The erroneously nicknamed “short session” of the 132nd Legislature wrapped up the majority of their work late Tuesday night, to the relief of the MFPC team. The Legislature has not yet adjourned “sine die” or “without day” as they will be back on April 29th to deal with vetoes and may take up a few other issues at that time. This in-between time keeps unresolved bills alive until such time as they finally adjourn. Anything left on the Special Appropriations Table is unlikely to be funded.
This week the chambers continued to debate the agriculture bond using both LD 2094 and LD 299 as vehicles. Ultimately neither bond achieved the necessary 2/3 support for passage. Also at this point our CLT bond, sponsored by our 2025 Legislator of the Year Rep. Sam Zager (LD 798) remains in the Appropriations Committee. Please join us in again thanking Sam for his tireless advocacy on behalf of our industry. We have really appreciated his determination and partnership on efforts to establish a CLT manufacturer in Maine.
The likelihood of any bonds being passed this year is becoming less and less likely, though bonds are one of the things that the Legislature may consider on April 29th when they return.
In the coming weeks, look for a more complete recap on the session in our other communications.
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This week, the Governor signed the Supplemental Budget into law. The following items included in the package are of interest to our members:
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- Part N: Funding for the Pass-Through Entity Tax Credit (introduced as LD 191). The proposal establishes 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.
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- LD 1313, sponsored by Senator Brad Farrin, is was one of MFPC’s priority bills. 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 and we greatly appreciate Senator Farrin’s effort to bring this bill to fruition.
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Despite our best efforts, LD 2044, “An Act to Make the Biofuel Commercial Production and Commercial Use Tax Credit and the Renewable Chemicals Tax Credit Refundable” was not funded. The bill sailed through both chambers under the hammer, but received a fiscal note when MRS determined that they needed roughly $117k to prepare to make the existing tax credit refundable. We remain dedicated to the effort and will look at options to support this emerging market in the 133rd Legislature.
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Also this week, the Governor signed LD 2018, “An Act to Amend the Requirements Governing Self-insurance Plans in the Paid Family and Medical Leave Benefits Program.” This bill was opposed by MFPC and a number of our members because it does 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.
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The Legislature funded and the Governor signed 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”. This law, which was the second to last bill printed this session, directs Maine Revenue Services 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.
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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As our legislative work is wrapping up, we appreciate all the support that you have given us in this first session with the new team. Your expertise and participation has been instrumental in the successes we had this session. More than once we have heard from legislators how much they appreciate hearing the views and voices of the forest products industry.
We look forward to seeing you in the off-session at our many events, including our Gubernatorial Forum in just a few weeks on May 8. Please RSVP now if you are an MFPC member and you plan to attend.