An Act To Promote Major Food Processing and Manufacturing Facility Expansion and To Create Jobs in Maine
Maine Legislature, Session 129, LD 1586
Committee: Taxation
Sponsors: JACKSON, MARTIN, CARPENTER, CHIPMAN, DOW, HERBIG, POULIOT, McCREA, STEWART, WHITE
Amends: 36 MRSA §191, 36 MRSA §5219-V

Legislative Document
No. 1586
S.P. 505
In Senate, April 16, 2019
An Act To Promote Major Food Processing and Manufacturing 
Facility Expansion and To Create Jobs in Maine
Reference to the Committee on Taxation suggested and ordered printed.
DAREK M. GRANT
Secretary of the Senate
Presented by President JACKSON of Aroostook.
Cosponsored by Representative MARTIN of Eagle Lake and
Senators: CARPENTER of Aroostook, CHIPMAN of Cumberland, DOW of Lincoln, 
HERBIG of Waldo, POULIOT of Kennebec, Representatives: McCREA of Fort Fairfield, 
STEWART of Presque Isle, WHITE of Washburn.
Be it enacted by the People of the State of Maine as follows:
Sec. 1.  36 MRSA §191, sub-§2, ¶HHH is enacted to read:
HHH.  The disclosure to the joint standing committee of the Legislature having 
jurisdiction over taxation matters pursuant to section 5219-VV, subsection 4, 
paragraph B of the revenue loss, including the loss due to refundable credits, 
attributable to each taxpayer claiming the tax credit for major food processing and 
manufacturing facility expansion provided under that section, regardless of the 
number of persons eligible for the credit.
Sec. 2.  36 MRSA §5219-VV is enacted to read:
§5219-VV.  Credit for major food processing and manufacturing facility expansions
1.  Definitions.  As used in this section, unless the context otherwise indicates, the 
following terms have the following meanings.
A.  "Certified applicant" means a qualified applicant that has received a certificate of 
approval from the commissioner pursuant to this section.
B.  "Commissioner" means the Commissioner of Economic and Community 
Development.
C.  "Employees based in the State" means employees that perform 100% of 
employee-related activities for the employer at the facility in the State.
D.  "Facility" means a food processing and manufacturing facility, plant or mill, 
including one or more structures and including the equipment, machinery, fixtures 
and personal property located in, on, over, under and adjacent to those structures, by 
which the applicant, as determined by the commissioner at the time of application, 
processes, produces and manufactures food from agricultural products primarily 
grown and harvested in the State.
E.  "Full-time" means an average of at least 36 hours weekly during the period of 
measurement.
F.  "Headquarters" means the principal office from which a qualified applicant 
directs, and has directed for each of the past 5 years prior to application for a 
certificate of approval, its national or global business activities, as determined by the 
commissioner at the time of application.
G.  "Primarily grown and harvested in the State" means that not less than 95% of the 
agricultural products processed in the facility are grown and harvested in the State, 
except when such products are not reasonably available by reason of an act of God, 
pestilence, weather or other factors beyond the reasonable control of the applicant or 
applicant's suppliers.
H.  "Qualified applicant" means an applicant that, at the time an application for a 
certificate of approval is submitted, is itself, or is the parent or subsidiary of, an entity 
that satisfies all of the following criteria:
(1)  The applicant is, and has been for each of the last 5 years prior to application 
for a certificate of approval, a corporation or limited liability company organized 
under the laws of this State;
(2)  The applicant's headquarters are, and have been for each of the last 5 years 
prior to application for a certificate of approval, located in the State;
(3)  The applicant intends to make a qualified investment in the State within 5 
years following the date of the application;
(4)  Construction of the applicant's facility begins no sooner than April 1, 2019 as 
evidenced by the date of issuance of an appropriate municipal building permit;
(5)  The applicant employs or will employ upon start-up of the facility at least 40 
full-time employees, of whom 100% are or will be employees based in the State; 
and
(6)  The annual per capita personal income of at least 75% of the applicant's 
employees exceeds the income derived from employment threshold as published 
by the Department of Economic and Community Development for the county in 
which the facility is located.
I.  "Qualified investment" means an investment of at least $35,000,000 to design, 
permit, construct, modify, equip or expand the applicant's facility in the State.  The 
investments and activities of a qualified applicant and other entities that are members 
of the qualified applicant's unitary business may be aggregated to determine whether 
a qualified investment has been made.  A qualified investment does not include an 
investment made prior to April 1, 2019 or after December 31, 2024.
2.  Procedures for application; certificate of approval.  The provisions of this 
subsection govern the procedures for providing for and obtaining a certificate of 
approval.
A.  A qualified applicant may apply to the commissioner for a certificate of approval.  
An applicant shall submit to the commissioner information demonstrating that the 
applicant is a qualified applicant.  If a certified applicant undertakes to make an 
additional qualified investment, the certified applicant may apply to the 
commissioner for an additional certificate of approval.
B.  The commissioner, within 30 days of receipt of an application submitted pursuant 
to paragraph A, shall determine whether the applicant is a qualified applicant and 
shall issue either a certificate of approval or a written denial indicating why the 
applicant is not qualified.  The certificate issued by the commissioner must describe 
the qualified investment and specify the total amount of qualified investment 
approved under the certificate.
C.  Upon issuance of a certificate of completion in accordance with paragraph F, the 
commissioner shall issue, on behalf of the State, a memorandum to the qualified 
applicant describing the benefits provided by this section at the time the certificate of 
completion is issued. The memorandum must provide that the certificate of 
completion does not prohibit the commissioner from revoking a certificate in 
accordance with paragraph E and does not prohibit the assessor from assessing and 
collecting an overpaid benefit in accordance with the provisions of this Title.
D.  A certified applicant shall obtain approval from the commissioner to transfer the 
certificate of approval or, if the certified applicant has obtained a certificate of 
completion, that certificate of completion to another person.  A certificate of approval 
or certificate of completion may be transferred only if all or substantially all of the 
assets of the certified applicant are, or will be, transferred to that person or if 50% or 
more of the certified applicant's voting stock is, or will be, acquired by that person.  
The commissioner shall approve the transfer of the certificate of approval or the 
certificate of completion only if at least one of the following conditions is satisfied:
(1)  The transferee is a member of the applicant's unitary affiliated group at the 
time of the transfer; or
(2)  The commissioner finds that the transferee will, and has the capacity to, 
maintain operations of the facility in the State in a manner that meets the 
minimum qualifications for continued eligibility of benefits under this section 
after the transfer occurs.
If the commissioner approves the transfer of the certificate, the transferee, from the 
date of the transfer, must be treated as the certified applicant and as eligible to claim 
any remaining benefit under the certificate of approval or the certificate of 
completion that has not been previously claimed by the transferor as long as the 
transferee meets the same eligibility requirements and conditions for the credit as 
applied to the original certified applicant.
E.  The commissioner shall revoke a certificate of approval if the certified applicant 
or a person to whom a certificate of approval has been transferred pursuant to 
paragraph D fails to make a qualified investment within 5 years of the date of the 
certificate of approval.  The commissioner shall revoke a certificate of approval or a 
certificate of completion if the applicant or transferee ceases operations of the facility 
in the State or the certificate of approval or certificate of completion is transferred to 
another person without approval from the commissioner pursuant to paragraph D.  A 
certified applicant whose certificate of completion is revoked within 5 years after the 
date issued shall return within 60 days following revocation of the certificate to the 
State an amount equal to the total credits claimed for all tax years under this section.  
A certified applicant whose certificate of completion is revoked during the period 
from 6 years after through 10 years after the date the certificate was issued shall 
return within 60 days following revocation of the certificate to the State an amount 
equal to the total credits claimed under this section for the period from 6 years after 
through 10 years after the date the certificate was issued.  The amount to be returned 
to the State under this paragraph is, for purposes of this Title, a tax subject to the 
collection and enforcement provisions contained in Part 1, including the application 
of applicable interest and penalties.  The amount to be returned to the State must be 
added to the tax imposed on the taxpayer under this Part for the taxable year during 
which the certificate is revoked.
F.  Upon making the qualified investment and completing the facility and 
employment criteria in subsection 1, paragraph H, a certified applicant shall submit 
an application to the commissioner for a certificate of completion.  If the 
commissioner determines that a qualified investment has been made, the applicant's 
facility is located in the State and 100% of the applicant's full-time employees, as 
measured at the time of application for the certificate of approval, are employees 
based in the State, the commissioner shall issue a certificate of completion to the 
certified applicant as soon as is practical.  The certificate of completion must state the 
amount of qualified investment made by the certified applicant.
The commissioner may not issue certificates of approval under this subsection that total, 
in the aggregate, more than $100,000,000 of qualified investment or any individual 
certificate of approval for more than $85,000,000 of qualified investment.
3.  Refundable credit allowed.  A certified applicant is allowed a credit as provided 
in this subsection.
A.  Subject to the limitations under paragraph B, beginning with the tax year during 
which the certificate of completion is issued or the tax year beginning in 2022, 
whichever is later, and for each of the following 19 tax years, a certified applicant is 
allowed a credit against the tax due under this Part for the taxable year in an amount 
equal to 2% of the certified applicant's qualified investment.  If the certified applicant 
is a pass-through entity, the owner or owners of the certified applicant are allowed the 
credit.  The credit allowed under this paragraph is refundable.
B.  The credit under this subsection is limited as follows.
(1)  A credit is not allowed for any tax year during which the taxpayer does not 
meet or exceed the following employment targets as measured on the last day of 
the tax year.
(a)  For each of the first 3 tax years for which the credit is claimed, there 
must be a total of at least 40 full-time employees based in the State whose 
jobs were added since the first day of the first tax year for which the credit 
was claimed.
(b)  For each tax year after the 3rd tax year for which the credit is claimed, 
the taxpayer must employ a total of at least 60 full-time employees based in 
the State whose jobs were added since the first day of the first tax year for 
which the credit was claimed.
Jobs for additional full-time employees that are counted for determining 
eligibility for the credit under one certificate of completion may not be counted 
for determining eligibility for the credit under a separate certificate of 
completion.  For purposes of this subparagraph, "additional full-time employees" 
does not include employees who are shifted to a certified applicant's facility in 
the State from an affiliated business in the State.  The commissioner shall 
determine whether a shifting of employees has occurred.  For purposes of this 
subparagraph, "affiliated business" has the same meaning as in section 6753, 
subsection 1-A.
(2)  Cumulative credits under this subsection may not exceed $34,000,000 under 
any one certificate.
4.  Reporting required.  A certified applicant, the commissioner and the assessor are 
required to make reports pursuant to this subsection.
A.  On or before March 1st of each year, a certified applicant shall file a report with 
the commissioner for the tax year ending during the immediately preceding calendar 
year, referred to in this paragraph as "the report year," containing the following 
information:
(1)  The number of full-time employees based in the State of the certified 
applicant on the last day of the tax year ending during the calendar year 
immediately preceding the report year; and
(2)  The incremental amount of qualified investment made in the report year.
The commissioner may prescribe forms for the annual report described in this 
paragraph.  The commissioner shall provide copies of the report to the assessor and to 
the joint standing committee of the Legislature having jurisdiction over taxation 
matters at the time the report is received.
B.  By April 1st of each year, the commissioner shall report to the joint standing 
committee of the Legislature having jurisdiction over taxation matters aggregate data 
on employment levels and qualified investment amounts of certified applicants for 
each year that the certified applicant claimed a credit under this section, and the 
assessor shall report to the committee the revenue loss during the previous calendar 
year, including the loss due to refundable credits, as a result of this section for each 
taxpayer claiming the credit.
Notwithstanding any other provision of law to the contrary, the reports provided under 
this subsection are public records as defined in Title 1, section 402, subsection 3.
Sec. 3.  Credit design evaluation.  By February 28, 2024, the Office of Program 
Evaluation and Government Accountability, referred to in this section as "the office," 
shall complete and submit to the joint standing committee of the Legislature having 
jurisdiction over taxation matters and the Government Oversight Committee a tax 
expenditure design evaluation review of the credit for major food processing and 
manufacturing facility expansions established under the Maine Revised Statutes, Title 36, 
section 5219-VV, referred to in this section as "the tax expenditure."  The review must 
include an assessment of:
1.  The extent to which the design of the tax expenditure supports accomplishment of 
the tax expenditure's purposes, intent and goals;
2.  The extent to which the design of the tax expenditure directs benefits to the 
intended beneficiaries; and
3.  The extent to which the State's current or planned administration of the tax 
expenditure, including enforcement efforts, is efficient and effective.
The office shall include with the review recommended performance measures 
appropriate for analyzing the evaluation objectives established for full evaluations under 
the Maine Revised Statutes, Title 3, section 999, subsection 1, paragraph A and make 
recommendations regarding data that would be necessary to perform the analyses.  The 
joint standing committee of the Legislature having jurisdiction over taxation matters may 
submit a bill to the Second Regular Session of the 131st Legislature regarding the credit 
for major food processing and manufacturing facility expansions.
Sec. 4.  Legislative findings; purpose.  The Legislature finds that it is in the best 
interest of the people of the State to encourage the location and expansion of major food 
processing and manufacturing facilities in the State and to encourage the recruitment and 
training of employees for these facilities.  The Legislature further finds that the location 
and expansion of major food processing and manufacturing facilities in the State will 
create jobs, benefit small businesses that supply goods and services to the major food 
processing and manufacturing facilities and their employees, increase the tax base and 
provide many other direct and indirect economic benefits to the State.
The purpose of this credit is to create high-quality jobs in the State by encouraging 
major businesses to locate or expand their food processing and manufacturing facilities in 
this State.
SUMMARY
This bill, modeled on the tax credit for major business headquarters expansions, 
provides a tax credit to a food processing and manufacturing business that:
1.  Is, and has been for the 5 years prior to application, a corporation or limited 
liability company organized under the laws of the State;
2.  Has been headquartered in this State for the 5 years prior to application;
3.  Pays at least 75% of its employees a salary that exceeds the income threshold for 
the county in which the facility that is the subject of the application is located;
4.  Agrees to make an investment of at least $35,000,000 in the construction or 
expansion in this State of a facility for that business; and
5.  Adds a total of 40 new full-time employees by the end of the first year of 
qualifying for the tax credit, maintains that number for the next 2 years and then adds 20 
more full-time employees, maintaining a total of 60 full-time employees for each year 
after the 3rd year of qualifying for the tax credit.   The employees added must be based in 
the State.
A business that qualifies is allowed a refundable tax credit equal to 2% of the amount 
of the qualified investment each tax year for 20 years.  The total investment that may be 
approved for any one business may not exceed $85,000,000 and the total aggregate 
investment that may be approved is limited to $100,000,000.  The maximum amount of 
tax credits that may be received by a business under one construction or expansion 
project is $34,000,000.