AUGUSTA — Proposed state legislation could cost the cities of Augusta and Portland up to $250,000 each in annual revenues by changing where utility companies pay excise taxes on their vehicles from corporate headquarters to the municipalities where they are kept.

Officials from Farmington and Fairfield testified at a hearing Monday that that is where the money would rightly be used to offset the cost of the wear and tear those vehicles have on the local roads they travel.

Rows of vehicles are parked at Central Maine Power’s Augusta Service Building on Old Winthrop Road in this 2014 file photo. Staff file photo by Joe Phelan

The same bill was proposed and rejected in the last two sessions of the state Legislature. Last year it was part of a spat between officials of the city of Augusta and Central Maine Power Co., which pays about $283,000 a year in excise taxes on its entire 489-vehicle fleet to Augusta, where its headquarters is located, as is required by current law.

This time Augusta officials and legislators who fought hard to kill the same bill last year seem resigned to the fact they may have to compromise and seek to limit the immediate impact of it, should it pass.

“The bill is now before you for the third time in four years, and the external circumstances are essentially the same,” Augusta City Manager William Bridgeo testified at a Taxation Committee public hearing on the bill, L.D. 514, Monday morning. “Requiring a utility to register its fleet of vehicles in 15 or 20 municipalities instead of one is still more costly and burdensome. And the quarter million-dollar financial hit Augusta would take is still daunting. But we in Augusta understand that our sister communities are also struggling financially, especially given the negative impacts of other state budget policies.”

Bridgeo asked lawmakers to give the city time to prepare for the loss in revenue if the bill passes and to “implement the law gradually.”

Officials from municipalities where CMP or other utilities keep some of their vehicle fleets overnight argued Monday excise taxes are meant to help pay for the upkeep of local roads. They said the current system of having utilities pay excise taxes to the municipality where their headquarters is located unfairly deprives them of excise revenues from utility company vehicles, often heavy bucket trucks, kept in their towns and thus contributing to the wear and tear of local roads.

“This is an issue of fairness,” Fairfield Town Manager Josh Reny said. Reny testified in favor of the bill.

A CMP location in Fairfield houses 38 trucks, which Reny said could provide the town between $20,000 and $30,000 in annual revenues.

“This would very much help our municipality,” he said. “And taking off my town manager’s hat, as a private citizen I’d still support this. It makes sense from a public policy standpoint.”

Farmington resident Lance Harvell, a former Republican state legislator who sponsored the bill in the last two sessions, said he sponsored the bill previously because he felt it was only fair that utility companies, like other companies in Maine, be required to pay excise taxes where their vehicles are kept. The first time he sponsored it, it was rejected by the Legislature after a now-former CMP lobbyist spoke against it and said it would cost the company, and thus ratepayers, more money to register and pay excise taxes on its vehicles at the many municipalities where they are kept across the state.

The second time he sponsored it, last session, CMP’s lobbyist asked him to sponsor the same legislation again.

Last year, in speaking against the bill, Augusta officials said CMP had changed its stance on the bill and backed it as a way to punish the city after CMP’s parent company, Iberdrola USA, didn’t like how the city dealt with Iberdrola subsidiary Maine Natural Gas. Following a bid process Maine Natural Gas officials said was unfair, the city awarded a contract to provide natural gas to city property to rival gas company Summit Natural Gas of Maine.

Harvell said he’d seen newspaper stories about the dispute between Augusta and Iberdrola, but he sponsored the legislation, and still supports it now, because it would be a fairer way of taxing utility companies.

“I figured if I could use revenge to get the bill passed, so be it,” he said Monday. “Hopefully this issue has somewhat dissipated, and it is time to look at it just from a tax fairness perspective.”

This session the bill is sponsored by Harvell’s replacement in the Legislature, Rep. Andrew Buckland, R-Farmington.

Buckland said CMP parks only 24 percent of its vehicles in Augusta and 76 percent elsewhere across the state, and yet pays 100 percent of the excise taxes on those vehicles exclusively to Augusta.

He said many of those vehicles parked at CMP sites outside of Augusta are heavy and contribute to the wear and tear on roads that are nowhere near Augusta. While he said he sympathized about the impact of the change on Augusta’s revenue, he said the roads of Augusta should not be maintained, even partially, by money that should be going to other municipalities, which also have tight budgets.

CMP officials, who advocated for the bill last session, did not testify at Monday’s committee hearing.

Jay Nutting, a lobbyist on behalf of northern Maine power company Emera Maine, testified in favor of the bill, stating the company saw no reason to treat utilities differently from other Maine companies in how they pay excise taxes.

He said when Bangor Hydro and Maine Public Service merged in 2014 to become Emera Maine, Presque Isle, which was Maine Public Service’s headquarters, lost about $20,000 a year in excise revenues because under the new combined corporate structure, Presque Isle was no longer corporate headquarters.

RoJean Tulk, director of government relations for FairPoint Communications, spoke against the proposed bill but said if it’s going to pass, it should be amended so utilities would have a choice to either pay excise taxes to the municipality where their vehicles are kept or where their headquarters is located.

She said FairPoint pays registration and excise fees totaling $270,000 annually to the city of Portland, the site of its headquarters in Maine, on its fleet of about 400 vehicles. About 80, or 20 percent, of them are kept in Portland with the rest spread through 12 other communities.

She said having to register and pay excise taxes in 13 instead of one municipality would create administrative burdens and add to FairPoint’s cost of doing business with those costs — which she said she didn’t have an estimate of — potentially being passed on to its customers.

Buckland said CMP officials previously estimated having to pay excise tax on their vehicles in all the municipalities where they are kept instead of just Augusta would cost the company an additional $6,900 a year, which he said would be about 1 cent a year from each ratepayer.

Sen. Roger Katz, R-Augusta, in testimony read Monday by Sen. Nathan Libby, D-Lewiston, because Katz couldn’t attend the hearing, said the reasons for the current excise tax system are clear and it provides utilities with an efficient and accurate way to pay.

With potential declines for the city in revenue because of changes to state revenue sharing, general assistance and state funding for schools, he said there is no compelling reason to do anything now.

He said if legislators feel it is necessary to change the law, he urged them to delay the effective date until 2018 and have the new law apply only to vehicles bought after that date to allow Augusta and other municipalities that will lose money to have the time to adjust.

Sen. Earle McCormick, R-West Gardiner, senate chairman of the Taxation Committee, said no work sessions had yet been scheduled on the bill, but he expected it to be taken up in a couple of weeks.

Keith Edwards — 621-5647

kedwards@centralmaine.com

Twitter: @kedwardskj

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