An Act To Include Disability Retirement Income in Retirement Income Eligible for Tax Exemption LR 2235(02)
Maine Legislature, Session 121, LD 1670
Committee Amendment CA_A_H787 (House)
Amends: 36 MRSA §5122

COMMITTEE AMENDMENT "n, to H.P. 1246, L.D. 1670, Bill, "An 
Act To Include Disability Retirement Income in Retirement Income 
Eligible for Tax Exemption" 
Amend the bill by striking out everything after the enacting 
clause and before the summary and inserting in its place the 
following: 
'Sec. I. 36 MRSA §5122, sub-§2, ,M, as amended by PL 2003, c. 
391, §5, is further amended to read: 
M. 
For 
each individual 
who 
is 
a 
primary recipient of 
benefits under an employee retirement plan or an employee 
disability retirement plan, an amount that is the lesser of: 
(1) 
Six thousand dollars reduced by the total amount 
of 
the 
individual's 
social 
security 
benefits 
and 
railroad retirement benefits paid by the United States, 
but not less than $0. 
The reduction does not apply to 
benefits paid under a military retirement plan; or 
(2) 
The 
aggregate 
of 
benefits 
under 
employee 
retirement 
plans 
and 
employee 
disability 
retirement 
~ 
included in the individual's federal 
adjusted 
gross income. 
For purposes of this paragraph, the following terms have the 
following 
meanings. 
"Primary 
recipient" 
means 
the 
individual upon whose earnings the employee retirement plan 
Page I-LR2235(2) 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT • ./1" to H.P. 1246, L.D. 1670 
benefits or employee disability retirement plan benefits are 
based or the surviving spouse of that individual. 
"Employee 
retirement 
plan" 
means 
a 
state, 
federal 
or 
military 
retirement 
plan 
or 
any 
other 
retirement 
benefit 
plan 
established and maintained by an employer for the benefit of 
its employees under the Code, Section 401(a), Section 403 or 
Section 457(b), except that distributions made pursuant to a 
section 457(b) 
plan are not eligible for 
the deduction 
provided by this paragraph if they are made prior to age 55 
and are not part of a series of substantially equal periodic 
payments made for the life of the primary recipient or the 
joint lives of the primary recipient and that recipient' s 
designated beneficiary. 
"Employee retirement plan" does not 
include an individual retirement account under Section 408 
of the Code, a Roth IRA under Section 408A of the Code, a 
rollover 
individual 
retirement 
account, 
a 
simplified 
employee pension under Section 408(k) of the Code or an 
ineligible deferred compensation plan under Section 457 (f) 
of the Code. 
Benefits under an employee retirement plan do 
not 
include distributions 
that are 
subject 
to 
the 
tax 
imposed by the Code, Section 72 (t) . 
"Military retirement 
plan" means benefits received as a result of service in the 
active or reserve components of the Army, Navy, Air Force, 
Marines 
or Coast Guard. 
"Employee disability retirement 
plan" means a state, federal or military disability benefit 
retirement plan or other disability benefit retirement plan 
established and maintained by an employer for the benefit of 
its employees that provides disability retirement benefits 
to employees who have retired from employment on the basis 
of disability but have not reached normal retirement age; 
Sec. 2. Application. 
This Act applies to tax years beginning 
on or after January 1, 2004.' 
SUMMARY 
This amendment expands the $6,000 income tax exemption for 
retirement 
income 
to 
include 
benefits 
under 
all 
employer-maintained disability retirement benefit plans. 
The 
amendment also adds an application section. 
FISCAL NOTE REQUIRED 
(See attached) 
COMMITTEE AMENDMENT 
Net Cost (Savings) 
General Fund 
Revenue 
General Fund 
Other Special Revenue Funds 
Fiscal Detail and Notes 
Approved: 03/04/04 ;;t;?ae 
l2lst Maine Legislature 
Office of Fiscal and Program Review 
LD 1670 . 
An Act To Include Disability Retirement Income in Retirement Income 
Eligible for Tax Exemption 
LR 2235(02) 
Fiscal Note for Bill as Amended by Committee Amendment" " 
Committee: Taxation 
Fiscal Note Required: Yes 
Fiscal Note 
2003-04 
$0 
$0 
$0 
2004-05 
$979,051 
($979,051) 
($52,615) 
Projections 
2005-06 
$2,484,168 
($2,484,168) 
($136,262) 
Projections 
2006-07 
$2,583,535 
($2,583,535) 
($141,713) 
This bill is expected to reduce income tax collections by $1,031,666 in fiscal year 2004-05, resulting in a General 
Fund revenue decrease of $979,051 and an Other Special Revenue funds decrease of $52,615 for state-municipal 
revenue sharing. 
LR2235(2) - Fiscal Note - Page 1 of 1