An Act To Create Transparency and Accountability in Economic Development Subsidies
Maine Legislature, Session 125, LD 1451
Committee: Labor, Commerce, Research and Economic Development
Sponsors: RUSSELL, BERRY, FLEMINGS, GOODE, STUCKEY

Legislative Document 
No. 1451 
H.P. 1065 
House of Representatives, April 11, 2011 
An Act To Create Transparency and Accountability in Economic 
Development Subsidies 
Reference to the Committee on Labor, Commerce, Research and Economic Development 
suggested and ordered printed. 
HEATHER J.R. PRIEST 
Clerk 
Presented by Representative RUSSELL of Portland. 
Cosponsored by Representatives: BERRY of Bowdoinham, FLEMINGS of Bar Harbor, 
GOODE of Bangor, STUCKEY of Portland. 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1.  10 MRSA c. 104-A is enacted to read: 
CHAPTER 104-A 
MAINE ECONOMIC DEVELOPMENT AND FISCAL ACCOUNTABILITY ACT 
§881.  Establishment; short title; purpose 
The Maine Economic Development and Fiscal Accountability Act, which may be 
referred to and cited as "the Maine Economic Deveopment and Accountability Act," is 
created to require accounting by recipients of development subsidies and the government 
entities that make those development subsidies available. 
§882.  Definitions 
As used in this chapter, unless the context otherwise indicates, the following terms 
have the following meanings. 
1.  Corporate parent. "Corporate parent" means a person, association, corporation, 
joint venture, partnership or other entity that owns or controls at least 50% of a recipient 
corporation. 
2.  Date of subsidy.  "Date of subsidy" means: 
A.  The date that a granting body provides the initial monetary value of a 
development subsidy to a recipient corporation; 
B.  If the development subsidy is for the installation of new equipment, the date the 
recipient corporation puts the equipment into service; and 
C.  If the development subsidy is for improvements to property, the date the 
improvement is finished or the date the corporation occupies the property, whichever 
is earlier. 
3.  Development subsidy.  "Development subsidy" means an expenditure of public 
funds with a value of at least $25,000 for the purpose of stimulating economic 
development within the State, including, but not limited to, bonds, grants, loans, loan 
guarantees, tax increment financing, grants, fee waivers, land price subsidies, matching 
funds, tax abatements, tax exemptions and tax credits. 
4.  Full-time position.  "Full-time position" means employment of an individual by a 
recipient corporation for at least 35 hours per week. 
5.  Granting body.  "Granting body" means any agency, board, office, public benefit 
corporation or authority of the State or a local government unit that provides a 
development subsidy. 
6.  Local government unit.  "Local government unit" means an agency, board, 
commission, office, public benefit corporation or public authority of a political 
subdivision of the State. 
7.  New employee.  "New employee" means a full-time employee who represents a 
net increase in the number of individuals employed by the recipient corporation in the 
State. "New employee" does not include an employee who performs a job that was 
previously performed by another employee of the recipient corporation if that job existed 
for at least 6 months before hiring the employee. 
8.  Part-time position. "Part-time position" means employment of an individual by a 
recipient corporation for less than 35 hours per week. 
9.  Project site.  "Project site" means the site of a project for which any development 
subsidy is provided. 
10.  Property-taxing entity.  "Property-taxing entity" means any entity that levies 
taxes, with the exception of sales or use taxes, upon real or personal property. 
11.  Recipient corporation.  "Recipient corporation" means any person, association, 
corporation, joint venture, partnership or other entity that receives a development subsidy. 
12.  Small business. "Small business" means a corporation whose corporate parent 
and all its subsidiaries employ fewer than 20 full-time employees or have total gross 
receipts of less than $1,000,000 during a calendar year. 
13.  State.  "State" means an agency, board, commission, office, public benefit 
corporation or public benefit authority of the State. 
14.  Subsidy value.  "Subsidy value" means the face value of any development 
subsidy provided to a recipient corporation. 
15.  Temporary position.  "Temporary position" means employment of an individual 
by a recipient corporation on a temporary basis, such as for a season or other similar 
limited period of time. 
§883.  Unified economic development budget 
1.  Submission of budget report.  The Department of Administrative and Financial 
Services, Bureau of Revenue Services shall submit an annual unified economic 
development budget report to the Legislature no later than October 1st. The report must 
present all types of expenditures made by the State and local government units for 
economic development during the prior fiscal year, including but not limited to: 
A.  The amount of state tax revenues not collected as a result of all corporate tax 
credits, abatements, exemptions and reductions provided by the State or a local 
governmental unit against a tax imposed by the State or a local municipal unit, 
including, but not limited to, income, sales, use, excise, property, utility and 
inventory taxes; 
B.  The name of each corporation that claimed a tax credit, abatement, exemption or 
reduction under paragraph A equal to or greater than $5,000, together with the dollar 
amount received by each of those corporations; 
C.  If the tax credit, abatement, exemption or reduction received by a corporation that 
does not meet the $5,000 threshold specified in paragraph B, an aggregate dollar 
amount of those expenditures and the number of companies so aggregated for each 
tax expenditure; and 
D.  All state-appropriated expenditures for economic development, including line-
item budgets for every state-funded entity concerned with economic development. 
§884.  Unified reporting of property tax reductions and abatements 
1.  Property-taxing entity report.  A property-taxing entity shall submit a report 
annually to the Department of Administrative and Financial Services, Bureau of Revenue 
Services, referred to in this section as "the bureau," regarding any real or personal 
property in the property-taxing entity's jurisdiction that received a property tax abatement 
or reduction during the immediately preceding year corresponding to the state fiscal year. 
The report must contain information including, but not limited to: 
A.  The name of the property owner; 
B.  The address of the property; 
C.  The start and end dates of the property tax reduction or abatement; 
D.  The schedule of the tax reduction; 
E.  Each tax abatement, reduction and exemption for the property; and 
F.  The amount of property tax revenue not paid to the taxing entity as a result of the 
reduction or abatement. 
2.  Aggregate data.  A property-taxing entity shall submit a report annually to the 
bureau detailing the total property tax revenue not paid to that property-taxing entity 
during the fiscal year as a result of all property tax reductions and abatements in that 
property-taxing entity's jurisdiction. 
3.  Filing of reports.  The reports required under subsections 1 and 2 must be 
prepared on 2 separate forms, provided by the bureau, and submitted to the bureau by the 
property-taxing entity no later than September 15th annually. 
4.  Publication.  The bureau annually shall compile and publish all of the data 
contained in the reports required under subsections 1 and 2 in both written and electronic 
form, including on the bureau's publicly accessible website. 
5.  Penalty for failure to file.  If a property-taxing entity fails to submit the reports to 
the bureau as required by this section within the required time, the bureau shall notify the 
Treasurer of State, who shall withhold further payments of any development subsidy to 
that delinquent property-taxing entity until that property-taxing entity files its reports with 
the bureau. 
§885.  Application for development subsidies 
1.  Application. A granting body and an applicant for a development subsidy from 
that granting body jointly shall complete an application for the development subsidy on a 
form provided by the Department of Economic and Community Development. The 
granting body and applicant shall provide at least the following information on the 
application: 
A.  A unique application tracking number for the granting body and the project, 
determined by the granting body; 
B.  The name, street and mailing addresses and telephone number of the chief officer 
of the granting body; 
C.  The name, street and mailing addresses and telephone number of the chief officer 
of the applicant's corporate parent, if any; 
D.  The name, street and mailing addresses and telephone number of the chief officer 
of the applicant; 
E.  The street address of the project site; 
F.  The 3-digit number of the project site under the North American Industry 
Classification System of the United States Department of Commerce, United States 
Census Bureau; 
G.  The total number of individuals employed by the applicant at the project site on 
the date of the application, separated by full-time, part-time and temporary positions; 
H.  The total number of individuals employed in the State by the applicant's corporate 
parent, and all subsidiaries thereof, as of December 31st of the prior fiscal year, 
separated by full-time, part-time and temporary positions; 
I.  The development subsidy being applied for with the granting body and the subsidy 
value; 
J.  The number of new jobs to be created by the applicant at the project site, separated 
by full-time, part-time and temporary positions; 
K.  The average hourly wage to be paid to all current and new employees at the 
project site, separated by full-time, part-time and temporary positions and further 
separated by wage groups as follows: $7.01 to $8.00 per hour; $8.01 to $9.00 per 
hour; $9.01 to $10.00 per hour; $10.01 to $11.00 per hour; $11.01 to $12.00 per hour; 
$12.01 to $13.00 per hour; $13.01 to $14.00 per hour; and $14.01 or more per hour; 
L.  For project sites located in a metropolitan statistical area, as defined by the federal 
Office of Management and Budget, the average hourly wage paid to nonmanagerial 
employees in the State for the industries involved at the project site, as established by 
the United States Department of Labor, Bureau of Labor Statistics; 
M.  For project sites located outside of a metropolitan statistical area, as defined by 
the federal Office of Management and Budget, the average weekly wage paid to 
nonmanagerial employees in the county for industries involved at the project site, as 
established by the United States Department of Commerce; 
N.  The type and amount of health care coverage to be provided by the applicant to its 
employees within 90 days of commencement of employment at the project site, 
including any costs to be borne by the employees; 
O.  A list of all development subsidies that the applicant is requesting and the name 
of any other granting body from which the applicant is requesting such development 
subsidies; 
P.  A statement as to whether the development subsidy may reduce employment at 
any other project site controlled by the applicant or its corporate parent, within or 
outside of the State, resulting from automation, merger, acquisition, corporate 
restructuring or other business activity; and 
Q.  A signed certification by the chief officer of the applicant as to the accuracy of 
the application. 
2.  Report of approval.  If the granting body approves the application, the granting 
body shall send a copy to the Department of Economic and Community Development 
within 15 days of such approval.  If the application is not approved, the granting body 
shall retain the application in its records for at least 6 years. 
§886.  Reports of granting body; publication; access by department 
1.  Annual reports.  A granting body shall file an annual progress report with the 
Department of Economic and Community Development for each project for which a 
development subsidy has been granted.  A granting body and a recipient corporation 
jointly shall file an annual progress report for the duration of the development subsidy or 
not less than 5 years, whichever period is greater. 
The report must be filed by February 1st and must contain the following information: 
A.  The application tracking number; 
B.  The name, street and mailing addresses, telephone number and chief officer of the 
granting body; 
C.  The name, street and mailing addresses, telephone number and chief officer of the 
recipient corporation; 
D.  A summary of the number of jobs required, created and lost, separated by full-
time, part-time and temporary positions and by the wage groups specified in section 
885, subsection 1, paragraph K; 
E.  The type and amount of health care coverage provided to the employees at the 
project site, including any costs borne by the employees; 
F.  The comparison of the total employment in the State by the recipient's corporate 
parent on the date of the application and the date of the report, separated by full-time, 
part-time and temporary positions; 
G.  A statement as to whether the use of the development subsidy during the previous 
fiscal year has reduced employment at any other site controlled by the recipient 
corporation or its corporate parent, within or outside of the State, as a result of 
automation, merger, acquisition, corporate restructuring or other business activity; 
and 
H.  A signed certification by the chief officer of the recipient corporation as to the 
accuracy of the progress report. 
After the first report filed pursuant to this subsection, the granting body shall indicate in 
all subsequent annual progress reports whether the recipient corporation is still in 
compliance with its job creation, wage, health care and other benefit goals as specified in 
the application completed pursuant to section 885, subsection 1 and whether the corporate 
parent has maintained 90% of its employment in the State pursuant to the requirements of 
section 888, subsection 2. 
2.  Two-year report.  No later than 15 days after the 2nd anniversary of the date of 
subsidy, the granting body shall file with the Department of Economic and Community 
Development a 2-year progress report including the same information as required under 
subsection 1.  The recipient corporation shall certify as to the accuracy of the report.  The 
granting body shall state in the 2-year report whether the recipient corporation has 
achieved its job creation, wage, health care and other benefit goals as specified in the 
application completed pursuant to section 885, subsection 1 and whether the corporate 
parent has maintained 90% of its employment in the State pursuant to the requirements of 
section 888, subsection 2. 
3.  Publication. The Department of Economic and Community Development 
annually shall compile and publish all data from the progress reports obtained pursuant to 
subsections 1 and 2 in both written and electronic form, including on the department's 
publicly accessible website. 
4.  Access to project site by granting body and department.  A recipient 
corporation shall allow the granting body and the Department of Economic and 
Community Development access at all reasonable times to the project site and the records 
of the recipient corporation in order to monitor the project site and to prepare progress 
reports. 
5.  Penalty.  A recipient corporation that fails to provide the granting body with the 
information or access required under subsections 1, 2 and 4 is subject to a fine of not less 
than $500 per day to commence within 10 working days after the February 1st deadline 
for the filing of the one-year report required by subsection 1 and of not less than $1,000 
per day to commence 20 days after the February 1st deadline. 
§887.  Subsidy limit and job quality standards 
1.  Cost per job limit.  A granting body may not grant a development subsidy if the 
cost per job is greater than $35,000.  As used in this subsection, "cost per job" means the 
amount of the development subsidy divided by the number of full-time jobs required 
under the application approved by the granting body. 
2.  Average wages limit; health care coverage.  A granting body may not grant a 
subsidy to an applicant unless the wages paid to employees at the project site are equal to 
or exceed 85% of the average wage specified in section 885, subsection 1, paragraphs L 
and M except that for a small business the average wage must equal or exceed 75% of the 
average wage specified in section 885, subsection 1, paragraphs L and M. The 
computation of wages under this subsection applies only to a recipient corporation that 
provides the health care coverage as approved in the recipient corporation's application to 
the granting body. 
§888.  Recapture 
1.  Maintenance of application requirements by recipient corporation.  A 
recipient corporation shall fulfill job creation, wage, health care and other benefit 
requirements as stated in its application filed pursuant to section 885, subsection 1 for the 
project site within 2 years of the date of subsidy. The recipient corporation shall maintain 
its wage and benefit goals for as long as the subsidy is in effect or 5 years, whichever 
period is longer. 
2.  Maintenance of application requirements by corporate parent.  The corporate 
parent shall maintain at least 90% of its employment in the State for as long as the 
development subsidy is in effect or 5 years, whichever period is longer. 
3.  Recapture.  If the requirements under subsection 1 or 2 are not met, the granting 
body shall recapture the development subsidy from the recipient corporation as follows. 
A.  Upon a failure by the recipient corporation to create the required number of jobs 
or to pay the required wages or benefits, the amount recaptured must be based on the 
pro rata amount that the unfulfilled jobs, wages or benefits bear to the total amount of 
the development subsidy. 
B.  Upon a failure of the corporate parent to maintain 90% of its employment in the 
State, the rate of recapture is equal to twice the percentage by which such 
employment is less than 90%. 
4.  Notice; repayment.  The granting body shall provide notice to the recipient 
corporation of the granting body's intent to recapture the development subsidy and shall 
state the reasons and amount to be recaptured. The recipient corporation shall remit to the 
governing body such amount within 60 calendar days of the date of that notice. 
5.  Repeated failure.  If a recipient corporation fails to maintain the application 
requirements of a development subsidy in 3 consecutive calendar years, the granting body 
shall rescind the development subsidy and shall provide notification of the rescission to 
the Department of Economic and Community Development and the recipient corporation. 
The recipient corporation shall pay back to the granting body all remaining subsidy value 
it has not previously repaid within 180 calendar days of the date of the notice of such 
failure. 
§889.  Private enforcement action 
If a granting body fails to enforce any provision of this chapter, any individual who 
paid personal income taxes to the State in the calendar year prior to the year in dispute, 
or, in the case of a municipally granted development subsidy, a property tax payer in that 
municipality or any organization representing such taxpayers may bring a civil action in 
Superior Court to compel enforcement under this chapter. The court shall award 
reasonable attorney's fees and costs to a prevailing taxpayer or organization. 
§890.  Public record disclosure 
All records required to be prepared or maintained under this chapter, including, but 
not limited to, applications, progress reports, recapture notices and any other records or 
proceedings related to those records, are subject to disclosure under Title 1, chapter 13. 
§891.  Preemption 
This chapter does not require or authorize a recipient corporation to reduce wages or 
benefits established under any collective bargaining agreement or state or federal 
prevailing wage law. 
SUMMARY 
This bill enacts certain safeguards for state and local government expenditures for 
economic development and job creation by creating a procedure to collect, analyze and 
make publicly available information regarding those expenditures.  It allows the 
governmental entity making a subsidy to recapture the subsidy if the recipient defaults on 
the employment, wages, health care or other benefits promised by the recipient in its 
application for the subsidy.