131st Legislature: First Regular and First Special Session Review

Typically, Maine lawmakers are well into their summer vacations in late July. But this year, lawmakers were essentially in session for an extra month.

The Budget

The first “regular” session of the 131st legislature adjourned at the end of March (typically it adjourns in June), a maneuver made by Democrats to ensure that Republicans could not use the threat of a government shutdown to negotiate the budget. The budget, like all bills, goes into effect 90 days after the session adjourns, UNLESS it is passed as an emergency measure, which requires ⅔ support in each chamber. Typically the budget is passed as an emergency measure after negotiations between parties finalize the bill. This year, Democrats control both the House, Senate, and the Governor’s mansion, and they passed a “majority” budget without Republican support. This $9.8 billion budget was passed to "continue services" -- meaning that no major new initiatives were included in it.

Adjourning the “regular” session in March after the continuing services budget passed meant that it would take effect in time for the July 1 fiscal year, but it also meant that there was still a lot of work left to do.

Bills MANP Watched

After the regular session adjourned, the legislature immediately started a “special session,” and that special session continued until Wednesday, July 26th. It was during the “special session” that most of the 2000+ proposed bills were taken up, and a $445 million budget with new initiatives was passed.

Maine’s nonprofit sector is very diverse, but there are issues that we all have in common, including:

• Accountability
• Nonprofit Advocacy Rights
• Tax Policy
• Charitable Giving + Volunteer Incentives
• Nonprofit/Government Relations

MANP testified in Augusta and virtually on several bills, monitored dozens more, and informed decision-makers of the importance of the sector, and the challenges many organizations continue to face because of workforce shortages amid increased community demands.

Accountability

• LD1312: An Act to Limit the Immunity of Charitable Organizations [Signed into law]
  
  This bill amends the state's immunity provisions related to charitable organizations to provide that it is not a defense or a means to limit damages for sexual assault of a minor or sexual exploitation of a minor.
  
  
• LD1699: An Act to Amend the Freedom of Access Act and Related Provisions [Dead]
  
  This bill proposed to make several changes to the Freedom of Access Act. Most relevant to nonprofits, it would have made public the Board meetings of any 501c3 “that receives more than 50% of its annual revenue from federal, state or municipal funding sources.”
  
  MANP submitted testimony in opposition to this bill for many reasons: receipt of public funding through arms-length transactions involving contracts or grants does not convert private independent nonprofit organizations into governmental instrumentalities; there are already many levels of public accountability for nonprofits who accept government funding; revenue sources in nonprofit budgets look different from year, making board & committee meetings open to the public could have adverse effects on the responsiveness of the nonprofit sector; for-profit businesses also receive government funding, and are not subject to the same requirements.

Tax Policy

This year, sales tax exemption for nonprofit organizations was at the top of our legislative agenda. Maine has a patchwork system of sales tax exemptions, which includes over one hundred separate statutory exemptions, and more than forty distinct types of nonprofits. New exemptions are regularly added on a case-by-case basis.

• LD 68: An Act to Exempt Certain Nonprofit Organizations from the Sales and Use Tax and the Service Provider Tax [Signed into law]
  
  This was MANP’s priority bill of the session. The ultimate goal is to pass a blanket sales tax exemption for 501c3 nonprofits, and this bill was turned into a study to help us keep this moving forward. We’ll talk about it more next year, too!

Nonprofit/Government Relations

• LD12: An Act to Amend the Laws Governing Severance Pay to Cover More Types of Employers and Include More Workers [Signed into law]
  
  Current law regarding employee severance pay due to the closing, substantial shutdown or relocation of a covered establishment applies only to industrial and commercial facilities. This bill removes that limitation, making the law applicable to sectors that are not within the industrial or commercial category, including nonprofits. The law only applies to organizations who have 100 or more employees.
  
  
• LD 234: An Act to Raise from 12 to 24 the Annual Limit on the Number of Public Events and Meals Nonprofit Organizations May Have That Are Exempt from Certain Rules and Regulations [Signed into law]
  
  This bill allowed nonprofit organizations including, but not limited to, 4-H Clubs, scouts and agricultural societies to be exempt from department rules and regulations relating to dispensing foods and nonalcoholic beverages at not more than 24 public events or meals within one calendar year.
  
  
• LD 514: Resolve, Directing the Office of the State Auditor to Report on Taxpayer Money Funding Maine Nonprofits [Dead]
  
  This bill would have directed the State Auditor to compile a report by December 6, 2023 of state funds received by nonprofit corporations in the State for the past 20 years, break down the report into 5-year increments, rank the nonprofits from the most state funds received to the least state funds received and state the percentage of the state budget that was disbursed to nonprofit corporations in the State.
  
  
• LD 824: Title: Resolve, Directing the Department of Health and Human Services to Review Reimbursement Rates for Island Nursing Homes [Dead]
  
  This bill would have directed the Department of Health and Human Services to review its reimbursement rates for nursing facilities located on islands in the State.
  
  
• LD 1043: An Act to Create an Office of Ombudsman to Help Nonprofit Organizations in Their Interactions with the Government [Dead]
  
  This bill was only printed as a concept draft, and further language was not published.
  
  
• LD 1292: An Act to Change the Limits Allowed for Raffles [Dead]
  
  This bill would have increased the prize limits allowed for a raffle without having to register with the Department of Public Safety, Gambling Control Unit.
  
  
• LD1082: An Act to Advance the Maine Retirement Savings Program [Signed into law]
  
  This bill extended the timeline for the start of the new Maine Retirement Savings Program, and made additional adjustments to the program. MANP expects to offer additional educational opportunities about implementing the Retirement Savings Program as the Retirement Savings Board continues to develop the program.

Paid Family Medical Leave also passed this year - a big piece of legislation that will impact your organization and your employees in the coming years. MANP will offer educational programming about implementing PFML as more details emerge. For now, it’s important to know that the program will not begin to collect funds until January 1, 2025, and employees will not be able to utilize the program until 2026.

More Bills That Got Carried Over

MANP also followed the bills below, which were carried over. We’ll continue to monitor them as the next session begins in the winter.

• LD513: An Act Regarding Overtime Protections for Certain Maine Workers
  
  This bill would annually raise the minimum salary that an employee who works in an executive, administrative or professional capacity must earn in order for that employee to be exempt from the laws governing the minimum wage and overtime pay until it is, when converted to an annual rate, greater than 4,500 times the State's minimum hourly wage on January 1, 2026. It provided that the overtime pay requirement applicable to employees of nonprofit corporations may be met through compensatory time agreements.
  
  
• LD949: An Act to Protect Workers from Employer Surveillance
  
  This bill would prohibit employer surveillance unless the surveillance is strictly necessary for employee health and safety or the security of the employer, with certain limitations. It would require employers to provide, upon a verifiable request by an employee, data collected on the employee and certain information regarding that data. It specified that an employer must provide notice to its employees prior to beginning employer surveillance.
  
  
• LD936: An Act to Require Disclosure of Pay Ranges and Record Keeping of Pay History
  
  This bill would require that employers disclose pay range for a posted position. MANP testified in support of this bill, in alignment with our own policy on pay transparency on our job board.
  
  
• LD 666: An Act to Support Community-based Volunteer Organizations
  
  This bill would have created the Community-based Volunteer Organization Support Program within the Maine Commission for Community Service
  
  
• LD 695:  An Act to Exempt Nonprofit Land Trusts from Sales Tax
  
  This bill would have added nonprofit land trusts to the list of sales tax exempt organizations
  
  
• LD1222: An Act to Expand Child Care Services Through Public-Private Partnership Tax Credits
  
  This bill repeals the law governing the employer-assisted day care income tax credit, which by its own terms does not apply to tax years beginning on or after January 1, 2016. The bill authorizes a refundable tax credit for an employer that pays or provides in-kind resources for child care for the children of its employees. The amount of the annual credit is 50% of the amount expended or $3,000 per child, whichever is lower.
  
  
• LD1755: An Act to Exempt All Youth Development Nonprofit Organizations from Sales Tax and the Service Provider Tax
  
  This bill would have added nonprofit youth development organizations to the list of sales tax exempt organizations