An Act To Strengthen the Job Creation Through Educational Opportunity Program
Maine Legislature, Session 124, LD 1296
Committee: Education and Cultural Affairs
Sponsors: WATSON, CHASE, KNIGHT, PILON, PINGREE, RUSSELL, ALFOND, PERRY
Amends: 20-A MRSA §12541, 20-A MRSA §12, 20-A MRSA §12542

FIRST REGULAR SESSIOt~-2009 
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Legislative Document 
No. 1296 
H.P.899 
House of Representatives, March 31, 2009 
An Act To Strengthen the Job Creation Through Educational 
Opportunity Program 
Reference to the Committee on Education and Cultural Affairs suggested and ordered 
printed. 
Presented by Representative WATSON of Bath. 
Cosponsored by Senatbr.RA YE of Washington and 
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MILLICENTM. MacFARLAND 
Clerk 
Representatives: CHASE of Wells, KNIGHT of Livermore Falls, PILON of Saco, Speaker 
PINGREE of North Haven, RUSSELL of Portland, SIROiS of Tumer, Senators: ALFOND of . 
Cumberland, PERRY of Penobscot. 
PrilllL"J nil !'ccyckd paper 
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Be it enacted by the People of the State of Maine as follows: 
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PART A 
Sec; A-I. 20-A MRSA §12541, sub-§l, as enacted by ·PL 2007, c. 469, Pt. A, § 1, 
is amended to read: 
1. Accredited Maine junior college, college or university. "Accredited Maine 
junior coIlege, coIlege or university" means: 
A. Any campus of the Maine Community CoIlege System; 
B .. Any campus of the University of Maine System; 
C. The Maine Maritime Acadeiny; 
D. Any educational institution that is located in this State and has authorization to 
confer an associate degree or a bachelor's degree, in accordance with sections 10704 
and 10704-A; 
E. Any educational institution that is .IQcated in this State and is exempted from 
chapter 409 under section 10708, subsections 1 and 2; and 
F. Any educational institution that is located i'n this State and is operating under a 
certificate of temporary approval from the state board under section 10703, to the 
extent that a student is ultimately able either to obtain an associate or a bachelor's 
degree at that institution or to transfer to and obtain a degree from an institution 
described in paragraphs A to E. 
An institution under this subsection must have regional accreditation. 
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Sec. A-2. 20-A MRSA §12541, sub-§4-A is enacted to read: 
. 4-A.Financial aid package. "Financial aid package" includes ariy loans that are 
certified by an accredited Maine junior coIlege, coIlege or university's financial aid office, 
subject to any changes made by the financial aid office. These loans may iriclude private 
loans or less than the fuIl amount of loans under federal programs, depending on the 
practices of the institution. 
Sec. A-3. 20-A MRS A §12541, sub-§5, as enacted by PL 2007, c. 469, Pt. A, §1, 
is amended to read: 
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5. Maine resident. "Maine resident" means ·an individual who qualifies for Maine 
residence under Title 21-A, section 112. For purposes of this section, an individual is 
deemed a Maine resident if, at the time the individual commences the relevant degree 
program, the individual is registered to vote in the State or occupies a dweIling in the 
State imd continues to occupy a dweIling in the State during the school year, except 
periods when it is reasonably necessary for the individual to live elsewhere as part of the 
relevant institution's academic programs. 
Sec. A-4. 20-A MRS A §12541, sub-§6,as enacted by PL 2007, c. 469, Pt. A, § 1, 
is repealed. 
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Sec. A-S. 20-A MRSA §12S41, sub-§8, is enacted to read: 
8. 
Registration. 
"Registration" means the process described in section 12542, 
subsection 4-A, paragraph A. 
Sec. A-6. 20-A MRSA §12S42, sub-§2, as enacted by PL 2007, c. 469, Pt. A, § 1, 
is amended to read: 
2. Principal·cap. The principal cap limits the loan principal that can serve as the 
basis for claiming the educational opportunity tax credit. The cap is based on in-state 
tuition and mandatory fees for either the Maine Community College System or the 
University of Maine System, depending on whether the opportunity contract registration 
is for p~lrsuit of an associate degree or of a bachelor's degree, respectively. The average 
in-state tuition and mandatory fees must be published and disseminated to the department 
and to all accredited' Maine junior colleges, colleges and universities by September 1 st 
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each year by the Chancellor of the University of Maine System and the President of the 
Maine Community College System, and the tuition and mandatOlY fees must be based on 
averages of program costs within the 2 systems respectively. 
A. For an individual earning a degree from the Maine Community College System or 
from the University of Maine System, the relevant finanCial aid office shall certify, 
once the individual h'as earned the degree, ,>",hether or not the total principal of loans 
the individual received as part of that individual's financial aid paclcage exceeds the 
cost of in state tuition and mandato!)' fees incurred in pursuit of the degree. That cost 
constitutes the nrincinal can fer such an individual. 
B. For an individual ~arning a degree from any other an accredited Maine junior 
c'ollege, college or university, the relevant financial aid office institution shall certify, 
once the individual has eamed the degree, whether or not the total principal of loans 
the individual received as part of that individual's financial aid package exce~ds the 
published in-state tuition and mandatory fees for full-time enrollment in the Maine 
Community College System or in the University of Maine System for the year of 
graduation, depending on whether the degree is an associate degree or a bachelor's 
. degree, respectively, during the relevant multiplied by 2 years in the case of an 
associate degree and by 4 years in the case of a bachelor's degree. The published in 
state tuition and mandatory fees constitute figure constitutes the principal cap for 
such an individual.-If the individual has not attended full time throughout the pursuit 
of ' that individual's degree, an appropriate principal cap must be determined in q 
manner consistent ,>vith the principles set out in this subsection: 
C. For an individual whose student loans exceed the principal cap, a The department 
shall determine benchmark loan payment must be calculated as follmvs. The financial 
aid office shall calculate payments for associate and bachelor's degree earners for 
each year of graduation by calculating what the monthly payment would be on a loan 
for the amount of the principal cap, to be paid over 10 years, at the nominal interest 
rate offered for federal Stafford loans under 20 United States Code, Section 1077a, 
during the irldividtial's last year of enrollment year of graduation. The departmerit 
shall ensure that the benchrriark loan payment must be snecified on the individual's 
opportunity contract is reflected in the registration data for any graduate participating 
in the program. 
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Sec. A-7. 20-AMRSA §12542, sub-§3, as enacted by PL 2007, c. 469, Pt. A, § 1, 
is amended to read: 
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3. Eligibility for the program. The state board shall draft an opportunity contract 
for use in enrolling individuals in the program. The terms of the opportunity contract 
must require an individual who wishes to participate. following are conditions for 
paliicipation in the program--te7~ 
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A. Certify that that The individual ts must be a Maine resident~~ 
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. B. Agree to The individual must attend and 16 obtain a specified degree, either an 
associate degree or a bachelor's degree, from an accredited Maine junior college, 
collegeor university. The individual need not obtain the degree from the institution in 
which that individual 6rigimilly enrolled, 5B as long as all course work toward the 
degree is performed at accredited Maine junior colleges, colleges or uriiversities~. An 
individual who transfers to an accredited Maine jUhior college, college or university, 
after pelforming up to the equivalent of one full-time year of course work toward a 
degree at an institution outside of the State, -is eligible for a portion of the benefits 
that would have been available under the program had the individual performed all 
,course work at an accredited Maine junior college, college or university. Such an 
individual i"s eligible for 112 of the educational opportunity tax credit in the case of an 
associate degree and 3/4 of the educational opportunity tax credit in the case of a 
bachelor's degree. Prograrri eligibility for such an individual must be determined as if 
the commencement of course work at the relevant accredited Maine junior college, 
college or university was the commencement· of course work for the degree prograrri 
as awhole. 
C. 
Agree to The individual must live in this. State while pursuing the degree, 
excepting periods when it is reasonably necessary for the individual to live elsewhere 
as part of the relevant institution's academic programs. The individual sflal-I. must also 
agree to live in this State after obtaining the degree during any period when that 
.individual seeks to take advantage of the educational opportunity tax credit~~ 
D. Agree to The individual must maintain records relating to loan payments claimed 
under the educational opportunity tax credit for 5 years after those payments are 
claim.ed~~ 
E. With respect to educational loans, agree to the following: 
(1) The individual may claim the educational opportunity tax credit only with 
respect to loans that are pali of that individual's financial aid package and that 
have a term of at least 8 years; 
(2) If the individual in any ';"'£1)' accelerates repayment, the individual forfeits any 
right to claim an makes any prepayment,. that prepayment is not eligible for 
reimbursement through the educational opportunity tax credit for that taxable 
year or any future taxable year; and 
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(3) The individual may refinance said loans only if they remain separate from 
other debt and if the effect of the refinancing is to decrease both the annual 
repayment and the total remaining indebtedness, whether nOJieducational debt or 
educational debt incurred in a program other than the degree program for which 
the educationalopp0l1unity tax credit is claimed. 
In e)whange for the consideration outlined in paragraphs B to E, the State shall agree to 
permit the individual to take advantage of the educational opportunity tax credit. 
The 0pp0l1unity contract must'leave space for the accredited Maine junior college, 
college or university to certify that the individual has obtained the relevant degree, and to 
certify whether or not the loail principal that the individual incurs in pursuing the relevant 
de2'ree e)weeds the nrincinal can. 
Sec. A-8. 20-A MRS A §12542, sub-§4, as enacted by PL 2007, c. 469, Pt. A, § I, 
is repealed. 
Sec. A .. 9. 20-A MRSA §12542, sub-§4-A is enacted to read: 
4-A. Administration. The program must be administered as follows. 
A. The depaJ1ment shall, in consultation with the Department of Labor, establish an 
electronic registration system for enrolling individuals in the program and shall 
integrate that system with an educational attainment database in a manner that 
permits integration with labor market data systems. Registration data must include, 
at a minimum, the individual's name, the individual's social security number, the 
degree obtained, the institution from which the degree was obtained, the total amount 
of the individual's eligible loan principal, the applicable benchmark loan payment and 
whether the individual exceeds the principal cap. 
Every accredited Maine junior 
college, college or university shall develop procedures to facilitate this process in 
cooperation with the department. 
The department shall provide accredited Maine 
junior colleges, colleges and universities with information about the program ,and 
about their duties with regard to the program. 
B. Any Maine resident who enrolls in an accredited Maine junior college, college or 
university and who receives financial aid in' the form of loans rriust have the 
, 0ppOJ1unity to participate in the program. 
An accredited. Maine junior college~ 
college or university shall, at a minimum, provide information about the program to 
students in admission materials, financial aid award materials, entrance interviews, 
exit interviews, materials listing financial aid resources and any posters provided by 
the depaJ1ment. 
C. Once an individual has registered, that indiv'idual becomes eligible to claim the 
educational opportunity tax credit for loan payments made after the date of 
registration, subject to the requirements of this chapter and of Title. 36, section 
5217-D. An individual may register at any time during pursuit of the relevant degree 
or during the life of any loans for which the educational opportunity tax credit is 
claimed. 
The individual may take advantage of any forbearance or deferment 
provisions in the relevant loan agreements without forfeiting the right to cl~tim the. 
educational opportunity tax credit when the individual resumes repayment. 
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Sec. A-to. 20-A MRSA §12542, sUllb-§5, as enacted by PL 2007, c. 469, Pt. A, 
, § 1, is amended to read: 
5. 
Effective date; participation by individual already enrolled in degree 
program. The program must commence for the first semester that begins after the 
effective date of this chapter. Maine residents who when the program commences ,are 
enrolled in an associate or a bachelor's degree program at an accredited Maine junior 
college, college or university may participate, subject to the same essential terms as other 
program participants. When such an individual obtains, the relevant degree,it must be 
specified in the individual's opportanity contract the relevant accredited Maine junior 
college, college or university shall determine what percentage of the course work 
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completed in pursuit of the c;legree was performed while the individual "vas participating 
tn after the effective date of the program, rounded to the nearest multiple of 12:5%. The 
principal cap and benchmark loan payment must be calculated in the ordinary way as 
provided in this chapter, but the individual must then apply the percentage in this 
subsection to actual payments or to the benchmark loan payment, whichever applies, in 
determining the amount the individtlalcan claim under the educational opportunity tax 
credit for a given year. 
Sec. A-H. 20-A MRSA §12542, sUllb-§7 is enacted to read: 
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7. Promotion by state agencies. The department, the Finance Authority of Maine, 
the Maine State Housing Authority, the Department of Labor, the Department of Health 
and Human Services, the Department' of Economic and Community Development and 
any other agencies erigaging in education-related outreach shall integrate promotion of 
the program into existing educational opportunity outreach efforts to the extent possible 
within existing resources in a manner consistent with the scope of the program and its 
centrality to the State's efforts to raise educational attainment. 
Sec. A-H. 20-A MRS A §12544, as enacted by PL 2007, c. 469, Pt. A, § I, is 
amended to read: 
§12544., Rules 
The state board depaItment shall, in accordance with section 3, adopt rules, which are 
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' routine technical rules pursuant to' Tide 5, chapter 375, subchapter 2-A, as necessary to 
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carry out the purposes of this chapter. 
Sec. A-13. Report ,on progress in implementation. An accredited Maine 
junior college, college or university, as defined in the Maine Revised Statutes, Title, 20-A, 
section 12541, subsection I, shall report to the Department of Education in writing by 
February I, 2010 and agaiIl by February I, 2011 on effOlts to promote and enroll 
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individuals in the Job Creation Through Educational Opportunity Program and to train 
admissions and financial aid staff about the program, and the department shall convey the 
information gathered to the joint standing commIttee of the Legislature having 
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jurisdiction over education and cultural affairs. 
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PARTB 
Sec. B-l. 36 MRSA §S217-D, sub-§l,~, as enacted by PL 2007, c. 469, Pt. B, 
§ 1, is repealed. 
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S~c.B-2. 36 MRSA §S217-D, sub-§l, '1[G, as enacted by PL 2007, c. 469, Pt. B, 
§ I, is amended to read: 
G. 
"Opportunity program participant" means an individual who enters into an 
opportunity contract with the State registers for the Job Creation Through 
Educational Opportunity Program, obtains the specified degree and complies with the 
requirements under Title 20-A, section 12542. subsections 3 to 5. 
Sec. B-3. 36 MRS A §S217-D, sub-§l, .,-rG-l is enacted to read: 
G-l. "Registration" has the same meaning as in Title 20-A. section 12541 and in 
rules adopted to implfiment that section. 
Sec. B-4. 36 MRS A §S217-D,sub-§3, as enacted by PL 2007, c.A69, Pt. B, §1, . 
. is amended to read: 
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3. Calculation of the credit. The following provisions govern the calculation of the 
credit in this section . 
A. If the relevant opportunity program participant's opportunity contract registration 
limits the amount of the credit to a benchmark loan paymel)t, and the relevant 
opportunity program participant's actual monthly payment due is higher than that 
amount, then the credit claimed may not exceed the product of the benchmark loan 
payment and the number of months in which the taxpayer made loan payments. 
B. If the relevant opportunity program participant's opportunity contract registration 
certifies that the principal for the relevant loans is at or below the level of the 
principal cap, or if the relevant opportunity program participant's actual monthly 
payment is below the benchmark loan payment, tlie taxpayer may claim a credit 
based only on regularly sche9uled loan payments actually made. 
C. If the credit is claimed on behalf of an individual who was already enrolled in an 
associate or a bachelor's degree program at an accredited Maine junior college, ' 
.college or university, as defined in Title 20-A, section 12541, subsection 1, on the 
commencement of the Job Creation Through Educational Opportunity Program under 
Title 20-A, chapter 428-C, the percentage figure listed in the opportunity contract, as 
specifi,ed under calculated pursuant to Title 20-A, section 12542, subsection 5, must 
be applied to the amount determined under paragraph A or B. 
Sec. B-S. 36 MRS A §S217-D, sub-§S, as enacted by PL 2007, c. 469, Pt. B, §1, 
is amended to read: 
·5. Conditions for an employer claiming the credit. A taxpayer constituting an 
employer may claim the credit under this section under the following circumstances. The 
employer may undertake to make partial or full loan payments directly to the . relevant 
lender or lenders on behalf of a qualified employee, having taken reasonable steps to 
ascertain that the employee is in fact a qualified employee, and may claim a credit based 
on amounts that came due and were paid by the employer during the term of employment. 
Such payments are not deemed compensation or income to the employee for pumoses of 
this Title. 
To receive the credit, the employer must retain for ;5 years any proof of. 
eligibility that the employee or indep~ndent contractor provides. 
The employer may claim a credit for the amount. that the qualified employee could have 
claimed during any months when the qualified employee was employed, had the qualified 
employee made the partial or full loan payments instead, under conditions where the 
. qualified employee had sufficient income to claim the full credit for the taxable year. If 
the qualified employee is employed ·only on apart-time basis, the employer may claim a 
credit only lip to half of the total that the qualified employee could have claimed had the 
qualified employee made all payments and earned sufficient income to claim the full 
credit for the taxable year, but the am~unt the employer claims must stifl be based on 
amounts actually paid. 
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An employer claiming this credit on behalf of a qualified employee for a taxable year 
may not simultaneously claim a credit under section 5219-V on the behalf of the same 
employee or any state deduction, credit or other tax benefit with respect to the loan 
payments in question. 
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SUMMARY 
This bill amends the definition of "accredited Maine junior college, college or 
university" to include that .the . institution must have regional accreditation. 
The bill 
defines the terms "financial aid package" and "registration." It repears the definition for 
"opportunity contract." The bill requires the President of the Maine Community College 
System and the Chimcellor of the University of Maine System to puplish and disseminate· 
to the Department of Education and all accredited Maine junior colleges, colleges and 
universities the average in-state tuition and mandatory fees. 
Th~ bill requires the 
Department of Education to determine benchmark ·Ioan payments. The bill changes the 
eHgibility criteria of participation in the Job Creation Through Educational Opportunity 
Program. The bill also sets out how the program is to be administered by establishing an 
electronic registration system. The bill directs all institutions to file a report with the 
Department of Education by February 1, 2010 and February 1, 2011 on how the program 
is working .. The bill also requires certain agencies to promote the program in existing 
educational opportunity putreach efforts. The bill amends the law that deals with the tax 
credit for educational opportunities to reflect the changes that were made to the program; 
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