H.P. 1661 - L.D. 2166
An Act to Provide Flexibility in the Rate of Interest Charged on Delinquent Taxes
Emergency preamble. Whereas, Acts of the Legislature do not become effective until 90 days after adjournment unless enacted as emergencies; and
Whereas, the current rate of interest charged on delinquent property taxes is so low that it does not serve as a deterrent to paying property taxes late; and
Whereas, the failure to pay property taxes on time causes municipalities hardship through the loss of expected revenue; and
Whereas, the tax year for many municipalities begins in April or May; action after that date would not be in time for the upcoming tax year; and
Whereas, in the judgment of the Legislature, these facts create an emergency within the meaning of the Constitution of Maine and require the following legislation as immediately necessary for the preservation of the public peace, health and safety; now, therefore,
Be it enacted by the People of the State of Maine as follows:
Sec. 1. 36 MRSA §505, sub-§4, as amended by PL 1983, c. 480, Pt. A, §40, is further amended to read:
4. When interest collected. The date or dates from and after which interest
shall must accrue, which shall must also be the date or dates on which taxes shall become delinquent. The rate of interest shall must be specified in the vote and shall must apply to delinquent taxes committed during the taxable year until those taxes are paid in full. The Except as provided in subsection 4-A, the rate of interest shall may not exceed the highest conventional rate of interest charged for commercial unsecured loans by Maine banking institutions on the first business day of the calendar year the vote is taken. The highest conventional rate of interest charged for commercial unsecured loans by Maine banking institutions on the first business day of each calendar year shall must be determined in his best judgment by the Treasurer of State, who shall send a written notice of such that rate of interest on or before January 20th of each year to the chief municipal officer of each municipality. The interest shall must be added to and become part of the taxes.
Sec. 2. 36 MRSA §505, sub-§4-A is enacted to read:
4-A. Alternate calculation of interest. For any tax year for which the maximum interest rate established by the Treasurer of State under subsection 4 is 2 percentage points or more lower than the maximum rate established by the Treasurer of State for the previous tax year, the municipality may adopt an interest rate that is up to 2 percentage points over the rate established by the Treasurer of State for the tax year under subsection 4.
Emergency clause. In view of the emergency cited in the preamble, this Act takes effect when approved.
Effective April 8, 2002.
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