Legislative Bulletin, March 20, 1998

MUNICIPAL PRIORITIES IN BUDGETARY LIMBO

This second legislative session is now entering its final weeks. The statutory adjournment date is April 15th, but legislative leadership had initially scheduled this second session to adjourn next week, in the spirit of efficiency, on Friday March 27th. With the extraordinary budget and tax relief issues yet to be decided, an adjournment date in the month of March now appears impossible.

The biggest issue facing the Legislature by far is the adoption of the supplemental budget, LD 1950. If there is such a thing as a typical second legislative session, the supplemental budget would be a routine and relatively non-controversial adjustment of the two-year spending package enacted during the first legislative session. This year, because of the dramatic increases in state revenues that were reprojected in December of 1997, and because of the citizens’ tax relief expectations that were initiated with the creation of dedicated tax relief funds during the first legislative session, there is nothing either routine or non-controversial with regard to LD 1950. To the contrary, the supplemental budget has now become the vehicle for virtually all the spending and tax relief priorities of the three distinct forces that will together make the final decision: the Democrats, the Republicans, and Governor King.

As this edition of the Legislative Bulletin goes to press, the supplemental budget as crafted by the Appropriations Committee is over $60 million out of balance. Negotiations now have to take place among the parties and the Governor’s Office to adjust the budget proposal as presently drafted to both bring it into balance and arrange the spending priorities in a way that will likely be accepted by the Legislature as a whole.

It is probably fair to say that no spending priority is completely safe, even though it has been moved into the supplemental budget by the Appropriations Committee. Conversely, just because a money item has been moved out of the budget, it is not necessarily dead. During the negotiations process, the situation is very fluid; any particular line in the budget is vulnerable.

Elements in (or not in) the supplemental budget of municipal interest, at this point in time are:

$47 million to pay for the property tax homestead exemption. Right now, the bill that would create the homestead exemption (LD 2219) is tabled in the Senate after being endorsed by the House on March 12th. Whether the homestead exemption is enacted at all, enacted to take effect this year, or enacted at the $7,500 as presented in LD 2219 is up in the air as the Appropriations Committee and legislative leadership come to an agreement about the amount of ongoing revenues that will be available to provide this form of tax relief.

Over $16.8 million to be added to the General Purpose Aid to Education (GPA) appropriation originally budgeted for FY 99. As currently budgeted, the GPA increase for FY 99 would be at a 3% level and approximate $550 million. As now proposed in the supplemental budget, the FY 99 GPA increase would be at 6%. Language would be added to the supplemental budget, however, to discount the additional 3% allocation when it comes to determining the base-level appropriation for the following fiscal year (FY 2000). In short, the additional $16.8 million would be a one-time-only boost to GPA, and would not affect the GPA base in outlying fiscal years.

$39 million to be issued as an extra GPA payment in June of 1998 to make up for the "push" of a one-month GPA payment in 1991 into the FY 1992 fiscal year. The primary purpose of this appropriation is to erase from the bottom line of the state’s annual audit a liability that appears every year because of the one-month payment "push" that occurred in 1991. For reasons that are not entirely clear to MMA, this appropriation would not result in most cases as "new money" to the schools; it would, instead, apparently result merely in money for which the schools would no longer need to borrow.

$20 million for FY 99 that would provide a mix of grant and loan money to school units for the purposes of needed renovations to school facilities (see related article in this issue of the Legislative Bulletin).

$12 million from the General Fund for highway and bridge work to be conducted by the Department of Transportation. This appropriation makes it possible for DOT to maximize federal matching dollars for the targeted projects.

Over $11 million to pay for the renovation of the Oak Grove Coburn school in Vassalboro to become the new Maine Criminal Justice Academy. This item has been moved into the budget.

$5.2 million to fill a hole in the Business Equipment Tax Reimbursement (BETR) account for the present fiscal year (FY 98). An even larger hole of $7.6 million for FY 99 was not moved into the supplemental budget by the Appropriations Committee (see related article in this issue of the Legislative Bulletin).

$3.5 million for the state share of municipal landfill closure costs. This money was originally in the environmental bond proposal, but was moved out of the bond package and into a General Fund appropriation.

$300,000 to fund the first increment of a 5-year shifting of the distribution of the Real Estate Transfer Tax so that by the year 2003 county government would be able to retain 25% of the Transfer Tax rather than the 10% share they counties currently retain. To the degree more of the Transfer Tax stays with the counties, less of it goes to the state’s General Fund. This proposal was part of the recommendation of the Task Force on Intergovernmental Cooperation, which has been working for several years to advance the capacity of the three levels of government in Maine (state, county, and local) to work together more cooperatively. This proposal was moved out of the supplemental budget by the Appropriations Committee.

This is, of course, just a sampling of the supplemental budget as it may directly affect municipal government. There are virtually hundreds of other lines in the budget that have less direct but nonetheless significant impacts. A major appropriation, for example, is headed for the state’s Rainy Day Fund; in fact, the cap on that Fund, which is currently 4% of the state’s annual General Fund Revenues, would move up to 5% with language that has been moved into the supplemental budget. There is money for the Office of Tourism, $10 million of General Fund money to advance the research and development initiative which would also be capitalized by a $20 million bond proposal that is also advancing through the Legislature, $14 million to pay part of the first-year tuition for Maine students going to Maine colleges…the list goes on.

Cops-in-Court Vulnerable

The enormous sweep of the supplemental budget is likely to leave very little extra revenue for bills that are enacted by the Legislature with fiscal notes that are not attached to LD 1950. Those bills end up on the "Appropriations Table", and after the supplemental budget is enacted, the Appropriations Committee and legislative leadership prioritize those bills "on the table" against the remaining available revenues. Because it is very likely that there will be little money after the budget to pay for those bills, the vast majority will die on the table.

There is one bill falling into that category of particular interest to municipalities. LD 2149 is a bill that would restore the reimbursement level to municipal and county government for their police officers who testify in District Court to assist in the prosecution of people who break traffic and other state laws. Under the current law, in place since 1991, municipal police officers receive $10 a day for their services, and the traffic fines paid all accrue to the state. LD 2149 would increase that reimbursement rate to $40 a day, which is still significantly less than the direct municipal cost, but a vast improvement over the "witness fee" $10-per-day rate. Representative Ken Lemont (Kittery) has been fighting his 6-year legislative career to fix this gimmick, which is really the only remaining legislative "shift-to-the-property-tax" gimmick enacted in 1991 that remains to be fixed. The fiscal note on LD 2149 is $770,000 for FY 99. Since this financial initiative is not part of the budget bill, and since most bills that will be competing on the Appropriations Table for funding are in trouble, the fate of LD 2149 does not look good without a concerted push from the municipal level.

Dozens of bills with fiscal notes have not moved through the process far enough to reach the Appropriations Table. However, as of today, there are over 30 bills on the table. Some of these bills of municipal interest are reported on below.

LD 80 An Act to Protect Internal Waters of the State (see 3/6/98 issue of Legislative Bulletin for description). Enacted in the House; on Appropriations Table with a fiscal note of $451,516 for the Department of Environmental Protection to establish a new lakes assessment and protection program (4 staff positions).

LD 174 AN ACT to Increase Health Insurance Benefits for Retired Educators. Increases the state’s contribution for health insurance for retired educators from 25% to 30%. Enacted in the House; on Appropriations Table with a fiscal note of $634,290.

LD 623 Resolve, to Provide Educational Placement Options within the Public School System. Authorizes the Commissioner of Education to establish a grant program to promote educational placement options for public school students in the state. Passed in the House; on the Appropriations Table with a fiscal note of $50,000.

LD 753 An Act to Require Law Enforcement Agencies to Collect Data Regarding Public Intoxication, to Extend Immunity from Liability to Law Enforcement Officers and to Establish a Group to Study Involuntary Commitment of Persons Suffering from Chronic and Life-threatening Substance Abuse (see 3/13/98 issue of Legislative Bulletin for description). Emergency enacted in House; on Appropriations Table with a fiscal note of $1,470 to provide funding for the per diem and expenses of legislative members of the study group. The bill requires local law enforcement agencies to keep records of all incidents of public intoxication and report all known incidents on a monthly basis to the Department of Public Safety. The additional costs of this state mandate are minor; the bill contains a mandate preamble.

LD 1963 An Act to Require the Bureau of Revenue Services to Report on the Incidence of Tax Burdens to Business Sectors of the State’s Economy and to Income Classes of Citizens. Requires the Bureau of Revenue Services (Bureau of Taxation) to analyze the tax structure of the state each biennium relative to the incidence of tax burden on various income and business sectors. The bill also requires an incidence impact analysis for legislative proposals that would shift tax impacts by $20,000,000 or more. Enacted in the House; on the Appropriations Table with a fiscal note for lease-purchase approval by the Bureau of Revenue Services as part of the Governor’s proposed 1998-1999 supplemental budget, LD 1950, as amended with Bureau of the Budget changes submitted on January 28, 1998. The Bureau of Revenue Services does not currently have the economic modeling capability to comply with the reporting requirements in this bill.

LD 1995 An Act to Appropriate Funds for Library Resource Sharing and for Acquisition for the Maine State Library. Establishes a non-lapsing account within the Maine State Library designed to provide support for public libraries and to foster and help fund library resource sharing. Enacted in the House; on the Appropriations Table with a fiscal note of $1,400,000 to enable the Maine State Library to support public libraries and find library resource sharing and to increase the Maine State Library’s acquisition budget.

LD 2044 An Act to Promote Access to Public Higher Education. Permits eligible secondary school students to receive state subsidy for up to 3 credit hours per semester at the institutions of the University of Maine System, the Maine Technical College System, and the Maine Maritime Academy. The Department of Education is required to pay 40% of the in-state tuition for the first 3 credit hours taken each semester and up to 6 credit hours taken per academic year. Enacted in the House; on the Appropriations Table with a fiscal note of $75,000 to provide funds to the Department of Education to enable 250 secondary school students to participate.

LD 2118 An Act to Increase Economic Security for the State’s Low-income Children and Families and Prevent Additional Costs to Municipalities (see 2/20/98 Legislative Bulletin for description). Enacted in House; on Appropriations Table with a fiscal note of $380,058 to provide funds to cover a portion of the costs associated with increasing Temporary Assistance for Needy Families assistance by 5% under certain circumstances.

LD 2192, An Act to Create a Non-Legislative System to Adjust Municipal Valuations in the Circumstance of Sudden and Severe Valuation Disruption, has worked its way through the Taxation Committee and will be presented to the full Legislature with a unanimous "Ought to Pass as Amended" report.

LD 2192 addresses the issue of the two-year lag between any municipality’s April 1st assessment date and the time that municipality’s equalized valuation is finally certified by the State Tax Assessor. It is the municipality’s state valuation that is used as the driving factor for school subsidy payments, county assessments, and revenue sharing. For municipalities that have a very stable property tax value, the two-year lag in computing the state valuation does not present a major problem. The problems occur when a municipality suffers a sudden and dramatic reduction in property value, as can occur when a large industrial enterprise in the community shuts down or relocates and removes its valuable property. In those cases, the municipality is on record for having a larger valuation than is actually the case, and it takes up to two years for school subsidy, revenue sharing, and the town’s exposure to the county tax to recognize the municipality’s actual, reduced value.

Under the current system, each time this happens the affected municipality has to go to the Legislature and make its case for an expedited state valuation. The idea behind LD 2192 is to develop some guidelines that will allow these requests to be dealt with fairly at the administrative rather than legislative level.

As printed, LD 2192 simply required the State Tax Assessor to make the valuation adjustment administratively when a sudden loss, destruction, obsolescence or removal of a single industrial or commercial property resulted in a 3% or greater reduction of that municipality’s value.

The Taxation Committee formed a subcommittee to work with the Bureau of Revenue Services to develop a more sophisticated set of guidelines. Larry Record of the Bureau’s Property Tax Division developed an amendment that replaces the printed bill and accomplishes the following.

First, a threshold would be created to determine which municipalities would be eligible for the expedited adjustment to their state valuation figure.

In order to be potentially eligible for the assessment modification, the municipality must have a relatively high property tax burden as measured by its mill rate. For this purpose, however, the simple mill rate of the municipality would not be the yardstick to measure property tax burden. The measure, instead, would be the municipal mill rate multiplied by the municipality’s assessment ratio that pertains to residential property. In a few communities, the "residential sales ratio" (or sometimes called the "developed parcel ratio") is much lower than the town’s overall assessment ratio and since the underlying purpose of LD 2192 is to protect the citizens of a community from punishing increases to their property tax mill rate due to circumstances beyond their control, the guidelines focus on the mill rate as it applies specifically to residential property.

The other element to the threshold is that the equalized valuation of the residential property in the municipality would have to be greater than the statewide average. Right now, the average full value mill rate, when all property is taken into account, is in the vicinity of 17 mills. If it can be assumed that 17 mills is also the statewide average full-value mill rate for residential property, any municipality applying for the modified valuation adjustment would have to exceed that average residential mill rate in order to qualify for a valuation adjustment.

The final moving part in these guidelines is the degree of lost value the municipality suffered between April 1st of the base year and July 1st, fifteen months later. The Committee decided to phase-in this eligibility threshold over a two-year period. For the first year (the 1999 state valuation), the municipality would have to have experienced a valuational loss of more than 2% in order to qualify for the adjusted value. The valuation loss must be due to the closure, removal, replacement, retrofit, obsolescence, disaster, or abatement of property belonging to a single taxpayer.

For the year 2000 state valuation, and every year thereafter, the lost-value threshold would be increased to 5%.

When these thresholds are met and this level of valuational loss is experienced, the municipal officers would have to notify the State Tax Assessor by August 1st. For example, if LD 2192 is enacted, any municipality that meets the thresholds described in this article (including the 2% loss in valuation) would have to apply for the adjustment by August 1, 1998 for the 1999 state valuation. Upon receiving an application, the State Tax Assessor will incorporate the change-in-value information into the certification of state valuation that is used to determine General Purpose Aid to Education. As a matter of law, that final certification of state value is provided to the Commissioner of Education by February 1st. The modified valuation, as certified, would also be used by the State Treasurer when calculating the distribution of municipal Revenue Sharing.

Because April 1st is the universal date of property tax assessment and the state Constitution requires an entirely equalized apportionment of property taxation, these guidelines would not be available to adjust a town’s state valuation for the purposes of adjusting a county assessment.

On Thursday this week the Taxation Committee took a final look at LD 2192 as developed by Larry Record and the subcommittee and drafted by the Committee’s analyst, Julie Jones, and voted it out of Committee with a unanimous endorsement.

Information from the Bureau of Revenue Services has recently been provided to both the Taxation and the Appropriation Committees regarding a shortfall in funding for the state’s Business Equipment Tax Refund Program (BETR).

The BETR program was enacted in 1995 and became effective with respect to the property tax year beginning April 1, 1996. The way the program works, businesses that purchase personal property and put it in place for industrial or commercial purposes are provided a rebate from the state for 100% of the local property taxes they pay for that "qualified" business personality. Certain types of personal property are not eligible for the BETR rebate, such as used property purchased in this state, lighting fixtures, office furniture, and property belonging to utility, cable, and telecommunications companies.

As the accompanying table shows, the short history of BETR shows that the state has had trouble accurately estimating the program’s demand on the state’s General Fund. For the current fiscal year, the program is underfunded to the tune of $5.2 million. For next year, the shortfall is $7.6 million. Over the next biennium (FY 2000 and 2001), there is a $33 million "structural gap" between initially projected costs of reimbursement and recent reprojections.

The new financial projections appear to have triggered a disagreement between the Taxation and Appropriations Committees as to how to deal with the BETR shortfalls. The Appropriations Committee has agreed to cover this year’s $5.2 million problem in the supplemental budget, but beyond that it would like the program trimmed back to fit within the initial projections. The Taxation Committee and the administration of Governor King appear to be lined up on a different approach. They both agree that the program’s costs must become predictable, but they want to fund the program at its recently reprojected funding levels and are only willing to make modest adjustments to the program so that its accelerated growth will become more manageable.

According to State Tax Assessor Brian Mahaney, there are a number of reasons for the underprojections of the state’s costs for this tax relief program to businesses. These explanations include:

Miscommunications between the Tax Office and the Bureau of the Budget with respect to the initial projection for FY 2001;

Using the state’s average property tax mill rate in the initial assumptions only to find out that large scale business expansion tends to occur in higher-than-average mill rate communities;

Reimbursements for retail personal property running three times the initial projections; and

Early property tax commitments on the part of some municipalities, which advanced the applications for reimbursement from outlying fiscal years to immediate fiscal years.

Despite the immediate problem of finding the shortfalls from a pot of revenues that seems to be disappearing under a mountain of demand, Mahaney expressed the view of the King Administration that the high demand on the BETR program is testimony to its success. The purpose of the program is to encourage the expansion of industrial capacity and the development of a strong commercial base and retail infrastructure, and according to Mahaney the explosive growth of the program demonstrates that those goals are in the process of being achieved.

Having said that, Mahaney provided the Taxation Committee with his proposal to adjust the BETR program in three ways to avoid unexpected and unbudgeted programmatic costs in the future. Those amendments, which have yet to be more fully reviewed at a Taxation Committee workshop, are:

1) Used Equipment. Under current law, used equipment is eligible provided it is purchased outside of Maine. Without this standard in the law, it would be fairly easy for a company to change its corporate identity and the new entity could purchase the former entity’s property, thus exposing the BETR program to nearly all the $100 million-plus personal property taxation in Maine. By allowing used property to come in from other states under the BETR program, this potential exposure is avoided but certain inequities result. Under Mahaney’s proposal, the general rule would be that used property would be ineligible for BETR reimbursement no matter where it was purchased. An exeception to the rule would be if the property was used in another state by the person making application for the BETR reimbursement. The careful wording of this amendment is intended to not interfere with several ongoing or future expansion projects occurring throughout the state where companies are in a multi-year process of consolidating in Maine their manufacturing equipment that was previously in service elsewhere.

2) Utility Property. During the last legislative session, the property of "public utilities" was excluded from the BETR program. During that same session, the Legislature enacted a utility deregulation law that will result in the sale of the electricity generation facilities owned by the electric utilities. As a consequence, major industrial properties will no longer belong to "public utilities" and so major upgrades to those properties would become eligible for BETR reimbursement. Mahaney’s proposal would keep those properties out of the BETR program by excluding all property that is operated to facilitate the production, generation, or transmission of electricity primarily for sale. This proposed amendment, again, has been written carefully to avoid excluding industrial facilities that generate electricity for their own purposes, primarily, and only sell excess electricity as an incidental part of their operations.

3) Pipeline Property. The final amendment to BETR offered by the administration is a clarification that natural gas pipeline property would not be eligible for BETR. The owners of the pipeline property were already of the understanding that they were not eligible for BETR under the public utility exclusion, but for various technical reasons the administration felt that a specific exclusion on the property, rather than on the circumstances of the property owner, was necessary to prevent any confusion.

Future of BETR. As this edition of the Legislative Bulletin goes to press, it is unclear if adjustments will be made this session to the BETR program beyond the amendments offered by the King Administration, which are intended to keep the program on course and make its costs more predictable. It is more likely that a much closer look at the BETR program will be conducted over the course of the summer by the interested parties, with recommendations possibly being presented to the next Legislature.

The long-term future of BETR was the matter of some discussion by the Appropriations Committee. Senator Rick Bennett (Oxford) asked Mahaney how much it would cost the state if the personal property tax in Maine was repealed, and the state reimbursed the affected municipalities 50% of the lost revenue as required by the Constitution. The answer to that question is in the neighborhood of $50-$60 million, with the municipalities absorbing losses of that identical magnitude to their tax revenue stream. Bennett then asked how long it would take before that approach would be less expensive to the state than the BETR program, which reimburses the taxpayers at 100% of their tax obligation.

The answer to that question is three or four years.

On Wednesday, March 18th the Education and Cultural Affairs Committee unanimously agreed that LD 2252 An Act to Implement the Recommendations of the Governor’s Commission on School Facilities, "ought to pass as amended". Although most of the amendments made to the bill were of a housekeeping nature, two amendments; increasing the initial funding of the Revolving Renovation Fund from $20 million to $30 million, and removing the provision for financially holding school district accountable for developing capital improvement plans, are of significance.

The bill in its entirety addresses three issues of municipal importance: 1) debt service tuition factor; 2) funding mechanism for repairs and renovations to school buildings; and 3) capital improvement plans for school buildings. The bill also addresses the issue of leased space by incrementally encouraging school administrative units to find permanent location or to enter into lease/purchase agreements.

Debt Service Tuition Rate Factor by Mutual Agreement. One aspect of the Commission’s proposal is to enable receiving schools to include the cost of debt service incurred to fund necessary expansion into the schools’ tuition rates. The tuition debt service rate approach outlined in LD 2252 would require both the receiving and sending school districts to agree to include debt service as part of the tuition rate. Also, both districts would be required to agree on what percentage of the debt service (up to 10% of a school’s legal tuition rate) would be reflected in the tuition rate. Currently, a school district required to expand facilities to meet the growth needs of both resident and tuition students must place the burden of the expansion entirely on the municipalities in that district.

Revolving Renovation Fund. The foundation of LD 2252 revolves around the establishment of the Revolving Renovation Fund. The Revolving Renovation Fund would provide municipalities and school districts access to a program of combined grant/loan monies for the costs of renovations. Based on the current school construction formula, municipalities and school districts would be provided 30% to 70% of the costs in the form of a grant, and provided an interest-free loan to fund the remaining costs of the renovation. The bill further stipulates that these fund would be used primarily to address issues of student health and safety, such as roof repairs/replacements; compliance with ADA regulations; and improving air quality. As written the bill requested a $20 million appropriation to the start the Revolving Renovation Fund, the Committee has requested $30 million.

CIP (Capital Improvement Plans). As originally written, the bill would have required and held financially accountable all school districts for the development of CIP’s (capital improvement plans) and further required the Department of General Services to provide technical assistance in the development of the CIP’s. As amended the Committee removed language that would have held school districts financially accountable for noncompliance and provided the Department of Education emergency authority to develop rules requiring school districts to implement CIP’s. The Committee felt that a more incremental approach, through the rule making process, would assist in meeting this goal in a less invasive manner.

LD 2111, An Act to Reauthorize the Toxics and Hazardous Waste Reduction Laws. DEP has characterized the Toxic Use Reduction Program (TUR) as the "centerpiece" of DEP’s pollution reduction program. DEP’s 1995 numbers show a 51% reduction in the amount of toxics released, a 26% reduction in toxic waste generated, and a 9% reduction in toxic use. Through the current bill, the Natural Resources Committee is considering how to reauthorize the program in ways that will facilitate further reductions in toxic use and reward industries that have performed well under the current law.

In its work sessions this week, the Committee considered a comprehensive draft amendment to this bill, incorporating proposals offered by DEP, including the continued exemption of municipal drinking water and wastewater treatment facilities from the toxic use reduction law’s reporting and planning requirements. This exemption acknowledges the reality that municipal water treatment only uses toxic chemicals to the extent they are required to in order to protect the public health and municipalities have no discretion to reduce that use.

LD 2265, An Act to Reduce Non-point Source Pollution from Existing Sources. As written, this bill would authorize loans from the clean water revolving loan fund for any non-profit organization proposing to reduce non-point source pollution, make it illegal to use fertilizer containing phosphorus on a lawn or similar landscaped area, and provide for an alternative expansion requirement for use in the shoreland zone. At public hearing, MMA expressed objections to the diversion of loan funds to those who are exempt from property taxes, to the bill’s approach to phosphorus reduction, and to mandatory mitigation measures that would be incorporated into the current 30% shoreland expansion provisions.

MMA supported the alternative expansion proposed in this bill. In the bill’s proposed alternative, municipalities could adopt an ordinance that permits the expansion of principal and accessory structures under a regime of maximum aggregate structural square footage allowances. Within the first 75’ setback, the maximum aggregate structural allowance would be 1,000 square feet. Within the 100’ setback, the maximum aggregate structural allowance would be 1,500 square feet. A special expansion allowance would be allowed if the property owner created and maintained a 50’ buffer strip of vegetation along the shoreline. In those cases, the maximum aggregate structural square footage allowance would increase by 500 square feet (to 1,500 square feet within 75’ of the shoreline, and 2,000 square feet within 100’ of the shoreline, the "bonus" expansion). The bill establishes standards for the expansion of nonconforming structures, including floor area and height limits. A written plan to implement measures to mitigate non-point source pollution must also be approved by the planning board for certain expansion. The buffer requirement will require planning board interpretation, as well as enforcement.

In a March 18 work session, the committee pared down the elements of the bill to report out a version that eliminates the loan fund issue and the mandatory mitigation in the current 30% expansion provisions. The revised bill includes:

A directive to DEP to expand its consumer awareness program to reduce the use of phosphorus-containing fertilizer on landscaped areas,

Erosion and sedimentation control provisions that seek to remedy existing problems,

A version of the alternative expansion requirement that is the same as described for the original bill, except that the buffer zone requirements will only apply to the "bonus" expansion, and

Reports to be developed concerning erosion control and the use of the alternative expansion provisions.

The Committee will review the language of the redrafted bill before taking a final vote, but the work session draft had nearly unanimous support.

This week, the Committee held a marathon public hearing on LD 2267, An Act to Reduce Mercury Use and Emissions. This bill is the product of a report, presented to the Committee by DEP in February, that details the presence of mercury in Maine from all sources: background (naturally occurring), manufacturing sources within and outside of the state, burning solid waste, and wood burning for home heating. The bill represents these recommendations proposed in DEP’s report:

Pursue cost-effective controls for local sources of mercury so that we will have "clean hands" as we seek out of state reductions;

Target municipal waste systems for mercury air emissions reductions;

Sunset the law that allows HoltraChem in Orrington to discharge mercury.

The bill would require municipal waste incinerators to reduce mercury air emissions to not more than 100 pounds per year by January 1, 2000, and to not more than 50 pounds per year by 2004. Sources of mercury in municipal waste include batteries, fluorescent light bulbs, electrical components and some sneakers and toys. The burn process in municipal incinerators is tailored to dealing with the entire solid waste stream and would not easily accommodate a separation process, but consumer sorting could go a long way toward alleviating the problem of mercury deposition from this source. Mayor Lee Young of Auburn explained the municipal waste burning issues to the Committee and offered an amendment that would provide assistance to attack the problem both at the consumer level, through education, labeling and establishment of mercury-added product collection systems, and at the tailpipe with installation of activated carbon systems to reduce mercury emissions.

While municipal trash burning received some attention at the hearing, at least seven hours of the eight-hour hearing focused on other sources of mercury deposition, the largest of which is the HoltraChem plant in Orrington. HoltraChem is the only manufacturer in the state that is allowed by statute to discharge mercury. This bill would end that exemption by January 1, 2004, and HoltraChem representatives testified that, without amendment, the bill would effectively shut down operations. The LD offers a provision for assisting economic development in Orrington, apparently in recognition of the impact that passage would have on HoltraChem and Orrington’s economy.

The Committee will work this controversial bill over the next few days with the goal of developing solutions to Maine’s mercury problems that can be passed by the Legislature in the time remaining.

On Monday, March 16 and Wednesday, March 18, the State and Local Government Committee heard testimony and worked LD 2270 Resolution, Proposing an Amendment to the Constitution of Maine to Amend the Timing of Elections Following the Submission of a Petition for People’s Veto. The bill as written would require that a people’s veto vote be held either at a regular statewide or general election.

The Maine Chamber of Commerce, Municipal Clerks Association, Secretary of State’s Office and the Maine Municipal Association provided testimony in favor of the bill. Proponents supported the bill primarily for two reasons: 1) costs associated with holding a special election and 2) the need to hold elections of significant or controversial matters at a time when a larger percentage of the electorate convenes.

According to MMA’s projected estimates, during the February 10th special election the municipalities of Maine spent nearly $340,000 statewide to hold the election. Had the referendum vote taken place during a regularly scheduled election, the cost of the people’s veto would have been absorbed in the cost of hold the general election.

Second, as with any special election held outside of a regularly scheduled election the voter turnout is reduced and therefore so is the accuracy of the reading of the citizen’s choice. As is commonly insisted on at the local level, when an issue of significance or controversy is sent to the general electorate for a decision, the vote should be held at a time when the broader electorate is convened.

The Committee voted 7-4 that LD 2770 "ought to pass as amended". The amendment would require that a people’s veto be held during the November election rather than at the primary election in June. Many Committee members felt that the amendment was necessary in order to provide unenrolled voters an opportunity to vote on the people’s veto. As unenrolled voters do not participate in the primary, the Committee felt that holding the people’s veto election in November would ensure that the election is held at a time when the entire electorate is traditionally available and accustomed to voting.

As it reviewed various bond proposals under consideration, MMA’s Legislative Policy Committee identified a range of important needs warranting municipal support. A number of proposals drawing support are targeted at direct municipal infrastructure needs. These proposals include an environmental bond issue to provide reimbursement for the State’s share of landfill closure costs and to assist in the construction of wastewater pollution control facilities, and various transportation bond issues to address highway and bridge improvements as well as other transportation needs such as ports, airports, ferry, rail and marine.

The LPC also voted to support the proposed Research and Development bond issue. In taking this action, the LPC noted the connection between this proposal and economic development efforts throughout the state, particularly in supporting natural resource- based industries which are essential to the economic vitality of communities throughout Maine.

LD 1204 -- An Act to Establish the Maine Disaster Relief Laws. Enacted; PL 1997, c. 600.

LD 1540 -- An Act to Establish a State Disaster Relief Trust Fund. Died Between Houses.

LD 1719 -- An Act Concerning Firearm Purchase Background Checks. Final Ought Not to Pass.

LD 1922 -- An Act to Expand the Uses of the Economic Opportunity Fund. Emergency enacted 3/12/98; PL 1997, c. 590.

LD 2027 -- An Act to Ensure Collection of Essential Data by the Department of Public Safety. Emergency enacted 3/18/98; PL 1997, c. 608.

LD 2100 -- An Act to Permit a Local Development Commission to Assess a User Fee. Final Ought Not to Pass.