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State House 2015: What We're Watching

by Lori Gramlich

The 127th Legislature has been busy preparing for the start of the long session in their two-year term, which begins today.

Legislative Leadership

Legislative leadership elections occurred last month, with Senator Michael Thibodeau elected as Senate President, Senator Garrett Mason as Majority Leader and Senator Andre Cushing as Assistant Leader. The Democrats have chosen Senator Justin Alfond as Senate Minority Leader and Senator Dawn Hill as Assistant Minority Leader.

House leadership includes Representative Mark Eves returning as Speaker, and Representative Jeff McCabe filling the position of House Majority Leader, with Representative Sara Gideon serving as Assistant Leader for the Democrats. House Republicans have chosen Representative Kenneth Fredette for their Minority Leader and Representative Eleanor Espling as their Assistant Leader.

Committee Assignments

Membership has also been set for the Joint Standing Committees that make most of the major decisions on proposed legislation.  Committees MANP generally follows closely include the Taxation, Appropriations and Financial Affairs Committees. Now is the perfect time to acquaint yourself with committee members who might impact your nonprofit.

Find a complete listing of committee assignments.

Bills + Issues We’re Watching

There are a number of issues that are likely to be taken up by this legislature that have broad and significant implications for nonprofits.

Taxation:  

Revenue Sharing

Maine cities and towns are bracing for new battles with Governor LePage over revenue sharing. As we saw during the 126th legislature, Governor LePage may be seeking to reduce or eliminate municipal revenue sharing as part of his proposed biennial budget – a move which has potential to further divide the legislature over tax policy issues and affect the sector.

Tax Incentives

Tax conformity is likely to be the first big issue for Maine lawmakers. On December 19, 2014, President Obama signed H.R.5771 , the Tax Increase Prevention Act of 2014, into law.  H.R. 5771 restores over two dozen temporary tax provisions for 2014 including the following charitable giving incentives:

  • Tax-free contributions to nonprofits from seniors’ Individual Retirement Accounts (i.e.”the IRA Rollover).
  • The tax deduction for donations of food inventory.
  • The tax deduction for donations of land for conservation.

Maine lawmakers will have to decide whether Maine should follow the lead of Congress and adopt some or all of the four dozen tax breaks for 2014 approved in the final hours of Congress last month.

This puts nonprofits and foundations in something of a bind, as while these charitable giving incentives are important, MANP and our partners at the National Council of Nonprofits would prefer to see them made permanent in the America Gives More Act, which the Obama White House is on record as opposing.

For more information on this issue, see this article from our friends at Nonprofit Quarterly.

PILOTS

We will also be watching for new but familiar proposals such as Payments in Lieu of Taxes (PILOTs) which impose payments certain nonprofits in lieu of paying taxes. This is an important issue for both municipalities and nonprofit property owners because if the State continues to cut its reimbursements to local governments, there will be an increased pressure on the property tax.  This increased pressure on the property tax has potential to renew interest on the part of many municipal officials with high concentrations of exempt property, to seek service charges and/or Payments In Lieu of Taxes (PILOTs) from nonprofit property owners.  Imposition of service charges would impact these nonprofits’ ability to serve the community.  It is important that our legislators understand the reasons for nonprofit tax-exemption in the first place and the value of the benefits we bring to the community.

Any legislation which aims to expand municipalities’ ability to charge tax-exempt nonprofit property owners service charges for municipal services will be opposed.

State Budget

Governor Le Page’s proposed biennial budget is expected to be available this Friday January 9th.  Many expect it to have an income tax cut proposal. Such a proposal is going to need additional sources of revenue, thus nonprofit exemptions are likely to be on the list.

MANP will be following this bill closely and will keep you updated with details as they develop.

Bill Details

Cloture, which is the deadline by which legislators may submit bills, was Friday January 2nd, however State Agencies released bill titles earlier in December. We know that legislation relative to taxation, particularly as it affects the nonprofit sector, will be a high priority for MANP in the upcoming session.

MANP will provide updates on proposed legislation once bill titles have been confirmed in the next couple of weeks, but this is a partial list of agency bill titles we will be following.

  • LR 477 An Act To Expand Opportunities for Economic Development in Maine
  • LR 480 An Act To Amend the Tax Laws
  • LR 484 An Act To Conform the Maine Tax Laws to the United States Internal Revenue Code
  • LR 485 Resolve, Authorizing the State Tax Assessor to Convey the Interest of the State in Certain Real Estate in the Unorganized Territory

A complete list of all bill titles, once printed, can be found at: http://legislature.maine.gov/lio.

Legislative Schedule

The presiding officers have released the legislative session schedule for January 2015, which will be further updated as the schedule unfolds.

Be Ready to Raise Your Voice

Leading up to Nonprofit Day, MANP is offering several opportunities in the coming month to educate nonprofit staff and volunteers to legally and effectively raise their voices on behalf of their missions and the people they serve.

  • January 22: Advocacy Under the Dome
    Learn from experienced legislative advocates Bob Howe and Pam Cahill during this live webinar on how to effectively advocate for issues that have an impact on nonprofits and those they serve, while also increasing support for the nonprofit community among elected officials, opinion leaders and the general public.
  • January 27: Insights Into the State House
    Join us in Augusta for an interactive day at the State House designed to help nonprofits get the information they need to be effective advocates. The day will feature a panel discussion with past legislators and advocates, a short tour of the State House and a legislative luncheon with Senate President Michael Thibodeau and House Speaker Mark Eves, who will be discussing legislative priorities for the upcoming session.
  • Plus, our Raise Your Voice Advocacy + Lobbying Toolkit is available anytime, and is an essential reference guide for all nonprofits.

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