An Act to Transfer the Responsibility for Tax Expenditure Review
Maine Legislature, Session 132, LD 0136
Committee: State and Local Government
Sponsors: BENNETT
Amends: 3 MRSA §994, 3 MRSA §998, 3 MRSA §999, 3 MRSA §1001

Legislative Document
No. 136
S.P. 72
In Senate, January 8, 2025
An Act to Transfer the Responsibility for Tax Expenditure Review 
from the Government Oversight Committee to the Joint Standing 
Committee on Taxation
Reference to the Committee on State and Local Government suggested and ordered printed.
DAREK M. GRANT
Secretary of the Senate
Presented by Senator BENNETT of Oxford.
Be it enacted by the People of the State of Maine as follows:
Sec. 1.  3 MRSA §994, sub-§3-B is enacted to read:
3-B.  Tax expenditure evaluations.  To direct the office to conduct tax expenditure 
evaluations pursuant to the processes established in section 999;
Sec. 2.  3 MRSA §998, as amended by PL 2023, c. 417, §§2 to 4, is further amended 
to read:
§998.  Process for review of tax expenditures
1.  Assignment of review categories.  By October 1, 2015, the The policy committee, 
in consultation with the policy committee, shall assign each tax expenditure to one of the 
following review categories:
A.  Full evaluation for tax expenditures that are intended to provide an incentive for 
specific behaviors, that provide a benefit to a specific group of beneficiaries or for 
which measurable goals can be identified;
B.  Expedited review for tax expenditures that are intended to implement broad tax 
policy goals that cannot be reasonably measured; and
C.  No review for tax expenditures with an impact on state revenue of less than $50,000 
or that otherwise do not warrant either a full evaluation or expedited review.
2.  Schedule.  The policy 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 policy committee shall group the review of tax 
expenditures with similar goals together. Beginning in 2024, when When prioritizing 
ongoing review of tax expenditures assigned to the full evaluation category, the policy 
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.
3.  Annual review of assignments and schedule.  By October 1st of each year, 
beginning in 2016, the policy committee, in consultation with the policy committee, shall 
review and make any necessary adjustments to the review category assignments and 
schedule pursuant to subsections 1 and 2, including adjustments needed to incorporate tax 
expenditures enacted, amended or repealed during the preceding year.
4.  Office responsibilities.  The office shall maintain a current record of the review 
category assignments and the schedule under this section.
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.
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 subsection, 
"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 
following a request by the policy committee.
Sec. 3.  3 MRSA §999, sub-§1, as amended by PL 2017, c. 266, §2, is further 
amended to read:
1.  Evaluation process.  Beginning January 1, 2016, the The office shall evaluate each 
tax expenditure identified under section 998, subsection 1, paragraph A in accordance with 
the schedule established in section 998, subsection 2.
A.  Prior to the beginning of each evaluation, the committee shall direct the office to 
present recommendations to the policy committee. The policy committee, after 
consideration of recommendations from the office, shall approve the following for each 
tax expenditure subject to full evaluation:
(1)  The purposes, intent or goals of the tax expenditure, as informed by original 
legislative intent as well as subsequent legislative and policy developments and 
changes in the state economy and fiscal condition;
(2)  The intended beneficiaries of the tax expenditure;
(3)  The evaluation objectives, which may include an assessment of:
(a)  The fiscal impact of the tax expenditure, including past and estimated 
future impacts;
(b)  The extent to which the design of the tax expenditure is effective in 
accomplishing the tax expenditure's purposes, intent or goals and consistent 
with best practices;
(c)  The extent to which the tax expenditure is achieving its purposes, intent or 
goals, taking into consideration the economic context, market conditions and 
indirect benefits;
(d)  The extent to which those actually benefiting from the tax expenditure are 
the intended beneficiaries;
(e)  The extent to which it is likely that the desired behavior might have 
occurred without the tax expenditure, taking into consideration similar tax 
expenditures offered by other states;
(f)  The extent to which the State's administration of the tax expenditure, 
including enforcement efforts, is efficient and effective;
(g)  The extent to which there are other state or federal tax expenditures, direct 
expenditures or other programs that have similar purposes, intent or goals as 
the tax expenditure, and the extent to which such similar initiatives are 
coordinated, complementary or duplicative;
(h)  The extent to which the tax expenditure is a cost-effective use of resources 
compared to other options for using the same resources or addressing the same 
purposes, intent or goals; and
(i)  Any opportunities to improve the effectiveness of the tax expenditure in 
meeting its purposes, intent or goals; and
(4)  The performance measures appropriate for analyzing the evaluation objectives. 
Performance measures must be clear and relevant to the specific tax expenditure 
and the approved evaluation objectives.
B.  Before final approval pursuant to paragraph A, the committee shall seek and 
consider input from the policy committee and stakeholders and may seek input from 
experts.
Sec. 4.  3 MRSA §1001, sub-§2, as enacted by PL 2015, c. 344, §4, is amended to 
read:
2.  Legislation.  The policy committee may submit to the Legislature any legislation it 
considers necessary to improve the process or availability of data for the review of tax 
expenditures.
SUMMARY
This bill amends the laws governing tax expenditure review by the Legislature. The 
bill transfers the primary responsibility for tax expenditure review and evaluation from the 
jurisdiction of the Government Oversight Committee to the joint standing committee of the 
Legislature having jurisdiction over taxation matters.