An Act to Implement the Recommendations of the Working Group to Review the Process for Ongoing Review of Tax Expenditures by the Legislature
Maine Legislature, Session 131, LD 0849
Committee: Taxation
Sponsors: TERRY, CARMICHAEL, MATLACK, MILLETT, SACHS, STOVER
Amends: 3 MRSA §993, 3 MRSA §998, 3 MRSA §1000, 3 MRSA §1002, 36 MRSA §199-B

Legislative Document
No. 849
H.P. 538
House of Representatives, February 21, 2023
An Act to Implement the Recommendations of the Working Group 
to Review the Process for Ongoing Review of Tax Expenditures by 
the Legislature
Reference to the Committee on Taxation suggested and ordered printed.
ROBERT B. HUNT
Clerk
Presented by Representative TERRY of Gorham.
Cosponsored by Representatives: CARMICHAEL of Greenbush, MATLACK of St. George, 
MILLETT of Waterford, SACHS of Freeport, STOVER of Boothbay.
Be it enacted by the People of the State of Maine as follows:
Sec. 1.  3 MRSA §993, as enacted by PL 2001, c. 702, §2, is amended to read:
§993.  Committee membership; chairs
The membership of the committee and the selection of chairs are established by joint 
rule of the Legislature. Beginning with the 132nd Legislature, at least 2 members of the 
committee must be members of the joint standing committee of the Legislature having 
jurisdiction over taxation matters and at least one member must be a member of the joint 
standing committee of the Legislature having jurisdiction over economic development 
matters.
Sec. 2.  3 MRSA §998, sub-§2, as amended by PL 2017, c. 266, §1, is further 
amended to read:
2.  Schedule.  The committee, in consultation with the policy committee, shall establish 
a prioritized schedule of ongoing review of the tax expenditures assigned to the full 
evaluation and expedited review categories pursuant to subsection 1, paragraphs A and B.  
To the extent practicable, the committee shall group the review of tax expenditures with 
similar goals together. Beginning in 2024, when prioritizing ongoing review of tax 
expenditures assigned to the full evaluation category, the committee, in consultation with 
the policy committee, shall give priority to tax expenditures that are intended to provide an 
incentive to businesses over tax expenditures that are directed primarily toward individual 
tax relief  and shall consider the impact of any statutory provisions regarding the expiration 
of a tax expenditure that may be the subject of legislation to extend the tax expenditure.
Sec. 3.  3 MRSA §998, sub-§5 is enacted to read:
5.  Policy committee meetings.  In order to perform its functions under this chapter, 
the policy committee may meet monthly or as often as is determined necessary by the chairs 
of the policy committee.
Sec. 4.  3 MRSA §998, sub-§6 is enacted to read:
6.  Limited analysis projects.  Notwithstanding any provision of this chapter to the 
contrary, the policy committee may request the committee to approve up to 2 limited 
analysis projects related to legislation before the policy committee to be completed by the 
office during each regular legislative session.  For the purposes of this section, "limited 
analysis project" means a limited review of a tax expenditure based on information readily 
available to the office that is intended to be completed and submitted to the committee and 
the policy committee within 30 days of approval by the committee.
Sec. 5.  3 MRSA §1000, sub-§2, as amended by PL 2019, c. 161, §2, is repealed.
Sec. 6.  3 MRSA §1000, sub-§2-A is enacted to read:
2-A.  Action by Maine Revenue Services.  By February 15th of each year beginning 
in 2025, the Department of Administrative and Financial Services, Bureau of Revenue 
Services shall report to the policy committee the following information with regard to tax 
expenditures identified for expedited review under section 998, subsection 1:
A.  A description of the tax policy under review;
B.  Summary information on each tax expenditure associated with the tax policy under 
review, including:
(1)  A description of the tax expenditure and the mechanism through which the tax 
benefit is distributed;
(2)  The intended beneficiaries of the tax expenditure; and
(3)  A legislative history of the tax expenditure; and
C.  The fiscal impact of the tax policy and each related tax expenditure, including past 
and estimated future impacts.
Sec. 7.  3 MRSA §1000, sub-§4 is enacted to read:
4.  Frequency of reports.  Each tax expenditure categorized for expedited review 
under section 998, subsection 1, paragraph B must be reviewed by the policy committee on 
a rotating schedule of every 6 years.  A newly enacted tax expenditure must be reviewed 
first in the first year following enactment of the tax expenditure that the tax policy including 
the tax expenditure is subject to review.
Sec. 8.  3 MRSA §1002 is enacted to read:
§1002.  Review of proposed tax expenditures
1.  Procedures before legislative committees.  Whenever a legislative measure 
contains a proposed new tax expenditure or a proposed change that affects an existing tax 
expenditure, the joint standing committee of the Legislature having jurisdiction over the 
proposal shall hold a public hearing and determine the level of support for the proposal 
among the members of the joint standing committee. If there is support for the proposal 
among a majority of the members of the joint standing committee, the joint standing 
committee shall request the policy committee to review and evaluate the proposal pursuant 
to subsection 2 and to report to the joint standing committee.  A proposed tax expenditure 
or change to an existing tax expenditure may not be enacted into law unless the review and 
evaluation pursuant to this section has been completed.
2.  Evaluation.  Upon referral pursuant to subsection 1 of a proposal from the joint 
standing committee of the Legislature having jurisdiction over the proposal, the policy 
committee, in consultation with the office, shall conduct a review and evaluation of the 
proposal and shall report in a timely manner to the joint standing committee.  The policy 
committee shall evaluate whether the proposed or amended tax expenditure is likely to be 
assigned to the full evaluation category under section 998, subsection 1, paragraph A.  If 
the tax expenditure is likely to be assigned for full evaluation, the policy committee shall 
evaluate whether the proposal contains the provisions necessary for a full evaluation under 
section 999, including whether the proposal:
A.  Identifies the purposes and goals of the tax expenditure;
B.  Identifies the data or other information necessary to evaluate the tax expenditure 
and the person or agency responsible for collecting that data or information;
C.  Requires the appropriate person or agency to provide the data or other information 
identified in paragraph B to the office; and
D.  Provides the necessary framework to permit the office to evaluate and report on the 
tax expenditure as required under section 999.
3.  Report.  After its evaluation pursuant to subsection 2, the policy committee shall 
report to the joint standing committee of the Legislature having jurisdiction over the 
proposal its findings and recommendation on whether the proposed tax expenditure is 
likely to be assigned to the full evaluation category under section 998, subsection 1, 
paragraph A and, if so, whether it contains the provisions necessary to fulfill the 
requirements of a full evaluation under section 999 or whether the legislation should be 
amended to contain the necessary provisions.
Sec. 9.  36 MRSA §199-B, sub-§1, ¶C, as enacted by PL 2001, c. 652, §7, is 
amended to read:
C.  An estimate of the cost of the tax expenditure for the current biennium and the 
previous 4 fiscal years, including actual revenue losses, if available;
Sec. 10.  36 MRSA §199-B, sub-§1, ¶E, as amended by PL 2017, c. 211, Pt. E, §4, 
is further amended to read:
E.  Any recommendation regarding the amendment, repeal or replacement of the tax 
expenditure; and
Sec. 11.  36 MRSA §199-B, sub-§1, ¶F, as enacted by PL 2017, c. 211, Pt. E, §4, 
is amended to read:
F.  The total amount of reimbursement paid to each person claiming a reimbursement 
for taxes paid on certain business property under chapter 915.; and
Sec. 12.  36 MRSA §199-B, sub-§1, ¶G is enacted to read:
G.  For tax expenditures intended primarily to enhance economic security for 
individuals with low income or to provide other economic assistance to individual 
taxpayers, an assessment of the number of taxpayers taking advantage of the tax 
expenditure compared to the number of individuals estimated to be eligible for the tax 
expenditure.
Sec. 13.  Review by Director of Office of Program Evaluation and 
Government Accountability.  By November 1, 2024, the Director of the Office of 
Program Evaluation and Government Accountability shall review the laws governing full 
evaluations of tax expenditures under the Maine Revised Statutes, Title 3, chapter 37 and 
identify and recommend to the Government Oversight Committee and the Joint Standing 
Committee on Taxation potential statutory changes to enhance the efficiency and 
effectiveness of the full evaluation process going forward, with particular attention to 
evaluation parameters and the schedule and pace of full evaluation reports.  The 
Government Oversight Committee may submit legislation related to the recommendations 
of the director to the First Regular Session of the 132nd Legislature.
Sec. 14.  Full Evaluation Review Task Force.  The Full Evaluation Review Task 
Force, referred to in this section as "the task force," is created for the purpose of reviewing 
tax expenditures subject to full evaluation under the Maine Revised Statutes, Title 3, 
chapter 37.  
1.  Members.  The task force is composed of 6 members appointed as follows.
A.  The President of the Senate shall appoint 3 members of the Senate:  one member 
of the Government Oversight Committee, one member of the Joint Standing 
Committee on Taxation and one member of the Joint Standing Committee on 
Innovation, Development, Economic Advancement and Business.
B.  The Speaker of the House shall appoint 3 members of the House of Representatives: 
one member of the Government Oversight Committee, one member of the Joint 
Standing Committee on Taxation and one member of the Joint Standing Committee on 
Innovation, Development, Economic Advancement and Business.
When making appointments, the President of the Senate and the Speaker of the House shall 
ensure that 3 of the members appointed represent the party holding the largest number of 
seats in the Legislature and 3 of the members appointed represent the party holding the 2nd 
largest number of seats in the Legislature.  
2.  Duties.  The task force shall review the statutes establishing each tax expenditure 
identified as a full review expenditure under the Maine Revised Statutes, Title 3, section 
998, subsection 1, paragraph A, identify which of those statutes do not have adequate 
elements to permit effective evaluation pursuant to Title 3, section 999 and recommend 
statutory changes if needed to permit effective evaluation.  The task force shall submit its 
report and recommended legislation to the Joint Standing Committee on Taxation by 
November 2, 2024.
3.  Staffing.  The Legislative Council shall provide necessary staffing services to the 
task force from the Office of Program Evaluation and Government Accountability and the 
Office of Fiscal and Program Review, except that Legislative Council staff support is not 
authorized when the Legislature is in regular or special session.
Sec. 15.  Staffing for tax expenditure review.  By January 15, 2025, the Office 
of Program Evaluation and Government Accountability and the Office of Fiscal and 
Program Review shall notify the Legislative Council whether they can, within existing 
resources, provide staffing adequate to support the Government Oversight Committee and 
the joint standing committee of the Legislature having jurisdiction over taxation matters in 
staffing the activities required by this Act or whether additional resources are needed.
SUMMARY
This bill implements the recommendations of the Working Group To Review the 
Process for Ongoing Review of Tax Expenditures by the Legislature established in 2021 
by Joint Order 2021, S.P. 578.  The bill:
1.  Beginning with the 132nd Legislature, changes the membership of the Government 
Oversight Committee by requiring that the membership of that committee must include at 
least 2 members who are members of the joint standing committee of the Legislature having 
jurisdiction over taxation matters and at least one member who is a member of the joint 
standing committee of the Legislature having jurisdiction over economic development 
matters for the purpose of improving communications among those committees regarding 
tax expenditure review activities;
2.   Authorizes the joint standing committee of the Legislature having jurisdiction over 
taxation matters to meet throughout the year as determined to be necessary by the chairs to 
perform tax expenditure review functions;
3.  Changes the process for expedited review of tax expenditures by repealing 
requirements that the information be provided to the joint standing committee of the 
Legislature having jurisdiction over taxation matters by the Office of Program Evaluation 
and Government Accountability and by expanding the scope of information required to be 
reported by the Department of Administrative and Financial Services, Bureau of Revenue 
Services to facilitate review by the joint standing committee;
4.  Prioritizes full review of business incentive tax expenditures over tax expenditures 
directed primarily toward individual tax relief;
5.  Requires that the schedule for review of full review tax expenditures take into 
consideration any statutory expiration dates;
6.  Establishes a procedure for review of current statutes containing full review tax 
expenditures to identify and address the need for statutory changes to improve the ability 
to analyze and evaluate those provisions;
7.  Establishes a procedure for review by the joint standing committee of the Legislature 
having jurisdiction over taxation matters of legislation under consideration that would enact 
a full review tax expenditure. The review is for the purposes of identifying and 
recommending provisions to facilitate tax expenditure review;
8.  Establishes a process for the joint standing committee of the Legislature having 
jurisdiction over taxation matters to request 2 limited analysis projects per year to be 
completed by the Office of Program Evaluation and Government Accountability for the 
purpose of assisting consideration of legislation before the committee; and
9.  Directs the Office of Program Evaluation and Government Accountability and the 
Office of Fiscal and Program Review to assess and report to the Legislative Council 
regarding the need for additional staff to perform the additional functions contained in the 
bill.