An Act Regarding the Evaluation of Economic Development Programs (AFTER DEADLINE)
Maine Legislature, Session 124, LD 1468
Committee: Business, Research and Economic Development
Sponsors: SMITH, SCHNEIDER, AUSTIN, CAIN, CLEARY, COHEN, GILES, HUNT, MARTIN, PRESCOTT, WRIGHT, RECTOR, SULLIVAN
Amends: 5 MRSA §13056, 5 MRSA §130, 5 MRSA §13063, 5 MRSA §13070-J, 5 MRSA §13103, 5 MRSA §13109, 7 MRSA §309, 36 MRSA §6652, 36 MRSA §6656

.FIRS'i' RElJULAR SESSIuN-2009 
, Legislative Document 
No. 1468 
H.P, 1022 
House of Representatives, April 30, 2009 
An Act Regarding the Evaluation of Economic Development 
Programs 
(AFTER DEADLINE) 
Approved for introduction by a majority of the Legislative Council pursuant to Joint Rule 
205. 
Reference to the Committee on Business, Research and Economic Development suggested 
and ordered printed. 
Presented by Representative SMITH of Monmouth. 
Cosponsored by Senator SCHNEIDER of Penobscot and 
'77/~ 1J1. 7l!1Lc:1~ul 
MILLICENT M. MacFARLAND 
Clerk 
Representatives: AUSTIN of Gray, CAIN of Orono, CLEARY of Houlton, COHEN of 
Portland, GILES of Belfast, HUNT of Buxton, MacDONALD of Boothbay, MARTIN of 
Orono, PRESCOTT of Topsham, WRIGHT of Berwick, Senators: RECTOR of Knox, 
SULLIVAN of York. 
Printed on recycled paper 
Be it enacted by the People oftheState of Maine as follows: 
Sec. 1. 5 MRSA §13056-lB, as enacted by PL 2007, c. '434, §2, is amended to 
read: 
§13056-B. Reporting requirements of recipients of economic development funding 
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To assist the department in preparing· the comprehensive economic development 
evaluation pursuant to section 13056-A, a recipient of state economic development 
funding, including General FUnd appropriations, dedicated revenue, tax expenditures as 
defmed in section 1666 and general obligation bond proceeds for economic development, 
shall, in addition to any other reporting requirements required by law, collect, maintain 
and provide data as requested by the department. 
llSee. 2. 5 MRSA. §13056-C, sub-§3, as enacted by PL 2007; c. 434; §3, is 
amended to read: 
3. Payments to fund. Notwithstanding section 1585 or any other provision oflaw, 
the department shall assess agencies or private entities that receive General Fund 
appropriations or general obligation bonds for economic developm:ent an amount for 
contribution to the fund that is not to exceed 0.08% of General Fund appropriations 
received by or general obligation bonds issued to an· agency or entity for economic 
development efforts. Private entities that receive. funds from general obligation bonds for 
economic development efforts shall pay to the Treasurer of State in the- fiscal year in 
which the general obligation bond was issued an assessment amount determined by the 
department that is notJo exceed 0.08% of the proceeds from the bond issue in any fiscal 
year, which payment must be made from available resources other than bond proceeds. 
Only those programS that receive $250,000 or more in economic development 
appropriations in any fiscal year or those entities that receive funds from a general 
obligation bond issue of $250,000 of more for economi<:: development efforts in any fiscal 
year, as identified and certified by the department and the Office of Fiscal and Program 
.. Review, may be assessed pursuant to this subsection. The department shall provide to 
each agency or private entity an annual budget for the fund and a detailed account of each 
institution's required assessment. Tqtal payments made pursuant to this section may not 
exceed $150,000 $200,000 in any fiscal year. 
Sec. 3. 5 MRSA §130.58, sub-§5, as amended by PL 1999, c. 776, §§4 and 5, is 
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further amended to read: 
5. Review of program; report to Governor and Legislature. The commissioner 
shall review and evaluate the programs and functions of the department and the operation 
35.. 
of the economic delivery system using the information available from the economic 
development evaluation pursuant to. section i3056-A. 
The Maine Small Business 
Commission, as established in section 13Q32, shall conduct the e .... caluation and review 
required by this section with respect to small business programs. The commissioner shall 
report the commissioner's findings and recommendations with respect to the issues 
described in this subsection to the Governor and to the Legislature no later than February 
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st of each fIrst regular session of the Legislature. The commissioD-er shall conduct the 
review and evaluation with respect to the following: 
A. 
The purpose of these programs· and the degree to which the purPose is being 
met; 
B. 
The degree of signifIcance of the purpose of the programs and functions of the 
department; 
C. 
The extent of the coordination of programs and services as required 'in 
subsection 4; 
D. 
The needs, problems and opportunities that are not being met by the programs 
and services of the department; 
E. 
The types of programs and services necessary to meet the needs,problems and 
opportunities as set out ip. paragraph D; 
F. 
The problems and successes in the economic delivery system; 
G. 
The state of small business in this State, including economic data, the 
effectiveness of state programs to aid small business, problems of small business that 
may be. affected by state policies and such other information on small business as 
desired by the commissioner; 
H. 
Within available resources, the extent of business growth and change, including 
business expansions, new businesses and business closings; 
1. 
Within available resources, the status of investments in business in the State; and 
J. 
The extent to which the purposes ofthe Maine Downtown Center are being met. . 
Sec. 4. 5 MRSA §13063-0, sub-§l, as enacted byPL 2003, c. 451, Pt. MMM, 
. § I, is amended to read: 
1. Accounting and reporting requirements. The department shall: 
A. 
Maintain an accurate accounting of the use of all program funds as required by 
state procedures and program guidelines, including· a detailed accounting of all 
program funding sources and expenditures; and 
B. 
Undertake an ongoing process to evaluate the impact of the projects undertaken 
v/ith program funds. The evaluation process must include benchmarks and criteria to 
evaluate the success of the fund. The benchmarks and criteria must be designed by 
the department to provide the follo'iVing: 
(1) An assessment of the direct and indirect economic impact of the funded 
projects; and 
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(2) 
An assessment of the contribution of the fund to the creation. of new 
entrepreneurial opportunities; and 
C. 
Each year, submit a report to the joint standing committee of the Legislature 
having jurisdiction over business, research and economic development matters. The' 
. report must include: 
(1) An: accounting of the use of all program funds received and expended since 
the program's inception; 
(2) A summary of the status of any approved projects; 
(3) A summary of the results of any completed projects; . 
(4) Evaluation data and assessment consistent with section 13056~A; and 
(5) 
Other information required to be submitted and evaluated by the joint. 
standing committee of the Legislature having jurisdiction over business .. research 
and economic development matters. 
Sec. 5. 5 MRSA §13070-J, as amended byPL 2005, c. 519, Pt. TIT, §1, is further 
amended to read: 
§13070-J. Business disclosure associated with eligibility for public subsidies and 
incentives 
1. Definitions. As used in this article, unless the context otherwise indicates, the 
following terms have the following meanings. 
B. 
"Commissioner" means the Commissioner of Economic and Community 
Development. 
C. "Department" means the Department of Economic and Community Development. 
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D. "Economic development incentive" means federal and state statutorily defined 
programs that receive state funds, dedicated revenue funds and tax expenditures as 
defmed by section 1666 whose purposes are to create, attract or retain business 
entities related to business development in the State, including but not limited to: 
(1) Assistance from Maine Quality Centers under Title 20-A; chapter 431-A; 
(2) 
The Governor's Training Initiative Program under Title 26, chapter 25, 
subchapter 4; 
(3) Municipal tax increment fmancing under Title 30-A, chapter 206; 
(4) The jobs and investment tax credit under Title 36, section 5215; 
(5) The research expense tax credit under Title 36, section 5219-K; 
(6) Reimbursement for taxes paid on certain business property under Title 36, 
chapter 915; 
(7) Employment tax increment financing under Title 36, chapter 917; 
(8) The shipbuilding facility credit under Title 36, chapter 919; 
(9) The credit for seed capital investment under Title 36, section 5216-B; ef and 
(10) The credit for pollution-reduci~g boilers under Title 36, section 5219-Z. 
E. "Economic development proposal" means proposed legislation that establishes a 
new program or that expands an existing program that: 
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(1) Is intended to encourage significant business expansion or retention in the 
State; and 
(2) 
Contains a tax expenditure, as defined in section 1664, or a budget 
expenditure with a cost that is estimated to exceed $100,000 per year. 
2. Disclosure. Each applicant for an economic development incentive described in 
subsection 1, paragraph D, subparagraphs (1) to (4) and (7) shall at a minimum identify in 
writing: 
A. 
The public purpose that will be served by the business through use of the 
economic development incentive and the specific uses to which the benefits will be 
put; and 
B. The goals of the business for the number, type and wage levels of jobs to be 
created or retained as a result of the economic development incentive received. 
Applications filed under this subsection are public records for purposes of Title 1, chapter 
13. 
3. Report. Annually, a business receiving an economic development incent~ve 
described in subsection 1, paragraph D, sUbparagraphs (1) to (8), the .va.lue of which 
exceeds $10 000 in one year, shall submit a written report to the corrnrusslOner no l~ter 
than l\'UguS; 1 st of the following year containing but not limited to the followmg 
information: 
A. The amount of assistance received by the business in the preceding year from 
each economic development incentive and the uses to ,,{hich that assistance has been 
putt 
B. The total amount of assistance received from all economic assistance programs: 
C. The number" type and ,,/age level of jobs created or retained as a result of an 
economic development incentive; 
D. Current employment levels for the business for all operations witJ:iin the State, the 
number of employees in each job classification and the average '.'lages and benefits 
foreach classification; 
E. Anv chane-es in emnlovment levels that have occurred over the nrecedine- 'lear: 
and 
F. An assessment of how the business has performed with respect to the public 
purpose identified in subsection 2, paragraph A, if applicable. 
The department shall mail report forms by May 15th of each year to every business 
required to file a report under this subsection. Reports filed under this subsection are 
public records for purposes of Title 1, chapter 13. ' 
4. Agency reports. The following agencies shall submit the following reports. 
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A. The State Tax Assessor shall submit a report by October 1st aI1Ilually to the 
Legislature identifying the amount of public funds spent and the amount of revenues 
foregone as the result of economic development incentives. The report must identify 
the amount of the economic development incentives under the jurisdiction of the 
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Bureau of Revenue Services received by each business to the extent permitted under 
Title 36, section 191 and other provisions of law concerning the confidentiality of 
infonnation. 
B. 
The Commissioner of Labor shall report by October 1 st annually to the 
Legislature on the amount of public funds spent on workforce development and 
training programs directly benefiting businesses in the State. 
The report must 
identify the amount of economic development incentives under the jurisdiction ofthe 
Department of Labor received by each business and the public benefit resulting from 
those economic development incentives. 
C. The Maine Community College System shall report by October I st annually to 
the Legislature on the amount of public funds spent onjob training programs directly 
benefiting businesses in the State. The report must identify the amount of economic 
development incentives under the jurisdiction of the system received by each 
business and the' public benefit resulting from those economic developme~t 
incentives. 
D. 
The department shall repqrt by October 1st annually to the Legislature the 
follovling: 
(1) The amount of public funds spent for the direct benefit of businesses in the 
State under municipal tm, increment financing, employment tax increment 
financing and the Governor's training initiative. The report must identify the 
amount of economic developinent incentives. under the jurisdiction of the 
department received by each employer and the public ben~fit resulting from those 
economic development incentives; and 
(2) The activities in the State, in the aggregate, of businesses receiving funds 
through the Maine Seed Capital Tax Credit program, including the fullO\ving: 
(a) 
The total amount of tax credit certificates issued· by the Finance 
Authority of Maine; 
(b) The total amount of private investment; 
(c) Total employment; 
(d) The total number ofj obs created;' 
(e) The total number of jobs retained; 
(f) Total payroll; and 
(g) Total annual sales. 
. The Finance Authority of Maine shall provide the department ',vith the information 
collected in accordance ','lith Title 10, section 1100 T, subsection. 6 and assist.in the 
preparation of this report. 
E. The department shall report by October 1st annually to the State Tm, Assessor a 
listing of businesses that have failed to submit reports required under subsection 3. 
The report must document that each business included in the report· was provided 
with reasonable official notification of· its noncompliance and that its failure to 
submit the required reoortvlithifl 30 days would result in the withholding and 
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potential furfeiture of reimbursements for which the business may be eligible under 
Title 36, chapter 915. The notification must be in the form of a letter posted by 
certified mail. before August 15th of the reporting year. 
If the department 
subsequently receives a report from the business, the department shall so notify the 
State Tax Assessor. 
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F. Prior to any forfeiture of benefits under Title 36, section 6652, subsection 3, the 
department shall make a l.vritten determination that the report required by subsection 
either has not been received or is not in an acceptable form. l .... copy of that written 
determination, including the reasons for the determination, must be mailed to the 
claimant by certified mail. The detel;1Ilination made by the department constitutes 
fmalagency action that is subject to review by the Superior Court in accordance with 
the Maine Administrative Procedure Act, except that sections 11006 and 11007 do 
not apply. The Superior Court shall conduct a de novo heaF.dlg and malee a de novo 
determination as to whether the claimant has filed a report in substantial compliance 
\vith this section. The Superior Court shall make its mvn detennination as to "all 
questions of fact and law. The Superior CoUrt shall enter such orders and decrees as" 
the case may require. In the event that the department's determination is appealed to 
Superior Court pursuant to this paragraph, forfeiture of the claimant's right to receive 
reimbursement of taxes under Title 36, chapter 915 may not occur unless the Superior 
Court, subject to any appeal to the La;s,y CoUrt, finds that the ciaimant had not 
substantially complied vAth the reporting requiremelits of this section. 
5. Rules. Rules adopted by the commissioner under this section are routine technical 
rules as defined in chapter 375, subchapter II-A 2-A. 
Sec. 6. 5 MRSA §13103, sub-§2, €fIG, as amended by PL 2003, c. 50, Pt. B, § 1 
and affected by §2, is further amended to read: 
G. 
Submit each biennium a report to the Governor, the joint standing committee of 
the Legislature having jurisdiction over appropriations and financial affairs and the 
joint standing committee of the Legislature having jurisdiction over business, 
research and economic development matters. 
The report must include detailed 
information on the status of the funds in the Maine Biomedical Research Fund, and a 
listing and explanation of each specific source of funding from grant sources for 
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biomedical research and its use and the number of new jobs created in the State and 
where those jobs are located. 
Sec. 7. 5 MRSA §13109, sub-§4, as repealed and replaced by PL 2005, c. 425, 
§ 7, is amended to read: 
4. Payments to fund. Notwithstanding section 1585 or any other provision of law, 
agencies or private entities that receive General Fund" or general obligation bonds for 
research and development shall contribute to the fund an amount not to exceed 0.8% of 
General Fund appropriations received by and general obligation bonds issued to an 
agency or entity for research and development efforts. Private entities that receive funds 
from general obligation bonds for research and development efforts shall pay to the 
Treasurer of State in the fiscal year in which the general obligation bond was issued an 
amount not to exceed 0.8% of the proceeds from the bond issue in any fiscal year, which 
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payment must be made from available resources other than bond proceeds. Only those 
programs that receive $500,000 or more in research and development appropriations in 
any fiscal year, or those entities that receive funds from a general obligation bond issue of 
$500,OQO or more' for research and development efforts in any fiscal year, as identified 
and certified by the Office of Irmovation and the Office of Fiscal and Program Review, 
may be assessed. The Office of Irmovation shall provide to each agency or private entity 
an annual budget for the fund and a detailed account of each institution's required 
assessment. Total payments made pursuant to this section may not exceed $120.000 
$200,000 in any fiscal year. 
Sec. 8. 5 MRS A §15302, sulb-§10, as amended by PL 2001, c. 562, §1, IS 
repealed. 
Sec. 9. 7 MRSA §309, as amended by PL 1999, c. 72, §6, is further amended to 
read: 
§309. Annual review 
The conunissioner and the Agriculture Development Conunittee shall, on an annual 
basis, review the effectiveness of the programs operated under the provisions of this 
chapter and provide a summary of the review to the Conunissioner of Economic and 
Community Development. 
Sec. 10. 36 MRSA §6652, sulb-§3, as enacted by PL 1999, c. 768, §6, is repealed. 
Sec. n. 36 MRSA §6656, sulb-§2, as enacted by PL 2005, c. 618, §20 and 
affected by §22, is amended to read: 
2. Pay certified amounts. The assessor shall pay the certified amounts to each 
approved applicant that qualifies for the benefit under this chapter by November 1st or 
within 90 days after receipt of the claim, whichever is later. For those claims for which 
payments are withheld pursuant to section 6652, subsection 3, and with respect to which 
the assessor receives notification under that subsection that the report has been received, 
reimbursement must be paid by November 1 st or within 90 days after. the assessor 
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receives the notification, 'ivhiche>ler is later. Interest is not allowed on any payment made 
to a claimant pursuant to this chapter. 
SUMMARY 
This bill implements the recommendations of the Department of Economic and 
Community Development relating to streamlining and improving the comprehensive 
econorrllc development evaluation for the State's economic development. programs and 
incentives. 
It also reduces duplicative statutory reporting requirements that will be 
included in the department's comprehensive evaluation process. The bill also amends the 
definition of "economic development incentive." It also increases the maximum budget 
amounts of contributing programs and organizations that can be assessed for economic 
development evaluation and research and development evaluation. 
It repeals the 
provision of law that allows the State Tax Assessor to withhold reimbursement for taxes 
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paid on certain business property from a claimant who has failed to provide certain 
information to the Department of Economic and Community Development.