An Act to Modernize Maine's Business Incentive Programs by Creating the Dirigo Business Incentives Program and Eliminating Certain Other Tax Incentive Programs
Maine Legislature, Session 131, LD 1918
Committee: Innovation, Development, Economic Advancement and Business
Sponsors: JACKSON, TERRY, CURRY, COLLAMORE, DUCHARME, ROBERTS, WHITE
Amends: 30-A MRSA §5250-J, 35-A MRSA §3210-E, 36 MRSA §191, 36 MRSA §1760, 36 MRSA §2016, 36 MRSA §2529, 36 MRSA §5219-W, 36 MRSA §5219-N, 36 MRSA §5219-A, 36 MRSA §6754, 36 MRSA §6763

Legislative Document
No. 1918
S.P. 780
In Senate, May 11, 2023
An Act to Modernize Maine's Business Incentive Programs by 
Creating the Dirigo Business Incentives Program and Eliminating 
Certain Other Tax Incentive Programs
Reference to the Committee on Innovation, Development, Economic Advancement and 
Business suggested and ordered printed.
DAREK M. GRANT
Secretary of the Senate
Presented by President JACKSON of Aroostook.  (GOVERNOR'S BILL)
Cosponsored by Representative TERRY of Gorham and
Senator: CURRY of Waldo, Representatives: COLLAMORE of Pittsfield, DUCHARME of 
Madison, ROBERTS of South Berwick, WHITE of Waterville.
Be it enacted by the People of the State of Maine as follows:
Sec. 1.  30-A MRSA §5250-J, sub-§5, as amended by PL 2021, c. 398, Pt. IIII, §1, 
is further amended to read:
5.  Termination and repeal.  A qualified Pine Tree Development Zone business 
located in a tier 1 location may not be certified under this subchapter after December 31, 
2023 2024, and a qualified Pine Tree Development Zone business located in a tier 2 
location may not be certified under this subchapter after December 31, 2013.  All Pine Tree 
Development Zone benefits provided under this subchapter are terminated on December 
31, 2033 2034. This subchapter is repealed July 1, 2035.
Sec. 2.  30-A MRSA c. 206, sub-c. 5, as amended, is repealed.
Sec. 3.  30-A MRSA c. 206, sub-c. 6, as amended, is repealed.
Sec. 4.  35-A MRSA §3210-E, sub-§1, as enacted by PL 2009, c. 627, §5 and 
affected by §12, is amended to read:
1.  Discount rates.  Transmission and distribution utilities may offer discounted rates 
on new incremental electricity usage to qualified Pine Tree Development Zone businesses 
established under Title 30‑A and qualified businesses with respect to the Dirigo business 
incentives program established under Title 36, section 5219-AAA.  If a transmission and 
distribution utility requires approval prior to offering any such rate, the transmission and 
distribution utility shall apply to the commission in accordance with applicable provisions 
of this Title, and the commission may approve the rate if it finds it to be in accord with 
applicable requirements of this Title, except that the commission may take into account the 
overall benefits to ratepayers resulting from state efforts to promote economic development 
within Pine Tree Development Zones.
Sec. 5.  35-A MRSA §3210-E, sub-§6, as amended by PL 2021, c. 398, Pt. IIII, §2, 
is further amended to read:
6.  Repeal.  This section is repealed December 31, 2033 2034.
Sec. 6.  36 MRSA §191, sub-§2, ¶SSS is enacted to read:
SSS.  The disclosure of information to the Department of Economic and Community 
Development necessary for the administration of the Dirigo business incentives 
program and the joint standing committees of the Legislature having jurisdiction over 
taxation and economic development matters for purposes of the annual report required 
by section 5219-AAA.
Sec. 7.  36 MRSA §1760, sub-§87, as amended by PL 2021, c. 398, Pt. IIII, §3, is 
further amended to read:
87.  Sales of tangible personal property and transmission and distribution of 
electricity to qualified development zone businesses.  Beginning July 1, 2005, sales of 
tangible personal property, and of the transmission and distribution of electricity, to a 
qualified Pine Tree Development Zone business, as defined in Title 30‑A, section 5250‑I, 
subsection 17, for use directly and primarily in one or more qualified business activities, as 
defined in Title 30‑A, section 5250‑I, subsection 16.  The exemption provided by this 
subsection is limited for each qualified Pine Tree Development Zone business to sales 
occurring within a period of 10 years in the case of a business located in a tier 1 location, 
as defined in Title 30‑A, section 5250‑I, subsection 21‑A, and 5 years in the case of a 
business located in a tier 2 location, as defined in Title 30‑A, section 5250‑I, subsection 
21‑B, from the date the business is certified pursuant to Title 30‑A, section 5250‑O or until 
December 31, 2033 2034, whichever occurs first.  For a business that applies for 
certification as a qualified Pine Tree Development Zone business with the Commissioner 
of Economic and Community Development on or after January 1, 2019, the exemption 
provided by this subsection requires a qualified Pine Tree Development Zone business to 
obtain a certificate of qualification issued by the Commissioner of Economic and 
Community Development pursuant to Title 30‑A, section 5250‑O.  As used in this 
subsection, "primarily" means more than 50% of the time during the period that begins on 
the date on which the property is first placed in service by the purchaser and ends 2 years 
from that date or at the time the property is sold, scrapped, destroyed or otherwise 
permanently removed from service by the purchaser, whichever occurs first.
Sec. 8.  36 MRSA §2016, sub-§4, ¶A, as amended by PL 2021, c. 398, Pt. IIII, §4, 
is further amended to read:
A.  Reimbursements made by the assessor pursuant to subsection 2, paragraph A are 
limited to taxes paid in connection with sales of tangible personal property that occur 
within a period of 10 years in the case of a qualified Pine Tree Development Zone 
business located in a tier 1 location, as defined in Title 30‑A, section 5250‑I, subsection 
21‑A, and 5 years in the case of a qualified Pine Tree Development Zone business 
located in a tier 2 location, as defined in Title 30‑A, section 5250‑I, subsection 21‑B, 
from the date the qualified Pine Tree Development Zone business receiving the 
property is certified pursuant to Title 30‑A, section 5250‑O or by December 31, 2033 
2034, whichever occurs first.
Sec. 9.  36 MRSA §2529, sub-§3, as amended by PL 2021, c. 398, Pt. IIII, §5, is 
further amended to read:
3.  Limitation.  The credit provided by this section may not be claimed for calendar 
years beginning on or after January 1, 2034 2035.
Sec. 10.  36 MRSA §5219-W, sub-§4, as amended by PL 2021, c. 398, Pt. IIII, §6, 
is further amended to read:
4.  Limitation.  The credit provided by this section may not be claimed for tax years 
beginning on or after January 1, 2034 2035.
Sec. 11.  36 MRSA §5219-NN, sub-§1-A, as enacted by PL 2019, c. 527, Pt. A, 
§6, is amended to read:
1-A.  Credit allowed; on or after January 1, 2020 and before January 1, 2025.  A 
taxpayer that claims a depreciation deduction under the Code, Section 168(k) for property 
placed in service in the State during a taxable year that begins on or after January 1, 2020 
and before January 1, 2025 is allowed a credit as follows:
A.  For a taxable corporation, a credit against the taxes imposed by this Part in an 
amount equal to 1.2% of the amount of the net increase in the depreciation deduction 
reported as an addition to income for the taxable year under section 5200‑A, subsection 
1, paragraph CC, subparagraph (1) with respect to that property, except for excluded 
property under subsection 2; and
B.  For an individual, a credit against the taxes imposed by this Part in an amount equal 
to 1.2% of the net increase in the depreciation deduction reported as an addition to 
income for the taxable year under section 5122, subsection 1, paragraph KK, 
subparagraph (1) with respect to that property, except for excluded property under 
subsection 2.
Sec. 12.  36 MRSA §5219-AAA is enacted to read:
§5219-AAA.  Dirigo business incentives program
1. Definitions. As used in this section, unless the context otherwise indicates, the 
following terms have the following meanings.
A. "Affiliated business" means a member of a group of 2 or more businesses in which 
more than 50% of the voting stock of each member corporation or more than 50% of 
the ownership interest in a business other than a corporation is directly or indirectly 
owned by a common owner, either corporate or noncorporate. 
B. "Commissioner" means the Commissioner of Economic and Community 
Development.
C. "Department" means the Department of Economic and Community Development.
D. "Eligible business property" means business property placed in service in this State 
in the tax year and used exclusively for a qualified business activity described in a letter 
of certification issued under subsection 3.
E. "Eligible capital investment" means the total of business expenditures incurred by a 
taxpayer after receiving a letter of certification under subsection 3 that exceed $50,000 
to purchase eligible business property that was placed in service during the tax year.
F. "Eligible sector" means one of the following industries only:
(1) Agriculture, forestry and fishing;
(2) Manufacturing;
(3) Long-distance freight transportation;
(4) Software publishing, data processing and computer design services; or
(5) Engineering, architecture and scientific research and development services.
G. "Facility" means one or more buildings and includes the real and personal property 
located in those buildings.
H. "Layoff" means a reduction in workforce at a qualified business with 20 or more 
persons employed during any one of the preceding 4 quarters that results in an 
employment loss for at least 2 consecutive months within the same tax year of at least 
20% of the qualified business's employees in this State. "Layoff" does not mean a 
reduction in workforce due to an accidental fire, flood, hurricane, windstorm, 
earthquake or other similar event.
I. "Primarily" means more than 50% of the time and, with respect to a building or other 
structure, more than 50% of the usable space.
J. "Program" means the Dirigo business incentives program created under subsection 
2.
K. "Qualified business" means any for-profit business in this State engaged in an 
eligible sector that has received a letter of certification as a qualified business pursuant 
to subsection 3. 
L. "Qualified business activity" means a business activity carried on primarily in an 
eligible sector.
M. "Qualified employee" means an employee who is employed in this State by a 
qualified business and works primarily in a qualified business activity in this State.
N. "Qualified employee training program" means a qualified business's training 
activities for a qualified business activity described in a letter of certification issued 
under subsection 3 for a minimum of 3 qualified employees that provide a minimum 
of 20 total training hours for each qualified employee and are:
(1) An apprenticeship program registered under the Maine Apprenticeship 
Program pursuant to Title 26, chapter 37;
(2) An on-the-job training contract pursuant to Title 26, section 2172;
(3) A training provided by or approved for funding from the Maine Community 
College System; or
(4) Education or training provided by the University of Maine System or other 
accredited university or college.
"Qualified employee training program" includes only training hours during which the 
qualified business pays a participating qualified employee the employee's regular 
hourly rate or training hours for which the qualified business pays more than $2,000 
per participant.
2. Program. The commissioner shall create the Dirigo business incentives program.
3. Certification of qualified business. A business may apply to the commissioner for 
certification as a qualified business for purposes of the program. Upon review and 
determination by the commissioner that a business is a qualified business, the 
commissioner shall issue a letter of certification to the business that includes a description 
of the qualified business activity for which the letter is being issued. A letter of certification 
for a qualified business activity is valid for 5 years for purposes of this section. A letter of 
certification may describe qualified business activities in multiple locations and multiple 
eligible business sectors. The commissioner may issue more than one letter of certification 
to a qualified business. A business may not be a qualified business if the business is:
A. A public utility as defined by Title 35‑A, section 102, subsection 13;
B. A business certified as a qualified Pine Tree Development Zone business as 
provided by Title 30-A, section 5250-O;
C. A business with a certificate of approval for the Maine Employment Tax Increment 
Financing Program as provided by section 6755;
D. A business with a certificate of approval for one of the tax credits allowed under 
section 5219-RR or 5219-YY; or
E. A business that has undergone a layoff within the past 2 tax years.
4. Credit allowed. For tax years beginning on or after January 1, 2025, a taxpayer who 
is a qualified business is allowed a credit as provided in this section. Subject to subsections 
and 6, the credit allowed is equal to the total of the following:
A. Fifteen percent of the eligible capital investment placed in service outside of 
Cumberland, Sagadahoc and York counties;
B. Seven and one-half percent of the eligible capital investment placed in service in 
Cumberland, Sagadahoc and York counties; and
C. Two thousand dollars for each qualified employee engaged in a qualified employee 
training program provided by the business completed in the tax year.
5. Credit refundable. The credit allowed under this section is refundable up to 
$500,000 per tax year, with the following exceptions.
A. In the case of a taxpayer that is a partner in a partnership or a shareholder in an S 
corporation, the credit under this section is refundable up to an amount equal to 
$500,000 multiplied by the pro rata share of the partner or shareholder determined in 
accordance with section 5219-G, subsection 1. 
B. In the case of a taxpayer that is a beneficiary of an estate or trust that is a partner in 
a partnership or shareholder in an S corporation, the credit under this section is 
refundable up to an amount equal to the amount determined in accordance with 
paragraph A for the estate or trust multiplied by each beneficiary's pro rata share of tax 
credits determined in accordance with section 5219-G, subsection 2.
C. In the case of a taxpayer that is a partner in a partnership or a shareholder in an S 
corporation that is an affiliated business, the credit under this section is refundable up 
to an amount equal to $500,000 multiplied by the ratio determined in accordance with 
paragraph A, the result of which is multiplied by a ratio, the numerator of which is the 
eligible capital investment of the affiliated business during the tax year plus $2,000 for 
each qualified employee of the affiliated business engaged in a qualified employee 
training program during the tax year and the denominator of which is the total eligible 
capital investment of all members of the affiliated business group during the tax year 
plus $2,000 for each qualified employee of all members of the affiliated business group 
engaged in a qualified employee training program during the tax year.
D. In the case of corporations that are members of an affiliated business group engaged 
in a unitary business, the credit under this section is refundable up to $500,000 for the 
entire group. The credit limit of $500,000 must be apportioned among the taxable 
corporations in the affiliated business group in the same proportion that the tax liability 
of each taxable corporation in the affiliated business group bears to the total tax liability 
of all the taxable corporations in the affiliated business group.
6. Limitation; carry-over. A taxpayer entitled to a credit under this section for any 
tax year may carry over any unused portion of the credit determined in accordance with 
subsection 4, as reduced from year to year, and apply it to the tax liability for any one or 
more of the next succeeding 4 tax years. Carry-over amounts may be applied to tax years 
after the expiration of a taxpayer's letter of certification issued pursuant to subsection 3.  
The credit allowed pursuant to this section, including carry-overs, may not exceed 
$2,000,000 for any one tax year, with the following exceptions.
A. In the case of a taxpayer that is a partner in a partnership or a shareholder in an S 
corporation, the credit under this section may not exceed $2,000,000 multiplied by the 
pro rata share of the partner or shareholder determined in accordance with section 
5219-G, subsection 1. 
B. In the case of a taxpayer that is a beneficiary of an estate or trust that is a partner in 
a partnership or shareholder in an S corporation, the credit under this section may not 
exceed $2,000,000 multiplied by the ratio determined in accordance with paragraph A, 
the result of which is multiplied by each beneficiary's pro rata share of tax credits 
determined in accordance with section 5219-G, subsection 2.
C. In the case of a taxpayer that is a partner in a partnership or a shareholder in an S 
corporation that is an affiliated business, the credit under this section may not exceed 
$2,000,000 multiplied by the ratio determined in accordance with paragraph A, the 
result of which is multiplied by a ratio, the numerator of which is the eligible capital 
investment of the affiliated business during the tax year plus $2,000 for each qualified 
employee of the affiliated business engaged in a qualified employee training program 
during the tax year and the denominator of which is the total eligible capital investment 
of all members of the affiliated business group during the tax year plus $2,000 for each 
qualified employee of all members of the affiliated business group engaged in a 
qualified employee training program during the tax year.
D. In the case of corporations that are members of an affiliated business group engaged 
in a unitary business, the credit under this section may not exceed $2,000,000 for the 
entire group. The credit limit of $2,000,000 must be apportioned among the taxable 
corporations in the affiliated business group in the same proportion that the tax liability 
of each taxable corporation in the affiliated business group bears to the total tax liability 
of all the taxable corporations in the affiliated business group.
7. Disallowance of carry-overs. Unused carry-over amounts allowed under this 
section must be disallowed if the eligible business property forming the basis of the credit 
under subsection 3 is not used in the State for the entire 5-year period following the date it 
is placed in service or the taxpayer undergoes a layoff. The amount disallowed is equal to 
the credit amount allowed based on subsection 4 multiplied by a fraction, the numerator of 
which is the number of years remaining in the 5-year period, rounded up to the nearest 
whole number, and the denominator of which is 5. Unused carry-over amounts are not 
required to be disallowed for eligible business property temporarily removed from service 
for maintenance or repair or as a result of a declared state disaster or emergency within the 
meaning of Title 10, section 9902, subsection 1. 
8. Eligible business property. To qualify as eligible business property, a property 
must be placed in service in the State and must be subject to an allowance for depreciation 
under the Code during the tax year or would be subject to an allowance for depreciation 
under the Code but for the fact that the property has been fully depreciated. 
A property does not qualify as eligible business property if that property is:
A.  Property with a depreciable useful life of less than 5 years;
B.  Property purchased or transferred from an affiliated business located in the State;
C.  Property located at a retail sales facility and used primarily in a retail sales activity. 
For purposes of this paragraph, the following terms have the following meanings.
(1)  "Retail sales activity" means an activity primarily associated with the selection 
and retail purchase of goods or rental of tangible personal property. "Retail sales 
activity" does not include production as defined in section 1752, subsection 9‑B.
(2)  "Retail sales facility" means a structure used to serve customers who are 
physically present at the facility for the purpose of selection and retail purchase of 
goods or rental of tangible personal property;
D. A vehicle on which a tax assessed pursuant to chapter 111 has been paid or a 
watercraft registered for use on state waters on which a tax assessed pursuant to chapter 
has been paid;
E. Qualified rehabilitation property used to calculate the credit for rehabilitation of 
historic properties under section 5219-BB; or
F. Real property placed in service in the State before the tax year for which a credit is 
sought.
9. Rules. The assessor and the commissioner may adopt joint rules necessary to 
implement this section. Rules adopted under this subsection are routine technical rules as 
defined in Title 5, chapter 375, subchapter 2-A.
10. Annual report to department and Legislature. On or before December 31st 
annually, beginning in 2026, the assessor shall report to the department the following 
information for each qualified business that received a credit pursuant to this section for 
the tax year ending during the immediately preceding calendar year:
A. The name of the qualified business;
B. The number of qualified employees engaged in a qualified employee training 
program;
C. The value of eligible capital investment expenditures in the municipalities in which 
the property was placed into service;
D. The credit amount received under subsection 4, paragraph A, B or C for the tax year; 
and
E. The eligible sector of the business's qualified business activity.
On or before March 1st annually, beginning in 2027, the department shall report to the joint 
standing committees of the Legislature having jurisdiction over taxation and economic 
development matters information on the program, including the information reported by 
the assessor under this subsection.
11. Evaluation; specific public policy objective; performance measures. The credit 
provided under this section is subject to legislative review in accordance with Title 3, 
section 999. In developing evaluation parameters to perform the review, the Office of 
Program Evaluation and Government Accountability, the joint legislative committee 
established to oversee program evaluation and government accountability matters and the 
joint standing committee of the Legislature having jurisdiction over taxation matters shall 
consider:
A. That the specific public policy objective of the credit provided under this section is 
to improve the productivity of workers and businesses in the State by encouraging 
businesses to invest in capital and worker training; and
B. Performance measures, including, but not limited to:
(1) The amount of eligible capital investment;
(2) The number of workers trained;
(3) The amount of credit used to offset tax liability;
(4) The amount of credit refunded pursuant to subsection 5; and
(5) The economic productivity of credit recipients.
Sec. 13.  36 MRSA §6754, sub-§1, ¶D, as amended by PL 2021, c. 602, §5, is 
further amended to read:
D.  For qualified Pine Tree Development Zone employees, as defined in Title 30‑A, 
section 5250‑I, subsection 18, employed directly in the qualified business activity of a 
qualified Pine Tree Development Zone business, as defined in Title 30‑A, section 
5250‑I, subsection 17, for whom a certificate of qualification has been issued in 
accordance with Title 30‑A, section 5250‑O, the reimbursement under this subsection 
is equal to 80% of the benefit base each year for which reimbursement is requested and 
attributed to those qualified employees for a period of no more than 10 years for a tier 
location as defined in Title 30‑A, section 5250‑I, subsection 21‑A and no more than 
years for a tier 2 location as defined in Title 30‑A, section 5250‑I, subsection 21‑B. 
Reimbursement under this paragraph may not be paid for years beginning after 
December 31, 2033 2034.
Sec. 14.  36 MRSA §6763 is enacted to read:
§6763.  Termination
The commissioner may not issue a certificate of approval for a business under this 
chapter after December 31, 2024. All employment tax increment financing benefits 
provided under this chapter are terminated on December 31, 2034.
SUMMARY
This bill creates the Dirigo business incentives program to provide a tax credit to 
qualified businesses.  The bill provides an exemption from the requirement for 
confidentiality of tax records for information disclosed as part of certain reports to the 
Department of Economic and Community Development and legislative committees 
regarding the Dirigo business incentives program. The bill extends the end date of the Pine 
Tree Development Zone program by one year, eliminates the Pine Tree Recreation Zone 
program and eliminates the Maine capital investment credit as of January 1, 2025. The bill 
prohibits issuing a certificate of approval for employment tax increment financing after 
December 31, 2024 and eliminates the employment tax increment financing benefits as of 
December 31, 2034.