CHAPTER 559
S.P. 941 - L.D. 2391
An Act to Simplify the Approval Process of Existing State Tax Increment Financing Districts
Be it enacted by the People of the State of Maine as follows:
Sec. 1. 30-A MRSA §5254-A, sub-§1-A, ¶C, as amended by PL 1993, c. 429, §2, is further amended to read:
C. Prior to approval of the proposed state tax increment financing district, the committee shall estimate the annual amount to be deposited in the state tax increment contingent account for all existing state tax increment financing districts, including the proposed district, and that estimate may be used only in determining compliance with the limitations imposed under subsection 4, paragraphs D and E. The committee shall project for 2 calendar years immediately subsequent to retail activity commencing in a state tax increment financing district the level of income and sales tax collections for a market area assuming the absence of the state tax increment financing district. After the initial projection, the committee must every 2 years project the level of income and sales tax collections for a market area assuming the absence of the state tax increment financing district. The committee shall determine a market area and every 2 years update that determination as retail activity develops in the state tax increment financing district and market area.
Sec. 2. 30-A MRSA §5254-A, sub-§2, ¶A, as amended by PL 1997, c. 220, §4, is further amended to read:
A. On or before April 15th of each year, designated businesses located within a state tax increment financing district shall report the amount of sales tax paid in connection with operations within the district, the number of employees within the district, the state income taxes withheld from employees within the district for the immediately preceding calendar year and any further information the committee State Tax Assessor may reasonably require.
On or before June 30th of each year, the committee State Tax Assessor shall determine the state tax increment of a district for the preceding calendar year.
Sec. 3. 30-A MRSA §5254-A, sub-§2-A, as repealed and replaced by PL 1993, c. 429, §4, is amended to read:
2-A. Calculation of state tax increment. The committee State Tax Assessor shall calculate a state tax increment for a particular district by:
A. Determining the gross state tax increment as applicable to the particular district;
B. Determining the state tax increment as applicable to the particular district by removing from the gross state tax increment the following:
(1) Revenues attributed to business activity shifted from affiliated businesses to the state tax increment financing district. This adjustment is calculated by comparing the current year's sales and income tax revenues for each designated business that is a member of an affiliated group with revenues for the group as a whole. If the growth in sales and income tax revenue for the entire group exceeds the growth of sales and income tax revenue generated by the designated business, the gross state tax increment does not have to be adjusted to remove business activity shifted from affiliated businesses. If the growth in sales and income tax revenue for the affiliated group is less than the growth in sales and income tax revenue for the designated business, the difference is presumed to have been shifted from affiliated businesses to the designated business and the gross state tax increment for the district is reduced by the difference; and
(2) Revenues attributed to retail spending shifts. Actual sales tax collections within the market area during the current year must be compared to the committee's projected level of sales tax collections within the market area for the current year assuming the absence of the state tax increment financing district. If actual sales tax collections within the market area are less than projected sales tax collections within the market area, the difference is presumed to be shifts in retail spending and the total sales tax collection within the state tax increment financing district is reduced by the difference; and
(3) Revenues attributed to normal growth. This adjustment is calculated by subtracting from the gross state tax increment a figure obtained by multiplying the previous year's total amount of sales taxes reported and income taxes withheld by designated businesses within the district by the percentage change in sales tax receipts and withholding taxes for all businesses within the State as a whole;
C. Offsetting designated businesses with negative tax increments with those with positive increments in determining the state tax increment for the district as a whole; and
D. Excluding all income tax revenue in calculating the state tax increment attributable to retail business operations.
Effective August 11, 2000, unless otherwise indicated.
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