An Act To Establish the Pine Tree Recreation Zone
Maine Legislature, Session 122, LD 0192
Committee: Taxation
Sponsors: MOODY, DAVIS, GERZOFSKY, HOTHAM, LERMAN, MILLS, PINEAU, SA VIELLO, MITCHELL, WOODCOCK
Amends: 36 MRSA §1760

Legislative Document 
No. 192 
H.P.143 
House of Representatives, January 13,2005 
An Act To Establish the Pine Tree Recreation Zone 
(EMERGENCY) 
Reference to the Committee on Taxation suggested and ordered printed. 
Presented by Representative MOODY of Manchester. 
Cosponsored by Senator DAVIS of Piscataquis and 
/tl~ 
'1J7. 7lldC~ 
MILLICENT M. MacFARLAND 
Clerk 
Representatives: GERZOFSKY of Brunswick, HOTHAM of Dixfield, LERMAN of Augusta, 
MILLS of Farmington, PINEAU of Jay, SA VIELLO of Wilton, Senators: MITCHELL of 
Kennebec, WOODCOCK of Franklin. 
Printed on recycled paper 
Emergency preamble. Whereas. acts of the Legislature do not 
become effective until 90 days after adjournment unless enacted 
as emergencies; and 
Whereas, recreational businesses and the areas of -the State 
that they serve are in need of economic support. and providing 
tax incentives to recreational businesses in rural portions of 
the State would improve the economic climate of those areas; and 
Whereas. in the judgment of the Legislature, these facts 
create an emergency within the meaning of the Constitution of 
Maine 
and 
require 
the 
following 
legislation 
as 
immediately 
necessary for the preservation of the public peace, health and 
safety; now, therefore, 
Be it enacted by the People of the State of Maine as follows: 
Sec. I. 30-A MRSA c. 206. sub-c. 5 is enacted to read: 
SUBCHAPTER 5 
PIBE TREE RECREATION ZONE 
§5250-Q. 
Definitions 
As 
used in this subchapter ( 
unless the context otherwise 
indicates, the following terms have the following meanings. 
1. 
Affiliated business. 
"Affiliated business" 
means 
a 
member of a group of 2 or more businesses in which more than 50°0 
of the voting stock of each member corporation or more than 
50~ 
of the ownership interest in a business other than a corporation 
is directly or indirectly owned by a 
common owner or owners, 
either corporate or noncorporate, or by one or more of the member 
businesses. 
2. 
Base level of emploJ1ll8nt. 
"Base level of employment" 
means the greater of either the total employment in the state o[ 
a business and its affiliated businesses as of the December 31st 
immediately preceding its certification as a gualified Pine Tree 
Recreation Zone business or its average employment during the 
base period. 
3. 
Base period. 
"Base per iod" means the 3 calendar years 
prior to the year in which a business is certified as a gualified 
Pine Tree Recreation Zone business~ 
4. 
CQlllllissioner. 
"Commissioner" means the Commissioner of 
Economic and Community Development. 
Page l-LR0525(1) 
.. 
" LL 
5. 
Department. 
"Department" 
means 
the 
Department 
of 
Economic and Community Development. 
6. 
Pine Tree Recreation Zone. 
"Pine Tree Recreation Zone" 
or "zone" includes the portion of this State that extends from 
the Androscoggin River to the northern or eastern border of the 
State. 
1. 
Pine 
Tree 
Recreation 
Zone 
benefits. 
"Pine 
Tree 
Recreation Zone benefits" means: 
A. 
The 
exclusion 
from the limitations established under 
section 
5223, 
subsection 
of 
tax 
increment 
financing 
districts included within the Pine Tree Recreation Zone; 
B. 
Expanded 
employment 
tax 
increment 
financing 
benefits 
under Title 36, chapter 917; 
C. 
The sales tax exemptions under Title 36, section 1760, 
subsections 88 and 89: and 
D. 
The Fine Tree Recreation Zone tax credits provided by 
Title 36, section 5219-Y. 
6. 
Qualified Pine Tree Recreation Zone business. "Qualified 
Fine Tree 
Recreation 
Zone business" 
or "qualified recreation 
business" means any for-profit business in this State engaged in 
an outdoor recreational business, including, but not limited to, 
providing services or merchandise relating to guiding, hunting, 
fishing, skiing, snowboarding, snowmobiling or water sports, that 
adds qualified Pine Tree Recreation Zone employees above its base 
level of employment in this State and that meets the following 
cr i tel-ia: 
A. 
It demonstrates that the establishment or expansion of 
operations wi thin the Pine Tree Recreation Zone wQuld not 
occur within the State absent the availability of the Pine 
Tree 
Recreation 
Zone 
benefits. 
The 
department 
shall 
investigate whether the business has met the requirements of 
this 
paragraph 
and 
provide 
an 
advisory 
opinion 
to 
the 
Executive Director of the Bureau of Revenue Services in the 
Department of Administrative 
and Financial Services, 
whQ 
shall make the final determination; and 
B. 1 t has received a certi£ icate as a qualified recreation 
business pursuant to section 5250-5. 
9. 
Qualified 
Pine 
Tree 
Recreation 
Zone 
emplOYees. 
"Uualified 
Pine 
Tree 
Recreation 
Zone 
employees" 
means 
new, 
full-time employees hired in this State by a qualified Pine Tree 
Recreation 
Zone 
business 
for 
work 
directly in 
one 
or 
more 
qualified business activities, 
for 
whom 
a 
retirement 
program 
subject to the Employee Retirement Income Security Act of 1974, 
United States Code, 
Sec;:tions 101 to 1461 (2003) 
and group 
health 
insurance 
are 
provided 
and 
whose 
wages 
derived 
fro~ 
employment within the Pine Tree Recreation Zone are greater than 
the average annual per capita wages in the local labor market, 
area 
in 
the 
county 
in 
which 
the 
qualified 
employees 
are 
employed. 
Qualified Pine Tree Recreation Zone employees must be 
residents of this State. 
10. 
Oua1ified recreation business activity. 
"Qualified 
recreation business activity" means a business activity that is 
conducted within the Pine Tree Recreation Zone that involves 
outdoor 
recreation, 
including, 
but not limited to. 
providing 
services or merchandise relating to guiding, hunting, fishing, 
skiing, snowboarding, snowmobiling or water sports, and for which 
the 
business 
receives 
a 
certificate 
from 
the 
commissioner 
pursuant to section 5250-S. 
§5250-R. 
Program administration; rules 
The 
commissioner 
shall 
administer 
this 
subchapter. 
Th~ 
~ommissioner 
shall 
adopt 
rul~~_~rsuant 
to 
the 
MaiDe 
Administrative Procedure Act for implementation of the Pine Tree 
Recreation Zone. 
Rules adopted under this section are routine 
technical rules as defined in Title 5, chapter 375, subchapter 
2-A. 
§5250-S. 
Certification of qualified recreation business 
A business may apply to the commissioner for certification 
as a gualified Pine Tree Recreation Zone business. 
Upon review 
and determination by the commissioner that a business gualifies 
as 
a 
gualified 
Pine 
Tree 
Recreation 
Zone 
business, 
the 
commissioner shall issue a certificate of gualification to the 
business that includes a description of the gualified recreation 
business activity for which the certificate is being issued. 
Sec. 2. 36 MRSA §1760. sub-§§88 and 89 are enacted to read: 
88. 
Construction 
contracts 
with 
qualified 
Pine 
Tree 
Recreation Zone businesses. 
Beginning July L 
2005, sales to a 
construction contractor of tangible personal property that is to 
be physically incorporated in, 
and become a permanent part of L 
real property that is owned by or for sale to a gualified Pine 
Tree Recreation Zone business, as defined in Title 3D-A, 
se~J:i911 
5250 Q, 
subsection 8, which real property will be used in the 
qualified recreation business activity, as defined in Title 30-A, 
section 
5250-0, 
subsection 
10, 
of 
the 
gualified 
Fine 
Tree 
• 
1fl 
1() 
Recreation Zone business in the Pine Tree Recreation Zone, 
as 
defined 
in Title 
30-A, 
section 
5250-0, 
subsection 
6. 
The 
exemption provided by this subsection is limited to sales to a 
construction contractor occurring wi thin a period of 10 years 
from the date the qualified Pine Tree Recreation Zone business 
receiving the property is certified pursuant to Title 
30-A, 
section 5250-S or until December 31, 2018, whichever occurs first. 
89. 
Sales of tangible personal property to qualified Pine 
Tree Recreation Zone businesses. 
Beginning July 1, 2005, sales 
of tangible personal property to a qualified Pine Tree Recreation 
Zone 
business, 
as 
defined 
in 
Title 
30-A, 
section 
5250-0, 
subsection 8, 
for 
use directly and primarily in one or more 
qualified recreation business activities, 
as defined in Title 
30-A, section 5250-0, subsection 10. The exemption provided by 
this 
subsection 
is 
limited 
for 
each 
qualified 
Pine 
Tree 
Recreation Zone business to sales occurring within a period of 10 
years from the date the business is certified pursuant to Title 
30-A, section 5250-S or until December 31, 2018, whichever occurs 
first. 
Sec. 3. 36 MRSA ~5219·Y is enacted to read: 
§52l9-Y. 
Pine Tree Recreation Zone tax credit 
1. 
Credit allowed. 
Except as provided by subsection 2, a 
taxpayer that is a qualified Pine Tree Recreation Zone business 
as defined in Title 30-A, section 5250-0, subsection 8 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 
beginning 
after 
the 
taxpayer 
commences 
its 
qualified recreation business activity, as defined in Title 
30-A, section 5250-0, subsection 10j 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 taxable year and ending with the 10th taxable year 
that the taxpayer is required to file a return pursuant to 
this 
Part 
after 
the 
taxpayer 
commences 
its 
qualified 
recreation business 
activity, 
as 
defined in Title 
30-A, 
section 5250-U, subsection 10. 
2. 
Apportioned credit in certain circumstances. 
In the 
case 
of 
a 
qualified Pine 
Tree 
Recreation 
Zone 
business, 
as 
defined in Title 30-A, section 5250-0, subsection 8, that has a 
business presence in the State other than that conducted within 
the Pine Tree Recreation Zone, as defined by Title 30 A, section 
5250-0, subsection 6, including, but not limited to, a qualified 
Pine Tree Recreation Zone business that is required to file a 
combined report pursuant to section 5220, subsection 5, the Maine 
income tax liability of the qualified Pine Tree Recreation Zone 
business, and the affiliated members of its unitary group, if 
any, upon which the credit provided for in this section must be 
calculated based upon a pro forma determination. 
The pro forma 
determination must be based on the assumptions that all of the 
business 
activities 
conducted 
by 
the 
qualified 
Pine 
Tree 
Recreation 
Zone 
business 
and 
the 
affiliated members 
of 
its 
unitary 
group, if any, within this State constitute a unitary 
business and that only the qualified business activity conducted 
in the Pine Tree Recreation Zone is subject to tax imposed by 
this chapter. 
The portion of the tax liability of the qualified 
Pine Tree Recreation Zone business and the affiliated members of 
its unitary group, 
if any, 
related to 
the business activity 
conducted in the Pine Tree Recreation Zone must be determined by 
use of a percentage, the numerator of which is the property value 
and the payroll for the taxable year directly attributed to the 
qualified recreation business activity of the business and the 
denominator of which is the statewide property value and payroll 
for the taxable year of the qualified recreation business and the 
members of its unitary group. 
3. 
Sole proprietors and O1fl1ers of pass-through entities. 
In the case of a sole proprietor or the owner of a partnership, 
limited liability company, S corporation, trust or other entity 
that is treated as a pass-through entity for income tax purpose~ 
under the Code, the amount of the credit allowed under subsection 
is the amount of tax otherwise due under this Part that relates 
to taxable income received by the sole proprietor or owner from 
the qualified Pine Tree Recreation Zone business, as defined Ul 
Title 30-A, section 5250-0, subsection 8, as apportioned. 
4. Limitation. 
The credit provided by this section may not 
be claimed for tax years beginning on or after January 1, 2019. 
Emergency clause. 
In view of the emergency cited in the 
preamble, this Act takes effect when approved. 
SUMMARY 
This bill establishes the Pine Tree Recreation Zone as the 
area of the State north and east of the Androscoggin River. 
Businesses 
that 
establish 
or 
expand 
within 
the 
Pine 
Tree 
Recreation Zone operations involving outdoor recreation, such as 
providing services or merchandise relating to guiding, hunting, 
fishing, 
skiing, 
snowboarding, 
snowmobiling 
or 
water 
sports, 
• 
vlQuld be eligible for tax benefits equal to those offered to 
businesses under the Pine Tree Development Zone program. 
These 
benefits 
include 
sales 
tax 
exemptions 
for 
certain 
building 
materials 
and 
tangible personal property, 
exclusion 
from 
the 
calculation of a municipality's tax increment financing district 
within the Pine Tree Recreation Zone, 
employment tax increment 
financing for 
a 
fixed period of years 
and state income 
tax 
credits for a fixed number of years.