An Act To Examine Best Practices Relating to Tax Expenditures
Maine Legislature, Session 126, LD 1463
Committee Amendment CA_A_H800 (House)

COMMITTEE AMENDMENT "A " 
to H.P. 1048, L.D. 1463, Bill, "An Act To 
Examine Best Practices Relating to Tax Expenditures" 
Amend the bill by striking out the title and substituting the following: 
'Resolve, To Develop a Process for Tax Expenditure Review' 
Amend the bill by striking out everything after the title and inserting the following: 
'Sec. 1. Office of Program Evaluation and Government Accountability to 
develop proposal for review of tax expenditures. Resolved: That the Office of 
Program Evaluation and Government Accountability, referred to in this resolve as "the 
office," shall develop a proposal for implementing a process for ongoing review of tax 
expenditures by the Legislature for the purpose of facilitating evaluation of the 
effectiveness of tax expenditures and providing a framework for recommendations to the 
Legislature and its committees. The proposal must include the following elements: 
1. Classification of tax expenditures. The assignment of each tax expenditure to 
one of the following review categories: 
A. 
Full evaluation review for tax expenditures that are intended to provide an 
incentive for specific behaviors, that provide a benefit to a specific group of 
beneficiaries or for which measurable goals can be established; 
B. Expedited review for tax expenditures that are intended to implement broad tax 
policy goals that cannot be reasonably measured; and 
C. No review for tax expenditures with an impact on state revenue of less than 
$50,000 or that otherwise do not warrant either a full evaluation or expedited review; 
2. Schedule. A schedule for ongoing review of the tax expenditures in the categories 
identified under subsection 1, paragraphs A and B. To the extent practicable, the office 
shall attempt to group tax expenditures with similar goals during the same review cycle; 
3. Evaluation parameters for full evaluations. Evaluation parameters for each tax 
expenditure identified under subsection 1, paragraph A, including: 
Page I - 126LR002S(02)-1 
COMMITTEE AMENDMENT 
ROFS 
COMMITTEE AMENDMENT'~ "to H.P. 1048, L.D. 1463 
A. The purposes, intent or goals of the tax expenditure; 
B. The intended beneficiaries of the tax expenditure; and 
C. The performance measures appropriate for measuring the extent to which the tax 
expenditure is accomplishing its purposes, intent or goals. Performance measures 
must be clear and relevant to the specific expenditure and the following evaluation 
objectives: 
(1) The extent to which those actually benefiting from the tax expenditure are the 
intended beneficiaries; 
(2) The fiscal impact of the tax expenditure, including past and estimated future 
impacts; 
(3) 
The extent to which the design of the tax expenditure is effective in 
accomplishing its purposes, intent or goals and is consistent with best practices; 
(4) The extent to which the tax expenditure is achieving its purposes, intent or 
goals identified under paragraph A; 
(5) The extent to which the desired behavior might have occurred without the tax 
expenditure; 
(6) The extent to which there are other tax expenditures, state spending or other 
government programs that have the same purposes, intent or goals as the tax 
expenditure and whether those additional programs are appropriately coordinated 
with the tax expenditure and are complementary or duplicative; 
(7) Any opportunities to improve the effectiveness of the tax expenditure in 
meeting its purposes, intent or goals; and 
(8) The extent to which the tax expenditure is a cost-effective use of resources 
compared to other options for using the same resources or addressing the same 
purposes, intent or goals. 
When determining evaluation parameters, the office shall consider legislative intent and 
may consider subsequent developments in the State's economy and economic or tax 
strategies, goals and policies. The office shall seek and consider input from the joint 
standing committee of the Legislature having jurisdiction over taxation matters and the 
Government Oversight Committee and may seek input from stakeholders and experts in 
evaluation, economics, economic development or tax policy; 
4. Identification of criteria for expedited review. A description of elements of an 
expedited review by the appropriate joint standing committee of the Legislature having 
jurisdiction over a tax expenditure identified under subsection I, paragraph B with the 
objectives of identifying: 
A. A description of each tax policy basis associated with a tax expenditure and the 
reasons the State adopted the tax policy; 
B. The fiscal impact of each tax policy and each related tax expenditure, including 
past and estimated future impacts; 
C. The extent to which each tax policy is consistent or inconsistent with other state 
goals; 
COMMITTEE AMENDMENT 
~. 
ROFS 
COMMITTEE AMENDMENT ,,~ " to H.P. 1048, L. D. 1463 
D. The extent to which the reasons for the adoption of each tax policy still remain or 
whe.ther the tax policy should be reconsidered; 
E. The extent to which the design of each tax expenditure is effective to accomplish 
its tax policy purpose; and 
F. Whether there are reasons to consider discontinuing or amending a specific tax 
expenditure; 
5. Data and data sources. A description of the type of data, and potential sources 
of that data, that would be needed to accomplish full evaluations and expedited reviews 
consistent with the proposed objectives in subsections 3 and 4 for each tax expenditure 
identified under subsection 1, paragraphs A and B. The description must indicate if any 
needed information is designated by law as confidential and identify procedures for 
protection of the confidentiality of that information; 
6. Stakeholder and public comment. Identification of options for including in the 
evaluation process an opportunity for comment by stakeholders and other members of the 
public; 
7. Assessment of resources. An estimate of the staff and other resources that would 
need to be budgeted for the office to perform the full evaluations of the tax expenditures 
identified pursuant to subsection 1, paragraph A to meet the objectives set forth in 
subsection 3, paragraph C and to provide the information needed for expedited reviews of 
the tax expenditures identified pursuant to subsection 1, paragraph B to meet the 
objectives in subsection 4, in accordance with the schedule proposed in subsection 2; and 
8. Revisions to statute. Revisions to statute that would be needed to implement a 
process and schedule for ongoing legislative review of tax expenditures and provide for 
effective evaluations. 
The office may request information and assistance from the Department of 
Administrative and Financial Services, Maine Revenue Services, the Department of 
Economic and Community Development or other sources, as needed, to develop this 
proposal; and be it further 
Sec. 2. Submission of proposal; legislation. Resolved: That the office shall 
submit the proposal developed under section 1 to the Government Oversight Committee 
and the joint standing committee of the Legislature having jurisdiction over taxation 
matters by March 1, 2015. 
The joint standing committee of the Legislature having 
jurisdiction over taxation matters may submit legislation related to the proposal to the 
COMMITTEE AMENDMENT 
ROFS 
\ 
COMMITTEE AMENDMENT "A .. to H.P. 1048, L.D. 1463 
SUMMARY 
This amendment replaces the bill with a resolve that directs the Office of Program 
Evaluation and Government Accountability to develop a proposal for implementation of a 
process for ongoing review of tax expenditures by the Legislature. The office is required 
to submit the proposal by March 1, 2015 to the Government Oversight Committee and 
the joint standing committee of the Legislature having jurisdiction over taxation matters. 
The joint standing committee may submit legislation related to the proposal to the First 
Regular Session of the 127th Legislature. 
FISCAL NOTE REQUIRED 
(See attached) 
COMMITTEE AMENDMENT 
Fiscal Detail and Notes 
Approved: 04/01114 
.M'.czc 
LD 1463 
LR 25(02) 
An Act To Examine Best Practices Relating to Tax Expenditures 
Fiscal Note for Bill as Amended by Committee Amendment .~ C H ~gaV 
Committee: Taxation 
Fiscal Note Required: Yes 
Fiscal Note 
Current biennium cost increase - General Fund 
The Office of Program Evaluation and Government Accountability will require the extension of a limited-period 
position at a cost of $69,254 and an additional $40,000 for outside consulting services to develop the process for the 
review of tax expenditures specified in this Resolve. The office has sufficient balances carried forward to fund the 
additional General Fund costs for the extension of the limited-period position and additional consulting services 
subject to approval by the Legislative Council. If the use of available balance forward is not approved by the 
Legislative Council, then a one-time General Fund appropriation of$109,254 in fiscal year 2014-15 will be required. 
Additional costs to the Departments of Economic and Community Development and Administrative and Financial 
Services associated with providing information and assistance can be absorbed within existing budgeted resources. 
LR0025(02) - Fiscal Note - Page 1 of 1