Sec. 1. 5 MRSA §1519 is enacted to read:

§1519.__Homestead Tax Relief Fund

1.__Homestead Tax Relief Fund.__There is created the Homestead Tax Relief Fund, referred to in this section as the "fund."__The fund is a nonlapsing fund.__The Treasurer of State shall credit all interest on fund balances to the fund.

2.__Transfers to fund.__At the close of each fiscal year, before other transfers, the State Controller shall transfer the following amounts to the fund:

A.__The amount by which the funds appropriated for the homestead exemption exceed actual expenditures and any encumbrances for that program for the fiscal year;

B.__The amounts by which the funds appropriated for the elderly householders' tax refund and the Maine Residents Property Tax Program exceed actual expenditures and any encumbrances for those programs for the fiscal year; and

C.__Any amount that would have been transferred to the Maine Rainy Day Fund under section 1513, including interest, if the Maine Rainy Day Fund had not reached its limit.

3.__Use of fund.__On January 15th, annually, the State Tax Assessor shall divide the amount in the fund by the number of homestead exemptions granted under Title 36, chapter 105, subchapter IV-B during the previous year.__The resulting amount must be added to the amount of the homestead exemption allowed under Title 36, section 683 for the property tax year based on the status of property on April 1st of the current year.__ Adjustments to the homestead exemption under this section may not increase the homestead exemption to more than $10,000.

SUMMARY

This bill creates the Homestead Tax Relief Fund consisting of surplus appropriations for homestead tax exemption reimbursement, the elderly householders' tax relief fund and the Maine Residents Property Tax Program and surplus revenues that would have been deposited in the Maine Rainy Day Fund if that fund had not reached its limit. The amount in the fund is used annually to increase the amount of the homestead exemption up to a maximum of $10,000.