S.P. 837 - L.D. 2243
An Act to Encourage Accountability and Return on Investment for Maine Taxpayers from Economic Development Initiatives
Be it enacted by the People of the State of Maine as follows:
Sec. 1. 5 MRSA §12004-I, sub-§6-E is enacted to read:
Sec. 2. 5 MRSA c. 383, sub-c. II, art. 6 is enacted to read:
Article 6
Return on Public Investment From Economic Development Incentives
§13070-J. Employer reporting associated with eligibility for public subsidies and incentives
1. Definitions. As used in this article, unless the context otherwise indicates, the following terms have the following meanings.
A. "Commission" means the Economic Development Incentive Commission established in section 12004-I, subsection 6-E.
B. "Commissioner" means the Commissioner of Economic and Community Development.
C. "Department" means the Department of Economic and Community Development.
D. "Economic development incentive" means:
(1) Assistance from Maine Quality Centers under Title 20-A, chapter 431-A;
(2) The Governor's Training Initiative Program under Title 26, chapter 25, subchapter IV;
(3) Municipal tax increment financing under Title 30-A, chapter 207;
(4) The jobs and investment tax credit under Title 36, section 5215;
(5) The research expense tax credit under Title 36, section 5219-K;
(6) Reimbursement for taxes paid on certain business property under Title 36, chapter 915; or
(7) Employment tax increment financing under Title 36, chapter 917.
2. Disclosure. Each applicant for an economic development incentive described in subsection 1, paragraph D, subparagraphs (1) to (4) and (7) shall at a minimum identify in writing:
A. The public purpose that will be served by the employer through use of the economic development incentive and the specific uses to which the benefits will be put; and
B. The goals of the employer for the number, type and wage levels of jobs to be created or retained as a result of the economic development incentive received.
Applications filed under this subsection are public records for purposes of Title 1, chapter 13.
3. Report. Annually, an employer receiving an economic development incentive, the value of which exceeds $10,000 in one year, shall submit a written report to the commissioner containing but not limited to the following information:
A. The amount of assistance received by the employer in the preceding year from each economic development incentive and the uses to which that assistance has been put;
B. The total amount of assistance received from all economic assistance programs;
C. The number, type and wage level of jobs created or retained as a result of an economic development incentive;
D. Current employment levels for the employer for all operations within the State, the number of employees in each job classification and the average wages and benefits for each classification;
E. Any changes in employment levels that have occurred over the preceding year; and
F. An assessment of how the employer has performed with respect to the public purpose identified in subsection 2, paragraph A, if applicable.
Reports filed under this subsection are public records for purposes of Title 1, chapter 13.
4. Agency reports. The following agencies shall submit the following reports.
A. The State Tax Assessor shall submit a report by May 1st of 1999 and each odd-numbered year thereafter to the Legislature and the commission identifying the amount of public funds spent and the amount of revenues foregone as the result of economic development incentives. The report must identify the amount of the economic development incentives under the jurisdiction of the Bureau of Revenue Services received by each employer to the extent permitted under Title 36, section 191 and other provisions of law concerning the confidentiality of information.
B. The Commissioner of Labor shall report by May 1st annually to the Legislature and the commission on the amount of public funds spent on workforce development and training programs directly benefiting businesses in the State. The report must identify the amount of economic development incentives under the jurisdiction of the Department of Labor received by each employer and the public benefit resulting from those economic development incentives.
C. The Maine Technical College System shall report by May 1st annually to the Legislature and the commission on the amount of public funds spent on job training programs directly benefiting businesses in the State. The report must identify the amount of economic development incentives under the jurisdiction of the system received by each employer and the public benefit resulting from those economic development incentives.
D. The department shall report by May 1st annually to the Legislature and the commission on the amount of public funds spent for the direct benefit of businesses in the State under municipal tax increment financing, employment tax increment financing and the Governor's training initiative. The report must identify the amount of economic development incentives under the jurisdiction of the department received by each employer and the public benefit resulting from those economic development incentives.
6. Rules. Rules adopted by the commissioner under this section are routine technical rules as defined in chapter 375, subchapter II-A.
§13070-K. Economic development incentive contract
If the commissioner enters into a contractual relationship with an employer regarding the provision of an economic development incentive in return for the employer's agreement to locate, expand or retain its facilities in the State, that contract must contain a statement of the State's expected public benefit from its investment of public funds.
§13070-L. Economic Development Incentive Commission
The Economic Development Incentive Commission, established in section 12004-I, subsection 6-E is created to review and advise the commissioner and the Legislature on public benefits derived from economic development incentives provided to employers.
1. Membership. The commission consists of 11 members appointed as follows:
A. Two members of the Senate appointed by the President of the Senate, at least one of whom is a member of the minority party;
B. Two members of the House of Representatives appointed by the Speaker of the House, at least one of whom is a member of the minority party;
C. The commissioner, or the commissioner's designee, appointed by the Governor;
D. The State Tax Assessor, or the State Tax Assessor's designee, appointed by the Governor; and
E. Five members of the public, appointed as follows: one member by the President of the Senate; one member by the Speaker of the House; and 3 members by the Governor.
2. Appointments; first meeting. Appointments of the first members of the commission must be made by August 1, 1998. The State Tax Assessor or the State Tax Assessor's designee shall convene the first meeting of the commission by September 30, 1998.
3. Terms; vacancies. Terms of the 5 public members are for 3 years, except that for those members first appointed, terms expire on October 1, 2001. Vacancies must be filled for the remainder of
the term in the same manner as the original appointment. Nonpublic members serve at the pleasure of the appointing authority or until their term of office or employment that qualified them for appointment ends. A quorum of the commission is 6 members and the affirmative vote of at least 6 members of the commission is necessary to conduct business. Each year the members shall select a chair from among the members.
4. Duties. The commission has the following duties:
A. Gathering information pertaining to economic development incentives provided in the State and analyzing the effectiveness of those incentives relative to alternative public investment opportunities;
B. Making recommendations to the commissioner on additional economic development incentives that should be included in section 13070-J, subsection 1;
C. Examining and making recommendations to the Legislature concerning whether economic development incentives are being used by employers to relocate employees outside the State or to encourage intercommunity competition for development projects;
D. Reviewing every 2 years economic development incentives provided to employers including the effect of all business-related grants, subsidies, tax exemptions, tax credits and tax abatements made under state law on the aggregate number of jobs created, the cost to taxpayers per job created and the wages paid in those jobs; and making recommendations to the Legislature concerning the public benefit to be gained and the feasibility of applying the wage and benefit standards of Title 36, chapter 917 to other economic development incentives;
E. Reporting biannually to the Legislature, the Governor and the commissioner on the rate of return to the State on its economic development incentives as determined by the commission; and
F. Examining whether economic incentive programs inhibit competition or provide preferential treatment to private employers and making recommendations to the Governor and the Legislature for improvement in the purpose, award criteria, administration, accountability and enforcement of economic development incentive programs.
5. Staffing. The Bureau of Revenue Services shall provide staff assistance to the commission.
This article is repealed October 1, 2001.
Sec. 3. 36 MRSA §5215, sub-§3, ¶¶A and B, as amended by PL 1993, c. 672, §1 and affected by §2, are further amended to read:
A. With property considered to be qualified investment of at least $5,000,000 for that taxable year with a situs in the State and placed in service by the taxpayer after January 1, 1979; and
B. With payroll records and reports substantiating that at least 100 new jobs attributable to the operation of property considered to be qualified investment were created in the 24-month period following the date the property was placed in service. To assess the continuing nature of the jobs, the taxpayer must demonstrate that the new jobs credit base is at least $700,000 for the taxable year of the qualified federal credit or either of the next 2 calendar years. The $700,000 must be adjusted proportionally for any change in Title 26, section 1043, subsection 2 wages from $7,000.; and
Sec. 4. 36 MRSA §5215, sub-§3, ¶C is enacted to read:
C. After August 1, 1998 and before October 1, 2001, who demonstrate that the qualifying jobs under paragraph B are covered by a retirement program subject to the Employee Retirement Income Security Act of 1974, 29 United States Code, Sections 101 to 1461, as amended; that group health insurance is provided for employees in those positions; and that the wages for those positions, calculated on a calendar year basis, are greater than the average annual per capita income in the labor market area in which the employee is employed.
Sec. 5. 36 MRSA §6660 is enacted to read:
§6660. Availability of information
Notwithstanding section 191, information contained in applications for reimbursement, the names of persons receiving reimbursement and the amount of reimbursement paid to an applicant may be publicly disclosed by the bureau. This section does not permit the disclosure of taxpayer identification numbers.
Sec. 6. Appropriation. The following funds are appropriated from the General Fund to carry out the purposes of this Act.
1998-99
ADMINISTRATIVE AND FINANCIAL SERVICES, DEPARTMENT OF
Bureau of Revenue Services
All Other $25,000
Provides funds for the computer programming and other costs associated with gathering information necessary to provide biannual reports to the Legislature related to economic development incentives.
DEPARTMENT OF ADMINISTRATIVE AND
FINANCIAL SERVICES ____________
TOTAL $25,000
LEGISLATURE
Economic Development Incentive Commission
Personal Services $2,420
All Other 3,200
Provides funds for the per diem and expenses of legislative members and miscellaneous costs, including printing, of the Economic Development Incentive Commission.
LEGISLATURE ____________
TOTAL $5,620
APPROPRIATION ____________
TOTAL $30,620
Effective July 9, 1998, unless otherwise indicated.
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