An Act To Provide Relief to Maine Residents from Postsecondary Tuition Costs
Maine Legislature, Session 123, LD 0948
Committee: Taxation
Sponsors: DAMON, PINGREE, BRYANT, EDMONDS, MARTIN, MITCHELL, PERRY, STRIMLING, FAIRCLOTH, MARLEY
Amends: 36 MRSA §5217-D

Legislative Document 
S.P.299 
An Act To Provide Relief to Maine Residents from Postsecondary 
Tuition Costs 
Reference to the Committee on Taxation suggested and ordered printed. 
No. 948 
March 1, 2007 
JOY J. O'BRIEN 
Secretary of the Senate 
Presented by Senator DAMON of Hancock. 
Cosponsored by Representative PINGREE of North Haven and 
Senators: BRYANT of Oxford, President EDMONDS of Cumberland, MARTIN of Aroostook, 
MITCHELL of Kermebec, PERRY of Penobscot, STRIMLING of Cumberland, 
Representatives: FAIRCLOTH of Bangor, MARLEY of Portland. 
Printed on recycled paper 
Be it enacted by the People of the State of Maine as follows: 
PART A 
Sec. A-I. 20-A MRSA c. 428-C is enacted to read: 
CHAPTER 428-C 
COLLEGE FOR ALL MAINE PROGRAM 
§ 12541. Definitions 
As used in this chapter, unless the context otherwise indicates, the following terms 
have the following meanings. 
1. 
Accredited Maine college or university. 
"Accredited Maine college or 
university" includes: 
A. Any community college, 4-year college, university or other educational institution 
that is located in the State and has authorization to confer an associate, bachelor's, 
master's or doctorate degree, in accordance with sections 10704 and 10704-A; 
B. Any educational institution that is located in the State and is exempt from chapter 
under section 10708, subsections 1 and 2; and 
C. Any educational institution that is located in the State and is operating under a 
license or certificate of temporary approval from the state board under section 10703. 
2. CFAME or the program. "CFAME" or "the program" means the College For 
All Maine program established in section 12542. 
3. CF AME contract. "CF AME contract" means the contract described in section 
12542, subsection 3. 
4. CFAME participant. "CFAME participant" means an individual who enters into 
l!_-<::EAME_Qpntract with the State, obtains the specified degree and complics..l'illi..lhe 
requirements under section 12542, subsections 3 to 5. 
5. CFAME tax credit. "CF AME tax credit" is the tax credit provi..Q~d forjn Title 
36, section 5217·0. 
~ 
__ Educational institution. 
"Educ_<!!i<ll.:illljQB.i!l1~i:~m" has...lt.!:;: _'ii!Te_ 
·:0lIilliS....f1? j!1 
sectioj1 1 07Q L_~!Ip_~ection 3_. 
""l 
.J L. 
7. Eligible t!ducation o:osts. "Eligil?le education costs" mean:;: the S_ll!l1 .}f iui!ion and 
mandatQry fee-Ulilidaft~[Jhe effective date ofthi~_sectiol!.bv a CF'~l\1EpanicipanUoan 
accredited Maine college or university for cour:;e_.~'{ork rfill:ired..t~d2~'t~lSh~ i~s·;Yi2..iatG.., 
bac!1eloU..l._master's or doctorat~ degree earned bv thc.J.2'!rticlmmt. 
• 
II 
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8. Maine resident. "Maine resident" means an individual who qualifies for Maine 
residence under the terms of Title 21-A, section 112. 
9. Principal cap. "Principal cap" means the maximum amount of student loan 
principal that can qualify for a CF AME tax credit as set forth in section 12542, subsection 
2, paragraph A. 
§12542. Program established 
1. Program goals. The College For All Maine program is established to reimburse 
eligible education costs for Maine residents who obtain an associate, bachelor's, master's 
or doctorate degree in Maine and thereafter live, work and pay taxes in the State. The 
program is designed to achieve the following goals: 
A. To promote economic opportunity for Maine people by ensuring access to the 
training and higher education that high-paying jobs require; 
B. To bring more high-paying jobs to Maine by increasing the skill level of Maine's 
workforce; 
C. To offer opportunity for education and retraining to individuals affected by job 
loss, disability or global outsourcing; 
D. To keep Maine's young people in the State by providing tax credits equal to the 
cost of attending college in Maine and through creation of more high-paying jobs; 
E. To create many high-paying jobs in Maine's community colleges, 4-year colleges 
and universities and surrounding communities by increasing enrollment and funding 
new campus jobs with the federal student loan proceeds produced by additional 
students; and 
F. To accomplish the goals set forth in this subsection with as little bureaucracy as 
possible and minimal administrative costs and without raising taxes. 
2. Principal cap. The principal cap determines a lifetime limit on the student loan 
principal one individual may claim as a CF AME tax credit. 
A. Except as provided in paragraph C, the principal cap is equal to the lowest of the 
following amounts: 
(I) The eligible educational costs incurred by the CF AME participant and paid 
for with the proceeds of a student loan; 
(2) $16,000 for participants obtaining one or more associate degrees; 
(3) $40,000 for participants obtaining one or more bachelor's degrees; and 
(4) $20,000 for participants obtaining one or more master's or doctorate degrees. 
Participants earning both an associate degree and a bachelor's degree have a 
combined principal cap of $40,000 for the 2 degrees. Participants earning both a 
master's degree and a doctorate degree have a combined principal cap of $20,000 for 
those 2 degrees but may also claim credit for loans related to obtaining a bachelor's 
degree subject to the separately calculated principal cap for the bachelor's degree. 
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. B. The financial aid office of each accredited Maine college or university attended 
by a CF AME participant shall calculate, once the participant has earned a degree, the 
. amount of student loan proceeds the CF AME participant spent on eligible education 
costs. This amount must be listed on an addendum attached to the participant's 
CF AME contract. 
C. Maine residents who are enrolled in a degree program prior to the effective date 
. of this subsection or who sign a CF AME contract after completing some 
requirements for a degree may participate in the program subject to the same tenns as 
other program participants, except that, when an already-enrolled individual signs a 
CF AME contract, the contract must specify the percentage of the individual's course 
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work completed in pursuit of the degree that was perfonned before the individual was 
participating in the program. The CF AME principal cap must be calculated as the 
lower of:. 
(1) The eligible education costs incurred by the participant; and 
(2) The appropriate amount under paragraph A, subparagraph (2), (3) or (4) 
multiplied by the percentage of course work completed after the participant 
signed the CF AME contract. 
3. CF AME contract. The state board shall draft a CF AME contract for use in 
enrolling individuals in the program. The tenns of the CF AME contract must be as 
follows. 
A. An individual who wishes to participate in the program must certify that the 
individual is a Maine resident. 
B. 
The individual must agree to attend and to attempt to earn an associate's, 
bachelor's, master's or doctorate degree from an accredited Maine college or 
university. The individual need not obtain the degree from the institution in which the 
individual originally enrolled, as long as all course work toward the degree is 
perfonned at an accredited Maine college or university. 
C. The individual must agree to live in Maine after obtaining the degree for any 
period during which the individual seeks to take advantage of the CF AME tax credit. 
D. 
The individual must agree to maintain records relating to all student loans 
received and all loan payments claimed under the CF AME tax credit for 5 years after 
those payments are claimed. 
E. With respect to education loans, the individual must agree to the following: 
(1) The individual will claim the CF AME tax credit only for student loans that 
are part of the individual's financial aid package and that have monthly payments 
for a tenn of at least 8 years; 
(2) If the individual in any way accelerates repayment ofCFAME-certified loans, 
the individual may not claim a CF AME tax credit for the early student loan 
payments until the year that the payment was originally due; and 
(3) The individual may refiance CFAME certified loans only if the loans remain 
separate from other debt and if the effect of the refinancing is to decrease both 
the annual repayment and the effective interest rate. 
F. In exchange for the considerations outlined in paragraphs B to E, the State shall 
agree to permit the individual to take advantage of the CF AME tax credit. 
G. The CF AME contract form must leave space for one or more accredited Maine 
colleges or universities to certify that the individual has obtained a degree and to 
certify the amount of student loan funds the CF AME participant used to pay for 
eligible education costs at the educational institution. 
4. Administration. The program must be administered as follows. 
A. 
A Maine resident who gains admission to an accredited Maine college or 
university and who receives financial aid in the form of loans may participate in the 
program. The financial aid office of the educational institution shall offer to such 
individuals the opportunity to sign a CF AME contract with the State. The financial 
aid office shall retain the contract until the individual obtains a degree or transfers to 
another accredited Maine college or university. 
B. 
Once a CF AME participant obtains a degree, the financial aid office of the 
educational institution shall certify that the CF AME participant has obtained a degree 
and list the amounts of student loan funds the CF AME participant used to pay for 
eligible education costs at that educational institution. The principal amounts, interest 
rates and terms of student loans that are part of the CF AME participant's financial aid 
packages must be listed on an addendum attached to the CF AME contract. Eligible 
education costs paid for with student loan proceeds must be similarly listed. The 
CF AME contract must then be filed with the Secretary of State. Every accredited 
Maine college and university shall develop procedures to facilitate this process, in 
consultation with the Secretary of State. 
Co Once the CF AME contract has been filed with the Secretary of State, the CF AME 
participant becomes eligible to claim the CF AME tax credit, subject to the 
requirements of this chapter and of Title 36, section 5217-D. The CFAME participant 
may thereafter take advantage of any forbearance or deferment provisions in the 
"relevant loan agreements without forfeiting the right to claim the CF AME tax credit 
when the CF AME participant resumes repayments. 
5. 
Effective date; participation by individuals already enrolled in degree 
programs. CF AME commences for the first semester that begins after the effective date 
of this chapter. Individuals enrolled in a degree program before the effective date of this 
chapter may participate in the program and claim credit for eligible education costs paid 
for with student loans subject to the conditions listed in subsection 2, paragraph C. 
§12543. Effect on funding of higher education 
It is the intent of the Legislature that neither the existence of the program nor the 
benefits provided under the CF AME tax credit serve as justification to decrease other 
funds appropriated or allocated to the accredited Maine colleges and universities and to 
other higher education programs. 
§12544. Rules 
The State Board of Education shall, in accordance with Title 20-A, section 3, adopt 
rules as necessary to carry out the purposes of this chapter. Rules adopted pursuant to this 
section are routine technical rules as defined in Title 5, chapter 375, subchapter 2-A. 
PARTB 
Sec. B-1. 36 MRSA §5217-D is enacted to read: 
§5217-D. Credit for student loan payments 
1. Definitions. As used in this section, unless the context indicates otherwise, the 
following terms have the following meanings. 
A. 
"CF AME contract" has the same meaning as III Title 20-A, section 12541, 
I I 
subsection 3. 
B. "CFAME participant" has the same meaning as in Title 20-A, section 12541, 
subsection 4. 
C. "Employer" has the same meaning as the term "employing unit," as defined in 
Title 26, section 1043. 
D. "Principal cap" has the same meaning as in Title 20-A, section 12541, subsection 
9. 
E. 
"Qualified employee" is an employee who is eligible for the credit under 
subsection 2 and who is employed at least part-time in the State. 
F. "Resident individual" has the same meaning as in section 5102, subsection 5. 
2. Credit and carry-over allowed. A taxpayer who is a CF AME participant or a 
Maine employer of a qualified employee is allowed a credit against the tax imposed by 
this Part for each taxable year under the terms established in this section. 
A taxpayer entitled to the credit for any taxable year may carry over any unusable credit 
or portion thereof and apply it against tax liabilities in one or more of the next succeeding 
years. The credit may not reduce the tax otherwise due under this Part to less than 
zero. More than one taxpayer may make payments on behalf of a single CF AME 
participant and then claim credit for the payments made, but no 2 taxpayers may claim a 
credit for the same payment. 
3. Calculation of the credit. The tax credit under this section is calculated as 
follows. 
A. If the CF AME participant's CF AME contract certifies that the total principal for 
all qualifying student loans is at or below the level of the principal cap, the taxpayer 
may claim a credit based on regularly scheduled student loan payments actually 
made, including both principal and interest. 
B. 
If the total CFAME principal value of the student loans listed on a CF AME 
participant's CF AME contract exceeds the principal cap, then a credit may be claimed 
only for a portion of each monthly student loan payment. That credit is equal to the 
f!m()ur11u9Jjh~.mQ..I)thl.Y.Joan paym~nt, includiQgjll"inci.m!Lilll.9j!l1~r~~!".m.1lltil?lj~(L9.Y . .A 
f!:.~.ctiQ!:L.~qual to the principal cap divided by the tQ1ill..J:!rincipal vi.l.lli~Q.f the student 
loans. 
4. 
Conditions for a CF AME participant claiming the credit. 
The CF AME 
participant may claim the credit under this section only for student loan payments made 
during months in which the participant was a resident individual working for an employer 
located in the State. A married couple filing jointly under section 5221 may claim the 
credit only to the extent that the spouse on whose behalf the credit is claimed meets these 
requirements. 
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5. Conditions for an employer claiming the credit. A taxpayer that is an employer 
may claim the credit under this section for repaying a qualified employee's CF AME-
certified loans. 
A. In order to claim the credit under this section, the employer must make partial or 
full loan paYments directly to the relevant lender or lenders on behalf of a qualified 
employee and must have taken reasonable steps to ascertain that the employee is in 
fact a qualified employee. The employer may claim a credit only for loan amounts 
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that come due and are paid by the employer during the term of the qualified 
employee's employment. To receive the credit, the employer must retain for 5 years 
any proof of eligibility that the employee provides. 
B. If the qualified employee is employed only on a part-time basis, the employer 
may claim a credit under this section for only half of the total that the qualified 
employee might otherwise have claimed. For purposes of this paragraph, employment 
Q!I~rt-time basis means employment with a normal work week of between 16 and 
llJ:wurs" 
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C. _.uA.ILemploYSL.claiming a credit under this section on behalf of a qualified 
employee for a .!'h"ill.bh::_year may not simultaneously claim a credit under, section 
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52t2:.\·_on.he..hillfo(the ~me employee. 
SUMMARY 
The purpose of this bill is to create economic opportunities for Maine people by 
I 
making co liege affordable and to help the State retain and attract educated young people 
and increase the State's tax base without raising tax rates. This bill provides a dollar-for-
dollar tax credit to rcimhtl(<:'e Maine residents for student loan payments when they earn a 
d,,"g~T~' in the State and then he, wc·rk and pay taxes in the State thereafter. Any Maine 
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~·s.:s;G\:nt who earns ,; degn;e [iom any accredited Maine college, including community 
colleges, privak c{)llegcs and all university campuses, may take advantage of the credit. 
A1tf;r;~atively:-
(!~~ ~Inpidyer rnay nlake student loan payments for an employee and claim 
the credit. 
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