Water tax bill turned into study of water in Maine, passes without Governor’s signature

This session’s controversial water tax bill, LD 1569, An Act Regarding an Excise Tax on Water Extracted for Commercial Bottling, became Resolve chapter 185 without Governor Janet Mills’ signature. Sponsored by Rep. Lori Gramlich (D-Old Orchard), the bill was gutted and finally passed as a resolve to study the role of water as a resource in Maine.  

As originally drafted, the bill would have imposed a 5-cent per gallon tax on water extracted for commercial bottling use. Maine State Chamber staff testified in strong opposition to the bill, which was aimed specifically at Poland Spring, a company that is very important to Maine’s economy. As originally drafted, LD 1569 would have had a chilling effect on future investment in Maine – and no doubt, jobs, as well. The Maine State Chamber testified that Maine’s groundwater sources are sustainable and renewable. This resource has been responsible for the development of an entire industry here in Maine. The excise tax on the use of a renewable, plentiful natural resource would be unprecedented nationally.  

As Resolve chapter 185, the statute establishes a commission, which will study the issues associated with the role of water resources in the state and the nature and extent of infrastructure involved in the use and delivery of water resources. This will entail looking at issues such as the extent of water resources available in the state, legal principles regarding the ownership of water resources in the state, the extent to which water resources will be needed in the state and the nation, the quality of available water resources and the need to protect water quality, the extent of transportation of water within the state and exportation of water from the state, the sustainability of aquifers in the state, the relationship between climate change and water resources in the state, and the nature and use of water resource extraction taxes in other states.

The commission will be comprised of 16 members. Four members will be appointed by the Senate President: two members of the Senate, one member of the public residing in northern Maine, and one member representing the interests of those who bottle or package water for commercial sale. Another four members will be appointed by the Speaker of the House of Representatives: two members of the House, one member of the public residing in western Maine, and one member representing the interests of businesses that use water in manufacturing or the provision of items or services for sale. The remaining eight members will be appointed by and agreed upon by the House Speaker and Senate President: one member representing municipal water utilities, one member representing the State Geologist, one member each representing the Office of the Attorney General, environmental organizations, the Department of Health and Human Services’ drinking water program, and the Office of Policy Innovation and the Future, as well as two members who are members of federally recognized Indian nations, tribes or bands in the state.  

The commission will then submit its report to the Joint Standing Committee on Taxation during the 131st Legislature no later than March 15, 2023. If you have any questions, please contact Linda Caprara, senior government relations specialist, by calling (207) 623-4568, ext. 106, or by emailing [email protected].