An Act To Improve Tax Expenditure Transparency and Accountability
Maine Legislature, Session 127, LD 0941
Committee Amendment CA_A_S296 (Senate)
Amends: 3 MRSA §992, 5 MRSA §1666, 36 MRSA §191

COMMITTEE AMENDMENT" A " to S.P. 332, L.D. 941, Bill, "An Act To 
Improve Tax Expenditure Transparency and Accountability" 
Amend the bill by striking out everything after the enacting clause and inserting the 
following: 
'Sec. 1. 3 MRSA §992, sub-§4-A is enacted to read: 
4-A. Policy committee. "Policy committee" means the joint standing committee of 
the Legislature having jurisdiction over taxation matters. 
Sec. 2. 3 MRSA §992, sub-§5, as amended by PL 2003, c. 673, Pt. GGGG, §3, is 
further amended to read: 
5. 
Program evaluation. 
"Program evaluation" means an examination of any 
government program that includes performance audits, management analysis, inspections, 
operations, research or examinations of efficiency, effectiveness or economy or the 
evaluation of any tax expenditure required under this chapter. 
Sec. 3. 3 MRSA §992, sub-§§6-A and 6-B are enacted to read: 
6-A. Statistic. "Statistic" means a numerical value computed from a set of data. 
"Statistic" includes, but is not limited to, a sum, mean, median, maximum, minimum, 
range and variance. 
6-B. Tax expenditure. "Tax expenditure" has the same meaning as under Title 5, 
section 1666. 
Sec. 4. 3 MRSA §§998 to 1001 are enacted to read: 
§998. Process for review of tax expenditures 
1. 
Assignment of review categories. 
By October 1, 2015, the committee, in 
consultation with the policy committee, shall assign each tax expenditure to one of the 
following review categories: 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT" f1 "to S.P. 332, L.D. 941 
A. Full evaluation 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 identified; 
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. By October 1, 2015, the committee, in consultation with the policy 
committee, shall establish a schedule of ongoing review of the tax expenditures assigned 
to the full evaluation and expedited review categories pursuant to subsection 1, 
paragraphs A and B. To the extent practicable, the committee shall schedule the review 
of tax expenditures with similar goals during the same year. 
3. Annual review of assignments and· schedule. By October 1st of each year, 
beginning in 2016, the committee, in consultation with the policy committee, shall review 
and make any necessary adjustments to the review category assignments and schedule 
pursuant to subsections 1 and 2, including adjustments needed to incorporate tax 
expenditures enacted, amended or repealed during the preceding year. 
4. Office responsibilities. The office shall maintain a current record of the review 
category assignments and the schedule under this section. 
§999. Full evaluation of tax expenditures 
1. Evaluation process. Beginning January 1, 2016, the office shall evaluate each 
tax expenditure identified under section 998, subsection 1, paragraph A in accordance 
with the schedule established in section 998, subsection 2. 
A. 
By January 31st of each year, the committee, after consideration of 
recommendations from the office, shall approve the following for each tax 
expenditure subject to full evaluation review in that year: 
(1) The pur,poses, intent or goals of the tax expenditure, as informed by original 
legislative intent as well as subsequent legislative and policy developments and 
changes in the state economy and fiscal condition; 
(2) The intended beneficiaries of the tax expenditure; 
(3) The evaluation objectives, which may include an assessment of: 
(a) The fiscal impact of the tax expenditure, including past and estimated 
future impacts; 
(b) The extent to which the design of the tax expenditure is effective in 
accomplishing the tax expenditure's purposes, intent or goals and consistent 
with best practices: 
(c) The extent to which the tax expenditure is achieving its pur,poses. intent 
or goals, taking into consideration the economic context, market conditions 
and indirect benefits; 
COMMITTEE AMENDMENT 
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CO:MMITTEE AMENDMENT" A" to S.P, 332, L.D. 941 
(d) The extent to which those actually benefiting from the tax expenditure 
are the intended beneficiaries: 
(e) The extent to which it is likely that the desired behavior might have 
occurred without the tax expenditure, taking into consideration similar tax 
expenditures offered by other states: 
(f) The extent to which the State's administration of the tax expenditure, 
including enforcement efforts, is efficient and effective: 
(g) The extent to which there are other state or federal tax expenditures, 
direct expenditures or other programs that have similar purposes, intent or 
goals as the tax expenditure, and the extent to which such similar initiatives 
are coordinated, complementary or duplicative: 
(h) 
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: and 
(i) Any opportunities to improve the effectiveness of the tax expenditure in 
meeting its purposes, intent or goals: and 
(4) 
The performance measures appropriate for analyzing the evaluation 
objectives. Performance measures must be clear and relevant to the specific tax 
expenditure and the approved evaluation objectives. 
B. Before final approval pursuant to paragraph A, the committee shall seek and 
consider input from the policy committee and stakeholders and may seek input from 
experts. 
2. Action by office; report. By December 31 st of each year, beginning in 2016, the 
office shall complete the tax expenditure evaluations pursuant to subsection 1 scheduled 
for that year and submit a report on the results to the committee and the policy 
committee. The office shall seek stakeholder input as part of the report. For each tax 
expenditure evaluated, the report must include conclusions regarding the extent to which 
the tax expenditure is meeting its purposes, intent or goals and may include 
recommendations for continuation or repeal of the tax expenditure or modification of the 
tax expenditure to improve its performance. 
3. Action by committee. The committee shall review the report submitted by the 
office under subsection 2, assess the report's objectivity and credibility and vote whether 
to endorse the report. By June 1st of each year, beginning in 2017, the committee shall 
submit a record of the vote on the report and any comments of or actions recommended 
by the committee to the policy committee for its review and consideration. 
4. Action by policy committee. The policy committee shall review the results of the 
tax expenditure evaluations and of the committee's review based on materials submitted 
under subsections 2 and 3. By December 1 st of each year, beginning in 2017, the policy 
committee shall submit to the Legislature a report documenting its activities under this 
chapter and any recommendations resulting from its review of the materials submitted 
under subsections 2 and 3. The policy committee may submit a bill to the next regular 
session of the Legislature to implement the policy committee's recommendations. 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT" A "to S.P. 332, L.D. 941 
§1000. Expedited review of tax expenditures 
1. Expedited review process. Beginning July 1, 2016, the policy committee shall 
conduct expedited reviews of tax expenditures and the associated tax policies identified 
under section 998, subsection 1, paragraph B, in accordance with the schedule established 
in section 998, subsection 2. 
A. For each tax policy subject to review, the policy committee shall assess the 
continued relevance of, or need for adjustments to, the policy, considering: 
(1) The reasons the tax policy was adopted: 
(2) The extent to which the reasons for the adoption still remain or whether the 
tax policy should be reconsidered: 
(3) The extent to which the tax policy is consistent or inconsistent with other 
state goals: and 
(4) The fiscal impact of the tax policy, including past and estimated future 
impacts. 
B. 
For each tax expenditure related to the tax policy under review, the policy 
committee shall assess the continued relevance of, or need for adjustments to, the 
expenditure, considering: 
(1) . The fiscal impact of the tax expenditure, including past and estimated future 
impacts: 
(2) The administrative costs and burdens associated with the tax expenditure: 
(3) The extent to which the tax expenditure is consistent with the broad tax 
policy and with the other tax expenditures established in connection with the 
policy; 
(4) 
The extent to which the design of the tax expenditure is effective in 
accomplishing its tax policy pm:pose; 
(5) The extent to which there are adequate mechanisms, including enforcement 
efforts, to ensure that only intended beneficiaries are receiving benefits and that 
beneficiaries are compliant with any requirements; 
(6) The extent to which the reasons for establishing the tax expenditure remain 
or whether the need for it should be reconsidered: and 
(7) Any other reasons to discontinue or amend the tax expenditure. 
2. Action by the office. By July 1 st of each year, beginning in 2016, the office shall 
collect, prepare and submit to the policy committee the following information to support 
the expedited reviews under subsection 1: 
A. A description of the tax policy under review: 
B. Summary information on each tax expenditure associated with the tax policy 
under review, including: 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT" A "to S.P. 332, L.D. 941 
(1) A description of the tax expenditure and the mechanism through which the 
tax benefit is distributed; 
(2) The intended beneficiaries of the tax expenditure; and 
(3) A legislative history of the tax expenditure; and 
C. The fiscal impact of the tax policy and each related tax expenditure, including 
past and estimated future impacts. 
3. Report by policy committee; legislation. 
By December 1st of each year, 
beginning in 2016, the policy committee shall submit to the Legislature a report on the 
results of the expedited reviews conducted pursuant to subsection I that year. The policy 
committee may submit a bill related to the report to the next regular session of the 
Legislature to implement the policy committee's recommendations. 
§1001. Tax expenditure evaluation process details 
... Information requests; confidentiality; reporting. The following provisions 
apply to the performance of duties under sections 999 and 1000. These powers are in 
addition to the powers granted to the office and committee under this chapter. 
A. 
The office may request confidential information from the Department of 
Administrative and Financial Services, Maine Revenue Services or other state 
agencies as necessary to address the evaluation objectives and performance measures 
approved under section 999, subsection 1. The office shall request any confidential 
information in accordance with section 997, subsection 4. The office shall request 
that confidential tax information, other than beneficiary contact information, be made 
accessible to the office as de-identified tax data. If Maine Revenue Services is unable 
to provide such data, the office and representatives of Maine Revenue Services shall 
determine appropriate methods for the office to access the requested information. 
B. Upon request of the office and in accordance with section 997, subsection 4, the 
Department of Administrative and Financial Services, Maine Revenue Services or 
other state agencies shall provide confidential information to the office. The office 
shall maintain the confidentiality of the information provided, in accordance with 
section 997, subsections 3 and 4. 
This paragraph does not apply to federal tax 
information that is confidential under Title 36, section 191, subsection 3. 
C. The office, the committee or the policy committee may consult with governmental 
agencies, other entities and experts, including members of the Consensus Economic 
Forecasting Commission under Title 5, section 1710. 
D. The office may contract with other entities for the purpose of obtaining assistance 
in the review of tax expenditures. The office shall require a nondisclosure agreement 
as part of any contract entered into pursuant to this paragraph. The office may not 
disclose confidential taxpayer information to a contractor, except for: 
(1) Contact information for specific beneficiaries of tax expenditures for the 
purpose of conducting interviews, surveys or other data collection; and 
(2) Statistics classified so as to prevent the identification of specific taxpayers or 
the reports, returns or items of specific taxpayers. 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT" A "to S.P. 332, L.D. 941 
The contractor shall retain physical control of any information obtained pursuant to 
this paragraph until the conclusion of the review for which the information was 
provided. after which the information must be immediately destroyed. 
E. The office may report confidential information obtained under this section to 
Legislators, legislative committees, state agencies and the public only in the form of 
statistics classified so as to prevent the identification of specific taxpayers or the 
reports, returns or items of specific taxpayers. 
F. Prior to the submission of a tax expenditure evaluation report under section 999, 
subsection 2, the office shall provide the State Tax Assessor an opportunity to review 
a draft of the report in accordance with the provisions of section 997, subsection 1. 
The State Tax Assessor may advise the office on compliance with paragraph E. 
G. For purposes of this section, the following terms have the following meanings: 
(1) "Beneficiary contact information" means the following information listed on 
a tax return or included in a tax return: the name, address, zip code, e-mail 
address and telephone number of the taxpayer, and of any related entity, officers, 
attorneys, personal representatives and other agents, tax preparers and 
shareholders of, partners of or members of the taxpayer or of a listed related 
entity. 
(2) 
"De-identified tax data" means tax returns and other confidential tax 
information that are redacted or otherwise modified or restricted by Maine 
Revenue Services so as to exclude the following: 
(a) Beneficiary contact information; 
(b) Identification numbers including federal or state employer identification 
numbers, social security numbers and registration numbers: and 
(c) Other information from which the State Tax Assessor determines that the 
identity of the taxpayer could reasonably be inferred. 
2. Legislation. The committee may submit to the Legislature any legislation it 
considers necessary to improve the process or availability of data for the review of tax 
expenditures. 
Sec. 5. 5 MRSA §1666, 3rd" as amended by PL 2007, c. 1, Pt. P, §2, is further 
amended to read: 
A budget document transmitted by the Governor or Governor-elect must include a 
part that asks the Legislature whether it wishes to continue funding each individual tax 
expenditure provided in the statutes. For purposes of this paragraph, "tax expenditures" 
means those state tax revenue losses attributable to provisions of Maine tax laws that 
allow a special exclusion, exemption or deduction or provide a special credit, a 
preferential rate of tax or a deferral of tax liability. The part must include for each tax 
expenditure a statutory section reference, a brief description of each tax expenditure and 
the loss of revenue estimated to be incurred by funding source and fiscal year. The joint 
standing committee of the Legislature having jurisdiction over appropriations and 
financial affairs shall consider any reports regarding the evaluation of tax expenditures 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT "A "to S.P. 332, L.D. 941 
completed during the previous 2 years pursuant to Title 3, sections 999 and 1000 and 
shall hold at least one public hearing to receive public comment regarding those tax 
expenditures when reviewing the continuation of tax expenditures pursuant to this 
section. This paragraph applies with respect to the preparation of the budget document 
for the 2008-2009 biennium and thereafter. 
Sec. 6. 36 MRSA §191, sub-§2,~,x:x and YY, as enacted by PL 2013, c. 331, 
Pt. B, §5, are amended to read: 
XX. The disclosure of information by the assessor to the board, except that such 
disclosure is limited to information that is pertinent to an appeal or other action or 
proceeding before the board; aad 
YY. 
The inspection and disclosure of information by the board to the extent 
necessary to conduct appeals procedures pursuant to this Title and issue a decision on 
an appeal to the parties. The board may make available to the public redacted 
decisions that do not disclose the identity of a taxpayer or any information made 
confidential by state or federal statute.; and 
Sec. 7. 36 MRSA §191, sub-§2, ~ZZ is enacted to read: 
ZZ. 
The disclosure of information by the State Tax Assessor or the Associate 
Commissioner for Tax Policy to the Office of Program Evaluation and Government 
Accountability under Title 3, section 991 for the review and evaluation of tax 
expenditures pursuant to Title 3, chapter 37. 
Sec. 8. Appropriations and allocations. The following appropriations and 
allocations are made. 
PROGRAM 
EVALUATION 
AND 
GOVERNMENT 
ACCOUNTABILITY, 
OFFICE OF 
Office of Program Evaluation and Government Accountability 0976 
fuitiative: Establishes one Senior Analyst position and one Analyst position effective 
October 5,2015 and provides funding for consultant services. 
GENERAL FUND 
POSITIONS - LEGISLATIVE COUNT 
Personal Services 
All Other 
GENERAL FUND TOTAL 
SUMMARY 
2015-16 
2016-17 
2.000 
2.000 
$143,884 
$212,280 
$25,000 
$25,000 
$168,884 
$237,280 
This amendment replaces the bill, which was a concept draft, and establishes a 
process for legislative review of tax expenditures based on the report of the Office of 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT" A "to S.P. 332, L.D. 941 
Program Evaluation and Government Accountability pursuant to Resolve 2013, chapter 
115. 
FISCAL NOTE REQUIRED 
(See attached) 
COMMITTEE AMENDMENT 
Approved: 06/16/15 *ac:.. 
LD941 
LR 1142(02) 
An Act To Improve Tax Expenditure Transparency and Accountability 
Fiscal Note for Bill as Amended by Committee Amendment ''AJI(S-.;LCli.,.Q) 
Committee: Taxation 
Net Cost (Savings) 
General Fund 
Appropriations/Allocations 
General Fund 
Fiscal Detail and Notes 
Fiscal Note Required: Yes 
Fiscal Note 
FY 2015-16 
FY 2016-17 
$168,884 
$237,280 
$168,884 
$237,280 
Projections 
FY 2017-18 
$245,771 
$245,771 
Projections 
FY 2018-19 
$254,602 
$254,602 
Provides an appropriation of $168,884 in fiscal year 2015-16 and $237,280 in fiscal year 2016-17 for two positions 
and related costs in the Office of Program Evaluation and Government Accountability for tax expenditure review and 
evaluation. Additional costs to the Department of Administrative and Financial Services associated with this 
legislation can be absorbed within existing budgeted resources. 
LRl142(02) - Fiscal Note - Page 1 of 1