For Wind Developers: Tax Increment Financing Law – Near Miss at the Legislature
Good news! For those of you following the potential impact of LD 581, An Act to Clarify the Municipal Development District Law, on wind development in the state, please note that on April 27, 2015, the Joint Standing Committee on Taxation voted “ought not to pass”!
This process of entertaining LD 581 was a stark reminder that even those TIF bills that appear to have a positive purpose could have devastating unintended consequences to ME’s TIF program if passed into law without careful scrutiny. While LD 581 was not designed to target the wind industry, it would have effectively eliminated the ability to create TIF districts around wind projects with the purpose of granting some of the TIF reimbursements to wind developers through a credit enhancement agreement.
Some of the problematic provisions of LD 581 were that LD 581 contained:
- Onerous job creation requirements would be impossible for any wind developer to meet
- Provisions that could be interpreted to limit the use of a credit enhancement agreement to only those TIF programs that would be located in a blighted area, which would almost never include a commercial wind project
- Provisions limiting credit enhancement agreement payments to property “owners,” yet most commercial wind projects are on leased (not owned) land
- Revised notice provisions that would have been onerous and extremely expensive to execute, which costs certainly would have been passed on to the company requesting TIF benefits
Shana Cook Mueller and Joan Fortin are members of Bernstein Shur’s Municipal and Regulatory Practice Group. For further information, including whether there are any other bills to watch that might impact your project contact them at firstname.lastname@example.org or 207 228-7134 or email@example.com or 207 228-7310.