Legislative Update

123^RD MAINE STATE LEGISLATURE

LEGISLATIVE SUMMARY

INTRODUCTION

The First Regular Session of the 123^rd Maine Legislature was a particularly lengthy and busy one for MPPA and the business community. A total of 1931 bills were submitted-MPPA tracked 120 of these bills, and took an active role in 38.

For the first time in many years the Legislature passed a bipartisan budget, which included cuts in social programs, a consolidation of school administration districts, and no tax increases. The sales tax apportionment formula was changed in a way that helped most manufacturers, and yet brought in more money to the State. Funding for the Business Equipment Tax Reimbursement (BETR) program was threatened in a budget alternative proposed by Democrats on the Appropriations Committee, but the final budget included full funding for BETR. MPPA and the State Chamber held a rally and produced full-page newspaper advertisements in support of the budget.

The Legislature's Taxation Committee worked on a comprehensive tax reform package nearly every day for the first four months of the session. They crafted a plan that lowered the income tax from a top rate of 8.5% to a flat 6%, and offered homeowners a reduction in property taxes through an expansion of the homestead and circuit breaker programs. To fund these reductions the Committee proposed an expansion of the sales tax base to services and recreation; eliminating many sales tax exemptions; increasing taxes on food, lodging and auto rentals; and increasing the real estate transfer tax.

The Taxation Committee tried to carve manufacturing out of any tax increases, but when their bill was finally drafted in early June it inadvertently expanded the sales tax to many new services including wood harvesting and real property services for manufacturers. The property tax sections intentionally shifted tax burden to business and non-resident taxpayers. The sales tax changes affected a wide segment of the business community, and MPPA joined a coalition of business community members in opposition to the bill. The business community mounted an effective campaign against the bill, and it was defeated in the Senate. Governor Baldacci, who shared many of the business community concerns, offered to draft his own plan based on the Taxation Committee's bill, for consideration in January.

MPPA worked diligently to defeat LD 1681, a bill that would have required a business with more than 100 employees that closes a facility to either "work in good faith" with the Governor and the DECD Commissioner to find a new owner for the business or pay back any economic incentives the State ever distributed to the business. MPPA also worked to defeat LD 1455, a bill that would have required any manufacturing plant with more than 100 employees to provide a one-year notice of plans to cease operations or lay-off more than 15% of its workforce for a period in excess of 3 months.

MPPA joined a broad coalition of businesses and trade associations to successfully support LD 1027, An Act to Clarify the Definition of Physical or Mental Disability in the Maine Human Rights Act. This bill incorporates the ADA definition of disability to mean, "substantially limits one or more life activities", but expands the list to include conditions such as cancer, diabetes, multiple sclerosis, and similar diseases. The bill provides an alternative definition that requires proof of a physical or mental impairment that is longer than six month in duration and impairs health to a "significant extent as compared to what is ordinarily experienced by the general population."

MPPA worked with the State Chamber of Commerce to defeat problematic labor bills. One of these bills, LD 1272, would have allowed employees that are out of work due to a labor dispute to draw unemployment benefits. Other defeated bills would have significantly increased unemployment taxes in Maine.

Health care reform was a hotly debated topic, but in the end a bill to make a number of substantive changes to the Dirigo Health program was defeated. This issue will be revisited next year.

MPPA submitted two environmental bills to the Legislature, both of which passed in amended form. LD 882 establishes a 10-year statute-of-limitations for DEP to take action on certain environmental violations. The bill was submitted at the request of MPPA in order to place some reasonable time limits on the pursuit of enforcement actions for minor environmental violations. LD 437 would have established quantity thresholds for reporting oil spills provided such spills were not released to surface or ground water and the facility maintained a log of each spill event. The bill was amended to a resolve requiring DEP to establish guidance for reporting certain oil spills.

The Legislature overwhelmingly endorsed Governor Baldacci's Regional Greenhouse Gas Initiative (RGGI). The RGGI bill establishes a cap and trade system on carbon dioxide emissions from the state's six largest fossil fuel energy plants, including two facilities owned by Verso Paper. The bill was drafted so that "behind the meter" power used in manufacturing is not included in the emission allowances. The program will raise the cost of electricity-for some mills this may be offset by a provision to allow large electricity consumers to apply for unrestricted grants to fund certain energy efficiency projects. This bill affects MPPA member companies in different ways, so MPPA took a neutral position on it.

In all it was a successful session for MPPA and our manufacturing associates. Much of the work was continued to 2008, where political posturing will be more prevalent as all parties ready themselves for November elections.

The following document is a summary of bills and public laws enacted this legislative session, as well a brief description of some bills that were defeated. Many thanks, to you our members, for your continued support. As always, we look forward to continuing to serve your interests.

NEW PUBLIC LAWS

APPROPRIATIONS

L.D. 499; Public Law c. 240, An Act Making Unified Appropriations and Allocations for the Expenditures of State Government, General Fund and Other Funds, and Changing Certain Provisions of the Law Necessary to the Proper Operations of State Government for the Fiscal Years Ending June 30, 2007 and June 30, 2008 and June 30, 2009 (Sponsor: Representative Jeremy R. Fischer, D-Presque Isle)

This is the Part I Budget Bill or Biennial Budget for fiscal years ending 2008 and 2009. The bill reduces spending for some social programs, restructures school administration, fully funds the BETR program, keeps spending within the LD 1 limits, and does not raise taxes. The budget includes total General Fund appropriations of $3,130,042,696 for fiscal year 2008 and $3,188,538,616 for fiscal year 2009. The budget also includes allocations from federal and special revenues of $3,705,373,482 for fiscal year 2008 and $3,762,915,676 for fiscal year 2009. MPPA supported this bill and worked with the Maine State Chamber to organize a rally in support of the bill.

The budget contains a provision (Part V) that converts Maine's current 3-factor income tax apportionment formula to a single sales factor formula. Under current law, Maine apportions the income of a multi-state business based on a 3-factor formula consisting of a property, a payroll and a double weighted sales factor. This legislation eliminates the property and payroll factors so that the apportionment of income to Maine is based entirely on a fraction equal to sales in Maine divided by total sales everywhere. The throwback rule remains in place under this bill. Under the throwback rule, sales of tangible personal property are "thrown back" to Maine if the property is shipped from an office, store, warehouse, factory or other place of business in Maine and the purchaser is the United States Government or the taxpayer is not taxable in the state of the purchaser.

BUSINESS & ECONOMIC DEVELOPMENT

L.D. 1926; Public Law, An Act to Expand the Pine Tree Development Zone Benefits to Small and Midsize Maine Manufacturers (Sponsor: Representative Nancy E. Smith, D-Monmouth)

The bill extends Pine Tree Development Zone benefits to small and midsize manufacturing companies who add a minimum of 4 new full-time employees and that make a minimum investment of $225,000. MPPA supported this bill.

ENVIRONMENTAL

L.D 443; Public Law, c. 95, An Act To Require the Department of Environmental Protection To Meet the Federal Requirements on Regional Visibility Impairment (Sponsor: Senator John L. Martin, D-Aroostook)

This bill was submitted on behalf of DEP and requires the agency to report to the Legislature by March 2008 on its plan for meeting federal regional haze requirements. As submitted the bill would have mandated low-sulfur fuel requirements for all BART-eligible sources. As amended the bill requires the DEP to determine which BART sources need additional controls to meet visibility requirements and those sources would be required to use fuel sources with no more than 1% sulfur content, or reduce sulfur emissions by 50% using a baseline year established by the DEP. According to DEP records, all MPPA member companies have controls in place to meet the visibility requirements, or have adopted measures to meet the 50% sulfur reduction requirement.

L.D. 848; Public Law, c. 43, An Act To Encourage Greater Public Input into the State Environmental Licensing Process (Sponsor: Representative James D. Annis, R-Dover Foxcroft)

This bill provides authority to the BEP or DEP, at their discretion, to hold public meetings on a proposed project for the purpose of collecting comments on a pending action.

L.D. 1845; Public Law, An Act To Strengthen the Laws Concerning Surface Water Ambient Toxic Monitoring (Sponsor: Representative Leila J. Percy, D- Phippburg)

This bill adds a second non-voting legislative member from the Marine Resources member to the Technical Advisory Group, and requires the Department's of Environmental Protection and Marine Resources to identify a reliable source of funding for SWAT by January 4, 2008.

L.D 1851; Public Law, c. 317, An Act To Establish the Regional Greenhouse Gas Initiative Act of 2007 (Sponsor: Representative Theodore S. Koffman, D-Bar Harbor)

This bill implements the Regional Greenhouse Gas Initiative in Maine and establishes the Energy and Carbon Savings Trust that may be used to fund eligible energy efficiency projects. Assessments on Maine's larger electricity consumers to fund the PUC's Efficiency Maine program are eliminated and revenues from the state's auction of its carbon emission credits will be directed to the trust fund. The bill also provides certain allowances for facilities that install combined heat and power systems that utilize both heat and electricity energy from fossil fuels.

JUDICIARY

L.D. 882; Public Law c. 337, An Act to Create a 10-year Statute of Limitations for Certain Environmental Violations (Sponsor: Senator Lois A. Snowe-Mellow, R-Androscoggin)

This bill was submitted at the request of MPPA and would have required that the DEP or Attorney Generals' Office bring enforcement actions within 5 years of the violation. The bill, as amended, requires that enforcement actions for air and water violations that are reported to the DEP be brought by the State within 10 years of the date of knowledge by the state of the violation.

L.D. 1027, Public Law c. 385, An Act To Clarify the Definition of "Physical or Mental Disability" in the Maine Human Rights Act (Sponsor: Senator Peter Mills, R-Somerset)

As originally drafted, this bill would have amended the definition of physical or mental disability in Maine law to be consistent with that of the federal Americans with Disability Act. As adopted, the bill incorporates the ADA definition of disability to mean, "substantially limits one or more life activities", but expands the list to include conditions such as cancer, diabetes, multiple sclerosis, and similar diseases. The bill provides an alternative definition that requires proof of a physical or mental impairment that is longer than six month in duration and impairs health to a "significant extent as compared to what is ordinarily experienced by the general population."

L.D. 1372, Public Law, An Act To Increase Caps on Damages in Actions under the Maine Human Rights Act (Sponsor: Representative Janet T. Mills, D-Farmington)

This bill increases the caps on damages that can be awarded under the Maine Human Rights Act. For large employers the caps relate to compensatory and punitive damages and generally mirror the provisions of federal anti-discrimination law. Caps for employers with greater than 200 employees will increase by $100,000, those with more than 500 will have a $200,000 increase.

LABOR

L.D. 1884, Public Law c. 352, An Act to Create the Competitiveness Skills Scholarship Fund and to Improve Maine Employment Security Programs (Sponsor: Representative James J. Campbell, R-Newfield)

This bill establishes a new job training fund, eliminates the social security and pension offset for seniors receiving unemployment insurance benefits, makes the UI benefits for part-time employees permanent and lowers the UI trust fund reserve from its current level of 21 months to 18 months. The new training program is funded through a "surcharge" on an employer's UI tax, which is targeted to raise $3 million and must be directed at skill training and education in high demand, high wage jobs. Lowering the UI reserve account by 3 months is expected to result in an overall tax reduction for employers of approximately $68 million in 2008/2009.

TAXATION

L.D. 528, Public Law c. 372, An Act to Make BETR Better (Sponsor: Representative Nancy E. Smith, D-Monmouth)

As amended, the bill clarifies that used equipment may qualify for the Business Equipment Tax Reimbursement (BETR) Program if it was first placed in service in the State after April 1, 1995 and does not qualify for the Business Equipment Tax Exemption passed last year.

L.D. 1225, Public Law, An Act to Make Technical Changes to the Repeal of the Personal Property Tax on Business Equipment (Sponsor Senator Joseph C. Perry, D-Penobscot)

The bill as amended changes the reporting dates for business equipment eligible for the personal property tax exemption from May 1^st to April 1^st but allows an automatic extension to May 1^st if necessary. MPPA initiated the amendment and supported the bill.

L.D. 1504; Public Law, An Act to Make Minor Substantive Changes to the Tax Laws (Sponsor: Representative John F. Piotti, D-Unity)

This bill makes a number of minor changes to the tax laws, including,

Clarification of Business Equipment Exemption Reporting Requirement: Section 10 of the Act clarifies the contents of the report that must be filed by taxpayers claiming the business equipment exemption on or before May 1 of each year. The report must identify the property for which exemption is claimed that would otherwise be subject to tax on April 1^st of that year.

Forest Management Planning Credit: The Act clarifies that the forestland must be located in this State in order to qualify for the credit.

Payee Withholding Statements: The Act provides that a withholder must furnish a written withholding statement to the payee on or before January 31^st of the succeeding year, or in the case of an employee who is terminated before the close of the calendar year, within 30 days from the date of receipt of a written request from the employee if that 30 day period ends before January 31^st. The January 31^st deadline had previously been February 15^th. The Act imposes a new $50 penalty for willful failure to furnish the statement in a timely manner, or willfully furnishing a false or fraudulent statement.

L.D. 1739, Public Law, An Act Concerning Technical Changes to the Tax Laws (Sponsor: Representative John F. Piotti, D-Unity)

This bill makes technical changes to Maine's tax laws. With respect to the newly enacted Business Equipment Exemption, Sections 23 through 25 correct some erroneous cross-references in the business equipment property tax exemption enacted last year. Sections 29 and 30 amend the definitions of water pollution and air pollution control facilities to codify a 1994 court decision that purchases of chemicals and supplies that are integral to the effectiveness of a certified pollution control facility are included within the sales tax exemption. The bill also provides for the service provider tax exclusion for certain transportation costs. Section 54 clarifies that the cost of transportation from a service provider's place of business or other point from which shipment is made directly to the purchaser is excluded from the service provider tax base, provided that the charges are separately stated and the transportation occurs by means of common carrier, contract carrier or the United States Postal Service. Previously this exclusion had been a part of the sales and use tax law, but a similar exclusion had been omitted from the service provider tax. This change corrects that omission.

NEW RESOLVES

BUSINESS & ECONOMIC DEVELOPMENT

L.D. 1469; Resolve c. 70, To Enhance the Accountability in Tax Increment Financing (Sponsor: Representative Seth A. Berry, D-Bowdoinham)

As originally drafted, the bill proposed that new Tax Increment Financing projects be subjected to higher standards for approval and be re-approved on an annual basis. The amended version of the bill is now a resolve. The resolve directs the Department of Economic & Community Development to study the effectiveness of TIF incentives and to develop recommendations for improving accountability and reporting. The bill directs DECD to look at current TIF reporting policies; goals and objectives of TIFs including, but not limited to, job creation and retention; and to look at TIF recommendations made by the Office of Program and Evaluation and Government Accountability (OPEGA). The bill directs DECD to report back to the Legislature's Business & Economic Development Committee by January 15^th 2008. The bill also authorizes the Committee to submit legislation relating to the report. MPPA will be monitoring this closely.

ENERGY

L.D. 1381; Public Law, c. 52, Resolve, To Ensure the Success of Regional Climate Change Efforts (Sponsor: Representative Kenneth C. Fletcher, R-Winslow)

This resolve requires the Public Advocate to convene a study group to examine issues related to the impact of the regional greenhouse gas initiative on electricity prices for Maine consumers and to identify potential strategies to reduce the costs. MPPA supported this bill.

ENVIRONMENTAL

L.D 437; Public Law, c. 99, Resolve Concerning the Reporting of Oil Spills (Sponsor: Senator John L. Martin, D-Aroostook)

This bill was submitted at the request of MPPA and was intended to reduce paperwork for reporting all oil spills, regardless of quantity or location of the spill. As submitted, the bill would have provided that oil spills of 50 gallons or less need not be reported to DEP provided certain conditions were met. The bill was amended as a Resolve to require the Department of Environmental Protection to clarify criteria it uses for entering into memoranda of agreements with facilities to reduce reporting requirements for some oil spills. It also requires the department to undertake education and outreach to small oil storage facilities and timber operations concerning the reporting requirements relating to the discharge of oil.

L.D. 1219; Public Law, c. 80, Resolve, to Study Flood Control and Water Storage (Sponsor: Senator Elizabeth H. Mitchell, D-Kennebec)

This resolve requires the DEP, Department of Defense, Veterans and Emergency Management and the Maine Emergency Management Agency to study flood control, water storage and water level regimes of Maine's impoundments in order to reduce the threat of flooding in the state. As originally drafted, the bill was entitled "An Act To Prevent Flooding" and would have added "flood control" as a protected, designated use in Maine's water quality standards.

L.D. 1528; Public Law, c. 88, Resolve, To Require State Agencies with Jurisdiction over Dams To Review and Update Plans for the Passage of Native Diadromous Fish (Sponsor: Senator Dennis S. Damon, D-Hancock)

As originally drafted, this bill would have required dam owners to provide downstream and upstream passage for indigenous diadromous fish such as eels, alewives, shad and salmon by January 2008. As amended the bill was changed to a resolve to review current efforts to provide for eel and fish passage over dams on the Kennebec and Sebasticook Rivers, and for the DEP and DMR to identify impediments for eel and fish passage on all rivers of the State. The Resolve also requires the agencies to develop a proposed amendment to Maine's water quality standards to include a definition for "fish kills".

FAILED LEGISLATION

BUSINESS & ECONOMIC DEVELOPMENT

L.D. 607, An Act to Improve Electrical Safety (Sponsor: Senator Margaret Rotundo, D-Androscoggin)

This bill would have required that a licensed electrician or a municipal code enforcement officer inspect any electrical work conducted by a nonlicensed person, regardless of whether such work was performed in a residential commercial or industrial location.

L.D. 630, Resolve, Directing the Commissioner of Professional and Financial Regulation to Strengthen Safety Inspection Requirements Governing Industrial Elevators (Sponsor: Representative John L. Patrick, D-Rumford)

This resolve would have required the Department of Professional and Financial Regulation to review and change current industrial elevator safety inspection requirements to be consistent with residential and business elevator requirements, including those industrial elevators not used for transporting passengers.

L.D. 719, An Act to Encourage Manufacturing by Expanding Pine Tree Development Zones (Sponsor: Representative Charles William Harlow, D-Portland)

This concept draft would have expanded Pine Tree Development Zones to allow Maine manufacturers to be more competitive with out-of-state manufacturers. The bill was replaced by L.D. 1926, which was signed into law. MPPA supported this bill.

L.D. 944, An Act to Reduce Regulatory Costs for Maine Businesses (Sponsor: Senator Douglas M. Smith, R-Piscataquis)

This bill was a concept draft that would have established a council of private sector business leaders to reduce regulatory costs on Maine businesses by establishing a new regulatory approach based on broad principles rather than specific rules and regulations.

L.D. 1278, An Act To Require Licensing for Certain Mechanical Trades (Sponsor: Representative Herbert E. Clark, D-Millinocket)

This bill would have required licensure of persons performing sheet metal work, refrigeration and air conditioning work, pipefitting work, and fire protection sprinkler system work. Persons who had completed apprenticeships, or who had worked at least 2,000 hours in one of these trades, would have been grandfathered from the licensing requirements.

L.D. 1681, An Act to Preserve and Grow Maine Jobs (Sponsor: Senator Elizabeth M. Schneider, D-Penobscot)

This bill, known as the "Clawback Bill" would have required a business with more than 100 employees that closes a facility to "work in good faith" to find a new owner for the facility, or reimburse the State for the full amount of all economic development incentives ever distributed to the business. MPPA opposed this bill.

L.D. 1863, An Act To Allow Pressure Boiler Inspections by National Board-certified Inspectors (Sponsor: Senator Richard W. Rosen, R-Hancock)

This bill would have required authorization from a licensed boiler inspector prior making repairs to any boiler or pressure vessel.

ENERGY

L.D. 764, An Act to Clarify Standards for Issuance of a Certificate of Public Convenience and Necessity (Sponsor: Representative Sean Faircloth, D-Bangor)

This bill would have required the Public Utilities Commission to consider the cost to Maine ratepayers for any new electric transmission line capable of operating at 138 kilovolts or more.

L.D. 1030, An Act To Encourage Cogeneration (Sponsor: Senator Philip L. Bartlett, D-Cumberland)

This bill would have established a revolving loan fund administered by the Finance Authority of Maine to support the development, construction, expansion and modernization of cogeneration units in the state. Direct loans would be provided to fund all or part of a cogeneration project if the facility was designed to use renewable resources as an energy source.

L.D. 1625, An Act to Protect Maine Consumers from Windfall Profits of Generators (Sponsor: Senator John L. Martin, D-Aroostook)

This bill was a concept draft that proposed a windfall profits tax on generators of electricity such as hydropower or nuclear who are not required to purchase carbon dioxide credits through the Regional Greenhouse Gas program.

ENVIRONMENTAL

L.D. 399, An Act To Require Impact Statements from Potential Purchasers of Public Utilities and Those Who Apply To Extract Natural Resources (Sponsor: Representative James M. Schatz, D-Blue Hill)

This bill would have required that a comprehensive economic and environmental study be conducted prior to issuance of a lease, permit or license for extraction of a natural resource from public lands or waters of the state.

L.D 1090, An Act To Authorize the State's Participation in the Regional Greenhouse Gas Initiative (Sponsor: Representative Theodore S. Koffman, D-Bar Harbor)

This bill would have authorized the state's participation in the Regional Greenhouse Gas Initiative; would have allowed DEP to develop routine, technical rules that comply with the RGGI model rule; and would have directed that all emission credits sold in the state must be auctioned with proceeds going to an energy efficiency and carbon reduction trust fund. The bill was replaced by L.D. 1851.

INSURANCE & FINANCIAL

L.D. 1890, An Act To Make Health Care Affordable, Accessible and Effective for All (Sponsor: Representative Hannah M. Pingree, D-North Haven)

This bill was the Governor's proposal that would have made a number of substantive changes to the Dirigo Health program.

JUDICIARY

L.D. 296, An Act to Amend the Laws Governing Indemnification Agreement (Sponsor: Representative Walter A. Wheeler, Sr., D-Kittery)

This bill would have prohibited a company from including language in a contract holding the contractor liable for damages or injury. The bill was ultimately withdrawn. MPPA opposed this bill.

L.D. 1415, An Act Regarding the Right of a Person To Appeal from an Action of a State Agency (Sponsor: Senator Dennis S. Damon, D-Hancock)

This bill would have allowed preliminary, procedural, or other non-final actions of an agency to be reviewed by the Superior Court. If passed, this bill could have significantly increased time and expenses for receiving administrative licenses or permits.

LABOR

L.D. 729, An Act To Compensate Employees Required To Be "On-call" by Their Employers (Sponsor: Representative Christian D. Greeley, R-Levant)

This bill would have prohibited an employer from requiring on-call duty unless that status was a condition of employment at the time of hire. The bill would have required that on-call pay be provided unless a written agreement provided otherwise.

L.D. 1113, An Act to Prevent Workplace Bullying (Sponsor: Senator Margaret Rotundo, D-Androscoggin)

This was a concept draft that sought to address intimidating, demeaning and reprehensible behavior in the workplace.

L.D. 1272, An Act To Repeal Certain Unemployment Benefit Disqualifications (Sponsor: Representative Herbert E. Clark, D-Millinocket)

This bill would have repealed provisions of Maine law that prohibit employees from drawing UI benefits as a result of a labor dispute.

L.D. 1455, An Act Concerning the Duties of Employers in the Case of Mass Employee Termination (Sponsor: Representative John L. Patrick, D-Rumford)

This bill would have required an employer with at least 100 employees to provide a 1-year notice to employees, municipalities, and DOL of an intended lay-off impacting at least 15% of the workforce, and to provide severance pay and health benefits for up to one year after the reduction. The bill would have also required the employer to pay into a fund an amount equal to 15% of the total wages of all eligible employees.

L.D. 1545, An Act To Protect Workers from Political or Religious Intimidation (Sponsor: Representative Sean Faircloth, D-Bangor)

This is identical to a bill that was defeated in the 122^nd Legislature and would have created a cause of action for an employee that was disciplined for refusing to attend an employer-sponsored meeting if the meeting was being held to discuss religious or political matters. "Political Matter" was broadly defined to include party affiliation, support/opposition to a candidate for public office, a partisan or nonpartisan public policy issue presented for the vote of electors, or support/opposition to joining any lawful political, social, community or labor organization.

L.D. 1777, An Act for Fair Treatment of Workers (Sponsor: Senator Joseph C. Brannigan, D-Cumberland)

This bill would have provided that an employer may terminate the employment of an employee for misconduct only.

LEGAL & VETERANS

L.D. 1498, An Act to Prohibit Out-Of-State Corporations from Contributing to State and County Elections (Sponsor: Senator Peter Bowman, D-York)

This bill would have prohibited an out-of-state corporation from contributing to a county or state election for a referendum campaign or to a candidate for political office. MPPA opposed this bill.

L.D. 1507, An Act regarding Political Activities of Corporation (Sponsor: Senator Ethan K. Strimling, D-Cumberland)

This bill would have prohibited corporations from taking part in political debate or campaigns. MPPA opposed this bill.

TAXATION

L.D. 132, An Act to Reform the Maine Tax Code (Sponsor: Representative Anne Rand, D-Portland)

This bill was a concept draft that would have made several changes to Maine's tax laws. The bill would have increased the top income tax rate, created a local option sales tax and broadened the sales tax base. MPPA monitored this bill.

L.D. 261, An Act Define More Clearly Procedures by Which a Municipality Assesses Property (Sponsor: Representative John L. Tuttle, Jr., D-Sanford)

The bill as amended would have created a resolve to establish an eleven member Property Tax Assessment Review Committee to review and report back on municipal assessment practices. MPPA monitored this bill.

L.D. 641, An Act to Amend the Nonresident Income Tax Filing Requirements (Sponsor: Representative Richard G. Woodbury, U-Yarmouth)

As amended, this bill would have amended the minimum taxability threshold for nonresidents by increasing from 10 to 12 the number of days a nonresident must be perform personal services in Maine before needing to file Maine income taxes. The bill would have also provided a 36-day grace period, exempting such activities as a training or installing new equipment from Maine income tax liability. MPPA supported this bill. The bill was killed on the Appropriations Table.

L.D. 690, An Act Regarding the Sales Tax (Sponsor: Representative Wendy Pieh, D-Bremen)

This bill would have amended the sales tax laws by eliminating all sales tax exemptions and lowering the sales tax rate to 3%. The bill would have also allowed business to retain ½ cent of the 3 cents per dollar imposed and established a mechanism to increase or decrease the sales tax rate based on projected shortfalls or surpluses. In addition, all revenues that would have been generated above current sales tax levels would have been used to decrease property tax rates through increased education funding and homestead tax exemption relief. MPPA opposed the bill.

L.D. 693, Resolution, Proposing an Amendment to the Constitution of Maine to Authorize the Legislature to Allow Municipalities to Exempt from Property Tax a Portion of the Value of Homesteads (Sponsor: Representative Wendy Pieh, D-Bremen)

This resolution would have placed a referendum question on the ballot asking Maine voters to approve a constitutional amendment to allow municipalities to exempt a portion of the just value of an owners' principal residence from taxation. This would have shifted the tax burden to businesses. MPPA opposed this bill.

L.D. 850, An Act to Reduce Taxes (Sponsor: Representative Thomas R. Watson, D-Bath)

This bill was part of the tax reform debate. The bill would have, among other things, eliminated the sales tax exemption for packaging materials. MPPA opposed this bill.

L.D. 962, An Act to Reform and Lower Maine Taxes (Sponsor: Representative Patsy Garside Crockett, D-Augusta)

Among other things, this bill would have expanded the sales tax base, eliminating numerous sales tax exemptions, and would have imposed a sales tax on construction services. MPPA opposed this bill.

L.D. 1459, An Act Concerning Spending Caps (Sponsor: Representative Patrick S. A. Flood, R-Winthrop)

This bill would have allowed municipalities to exceed by a 2/3 vote spending caps established by Public Law 2005, Chapter 2. Current law provides these caps may be exceeded by a majority vote. MPPA supported this bill.

L.D. 1560, An Act to Rebalance Maine's Tax Code (Sponsor: Representative Lawrence Bliss, D-South Portland)

This bill would have repealed the sales tax exemption for packaging materials and imposed a sales tax on personal property and real property services, potentially costing the manufacturing community millions of dollars. The bill would have also increased the real estate transfer tax on a sliding scale of $1 per thousand for real estate valued at less than $100,000 up to $7 per thousand of value for properties exceeding $1,000,000. MPPA opposed this bill.

L.D. 1588, An to Enact the 2007 Tax Reform and Tax Relief Act (Sponsor Representative Richard G. Woodbury, U-Yarmouth)

This bill was part of the tax reform debate. Among other things the bill would have reduced the income tax to 4% while eliminating many sales and income tax exemptions and deductions and increasing the sales and excise tax rates to pay for the decrease. The bill would have lowered the corporate income tax to 4%, but eliminated prospectively business tax incentives programs such as BETR, Pine Tree Zone incentives, and all sales tax exemptions. The tax increases would have greatly outweighed the lower corporate income tax rate, costing the business community tens of millions of dollars in increased tax burden. MPPA opposed this bill.

L.D. 1610, An Act to Preserve Manufacturing in Maine (Sponsor: Representative Deborah L. Simpson, D-Auburn)

This bill would have eliminated the personal property tax on pre-1995 business equipment. While a noble concept, the bill would have had resulted in a large fiscal impact for municipalities and would have reopened the debate on the elimination of the tax on new personal property that recently went into effect. MPPA monitored this bill.

L.D. 1631, An Act to Cut Taxes for Working Income Mainers (Sponsor: Representative Sean Faircloth, D-Bangor)

Yet another tax reform bill, L.D. 1631 would have repealed the sales tax exemption for packaging materials and expanded the sales tax to personal and real services. In addition the bill would have increased the real estate transfer tax. MPPA opposed the bill.

L.D. 1819, Resolution, Proposing an Amendment to the Constitution of Maine to Restrict Property Tax Increases (Sponsor: Senator Ethan K. Strimling, D-Cumberland)

This bill would have amended the Maine Constitution to do three things: require a 2/3 approval of each House of the Legislature to adjust the income tax, sales tax or motor vehicle excise tax rates; authorize municipalities to opt out of the un-reimbursed portion of the homestead exemption by holding a municipal referendum and require a 2/3 vote of a municipal body to increase the local property tax rate or implement a local option sales tax that would in part be used to provide property or excise tax relief. The bill was coupled with L.D. 1925, the Taxation Committee's tax reform bill. Republicans noted that in order to maintain their support on the tax reform package, this bill would have to pass in both the House and Senate. The bill died in the House.

L.D. 1925, An Act to Cut Taxes on Maine Residents by $140,000,000 (By Joint Order)

This was the Taxation Committee's tax reform bill to lower the income tax from a top rate of 8.5% to a flat 6%, and offer homeowners a reduction in property taxes through an expansion of the homestead and circuit breaker programs. To fund these reductions the Committee proposed expanding the sales tax base to services and recreation; eliminating many sales tax exemptions; increasing taxes on food, lodging and auto rentals; and increasing the real estate transfer tax.

The Taxation Committee tried to carve manufacturing out of any tax increases, but when their bill was finally drafted in early June it inadvertently expanded the sales tax to many new services including wood harvesting and real property services for manufacturers. The property tax sections intentionally shifted tax burden to business and non-resident taxpayers. The bill was later amended in the House to eliminate these tax shifts onto manufacturers, although even in its amended form manufacturers would have been subject to some relatively minor tax increases.

The sales tax changes affected a wide segment of the business community, and, based on the language of the bill coming out of Committee, MPPA joined a coalition of business community members in opposition to the bill. The business community mounted an effective campaign against the bill, which passed as amended in the House but was defeated in the Senate. Governor Baldacci, who shared many of the business community concerns, offered to draft his own plan based on the Taxation Committee's bill, for consideration in January.

CARRYOVER LEGISLATION

APPROPRIATIONS

L.D. 425, An Act Regarding the Accounting Procedure for Certain State Programs (Sponsor: Representative Abigail Holman, R-Manchester)

The bill would reverse legislation enacted in 2005 to establish a Business Equipment Tax Reimbursement (BETR) program reserve account funded by income tax revenue, from which the State Tax Assessor pays BETR claims. If L.D. 425 were to be approved BETR reimbursements will once again be funded though a General Fund appropriation. The BETR reserve account provides a more stable mechanism to fund BETR payments. MPPA opposes this bill.

L.D. 804, an Act to Ensure Responsible Government Spending and Investment (Sponsor: Senator Beth Edmonds, D-Cumberland)

This bill would implement spending caps proposed by the State Chamber and other groups as an alternative to the Taxpayer Bill of Rights (TABOR) proposal that failed at the polls last November.

L.D. 1852, An Act to Provide Taxpayer Relief (Sponsor: Representative Scott E. Lansely, R-Sabattus)

This bill would impose expenditure limitations at the state and local level that may only been exceeded by a 2/3 vote of the Legislature or a majority vote of the voters of the local district.

ENVIRONMENTAL

L.D. 1392, An Act To Update the Dioxin Monitoring Program (Sponsor: Senator John L. Martin, D-Aroostook)

This is a Department of Environmental Protection bill that proposes to repeal the sunset provisions on the state's dioxin monitoring program. The program would have no end date. Maine's Kraft pulp mills that had been determined to be in compliance with the state's so-called "Above/Below" fish test would be exempt from being assessed costs for on-going dioxin monitoring.

LABOR

L.D. 1454, An Act to Care For Working Families (Sponsor: Representative Jacqueline R. Norton, D-Bangor)

This bill proposes a requirement for an employer with 25 or more employees to provide 1 hour of paid sick leave for every 30 hours worked, not to exceed 9 days annually. An employer could require verification of the illness or health condition when 5 consecutive paid sick days are used.

TAXATION

L.D. 276, Resolve Proposing an Amendment to the Constitution of Maine to Require the Legislature to Freeze the Valuation of Maine Primary Residence Land (Sponsor: Senator Joseph C. Perry, D-Penobscot)

This resolution proposes that the Legislature approve a constitutional amendment for freezing the valuation of primary residence land. This will shift the tax burden to businesses, new purchasers of homes and homes with a relatively high proportion of value in the structure rather than the land. MPPA opposes this resolution and will monitor this next session.

L.D. 1001, An Act to Eliminate the Property Tax on Business Equipment Owned by Small Retailers (Sponsor: Senator Jonathan T. E. Courtney, R-York)

This bill would extend the business equipment tax exemption to eligible property located at small retail facilities. MPPA supported this bill.

L.D. 1109, Resolve Establishing a Study Commission to Reform Taxes and Spending in Maine (Sponsor: Senator Peter Bowman, D-York)

This resolve would establish a 9-member commission to study taxes and spending in Maine, reviewing the Brookings Institution Report titled, "Charting Maine's Future". The resolve would establish a commission made up of four member of the Senate, two appointed by the President and two by the Minority Leader; two members of the House, one appointed by the Speaker and one by the minority leader; and three member of the public having expertise in taxation and budgeting appointed by the Governor.

MPPA will be monitoring this resolve.

L.D. 1582, An Act to Reduce Maine's Tax Burden over a 10-year Period (Sponsor: Representative Richard G. Woodbury-U-Yarmouth)

This bill seeks a statewide referendum to establish a 10-year plan to reduce Maine's tax burden by placing spending caps on state, local and county government.

L.D. 1833, An Act to Provide Property Tax and Income Tax Relief (Sponsor: Representative Randy E. Hotham, R-Dixfield)

This bill would repeal various sales tax exemptions and broaden the sales tax base to tax services not currently taxed such as personal and real property services and transportation services. The bill proposes to increase the homestead property tax exemption from $13,000 to $50,000. The bill also adjusts the individual income tax brackets and rates. The bill would also increase the sales tax on beer and wine and on meals and lodging. MPPA opposes this bill.