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MTA: Car Rental Sales Tax, Single-use Plastic Bag/Polystyrene Containers, Grocery Stores/Holiday Hours, Maine Turnpike Authority, Minimum Wage…Take Two

Car Rental Sales Tax: A bill before the Legislature this year that would have increased the sales tax on car rentals has been rejected. LD 116, An Act To Increase Funding for Multimodal Transportation, proposed increasing from 10% to 15% the sales tax applied to short-term rentals of automobiles, small trucks, and vans to provide funding for multimodal transportation. Earlier this year, the Taxation Committee recommended reducing the increase to 12%. The House approved the amended bill but the Senate rejected the entire proposal.

Single-use Plastic Bag and Polystyrene Containers: The House sustained a Governor’s veto on legislation that would have established a new state policy to promote the use of reusable bags and locally recyclable alternatives to disposable polystyrene foam food service containers. With the sustaining of the veto, LD 57 is officially dead.

If the bill had been overridden, the law would have established goals for municipal adoption of reusable bag ordinances and polystyrene foam food service container ordinances (20 by 2018, 35 by 2024, and 50 by 2029). DEP would have been required to share online information regarding municipally adopted reusable bag ordinances and polystyrene foam food service container ordinances. Additionally, DEP would have been required to submit an annual report, beginning February 15, 2020, that details municipal progress on the goals and includes any recommendations to further promote the use of reusable bags and locally recyclable alternatives to disposable polystyrene foam food service containers.

Grocery Stores and Holiday Hours: Both the House and Senate enacted legislation that would allow grocery stores to be open on certain holidays. Under Maine’s “blue laws” certain sized grocery stores are not allowed to be open on Thanksgiving, Christmas, and Easter. LD 488 allows a municipality by ordinance to allow grocery stores with no more than 10,000 square feet of interior customer selling space to be open on those holidays. The proposal has been sent to the Governor for his approval.

Maine Turnpike Authority: What does the future hold for the Maine Turnpike Authority? If the Governor has his way, it will cease to exist by the end of the decade. LD 1409, An Act To Initiate the Process of Terminating the Maine Turnpike Authority, introduced by Governor LePage, was printed and referred to the Transportation Committee this past week.

The proposal prohibits the Maine Turnpike Authority from issuing any bonds after October 15, 2017; requires the Maine Turnpike Authority to set aside sufficient funds in trust to pay all its bonds and debts or to pay all its bonds and debts by October 15, 2027; and requires the Maine Turnpike Authority to provide to the Department of Transportation a plan to accomplish the payment of outstanding debt held by the authority by April 1, 2018.

In a nutshell, the MTA would have 10 years to transfer all of its duties to the MDOT. All toll facilities, with the exception of the York toll facility, would be removed. One would expect that the toll charged in York, if this plan were to come to fruition, would be considerably higher than the current rate of $3.00.

A public hearing for the bill will be held before the Transportation Committee on Thursday, May 25th at 1 pm.

Minimum Wage…Take Two: This past week, Governor LePage revealed his version of how to change the minimum wage laws approved in November. LD 1609 reduces increases to the minimum wage and provides a minimum wage of $11 per hour starting January 1, 2021. The bill eliminates the annual cost-of-living adjustment to the minimum wage and reinstates the tip credit at 50% of the state minimum wage. The proposal also allows employers to pay a training or youth wage at 80% of the state’s minimum wage so long as that wage is above the federal minimum wage rate.

The difference between this bill and those minimum wage bills heard back in April is that LD 1609 addresses limits on mandatory overtime as well as service charges. Maine statute requires that the salary for exempt employees be paid at 3,000 times the prevailing minimum wage (currently $27,000). LD 1609 removes the 3,000 times language and would keep our minimum salary threshold on par with the federal rate of $23,660.

The bill’s language states that a compulsory charge for service is not a tip and should be treated as a part of the employer’s gross receipts. Sums distributed to employees from service charges may not be counted as tips received, but may be used to satisfy the employer’s minimum wage and overtime obligations. If an employee receives tips in addition to the compulsory service charge, those tips may be considered in determining whether the employee is a tipped employee and in the application of the tip credit.

The public hearing is scheduled for Tuesday, May 23rd at 1 pm. The LCRED Committee will hold a work session on the legislation later that day. The full text of LD 1609 may be found here: http://www.mainelegislature.org/legis/bills/bills_128th/billtexts/SP056501.asp