SAMPLE BILL

     State YMCA of Maine

          YOUTH AND GOVERNMENT

BILL #   2018--713

Bill Sponsor:  Annette Mubang

School / Club / YMCA: Maine School of Science and Mathematics   

Endorsed By: Mr. Dan Melega 

Referred to the committee on: Labor, Commerce, and Economic Development

An Act Relating To:   

Creating a tax credit to incentivize private entities to renovate local abandoned property

Be it enacted by the State YMCA of Maine’s 2018 Youth and Government Program as follows:

1. SECTION 1 : Definition of vacant, abandoned building: Any building or other structure that is unoccupied
2. by a person or occupied by an unauthorized person for 60 days, expecting permitted garages or accessory
3.  This excludes vacation rentals which should be registered with the town.
4. Definition of renovation: Any private entity, renovating a building means that they are meeting the standards
5. set by the local municipal office or by their local building codes.
6. Definition of private entity: Any person or business from Maine.
7. SECTION 2 : For any private entity that buys abandoned property with the intention to renovate abandoned
8. property to sell, own, or rent will receive a $5,000 in tax credit until the construction of the building is
9. complete and the owner has decided to keep the building or is making a profit from it through short-term
10. rentals or selling it.
11. SECTION 3 : A municipal officer or property manager must go to these properties to inspect them to the
12. standards of local building codes.
13. SECTION 4 : These private entities must reapply for this tax credit every year with their local municipal
14. SECTION 5 : Depending on the popularity of the program, this program is subject to having a cap on the
15. number of participants.

STATEMENT OF FACT:

“Instead of cities focusing so much on growing, they should really focus on making themselves attractive and having the market respond to that,” says Justin Hollander, associate professor of urban and environmental policy and planning at Tufts University. “If a place becomes more desirable, it likely will lead to further growth in the future.” In order to advance into the future, Maine needs to start looking at the part and some towns and cities are taking the initiative to make this happen. For instance, in Lewiston, Maine the Bates Mill Complex was the largest textile manufacturer in New England in the 1850s.⁵ However, in 1992, the city acquired the complex after late real estate tax payments. The city moved quickly by creating the Lewiston Mill Redevelopment Corp. made up of city staff, elected officials, and private citizens to take on this rehabilitation project. For over two decades, the city alongside architecture and engineering firm has worked tirelessly on the redevelopment of this town staple. To date, Bates Mill LLC is flourishing with businesses such as TD Bank, Baxter Brewing Co., Grand Rounds, Cross Insurance and more, including 48 residential apartments. Bates Mill as investment increased the taxable real and personal property to more than $37 million and generated 921,000 in annual taxes. The cost of renovating Bates Mill was 50% less expensive than building new facilities at about $120 per square foot.⁴ 

JUSTIFICATION:

 Abandoned buildings cause an abundance of issues for Maine communities. Besides being eyesores, abandoned buildings insight crime and violence, public health concerns, and lower property values. Burglary and squatting are rampant in communities with the abandoned property which instills fear into Maine residents. Public wellness also comes into question when abandoned buildings are in an area because they are sites for illegal dumping, lead particles, asbestos, and overgrown vegetation. Illegal dumping and overgrown vegetation can send airborne molds into the air and attract vermin and insects that are hosts to spread parasites and diseases like West Nile virus and rabies. In addition to the public health issues, environmental concerns come about with illegal dumping of hazardous discharge. Hazardous waste discharge creates “brownfields” which are abandoned areas contaminated with dangerous waste products that later become expensive cleanup projects for the Environmental Protection Agency. Lastly abandoned buildings lower the property values of surrounding homes and buildings. A study done by the Federal Reserve bank of Cleveland found that “foreclosures cost the community $130,000 in lost property value, more than half, or about $70,000 of that loss comes from its status as being abandoned. Thus, each abandoned property costs its neighbors $70,000 in the loss as it sits vacant, independent of its status as a foreclosure.”⁶ Abandoned properties create an issue in all aspects of Mainers’ lives. With this incentive to renovate these properties, Mainers will see an increase in business, employment, and annual tax revenue for the state.

FINANCIAL CONSIDERATION:

$5,000 per building registered in the tax credit program for the duration of their construction and maintenance of the redevelopment project

REFERENCES:

http://www.augustamaine.gov/document_center/City%20Council%20Agendas%20&%20Minutes/2015/9.September/15-141_Amendment_-_Vacant_Property_Ordinance_attachment(1).pdf

http://www.popcenter.org/problems/abandoned_buildings_and_lots/

https://www.huduser.gov/portal/periodicals/em/winter14/highlight1.html#title

http://www.sunjournal.com/bates-mill-no-5-what-comes-next/

https://www.batesmillstore.com/pages/our-story

https://cityofjeannette.com/uploads/6/9/5/4/69549785/understanding_the_true_costs_of_abandoned_properties.pdf

https://www.phila.gov/services/payments-assistance-taxes/tax-credits/community-development-corporation-cdc-tax-credit/

BILL SUMMARY

This bill creates an tax credit incentive for private entities to buy and renovate abandoned buildings in local Maine communities. This bill is expected to create jobs, increase the property values of surrounding land, and promote Maine communities for homeowners from in and outside of Maine.