A. For months beginning before July 1, 2005, 5.1%; and

B. For months beginning on or after July 1, 2005, 5.2%.

Sec. 6. 30-A MRSA §5681, sub-§5-B, as enacted by IB 2003, c. 2, §3, is amended to read:

5-B. Fund for the Efficient Delivery of Local and Regional Services. For the months beginning on or after July 1, 2004 and before the distributions required by subsections subsection 4-A and 4-B, 2% of all receipts transferred each month pursuant to subsection 5 must be deposited in the Fund for the Efficient Delivery of Local and Regional Services, as established in subsection 3, and distributed to those municipalities that can demonstrate significant and sustainable savings in the cost of delivering local and regional governmental services through collaborative approaches to service delivery, enhanced regional delivery systems, the consolidation of administrative services, the creation of broad-based purchasing alliances or the execution of interlocal agreements.

Sec. 7. 30-A MRSA §5681, sub-§7, as enacted by PL 1989, c. 871, §1 and affected by §22, is amended to read:

7. Indian territory. For purposes of state-municipal revenue sharing, the Passamaquoddy Tribe and the Penobscot Nation Indian Territories shall must be treated as if they were municipalities. In the absence of a levy of real and personal property taxes in either or both Indian territories, the property tax assessment is computed by multiplying the state valuation for the Indian territory for the period for which revenue sharing is being determined by the most current average equalized property tax rate of all municipalities in the State at that time as determined by the State Tax Assessor and reduced by .01.

SUMMARY

This bill changes the state-municipal revenue-sharing formula by discounting the first 10 mills of a municipality's property tax rate. The current state-municipal revenue-sharing program counts the municipality's tax effort for education even though this is already considered within the State's school finance formula. A 10-mill discount targets state-municipal revenue sharing largely toward the noneducational component of a municipality's tax effort.