An Act To Strengthen Maine Industry through Energy Efficiency Investment
Maine Legislature, Session 125, LD 1449
Committee: Taxation
Sponsors: HINCK, BERRY, FITTS, FLEMINGS, HAYES, KNIGHT, RUSSELL, THIBODEAU
Amends: 35-A MRSA §10122, 36 MRSA §1760, 36 MRSA §1760-E, 36 MRSA §5216-D

Legislative Document 
No. 1449 
H.P. 1063 
House of Representatives, April 11, 2011 
An Act To Strengthen Maine Industry through Energy Efficiency 
Investment 
Reference to the Committee on Taxation suggested and ordered printed. 
HEATHER J.R. PRIEST 
Clerk 
Presented by Representative HINCK of Portland. 
Cosponsored by Representatives: BERRY of Bowdoinham, FITTS of Pittsfield, FLEMINGS 
of Bar Harbor, HAYES of Buckfield, KNIGHT of Livermore Falls, RUSSELL of Portland, 
Senator: THIBODEAU of Waldo. 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1.  35-A MRSA §10122 is enacted to read: 
§10122.  Manufacturing energy savings tax credit 
1.  Definitions.  As used in this section, unless the context otherwise indicates, the 
following terms have the following meanings. 
A.  "Certified project" means an eligible project funded by an investment for which a 
tax credit certificate has been issued by the trust. 
B.  "Eligible project" means an energy efficiency improvement, a renewable energy 
installation or smart grid technology installation. 
C.  "Energy efficiency improvement" means an improvement in a manufacturing 
facility that meets energy efficiency standards adopted by the trust by rule. 
D.  "Energy savings tax credit" means the tax credit established in Title 36, section 
5216-D. 
E.  "Manufacturing facility" has the same meaning as in Title 36, section 1752, 
subsection 6-A. 
F.  "Qualified investment" means an investment in an eligible project that meets the 
criteria established by the trust pursuant to subsection 2, paragraph B. 
G.  "Renewable energy installation" means an installation in a manufacturing facility 
that uses fuel cells; tidal power; solar arrays and installations; geothermal 
installations; hydroelectric generators that meet all state and federal fish passage 
requirements applicable to the generator; or biomass generators that are fueled by 
wood or wood waste. 
H.  "Smart grid technology" means technology that allows the use of smart grid 
functions, as defined in section 3143, subsection 1, paragraph C, in accordance with 
rules adopted by the trust. 
I.  "Tax credit certificate" means a certificate for an energy savings tax credit issued 
by the trust under this section. 
2.  Tax credit certification.  The trust may issue a tax credit certificate for a 
qualified investment in accordance with this subsection. 
A.  The trust shall establish by rule application requirements for persons applying to 
the trust for a tax credit certificate.  The rules must specify the information required 
to be submitted to demonstrate that an investment is a qualified investment. 
B.  To be eligible for a tax credit certificate, an investment must meet the following 
requirements: 
(1)  The investment must be made in an eligible project after January 1, 2012; 
(2)  The investment must be cost effective and likely to reduce a manufacturing 
facility's net energy costs; and 
(3)  If the investment exceeds $500,000, the person making the investment must 
certify that reasonable apprenticeship opportunities will be offered during the 
course of the work funded by the investment.  The trust shall provide for waivers 
of this requirement in instances where the trust finds that providing such 
opportunities would be inappropriate. 
C.  If the trust finds that an applicant has demonstrated that an investment is a 
qualified investment, the trust shall issue a tax credit certificate for 50% of the 
qualified investment except that, if the investment has not yet been made, the trust 
may issue a tax credit certificate prospectively for 25% of the qualified investment 
and, upon completion of the qualified investment, issue a tax credit for an additional 
25% of the qualified investment.   The tax credit certificate must specify all 
conditions and requirements under which the certificate is issued and remains valid. 
3.  Reporting.  A person receiving an energy savings tax credit shall report annually 
to the trust.  The report must include the amount of the qualified investment made, a 
description and the status of the certified project and the projected and actual energy and 
cost savings achieved over the useful life of the certified project. 
4.  Revocation.  A tax credit certificate is subject to revocation pursuant to this 
subsection. 
A.  The trust shall revoke in whole or in part a tax credit certificate if the trust 
determines that: 
(1)  Any representation made to the trust in connection with the application for 
the certificate was false; 
(2)  Any reporting requirement under subsection 3 has not been met; or 
(3)  Any requirement or condition specified in the tax credit certificate has been 
violated. 
B.  The trust shall revoke an entire tax credit certificate if within 15 years after the 
issuance of the certificate the trust determines that: 
(1)  Any portion of the certified project is transported out of the State; 
(2)  Any portion of the certified project is transferred to another entity, other than 
as part of a sale of the manufacturing facility; 
(3)  The manufacturing facility ceases substantially all operations for more than 
one year, not including any closure associated with a seasonal closure that is 
customary for the industry, as defined by the trust by rule; or 
(4)  The activities of the manufacturing facility are transferred to another location 
and there is a 20% or greater reduction in the facility's full-time equivalent 
workforce, as defined by the trust by rule. 
If the trust revokes a tax credit certificate under this subsection, the trust shall provide 
notice to the person holding the certificate and to the State Tax Assessor. 
5.  Rules.  The trust shall adopt rules to implement this section.  Rules adopted under 
this section are routine technical rules as defined in Title 5, chapter 375, subchapter 2-A. 
Sec. 2.  36 MRSA §1760, sub-§9-D, as amended by PL 1999, c. 414, §20, is 
further amended to read: 
9-D.  Fuel and electricity used at a manufacturing facility.  Ninety-five percent of 
the sale price of all fuel and electricity purchased prior to January 1, 2018 for use at a 
manufacturing facility.  For purposes of this subsection, "sale price" includes, in the case 
of electricity, any charge for transmission and distribution. 
Sec. 3.  36 MRSA §1760-E is enacted to read: 
§1760-E.  Tax recapture 
1.  Recapture tax.  Upon the occurrence of an event described in subsection 2, 
paragraph A or B, the owner of a manufacturing facility that has received the benefit of 
the tax exemption under section 1760, subsection 9-D is subject to a recapture tax in the 
amount of sales tax that would have been payable in the absence of the exemption 
provided in section 1760, subsection 9-D: 
A.  Prior to January 1, 2018; and 
B.  After January 1st of the calendar year commencing 15 years prior to the event 
described in subsection 2. 
2.  Events causing tax.  The recapture tax described in subsection 1 is imposed if: 
A.  The manufacturing facility ceases substantially all operations for more than one 
year, not including any closure associated with a seasonal closure that is customary 
for the industry as defined by rules adopted by the Efficiency Maine Trust under Title 
35-A, section 10122; or 
B.  The activities of the manufacturing facility are transferred to another location and 
there is a 20% or greater reduction in the facility's full-time equivalent workforce, as 
defined by rules adopted by the Efficiency Maine Trust under Title 35-A, section 
10122. 
Sec. 4.  36 MRSA §5216-D is enacted to read: 
§5216-D.  Energy efficiency tax credit 
1.  Definitions.  As used in this section, unless the context indicates otherwise, the 
following terms have the following meanings. 
A.  "Certificate" means a tax credit certificate issued by the trust pursuant to Title 
35-A, section 10122. 
B.  "Credit limit" means an amount equal to 95% of the tax imposed under Part 3, 
absent any exemption under section 1760, subsection 9-D, on the sale price of all fuel 
and electricity purchased for use at the subject manufacturing facility during the 
taxable year, including, in the case of electricity, any charge for transmission and 
distribution. 
C.  "Investment" means an investment for which a certificate has been received. 
D.  "Investor" means a taxpayer who has received a certificate. 
E.  "Subject manufacturing facility" means the manufacturing facility, as defined in 
section 1752, subsection 6-A, in which an investment has been made. 
F.  "Trust" means the Efficiency Maine Trust under Title 35-A, section 10103. 
2.  Credit.  An investor is entitled to a credit against the tax otherwise due under this 
Part equal to the amount of the certificate.   In the case of a partnership, limited liability 
company, S corporation, nontaxable trust or any other entity that is treated as a flow-
through entity for tax purposes under the Code, the individual partners, members, 
stockholders, beneficiaries or equity owners of the entity are each deemed to be investors 
under this section and are allowed a credit against the tax otherwise due from them under 
this Part in proportion to their respective interests in the partnership, limited liability 
company, S corporation, nontaxable trust or other flow-through entity.  
3.  Limitation; increased credit.  The amount of the credit allowed under this 
section for any taxable year may not exceed the credit limit.  If the amount of the credit 
allowed an investor under this section in any taxable year ending before January 1, 2018 
is greater than zero but less than the credit limit, the investor is entitled to an additional 
credit so that the total credit allowed under this section is equal to the credit limit. 
4.  Carry forward.  Credits not taken because of the limitation in subsection 3 must 
be taken in the next taxable year in which the credit may be taken.  The provisions of 
subsection 3 apply to each carry-forward year.  Credits may be carried forward up to 15 
years. 
5.  Recapture.  In the event that the trust revokes a certificate in whole or in part 
pursuant to Title 35-A, section 10122, subsection 4, there is added to the tax imposed on 
the investor under this Part for the taxable year in which the revocation occurs an amount 
equal to the excess of the amount of the credit revoked over the amount of credit not yet 
taken. 
6.  Payment conditions; transition.  In order to ensure that an investor that receives 
a tax credit under this section does not receive the additional benefit of the tax exemption 
provided under section 1760, subsection 9-D, an investor may not receive a tax credit 
under this section in any taxable year ending prior to January 1, 2018 unless the investor 
pays to the State Tax Assessor in each taxable year prior to January 1, 2018 in which the 
investor claims the tax credit an amount equivalent to the credit limit.  In the case of a 
partnership, limited liability company, S corporation, nontaxable trust or any other entity 
treated as a flow-through entity for tax purposes under the Code, the individual partners, 
members, stockholders, beneficiaries or equity owners of the entity are deemed to be 
investors under this subsection and are liable for payments under this subsection in 
proportion to their respective interests in the partnership, limited liability company, S 
corporation, nontaxable trust or other flow-through entity. 
SUMMARY 
This bill creates a 50% income tax credit for any capital investment in a 
manufacturing facility that the Efficiency Maine Trust has determined is cost effective 
and is likely to reduce the facility's net energy costs through energy efficiency, renewable 
energy technology or smart grid technology.  During a transition period that ends January 
1, 2018, a taxpayer may elect to take the credit rather than claiming the sales and use tax 
exemptions applicable to the purchase of fuel and electricity for manufacturing facilities.  
After that date, the income tax credit will replace the sales and use tax exemption.