An Act To Streamline the Evaluation of Economic Development Programs
Maine Legislature, Session 124, LD 0999
Committee: Business, Research and Economic Development
Sponsors: CAIN, RECTOR, AUSTIN
Amends: 5 MRSA §13056-B, 5 MRSA §13056-C, 5 MRSA §13063, 5 MRSA §13070-J, 5 MRSA §13103, 5 MRSA §13109, 5 MRSA §15302, 7 MRSA §309, 36 MRSA §6652, 36 MRSA §6656

MAINE STATE LEGISLATURE 
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124th MAl E LEGISLATURE 
Legislative Document 
No. 999 
H.P.687 
HOLlse of Representatives, March 12,2009 
An Act To Streamline the Evaluation of Economic Development 
Programs 
Submitted by the Department of Economic and Community Development pursuant to Joint 
Rule 204. 
Reference to the Committee on Business, Research and Economic Development suggested 
and ordered printed. 
Presented by Representative CAIN of Orono. 
Cosponsored by Senator RECTOR of Knox and 
Representative: AUSTIN of Gray. 
'-)7/_fl~ '111. 7Ilf1C~{ 
MILLICENT M. MacFARLAND 
Clerk 
Be it enacted by the People ofthe State of Maine as follows: 
Sec. 1. 5 MRSA §13056-B, as enacted by PL 2007, c. 434, §2, is amended to 
read: 
§13056-B. Reporting requirements of recipients of economic development funding 
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 
defined 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. 
Sec. 2. 5 MRSA §13056-C, sUlb-§3, as enacted by PL 2007, c. 434, §3, IS 
amended to read: 
3. Payments to fund. Notwithstanding section 1585 or any other provision of law, 
the department shall assess agencies or private entities that receive General Fund 
appropriations or general obligation bonds for economic development 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 effmis 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 not to 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 or more for economic 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 depaliment shall provide to 
e~ch 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 $150.000 $200,000 in any fiscal year. 
Sec. 3. 5 MRS A §13058, sUlb-§5, as amended by PL 1999, c. 776, §§4 and 5, is 
fUIiher 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 
of the economic delivery system using the information obtained from the economic 
development evaluation pursuant to section 13056-A. 
The Maine Small Business 
Commission, as established in section 13032, shall conduct the evaluation 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 commissioner 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 in 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; 
I. 
Within available resources, the status of investments in business in the State;' and 
J. 
The extent to which the purposes of the Maine Downtown Center are being met. 
Sec. 4. 5 MRSA §13063-0, sub-§l, as enacted by PL 2003, c. 451, Pt. MMM, 
§ 1, 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 unde!takefl 
'.'lith program funds. The evaluation process must include benchmarl(s and criteria to 
evaluate the success of the fund. The benchmarks and criteria must be designed by 
the department to provide;the follov,'ing: 
(1) An assessment of the direct and indirect economic impact of the funded 
projects; and 
(2) 
An assessment of the contribution of the fund to the creation' of ne,,'l 
entreprefieurial 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 
stariding committee of the Legislature having jurisdiction over business~ research 
and economic development matters. 
Sec. 5. 5 MRSA §13070-J, as amended by PL 2005, c. 519, Pt. TTT, § 1, is further 
amended to read: 
§13070-J. Business disclosure associated with eligibility for public subsidies and 
incentives 
1. Definitions. As used in this al1icle, lmless 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 
. defined 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, 
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subchapter 4; 
(3) Municipal tax increment financing under Title 30-A; chapter 206:; 
(4) The jobs and investm~nt ta~ 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 incr_ement 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-reducing 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 
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(2) 
Contains a tax expenditure, as defined in section 1664, or a budget 
expenditure with acost that is estimated to exceed $100,000 per year. 
2. Disclosure. Each applicant for an economic development incentive described in 
subsection 1, paragraph D, subparagraphs (1)to (4) and (7) shall at a minimum identify in 
writing: 
A. 
The public purpose that will be served by the business through use of the 
economic development incentive and the specific uses to which the benefits will be 
put; and 
B. The goals of the business for the number, type and wage levels of jobs to be 
created or retained as a result of the economic development incentive received. 
Applications filed under this subsection are public records for purposes of Title 1, chapter 
13. 
3. Report. Annually, a business receiving an economic development incentive 
described in subsection 1, pamgmph D, subparagraphs (1) to (8), the value of '.",hich 
e~(Ceeds$lO,OOO in one. year, shall submit a '""ritten repQrt to the commissioner no later 
than August 1st of the follo,tVing year containing but not limitqd to the follo';ving 
information: 
A. The a,mount of assistance received by the business in the 
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pi ece mg :year from 
;,.' economlcevelopment incentive and the uses t6 which that assistanc~ hns b;en 
B. The total amount of assistance received ii'om all economiC assistance progmms; 
;~onThe. n:~,b~r, type ~nd ';v~ge level of jobs created or retained as a result of an 
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omlc eve opment mcentrve; 
D. Current employment le"els fi 
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num er 0 employees mea I . b l'fi ,.' 
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c assl catIOn and the average '.'lages and benefits 
or eac 1 c asslficatlOn; 
!.a Any changes in employment levels that have occurred over the preceding Yea-P, 
F. 
An assessment of hm", the business has performed with respect to the public 
purpose identified in subsection 2. pamgraph 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 
oublic records for Ol:lFDOSeS of Title l.chaoter 13. 
4. Agency reports. The following agencies shall submit the following reports. 
A. 
The State Tax Assessor shall submit a report by October 1st annually to the 
Legislature identifying the amount ~fpublic funds spent and the amount of revenues 
foregone as the result of economic development incentives. The report must identify 
the amount of the economic developll1ent incentives ynder the jurisdiction of the 
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 
information. 
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 of the 
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 1 st annually to 
the Legislature on the amount of public funds spent on job 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 development 
incentives. 
D. 
The department shall report by October 1 st annually to the Legislature the 
follo'i'ling: 
(l) The amount of public funds spent for the direct benefit of businesses in the 
State under municipal til)' increment financing, employment tax increment· 
financing and the Governor's training initiative. The report must identifY the 
amount of economic development incentives under the jurisdiction of the 
department received by each employer and the public benefit 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 following: 
(a) 
The total amount of tax credit certificates issued by the Finance 
l\:uthority of Maine; 
(b) The total amount of pri.'vate investmef!~; 
(c) Total employment; 
(d) The total number of jobs 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 with the information 
collected in accordance with Title 10, section 1100 T, subsection 6 and assist in the 
preparation of this report. 
E. The department shall report by October 1 st annually to the State Tax 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 Vias provided 
with reasonable official notification of its noncompliance and that its failure to 
submit the reauired reDort \vithin 30 daNS would result in the withholdin!l and 
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potential furfeitHre of reimbursements fur 'Nhich the business may be eligible under 
Title 36, chapter 915. The notification must be in the furm of a letter posted by 
certified mail befure 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. 
F. Prior to any forfeiture of benefits under Title 36, section 6652, subsection 3, the 
department shall make a written determination that the report required by subsection 
either has not been received or is not in an acceptable furm. A copy of that written 
determination, including the reasons fur the determination, mHst be mailed to the 
claimant by certified mail. The determination made by the department constitutes 
final agency action that is subject to revie"'l by the SHperior Gourt in accordance 'Nith 
the Maine Administrative ProcedHre Act, mecept that sections 11006 and 11007 do 
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not apply. The SHperior GOHrt shall conduct a de novo heariRg aRd make a de ROVO 
determination as to vt'hether the claimant has filed a report in substantial compliance 
with this sectioR. The SHperior Gourt shall make its o'O'n determination as to all 
qHestions of fact and Iw...... The Superior GOHrt shall enter such orders and decrees as 
the case may require. IR the event that the depaI1ment's determination is appealed to 
8Hperior Gourt pursuarit"to this paragraph, furfeitureof the claimant's right to receive 
reimbursement oftaxeslinder Title 36, chapter 915 may not OCCHr Hnless the Superior 
Gourt, subject to any appeal to the Law Gourt, finds that the claimant had not 
substantially complied with the reporting reqHirements 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, CUG, 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 
biomedical research and its Hse and the number of new jobs created in the State aRd 
\vhere 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 
payment must be made from available, resources other than bond proceeds. Only those 
-programs that receive $500;000 or more in rese'arch and development appropriations in 
any fiscal year, or those entities that receive funds from a general obligation bond issue of 
,$500,000 or more for research and development efforts iil any fiscal year, as identified 
and certified by the Office of Iimovation and the Office' of Fisca.l and Program Review, 
may be assessed. The Office of Innovation 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. 
MRSA §15302, sub-§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: 
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§309. Ann~al review 
The commissioner and the Agriculture Development Committee 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 Commissioner of Economic and 
Community Developinent. 
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Sec. ~O. 36 MRSA §6652~ sub-§3, as enacted by PL 1999,.c. 768, §6, is repealed. 
Sec. 11. 36 MRSA §6656, sub-§2,as ~nacted by PL 2005, c. 618, §20 and 
affected by §22, is amended t() read: 
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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 \vhich 
payments are 'Nithheld pursuant to section 6652, subsection 3, and .... ."ith respect to which 
, the assessor receiyes notification under that subsection that the report has been received, 
reimbursement must be paid by November 1 st or, vo'ithin 90 days after the assessor 
receives the notification, whichever 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 
economic development evaluation for the State's economic development programs and 
incentives. 
It also reduces duplicative statutory repOIting 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 celiain busil1essproperty from a claimant who has failed to provide certain 
information to the Depaliment of EconomiC and Community Development.