Sec. 1. 23 MRSA §§1808 and 1809 are enacted to read:

§1808.__Project cost-sharing

1.__Project match.__For a highway reconstruction project on a federally designated principal arterial, minor arterial or major collector, the department may require a financial match of the municipality where the project is located, based on the department's total project cost, only as follows:

A.__If the posted highway speed is less than 45 miles per hour but greater than 39 miles per hour, the municipal match required is 2.5%;

B.__If the posted highway speed is less than 40 miles per hour but greater than 34 miles per hour, the municipal match required is 5%;

C.__If the posted highway speed is less than 35 miles per hour but greater than 29 miles per hour, the municipal match required is 7.5%; and

D.__If the posted highway speed is less than 30 miles per hour, the municipal match required is 10%.

A financial match of the municipality may not exceed one mil of the municipality's full value.

2.__Loans.__The department shall make available loans through the State's infrastructure bank as provided in section 1853 to minimize the annual cost to the municipality of the project match under subsection 1.

§1809.__Urban compact contributions

The Department of Transportation may not require a local match for highway reconstruction projects located in whole or in part in urban compact areas.

Sec. 2. Application. That section of this Act that enacts the Maine Revised Statutes, Title 23, section 1809 applies both prospectively to new projects and to projects in the planning phase on the effective date of this section.