Summary: The Pine Tree Development Zones Program was established by the Legislature in PL 2003 Chapter 439, Part NNN. The Department of Economic and Community Development oversees the program that creates eight Pine Tree Development Zones, each containing no more than 5000 acres and 20 noncontiguous parcels. This rule defines what regions are eligible to apply and the application process. It also defines what a business must do to qualify for the benefits provided by a zone.

Basis Statement:
The Pine Tree Development Zones program, established under Title 30-A, Chapter 206, Sub-chapter 3, is designed to encourage business investment in economically distressed areas of the state in order to:

A. Provide new employment opportunities;
B. Improve existing employment opportunities;
C. Improve and broaden the tax base; and
D. Improve the general economy of the state

The rules governing the Pine Tree Development Zones program, adopted pursuant to the Department's rulemaking authority under Title 30-A sections 5247 and 5250, establish the minimum requirements for the designation of zones, the determination and certification of eligibility, the selection of zones for designation, and the periodic evaluation of zone performance. The rules prescribe application requirements, procedures for designation and amendment of zones, reporting requirements and the general administration of the program. Additionally, the rules establish the requirements and procedures for the certification of Qualified Pine Tree Development Zone Businesses.

It is the intent of the Department of Economic and Community Development to ensure that all eligible and interested units of local government have the opportunity to participate in the Pine Tree Development Zones program.

Summary: Definitions of many of the terms used in these rules are contained in Title 30-A section 5246. This section defines certain terms that are used in the rules but that are not defined by Title 30-A, Chapter 206.

As used in these rules, unless the context otherwise indicates, the following terms have the following meanings:

1. Androscoggin Valley Region. “Androscoggin Valley Region” means the communities included within the Androscoggin Valley Regional Planning and Development District.

2. Applicant. “Applicant” means a unit of local government, an organization of multiple participating units of local government, or an organization representing one or more units of local government, which provides information related to, and seeks final designation of, a Pine Tree Development Zone.

3. Aroostook County Region. “Aroostook County Region” means the area contained within the boundaries of Northern Maine Economic Development District.

4. Authorized official. “Authorized official” means an official authorized by all participating units of local government to submit an application for final designation of a Pine Tree Development Zone on their behalf, serve as a point of contact on application review and approval matters, and coordinate administration, marketing and annual reporting for the zone.

5. Certified business. “Certified business” means a qualified Pine Tree Development Zone business that has received a certificate from the department in accordance with Title 30-A section 5250-B, and section 13 of this rule.

6. Combined unemployment rate. “Combined unemployment rate” means the unemployment rate calculated by dividing the total number of unemployed workers in the municipalities of labor market areas included in a multi-jurisdiction application by the total work force within the same municipalities of the included labor market areas, for the 12 months preceding the date of application most recently reported by the Maine Department of Labor.

7. Designated growth area. “ Designated growth area” means an area that meets at least one of the following conditions:

a. Has been designated for growth in a municipality's comprehensive plan;
b. Served by public sewer or its equivalent;
c. An urban compact zone as defined by the Maine Department of Transportation;
d. A census designated area; or
e. An area that, in the opinion of the Commissioner, meets intent of Title 30-A section 4349-A sub 1.

9. Final designation. “Final designation” means the action taken by the Commissioner, as evidenced by the execution of a letter of designation, approving the designation of a specific Pine Tree Development Zone, including all local designations of sub-zones included in the development plan.

10. Local designation. “Local designation” means the action taken by the legislative body of a unit of local government to identify and approve property for inclusion in a proposed Pine Tree Development Zone. Local designation must be evidenced by a resolution or order:

a. Designating the property as a sub-zone or sub-zones;
b. Adopting the proposed Pine Tree Zone development plan; and
c. Agreeing to maintain at least one pre-permitted site within the sub-zone or sub-zones.

11. Penobscot Valley Region. “Penobscot Valley Region” means the town of Bucksport in Hancock County, and all of the areas of Penobscot County, with the exception of the towns of Dexter, Newport, Patten, Stacyville and Mount Chase.

12. Pre-authorized region. “Pre-authorized region” means the Aroostook County, Penobscot Valley, Androscoggin Valley and Washington County and Downeast regions.

13. Preliminary designation. “Preliminary designation” means the Commissioner's initial designation of a Pine Tree Development Zone based upon information and a development plan submitted in accordance with Title 30-A section 5247 and section 7 of this rule, and prior to the receipt and approval of documentation of local legislative action required by Title 30-A section 5248.

14. Pre-permitted development site. “Pre-permitted development site” means a site within a Pine Tree Development Zone sub-zone determined by the unit of local unit of government to be generally suitable for development and use by a Pine Tree Development Zone business.

15. Sub-zone. “Sub-zone” means all property contained within a single unit of local government, regardless of ownership, that is locally designated for inclusion in a proposed Pine Tree Development Zone. A finally-designated Pine Tree Development Zone may be comprised of up to twenty sub-zones.

16. Washington County and Downeast Region. “Washington County and Downeast Region” means the combined areas of Washington and Hancock counties, with the exception of the Town of Bucksport.

Summary: This section establishes the minimum requirements that must be met for property to be eligible for final designation as a Pine Tree Development Zone under Title 30-A section 5247.

1. Applicability

This section is applicable to all Pine Tree Development Zones proposed for designation within the State of Maine.

To be eligible for designation as a Pine Tree Development Zone under this section, the following requirements must be met:

A. All real property proposed for inclusion within the zone, including all non-contiguous parcels or sub-zones, must be located within either a single pre-authorized region as defined in section 3, or in an area of the state not included within a pre-authorized region that meets the requirements of Title 30-A section 5247 sub-section (3).

B. All real property proposed for inclusion within the zone must be suitable for conducting the business activities described in Title 30-A section 5246, sub-section 16. Suitability may be evidenced by appropriate zoning or other land use regulations adopted by unit of local government having jurisdiction over the property, or, in the absence of such regulations, documentation from the selectman or council finding the property to be suitable. Suitable property includes property currently or potentially used for related business activities, including, but not limited to, transportation and utility services. Parcels proposed for inclusion in the Pine Tree Development Zone must be within a designated growth area as defined by this rule.

C. The total area of property proposed for inclusion within the zone, including all non-contiguous parcels or sub-zones, may not be greater than 5,000 acres.

D. The total number of non-contiguous parcels or sub-zones proposed for inclusion within the zone may not exceed 20.

E. Each participating unit of local government must agree to maintain at least one pre-permitted development site within the parcel(s) or sub-zone(s) proposed for inclusion within the zone throughout its term, but only to the extent that property remains available for development within the parcel(s) or sub-zone(s).

F. All real property proposed for inclusion within the zone, including any non-contiguous parcels or sub-zones, must meet at least one of the following conditions at the time of application to the Department:

1. Unemployment rate

a. If the property is contained within a single labor market area, the unemployment rate in that area exceeds the state unemployment rate;
b. If the property is contained within multiple labor market areas, the combined unemployment rate, as defined by this rule, of the municipalities to be included in the zone exceeds the state unemployment rate; or

2. Average weekly wage

a. If the property is contained within a single county, the average weekly wage in that county is less than the state average weekly wage;
b. If the property is contained within multiple counties, the average weekly wages of those counties combined is less than the state average weekly wage; or

3. The property is contained within a labor market area that has lost more than 5% of its population over the immediately preceding 3-year period as a result of business closings; or

4. The property is contained within a labor market area that has lost more than 5% of its employed workers over the immediately preceding 3-year period as a result of business closings.

Of the total acreage authorized for inclusion in Pine Tree Development Zones, the following is reserved for the use of Maine Indian tribes:

A. 100 acres within the Aroostook County region for the Aroostook Band of Micmacs and Houlton Band of Maliseets;

B. 500 acres within the Penobscot Valley region for the Penobscot Nation; and

C. 500 acres within the Washington County and Downeast region for the Passamaquoddy Tribe.

Each zone will designate a single entity to administer and coordinate the activities of that zone. The development plan adopted by each unit of local government will identify the entity responsible for the administration of the zone, and include the governance structure. The administration unit will be responsible for managing all zone activities including:

A. Developing and implementing a coordinated marketing strategy;

B. Developing the annual and long range operational budget for management of the zone including sources and uses of funds;

C. Creating a five year development plan, which will include the establishment of long and short term milestones and a strategy for meeting those milestones;

D. Ensuring a representative governance structure;

E. Ensuring regional cooperation in meeting the goals of the zone; and

F. Submitting zone amendments to the commissioner for approval.

Summary: This section establishes the requirements for applications for the preliminary and final designation of Pine Tree Development Zones authorized in Title 30-A section 5247, sub-section 1, ¶¶ A-D, including approval of the local designations of all included non-contiguous parcels or sub-zones.

1. Application Required

An applicant seeking designation of a Pine Tree Development Zone shall submit for the Department's review one original and two copies of an application that satisfies the requirements of this section.

In order to minimize the administrative and financial burdens associated with the local legislative action required by Title 30-A section 5248, an applicant may submit an application for preliminary designation of a Pine Tree Development Zone based upon the determination of the executive body of each participating unit of local government. In such cases, and where preliminary designation has been granted by the Commissioner, final designation will require the submission and approval of the documentation of local legislative action specified in sub-section 3 below. No business may be certified as a Pine Tree Development Zone business in a Pine Tree Development Zone that has not received preliminary designation by the Commissioner.

An application for preliminary designation of a Pine Tree Development Zone must contain the following:

A. A letter of transmittal from an authorized official certifying that all information contained in the application is true and correct to the best of his or her knowledge;
B. Documentation from the units of local government of their intent to participate in the Pine Tree Development Zone Program;
C. An Application Data Sheet on a form provided by the Department;
D. A table listing all participating units of local government, with the following information included for each:

1. The name, acreage and zoning (if applicable) of all parcels proposed for inclusion within the zone that are located within the boundaries of the unit of local government. Absent zoning, documentation from the selectman or council finding the property to be suitable;
2. Documentation that all parcels meet the requirements of designated growth area as defined by this rule;
3. The combined unemployment rate as defined by this rule;
4. The county average weekly wage; and
5. The labor market work force changes in each of the preceding three years, including identification of losses in population or workforce as a result of business closings in the proposed zone.

E. Maps:

1. A state or regional map highlighting all participating units of local government;
2. A map or maps of sufficient scale to accurately depict all parcels or sub-zones proposed for inclusion within the zone; and
3. A map depicting the region expected to be benefited by the proposed zone.

F. A narrative summary of the purpose of the proposed zone, and how it will be administered;

G. A detailed narrative description of the geographic region that will be affected by the proposed zone, the economic distress that justifies the zone, and how the proposed zone will address this need;

H. A signed Memorandum of Understanding between the Department and the administrative unit of the Pine Tree Development Zone on a common protocol for intake and referral of business leads; and

I. A detailed five year preliminary development plan for the proposed zone, including:

1. Governance structure;
2. The goals and objectives of the proposed zone and the criteria the applicant will use to determine if the goals and objectives are met;
3. A description of how the development plan's goals fit with the region's comprehensive economic development strategy.
4. An annualized five year plan for achieving those goals and objectives, including:

a) Operations and administration;
b) Budget;
c) Cooperative agreements between participating units of local government and other public and private organizations;
d) Marketing and public relations;
e) The specific roles of participating units of local government and other organizations; and
f) A timeline depicting milestones and activities throughout the term of the zone;

5. The financial and other resources that have been or will be committed by participating units of local government and other public and private organizations;
6. Identification of potential capital and infrastructure needs for the zone, including but not limited to public water, sewer, three-phase power and access to transportation and telecommunications infrastructure; and
7. Documentation of any inter-local agreements for management and financial operations in place prior to final designation including:

a) Designation of administrative and governance unit;
b) Financial commitments to operation and capital improvements; and
c) Tax base sharing agreements, if any.

In cases where an applicant has received preliminary designation of a Pine Tree Development Zone, an application for final designation of a Pine Tree Development Zone must contain:

A. A copy of the certificate of preliminarily designation of the zone issued by the Commissioner; and

B. The following documentation from each participating unit of local government evidencing the adoption of the development plan and the local designation of property for inclusion as one or more sub-zones:

1. A certified copy of the notice of public hearing required by Title 30-A section 5248, sub-section 1, showing the date upon which the notice was first published;
2. A certified copy of the record of the public meeting at which the proposed zone and development plan were discussed;
3. A certified copy of the legislative body's resolution or order:

a) Adopting the proposed zone's development plan;
b) Designating the unit of local government's parcel(s) or sub-zone(s) for inclusion within the proposed zone;
c) Agreeing to maintain at least one pre-permitted development site within its parcel(s) or sub-zone(s) for the entire term of the zone or until such time as all designated property has been developed; and
d) Agreeing that the administrative body of a Pine Tree Development Zone or units of local government within a zone will not use the benefits of a Pine Tree Development Zone to encourage or facilitate the transfer of existing positions or property of a qualified business or affiliated business into a zone from a location elsewhere in the state.

4. Final development plan, including any changes as from the development plan provided in the preliminary application;
5. Documentation of inter-local agreements for management and financial operations including:

a. Designation of administrative and governance unit;
b. Financial commitments to operation and capital improvements; and
c. Tax base sharing agreements, if any.

Summary: This section establishes the requirements for an application for approval by the Commissioner of an amendment to a Pine Tree Development Zone or Development Plan. Examples of such amendments include alteration of zone or parcel boundaries and the addition or deletion of participating units of local government. In no case may an amendment to a zone adversely affect the Pine Tree Development Zone benefits of a certified Pine Tree Development Zone business located within that zone.

1. Application Required

An applicant seeking to amend a Pine Tree Development Zone or an adopted Development Plan shall submit for the Department's review one original and two copies of an application that satisfies the requirements of this section.

At the request of a unit of local government, the administrative body of a designated Pine Tree Development Zone may request an amendment to the location of a parcel within its borders. The new location of the parcel must be approved by the legislative body of the effected unit of local government in accordance with Title 30-A section 5248, and section 7, sub-section 3, paragraph B of this rule. An amendment that changes the location only of a parcel does not require approval of all participating municipalities within the Pine Tree Development Zone. All municipalities within the zone must approve any change in size of a parcel. All parcels must be in a designated growth zone, as defined by this rule. Amendments must be submitted to the Department for final approval.

An application to amend a Pine Tree Development Zone or adopted Development Plan must contain the following:

A. A letter of transmittal executed by an authorized official certifying that all information contained in the application is true and correct to the best of his or her knowledge;

B. A narrative summary of the purpose of the proposed amendment, how it will affect the designated zone;

C. Maps clearly depicting all changes to the designated zone;

D. An updated development plan that accounts for the effect of the amendment; and

E. Documentation from each effected unit of local government evidencing the adoption of the amended development plan and the revisions to the local designations of property included within the zone in accordance with Title 30-A section 5248, and section 3, sub-section 3, paragraph B of this rule.

An applicant seeking to amend a Pine Tree Development Zone shall submit:

A. An application containing only the changes to the original application, consistent with subsection 2; or
B. A new version of the complete original application containing the proposed changes consistent with subsection 2.

Upon receipt of an application for amendment of a Pine Tree Development Zone, the Department shall review the application to ensure that it is complete and satisfies the requirements of both Title 30-A, Chapter 206, Sub-chapter 3, and this Chapter of the Department's rules.

Summary: This section prescribes procedures for the Department's review of applications for the designation or amendment of a Pine Tree Development Zone. 1. Review by Department

Upon receipt of an application for preliminary designation or amendment of a Pine Tree Development Zone, the Department shall review the application to ensure that it is complete and satisfies the requirements of both Title 30-A, Chapter 206, Sub-chapter 3, and this Chapter of the Department's rules.

The designation of Pine Tree Development Zones is limited by Title 30-A section 5247, sub-section 1 as follows:

A. No more than one zone in each of the four pre-authorized regions; and

B. No more than four zones in the area of the state not included in a pre-authorized region.

The department will evaluate applications and select zones for designation based upon the following criteria:

A. Severity of economic distress within the region expected to be affected by the proposed zone; (15%)

1. Total number of unemployed;
2. Combined unemployment rate;
3. Weighted average weekly wage; and
4. Weighted average per capita income;

B. Predicted short and long-term effects of the proposed zone upon the economic distress of the region and how the proposed zone meets the statutory purpose of the Pine Tree Development Zone program as outlined in Title 30-A § 5245; (25%)

C. Resources, regional cooperation and partnerships committed to the proposed zone by participating units of local government and other public and private organizations, including; (30%)

1.) Financial;
2.) In-kind and supporting; and
3.) Demonstrated commitment to regional cooperation and coordination to promote and development the proposed Pine Tree Development Zone;

D. The likelihood that the zone and the development plan will produce the results predicted as evidenced by; (30%)

1. The ability of included parcels or sub-zones to support commercial or industrial development, including, but not limited to the following factors:

a) Availability of or access to transportation and utility infrastructure;
b) Suitability of geography;
c) Available work force;
d) Readiness for development; and
e) Availability of or access to raw materials and supporting resources;

2. Quality of the marketing plan and strategy for development of the zone;

3. The feasibility of achieving the overall goals and objectives of the proposed zone and practicality of the milestones set forth; and

4. Strength of the governance structure of the proposed zone.

Unsuccessful applicants will be ineligible for designation as a Pine Tree Development Zone under any other authority.

After reviewing applications and selecting a zone for preliminary designation, the Commissioner shall issue a Certificate of Preliminary Designation; deny the application, stating in writing the reason or reasons for the denial; or issue a conditional preliminary designation in accordance with section 3, sub-section 2 of this rule. Upon receipt of the documentation of local legislative action specified under section 3, sub-section 3, in a form acceptable to the Commissioner, the Commissioner shall issue a Certificate of Final Designation. A Pine Tree Development Zone is effective from the date of its final designation by the Commissioner until December 31, 2018.

Summary: This section establishes requirements for applications for certification as a qualified Pine Tree Development Zone business pursuant to Title 30-A section 5250-B.

1. Application Required

A business establishing or expanding operations in a Pine Tree Development Zone must be certified by the department as a Qualified Pine Tree Development Zone business prior to applying for, or receiving Pine Tree Development Zone benefits through any agency or other source. A business seeking such certification shall submit for the Commissioner's review one original and two copies of an application that satisfies the requirements of this section. Certification under this section does not fulfill the application requirements for, or approval of Employment Tax Increment Financing (ETIF) benefits for the business under 36 M.R.S.A. Chapter 917.

An application for certification as a qualified Pine Tree Development Zone business shall contain the following information for the business, including all of its affiliates within the state:

A. Descriptive data:

1. A description of the business, its products and/or services and history of operation;
2. A description of the business operations or activities that will be conducted within the Pine Tree Development Zone;
3. A description of the market(s) and/or competitive environment in which the business operates or expects to operate; and
4. A description of the employment growth and investment plans for the business within a Pine Tree Development Zone over the five years following the date of application, including:

a) Facilities to be constructed or modified;
b) Equipment to be purchased;
c) Number and average wages of full-time employees to be hired; and
d) Number and average wages of part-time employees to be hired;

B. Base level data:

1.) Employment, including either:

a) The number and location of all employees employed by the business within the state as of the December 31st preceding its certification; or
b) The number and location of qualified employees of that business on each of 6 consecutive measurement days in each of the 3 calendar years in the base period preceding its certification as chosen by the business divided by 18;

2.) Total payroll within the state of the business for each of the three calendar years preceding the its certification; and
3.) Total Maine state income taxes withheld for employees of the business for each of the three years preceding its certification;

C. A statement describing the basis under which it has been determined that the project would not go forward but for the benefits provided within a Pine Tree Zone; and

D. Certification that new employees employed, or to be employed, within the Pine Tree Development Zone will be:

1.) Paid a wage that, when calculated on a calendar year basis, exceeds the average per capita income in the county in which employed;
2.) Offered participation in a retirement program subject to the Employee Retirement Income Security Act of 1974, 29 U.S.C. §§1001-1461; and
3.) Offered participation in a group health insurance plan.

Applications for certification of qualified Pine Tree Development Zone businesses will be reviewed by the Commissioner, subject to the following provisions:

A. Completed applications will be reviewed in the order in which they are received;

B. Information contained within completed applications must be current as of the application date;

C. Prior to issuing a certificate, the Commissioner must determine that:

1. The application is complete;
2. The business is a for-profit business engaged, or to be engaged, in financial services, manufacturing or targeted technology activities within a Pine Tree Development Zone, as each such business category as defined in Title 30-A section 5246;
3. The business has added, or will add one or more employees; and
4. The business establishment or expansion would not go forward but for the benefits available within the Pine Tree Development Zone, as per the final determination of the Executive Director of the Bureau of Revenue Services, Department of Administrative and Financial Services.

D. Preliminary letter; start date for Pine Tree Zone benefits:

1. A business that will be applying for certification as a qualified Pine Tree Development Zone business may submit a letter to the Commissioner in advance of submitting its application stating its intent to submit an application and describing why the project would not go forward but for the benefits provided within a Pine Tree Development Zone.
2. If the business is subsequently certified as a qualified Pine Tree Development Zone business, the tax benefits described in Title 30-A section 5246(14)(C) and (D) shall become effective and available as of the earlier of the date of such letter, the date of submission of the company's application, or the date that the specific tax law takes effect.

Should the Commissioner determine to deny the application for certification as a qualified Pine Tree Development Zone business, the reason(s) for denial shall be explained in writing to the applicant business.

Summary: This section establishes the reporting requirements for Pine Tree Development Zones, and for certified businesses conducting business activities within Pine Tree Development Zones.

1. Pine Tree Development Zone Information Required

The authorized official of a Pine Tree Development Zone shall submit to the department, by March 31st of each year following the final designation of the zone, a report containing the following information:

A. A brief narrative summary of zone activities for the prior calendar year;

B. The status of the zone's development plan, including marketing activities, budget, capital plan and the accomplishment of goals and objectives;

C. A narrative on how the zone is meeting the purposes of the statute as defined by Title 30-A, section 5245 sub (1) and (2);

D. A list of qualified businesses establishing or expanding operations within the zone; and

E. Information regarding any successes, challenges or lessons learned that would be of potential use in improving the Pine Tree Development Zone program.

A certified Pine Tree Development Zone business shall submit to the department, by March 31st of each year following its certification, a report containing the following information:

A. A brief description of its business activities conducted within the zone during the prior calendar year;

B. The number and location, and average wages of all full-time and part time employees employed by the business, including its affiliates, within the state as of the preceding December 31st;

C. The number and location, average wages and benefits offered of all full-time and part time employees employed by the business within the Pine Tree Zone as of the preceding December 31st; and

D. The value of investments made in buildings and/or facilities, business equipment and employee training within the zone during the prior calendar year.