An Act To Tax the Extraction of Water for Certain Commercial Purposes and Fund Water Quality Programs
Maine Legislature, Session 128, LD 0493
Committee: Taxation
Sponsors: MELARAGNO, ACKLEY, COOPER, HILLIARD, HOGAN, KORNFIELD, PIERCE, TUCKER, VACHON
Amends: 38 MRSA §424-C, 38 MRSA §424-D, 38 MRSA §424-E

Legislative Document
No. 493
H.P. 356
House of Representatives, February 9, 2017
An Act To Tax the Extraction of Water for Certain Commercial 
Purposes and Fund Water Quality Programs
Reference to the Committee on Taxation suggested and ordered printed.
ROBERT B. HUNT
Clerk
Presented by Representative MELARAGNO of Auburn.
Cosponsored by Representatives: ACKLEY of Monmouth, COOPER of Yarmouth, 
HILLIARD of Belgrade, HOGAN of Old Orchard Beach, KORNFIELD of Bangor, PIERCE 
of Falmouth, TUCKER of Brunswick, VACHON of Scarborough.
Be it enacted by the People of the State of Maine as follows: 
Sec. 1.  36 MRSA c. 370-A is enacted to read: 
CHAPTER 370-A 
EXTRACTION OF WATER FOR BOTTLING 
§2831.  Definitions 
As used in this chapter, unless the context otherwise indicates, the following terms 
have the following meanings. 
1.  Bottled water operator.  "Bottled water operator" means a person engaged in the 
business of bottling or packaging water for sale. 
§2832.  Excise tax 
1.  Imposition of tax.  Beginning with the extraction of water occurring on or after 
October 1, 2017, an excise tax is imposed on each bottled water operator that extracted 
more than 1,000,000 gallons of water in the previous calendar year for the privilege of 
engaging in the business of extracting groundwater or surface water from springs or other 
underground sources within the State for commercial bottling for sale. 
2.  Rate of tax.  The excise tax under this section is imposed at a rate of 1¢ per 25 
gallons of water extracted in the State. 
3.  Payment.  A bottled water operator shall prepare and submit to the bureau a 
monthly report according to procedures and schedules specified by the bureau showing 
the total gallons of water extracted for bottling during the preceding month and other 
information required by the bureau and shall pay excise tax under this section each month 
to the bureau at the time the report is submitted. 
4.  Records.  A bottled water operator shall keep a record of all water extracted in 
this State by that bottled water operator. 
§2833.  Application of revenues 
All revenues received by the bureau under this chapter after reduction for 
administrative costs must be credited to a General Fund suspense account.  No later than 
the last day of each month, the State Controller shall transfer all such revenues to the 
Maine Water Quality Testing and Monitoring Fund established in Title 38, section 424-E. 
Sec. 2.  38 MRSA §424-C is enacted to read: 
§424-C.  Maine Well Water Testing Grant Program 
1.  Establishment.  The Maine Well Water Testing Grant Program, referred to in this 
section as "the program," is established to provide grants to public and private entities in 
the State to facilitate the testing for heavy metals, bacteria and other contaminants of 
drinking water from a well or other private water supply used by an entity. 
2.  Administration.  The department may administer the program and shall disburse 
revenue from the Maine Water Quality Testing and Monitoring Fund established under 
section 424-E for the purposes of the program based on approved grant requests from 
public and private applicants in accordance with subsection 4.  Costs incurred by the 
department in the development and administration of the program are paid with revenue 
in the Maine Water Quality Testing and Monitoring Fund in a manner consistent with 
section 424-E. 
3.  Audit.  Revenue from the Maine Water Quality Testing and Monitoring Fund 
established under section 424-E disbursed by the program is subject to audit as 
determined by the department, and the recipient of any such funding must agree to be 
subject to audit and to cooperate with the auditor as a condition of receiving funding. 
4.  Eligibility criteria; priorities.  The department may disburse grants under the 
program to any public or private entity demonstrating that the well or other private water 
supply used by the entity as the primary source for drinking water has not been tested for 
heavy metals, bacteria or other contaminants within the 3 years prior to the filing of the 
grant application.  The department shall request financial information from each applicant 
and shall prioritize the awarding of grants under the program to low-income applicants 
and to applicants demonstrating to the department's satisfaction, based on information 
submitted with the application, that the drinking water used by the applicant is likely to 
be contaminated.  
5.  Rules.  The department may adopt rules to implement this section.  Rules adopted 
pursuant to this subsection are routine technical rules as defined in Title 5, chapter 375, 
subchapter 2-A. 
Sec. 3.  38 MRSA §424-D is enacted to read: 
§424-D.  Lake water quality monitoring and support program 
1.  Program established.  The commissioner shall contract with a private 
organization, through a competitive bidding process, to establish and administer a 
program to monitor and support lake water quality in the State, as described in subsection 
2, as long as the commissioner determines that sufficient funds are available pursuant to 
subsection 3 to support the program and that a suitable private organization is available to 
establish and administer the program.   
2.  Program activities.  The lake water quality monitoring and support program 
established pursuant to subsection 1 shall engage in the following activities to support 
lake water quality in the State: 
A.  The program shall provide for the distribution of educational or informational 
material on measures relating to the monitoring, maintenance and improvement of 
lake water quality in the State; 
B.  The program shall train, certify and provide technical support to individuals and 
entities that monitor lake water quality in the State, assess watershed health and 
function and screen lakes for invasive aquatic plants and animals; and 
C.  The program shall facilitate the gathering and compilation of data relating to lake 
water quality in the State and shall distribute or otherwise make that data available to 
interested individuals and entities, including state agencies. 
3.  Program funding.  The lake water quality monitoring and support program 
established pursuant to subsection 1 is funded from the Maine Water Quality Testing and 
Monitoring Fund, established under section 424-E, and any other sums that are 
appropriated by the Legislature or transferred from time to time by the State Controller. 
Sec. 4.  38 MRSA §424-E is enacted to read: 
§424-E.  Maine Water Quality Testing and Monitoring Fund 
1.  Fund established.  The Maine Water Quality Testing and Monitoring Fund, 
referred to in this section as "the fund," is established as a dedicated, nonlapsing fund 
administered by the department for the purpose of providing funds, in accordance with 
subsection 3, to support activities under the Maine Well Water Testing Program 
established under section 424-C and the lake water quality monitoring and support 
program under section 424-D. 
2.  Sources of funding.  The fund consists of any money received from the following 
sources: 
A.  Revenues transferred by the State Controller under Title 36, section 2833; 
B.  Contributions from private sources; 
C.  Federal funds and awards; and 
D.  Any other sums that are appropriated by the Legislature or transferred from time 
to time by the State Controller. 
3.  Distributions.  Except as provided in subsection 4, the department shall apply the 
money in the fund in accordance with the following breakdown: 
A.  Eighty-five percent of the money distributed by the fund in any calendar year 
must support activities under the Maine Well Water Testing Program established 
under section 424-C; and 
B.  Fifteen percent of the money distributed by the fund in any calendar year must 
support activities under the lake water quality monitoring and support program under 
section 424-D. 
4.  Administrative costs.  Costs incurred by the department in the development and 
administration of the fund or in the development and administration or oversight of the 
programs established under sections 424-C or 424-D may be paid with revenues in the 
fund, except that such costs may not exceed 10% of the total revenues credited to the 
fund in any calendar year. 
SUMMARY 
This bill creates an excise tax of 1¢ per 25 gallons of groundwater or surface water 
extracted from springs or other underground sources in this State by a bottled water 
operator that extracted more than 1,000,000 gallons in the previous calendar year if the 
water is packaged for sale.  The revenues from the tax are transferred to a newly created 
Maine Water Quality Testing and Monitoring Fund to be administered by the Department 
of Environmental Protection.  Of the money transferred, 85% will support well water 
testing and 15% will support lake water quality monitoring and support.