An Act To Encourage Job Growth in the Forest Products Sector through Tax Incentives
Maine Legislature, Session 130, LD 1919
Committee: Taxation
Sponsors: EVANS, JACKSON, COLLINGS, FECTEAU, PERRY
Amends: 36 MRSA §6753, 36 MRSA §6754

Legislative Document
No. 1919
H.P. 1425
House of Representatives, January 12, 2022
An Act To Encourage Job Growth in the Forest Products Sector 
through Tax Incentives
Approved for introduction by a majority of the Legislative Council pursuant to Joint Rule 
203.
Received by the Clerk of the House on January 10, 2022.  Referred to the Committee on 
Taxation pursuant to Joint Rule 308.2 and ordered printed pursuant to Joint Rule 401.
ROBERT B. HUNT
Clerk
Presented by Representative EVANS of Dover-Foxcroft.
Cosponsored by President JACKSON of Aroostook and
Representatives: COLLINGS of Portland, Speaker FECTEAU of Biddeford, McCREA of Fort 
Fairfield, PERRY of Calais.
Be it enacted by the People of the State of Maine as follows:
Sec. 1.  36 MRSA §6753, sub-§8-A is enacted to read:
8-A. Forest products business. "Forest products business" means a business engaged 
commercially in:
A. Timber harvesting, as defined in Title 12, section 8868, subsection 4;
B. The delivery of raw materials to a wood products facility;
C. Activities that are dependent on the production of wood fiber;
D. The processing of trees as a renewable resource for wood or biomass or for direct 
timber sales;
E. The production of trees for ornamental plantings or woody material for composite 
products or for use as a combustion energy source; or
F. Other timber harvesting activities such as the construction and maintenance of roads 
used primarily for timber harvesting and other activities conducted to facilitate timber 
harvesting, including, but not limited to, the mining of gravel used for the construction 
and maintenance of roads used primarily for timber harvesting and other activities 
conducted to facilitate timber harvesting.
Sec. 2.  36 MRSA §6753, sub-§11, as amended by PL 2001, c. 157, §1, is further 
amended to read:
11.  Qualified business.  "Qualified business" means any for-profit business in this 
State, other than a public utility as defined by Title 35‑A, section 102, that adds 5 or more 
qualified employees above its base level of employment in this State within any 2-year 
period commencing on or after January 1, 1996, or, in the case of a forest products business, 
adds one or more qualified employees above its base level of employment in this State 
within a one-year period commencing on or after January 1, 2023, and that meets one of 
the following criteria:
A.  The business is not engaged in retail operations;
B.  The business is engaged in retail operations but less than 50% of its total annual 
revenues from Maine-based operations are derived from sales taxable in this State; or
C.  The business is engaged in retail operations and can demonstrate to the 
commissioner by a preponderance of the evidence that any increased sales will not 
include sales tax revenues derived from a transferring or shifting of retail sales from 
other businesses in this State.; or
D.  The business is a forest products business.
For purposes of this subsection, "retail operations" means sales of consumer goods for 
household use to consumers who personally visit the business location to purchase the 
goods.
Sec. 3.  36 MRSA §6753, sub-§12, as amended by PL 2015, c. 368, §5, is repealed 
and the following enacted in its place:
12.  Qualified employee.  Except as provided in paragraph A or B, "qualified 
employee" means a new, full-time employee hired in this State by a qualified business for 
whom a retirement program subject to the Employee Retirement Income Security Act of 
1974, 29 United States Code, Chapter 18 and group health insurance are provided and 
whose income derived from employment with the applicant, calculated on a calendar year 
basis, is greater than the most recent annual per capita personal income in the county in 
which the qualified employee is employed, as long as Maine income tax withholding 
attributed to the qualified employee is subject to reimbursement to the qualified business 
under this chapter.
A. For an employee in a call center in Aroostook County or Washington County, 
"qualified employee" means a new, full-time employee hired in this State by a qualified 
business for whom a retirement program subject to the Employee Retirement Income 
Security Act of 1974, 29 United States Code, Chapter 18 and group health insurance 
are provided and whose income derived from employment with the applicant, 
calculated on a weekly basis, is greater than the average weekly wage for the most 
recent available calendar year as derived from the quarterly census of employment and 
wages and provided annually by the Department of Labor, as long as Maine income 
tax withholding attributed to the qualified employee is subject to reimbursement to the 
qualified business under this chapter. The calculation of the average weekly wage must 
include data from the counties of Androscoggin, Aroostook, Franklin, Hancock, 
Kennebec, Knox, Lincoln, Oxford, Penobscot, Piscataquis, Sagadahoc, Somerset, 
Waldo and Washington. With respect to a call center in Aroostook County or 
Washington County, in a county in which the average annual unemployment rate at the 
time of certification for the most recent calendar year is greater than the state average 
for the same year, the wage threshold is 90% of the average weekly wage as derived 
from the quarterly census of employment and wages. With respect to a call center in 
Aroostook County or Washington County and upon approval of the commissioner, a 
qualified business located in a county in which the average annual unemployment rate 
at the time of certification for the most recent calendar year is greater than the state 
average for that same year qualifies for a phase-in of salary threshold requirements.  
Except for a call center in Aroostook County or Washington County as otherwise 
provided in this paragraph, a qualified business under this provision must meet 70% of 
the average weekly wage as derived from the quarterly census of employment and 
wages in the first year of certification, 80% of the average weekly wage as derived 
from the quarterly census of employment and wages in the 2nd year of certification 
and 90% of the average weekly wage as derived from the quarterly census of 
employment and wages in all following years of certification.  Failure to meet any of 
these requirements results in automatic revocation of certification.
B. For an employee employed by a qualified business that is a forest products business, 
"qualified employee" means a new employee hired in this State by the qualified 
business who is employed for at least 900 hours in a calendar year by the qualified 
business and for whom a retirement program subject to the Employee Retirement 
Income Security Act of 1974, 29 United States Code, Chapter 18 and group health 
insurance are provided and whose income derived from employment with the 
applicant, calculated on a calendar year basis, is greater than the most recent annual 
per capita personal income in the county in which the qualified employee is employed, 
as long as Maine income tax withholding attributed to the qualified employee is subject 
to reimbursement to the qualified business under this chapter.
"Qualified employee" does not include an employee who is shifted to a qualified business 
from an affiliated business.  The commissioner shall determine whether a shifting of 
employees has occurred.
Sec. 4.  36 MRSA §6754, sub-§1, ¶E is enacted to read:
E.  For a qualified business that is a forest products business in this State, 
notwithstanding any provision of this chapter to the contrary, the reimbursement is 
equal to:
(1) Up to 160 hours of the labor costs for both the qualified employee and another 
employee of the qualified business who is training that qualified employee;
(2) The cost of training and equipment, other than the cost of labor, required to 
train a qualified employee; and
(3) A percentage of the amount of Maine income tax withheld for a qualified 
employee as follows:
(a) For the first calendar year of employment, 80%; 
(b) For the 2nd calendar year of employment, 70%; and
(c) For the 3rd calendar year of employment, 60%.
For purposes of this paragraph, an employee who meets the definition of "qualified 
employee" but for the failure to work at least 900 hours in the calendar year of that 
employee's first year of employment with a qualified business that is a forest products 
business is deemed to complete that employee's first year of employment on December 
31st of the calendar year following the hire of that employee and a qualified employer 
may obtain reimbursement for the costs incurred pursuant to subparagraphs (1) and (2) 
and subparagraph (3), division (a) as long as that employee is a qualified employee.
SUMMARY
This bill amends the Maine Employment Tax Increment Financing Act to allow 
employers engaged in the forest products business, which includes timber harvesting and 
the processing of trees as a renewable resource for wood or biomass, that otherwise would 
not meet the minimum requirements for participation, which include adding 5 new full-
time employees, to be eligible for reimbursement of certain training and other costs.  
This bill allows a qualified forest products business that adds at least one new employee 
who works a minimum of 900 hours in a calendar year to be eligible for reimbursement 
for:
1.  Up to 160 hours of the labor costs for both the new employee and the person training 
that employee;
2.  The cost of training and equipment, other than the cost of labor, necessary to train 
that new employee; and
3.  A percentage of Maine income tax withheld for a new employee in the first 3 years 
of employment as follows:
A.  For the first calendar year of employment, 80%;
B.  For the 2nd calendar year of employment, 70%; and
C.  For the 3rd calendar year of employment, 60%.
If a new employee does not work at least 900 hours in the first calendar year of 
employment, the partial first year of employment and the calendar year following that 
employee's start is considered the first year of employment for purposes of determining the 
percentage of reimbursement as long as that employee meets the requirements during the 
first full year of employment. Additionally, the costs of training incurred by the employer 
and the amount equal to the tax withheld for that new employee during that partial calendar 
year of employment may be claimed by the employer in the calendar year following the 
employee's start, as long as that employee meets all the requirements for qualification, 
including working at least 900 hours.