18-125-815 Me. Code R. § 1

Current through 2024-51, December 18, 2024

Section 125-815-1 - Definitions

Terms used in this rule have the same meaning as defined in 36 M.R.S. §5219-AAA. This section also adds additional clarification to certain terms.

As used in this rule, the following terms have the following meanings:

1. "Commissioner" means the Commissioner of Economic and Community Development.

2. "Department" means the Department of Economic and Community Development.

3. "Eligible sector" means any one of the following industries identified and described by the corresponding code (in parentheses below) contained in the 2022 North American Industry Classification System (NAICS) issued by the United States Office of Management and Budget:

(1) Agriculture, forestry and fishing (1111 through 1141; 1151 through 1153);

(2) Manufacturing (31-33);

(3) Long-distance freight transportation (481112, 481212, 482, 483111, 483113, 483211, 48412, 48423, 48819, 4882, 4883, 4885);

(4) Software publishing (5132), data processing (518) and computer design services (5415); or

(5) Engineering (5413), architecture (5413) and scientific research and development services (5417).

Construction versus manufacturing. In general, on-site construction and assembly of an asset is considered part of the construction industry and is not an eligible sector, while the off-site production of an asset may be considered manufacturing and is an eligible sector. For example, the on-site construction of "stick-built" residential housing is not an eligible sector, but the production of manufactured housing at a central facility is an eligible sector. Similarly, the on-site construction of a power generation structure would be classified as construction while the off-site assembly and preparation of the structure components may be classified as manufacturing. For example, the assembly and preparation of an offshore wind turbine at an onshore facility would be classified as manufacturing while the final installation and ongoing operation activities would be classified as construction and electric power generation, respectively.

Local and long-distance trucking. NAICS defines "long-distance" trucking transportation establishments as those that carry goods between metropolitan areas. Local trucking establishments are those that primarily carry goods within a single metropolitan area and its adjacent nonurban areas and are not considered an eligible sector for Dirigo Business Incentives.

4. "Qualified business activity" means a business activity carried on primarily in an eligible sector. When determining whether an activity is carried on primarily in an eligible sector, the Department will refer to the production or service description for the relevant industry code contained in the 2022 NAICS. For example, a qualified business activity for a logging operation (NAICS code 113310) would relate to "one or more of the following:

(1) cutting timber;

(2) cutting and transporting timber; and

(3) producing wood chips in the field." The qualified business activity described in the letter of certification may be more specific or limited, such as "cutting timber," or combined with other qualified business activities, such as "cutting and transporting timber and operating a sawmill."

The entirety of spaces, property, and functions of the business will be considered in determining whether the business is engaged in one or more qualified business activities. Supporting activities that on their own would not be considered qualified business activities would nonetheless be considered as such if conducted exclusively in direct support of the business's core qualified business activity. For example, the activities of a life sciences research operation that might be considered supporting components of a qualified business activity include those associated with lab and production areas, warehouses that receive raw material, administrative offices, quality control labs, cafeterias for employees, warehouses that hold products prior to shipment, and employee gyms and locker rooms.

A business may seek a new or revised letter of certification for any additional qualified business activity not included in the original or previous application for certification. For example, a business that receives a letter of certification establishing a qualified business activity as a precision machining operation may not claim a credit for purchasing forestry equipment, as that property is not related to the qualified business activity described in the original letter of certification issued to the business. However, the business may request that the Department amend the letter of certification to include the additional qualified business activity.

18-125 C.M.R. ch. 815, § 1