An Act to Create and Sustain Jobs and Affordable Housing Through the Development of Cooperatives and Employee-owned Businesses
Maine Legislature, Session 131, LD 1276
Committee Amendment CA_A_SA_A_S750 (Senate)
Amends: 5 MRSA §13062, 36 MRSA §5122, 36 MRSA §5200-A

SENATE AMENDMENT" A "to COMMITTEE AMENDMENT "A" to S.P. 513, 
L.D. 1276, "An Act to Create and Sustain Jobs and Affordable Housing Through the 
Development of Cooperatives and Employee-owned Businesses" 
Amend the amendment by striking out everything after the title and inse11ing the 
following: 
'Amend the bill by striking out everything after the enacting clause and inse11ing the 
following: 
'Sec. 1. 5 MRSA §13062, 2nd 1, as enacted by PL 1987, c. 534, Pt. A, §§17 and 
19, is amended to read: 
The Office of Business Development shall be 1§ responsible for the implementation of 
a program consisting of J- ± primary elements. 
Sec. 2. 5 MRSA §13062, sub-§4 is enacted to read: 
4. 
Encouragement of employee ownership of businesses; Maine Employee 
Ownership Center. Within available federal funds, the office may contract with a 
nonprofit economic development organization with relevant expe1iise to develop and 
manage the Maine Employee Ownership Center. The Maine Employment Ownership 
Center shall: 
A. Develop educational programs, including convening an annual conference on 
employee ownership issues; 
B. Provide info1mation about employee ownership and technical assistance to retiring 
business owners, employees of plants threatened with closure and entrepreneurs 
interested in creating businesses with broadly shared ownership; 
C. Link businesses in the State interested in implementing employee ownership to 
available financial, technical and legal resources; 
D. Assist businesses and employee groups in perfonning prelimina1y feasibility studies 
to dete1mine the initial feasibility of employee ownership and whether the business and 
employee group should perform a full feasibility study; 
E. Help businesses interested in implementing some fonn of employee ownership 
obtain financing; 
SENATE AMENDMENT 
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SENATE AMENDMENT" A "to COMMITTEE AMENDMENT "A" to S.P. 513, L.D. 1276 {S-156) 
F. Promote best practices for operating employee-owned businesses; 
G. Recommend legislative or executive action to promote employee ownership; and 
H. Work with the Office of Program Evaluation and Government Accountability to 
define the scope of data collection and to collect data and other infonnation to facilitate 
tax expenditure review under Title 3, chapter 37, including, but not limited to: 
(l) The number of businesses that have conve1ted to employee or cooperative 
ownership; 
(2) The number of full-time equivalent jobs retained as a result of conversion to 
employee or cooperative ownership; 
(3) The number of housing units conve1ted to cooperative ownership; and 
(4) Data and infonnation regarding other measures of the fiscal impact and overall 
economic development in the State that occurred as the result of conversion to 
employee or cooperative ownership. 
Sec. 3. 36 MRSA §5122, sub-§2, ,rAAA is enacted to read: 
AAA. For taxable years beginning on or after January 1, 2024, to the extent included 
in federal adjusted gross income and to the extent otherwise subject to state income 
tax, an amount equal to any gain recognized on the sale by the taxpayer of an ownership 
interest greater than 50% in a qualified business if the business provides housing and 
was transferred to a consumer cooperative organized under Title 13, chapter 85, 
subchapter 1 or a cooperative affordable housing cooperation organized under Title 13, 
chapter 85, subchapter 1-A. 
(l) The deduction allowed pursuant to this paragraph may not exceed $750,000. 
(2) For purposes of this paragraph, "qualified business" means a business whose 
securities are not publicly traded on any stock exchange and that is registered with 
the Secretaiy of State or whose principal place of business is within the State, 
including a corporation, an S corporation, a limited liability company, a limited 
liability patinership, a sole proprietorship and all entities that are not publicly 
traded and are related by common majority ownership or control. 
Sec. 4. 36 MRSA §5200-A, sub-§2, ,rJJ is enacted to read: 
JJ. For taxable years beginning on or after Januaiy L 2024, to the extent included in 
federal taxable income and to the extent otherwise subject to state income tax, an 
amount equal to any gain recognized on the sale by the taxpayer of an ownership 
interest greater than 50% in a qualified business if the business provides housing and 
was transferred to a consumer cooperative organized under Title 13, chapter 85, 
subchapter 1 or a cooperative affordable housing corporation organized under Title 13, 
chapter 85, subchapter 1-A. 
(1) The deduction allowed pursuant to this paragraph may not exceed $750,000. 
(2) For purposes of this paragraph, "qualified business" means a business whose 
securities are not publicly traded on any stock exchange and that is registered with 
the Secretaiy of State or whose principal place of business is within the State, 
including a corporation, an S corporation, a limited liability company, a limited 
SENATE AMENDMENT 
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SENATE AMENDMENT" k "to COMMITTEE AMENDMENT "A" to S.P. 513, L.D. 1276 (s-l'Sb) 
liability partnership, a sole proprietorship and all entities that are not publicly 
traded and are related by common majority ownership or control. 
Sec. 5. Evaluation; specific public policy objective; performance measures. 
The deductions provided under this Act are subject to ongoing legislative review in 
accordance with the Maine Revised Statutes, Title 3, chapter 3 7. The Office of Program 
Evaluation and Government Accountability shall include review of deductions provided 
under this Act in its regular schedule of tax expenditure reviews. In developing evaluation 
parameters to perform the evaluation, the Office of Program Evaluation and Government 
Accountability, the Government Oversight Committee and the joint standing committee of 
the Legislature having jurisdiction over taxation matters shall consider: 
1. Policy objective. That the specific public policy objective of the deductions 
provided under this Act is to preserve and expand units of affordable housing in 
manufactured housing parks and apartment buildings; and 
2. Performance measures. Perfonnance measures, including, but not limited to: 
A. The number of qualifying businesses that have converted to employee or 
cooperative ownership if the Maine Employee Ownership Center is established; 
B. The number of full-time equivalent jobs retained and units of affordable housing 
created or retained if the Maine Employee Ownership Center is established; 
C. The number of housing units converted to cooperative housing; and 
D. Measures of fiscal impact and overall economic impact to the State. 
Sec. 6. 
Appropriations and allocations. The following appropriations and 
allocations are made. 
ADMINISTRATIVE AND FINANCIAL SERVICES, DEPARTMENT OF 
Revenue Services, Bureau of 0002 
Initiative: Provides one-time funding for computer programming costs to modify tax 
returns to incorporate new income tax exemptions. 
GENERAL FUND 
All Other 
GENERAL FUND TOTAL 
ADMINISTRATIVE AND FINANCIAL 
SERVICES, DEPARTMENT OF 
DEPARTMENT TOTALS 
GENERAL FUND 
2023-24 
$0 
$0 
2023-24 
$0 
2024-25 
$33,000 
$33,000 
2024-25 
$33,000 
DEPARTMENT TOTAL-ALL FUNDS 
$0 
$33,000 
ECONOMIC AND COMMUNITY DEVELOPMENT, DEPARTMENT OF 
Business Development 0585 
SENATE AMENDMENT 
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SENATE AMENDMENT" A" to COMMITTEE AMENDMENT "A" to S.P. 513, L.D. 1276 { ~-l'Sb) 
Initiative: Provides base allocations to authorize expenditures in the event federal funds are 
received to contract with a nonprofit economic development organization with relevant 
expe1tise to develop and manage the Maine Employee Ownership Center. 
FEDERAL EXPENDITURES FUND 
2023-24 
All Other 
$0 
FEDERAL EXPENDITURES FUND TOTAL 
ECONOMIC AND COMMUNITY 
DEVELOPMENT, DEPARTMENT OF 
DEPARTMENT TOTALS 
FEDERAL EXPENDITURES FUND 
DEPARTMENT TOTAL-ALL FUNDS 
SECTION TOTALS 
GENERAL FUND 
FEDERAL EXPENDITURES FUND 
SECTION TOTAL - ALL FUNDS 
$0 
2023-24 
$0 
$0 
2023-24 
$0 
$0 
$0 
2024-25 
$500 
$500 
2024-25 
$500 
$500 
2024-25 
$33,000 
$500 
$33,500 
Amend the amendment by relettering or renumbering any nonconsecutive Part letter or 
section number to read consecutively. 
SUMMARY 
This amendment does the following to suppo1t employee-owned businesses and 
cooperatives. 
1. It excludes from State income tax the amount of gain, up to a maximum of $750,000, 
recognized by a business owner in transferring the business to an affordable housing 
cooperative. 
2. It allows the Depaitment of Economic and Community Development, Office of 
Business Development to use available federal funds to contract with a nonprofit 
development organization with relevant expe1tise to develop and manage the Maine 
Employee Ownership Center to provide information and programs to assist businesses in 
the transition to employee or cooperative ownership. 
3. It specifies performance measures that the Office of Program Evaluation and 
Government Accountability, the Government Oversight Committee and the joint standing 
committee of the Legislature having jurisdiction over taxation matters must consider in 
SENATE AMENDMENT 
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SENATE AMENDMENT" A-" to COMMITTEE AMENDMENT "A" to S.P. 513, L.D. 1276{S-7c;;b) 
developing evaluation parameters to perfonn the review of the deductions provided under 
the amendment as required by the Maine Revised Statutes, Title 3, chapter 37. 
SPONSORED BY: __ 
J/11_--=---1--'-N----'-~---=-J_.; __ 
_ 
(Senator ROTUNDO, M.) 
COUNTY: Androscoggin 
FISCAL NOTE REQUIRED 
•• ···,.:c .. ,.,. (See attached) _...._~~ 
SENA TE AMENDMENT 
Approved: 04/03/24 J!W'a<:.. 
LD 1276 
LR 1824(04) 
An Act to Create and Sustain Jobs and Affordable Housing Through the Development of 
Cooperatives and Employee-owned Businesses 
Fiscal Note for Senate Amendment ''A'' to Committee Amendment "A"{S-75b) 
Sponsor: Sen. Rotundo of Androscoggin 
! 
• : ,,· 
Net Cost(Savings) 
Gen'ei'al Fund 
App·r~prlations/Allocations 
General Fund 
Federal Expenditures Fund 
Revenue 
General Fund 
Other Special Revenue Funds 
Fiscal Detail and Notes 
Fiscal Note Required: Yes 
Fiscal Note 
FY 2023-24 
$0 
$0 
($500) 
$0 
$0 
FY 2024-25 
($432,000) 
($33,000) 
$0 
$399,000 
$21,000 
Projections 
FY 2025-26 
($413,250) 
$0 
$0 
$413,250 
$21,750 
Projections 
FY 2026-27 
($427,500) 
$0 
$0 
$427,500 
$22,500 
This amendment reduces the ongoing revenue loss in the bill by limiting the application of the tax deduction to 
businesses that provide housing. Relative to the committee amendment, the General Fund revenue loss is reduced by 
$399,000 to $47,500 and the Local Government Fund Revenue loss is reduced by $21,000 to $2,500 in fiscal year 
2024-25. The amendment also reduces the one-time General Fund appropriation to the Department of Administrative 
and Financial Services, Bureau of Revenue Services for implementation costs by $33,000 in fiscal year 2024-25. The 
Federal Expenditures Fund allocation of $500 is removed from fiscal year 2023-24 but remains in subsequent years. 
LR1824(04) - Fiscal Note - Page 1 of 1