An Act To Establish the Pine Tree Development Zones Program
Maine Legislature, Session 121, LD 1385
Committee: Business, Research and Economic Development
Sponsors: BROMLEY
Amends: 36 MRSA §655, 36 MRSA §5219-W

12lst MAINE LEGISLATURE 
Legislative Document 
No. 1385 
S.P.456 
In Senate, March 18, 2003 
An Act To Establish the Pine Tree Development Zones Program 
Reference to the Committee on Business, Research and Economic Development suggested 
and ordered printed. 
JOY J. O'BRIEN 
Secretary of the Senate 
Presented by Senator BROMLEY of Cumberland. (GOVERNOR'S BILL) 
Under suspension of the rules, cosponsored by Representative SULLIVAN of Biddeford and 
Senators: President DAGGETT of Kennebec, DAVIS of Piscataquis, EDMONDS of 
Cumberland, GAGNON of Kennebec, HALL of Lincoln, HATCH of Somerset, MARTIN of 
Aroostook, SHOREY of Washington, STANLEY of Penobscot, TREAT of Kennebec, 
WOODCOCK of Franklin, Representatives: ASH of Belfast, AUSTIN of Gray, BARSTOW of 
Gorham, BERUBE of Lisbon, CARR of Lincoln, CLARK of Millinocket, Speaker COLWELL 
of Gardiner, DUDLEY of Portland, DUPLESSIE of Westbrook, DUPREY of Medway, 
EARLE of Damariscotta, FINCH of Fairfield, FISCHER of Presque Isle, FLETCHER of 
Winslow, GERZOFSKY of Brunswick, GOODWIN of Pembroke, GREELEY of Levant, 
Printed on recycled paper 
HATCH of Skowhegan, HOTHAM of Dixfield, JACKSON of Fort Kent, JACOBSEN of 
Waterboro, JOY of Crystal, LA VERRIERE-BOUCHER of Biddeford, LERMAN of Augusta, 
MARLEY of Portland, McKEE of Wayne, McKENNEY of Cumberland, McLAUGHLIN of 
Cape Elizabeth, McNEIL of Rockland, MOORE of the Passamaquoddy Tribe, O'BRIEN of 
Lewiston, PELLON of Machias, PERRY of Calais, PINGREE of North Haven, RECTOR of 
Thomaston, RICHARDSON of Greenville, RICHARDSON of Brunswick, ROGERS of 
Brewer, SHERMAN of Hodgdon, SHIELDS of Auburn, SMITH of Monmouth, THOMPSON 
of China, USHER of Westbrook. 
Printed on recycled paper 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1. 30-A MRSA §S223, sub-§3, ,e, as enacted by PL 2001, c. 
669, §1, is amended to read: 
C. 
The original assessed value of a proposed tax increment 
financing district plus the original assessed value of all 
existing 
tax 
increment 
financing 
districts 
within 
the 
municipality may not exceed 5~ of the total value of taxable 
property within the municipality as of April 1st preceding 
the date of the commissioner's approval of the designation 
of the proposed tax increment financing district. 
Excluded 
from 
the calculation in this paragraph is any 
district excluded from the calculation under former section 
5253, 
subsection 1, 
paragraph 
C, 
any district included 
within a Pine Tree Development Zone designated and approved 
under subchapter 3 and any district designated on or after 
the effective date of this chapter that meets the following 
criteria: 
(1) 
The development program contains project costs, 
authorized by section 5225, subsection 1, paragraph A, 
that exceed $10,000,000; 
(2) 
The 
geographic 
area 
consists 
entirely 
of 
contiguous property owned by a single taxpayer; 
(3) 
The assessed value exceeds 
10~ of the total value 
of taxable property within the municipality; and 
(4) 
The development program does not contain project 
costs 
authorized 
by 
section 
5225, 
subsection 
1, 
paragraph C. 
For the purpose of this paragraph, 
"contiguous property" 
includes a parcel or parcels of land divided by a 
road, 
power line or right-of-way. 
Sec. 2. 30-A MRSA c. 206, sub-c. 3 is enacted to read: 
SUBCllAP'.rER 3 
PIllE TREE DEVELOPMENT ZQRES 
§5245. 
Findings and declaration of necessity 
1. 
Legislative finding. 
The Legislature finds that there 
is a need to encourage development in economically distressed 
areas of the State in order to: 
A. 
Provide new employment opportunities: 
B. 
Improve existing employment opportunities: 
C. 
Improve and broaden the tax base: and 
D. 
ImprQv~ tb,~ g~n~rgl ~S;;QnQmy Qf th~ 5tgt~. 
2. 
Authorization. 
For the reasons set out in subsection 
I. cQQpergting municipglities gnd counties mgy develop g program 
fQr imprQving gn greg within their S;;Qlles;;tive bQundgries: 
A. 
To provide impetus fQr targeted cQmmercigl developmentj 
B. 
TQ ins;;rease emplQyment: gnd 
C. 
To provide the fgdlities Qutlined in the development 
plgn 
Submitted pursugnt 
tQ 
section 
5247. 
subsection 4. 
pgrggrgph E. 
3. 
Declaration of public pu~se. The Legislgture des;;lares 
thgt the gctiQns reguired tQ gssist the implementgtion Qf these 
development programs gre g publiS;; purpose gnd tb,gt the executiQn 
gnd fingns;;ing Qf these programs gre g public purpose. 
§5246. 
Definitions 
As used in this subchgpter. unless the context otherwise 
indis;;gtes. the fQIIQwing terms hgve the following megnings. 
1. 
Affiliated business. 
"Affiligted business" 
means 
businesses exhibiting either of the following relgtionships: 
A. 
One business owns 
50~ or more of the stock of the other 
business Qr owns g controlling interest in the Qtherj or 
~ 
Fifty percent or more of the stos;;k or a 
s;;ontrQlling 
interest is dires;;tly Qr indires;;tly owned Qr gs;;guired by a 
s;;ommon 
owner 
or 
owners 
following 
gpproVgl 
by 
the 
S;;QmmissiQner. whether by as;;guisition Qf substgntially all of 
the gssets. 
50~ or more of the stock or through g merger. 
S;;QnsQlidgtion Qr reQrggnizgtion. 
2. 
Base level of emplQEll8nt. 
"Bgse level Qf employment" 
megns the gregter Qf either the tQtgl emplQJl:IDent Qf a business as 
Qf the December 31st imroedigtely preceding its certification gS a 
gUglified Pine Tree DevelQpment 
ZQne business Qr its gVerage 
emplQJl:ffient during the base periQd. 
3. 
Base period. 
"Base period" means the 3 calendar years 
prior to the year in which a business is certified as a qualified 
Pine Tree Development Zone business. 
4. 
COIBilligDer. 
"C!::IIDmi s s i QIU~ r;:" maans tha CQmmissiQnar Qf 
ECQnQmic and CQmmunity DavalQpmant. 
5. 
De»~"'nt. 
"~apartmaut" 
maaus 
tha 
~apartmaut 
Qf 
E!;;QnQmi!:: aug CQIDml.l.nity ~avalQPmant. 
6. 
Pine Tree DevelOJPent Zeme. 
"Pina Traa DevelQpment 
ZQne" maans a spadfiag araa within tha !::QrpQrata limits Qf a 
municipality 
Qr 
tha 
cQrpQrata 
limits 
of 
cQQperating 
ml.l.nicipalitias in a ml.l.ltijl.l.risdi!::tiQnal appli!::atiQn that has been 
gesignated as a Pina Trae DavelQPmant ZQne ill. accQrgance with 
chapter 120 ang appr;:Qvag by tha cQIDmissiQnar;:. 
7. 
Pine 
Tree 
Deyelgpgent 
Zooe 
benefitl. 
"Pine 
Tree 
DevelQpmant ZQne banafits" maans: 
A. 
Municipal tax in!::ramant finan!::ing ungar subchaptar 1: 
B. 
EmplQymant 
tax 
incr;:amant 
finan!::iU9 
l.l.ngar;: 
Title 
36, 
chaptar 917: ang 
C. 
The Pine Traa Development Zone tax cregit provided by 
Titla 36, sa!::tiQn 52l9-W. 
8. 
Financial services. 
"Financial servi!;;es" means services 
provided by an insuranca cQmpany subject to taxatiQn unger Title 
36, 
chapter 357: 
a financial institutiQn subject to taxation 
under Titla 36, chapter 819: Qr a mutual fung servi!::e prQvider as 
defineg in Title 36, sa!::tiQn 5212, subSa!;;tiQU 1, paragraph E. 
9. 
Manufacturing. 
"Manufacturing" means the prQduction of 
tangible 
parsQnal 
prQParty 
intangag 
tQ 
be 
SQld 
or 
leased 
ultimataly for final use or consumption or the proguction of 
tangible 
perSQnal 
prQParty pursuant to 
a 
cQntract with the 
Federal Government Qr any agancy theraQf. 
10. 
Qualified 
Pine 
Tree 
Deyelqpment 
Zone 
business. 
"Qualified 
Pine 
Traa 
DevelQpment 
ZQna 
business" 
means 
any 
for-profit businass in tha State engageg in financial services or 
manufacturing Qr a targateg technQlQgy sactQr that adgs qualified 
Pine Trea DevalQpmant ZQUa 
amplQyaaS abQva its base laval Qf 
emplQyment in tha Stata ang that meets the fQllQwing criteria: 
A. 
The ingustrial sactor in which it prindpally operates 
is igentifiag in tha stata eCQnQmi!:: gavalQpment strategy as 
a targeteg grQwth sectQr: 
B. 
Its business operations established within the Pine Tree 
Development Zone represent net new investment or employment 
within the State: 
C. 
It demonstrates that the establishment of operations 
within the Pine Tree Development Zone would not occur absent 
the availability of the benefits described in subsection 7; 
£nd 
D. 
It is not engaged in retail operations. 
Upon review and determination by the commissioner that a business 
is 
a 
qualified 
Pine 
Tree 
Development 
Zone 
business, 
the 
commissioner shall issue a certificate of qualification to the 
business. 
11. 
Qualified 
Pine 
Tree 
Deyelo.pment 
Zone 
empl~ees. 
"Qualified Pine 
Tree 
Development 
Zone 
employees" 
means 
new, 
full-time employees hired in the State by a qualified Pine Tree 
Development 
Zone business 
and for 
whom 
a 
retirement program 
subject to the federal Employee Retirement Income Security Act of 
1974, 29 United States Code, Sections 101 to 1461. as amended, 
and group health insurance are provided, and whose income derived 
from employment with the applicant, calculated on a calendar year 
basis, is greater than the average annual per capita income in 
the county in which the qualified employee is employed and whose 
state income withholding taxes are subject to reimbursement to 
the qualified Pine Tree Development Zone business under this 
subchapter. 
Qualified Pine Tree Development Zone employees must 
be residents of the State. 
12. 
Retail operations. 
"Retail operations" means sales of 
consumer goods for household use to consumers who personally 
visit the business location to purchase the goods. 
13. 
Targeted 
technology 
sector. 
"Targeted 
technology 
sector" 
means 
an 
industry sector 
receiving sut 
through 
the 
Applied 
Technology 
Development 
Center 
System 
under Title 
5, 
section 15321. 
14. 
Tax 
increment financing. 
"Tax 
increment financing" 
means financing provided under section 5227. 
§5247. 
Pine Tree Deyelo.pment Zones 
1. 
Creation; apRlication. 
Qne or more municipalities, or 
an organization representing one or more municipalities, referred 
to throughout this subchapter as "applicant." may apply to the 
commissioner for the designation of a Pine Tree Development Zone 
within the boundaries of the municipality or municipalities in 
accordance 
with 
the 
requirements 
of 
this 
subchapter. 
The 
designation of a Pine Tree Development Zone may not conflict with 
the 
prov~s~ons of 
a municipal charter. 
Zones that meet the 
requirements of subsection 2 are authorized for location within 
the following regions: 
A. 
Aroostook County, including up to 100 acres of trust 
land reserved for designation by the Aroostook 
Band of 
Micmacs and the Houlton Band of Maliseet Indians: 
B. 
The Androscoggin Valley region, including the Lewiston 
Enterprise Community area as designated by the Agriculture, 
Rural Development, Food and Drug Administration, and Related 
Agencies, Appropriations Act, Public Law 105-277 (1999): 
C. 
The Penobscot Valley region, including up to 500 acres 
of trust land reserved for designation by the Penobscot 
Nation: and 
D. 
The Washington County Downeast region, including up to 
acres of trust land reserved for designation by the 
Passamaquoddy Tribe. 
The commissioner may designate up to 4 zones through the process 
established in section 5249. 
2. 
Requirements for designation. 
The commissioner shall 
adopt 
rules 
establishing 
the 
m~n~mum 
requirements 
for 
the 
designation of Pine Tree Development Zones. 
Additionally, each 
participating municipality must: 
A. 
Designate the area of the Pine Tree Development Zone 
lying within its corporate limits as a municipal development 
district in which 
years 
of 
municip<".l 
tax 
increment 
financing is provided to qualified Pine Tree Development 
Zone businesses equal to at least 100% of the real property 
tax 
increment 
resulting 
from 
the 
business's 
investment 
within the district following the district's designation: and 
B. 
Agree to maintain at least one prepermitted construction 
or 
development 
site 
available 
within 
the 
Pine 
Tree 
Development Zone on a continual basis throughout the term of 
the zone. 
3. 
Limitations. 
The designation of Pine Tree Development 
Zones is subject to the following limitations: 
A. 
A Pine Tree Development Zone located in Aroostook County 
as described 
in subsection 1, paragraph A may include only 
property that is not also included within the Aroostook 
County 
Empowerment 
Zone 
as 
designated 
by 
the 
federal 
Community Renewal Tax Relief Act of 2000, Public Law 106-554: 
B. 
With the exception of tax increment financing, Pine Tree 
Development 
Zone 
benefits 
may 
be 
provided to qualified 
businesses for a period not to exceed 10 years: 
C. 
Pine Tree Development Zone benefits may not be used to 
encourage or facilitate the transfer of existing positions 
or 
property of 
a 
qualified Pine 
Tree 
Development 
Zone 
business or any affiliated businesses: 
D. 
Pine Tree Development Zone benefits may not be provided 
based upon any employees or positions transferred by the 
qualified 
Pine 
Tree 
Development 
Zone 
business. 
or 
an 
affiliated business into a Pine Tree Development Zone from a 
location elsewhere in the State: 
E. 
A Pine Tree Development Zone may not consist of more 
than 10 noncontiguous parcels of property: and 
F. 
All property included within the boundaries of a Pine 
Tree Development Zone must be suitable for commercial use. 
4. 
Application. 
An application for designation of a Pine 
Tree 
Development 
Zone 
must 
include, 
but is not necessarily 
limited to, the following: 
A. 
A narrative description of the Pine Tree Development 
Zone to be designated: 
B. 
Maps 
and any other information necessary to clearly 
identify 
the 
geographic 
boundar ies 
of 
the 
Pine 
Tree 
Deye10pment Zone and any subzones it may include: 
C. 
Evidence that the Pine Tree Development Zone meets the 
requirements of subsection 3; 
D. 
Any information evidencing economic distress: and 
E. 
A development plan that includes: 
(1) 
Documentation 
of 
all 
municipal 
requirements 
required under subsection 2; 
(2) A description of how the Pine Tree Development Zone 
will be administered, including any related inter local 
cooperative agreements; 
(3) A description of the goals and objectives to be 
accomplished through the Pine Tree Development Zone; 
(4) A description of the resources to be committed to 
the Pine Tree Development Zone by the applicant or 
applicants; and 
(5) Plans for accomplishing the goals and objectives, 
including a marketing plan. 
5. 
Termination. 
All 
Pine 
Tree 
Development 
Zone 
designations approved under this subchapter are terminated on 
December 31, 2018. 
§5248. 
Procedure 
1. 
Notice and hearing. 
Before designating a 
Pine Tree 
Development Zone or adopting a development plan, the legislative 
body of each applicant municipality or the legislative body's 
designee must hold at least one public hearing. 
Notice of the 
hearing must be published at least 10 days before the hearing in 
a newspaper of general circulation within the municipality. 
2. 
Vote of municipal legislative body. 
Each applicant 
municipality 
must 
designate 
that portion 
of 
the 
Pine 
Tree 
Development Zone contained within its municipal boundaries by 
majority vote of its legislative body. 
3. 
Effective 
date. 
A 
designation 
of 
a 
Pine 
Tree 
Development Zone is effective upon approval by the commissioner. 
4. 
Administration. 
The municipalities participating in a 
Pine Tree Development Zone may create an organization, designate 
an existing department or agency or enter into a contractual 
arrangement 
with 
a 
private entity 
to 
administer 
activities 
authorized under this subchapter. 
5. 
Amendments. 
A participating municipality may amend the 
designation of that portion of a 
Pine Tree Development 
Zone 
contained within its boundaries or an adopted development plan 
only 
after 
meeting 
the 
requirements 
of 
this 
section 
for 
designation of a Pine Tree Development Zone or adoption of a 
development 
plan 
and 
with 
the 
concurrence 
of 
all 
other 
participating municipalities. 
A participating municipality may 
not amend the designation of a Pine Tree Development Zone if the 
amendment would result in the zone's being out of compliance with 
any of the requirements under in section 5247. 
§5249. 
Selection criteria 
1. 
Review and selection. 
The commissioner shall review 
applications and designate Pine Tree Development Zones based upon 
the following criteria: 
A. 
Severity of economic distress within a region affected 
by the Pine Tree Development Zone; 
B. 
Viability of a development plan described under section 
5247, subsection 4, paragraph E; 
C. 
Commitment of local and regional financial resources; 
D. 
Partnerships with public and private organizations; and 
E. 
Impact 
on 
surrounding 
regions 
of 
the 
Pine 
Tree 
Development Zone. 
§5250. 
Program administration: rules 
The 
commissioner 
shall 
administer this 
subchapter. 
The 
commissioner and the State Tax Assessor may 
adopt rules for 
implementation 
of 
the 
Pine 
Tree 
Development 
Zone 
program, 
including, 
but 
not 
limited 
to, 
rules 
for 
determining 
and 
certifying 
eligibility. 
Rules 
adopted 
pursuant 
to 
this 
subchapter are routine technical rules as defined in Title 5, 
chapter 375, subchapter 2-A. 
§5250 A. 
Unorganized territory 
For the purposes of this subchapter, a county may act as a 
municipality for the unorganized territory within the county and 
may 
designate 
development 
districts 
within 
the 
unorganized 
territory. 
When a county acts under this section, the county 
commissioners 
act 
as 
the municipality 
and 
as 
the 
municipal 
legislative bod,y, the State Tax Assessor acts as the municipal 
assessor and, the unorganized, territory fund, receives the funds 
d,esignated, for the municipal general fund,. 
Sec. 3. 36 MRSA §655, sub-§l, fI' is enacted to read: 
T. 
Personal 
property 
owned, 
by 
a 
gualified, 
Pine 
Tree 
Development Zone business as d,efined, by Title 30 A, chapter 
206, subchapter 3 that is otherwise taxable by the taxing 
jurisd,iction in which the d,evelopment zone is located. 
Sec. 4. 36 MRSA §5219-W is enacted to read: 
§5219 W. 
Pine Tree Deyelopment Zone tax credit 
1. 
Credit allowed. 
Except as provided by subsection 2, a 
taxpayer that is a qualified Pine Tree Development Zone business 
as defined in Title 30 A, chapter 206, subchapter 3 is allowed a 
credit in the amount of: 
A. 
One hundred percent of the tax that would otherwise be 
due under this Part for each of the first 5 taxable years 
that the taxpayer is required to file a return pursuant to 
this Part: and 
B. 
Fifty percent of the tax that would otherwise be due 
under this Part for each of the taxable years beginning with 
the 6th year and ending with the 10th year that the taxpayer 
is required to file a return pursuant to this Part. 
2. 
Apportioned credit in certain circumstances. 
In the 
case of a business, including an affiliated group, that has a 
business presence in the State other than that conducted within a 
Pine Tree Development Zone as defined by Title 30-A, 
section 
5246, subsection 6, including, but not limited to, 
a taxpayer 
that is required to file a combined report pursuant to section 
5206-G or 5244, the assessor shall make a pro forma determination 
of the state income tax liability of the qualified Pine Tree 
Development Zone business, based upon which the credit provided 
by this section is to be calculated. 
In making the pro forma 
determination, the assessor shall assume that all of the business 
activities conducted by the taxpayer within this State constitute 
a 
unitary business, 
but that only 
the qualified Pine 
Tree 
Development Zone business is subject to the tax imposed by this 
Part and the assessor shall apply the apportionment rules set 
forth in chapter 821 or in section 5206-E. 
3. 
Limitation. 
The credit provided by this section is 
limited 
to 
an 
amount 
that would 
not 
reduce 
the 
taxpayer's 
liability under this Part, including the aggregate tax liability 
under this Part of affiliated members of a unitary group, to less 
than the liability under this Part in the taxable year prior to 
the commencement of the taxpayer's activity within a Pine Tree 
Development 
Zone 
as 
defined 
in 
Title 
A, 
chapter 
206, 
subchapter 3. 
Sec. 5. 36 MRS A §6754, sub-§l, 1JD is enacted to read: 
D. 
For qualified employees employed by a qualified Pine 
Tree Development Zone business, as defined in Title 30-A, 
section 5246, subsection 10 and for whom a certificate of 
qualification has been issued in accordance with Title 30 A, 
section 5246, subsection 10, the reimbursement is equal to 
100% of the withholding taxes withheld each year for which 
reimbursement is requested and attributed to those qualified 
employees, 
as 
defined 
in 
Title 
30-A, 
section 
5246, 
subsection 11. 
SUMMARY 
This bill establishes the Pine Tree Development Zone program 
within the Department of Economic and Community Development and 
authorizes qualified businesses in the manufacturing, technology 
and financial services sectors to receive the following benefits 
for 
a 
period of 
years 
as 
a 
result of their operations 
established within the zones: 
1. 
Financing assistance equal to 100'1& of the tax paid on 
real property improvements; 
2. 
Exemption of personal property from taxation; 
3. 
Employment 
qualified employees' 
of 10 years; and 
tax increment financing equal to 
100~ of 
state income tax withholdings for a period 
4. 
A tax credit equal to 
100~ of the state income tax due 
and attributable to operations within the zones for each of the 
first 5 years, followed by a credit equal to 50'1& of the state 
income tax due and attributable to operations within the zones 
for the 6th through the 10th years.