Legislative Bulletin
May 28, 1999

THE LAST DANCE….

The end of the first session of the 119th Legislature appears to be just days away, with adjournment likely in the week following the Memorial Day holiday.

All the issues of municipal interest this session have been resolved one way or the other, except for the two most significant matters – GPA and Highway. The final bond package has yet to be developed, also.

It is a difficult time of the session to report on the legislative decision-making process with respect to the state budget deliberations. The details of the final budget proposals and the choreography of the budget process are held closely by legislative leadership and the Governor’s Office as the two parties (Republican and Democrat), the two chambers (House and Senate), and the two branches of government (legislative and executive) negotiate over their differences.

From what can be determined, however, the major elements of the state budget negotiations of municipal interest have been agreed to. The Governor’s proposal to reduce the sales tax to 5% beginning on July 1, 2000 has been agreed to by the Democratic leaders despite their interest in holding the tax rate at 5.5% and dedicating a half-penny of that revenue to K-12 education.

A compromise on the appropriations for General Purpose Aid to Education has also been struck, apparently. All session long, in its deliberations over the school funding formula and the level of education funding, generally, the Education Committee has been advocating for a 6% increase to GPA over the appropriation for this current year (FY 99), which was $592 million. The 6% increase would boost the spending level to $627 million. With the distribution formula amendment that the Education Committee also developed, an additional $3 million "hold harmless" appropriation was added to the funding level so that no school district would lose money in the first year due to the implementation of the new distribution formula.

Many printouts showing the amount of money each school unit would receive at the $627 to $630 million appropriation level have been distributed over the course of the last two months.

To accommodate the impending sales tax cut, however, and other spending priorities, the GPA appropriation will likely be $620.7 million, rather than $627 million, with a $3.7 million "hardship cushion," yielding a total GPA appropriation of $624.5 million for FY 2000 and a straight $638 million appropriation for FY 2001. Without counting the hardship cushion (which is distributed outside the formula to targeted school units), the percentage increase from FY 99 to FY 2000 is 4.9%, and the percentage increase from FY 2000 to FY 2001 will be 2.8%. In order for the state to achieve its long-intended 55% share of K-12 education, steady 6% annual increases to GPA would have to be maintained for a 10-year period to recover from the sustained 7% annual increases from the property tax between 1991 and 1997. Although it can’t be denied that the state’s annual percentage increases to GPA have been easily outpacing the Consumer Price Index over the last two years, the 10-year GPA restoration plan supported by MMA will not be implemented with the spending package.

A printout of GPA distribution at this level of funding is available by calling SFR’s Tina Means at 1-800-452-8786.

As of this writing, legislative leadership plans to send most legislators home for the Memorial Day holiday and give the Appropriations Committee a chance to negotiate the final budget details, prioritize the over 200 bills on the Special Appropriations Table, and put together a proposed bond package. According to the game plan, when the details have all been worked out, the full Legislature will be called back in next week for the briefings, the caucusing, and, if it all works out, the last grand waltz of the session. (GH)

MANURE PITS

LD 2246, An Act to Amend the Nutrient Management Laws, is a bill that has been developed over the course of the legislative session by the Agriculture, Conservation and Forestry Committee and has been just now printed in the form of a bill. The authority for the Committee to develop the amendments to the existing manure management laws was initiated by legislation enacted in 1998.

Generally, LD 2246 merely refines the current requirement that the owners of farms with more than 50 "animal units" must prepare nutrient management plans which detail how the manure produced by the livestock will be stored and handled. The bill phases in the plan development timetable, creates a variance procedure, and makes several other non-substantive changes to the law.

LD 2246 also creates a new property tax exemption to be placed in 36 MRSA §656, which is the general section of tax law where the exemption for "pollution control facilities" is found.

This new exemption is for manure pits that are built on farms that have nutrient management plans certified by the Commissioner of Agriculture. According to the Agriculture Committee, at the heart of this new exemption is the fact that the farm manure management law is requiring the larger farm operations to construct a facility that is capable of holding the manure generated by the animals on the farm for the 180-day winter period when the land-spreading of manure is prohibited.

The Agriculture Committee believed that because the Legislature is mandating the construction of these large concrete bunkers, and because these facilities are essentially "water pollution control facilities," the Legislature should exempt the facilities from the property tax and the materials that go into making the facilities from the sales tax.

In accordance with a provision in the state’s Constitution, LD 2246 provides for a 50% reimbursement of the property tax revenues lost to any municipality because of the new exemption. The revenue losses to municipalities because of this new, manure-pit exemption are not expected to be substantial. A large number of these large-scale manure pits are not going to be constructed, many existing manure pits have already been certified by DEP as "water pollution control facilities", and municipal assessors typically lump manure pits into the category of farm "outbuildings" which is given a very significant mark-down from cost-less-deprectiation value for reasons of both financial and economic obsolescence. (GH)

SENATE BENDS TO NRA GUN MANUFACTURERS

Under pressure from the Sportsman’s Alliance of Maine (SAM) and gun enthusiasts around the state who responded to a postcard campaign by the National Rifle Association (NRA), the Maine Senate this week reversed its initial, May 17th rejection of LD 2192, An Act to Prohibit Law Suits by Municipalities Against Firearm or Ammunition Manufacturers.

Despite having rejected the measure by a strong 23-11 ought-not-to-pass vote ten days ago, by Wednesday night seven Senators had crossed over and the preemption of municipal access to the courts was enacted by a 19-16 ought-to-pass margin. The bill was also lobbied by the gun manufacturers in Maine who indicated that this was a threshold issue with respect to the decisions they might make to locate or expand their operations in Maine.

LD 2192, which has now been finally enacted and sent to the Governor for his signature, prohibits municipalities from filing a suit against any company engaged in the lawful design, manufacture, marketing or sales of guns or ammunition. Two exceptions to that general preemption would be for breach of contract or breach of warranty. By the use of the word "lawful" in that preemption, the bill generally disallows suits on the basis of negligence. The legislation is part of a national NRA campaign to protect gun manufacturers from lawsuits filed by municipalities. The campaign is being launched by NRA and the corporate manufacturers in response to municipal lawsuits filed in urban states on claims of flooding the market and negligently failing to control illegal gun sales.

The initial Senate debate on this bill, which was reported in last week’s Legislative Bulletin, highlighted some of the most cogent debate on the floor of the Senate as to why LD 2192 should not become law. Ironically, the very Senators identified in that article who put forward those compelling arguments to kill the bill were two of the seven Senators that changed their position as the result of the NRA phone campaign and ultimately voted to enact the bill.

At its core, LD 2192 codifies into law the proposition that the selectmen and town and city councilors of this state cannot be trusted to refrain from filing frivolous lawsuits and should therefore be prohibited from suing gun and ammunition manufacturers except under narrow circumstances.

The NRA postcard campaign suggested that "irresponsible" municipal lawsuits were creating a threat to gun availability and represented a calculated attempt by municipal government to effect gun control through litigation rather than legislation, in the same way tobacco litigation brought the tobacco industry to the table. The clear implication was that these irresponsible lawsuits were happening in Maine. These NRA postcards failed to mention that no Maine municipalities have ever filed a product liability lawsuit against any manufacturer in Maine, not to mention gun or ammunition manufacturers.

Some Senators justified their vote by saying the prohibition on municipal lawsuits merely "clarified" an existing law that limits municipal regulatory authority in the field of firearm regulation. This argument is completely false. There are many areas where municipalities are limited with respect to regulatory authority (including traffic control, alcohol distribution, firearm distribution, elements of solid waste regulation, etc.), but there has never been a prohibition on municipal authority to obtain civil remedies in court. LD 2192 establishes a completely new precedent of municipal preemption and proscription. One legacy of the 119th will be that it is the first Legislature to block municipal access to the courts in the state’s history.

In addition to the fact that LD 2192 attacks a problem that doesn’t exist in this state, the bill was poorly drafted. As finally enacted by the Senate, LD 2192 could bar the following attempts to obtain remedies in court by municipalities.

• A person on the street shoots a defective gun and because of the defect, municipal property is damaged. Normally, the municipality would seek recovery of the damages from the person who shot the gun and the manufacturer of the defective weapon. LD 2192 only allows lawsuits against gun manufacturers when the municipality has purchased a gun, not a third party, and would therefore prohibit the municipality from seeking recovery from the manufacturer.

• A salesman of firearms negligently drives her car into municipal property or a company delivering a load of ammunition drives off the road in a motor vehicle accident that results in damage or injury to municipal property or employees. Being negligent is not being "unlawful". The municipality would be prohibited under LD 2192 from seeking recovery against the manufacturer.

• If a municipality chose to dispose of the weapons turned into police (or recovered by the police during their operations through forfeiture) and the method of disposal was public auction (which is not only common in Maine, it is actually encouraged by the Legislature, which passed a bill this session to that effect), the municipality could be sued for resultant damages if the weapon is defective whether the municipality knew the weapon was defective or not. By putting the weapon "into the stream of commerce," the municipality would be exposed to liability. Under LD 2192, the liability would be incurred by the municipality without the town having the ability to bring the manufacturer into the suit as a third party because, again, there was no "privity of contract or warranty" between the municipality and the gun manufacturer.

• A gun manufacturer disposes of its lubricating oils in the town landfill. The landfill is ultimately identified as a hazardous waste site. The EPA and DEP do not have sufficient records to identify the gun manufacturer as a "partially responsible party", and the responsibility for the pollution caused by the gun manufacturer is attributed to the town. The town wants to bring the manufacturer into the case to pay its fair share. As is the case with the hazardous waste site in Wells and other polluted sites in Maine, the depositing of the waste oil in the landfill was not an unlawful act by the various participants, and therefore LD 2192 would not allow the town to sue the manufacturer for its fair-share responsibility of the costs of remediation.

• A police officer injures an innocent bystander because of his defective gun. The plaintiff sues the town for the injury. The municipality files a third party action against the manufacturer for breach of warranty. Under breach of warranty, the municipality is unable to recover for emotional distress, punitive damages and a number of other damages for which the municipality would be held liable. In this case, the municipalities will be financially responsible for damages that are the responsibilities of the manufacturer.

• The municipality purchases an order of guns for the police department that are poorly designed. The safety device fails and an officer is injured. The municipality seeks recovery for the injury. Under LD 2192, the municipality would be prohibited from recovering its attorney fees or obtaining injunctive relief (an order from the court to discontinue the defective product), because those remedies are not available under breach of warranty claims. In Maine there exists an Unfair Trade Practices Act in Title 5 MRSA that was created in order to provide plaintiffs with attorney fees and injunctive relief, in addition to actual damages, so that they would not have to bear the litigation costs associated with obtaining relief and could prevent other consumers of the product from being injured.

There are many more examples of this kind. When these legal defects in the bill are pointed out to the proponents of LD 2192, their response is that these and other examples of consequences of this law are "merely hypothetical." That’s the ultimate irony with respect to this legislation. In this state, the municipal lawsuits the NRA and the gun manufacturers are trying to squelch are what is "merely hypothetical" given the culture of this rural state and the closeness of the municipal officers to the people.

But the bill had to be passed, nonetheless. You might want to ask your legislators why.

HIGHWAY FUND PART II BUDGET OUT OF COMMITTEE

On Wednesday the Transportation Committee reported out two different measures for addressing the $55 million Highway Fund Part II budget gap. The bipartisan majority report supported by eight members addresses the gap by implementing a 2-cent fuel tax increase and a one-time $22 million General Fund appropriation to fund the Urban-Rural Initiative program. The majority report provides a funding solution for the FY 00-01 biennium. In order to address future funding gaps, the majority report includes a study to develop long-term solutions for appropriately funding Maine’s road infrastructure.

The minority report, supported by five members of the Committee, incrementally increases the fuel tax over the next three years on a 3 cent-1 cent–1 cent schedule. This approach would increase the current 19-cent state tax on gas to 22-cents in FY 2000, 23-cents in FY 2001 and 24-cents in FY 2002. Similarly, the diesel tax would increase from the current 20-cent state tax to 23-cents, 24-cents and 25-cents in FY 2000, 2001, 2002, respectively. This approach provides a funding solution for the FY 00-01 biennium and the FY 01-02 biennium. This report also includes a study to develop long-term solutions for funding Maine’s road infrastructure.

While the reports differ in their proposed funding approach, the content of each is identical. Each Highway Fund Part II budget proposal includes: 1) the changes to the Local Road Assistance Program developed by the MMA Transportation Advisory Committee and the Department of Transportation (DOT), which to divides the program into the Urban/Rural Road Initiatives; 2) funding for the Urban/Rural Initiatives and Highway and Bridge improvements; and 3) funding for municipal and state salt and sand storage facilities. Each report provides $45 million ($39 million existing and $6 new revenue) over the biennium to fund local roads and $1 million for municipal salt/sand storage facilities. As shown in figure 2, the increase in state funding for local roads will benefit each region of the state.

While both reports benefit Maine’s 494 communities, MMA supports the minority report on the principle that Highway Fund revenues should be sufficiently assessed to provide for Highway Fund purposes. MMA believes that since the fuel tax revenues are user-fee revenues constitutionally dedicated to the Highway Fund, the fuel tax increase is the most stable mechanism for funding Maine’s infrastructure.

When you are talking to your legislators, please urge them to support the minority report of the Transportation Committee. The minority report puts stability back into the Highway Fund. (KD)

SOLID WASTE MANAGEMENT IMPROVEMENTS ENACTED

Changes to state law, sought through LD 1714, An Act to Clarify and Improve the State’s Solid Waste Management Laws, will mean fairer fee schedules, improved incentives, some technical assistance and cost savings for municipalities. The bill was the product of a stakeholder process that studied ways to streamline and improve solid waste handling and identify missing pieces in the state’s regulation and assistance programs.

The stakeholders determined that efficiency could be gained in the nonhazardous waste transporter licensing program and proposed limiting the scope of that program to transportation of septage, used motor vehicle tires, and construction or demolition debris. The change becomes law with LD 1714.

LD 1714 revises the Environmental Protection Fund fee schedule for maximum fees. Most significant for municipalities, the law revises the schedule for fees imposed on certain wastes disposed of in landfills. These fees are collected from the municipal and business entities that deposit the waste at the landfills and used by the state to fund the solid waste management and regulatory programs at the Department of Environmental Protection and the State Planning Office. The new schedule makes fee amounts consistent between commercial and municipal landfills, with a level $5 per ton fee on most categories of special waste.

With respect to municipal solid waste, LD 1714 will reduce the fee on municipal solid waste incinerator ash from $2 per ton to $1 per ton, and the fee on front end process residue from $4 per ton to $1 per ton. The bill imposes a consistent $2 per ton fee on regular municipal solid waste disposed of at commercial and municipal landfills.

The fee changes will not result in any net change in total revenues collected by DEP, but instead are intended to correct financial incentives. Increasing the cost for landfill sludge from $2 to $5 per ton will serve as a disincentive to landfill. Leveling the fees for municipal and commercial facilities will eliminate the incentive to use formerly less expensive municipal facilities, easing capacity pressure on those municipal facilities.

The new law allows the State Planning Office to provide planning assistance to municipalities and regional organizations for managing municipal solid waste. The assistance is expected to include cost and capacity analysis and public education. (LL)

APPROPRIATIONS TABLE

At last count there were over 200 bills on the Special Appropriations Table and eight bills on the Special Highway Table. These are bills that would cost either the state’s General Fund or the Highway Fund some money over the next biennium if they are enacted. The fiscal notes on these bills range from an undeterminable but negligible amount to several million dollars apiece. Which of these bills get funded and which get killed are decisions the Legislature makes only after the state budget gets enacted and the amount of remainder funds become known.

The following is a list of all the bills on the Special Tables that MMA has been Tracking, by LD number and bill title. Although there are a number of bills of modest fiscal impact that are very important to certain municipal constituencies, the bills of greatest priority for MMA are:

LD 968 – An Act to Restore Municipal Revenue. As amended, this bill authorizes the transfer of $1,152,347 from the sales tax reserve to the Local Government Fund in FY 1999-00. This sum represents the amount that would have been transferred to the Local Government Fund if the 4-month reserving of money authorized in 36 MRSA §1811 had not been interpreted and applied to preclude that transfer. The bill also adds language that is designed to prevent a reduction to the Local Government Fund due to the application of Title 36, section 1811 or any other law, making it clear that the Local Government Fund must be credited with a calculation based on the state’s total sales and use tax and income tax receipts regardless of the operation of any other inconsistent law. (Fiscal note: the transfer of $1,152,347 from the Sales Tax Reserve to the Local Government Fund in FY 1999-00; this amount will be distributed through the state-municipal revenue sharing program by October 20, 1999) and

LD 1251 – An Act to Change the Reimbursement Rate for Law Enforcement Personnel Who Testify in Court. This bill would increase the reimbursement paid to a municipality for the time a municipal law enforcement officer spends in District Court to testify in the prosecution of offenses. The current "witness fee" for law enforcement officers is $25 per day. Under this bill, the reimbursement would increase to $50 per day. (Fiscal note: $46,089 in FY 1999-00 and $121,919 in FY 2000-01).

LD 122 – 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

LD 272 – Resolve, Establishing the Commission to Study High-speed Chases and Emergency Responses

LD 318 – An Act to Allow Counties to Retain a Larger Share of the Real Estate Transfer Tax

LD 552 – An Act to Change the Minimum Time for Issuing a Temporary Registered Gross Weight Increase from 2 Months to One Month

LD 587 – An Act to Ameliorate Penalties for Late Filing of Municipal Tax Returns

LD 639 – An Act to Improve the State’s Democracy by Increasing Access to the Ballot and Other Election Processes

LD 656 – An Act to Adjust the Alternative Funding Mechanism for the Maine Public Drinking Water Commission

LD 756 – Resolve, to Create a Task Force to Study Ways to Improve and Streamline the Regulation of Water Utilities

LD 806 – An Act to Provide Adjustments to Accommodate Increases in the Cost of Living for Injured Workers

LD 899 – An Act to Establish a Part-time Liquor License

LD 1086 – An Act to Improve Snowmobile Trail Grooming

LD 1134 – An Act to Extend the Maine Residents Property Tax Program to Persons Living in Subsidized Housing Who Receive Certain Disability Payments

LD 1143 – An Act to Provide Funding for the Education Research Institute

LD 1170 – An Act Concerning the Review of State Solid Waste Management Policies

LD 1200 – An Act to Amend the Laws Pertaining to Excise Tax Collection

LD 1224 – An Act to Allow the Town of Cornville to Receive its 1997 Tree Growth Tax Reimbursement

LD 1266 – RESOLUTION, Proposing an Amendment to the Constitution of Maine to Promote Historic and Scenic Preservation

LD 1428 – Resolve, to Enhance Fire Protection Services throughout the State

LD 1524 – An Act to Include the Income of a Lessee for the Purpose of Determining Eligibility in Farm and Open Space Tax Laws

LD 1550 – Resolve, to Establish a Task Force to Study the Improvement of Public Water Supply Protection

LD 1577 – An Act to Amend the Liability Limit Under the Maine Tort Claims Act

LD 1587 – An Act to Allow the Surviving Veteran Spouse of a Veteran to Continue to Receive the Property Tax Exemption

LD 1638 – Resolve, to Review Traffic Congestion Including Truck Traffic along the Route 1 York Corridor

LD 1847 – An Act to Increase the Amount of Revenue Dedicated to Local Revenue Sharing

LD 1878 – An Act to Make More Uniform the Training of Firefighters

LD 1938 – An Act to Provide Equity for Veterans of the Vietnam War and the Persian Gulf Conflict

LD 2038 – An Act to Amend the Water Quality Laws to Establish a New Standard for Mercury Discharges

LD 2180 – An Act to Promote Participation in the Maine Residents Property Tax Program

You should be in contact with your legislators immediately with respect to any of these bills that are of great importance to your community. (TM)