Legislative Bulletin, March 6, 1998

TAXATION COMMITTEE SENDS HOMESTEAD TO FULL LEGISLATURE

The Taxation Committee held a work session on Thursday on the Governor’s tax relief proposal, LD 2219 An Act to Reduce Income and Property Taxes. During the course of the afternoon, the full Committee "worked" LD 2219 in a nonpartisan manner to shape the bill to the Committee’s liking. At the end of the day, however, the final vote on the bill split exactly down party lines. The majority Democrats voted ‘yes’ on the income tax relief and property tax homestead exemption that the Governor proposed and the Committee reworked. The minority Republicans are reporting out at least one competing proposal, and perhaps two. The details of the minority reports were not clearly described at the work session.

As described in last week’s Legislative Bulletin, LD 2219 has two components.

First, the personal deduction under Maine’s income tax code would be increased in two steps over two years to bring it in conformity for tax year 1999 with the personal deduction allowed under federal income tax law. That increased deduction reduces the income tax hit to Maine’s citizens by $30 million in the first year of implementation.

During its work session, the Committee reviewed the income tax relief component, but made no changes to it.

The second component of LD 2219 the homestead rebate program as proposed by the Governor commanded a good deal of the Committee’s attention.

The Committee started with the question of how much money can the state afford, year after year, to dedicate to broad-based property tax relief? A homestead exemption calculated at a flat rate of $7,500 of assessed value would cost the state $47 million in the first year, according to the Committee’s financial analysts. The entire package of property tax relief and income tax cuts would have an estimated cost to the state of nearly $78 million, which is over the $75 million of annual "ongoing extra revenue" the Committee is working with. A motion was made to drop the homestead exemption rate down to $7,000 to bring the state’s overall cost into line, but that motion did not succeed. The Committee chose instead to slightly limit eligibility for the exemption by providing it to homeowners who have had a homestead in the state of Maine for at least a year’s duration. This standard would not require that the homeowner lived in the same homestead for that year, as long as those applicants who have relocated over the past year moved from one homestead in Maine to another. By removing applicants who within the past year lived in another state or otherwise did not own a homestead in Maine, the cost of the homestead exemption reimbursement to the state drops down to the $45 million level that the Committee was looking for.

The second major issue presented by LD 2219 for the Committee to resolve was whether the property tax relief program should be administered by the state as a rebate program or by the municipalities as an exemption program. As a rebate program, homeowners would pay the property taxes in full, apply for a rebate from the state, and some months later receive a check for their "homestead rebate". A locally administered exemption would reduce the homeowner’s property tax bill by the amount of the exemption. The municipalities, in turn, would be reimbursed in a timely manner for 100% of their lost tax revenues.

In a structured way the Committee listened to the debate on both sides. State Tax Assessor Brian Mahaney laid out arguments supporting the rebate approach. MMA made a case for the locally administered exemption.

One of the questions about the locally administered program is how much of a burden it would be to administer locally. Some confusion has been generated about the local costs of administration because an early draft of the homestead exemption system prepared by the State Tax Assessor’s staff included some cumbersome administrative requirements that would have been costly to administer and unnecessary. For example, under that early draft applicants would have been required to apply for the exemption in person, setting up long lines for the face-to-face contact in many communities. Also, an annual reapplication process in the early draft involved a lot of mailings back and forth between the homeowners and the municipal assessors. While there will clearly be situations where some applicants will need to meet with the assessor, and paper work will need to be generated to verify those applicant’s eligibility, for the vast majority of homeowners in Maine, an extensive and annual recertification process is simply unnecessary.

Working from the early draft prepared by Governor King’s administration, MMA presented an amended version that simplified the local administrative process so that it parallels the procedures associated with the existing veterans’ exemption.

After hearing both sides of the argument and holding brief party caucuses, the Committee chose to adopt the simplified, locally administered approach.

After working out all the details, LD 2219 was sent out of Committee with a majority "ought to pass" report as the following package:

~Increased personal deduction with respect to Maine’s income tax code from the current $2,150 to $2,400 for tax year 1998 and $2,750 for tax year 1999;

~Locally administered $7,500 property tax homestead exemption without the excessive application or recertification procedures as originally proposed;

~Adjust the standard of eligibility for the Homestead Exemption so that a qualified applicant would have to have been a Maine "homesteader" for the duration of the previous year;

~Require that all municipal property tax bills clearly reflect each homeowner’s overall assessed value and the assessed value for the purposes of taxation as adjusted by the homestead exemption;

~Provide specific authorization for the Bureau of Revenue Services to audit municipal assessment programs to ensure that exemption eligibility is properly determined;

~Provide an appropriation to reimburse municipalities not only for 100% of the tax revenues lost to the homestead exemption, but 90% for the local costs associated with administering the exemption; and finally

~Adjust the standard of eligibility under the Circuit Breaker program to provide $4 million of additional benefits each year targeted exclusively to renters, estimated to open up that program to an additional 7,500 of the state’s residential tenants.

The Committee will be giving the bill a technical review next week, after all the language is finally drafted, before sending it to the full Legislature.

The Taxation Committee has not given up on taking some steps towards property tax reform in areas that go beyond the property tax homestead exemption that has received so much attention. On February 26th, the Committee looked at a couple of areas of property tax reform that will likely be addressed in a Committee bill to be reported out within the next couple of weeks.

Telecommunications property

One issue the Committee reviewed concerns the taxation of telecommunications property. There are two essential tasks in the modernization of telecommunications property tax law in Maine. The first is the equitable distribution of the tax burden. The second is the appropriate tax jurisdiction between state and local governments.

Under current law, the personal property of telecommunication carriers offering one-way telecommunications service, such as the personal property of cable companies, is subject to the municipal property tax. The personal property of companies carrying two-way telecommunication systems, such as traditional telephone lines, is subject to a property tax that is levied by the state at a flat mill rate of 27.

With the burgeoning growth of new telecommunication systems, such as the Internet, satellite transmission, cellular telephones, etc., time is of the essence to take a thorough review of the way the various aspects of the telecommunications industries are affected by the tax burden and to ensure that that burden is meted out equitably. The other wrinkle to be sorted out is which governmental entity should be authorized to tax telecommunications property. The Committee reviewed some draft legislation to form a stakeholders group on the matter that would be given the task of making recommendations about these tax equity and tax jurisdiction issues.

"Benevolent and Charitable" Property Tax Exemption

The other property tax reform issue addressed by the Committee involves the standards (or lack of standards) for eligibility for a property tax exemption as a "benevolent and charitable" organization. At the direction of the Committee last November, MMA and the Bureau of Revenue Services collaborated on a redraft on that section of statute (36 MRSA, section 652) to accomplish two goals. The most important goal was to insert into that statute some standards of eligibility, so that organizations would not be allowed to obtain a tax-exempt status merely on the basis of their capacity to obtain tax-exempt status with respect to the federal Internal Revenue Code. From the municipal perspective, the conspicuous provision of tangible societal benefits should be an integral part of conferring valuable property tax exemptions to any organization. Municipalities are always concerned about the erosion of their tax base to exemptions, but particularly when the exempt organizations are performing functions and providing services that are identical to the services provided by non-exempt organizations.

The collaborative draft that was presented to the Committee at its Thursday work session included the following changes to this section of the tax code.

First, it completely reorganizes the statute, which currently is full of overly complex language and has become disorganized by the various amendments to the statute that have been enacted over the years.

The collaborative draft went on to insert some new standards of eligibility, particularly with respect to benevolent and charitable organizations. Those proposed new standards would be that:

~The exempt property would have to be exclusively devoted to the organization’s charitable pursuits;

~The organization would have to be recognized as a charitable, non-profit organization under Section 501(C) of the Internal Revenue Code;

~ The organization would have to provide a significant portion of its services to a substantial class of persons who are the legitimate subjects of charity or otherwise relieve the government of its burden to care for or advance the interests of its citizens;

~Benevolent and charitable organizations would have to file an annual report with the assessor which would include some quantifiable explanation of the charitable services they provide and a review of the value of those services compared to the value of their tax exemption; and

~Municipal assessors could evaluate according to published, objective standards, the salary and benefit compensation provided to the executive directors and other highly-paid personnel who work for some tax-exempt entities to make sure that those compensation levels met the "reasonable compensation" standard that exists in current law.

Upon reviewing this draft, the Taxation Committee agreed to accept only two of the new standards that were being proposed. The Committee accepted the requirement that benevolent and charitable institutions would have to be recognized as 501(C) organizations under the Internal Revenue Code. This addition really adds nothing to the substance of current tax-exempt law as it is practiced.

The Committee also accepted as a newly articulated standard that the organization must provide a significant portion of its services to a substantial class of persons who are the legitimate subject of charity or otherwise relieve the government of its burden to care for or advance the interests of its citizens. The Committee apparently felt that this was an accurate description of what a benevolent and charitable organization must do in order to be deserving of tax-exempt status, without being so restrictive so as to affect any currently-eligible organizations.

The Committee rejected all of the other proposed tightening standards, including the requirement that the property of the organization would have to be devoted to its charitable pursuits, the standards associated with annual reporting requirements, and the standard that would analyze salary and benefit levels to assure that organizational managers were not effectively profiting through the distribution of inordinately high salaries.

The Committee did support the reorganization of the statute to make it more user friendly.

The Committee’s action on its property tax reform bill is not final, and there will undoubtedly be subsequent reviews as the composite bill’s language is brushed up by the Committee analyst.

On Thursday, March 5 the LPC voted to support LD 2082 AN ACT to Improve the Integrity of the Citizen Initiative Process. This bill changes the time period for submission to the Secretary of State of a direct citizens’ initiative, and the validity of the application for a direct citizens’ initiative, from 3 years to one year, to correspond to the time for validity of petition signatures set forth in the Constitution of Maine.

According to the Secretary of State’s office, the evidence over the last 20 years, shows that a year’s time is ample to collect the necessary number of signatures for a citizens’ initiative, and the competing one-year standard in the Constitution and 3-year statutory standard has created a rolling 12-month period of validity that is very confusing to administer.

Pending final draft language the Committee on Agriculture, Conservation and Forestry on Tuesday, March 3 committed to support an amended LD 1405 An Act to License Timber Harvesters and Deter Timber Trespass. Although the amended bill primarily addresses issues around the transportation of wood and harvesting notification requirements, this bill does have one aspect of direct municipal importance.

As amended LD 1405 requires municipalities to be notified prior to the commencement of harvesting operations within the municipality. As discussed in the work session on Tuesday, harvesters would be required to file notice with the Maine Forest Service who would in turn notify the municipality of harvesting activity.

On Thursday, March 5 the Committee voted to support LD 1746 An Act to Amend the Laws Relating to the Development and Centralized Listing of Municipal Ordinances that Apply to Forest Practices. This bill is a remnant of the Forestry Compact that failed to get the necessary popular vote at referendum in 1997. The bill requires municipalities to notify by mail all property owners whose land is in or abuts a zone or district affected by a proposed timber harvesting ordinance or proposed amendment to a timber-harvesting ordinance at least 14 days prior to a public hearing. Because timber harvesting ordinances are rarely zone-specific, the bill will effectively require mailed notification to all municipal property taxpayers.A majority of the Committee felt that this notification process would protect the interests of the landowners. The bill also provides 100% reimbursement for the municipal costs of this special notification process.

The bill also: 1) requires municipalities to meet with representatives of Department of Conservation with working on an amendment as well as developing a new ordinance; 2) requires that representative of the Department of Conservation be given an opportunity at the public hearing to present information that relates to the proposed ordinance or amendments; 3) states that municipal ordinances may not be "unreasonable, arbitrary or capricious and must employ means appropriate to the protection of public health, safety and welfare"; and 4) requires the Department of Conservation to pay municipalities for costs associated with landowner notification and public notice requirements and for costs associated with the amendment of certain ordinances adopted before 9/1/90 and required by this bill to come into definitional compliance.

The Taxation Committee took up LD 1927 An Act to Amend the Laws in a work session on Monday and unanimously reported the bill out "ought not to pass".

As printed, LD 1927 would have expanded the property tax exemption allowed under current law in a sweeping way. A description of the expanded exemption as proposed under the bill was provided in the February 6th edition of the Legislative Bulletin. At the public hearing, the bill was supported by the Maine Pulp and Paper Association, the Department of Environmental Protection, the Maine Chamber and Business Alliance, and several individual paper companies. The claim of both the paper companies and the Maine DEP was that LD 1927 merely codified the existing DEP practice or philosophy with respect to the current exemption statute.

For its potentially sharp impact on local property taxes in the affected municipalities, LD 1927 was strongly opposed by the municipal community. The claim that LD 1927 merely codified existing DEP practice was of particular municipal concern because many of the affected towns believe DEP to be inappropriately stretching the application of the existing exemption statute and disregarding in its certification process the legitimate informational and procedural concerns of the communities.

Brian Mahaney, the State Tax Assessor, recognized that LD 1927 represented an expansion of the existing exemption, which slowed down the industry’s implied claim that the bill was merely a "clarification" of existing law.

Between the bill’s public hearing on February 2d and this week’s work session, the work on LD 1927 was not taking place in the Committee room. The industry representatives redrafted LD 1927 without appreciably changing its impact, and asked the municipalities if they could sign on. The offer was declined. Finally, in a meeting between the DEP, the Bureau of Revenue Services, some directly affected municipalities, the industry representatives, and MMA, it was agreed that the bill should not go forward this second legislative session. Instead, the interested parties agreed to continue to meet over the course of the summer to share more information about all the various issues that were brought to the surface by the introduction of this proposal. Some of the issues deserving further discussion include: (1) more precise descriptions about all the property the industry would like to see exempted from taxation; (2) the administrative procedures used by DEP that lead to the issuance of an exemption certificate; (3) the tax policy implications of environmental benefit exemptions; and (4) the distribution of financial impact for environmentally-based property tax exemptions.

On Thursday, March 5 the LPC voted to support an amended LD 2195, An Act Concerning Enforcement of Parking Spaces for Persons with Physical Disabilities. As originally written the bill would have created a bureaucracy within the Department of Public Safety to monitor and enforce parking regulations governing the appropriate use of designated parking for people with disabilities. The bill would have created the position of Director of Parking Enforcement who would have been responsible for working with volunteer parking enforcement specialists in each county. The parking enforcement specialists would have enforced parking regulations in private parking lots with public access.

Over concerns that a needless bureaucracy was being created, the Transportation Committee amended the bill to authorize municipal law enforcement officers to enforce parking regulations in private parking lots. Currently 30-A MRSA, Section 3009 (D) requires a private entity to enter into a contractual agreement with municipal law enforcement agencies before any parking regulations can be enforced on public property. The Committee felt that since the private entities rarely enter into the required contractual agreements the best possible solution to end the abuse of designated parking spaces was to authorize municipalities to enforce parking regulations regardless of the contractual agreement.

By a 7-6 margin, the State and Local Government Committee voted that LD 1551, An Act to Limit the Amount of Retainage on Public Building Projects, ought to pass in its amended form.

The issue of contract retainage has been covered in previous editions of the Legislative Bulletin (see especially the February 20th edition).

There are two distinct sides to this issue. On one side there is the State of Maine represented by the administration of Governor King, the Associated Constructers of Maine, a contingent of architects and professional engineers, and a majority of the State and Local Government Committee. These groups support LD 1551 as amended because they believe the existing retainage law leads to unfair and unbalanced retention of contract payments that are legitimately due the subcontractors. During the committee process there has also been some anecdotal discussion that school construction projects are in some cases not being actively managed and that the owner’s representatives do not pay enough attention to the project as it is proceeding, do not spend enough time on the construction site, and are not experienced in construction. It is alleged that costly mistakes are being made that could be caught early in the construction process with active management. From the perspective of Representative Randy Bumps (China), a proponent of LD 1551, that is the issue whether public sector owners should actively manage construction projects or rely on retainage to protect the taxpayers if construction mistakes are made.

On the other side of the argument are the schools, the municipalities, and a minority of the State and Local Government Committee. From the local government perspective, the amended version of LD 1551 is a top-down, state government directive to local government that attempts to solve the problem of the unfair distribution of contract payments among the subcontractors at the direct expense of the city’s or school board’s position to have some level of assurance that the general contractor will finish the job according to specifications. In short, LD 1551 weakens the owner’s retainage position, from the local government perspective, while at the same time mandating the incrementalized management of all school construction projects that involve state money. The anecdotal testimony from the local governments are that even under the existing law, contractors are in some cases giving up their retainage rather than finishing projects satisfactorily, that without strong retainage clauses the "volunteer" and non-expert owner representatives (selectmen, building committees, school principals or superintendents) will have no tools to level the playing field with aggressive contractors or clerks of the works (who represent the architects on a construction site, and not the owner), and that municipalities and schools are not stupid or negligent and they have extremely powerful and natural interests in assuring their community structures are properly built.

Those are the two sides of the argument. This is what LD 1551 would do:

Who would be governed by the proposed law and who will not?

~With a major exception, the proposed law would govern all state construction projects with a value over $100,000 and all school construction projects over $25,000 in value which involve any state financial participation. The major exception is highway projects under the supervision of the Department of Transportation which are exempt from the retainage limitation aspects of the current statute. Thus far, there has been no reason given why school construction projects would be held to a different financial threshold ($25,000) than state construction projects ($100,000). The bill would not govern non-school municipal projects or local school projects funded totally by local dollars.

How would the proposed law would work in the contract development phase?

~Maine law would specify that no amount of retainage with respect to the affected public construction projects could be withheld from the contractor for the purpose of curing warranty defects in construction materials; retainage could only be withheld for non-performance of the contract.

~Payment to the contractor and retention of that payment could be conducted only on contract line items, and each of those line items would have to be identified by the school unit and the general contractor prior to the start of the project.

How would the proposed law work as the construction was proceeding?

~The retainage amount could never exceed 5% of any payment due, and when the school unit determines that the contractor’s performance for any payment has been completed or corrected, the school would be required to promptly pay for that performance. Specifically, for line items that are completed at the beginning of a project or at project mid-points, and when the owner accepts that line item as complete, the full 100% of that line item must be paid. This is the essential change created by LD 1551. Retainage for specific lines would have to be released before the project is "substantially complete" and before the project is finally accepted by the owner.

How would the proposed law work to adjust retainage upon "substantial completion"?

~An adjustment of all remaining retainage would occur at the point the project is determined to be "substantially complete."

~The determination of "substantial completion," under LD 1551, is a process that begins when the general contractor notifies the school unit that the project has reached that stage of completion.

~Within 14 days of that notification, under this bill, the owner must have inspected the project. If as a result of that inspection the school agrees that the project is "substantially complete" the school and the contractor must jointly prepare a list of unsatisfactory elements of the project needing minor correction (the "punch list") and a list of incomplete items.

~Within seven days of the establishment of these two lists, the school and the general contractor would be required to assign values to all listed items. The school would be required to turn over to the contractor all retained funds except 150% of the aggregate value assigned to the punch list and 100% of the aggregate value assigned to the list of incomplete items.

~The contractor would be required to address the items on the two lists according to a mutually agreed upon schedule. Upon completion of each listed item, the school would have 14 days to inspect the item and pay all retainage applicable to that item if satisfactorily completed.

What other rules of general application are a part of LD 1551?

~Any non-payments or late payments would be subject to the penalties of "Maine’s Prompt Pay" law, and to the extent those penalties were applied to the school, those costs would have to be borne locally and could not be passed onto the state.

~All school construction projects with any state financial contribution would have to use uniform construction documents prepared by the state. Those uniform construction documents would have to establish the same relationship regarding payments and retention of payments between general contractors and their subcontractors as the proposed law would establish between the owners and the general contractors.

~Under current law, general contractors can be effectively disqualified from bidding on state or school projects for up to one year if they are found by the state’s Director of General Services to have: (1) not completed a project in a timely manner resulting in hardship to the owner; (2) a history of inability to complete similar work; or (3) been convicted of collusion, fraud or other violations relating to construction projects. LD 1551 would extend that potential for disqualification to subcontractors as well.

The State and Local Government Committee will be taking a final, technical look at the drafted bill after this issue of the Legislative Bulletin goes to press.

Several Natural Resources bills of interest drew committee and full legislative attention this week including: LD 80, An Act to Protect Internal Waters of the State, LD 1730, An Act to Implement the Recommendations of the Great Pond Task Force, LD 2111, An Act to Reauthorize the Toxics and Hazardous Waste Reduction Laws, and LD 1972, An Act to Implement the Recommendations of the Interagency Committee on Outdoor Trash Burning.

LD 80 restores the DEP’s Lakes Assessment and Protection Program with a general fund appropriation of $451,516. The Lakes Program was an earlier component of LD 1730, the Great Pond bill. The LPC opposed LD 1730 because it would have imposed a water quality impact fee on all residential property located in the shoreland zone of a great pond as well as a real estate transfer fee on all property within a great pond watershed. The revenue would have supported DEP’s Lakes Program. The Committee separated the Lakes Program from the remaining personal watercraft issues in the Great Pond Task Force bill, using LD 80 as the vehicle for the Lakes Program. LD 80 appears to be on a clear path to enactment.

The Great Pond Task Force bill, LD 1730, was referred jointly to Inland Fisheries and Wildlife and Natural Resources to deal with issues remaining in the bill, mainly regulation of personal watercraft. Subcommittees of the two committees met February 27 to begin working the bill and the legislators did not seem inclined to reinstate the property fees in the context of the personal watercraft legislation.

LD 2111 is a reauthorization bill to continue and expand DEP’s toxic use reduction program. Reduction goals continue to be voluntary, but for most "toxics users" (those who manufacture, use or release toxic substances designated in the incorporated lists in reportable quantities) planning and reporting requirements are mandatory. Drinking water supply treatment facilities and municipal wastewater treatment facilities are toxics users, but currently are granted an exemption from the planning and reporting requirements. As originally proposed, the reauthorization bill would have removed that exemption. However, this week, DEP submitted an amended version of the bill that restores the exemption for drinking water and wastewater treatment facilities. The LPC voted to support this bill if DEP’s amendment continuing municipal exemption is included.

The backyard burning bill, LD 1972, passed through the House as amended by the Committee and a majority of the House rejected an additional amendment offered by Representative Edgar Wheeler (Bridgewater). The Natural Resources Committee’s amendment, described more fully in the February 6 Bulletin, requires municipal fire officials to consider the public health risk from toxic chemicals in the smoke plume and the practicality of locating the incinerator at least 300 feet from any abutting property lines and 150 feet from residential dwellings. Representative Wheeler’s amendment delays the effective date of the bill’s requirements until municipalities have adopted them. The Senate adopted both the Committee amendment and Representative Wheeler's amendment and returned the bill to the House for additional consideration.

LD 2253 An Act to Authorize a General Fund Bond Issue in the Amount of $10,000,000 to Finance the Acquisition of Land for Conservation, Outdoor Recreation and Wildlife Habitat Protection and Farmland Preservation and to Access $5,000,000 in Matching Contributions From Public and Private Sources (Sponsored by Sen. Pingree of Knox; additional cosponsors) (Governor’s bill).

This bill would send to the voters a $10 million bond issue which will be used by the Land for Maine’s Future Board to acquire lands and easements from willing sellers for public outdoor access and recreation, farmland preservation, conservation and to protect wildlife habitat. To maximize the effectiveness of this investment in Maine’s future, the board will secure at least $5,000,000 in other public and private contributions.

Business and Economic Development

LD 2238 An Act to Create the Kennebec Regional Development Authority (Sponsored by Speaker Mitchell of Vassalboro; additional cosponsors). EMERGENCY.

This bill creates the Kennebec Regional Development Authority, allowing initial participation by the towns and cities presently comprising the Kennebec Valley Economic Development District (the communities of Kennebec and Somerset Counties, and six municipalities of Waldo County). The Authority created by this bill would be charged with: providing for the sharing of costs among municipalities for regional economic development needs, developing infrastructure for employment and economic development opportunities, and generally promoting and enabling economic development among its member municipalities.

The Authority would be governed by its general assembly. Each municipal member would have at least one appointee serving on the general assembly. Municipalities with a state valuation of at least 5% of the aggregate state valuation of all participating municipalities would have an additional appointee for each full 5% of the aggregate state valuation.

Through its general assembly, the Authority would be authorized to buy and sell property, enter into contracts, issue notes and general obligation bonds, buy and sell ownership interests in corporations, accept gifts, grants and services from federal state and private sources, lend money, etc.

With respect to issuing general obligation bonds, the general assembly would have to formally notify all participating municipalities upon ordering the issuance of the bonds. The decision of the general assembly would be final unless the general assembly received a petition requesting that the bond issue be put to referendum signed by 10% of all the voters of the participating municipalities within 15 days.

The Authority would also be authorized to levy a tax among its member municipalities based on a budget developed and presented to the general electorate of the Authority at a budget meeting held before the first day of September.

LD 2252 An Act to Implement the Recommendations of the Governor’s Commission on School Facilities (Sponsored by Rep. Richard of Madison; additional cosponsors) (Governor’s bill).

This bill provides for the implementation of recommendations from the Governor’s Commission on School Facilities. The bill does the following: (1) establishes a debt service factor that permits schools that accept tuition students to charge an additional fee to help cover the cost of school construction or renovation; (2) establishes the Maine School Facilities Finance Program within the Maine Municipal Bond Bank to provide capital financing for construction, renovation and maintenance of school facilities and the leasing and purchase of needed equipment and school facilities; (3) establishes the School Revolving Renovation Fund within the Maine School Facilities Finance Program to provide loans to school administrative units for health, safety and compliance repairs, as well as for limited non-emergency repairs, upgrades of learning spaces and small-scale capital improvements; (4) provides for interest-free loans and loan forgiveness for eligible school administrative units; (5) provides a $20,000,000 appropriation from the General Fund to fund the School Revolving Renovation Fund; (6) revised the terms of compensation for lease costs of school facilities; (7) requires that school administrative units establish maintenance and capital improvement programs for all school facilities; and (8) provides $425,000 for software for Maine schools to establish maintenance and capital improvement plans and an electronic inventory of school facilities.

LD 2244 An Act to Encourage Intergovernmental Cooperation (Sponsored by Rep. Saxl of Bangor) (Governor’s bill).

This bill is the final, scaled-back form of what was originally the recommendation of the state-county-local Task Force on Intergovernmental Structure. As printed, the bill would do the following: (1) County Government law in Title 30-A would be amended to make it clear that the counties may develop and provide any municipal service which would be provided only through a contract (i.e., on a voluntary basis, not through the assessment process) with one or more municipalities, and to assist in the provision of those services the counties could contract with regional planning councils, councils of governments, quasi-municipal corporations, other political subdivisions, or state agencies; (2) $500,000 in grant funds would be made available for pilot projects conducted by county government to provide those services to municipal government; (3) the distribution of the Real Estate Transfer Tax would be incrementally changed over a 5-year period so that after full implementation the counties would receive 25% of the transfer tax collected by them rather than the 10% they currently receive, and the phased-in redistribution would not affect the portion of the transfer tax that currently goes to the Maine State Housing Authority; and (4) the state-county-local forum would be continued through a memorandum of agreement subscribed to by the Governor’s Office, the Maine County Commissioner Association, and the Maine Municipal Association. Under LD 2244, four legislators would be appointed to join that Task Force on Intergovernmental Cooperation.

LD 2239 An Act to Amend the Law Concerning Tax Base Sharing (Sponsored by Speaker Mitchell of Vassalboro; additional cosponsors).

This bill would amend the statute governing tax base sharing to clarify that municipalities do not have to be contiguous to share in a tax base. It would also amend that law to allow the municipality with the property tax base that is being shared to send the share of the tax base revenues (that normally accrue to the other, recipient municipalities) to another entity.

Appropriations and Financial Affairs
Room 228, State House, 1:00 p.m.
Tel. 287-1635

LD 2224 An Act to Authorize a General Fund Bond Issue in the Amount of $16,000,000 to Construct Water Pollution Control Facilities; to Close and Clean Up Municipal Solid Waste Landfills; to Clean Up Tire Stockpiles; to Investigate, Abate, Clean Up and Mitigate Hazardous Substance Discharges; to Mitigate Storm Water Pollution through a Comprehensive Watershed Protection Program; and to Make Drinking Water System Improvements (Sponsor: MICHAUD) (Governor’s bill).

LD 2253 An Act to Authorize a General Fund Bond Issue in the Amount of $10,000,000 to Finance the Acquisition of Land for Conservation, Outdoor Recreation and Wildlife Habitat Protection and Farmland Preservation and to Access $5,000,000 in Matching Contributions From Public and Private Sources (Sponsor: PINGREE) (Governor’s bill).

Business and Economic Development
Room 124, State House, 1:00 p.m.
Tel. 287-1331

LD 2238 An Act to Create the Kennebec Regional Development Authority (Sponsor: SPEAKER MITCHELL) (Emergency).

Education and Cultural Affairs
Room 120, State Office Building, 1:00 p.m.
Tel. 287-3125

LD 2252 An Act to Implement the Recommendations of the Governor’s Commission on School Facilities (Sponsor: RICHARD) (Governor’s bill).

State and Local Government
Room 334, State House, 1:00 p.m.
Tel. 287-1330

LD 2244 An Act to Encourage Intergovernmental Cooperation (Sponsor: SAXL J) (Governor’s bill).

Taxation
Room 221, State House, 1:00 p.m.
Tel. 287-1552

LD 2239 An Act to Amend the Law Concerning Tax Base Sharing (Sponsor: SPEAKER MITCHELL).

Taxation
Room 134, State House, 1:00 p.m.
Tel. 287-1552

LD 2243 An Act to Encourage Accountability and Return on Investment for Maine Taxpayers from Economic Development Initiatives (Sponsor: PINGREE).