Governor Janet Mills finally caved to pressure from business groups last week when she proposed an $82 million tax break on federal relief companies received during the pandemic. Under federal law, Paycheck Protection Program (PPP) loans are not subject to a federal tax, but they are taxed under state law and business groups have been calling on the Mills administration to conform to the federal tax law.

After taking input from the Chamber of Commerce and the National Federation of Independent Businesses, Governor Mills released a plan that would provide a full state tax break on the first $1 million of PPP funds received. The Mills administration said that this would match the federal government’s double benefit for more than 99% of Maine businesses and would provide a partial tax break for businesses that received more than $1 million.

In a joint statement with the National Federation of Independent Businesses, Mills said that the intent of the bill was to “strike a middle ground between those who oppose conforming to the federal government’s double benefit and those who support full conformity.”

The Maine Department of Economic and Community Development estimates that there are nearly 27,000 businesses in Maine that received $1 million or less in PPP grants, representing about 99% of businesses in the state. Under the proposal, the other 1%, representing 251 businesses that received over $1 million from PPP, would get a full tax break for the first million dollars and the rest would be treated as taxable income.

The governor’s original proposal would have counted PPP as income, but would have allowed businesses to deduct business expenses like keeping employees on the payroll. However, that proposal received a massive backlash from business groups who insisted on a tax cut on all of the grants, even if the companies received a $1 million PPP grant and made $1 million in profits. Mills quickly changed course two days later, stating that she would look for a way to accommodate business interests. The governor’s latest tax break got a better receptions from the business community.

“We commend Governor Mills and her administration for their work to find a solution to this problem,” said David Clough, Maine NFIB director, in the joint statement with Mills.

The Mills administration proposes to pay for this colossal tax break by using $60 million it had originally proposed for the state’s so-called “rainy day fund” and $20 million from increased federal Medicaid reimbursement rates and various cost reductions.

As the administration noted in the statement, the proposal follows several of the governor’s pro-business initiatives including providing more than $250 million in economic recovery grants for businesses and dumping nearly $300 million into the Unemployment Trust Fund to avert tax increases for businesses.

However, the tax break has drawn fire from progressive groups for using taxpayer dollars to enrich profitable businesses that don’t need it.

According to the liberal-leaning Maine Center for Economic Policy, half of the state’s PPP recipients received average loans of $9,000, while the top 1% of recipients received $2 million on average.

In a straw vote, Democrats expressed support for the Mills plan, but in the end Republicans on the committee moved for a full PPP exemption for all businesses and Democrats voted against that proposal. The measure now goes to the Appropriations Committee.

Decreasing the Number of Children in the Juvenile Justice System

On February 24, the Judiciary Committee will take up a measure that would make big changes to the juvenile justice system. Under current law, Maine has no minimum age at which a child may be prosecuted for a crime. LD 320, sponsored by Rep. Victoria Morales (D-South Portland), would prevent children under 12 years of age from being prosecuted for crimes and would prevent children under 14 from being incarcerated. It would eliminate the requirement that if committed, juveniles be committed for at least a year. It would also prevent courts from imposing dispositions against juveniles that involve commitment without exhausting all other less-restrictive alternatives.

Expanding MaineCare for Children & Postpartum Mothers

On February 24, the Health and Human Services Committee will take up two bills that would expand health care coverage for low-income families. LD 265, sponsored by Sen. Anne Carney (D-Cumberland County), would extend MaineCare coverage for low-income mothers from 60 days to 12 months following the birth of a child.

On the same day, Carney will present LD 24, which would expand eligibility for Cub Care, a health care program for children under the age of 19 who don’t meet the income requirements for MaineCare. Under current law, Cub Care is only available to children and teenagers at 200% of the federal poverty level, which amounts to $25,520 a year for a household of one and $43,440 for a household of three. LD 24 would expand eligibility to 300% of the federal poverty level ($38,280 for a household of one and $65,160 for a household of three) while also expanding eligibility to 19- and 20-year-olds and to noncitizens under 21 years of age.

Committee Passes Bill to Provide MaineCare Coverage for Breast Milk

On February 11, the Health Coverage, Insurance and Financial Services Committee approved LD 85, which would allow MaineCare to cover donor breast milk for babies who cannot take their mothers’ milk or whose mothers can’t produce it.

Testifying for the measure, Naomi Bar-Yam of the nonprofit Mothers’ Milk Bank Northeast, said milk banks operate similarly to blood banks and provide “safe, donated, pasteurized human milk to babies in fragile health.” She said the bill would provide “equitable access to lifesaving donor human milk for its smallest, youngest citizens — premature and fragile babies in the neonatal intensive care unit and late preterm and term babies with medical need for donor milk both in hospital and at home.”

Mothers’ Milk Bank Northeast serves several hospitals, including Pen Bay Medical Center and Waldo County General Hospital.

Banning Banks from Charging Late Fees

On February 18, the Health Coverage, Insurance and Financial Services Committee will consider Rep. Joe Perry’s (D-Bangor) proposal (LD 300) that would ban banks from charging late fees or fees for transactions not occurring on a day that the financial institution closes for a “good cause,” such as emergency weather conditions, community events or “other similar reasons.”

Excusing Veterans from Jury Duty

Rep. Nicole Grohoski (D-Ellsworth) will present a bill (LD 237) to the Judiciary Committee on February 18 that would allow veterans to be excused from jury duty if they don’t want to serve. Under current law, prospective jurors can be excused from jury duty if they are over 80, are a Christian Scientist or they have a physical or mental disability. Municipal election clerks can also be excused if jury duty is on the date of an election.

More Funding for Homeless Shelters

Advocates for the homeless will be testifying on a bill that would provide more funding for homeless shelters, Wednesday, February 17, in the Labor and Housing Committee. LD 211, sponsored by Rep. Kristen Cloutier (D-Lewiston), would provide $3 million to shelters across Maine to support operations and capacity. According to the Portland-based Preble Street, which operates shelters across the state, thousands of Mainers go without shelter every night. According to the National Alliance to End Homelessness, people without shelter have a life expectancy of 28 years less than their housed counterparts.

Committee Considers Divesting State from Fossil Fuels

The State and Local Government Committee is considering a bill (LD 99) that would require the state to divest itself from fossil fuels. Several climate activists testified in support of the bill, arguing that the state should lead on climate justice as carbon emissions are cooking the planet.

“The future of energy is renewable. If it is not, there is no future,” wrote University of Maine student Charles Cooper of Hope.

State Treasurer Henry Beck testified in support of the bill and noted that, unlike state pensions, the state treasury does not invest in equities, and its investments “could easily” be separated from fossil fuels. Speaking for the Maine Service Employees Association, Jeff McCabe said many of the public employees the union represents support taking action on the climate. However, he urged the committee to proceed with caution as it considers removing fossil fuels from public pension investments as state employees and teachers don’t have Social Security to fall back on if their pensions are weakened further.

“The bill raises some questions for us: will this cause a loss in revenue for the retirement system from what [has been] projected?” wrote McCabe.

Determining Racial Impacts of Laws

A legislative committee is currently working on a bill that would require state government to assess the potential impact legislation could have on minority populations who have been historically disadvantaged. Penobscot Nation Tribal Ambassador Maulian Dana said she has witnessed firsthand systemic racism in Maine and racial disparities in economics, public health, and in the criminal justice system.

“When you hold space for the most vulnerable of your citizenship you will see the entire state flourish in new and exciting ways,” she said.

Currently five other states have policies that address racial impact statements, which generally focus on how laws impact disadvantaged populations in the criminal justice system and corrections.

Should Maine Adopt the State’s Original Flag?

Once again, the Maine Legislature will vote on whether to replace the current state flag featuring the state coat of arms with the state’s original flag. Maine didn’t have an official state flag until 1901, when it adopted a design featuring a pine tree and North Star on a buff background. In March 1901, the Kennebec Journal praised the new flag:

“Maine is everywhere known as ‘The Pine Tree State’ and what could be more appropriate than … the tree should be one of the features of the flag? … Were a flag bearing the pine tree carried through any city the people would say ‘There is Maine.’”

According to flag expert Dave Martucci of Washington, the original flag was replaced in 1909 by a Legislature largely made up of aging Civil War veterans who wanted the flag to “be more military-like.” Martucci argued that the original flag would set Maine apart from 25 other state flags that look very similar to Maine’s. He argued that the original flag has become much more popular and can be seen throughout Maine, while few Mainers fly the current one.

In a committee vote last week, legislators split on whether to change the flag. Some argued the bill was frivolous and a waste of time.

“We’re in the middle of a pandemic and the state has a lot of other concerns to deal with,” said Rep. Will Tuell (R-East Machias). “This is not on the high priority list of dealing with the pandemic and our fiscal issues.”

Establishing Juneteenth as an Official State Holiday

On February 17, the State and Local Government Committee will hear a bill that would establish June 19th as Juneteenth and a paid state holiday. Juneteenth celebrates the emancipation of people who had been enslaved and originated when Union Army General Gordon Granger proclaimed freedom from slavery on June 19, 1865, at the end of the Civil War.

In 2011, Maine established Juneteenth as a state holiday and Governor Janet Mills has issued a proclamation every year to renew the designation, but it is not currently a paid holiday in Maine. Four states recognize Juneteenth as an official paid holiday for state employees.

Proposed Pesticides Ban Returns

The Agriculture Conservation and Forestry Committee will once again hold a hearing on a bill (LD 155) that would ban the use of pesticides containing neonicotinoids. The bill, which is sponsored by Rep. Nicole Grohoski (D-Ellsworth), has been submitted in various forms over the years by legislators who cite some studies that claim neonics have led to the collapse of bee colonies.

But testifying on a proposed ban in 2017, State Horticulturist Gary Fish said there aren’t any definitive links found behind the use of the pesticide and pollinator decline. He also noted that the state Board of Pesticides Control had never received a report of a bee hive loss from neonicotinoids.

Reclassifying Dishonorably Discharged LGBTQ Vets

The Veterans and Legal Affairs Committee is considering a bill that will allow LGBTQ veterans who received a dishonorable discharge for their sexual orientation or gender identity to be recognized as honorably discharged under state law. LD 173, sponsored by Rep. Barbara Wood (D-Portland), would establish a process for those veterans to be treated as honorably discharged for purposes of determining eligibility for rights, privileges and benefits under state law.

According to the Maine Bureau of Veterans’ Services, between the end of World War II and the 2010 repeal of “Don’t Ask, Don’t Tell,” more than 100,000 veterans were involuntarily discharged from service due to their sexual orientation. As recently as this past January, transgender service members could also be kicked out of the military just for being who they are. As a result, these LGBTQ veterans have been denied the same benefits that straight and cis-gendered veterans receive.

The Maine Bureau of Veterans’ Services testified in support of the bill and has stated that it would assist LGBTQ veterans in getting their state-level benefits and help them navigate the federal process for upgrading their discharge statuses to become eligible for federal benefits as well.

Summit Natural Gas Proposes Power-to-Fuel Pilot Project

The Energy Utilities and Technology Committee will vote soon on a bill (LD 9) that would direct the Maine Public Utilities Commission to approve up to two power-to-fuel pilot projects in the state. Power-to-fuel is a process of converting electricity to hydrogen through electrolysis. The fuel is known as “green hydrogen” when produced using renewable energy and can then be stored or combined with C02 for conversion into methane gas.

Summit Natural Gas President and CEO Kurt Adams told the committee that the company already has a voluntary renewable natural gas program that allows Mainers to reduce their carbon footprints.

“This program will not only benefit the grid by relieving pressure on it, but will also generate carbon neutral, green energy to create another avenue to decarbonize our energy system,” wrote Adams. “Maine was in a unique position to lead on this technology because our renewable resources are greater than our ability to transmit those resources in all hours.”

The Mills administration expressed support for the measure. According to various news reports, the European Union has set a goal to develop 40 gigawatts of electrolyzer projects by 2030. Adams said the company is also developing a renewable natural gas digester in central Maine that will recycle waste from dairy cows to produce natural gas.

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