, both conversant with the property and with prevailing general price levels.
"Value" does not include the amount of consideration attributable to vacation exchange rights, vacation services or club memberships or the costs associated with those rights, services or memberships. Upon request of a municipal assessor or the State Tax Assessor, a developer of a time-share estate, as defined in Title 33, section 591, subsection 7, or an association of time-share estate owners shall provide an itemized schedule of fees included in the sales price of a time-share estate.
Sec. I-3. 36 MRSA §4641-A, as repealed and replaced by PL 1993, c. 398, §2, is repealed and the following enacted in its place:
§4641-A. Rate of tax; liability for tax
1. Deeds. A tax is imposed on each deed by which any real property in this State is transferred.
A. The rate of the tax is $2.20 for each $500 or fractional part of $500 of the value of the property transferred.
B. The tax is imposed 1/2 on the grantor and 1/2 on the grantee.
2. Transfer of direct or indirect controlling interest in entity with interest in real property. A tax is imposed on the transfer or acquisition within any 12-month period of a direct or indirect controlling interest in any entity with a fee interest in real property in this State.
A. The rate of the tax is $2.20 for each $500 or fractional part of $500 of the value of the real property owned by the entity and located in this State.
B. The tax is imposed 1/2 on the transferor and 1/2 on the transferee, but if the transfer or acquisition is not reported to the register of deeds in the county or counties in which the property is located and the tax is not paid within 30 days of the completion of the transfer or acquisition, the transferor and the transferee are jointly and severally liable for the full amount.
C. If a controlling interest is acquired by a series of transfers, each transferor is liable for its proportional share of tax based on the value of the property on the date of the sale.
Sec. I-4. 36 MRSA §4641-B, as amended by PL 2001, c. 439, Pt. XXX, §2, is repealed and the following enacted in its place:
1. Transfer of real property by deed. The State Tax Assessor shall provide for the collection of the tax on the transfer of real property by deed by each register of deeds and for that purpose may provide for the installation of a meter machine in each registry office. When any deed is offered for recordation, the register of deeds shall ascertain and compute the amount of tax due on the deed and shall collect that amount. The amount of tax must be computed on the value of the property as set forth in the declaration of value prescribed by section 4641-D. Payment of tax must be evidenced by affixing such indicia of payment as prescribed by the assessor to the declaration of value provided for in section 4641-D.
2. Transfer or acquisition of controlling interest in entity with fee interest in real property. A person transferring or acquiring a controlling interest in an entity with a fee interest in real property for which a deed is not given shall report the transfer or acquisition to the register of deeds in the county or counties in which the real property is located within 30 days of the transfer or acquisition on a return in the form of an affidavit furnished by the State Tax Assessor. The return must be signed by both the transferor and the transferee and accompanied by payment of the tax due. When the real property is located in more than one county, the tax must be divided among the counties in the same proportion in which the real property is distributed among the counties. Disputes between 2 or more counties as to the proper amount of tax due to them as a result of a particular transaction must be decided by the State Tax Assessor upon the written petition of an official authorized to act on behalf of any such county.
3. Disposition of funds. Each register of deeds shall, on or before the 10th day of each month, pay over to the State Tax Assessor 90% of the tax collected pursuant to this section during the previous month. The remaining 10% must be retained for the county by the register of deeds and accounted for to the county treasurer as reimbursement for services rendered by the county in collecting the tax. If the tax collected is not paid over by the 10th day of the month, the State Tax Assessor may impose interest pursuant to section 186.
4. Distribution of State's share of proceeds. The State Tax Assessor shall pay all net receipts received pursuant to this section to the Treasurer of State, and shall at the same time provide the Treasurer of State with documentation showing the amount of revenues derived from the tax imposed by section 4641-A, subsection 1 and the amount of revenues derived from the tax imposed by section 4641-A, subsection 2. The Treasurer of State shall credit 1/2 of the revenues derived from the tax imposed by section 4641-A, subsection 1 to the General Fund and shall monthly pay the remaining 1/2 of such revenues to the Maine State Housing Authority, which shall deposit the funds in the Housing Opportunities for Maine Fund created in Title 30-A, section 4853. The Treasurer of State shall credit to the General Fund all of the revenues derived from the tax imposed by section 4641-A, subsection 2.
5. Dispute regarding amount. In the event of a dispute as to the correct amount of tax, the individual seeking to record the deed may request that the State Tax Assessor determine the correct amount of tax to be paid in order for the deed to be recorded.
Sec. I-5. 36 MRSA §4641-C, first ¶, as amended by PL 1993, c. 398, §4, is further amended to read:
The following deeds are exempt from the tax imposed by this chapter:
Sec. I-6. 36 MRSA §4641-C, sub-§18, as amended by PL 1999, c. 638, §46, is further amended to read:
18. Limited liability company deeds. Deeds to a limited liability company from a corporation, a general or limited partnership or another limited liability company, when the grantor or grantee owns an interest in the limited liability company in the same proportion as the grantor's or grantee's interest in or ownership of the real estate being conveyed; and
Sec. I-7. 36 MRSA §4641-C, sub-§19, as enacted by PL 1999, c. 638, §47, is amended to read:
19. Change in identity or form of ownership. Any transfer of real property, whether accomplished by deed, conversion, merger, consolidation or otherwise, if it consists of a mere change in identity or form of ownership of an entity. This exemption is limited to those transfers where when no change in beneficial ownership is made and may include transfers involving corporations, partnerships, limited liability companies, trusts, estates, associations and other entities.; and
Sec. I-8. 36 MRSA §4641-C, sub-§20 is enacted to read:
20. Controlling interests. Transfers of controlling interests in an entity with a fee interest in real property if the transfer of the real property would qualify for exemption if accomplished by deed of the real property between the parties to the transfer of the controlling interest.
Sec. I-9. 36 MRSA §4641-D, first ¶, as amended by PL 1993, c. 398, §5, is further amended to read:
Any deed, except Except as otherwise provided in this section, must any deed, when offered for recording, and any report of a transfer of a controlling interest must be accompanied by a statement or declaration prepared in duplicate and signed, subject to the penalties of perjury, by the parties to the transaction or their authorized representatives, declaring the value of the property transferred and indicating the taxpayer identification numbers of the grantor and grantee. The statement or declaration with regard to a transfer by deed must include evidence of compliance with section 5250-A and reference to the appropriate tax map and parcel number unless no tax map exists that includes that property, in which event the declaration must indicate that no appropriate tax map exists. The exceptions to the foregoing are the following:
Sec. I-10. 36 MRSA §4641-D, 3rd ¶, as amended by P&SL 1975, c. 78, §21, is further amended to read:
The declaration shall must be in a form prescribed by the State Tax Assessor, who shall provide an adequate supply of such forms to each register of deeds in the State. The State Tax Assessor shall prescribe a form for the declaration of value with regard to transfers of controlling interests subject to tax under this chapter.
Sec. I-11. 36 MRSA §4641-E, 2nd ¶, as amended by PL 1993, c. 398, §6, is further amended to read:
Within 3 years of the recording of a deed subject to the tax imposed by this chapter or a transfer of a controlling interest in an entity subject to taxation under this chapter, the State Tax Assessor may examine any books, papers, records or memoranda of the grantor or grantee bearing upon the amount of tax payable, and may enforce that right of examination by subpoena. If the assessor determines that there is a deficiency of taxes due under this chapter, such deficiency must be assessed, together with interest and penalties, with notice to the persons liable, but no such assessment may be made more than 3 years after the date of recording or transfer.
Sec. I-12. 36 MRSA §4641-J, as repealed and replaced by PL 1977, c. 696, §293, is further amended to read:
§4641-J. Recording without tax
Any register of deeds who, upon recording any deed or receiving a report of a transfer of a controlling interest upon which a tax is imposed by this chapter, fails to collect that tax or to obtain the declaration of value required by this chapter and does so with the intent of defeating the purposes of this chapter commits a civil violation for which a forfeiture not to exceed $200 may be adjudged.
Sec. I-13. 36 MRSA §4641-K, as amended by PL 1993, c. 398, §7, is further amended to read:
§4641-K. Falsifying declaration of value
Any person who knowingly falsifies the declaration of value prescribed by section 4641-D or refuses to permit the State Tax Assessor, or any of the State Tax Assessor's agents or representatives to inspect property in question or any relevant books, papers, records or memoranda within 3 years after recording or transfer of a controlling interest subject to tax under this chapter, or knowingly alters, cancels or obliterates any part thereof, or knowingly makes any false entry therein is guilty of a Class E crime.
Sec. I-14. 36 MRSA §4641-L, as enacted by PL 1975, c. 572, §1, is amended to read:
§4641-L. No effect on recordation
Failure to comply with the requirements of this chapter shall in no way does not affect the validity of any recorded instrument or the validity of any recordation or transfer of a controlling interest.
Sec. I-15. Application. That section of this Part that enacts the Maine Revised Statutes, Title 36, section 4641-A, subsection 2, and other sections of this Part affecting Title 36, chapter 711-A to the extent that they deal with the tax imposed on the transfer or acquisition of a controlling interest in any entity with a fee interest in real property in this State, apply to transactions occurring on or after June 1, 2002, except that transactions made pursuant to contracts executed before March 1, 2002 are not subject to such tax.
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