August 16, 2023 Article

131st Maine Legislature End of Session Update

The First Regular Session of the 131st Legislature was expected to end on June 15th or soon after. Instead, the First Regular Session ended on March 30th, and the Governor signed the “continuing services” budget into law on March 31st. Legislative committees continued to work and the First Special Session of the 131st Legislature started on April 6th. The Special Session did not officially adjourn Sine Die (without day) until around 5 am Wednesday morning, July 26th.

An usually high number of bills were submitted to the Legislature this year, with 2019 bills considered.  Although the Legislature enacted hundreds of bills, many of these were killed or carried over to the Second Session.  A number of committees will be meeting in the interim to consider many of these carry over bills.

As happened two years ago, the Democratic majority, realizing they would not be willing to allocate enough revenue to income tax cuts as Republicans would require to support the biennial budget, chose to avoid any threat of a state shut down, and passed a budget in time to allow the budget to be in place by July 1st.  The general effective date for nonemergency laws passed in the First Regular Session of the 131st Legislature was June 29, 2023.

This budget (Part I) contained almost no new expenditures, but rather funded the already existing baseline budget necessary to continue programs already in place without interruption. Almost all of these items had been supported in legislative committees and by the Appropriations Committee in straw votes in a bipartisan manner.

However, the majority party choosing to move ahead with only a portion of the budget meant the Republicans would no longer support that budget. It left them with no real power to influence the second part of the budget (Part II), other than public pressure and the Democrats’ goodwill. This was in the context of having the largest surplus in Maine history, along with the biggest rainy-day fund ever, and more money set aside in special funds for MaineCare and education costs.

For Republicans this surplus gave hope for the ability to lower income taxes. Governor Mills and Democratic leadership made the point that most Maine taxpayers had received two direct payments from the revenue surplus in the past two years. However, these were one-time payments and offered no structural changes or lowering to Maine’s income taxes.

Democrats’ resistance to Republican income tax cut proposals stemmed from their view that Maine needs to invest in subsidized housing, free community college, paid family medical leave (see below for more details regarding PFML), childcare, and be prepared to sustain 55% of education costs and MaineCare expansion. Everyone is also aware that revenues will begin to lessen again during the next budget cycle. The budget also allocated $55 million for a new economic development program (Dirigo Business Incentive Program) that will replace the current programs, including the Pine Tree Development Zone program. Preti led the lobbying for additional energy-related benefits for the new program, including economic development incentive electric rates and exemption from the cost of the Renewable Portfolio Standard.

Republicans and Democrats continued to work together well on the vast majority of the proposals before them and the Appropriations Committee. After only working in their partisan caucuses in private for a few weeks, they eventually sat down together in the committee room to continue voting on elements of the original budget proposal that they had not yet taken up and were not included in the Part I budget. The Governor also presented them with a change package in May, including some of the revised revenue increases and a proposed $11 million for the legislative caucuses to split up and spend.

The Table
This latter amount is what is commonly referred to as “the table”, meaning the money left after the budget has passed for legislators to allocate for legislation that passed but requires funding, and was not included in the budget. This money was not allocated until the last week of the session and was the bulk of the work that was required of the Legislature on Tuesday and Wednesday of that week.

Almost all of the bills funded from the table were one-time expenditures and that allocation was moved into fiscal year 24/25. Almost every vote in the Appropriations Committee for these bills was unanimous.

While the Appropriations Committee continued to work on the Part II budget in a bipartisan fashion, and only one Republican on the committee voted against it, in the House, Rep. Swain Millett was the only Republican to support it, and Senators Bennett and Stewart were the only Republican Senators to support it in the Senate. This means that the programs included in the Part II budget, as well as any nonemergency legislation passed in the Special Session, do not go into effect until October 25th.

This budget process, plus Governor Mills’ expansion of access to abortion, the paid family medical leave bill, among others, made for a bitter partisan end of session, at least as presented to the public. As always, most of the work that does pass into law is actually bipartisan, but it does become harder to get work done with the overlay of partisan divide, and an angry constituency.

LD 1964, An Act to Create the Maine Paid Family and Medical Leave Benefits Program, LBHS Committee - included in the Part II budget – PL Chapter 412, pages 317-337.

This new law establishes a new paid family and medical leave program accessible to all workers, allowing eligible employees to take up to 12 weeks of paid leave per benefit year.  But employers will be able to provide benefits through a private plan, such as a commercial insurance policy, with special permission. The budget provides $25 million in one-time start-up funding. Maine will be the 13th state to establish a program.  The rulemaking for this program will start this Fall.

Permitted leave for employees will include medical leave, caregiving leave, parental leave, safe leave, and deployment-related leave.  Employees will have the right to get their job, or an equivalent job, back following covered leave so long as they have been employed by their employer for at least 120 days prior to their leave.

The legislation defined “family” as a worker’s spouse or domestic partner, child, parent, parent-in-law, sibling, grandchild, or grandparent. It also includes a person designated by the worker “with whom the covered individual has a significant personal bond that is or is like a family relationship, regardless of biological or legal relationship.”

Workers and employers will start contributing to PFML fund 1/1/2025 and workers will be able to take leave and receive benefits by 5/1/2026.  The program will be open to all full time, part time, seasonal, temporary, and self-employed workers in private and public sectors regardless of the size of the business.

Workers will receive as wage replacement 90% of the portion of their weekly wages that is less than or equal to 50% of the state average weekly wage, plus 66% of the portion of their weekly wages that is more than 50% of the SAWW.  Benefits will be capped at 100% of the SAWW.

The program will be funded through payroll contributions split evenly between employee and employer, capped at 1% of wages in total. Employers with fewer than 15 employees will not pay the employer share of the contribution.

Energy & Environment
On the environmental front, perhaps the most significant enacted legislation was the extension of  the date for compliance with Maine’s law on reporting PFAS compounds in products sold within the state, and changes to Maine’s restrictions on out of state waste  in order to address a de facto ban on disposal of publicly owned wastewater treatment plant sludge in landfills, exacerbated by an actual ban on land spreading of such sludge.

Energy matters were front and center this session, due to concerns over increased electricity and other energy related costs.  After significant debate, yet another tweak was added to Maine’s Net Energy Billing programs in a hoped-for reduction in the costs of those programs being borne by all Maine ratepayers. It remains to be seen whether this latest change will significantly reduce costs.  However, the Legislature also enacted bills to: (1) adopt a formal policy on beneficial electrification along with authority for the PUC and Efficiency Maine Trust, (2) set up a program to promote siting of renewable projects on farmland contaminated with PFAS; (3) approve the transmission line necessary to support the Northern Maine Renewable Program; and (4) examine on-bill financing options and time of use electric rates to benefit consumers.

The Governor vetoed four bills this session, with all four sustained by the Legislature.  These were the following:

What’s Next?
The Senate will have a confirmation session sometime in September, but the Second Regular Session of the 131st Legislature will not start until January 3, 2024.  However, cloture for the Second Regular Session of the 131st Legislature has been established as Friday, September 29, 2023, at 4 pm. This means all legislative proposals must be submitted by a legislative sponsor by that time.

Several of our clients’ most important bills have been carried over to the Second Session, so will not need to be resubmitted, but please be in touch regarding any other proposals you may have for the next session. We will be in touch regarding the more convoluted process of getting bills to be considered in the second or “short” session. Unlike the first session not all bills will be allowed in, drafted and given a public hearing, as happens in the first session.

Please get in touch with any questions or concerns you may have.