An Act to Encourage Resident-owned Communities and
Maine Legislature, Session 132, LD 0554
Committee: Taxation
Sponsors: RENY
Amends: 36 MRSA §5122, 36 MRSA §5200-A

Legislative Document
No. 554
S.P. 211
In Senate, February 11, 2025
An Act to Encourage Resident-owned Communities and 
Cooperatives and Preserve Affordable Housing Through Tax 
Credits
Reference to the Committee on Taxation suggested and ordered printed.
DAREK M. GRANT
Secretary of the Senate
Presented by Senator RENY of Lincoln.
Cosponsored by Senators: BAILEY of York, CURRY of Waldo, Representatives: DOUDERA 
of Camden, FARRIN of Jefferson, GERE of Kennebunkport, GRAMLICH of Old Orchard 
Beach.
Be it enacted by the People of the State of Maine as follows:
Sec. 1.  36 MRSA §5122, sub-§2, ¶AAA is enacted to read:
AAA.  For taxable years beginning on or after January 1, 2025, 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 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, including a corporation, 
an S corporation, a limited liability company, a limited liability partnership, a sole 
proprietorship and all entities that are not publicly traded and are related by 
common majority ownership or control, and:
(a) That is registered with the Secretary of State; or
(b) Whose principal place of business is within the State.
Sec. 2.  36 MRSA §5200-A, sub-§2, ¶JJ is enacted to read:
JJ.  For taxable years beginning on or after January 1, 2025, 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, including a corporation, 
an S corporation, a limited liability company, a limited liability partnership, a sole 
proprietorship and all entities that are not publicly traded and are related by 
common majority ownership or control, and:
(a) That is registered with the Secretary of State; or
(b) Whose principal place of business is within the State.
Sec. 3. Evaluation; specific public policy objective; performance measures. 
The tax deductions provided under this Act are subject to ongoing legislative review in 
accordance with the Maine Revised Statutes, Title 3, chapter 37. The Office of Program 
Evaluation and Government Accountability shall include review of tax 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 tax deductions 
provided under this Act is to preserve and increase the number of units of affordable 
housing in manufactured housing parks and apartment buildings; and
2. Performance measures. Performance measures, including, but not limited to:
A. The number of full-time equivalent jobs retained and units of affordable housing 
created or retained;
B. The number of housing units converted to cooperative housing; and
C. Measures of fiscal impact and overall economic impact to the State.
SUMMARY
This bill does the following to support resident-owned communities and cooperatives.
1. It excludes from state income tax the amount of gain, up to a maximum of $750,000, 
recognized by a taxpayer in transferring the business to a consumer cooperative or 
cooperative affordable housing corporation.
2. It specifies the policy objective and the 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 developing evaluation parameters to perform the review 
of the tax deductions provided under the bill as required by the Maine Revised Statutes, 
Title 3, chapter 37.