Maine Governor Signs Economic Development Legislation

June 22, 2009 -- AUGUSTA – Maine Governor John E. Baldacci today signed legislation to expand the Pine Tree Zone program, a signature economic development tool that provides incentives for businesses to expand in Maine or move to the State. The bill the Governor signed expands Pine Tree Zones statewide, using a two-tiered system so that more economically challenged areas have a longer benefit period.

“The Pine Tree Zone program that we established in 2003 – with its inclusion and enhancement of all Maine’s tax incentive tools for business development - is a proven economic development tool for the State,” said the Governor. “The program has resulted in more opportunities for Maine workers and businesses.”

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“During these difficult economic times, it’s vital that we continue to take aggressive steps to encourage business growth and job creation, including continued focus on target sectors like manufacturing and technology, expansion across Maine of tax free areas for them to grow in, and the lowering of taxes like our recent income tax reduction,” said the Governor.

According to the Maine Department of Economic and Community Development, at the end of 2008, there were a total of 213 Pine Tree Zone certified businesses in Maine, who reported their plans to create more than 6,500 jobs and invest $685 million. Those jobs are expected to generate $203 million in payroll.

Earlier this month, the Governor celebrated news in Auburn and Augusta of Pine Tree Zone businesses. In Auburn, TD Bank is expanding its presence and workforce. In Augusta, Bolduc Technology Group is relocating to the State.

“This bill comes at an important time,” said the Governor. “Pine Tree Zones enable Maine to encourage growth internally and attract new businesses and along with them, quality jobs with good pay and benefits.”

The bill, LD 1473, "An Act To Reaffirm Maine's Commitment to Business by Amending the Pine Tree Development Zone Laws,” was sponsored by Rep. Nancy Smith (D-Monmouth).

A fact sheet of the Pine Tree Zone expansion bill follows. For additional information about Maine’s Pine Tree Zone program, visit http://www.mainebiz.org/pinetreezones/default.asp

LD 1473

• Pine Tree Development Zone is a performance-based program; businesses do not receive benefits unless they create quality jobs and make additional investments.

• Quality jobs are full time, income at or above the county per capita average, provide access to group health insurance, and provide access to a qualified retirement plan (e.g. ERISA based plan)

• Businesses must certify that they would not locate/relocate/expand ‘but for’ the benefits of the program.

• A business must be classified in 1 of 9 qualifying (targeted) sectors. These include Advanced Technologies for Forestry & Agriculture, Aquaculture & Marine Technology, Biotechnology, Composite Materials, Environmental Technology, Financial Services, Information Technology, Manufacturing, and Precision Manufacturing.

• From 2003 through 2008, there have been 213 businesses certified. These businesses anticipate creating more than 6,500 jobs, $203 million in payroll, and $685 million in investments.

• Benefits include income tax credits, sales tax exemptions, employee income tax withholding (payroll tax) reimbursements, and access to reduced utility rates; these provide a nearly tax free period of benefits for the duration of a company’s Pine Tree Development Zone certification.

• In today’s economic climate, it’s not a matter of Portland competing against Ft. Kent but rather Maine competing against other states and other countries.

• Effective January 2010, creates a statewide, two-tier program, which allows businesses in and/or expanding to Tier 2 locations to receive 5 years of benefits; Tier 1 locations offer access to 10 years of benefits.

• Tier 2 locations are municipalities located in Cumberland and York counties with unemployment rates that are closer in alignment with their labor market area’s unemployment rate. All other municipalities are considered Tier 1.

• With this bill, and in these difficult economic times, in calendar year 2009 only, all of Maine is Tier 1 and provides 10 years of benefits to otherwise qualified businesses. The goal is to encourage development projects to make job creation and investment decisions sooner rather than later.

Source: Maine Governor