An Act To Implement the Recommendations of the Government Oversight Committee To Improve the Efficiency and Effectiveness of Evaluations of the State's Investments in Economic Development
Maine Legislature, Session 128, LD 1217
Committee: Labor, Commerce, Research and Economic Development
Amends: 5 MRSA §13051, 5 MRSA §13053, 5 MRSA §13056-A, 5 MRSA §13056-B, 5 MRSA §13056-C, 5 MRSA §13058, 5 MRSA §13063-O, 5 MRSA §13070-J, 5 MRSA §13070-O, 5 MRSA §13070-P, 5 MRSA §13070-Q, 5 MRSA §13107, 5 MRSA §13108, 5 MRSA §13109

Legislative Document
No. 1217
H.P. 849
House of Representatives, March 28, 2017
An Act To Implement the Recommendations of the Government 
Oversight Committee To Improve the Efficiency and Effectiveness 
of Evaluations of the State's Investments in Economic Development
Reported by Representative MASTRACCIO of Sanford for the Government Oversight 
Committee pursuant to the Maine Revised Statutes, Title 3, section 997, subsection 2.
Reference to the Committee on Labor, Commerce, Research and Economic Development 
suggested and ordered printed pursuant to Joint Rule 218.
ROBERT B. HUNT
Clerk
Be it enacted by the People of the State of Maine as follows: 
Sec. 1.  5 MRSA §13051, as corrected by RR 2013, c. 2, §5, is repealed. 
Sec. 2.  5 MRSA §13053, first ¶, as amended by PL 1987, c. 816, Pt. P, §6, is 
further amended to read: 
The Department of Economic and Community Development is established to 
encourage economic and community planning and development policies and programs of 
the State and to coordinate these programs and policies within the context of a state 
economic development strategy plan and the long-term economic plan for the State 
developed pursuant to Title 10, section 929-A, subsection 1.  The department is also 
established to work with municipalities and regional planning and economic development 
organizations to build strong local and regional economics and to implement programs 
and services through these local and regional organizations. 
Sec. 3.  5 MRSA §13056-A, as amended by PL 2011, c. 563, §2, is repealed. 
Sec. 4.  5 MRSA §13056-B, as amended by PL 2009, c. 337, §1, is repealed. 
Sec. 5.  5 MRSA §13056-C, as amended by PL 2011, c. 563, §3, is repealed. 
Sec. 6.  5 MRSA §13058, sub-§5, as amended by PL 2009, c. 337, §3, is further 
amended to read: 
5.  Review of program; report to Governor and Legislature.  The commissioner 
shall review and evaluate the programs and functions of the department and the operation 
of the economic delivery system using the information available from the long-term 
economic plan for the State pursuant to Title 10, section 929-A, subsection 1, the 
evaluation of state economic development evaluation investments pursuant to section 
13056-A 13070-P and the evaluations of tax expenditures pursuant to Title 3, section 999.  
The commissioner shall report the commissioner's findings and recommendations with 
respect to the issues described in this subsection to the Governor and to the Legislature no 
later than February 1st of each first regular session of the Legislature.  The commissioner 
shall conduct the review and evaluation with respect to the following: 
A.  The purpose of these programs and the degree to which the purpose is being met; 
B.  The degree of significance of the purpose of the programs and functions of the 
department; 
C.  The extent of the coordination of programs and services as required in subsection 
4; 
D.  The needs, problems and opportunities that are not being met by the programs and 
services of the department; 
E.  The types of programs and services necessary to meet the needs, problems and 
opportunities as set out in paragraph D; 
F.  The problems and successes in the economic delivery system; 
G.  The state of small business in this State, including economic data, the 
effectiveness of state programs to aid small business, problems of small business that 
may be affected by state policies and such other information on small business as 
desired by the commissioner; 
H.  Within available resources, the extent of business growth and change, including 
business expansions, new businesses and business closings; 
I.  Within available resources, the status of investments in business in the State; and 
J.  The extent to which the purposes of the Maine Downtown Center are being met. 
Sec. 7.  5 MRSA §13063-O, sub-§1, ¶C, as amended by PL 2009, c. 337, §4, is 
further amended to read: 
C.  Each year, submit a report to the joint standing committee of the Legislature 
having jurisdiction over business, research and economic development matters.  The 
report must include: 
(1)  An accounting of the use of all program funds received and expended since 
the program's inception; 
(2)  A summary of the status of any approved projects; 
(3)  A summary of the results of any completed projects; 
(4)  Evaluation data and assessment consistent with section 13056-A 13070-P; 
and 
(5)  Other information required to be submitted and evaluated by the joint 
standing committee of the Legislature having jurisdiction over business, research 
and economic development matters. 
Sec. 8.  5 MRSA §13070-J, sub-§1, as amended by PL 2015, c. 494, Pt. B, §1, is 
further amended to read: 
1.  Definitions.  As used in this article, unless the context otherwise indicates, the 
following terms have the following meanings. 
B.  "Commissioner" means the Commissioner of Economic and Community 
Development. 
C.  "Department" means the Department of Economic and Community Development. 
D.  "Economic development incentive" means federal and state statutorily defined 
programs that receive state funds, dedicated revenue funds and tax expenditures as 
defined by section 1666 whose purposes are to create, attract or retain business 
entities related to business development in the State, including but not limited to:. 
(1)  Assistance from Maine Quality Centers under Title 20-A, chapter 431-A; 
(2)  The Governor's Jobs Initiative Program under Title 26, chapter 25, 
subchapter 4; 
(3)  Municipal tax increment financing under Title 30-A, chapter 206; 
(4)  The jobs and investment tax credit under Title 36, section 5215; 
(5)  The research expense tax credit under Title 36, section 5219-K; 
(6)  Reimbursement for taxes paid on certain business property under Title 36, 
chapter 915; 
(7)  Employment tax increment financing under Title 36, chapter 917; 
(8)  The shipbuilding facility credit under Title 36, chapter 919; 
(9)  The credit for seed capital investment under Title 36, section 5216-B; and 
(11)  The credit for Maine fishery infrastructure investment under Title 36, 
section 5216-D. 
D-1.  "Economic development investments" means commitments of state funds, 
dedicated revenue funds and tax expenditures as defined by section 1666 for research 
and development activities and economic development incentive programs. 
E.  "Economic development proposal" means proposed legislation that establishes a 
new program or that expands an existing program that: 
(1)  Is intended to encourage significant business expansion or retention in the 
State; and 
(2)  Contains a tax expenditure, as defined in section 1666, or a budget 
expenditure with a cost that is estimated to exceed $100,000 per year. 
F.  "Research and development activities" means activities that directly or through 
capital investment support basic and applied scientific research and related 
commercial development funded by state appropriations and bond proceeds. 
G.  "State strategic economic improvement plan" means the long-term economic plan 
for the State's economy developed by the Maine Economic Growth Council pursuant 
to Title 10, section 929-A, subsection 1. 
Sec. 9.  5 MRSA §13070-J, sub-§2, as amended by PL 2001, c. 481, §2, is 
repealed. 
Sec. 10.  5 MRSA §13070-J, sub-§2-A is enacted to read: 
2-A.  Disclosure.  The following provisions govern disclosure requirements. 
A.  An applicant for an economic development incentive shall at a minimum identify 
in writing: 
(1)  The public purpose that will be served by the business through use of the 
economic development incentive and the specific uses to which the benefits will 
be put; and 
(2)  The goals of the business for the number, type and wage levels of jobs to be 
created or retained as a result of the economic development incentive received. 
Applications filed for economic development incentives are public records for 
purposes of Title 1, chapter 13. 
B.  To assist the department in preparing the comprehensive evaluation of state 
investments in economic development pursuant to section 13070-P, subsection 1, a 
recipient of state funding for research and development activities or economic 
development incentives, including General Fund appropriations, dedicated revenue, 
tax expenditures as defined in section 1666 and general obligation bond proceeds for 
economic development, shall, in addition to any other reporting requirements 
required by law, collect, maintain and provide data as requested by the department. 
Sec. 11.  5 MRSA §13070-J, sub-§4, as amended by PL 2009, c. 337, §5, is 
further amended to read: 
4.  Agency reports.  The following agencies shall submit the following reports. 
A.  The State Tax Assessor shall submit a report by October 1st annually to the 
Legislature and the department identifying the amount of public funds spent and the 
amount of revenues foregone as the result of economic development incentives.  The 
report must identify the amount of the economic development incentives under the 
jurisdiction of the Bureau of Revenue Services received by each business to the 
extent permitted under Title 36, section 191 and other provisions of law concerning 
the confidentiality of information. 
B.  The Commissioner of Labor shall report by October 1st annually to the 
Legislature and the department on the amount of public funds spent on workforce 
development and training programs directly benefiting businesses in the State.  The 
report must identify the amount of economic development incentives under the 
jurisdiction of the Department of Labor received by each business and the public 
benefit resulting from those economic development incentives. 
C.  The Maine Community College System shall report by October 1st annually to 
the Legislature and the department on the amount of public funds spent on job 
training programs directly benefiting businesses in the State.  The report must 
identify the amount of economic development incentives under the jurisdiction of the 
system received by each business and the public benefit resulting from those 
economic development incentives. 
Sec. 12.  5 MRSA §13070-O, sub-§1, ¶J, as enacted by PL 2007, c. 434, §8, is 
amended to read: 
J.  Require that a business that receives benefits under the program have a business 
statement that includes the requirements of section 13070-J, subsection 2 2-A. 
Sec. 13.  5 MRSA §13070-P is enacted to read: 
§13070-P.  Comprehensive evaluation of state investments in economic development 
1.  Conduct evaluation.  By February 1, 2021, and every 4 years thereafter, the 
commissioner shall submit a comprehensive evaluation of state economic development 
investments, referred to in this section as "the evaluation," not to include programs 
subjected to independent evaluations required by federal programs, to the Governor and 
the Legislature. 
A.  The scope of the evaluation must include research and development activities and 
economic development incentives in this State. 
B.  The evaluation must be performed by independent, objective reviewers. 
C.  The evaluation objectives include, but are not limited to, an assessment of: 
(1)  The extent to which the State's portfolio of economic development 
investments, particularly in terms of level and types of investments, aligns with 
and supports the state strategic economic improvement plan; 
(2)  The extent to which individual activities and programs, or groups of activities 
and programs, within the State's portfolio are contributing to the achievement of 
particular goals, measurable objectives and performance targets associated with 
the state strategic economic improvement plan; 
(3)  How the State's portfolio of economic development investments, particularly 
in terms of level and types of investments, compares to investments in other 
states; 
(4)  The effect of the State's economic development investments in improving the 
competitiveness of the State's established and emerging technology and industry 
sectors in regional, national and global arenas; and 
(5)  The extent to which the overall framework for the State's economic 
development investments provides for sufficient transparency and accountability, 
effective and efficient coordination among the State's activities and programs and 
easy access for interested businesses and other entities. 
D.  The evaluation must include recommendations to the department, the Governor 
and the Legislature on any identified: 
(1)  Opportunities to modify the current portfolio of state economic development 
investments, particularly with regard to level of investment or types of activities 
and programs, in order to better align resources with the state strategic economic 
improvement plan and more cost-effectively support achievement of goals, 
objectives and performance targets associated with the plan; 
(2)  Opportunities to shift investments from economic development activities and 
programs to other state efforts in order to better align resources with the state 
strategic economic improvement plan and more cost-effectively support 
achievement of goals, objectives and performance targets associated with the 
plan; 
(3)  Opportunities to improve transparency and accountability for state economic 
development investments, coordination among economic activities and programs 
in the portfolio or accessibility of business and other entities to those activities 
and programs; and 
(4)  Areas for improvement. 
E.  In planning and conducting the evaluation, the department and independent 
reviewers may consider pertinent information available from the Maine Economic 
Growth Council, as established in Title 10, section 929-A, and from reviews 
conducted by the Office of Program Evaluation and Government Accountability, as 
established in Title 3, section 991. The independent reviewers may consult with the 
Office of Program Evaluation and Government Accountability on accessing data, 
confidential or otherwise, necessary for the evaluation. 
2.  Action on evaluation recommendations.  By February 1, 2021 and every 4 years 
thereafter, the commissioner shall present the evaluation and results from the most recent 
evaluation required under this section to the joint standing committee of the Legislature 
having jurisdiction over labor, commerce, research and economic development matters. 
The commissioner shall report to the Governor and the committee on actions planned by 
the department and other entities administering the programs to address the 
recommendations made. The committee shall also consider the independent reviewers' 
recommendations and may submit a bill to the Legislature to implement 
recommendations. 
By February 1, 2023 and by February 1st every 4 years thereafter, the commissioner shall 
submit to the Governor and the joint standing committee of the Legislature having 
jurisdiction over labor, commerce, research and economic development matters a 
progress report related to the evaluation required under this section that describes the 
implementation status of the planned actions to address the recommendations from the 
prior evaluation. 
Sec. 14.  5 MRSA §13070-Q is enacted to read: 
§13070-Q.  Maine Economic Development Evaluation Fund 
1.  Fund established.  The Maine Economic Development Evaluation Fund, referred 
to in this section as "the fund," is established as a nonlapsing Other Special Revenue 
Funds account administered by the department for the purposes of funding the 
comprehensive economic development investments evaluation required pursuant to 
section 13070-P, subsection 1. 
2.  Fund sources.  The fund receives money deposited by the Treasurer of State 
pursuant to this section and any other gift, grant or other source of revenue deposited for 
funding the comprehensive economic development investments evaluation required 
pursuant to section 13070-P, subsection 1. 
3.  Payments to fund.  Notwithstanding section 1585 or any other provision of law: 
A.  The department shall assess agencies or private entities that receive General Fund 
appropriations or general obligation bonds for economic development incentives an 
amount for contribution to the fund that is not to exceed 0.8% of General Fund 
appropriations received by or general obligation bonds issued to an agency or entity 
for economic development incentives. Private entities that receive funds from general 
obligation bonds for economic development incentives shall pay to the Treasurer of 
State in the fiscal year in which the general obligation bond was issued an assessment 
amount determined by the department that is not to exceed 0.8% of the proceeds from 
the bond issue in any fiscal year, which payment must be made from available 
resources other than bond proceeds. Only those programs that receive $250,000 or 
more in economic development appropriations in any fiscal year or those entities that 
receive funds from a general obligation bond issue of $250,000 or more for economic 
development incentives in any fiscal year, as identified and certified by the 
department and the Office of Fiscal and Program Review, may be assessed pursuant 
to this subsection. The department shall provide to each agency or private entity that 
is assessed a payment under this paragraph an annual budget for the fund and a 
detailed account of each institution's required assessment. Total payments made 
pursuant to this paragraph may not exceed $200,000 in any fiscal year; and 
B.  Agencies or private entities that receive General Fund appropriations or general 
obligation bonds for research and development activities shall contribute to the fund 
an amount not to exceed 0.8% of General Fund appropriations received by and 
general obligation bonds issued to an agency or entity for research and development 
activities. Private entities that receive funds from general obligation bonds for 
research and development activities shall pay to the Treasurer of State in the fiscal 
year in which the general obligation bond was issued an amount not to exceed 0.8% 
of the proceeds from the bond issue in any fiscal year, which payment must be made 
from available resources other than bond proceeds. Only those programs that receive 
$500,000 or more in research and development appropriations in any fiscal year, or 
those entities that receive funds from a general obligation bond issue of $500,000 or 
more for research and development activities in any fiscal year, as identified and 
certified by the Office of Innovation, established pursuant to section 13105, and the 
Office of Fiscal and Program Review, may be assessed. The Office of Innovation 
shall provide to each agency or private entity that is assessed a payment under this 
paragraph an annual budget for the fund and a detailed account of each institution's 
required assessment. Total payments made pursuant to this paragraph may not exceed 
$200,000 in any fiscal year. 
Sec. 15.  5 MRSA §13107, as amended by PL 2011, c. 563, §§8 and 9 and c. 655, 
Pt. EE, §10 and affected by §30, is repealed. 
Sec. 16.  5 MRSA §13108, as enacted by PL 2003, c. 673, Pt. M, §8, is repealed. 
Sec. 17.  5 MRSA §13109, as amended by PL 2009, c. 337, §7, is repealed. 
SUMMARY 
This bill implements changes in the efficiency and effectiveness of statutorily 
required independent evaluations of research and development activities and economic 
development incentives that are the responsibility of the Department of Economic and 
Community Development. The Government Oversight Committee identified these 
changes in its ongoing follow-up of the recommendations included in the Office of 
Program Evaluation and Government Accountability's 2006 report on economic 
development programs in Maine. Current law requires the department to conduct an 
independent evaluation of research and development activities and a separate evaluation 
of economic development incentives that are not covered in the research and development 
evaluation. Since the primary purpose of research and development activities is to support 
economic development, this bill combines the statutory provisions related to both these 
evaluations into a requirement for conducting and funding one independent evaluation 
that encompasses both. The bill also changes the required cycle for evaluation from every 
years, with results reported to the Legislature during second regular sessions, to every 4 
years, with results reported during first regular sessions. This is intended to allow the 
Legislature more time to consider the recommendations from evaluation reports and 
allow for recommendations to be implemented in between evaluation periods. 
Additionally, this bill establishes the objectives for the evaluation and ties those 
objectives and any recommendations made to the State's long-term economic plan 
developed by the Maine Economic Growth Council pursuant to the Maine Revised 
Statutes, Title 10, section 929-A, subsection 1. There is currently a separate bill, 
Legislative Document 367, before the 128th Legislature addressing the Maine Economic 
Growth Council's responsibilities for that plan. Lastly, this bill seeks to ensure that 
evaluation results are considered and acted on, as appropriate, by assigning responsibility 
for review and action to both the Department of Economic and Community Development 
and the joint standing committee of the Legislature having jurisdiction over labor, 
commerce, research and economic development matters.