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1996 Maine Attorney General Reports and Opinions 1 (1996)

handle is hein.sag/sagme0024 and id is 1 raw text is: 96-1

ATTORNEY GENERAL                     0                              REGIONAL OFFIcEs:
Telephone (207) 626-8800
TFAXn: (207 2-8800           6 STATE HOUSE STATION                   TEL: (207) 822-0260
FAX: (207] 287-3145
AUGUSTA, MAINE 04333-0006
January 3, 1996
Brian H. Mahaney, Esq.
State Tax Assessor
Bureau of Taxation
24 State House Station
Augusta, ME 04333-0024
Dear Mr. Mahany:
I am responding to your request for an opinion relating to Tax Increment
Financing (TIF) under Maine law. Your request is made in behalf of the TIF Task
Force of which you are a designated member as well as in your capacity as State Tax
Assessor. First, you have asked whether, pursuant to a TIF development plan or
otherwise, a municipality may constitutionally pay public money directly or
indirectly to a private taxpayer where the payments are not in exchange for services
rendered. 'Your second inquiry is whether payments of public moneys by a
municipality to a private taxpayer where those payments may offset the amount of
incremental property taxes on property which is the subject of TIF financing violate
the provisions of the Maine Constitution relating to equal apportionment and
assessment of such taxes. For reasons set forth below, it is the opinion of this
Department that a municipality may constitutionally pay public moneys to a private
party without regard to whether the payments are in consideration of services
rendered by that private party providing that the benefit to the municipality can
reasonably be characterized as serving a public purpose, and that payments of
revenues derived from property tax increments to private parties as described in
your second inquiry do not result in an unconstitutional apportionment and
assessment of property tax.
A brief description of tax increment financing is provided to assist an
understanding of this opinion. In Maine, the authority for TIF financings is found
at 30-A M.R.S.A. § 5251 e sq., the Municipal Development Districts statute. In a
typical project utilizing TIF, a municipality adopts a plan for new development in
an area of the municipality to provide new employment opportunities and broaden

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