Major Food Processing and Manufacturing Facility Expansion and To Create Jobs in Maine
On June 19, 2019, PL 386, An Act To Promote Major Food Processing and Manufacturing Facility Expansion and To Create Jobs in Maine became law. This program is intended to encourage the location and expansion of food processing and manufacturing facilities in the State of Maine, create employment opportunities and generate significant economic growth.
A qualified applicant must satisfy, at time of application for a certificate of approval, the following criteria:
- The applicant’s headquarters are, and have been for each of the last 5 years, located in the State;
- The applicant intends to make a qualified investment in the State within 5 years following the date of the application;
- Construction of the applicant’s facility shall not have commenced prior to April 1, 2019 as evidenced by the date of issuance of an appropriate municipal building permit;
- The applicant employs or will employ upon startup of the facility; at least 40 full-time employees in the State;
- The annual income derived from employment with the applicant of at least 75% of the applicant’s employees exceeds the most recent annual per capita personal income in the county in which the facility is located.
- “Qualified investment” means an investment, of at least $35,000,000 to design, permit, construct, modify, equip or expand the applicant's facility in the State. The investments and activities of a qualified applicant and other entities that are members of the qualified applicant’s unitary business may be aggregated to determine whether a qualified investment has been made. A qualified investment does not include an investment made prior to April 1, 2019 or after December 31, 2024.
Procedures for application; Certificate of Approval:
A qualified applicant may apply to the Commissioner of DECD for a certificate of approval. An applicant shall submit to the commissioner information demonstrating the applicant is a qualified applicant. If a certified applicant undertakes to make an additional qualified investment, the certified applicant may apply to the commissioner for an additional certificate of approval.
The Commissioner, within 30 days of receipt of an application, shall determine whether the applicant is a qualified applicant and shall issue a certificate of approval or a written denial indicating why the applicant is not qualified. The certificate of approval, issued by the Commissioner of DECD, must describe the qualified investment and specify the total amount of qualified investment approved under the certificate.
Upon issuance of a certification of completion, the Commissioner of DECD shall issue, on behalf of the State, a memorandum to the qualified applicant, describing the benefits provided by this section at the time the certificate of completion is issued.
A certified applicant shall obtain approval from the Commissioner to transfer the certificate of approval, or if the certified applicant has obtained a certificate of completion, that certificate of completion to another person. A certificate of approval or certificate of completion may be transferred only if all or substantially all of the assets of the certified applicant are, or will be, transferred to that person or if 50% or more of the certified applicant’s voting stock is, or will be, acquired by that person. The Commissioner shall approve the transfer of the certificate of approval or the certificate of completion in accordance with 36 MRSA §5219-VV(2)(D).
The Commissioner must revoke a certificate of approval if the certified applicant or person to whom a certificate of approval has been transferred fails to make a qualified investment within 5 years of the date of the certificate of approval, if the applicant ceases operation of the headquarters in the State, or if the certificate of approval or certificate of completion is transferred without approval from the Commissioner.
- Beginning with the tax year during which the certificate of completion is issued or the tax year beginning in 2022, whichever is later, and for each of the following 19 tax years, a certified applicant is allowed a credit against the tax due for the taxable year in an amount equal to 1.8% of the certified applicant's qualified investment.
- A credit is not allowed for any tax year during which the taxpayer does not meet or exceed employment targets measured on the last day of the tax year;
- For each of the first 3 tax years for which the credit is claimed, there must be a total of at least 40 additional full-time employees based in the State whose jobs were added since the first day of the first tax year for which the credit was claimed.
- For each tax year after the 3rd tax year for which the credit is claimed, the taxpayer must employ a total of at least 60 full-time employees based in the State whose jobs were added since the first day of the first tax year for which the credit was claimed.
- Jobs for full-time employees that are counted for determining eligibility for the credit under one certification of completion may not be counted for determining eligibility for the credit under a separate certificate of completion.
- A credit is not allowed for any tax year following 2 consecutive tax years during which the certified applicant did not have between $5,500,000 and $12,000,000 in ordinary business income.
- Cumulative credits may not exceed $30,600,000 under any one certificate.
On or before March 1st of each year, a certificated applicant shall file a report with the Commissioner of DECD for the tax year ending immediately preceding the calendar year. The certified applicant's report shall contain the following information:
- Number of full-time employees based in the State of Maine
- Incremental amount of qualified investment made in the report year
The Commissioner of DECD must provide copies of the report to the State Tax Assessor and the joint standing committee of the Legislature having jurisdiction over tax matters at the time the report is received.
By April 1st of each year, the commissioner shall report to the joint standing committee of the Legislature having jurisdiction over tax matters aggregate data on employment levels and qualified investment amounts of certified applicants for each year.
The State Tax Assessor shall report to the committee the revenue loss during the previous calendar year, including the loss due to refundable credits, as a result of this section for each taxpayer claiming the credit.
The Office of Program Evaluation and Government Accountability (OPEGA) shall submit an evaluation of the credit provided under this section to the joint legislative committee established to oversee program evaluation and government accountability and the joint standing committee of the Legislature having jurisdiction over taxation matters. The evaluation parameters to perform the review are detailed in 36 MRSA §5219-VV(7).