AUGUSTA — With controversy over State Treasurer Bruce Poliquin as backdrop, lawmakers on the Legislature’s Taxation Committee voted unanimously to make changes to the state’s tree growth tax program.
The legislative panel on Thursday advanced a bill that would increase legal requirements for landowners to grow and harvest timber for commercial use. The amended bill, LD 1138, sponsored by Rep. Gary Knight, R-Livermore Falls, will ensure that landowners who pull out of the Tree Growth Tax Law program pay steep penalties.
Lawmakers are also expected to support a concept bill sponsored by Senate President Kevin Raye, R-Perry. The bill was tabled Thursday, but lawmakers on the Taxation Committee indicated the bill could be amended to mandate that state foresters make random checks to ensure landowners are harvesting timber in accordance with their respective management plans.
The tree growth law was adopted in 1972. Touted as one of the state’s most successful conservation tools, the law was designed to support sustainable timber harvesting by creating significant tax incentives for landowners who own a minimum of 10 acres.
Despite its success, the program is not without problems, including what some critics describe as insufficient enforcement provisions. The Legislature is no stranger to bills attempting to study and tweak the law.
The Maine Municipal Association has frequently complained about coastal landowners who use the program as a tax shelter, but who don’t appear to be engaging in commercial timber harvesting.
The controversy over Poliquin’s enrollment in the tree growth program brought additional attention to three bills before the Legislature. The treasurer’s waterfront property in Georgetown was highlighted in a 2009 state report as an example of potential misuse of the program. However, that report never saw the light of day, until Poliquin’s political opponents this week questioned whether the state treasurer had exploited the program to receive tax breaks without any intention of harvesting trees.
Roughly 23,000 parcels are enrolled in Maine’s Tree Growth Tax Law. The land accounts for more than 11 million acres, according to statistics provided by the Maine Forest Service.
Critics like the MMA say the biggest problems with the law seem to occur along the coast where wealthy landowners use the program as a tax shelter.
Lawmakers hope the amended LD 1138 will address that problem. The bill was originally designed to give landowners a final warning before pulling them out of the program and assessing significant withdrawal penalties.
LD 1138 will now move to the House of Representatives for a vote. Raye’s bill, LD 1470, is scheduled for a Feb. 9 work session.