The end of the 132nd Legislature is in sight with only 5 days remaining until Statutory Adjournment. Most of the bills we have engaged with have finished debate and all that remains to be seen is whether those with fiscal notes will be funded.
The budget and bond processes remain contentious, as they often are in the short session. This week, the full Legislature narrowly enacted the Supplemental Budget along partisan lines. The following items included in the package are of interest to our members:
- Part N: Funding for the Pass-Through Entity Tax Credit (introduced as LD 191). The proposal would establish a pass-through entity tax on the income of partners and shareholders of S corporations and permit certain entities to elect to pay Maine income tax at the entity level. The effect of this is to allow a member of a pass-through entity a credit of 90% of the member’s share of Maine income taxes paid as a pass-through entity. This brings Maine into partial conformity (without retroactivity) with federal tax law. This change would improve the tax treatment of pass-through entities while being revenue positive for the State (a win-win!). Thanks to the Manufacturers Association of Maine and the State Chamber of Commerce for their advocacy on this section.
- Part O: Non-retail equipment eligible under the current program will remain in the program. Most forest industry reimbursements are in non-retail categories. Retail equipment will be phased out in 2029. Our full testimony on Part O is available here.
- Part UUU: Implements a new, sustainable funding source for the Land for Maine’s Future Program, moving the program away from relying on bonding.
- Part XXX: Finally, the content of our bill LD 1313, “An Act to Promote Equity in the Forest Products Industry by Allowing Commercial Wood Haulers to Be Eligible for Certain Sales Tax Exemptions and Refunds” have been moved into the supplemental budget.
LD 1313, sponsored by Senator Brad Farrin, is one of MFPC’s priority bills. If passed, it will make commercial wood haulers eligible for the heritage industry tax exemption, bringing treatment of this equipment in line with other forestry equipment and agricultural equipment. We are very appreciative that this bill has been selected for funding with this budget. The cost of logging trucks and trailers has increased dramatically over recent years, and this exemption will provide meaningful relief for our loggers.
The package also included a 2% surcharge tax on individuals with annual income above $1 million in part DDDD along with a sizeable withdrawal from the rainy day fund for one-time “affordability” checks to go to certain Mainers.
The chambers continue to debate a bond package using LD 2094, the Agriculture Bond, as the vehicle. At this point our CLT bond sponsored by our 2025 Legislator of the Year, Rep. Sam Zager (LD 798) remains in the Appropriation’s Committee. The likelihood of any bonds being passed this year is becoming less and less likely.
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This week, LD 2044, “An Act to Make the Biofuel Commercial Production and Commercial Use Tax Credit and the Renewable Chemicals Tax Credit Refundable” sailed through both chambers under the hammer and is awaiting funding on the Special Appropriations Table. This bill is vitally important to diversify Maine’s low-grade wood market. This will remain a top priority for MFPC as we continue to work with bill sponsor Senator Teresa Pierce to advocate for funding, or if necessary, push effective date out to allow for this tax credit to be refundable, making it usable to manufacturers early in the start-up process.
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Also this week, the Senate enacted the majority report of LD 2018, “An Act to Amend the Requirements Governing Self-insurance Plans in the Paid Family and Medical Leave Benefits Program.” This bill is opposed by MFPC and a number of our members because it will not allow for employers who are self-insuring their paid family and medical leave benefits to pool risk across companies, a practice that is common in other types of insurance policies. This bill will be sent to the governor for her signature and we hope that she will strongly consider a veto.
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The Legislature printed and voted on LD 2244, “An Act to Implement Certain Preliminary Recommendations of the Real Estate Property Tax Relief Task Force and to Make Other Changes to Tax Law” within a few hours on Wednesday. This bill, which was the second to last bill printed this session, directs MRS to conduct a survey of tax assessors related to the Tree Growth Tax Program. Findings and recommendations based on survey results will be presented to Taxation Committee next January. Timing did not allow for this bill to receive a public hearing before advancing to the full body for consideration.
This bill is now on the Special Appropriations Table. MFPC will continue to monitor this legislation closely, as the Tree Growth Tax program is foundationally important to Maine’s $8.3 billion forest industry.
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Also this week, Senator Stacey Guerin’s amendment CA-B to LD 19, “An Act to Change the Definition of “Oversized ATV” in the Laws Governing the Registration of All-terrain Vehicles” was adopted, after some debate, in both chambers and the bill has been placed on the Special Appropriations Table.
The Council would like to thank Senator Guerin and legislators who supported this report, effectively saving the 2026 ATV season. The majority report, CA-A, was universally opposed by MFPC members managing more than 900 miles of the trail system, and by small landowners represented by Maine Woodland Owners.
While funding is uncertain at this point, CA-B, would advance a number of the consensus recommendations from the LD 1308 report to strengthen Maine’s trail network, support landowners who host ATV trails and address the top priority recommendation to strengthen the enforcement of existing laws. It would also support handicapped individuals that may need special accommodations to utilize Maine’s ATV trail network.
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In related ATV news, LD 276, “An Act Regarding Inland Fisheries and Wildlife” and LD 350, Resolve, Directing the Landowners and Land Users Relations Advisory Board to Consider Issues Related to All-terrain Vehicles in the State are en route to final enactment. Both of these bills originated as concept drafts that were originally opposed by the Council, but were heavily amended.
Now supported by MFPC, LD 276 will require the oversized ATV disclaimer signed at time of purchase to be sent to DIFW and the town clerks, effectively closing a loophole that has been openly exploited by some dealers to push thousands of illegal machines out onto Maine’s trails.
LD 350, originally recreating the ATV task force, was amended to instruct the Landowners and Land Users Relations Advisory Board to consider issues relating to ATVs in consultation with several interested parties relating to ATVs. This will result in a report back to the next IFW Committee along with recommendations.