An Act to Transfer the Responsibility for Tax Expenditure Review from the Government Oversight Committee to the Joint Standing Committee on Taxation

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132nd MAINE LEGISLATURE
FIRST REGULAR SESSION-2025
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.

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1Be it enacted by the People of the State of Maine as follows:
2Sec. 1. 3 MRSA §994, sub-§3-B is enacted to read:
33-B. Tax expenditure evaluations. To direct the office to conduct tax expenditure
4 evaluations pursuant to the processes established in section 999;
5Sec. 2. 3 MRSA §998, as amended by PL 2023, c. 417, §§2 to 4, is further amended
6 to read:
7§998. Process for review of tax expenditures
81. Assignment of review categories. By October 1, 2015, the The policy committee,
9 in consultation with the policy committee, shall assign each tax expenditure to one of the
10 following review categories:
11 A. Full evaluation for tax expenditures that are intended to provide an incentive for
12 specific behaviors, that provide a benefit to a specific group of beneficiaries or for
13 which measurable goals can be identified;
14 B. Expedited review for tax expenditures that are intended to implement broad tax
15 policy goals that cannot be reasonably measured; and
16 C. No review for tax expenditures with an impact on state revenue of less than $50,000
17 or that otherwise do not warrant either a full evaluation or expedited review.
182. Schedule. The policy committee, in consultation with the policy committee, shall
19 establish a prioritized schedule of ongoing review of the tax expenditures assigned to the
20 full evaluation and expedited review categories pursuant to subsection 1, paragraphs A and
21 B. To the extent practicable, the policy committee shall group the review of tax
22 expenditures with similar goals together. Beginning in 2024, when When prioritizing
23 ongoing review of tax expenditures assigned to the full evaluation category, the policy
24 committee, in consultation with the policy committee, shall give priority to tax
25 expenditures that are intended to provide an incentive to businesses over tax expenditures
26 that are directed primarily toward individual tax relief and shall consider the impact of any
27 statutory provisions regarding the expiration of a tax expenditure that may be the subject
28 of legislation to extend the tax expenditure.
293. Annual review of assignments and schedule. By October 1st of each year,
30 beginning in 2016, the policy committee, in consultation with the policy committee, shall
31 review and make any necessary adjustments to the review category assignments and
32 schedule pursuant to subsections 1 and 2, including adjustments needed to incorporate tax
33 expenditures enacted, amended or repealed during the preceding year.
344. Office responsibilities. The office shall maintain a current record of the review
35 category assignments and the schedule under this section.
365. Policy committee meetings. In order to perform its functions under this chapter,
37 the policy committee may meet monthly or as often as is determined necessary by the chairs
38 of the policy committee.
396. Limited analysis projects. Notwithstanding any provision of this chapter to the
40 contrary, the policy committee may request the committee to approve up to 2 limited
41 analysis projects related to legislation before the policy committee to be completed by the
42 office during each regular legislative session. For the purposes of this section subsection,
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43 "limited analysis project" means a limited review of a tax expenditure based on information
44 readily available to the office that is intended to be completed and submitted to the
45 committee and the policy committee within 30 days of approval by the committee
46 following a request by the policy committee.
5Sec. 3. 3 MRSA §999, sub-§1, as amended by PL 2017, c. 266, §2, is further
6 amended to read:
71. Evaluation process. Beginning January 1, 2016, the The office shall evaluate each
8 tax expenditure identified under section 998, subsection 1, paragraph A in accordance with
9 the schedule established in section 998, subsection 2.
10 A. Prior to the beginning of each evaluation, the committee shall direct the office to
11 present recommendations to the policy committee. The policy committee, after
12 consideration of recommendations from the office, shall approve the following for each
13 tax expenditure subject to full evaluation:
14 (1) The purposes, intent or goals of the tax expenditure, as informed by original
15 legislative intent as well as subsequent legislative and policy developments and
16 changes in the state economy and fiscal condition;
17 (2) The intended beneficiaries of the tax expenditure;
18 (3) The evaluation objectives, which may include an assessment of:
19 (a) The fiscal impact of the tax expenditure, including past and estimated
20 future impacts;
21 (b) The extent to which the design of the tax expenditure is effective in
22 accomplishing the tax expenditure's purposes, intent or goals and consistent
23 with best practices;
24 (c) The extent to which the tax expenditure is achieving its purposes, intent or
25 goals, taking into consideration the economic context, market conditions and
26 indirect benefits;
27 (d) The extent to which those actually benefiting from the tax expenditure are
28 the intended beneficiaries;
29 (e) The extent to which it is likely that the desired behavior might have
30 occurred without the tax expenditure, taking into consideration similar tax
31 expenditures offered by other states;
32 (f) The extent to which the State's administration of the tax expenditure,
33 including enforcement efforts, is efficient and effective;
34 (g) The extent to which there are other state or federal tax expenditures, direct
35 expenditures or other programs that have similar purposes, intent or goals as
36 the tax expenditure, and the extent to which such similar initiatives are
37 coordinated, complementary or duplicative;
38 (h) The extent to which the tax expenditure is a cost-effective use of resources
39 compared to other options for using the same resources or addressing the same
40 purposes, intent or goals; and
41 (i) Any opportunities to improve the effectiveness of the tax expenditure in
42 meeting its purposes, intent or goals; and
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1 (4) The performance measures appropriate for analyzing the evaluation objectives.
2 Performance measures must be clear and relevant to the specific tax expenditure
3 and the approved evaluation objectives.
4 B. Before final approval pursuant to paragraph A, the committee shall seek and
5 consider input from the policy committee and stakeholders and may seek input from
6 experts.
7Sec. 4. 3 MRSA §1001, sub-§2, as enacted by PL 2015, c. 344, §4, is amended to
8 read:
92. Legislation. The policy committee may submit to the Legislature any legislation it
10 considers necessary to improve the process or availability of data for the review of tax
11 expenditures.
12SUMMARY
13 This bill amends the laws governing tax expenditure review by the Legislature. The
14 bill transfers the primary responsibility for tax expenditure review and evaluation from the
15 jurisdiction of the Government Oversight Committee to the joint standing committee of the
16 Legislature having jurisdiction over taxation matters.
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