An Act Concerning Technical Changes to the Tax Laws
Maine Legislature, Session 125, LD 1752
Committee: Taxation
Sponsors: KNIGHT
Amends: 10 MRSA §1100-Z, 20-A MRSA §12542, 22 MRSA §1714-C, 32 MRSA §14706, 36 MRSA §112, 36 MRSA §191, 36 MRSA §844, 36 MRSA §1752, 36 MRSA §1760, 36 MRSA §1764, 36 MRSA §2519, 36 MRSA §2531, 36 MRSA §2533, 36 MRSA §2534, 36 MRSA §4603, 36 MRSA §5122, 36 MRSA §5142, 36 MRSA §5164, 36 MRSA §5191, 36 MRSA §5200-A, 36 MRSA §5204, 36 MRSA §5216-D, 36 MRSA §5219-B, 36 MRSA §5219-G, 36 MRSA §5219-H, 38 MRSA §2138

Legislative Document 
No. 1752
H.P. 1293 
House of Representatives, January 9, 2012
An Act Concerning Technical Changes to the Tax Laws 
Submitted by the Department of Administrative and Financial Services pursuant to Joint 
Rule 204. 
Reference to the Committee on Taxation suggested and ordered printed. 
HEATHER J.R. PRIEST 
Clerk 
Presented by Representative KNIGHT of Livermore Falls. 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1.  10 MRSA §1100-Z, sub-§2, as enacted by PL 2011, c. 380, Pt. Q, §1 and 
affected by §7, is amended to read: 
2.  Program.  The Maine New Markets Capital Investment Program, referred to in 
this section as "the program," is established to encourage new investment in economically 
distressed areas of the State. For the purposes of this section, unless otherwise defined in 
this section, all terms have the same meaning as under Title 36, section 5219-GG 
5219-HH and Section 45D of the United States Internal Revenue Code of 1986, as 
amended. 
Sec. 2.  10 MRSA §1100-Z, sub-§3, ¶G, as enacted by PL 2011, c. 380, Pt. Q, §1 
and affected by §7, is amended to read: 
G.  Upon receipt of notice that a qualified community development entity has issued 
its qualified equity investments or long-term debt securities, the authority shall certify 
the entity's qualified equity investments or long-term debt securities as qualified 
equity investments and eligible for tax credits under Title 36, section 5219-GG 
5219-HH.  The authority shall provide written notice, sent by certified mail or any 
other means considered feasible by the authority, of the certification to the qualified 
community development entity, Maine the Department of Administrative and 
Financial Services, Bureau of Revenue Services and the Commissioner of 
Administrative and Financial Services. The notice must include the names of persons 
eligible to claim the tax credits and their respective tax credit amounts. If the names 
of the persons that are eligible to claim the tax credits change due to a transfer of a 
qualified equity investment or a change in an allocation pursuant to this subchapter, 
the qualified community development entity shall notify the authority of such that 
transfer or change. 
Sec. 3.  10 MRSA §1100-Z, sub-§4, as enacted by PL 2011, c. 380, Pt. Q, §1 and 
affected by §7, is amended to read: 
4.  Limit on amount of tax credits authorized.  The maximum aggregate amount of 
qualified equity investments for which the authority may issue tax credit authority under 
this section is $250,000,000; a tax credit claim may not exceed $20,000,000 in any one 
state fiscal year over the 7 years of the tax credit allowance dates as described in Title 36, 
section 5219-GG 5219-HH, subsection 1, paragraph A. 
Sec. 4.  10 MRSA §1100-Z, sub-§5, as enacted by PL 2011, c. 380, Pt. Q, §1 and 
affected by §7, is amended to read: 
5.  Reporting and disclosure of information.  The authority shall require annual 
reports of a qualified community development entity granted tax credit allocation 
authority pursuant to subsection 3.  Reports may be shared with Maine the Department of 
Administrative and Financial Services, Bureau of Revenue Services and the 
Commissioner of Administrative and Financial Services.  Notwithstanding section 975-A, 
the authority may disclose any information to Maine the Department of Administrative 
and Financial Services, Bureau of Revenue Services and the Commissioner of 
Administrative and Financial Services that it considers necessary for the administration of 
the program pursuant to this section, Title 36, section 2531 2533 or Title 36, section 
5219-GG 5219-HH. 
Sec. 5.  20-A MRSA §12542, sub-§2-A, ¶D, as enacted by PL 2009, c. 553, Pt. 
A, §9, is amended to read: 
D.  For an individual whose student loans exceed the principal cap, a A benchmark 
loan payment must be calculated as described in this paragraph.  The State Tax 
Assessor shall annually by November 1st calculate what the monthly payment would 
be on a loan for the amount of the principal cap, to be paid over 10 years, at the 
interest rate offered for federally subsidized Stafford loans under 20 United States 
Code, Section 1077a, during the individual's last year of enrollment at an accredited 
Maine community college, college or university. 
Sec. 6.  22 MRSA §1714-C, as enacted by PL 2009, c. 213, Pt. CC, §2, is 
amended to read: 
§1714-C.  Critical access hospital staff enhancement reimbursement 
Beginning April 1, 2011, the department shall reimburse critical access hospitals 
from the total allocated from hospital tax revenues under Title 36, chapter 375 377 at 
least $1,000,000 in state and federal funds to be distributed annually among critical 
access hospitals for staff enhancement payments. 
Sec. 7.  32 MRSA §14706, sub-§6, as enacted by PL 2001, c. 324, §12, is 
amended to read: 
6.  Seller's certificate.  The number of a valid transient seller of consumer 
merchandise's registration certificate issued to the applicant by the State Tax Assessor 
pursuant to Title 36, chapter 211 or satisfactory evidence that the applicant is not required 
to be registered under that Title chapter. 
Sec. 8.  36 MRSA §112, sub-§8, as amended by PL 2011, c. 211, §17, is further 
amended to read: 
8.  Additional duties.  In addition to the duties specified in this Title, the assessor is 
responsible for has the following duties: 
A.  Collection of the tax levied on fire insurance companies imposed by Title 25, 
section 2399; 
C.  Administration of the spruce budworm excise tax in accordance with Title 12, 
section 8427; and 
D.  Administration of the premium imposed on motor vehicle oil under Title 10, 
section 1020.; and 
E.  Administration of reports and payments required under Title 32, section 1866-E. 
Sec. 9.  36 MRSA §191, sub-§2, ¶SS, as enacted by PL 2011, c. 380, Pt. Q, §4 
and affected by §7, is amended to read: 
SS.  The disclosure of information to the Finance Authority of Maine necessary for 
the administration of the new markets capital investment credit in sections 2531 2533 
and 5219-GG 5219-HH and to the Commissioner of Administrative and Financial 
Services as necessary for the execution of the memorandum of agreement pursuant to 
section 5219-GG 5219-HH, subsection 3.; 
Sec. 10.  36 MRSA §191, sub-§2, ¶TT, as reallocated by RR 2011, c. 1, §50, is 
amended to read: 
TT.  The disclosure to tax officials of other states, and to clearinghouses and other 
administrative entities acting on behalf of participating states, of information 
necessary for the administration of a multistate agreement entered into pursuant to 
section 2532.; 
Sec. 11.  36 MRSA §844, sub-§2, as amended by PL 1995, c. 262, §7, is further 
amended to read: 
2.  Nonresidential property of $1,000,000 or greater.  Notwithstanding subsection 
1, with regard to nonresidential property or properties with an equalized municipal 
valuation of $1,000,000 or greater either separately or in the aggregate, either party the 
applicant may choose to appeal the decision of the assessors or the municipal officers 
with regard to on a request for abatement with respect to nonresidential property or 
properties having an equalized municipal valuation of $1,000,000 or greater, either 
separately or in the aggregate, to the State Board of Property Tax Review within 60 days 
after notice of the decision from which the appeal is taken or after the application is 
deemed to be denied.  If the state board thinks State Board of Property Tax Review 
determines that the applicant is over-assessed, it shall grant such reasonable abatement as 
the board thinks it determines proper.  For the purposes of this subsection, "nonresidential 
property" means property that is used primarily for commercial, industrial or business 
purposes, excluding unimproved land that is not associated with a commercial, industrial 
or business use. 
Sec. 12.  36 MRSA §1752, sub-§1-H, as enacted by PL 2007, c. 240, Pt. 
WWWW, §1, is repealed. 
Sec. 13.  36 MRSA §1760, sub-§5, as amended by PL 2009, c. 625, §6, is further 
amended to read: 
5.  Medicines. Sales of medicines for human beings sold on a doctor's prescription.  
This subsection does not apply to the sale of marijuana pursuant to Title 22, chapter 
558-C. 
Sec. 14.  36 MRSA §1760, sub-§8, as amended by PL 2009, c. 434, §25, is 
further amended to read: 
8.  Certain motor fuels.  Sales of: 
A.  Motor fuels upon which a tax at the maximum rate for highway use has been paid 
pursuant to Part 5 or a comparable tax of any other another state or a province of 
Canada has been paid; or 
B.  Internal combustion engine fuel, as defined in section 2902, bought and used for 
the purpose of propelling jet engine aircraft; and. 
D.  Diesel internal combustion engine fuel bought and used from July 1, 2007 to June 
30, 2008 for the purpose of operating or propelling a commercial groundfishing boat. 
Sec. 15.  36 MRSA §1764, as amended by PL 2007, c. 375, §2, is further amended 
to read: 
§1764.  Tax against certain casual sales 
The tax imposed by chapters 211 to 225 this Part must be levied upon all casual 
rentals of living quarters in a hotel, rooming house or, tourist camp or trailer camp and 
upon all casual sales involving the sale of trailers, truck campers, motor vehicles, special 
mobile equipment except farm tractors and lumber harvesting vehicles or loaders, 
watercraft or aircraft except those unless the property is sold for resale at retail sale or to 
a corporation, partnership, limited liability company or limited liability partnership when 
the seller is the owner of a majority of the common stock of the corporation or of the 
ownership interests in the partnership, limited liability company or limited liability 
partnership.  This section does not apply to the rental of living quarters rented for a total 
of fewer than 15 days in the calendar year, except that a person who owns and offers for 
rental more than one property in the State during the calendar year is liable for collecting 
sales tax with respect to the rental of each unit regardless of the number of days for which 
it is rented.  For purposes of this section, "special mobile equipment" does not include 
farm tractors and lumber harvesting vehicles or loaders. 
Sec. 16.  36 MRSA §2519, as amended by PL 2011, c. 331, §13 and affected by 
§§16 and 17, is further amended to read: 
§2519.  Ratio of tax on foreign insurance companies 
Any An insurance company incorporated by a state of the United States or province 
of Canada whose laws impose upon insurance companies chartered by this State any a 
greater tax than is herein provided in this chapter shall pay the same tax upon business 
done by it in this State, in place of the tax provided in any other section of this Title 
chapter.  If it is not paid the insurance company fails to pay the tax as provided in section 
2521-A, the assessor shall certify that failure to the Superintendent of Insurance, who 
shall suspend the insurance company's right of said company to do business in this State.  
Any For purposes of this section, an insurance company incorporated by another country 
is regarded for the purpose of this section as though deemed to be incorporated by the 
state where it has elected to make its deposit and establish its principal agency in the 
United States.  For nonadmitted insurance premiums subject to section 2531, the rate 
applied pursuant to this section must be the highest rate that the state or province applies 
to nonadmitted insurance premiums taxed in that state or province. 
Sec. 17.  36 MRSA §2531, as enacted by PL 2011, c. 331, §14 and affected by 
§§16 and 17; enacted by c. 380, Pt. Q, §5 and affected by §7; and enacted by c. 453, §4, 
is repealed and the following enacted in its place: 
§2531.  Taxation of nonadmitted insurance coverage 
1.  Generally.  All gross direct insurance premiums and annuity considerations paid 
to insurers that do not have certificates of authority to do business in this State issued by 
the Superintendent of Insurance pursuant to Title 24-A are subject to taxation in 
accordance with this section if this State is the insured's home state, as defined in the 
federal Nonadmitted and Reinsurance Reform Act of 2010, Public Law 111-203, Section 
527.  This section does not apply to reinsurance premiums paid by an authorized 
domestic insurer. 
2.  Rate and incidence of tax.  Except as otherwise provided in section 2519 or 
2532, the rate of taxation is 3% of the premiums subject to tax under this section.  For all 
coverage placed in accordance with Title 24-A, chapter 19, the tax must be paid by the 
surplus lines producer.  For all other nonadmitted insurance, the tax must be paid by the 
insured. 
3.  Returns.  Except as otherwise provided in accordance with a multistate agreement 
entered into pursuant to section 2532, every producer holding surplus lines authority in 
this State shall file a return and pay the tax due in accordance with section 2521-A and 
every insured subject to tax in accordance with this section shall file a return and pay the 
tax due subject to the same requirements as provided in section 2521-A.  An insurance 
agency may elect to collect and pay the tax on surplus lines premiums on behalf of all of 
its employees who are surplus lines producers and file a single return. 
Sec. 18.  36 MRSA §2533 is enacted to read: 
§2533.  New markets capital investment credit 
A person that is subject to tax under this chapter, or would be subject to tax under this 
chapter if it did business or collected premiums or assessments in this State, that holds a 
qualified equity investment certified by the Finance Authority of Maine pursuant to Title 
10, section 1100-Z, subsection 3, paragraph G is allowed a credit equal to the amount 
determined in accordance with section 5219-HH against the tax otherwise due under this 
chapter. Section 5219-HH governs the allowance of the credit and limitations on the 
amount, refundability, carry-over and recapture of the credit. 
Sec. 19.  36 MRSA §2534 is enacted to read: 
§2534.  Credit for rehabilitation of historic properties 
A taxpayer is allowed a credit against the tax otherwise due under this chapter as 
determined under section 5219-BB. 
Sec. 20.  36 MRSA §4603, sub-§1, as amended by PL 1995, c. 502, Pt. C, §14, is 
further amended to read: 
1.  Establishment.  The Maine Potato Board is a body corporate and politic and an 
incorporated public instrumentality of the State and the exercise of powers conferred by 
this Part is determined to be the performance of essential government functions.  For the 
purposes of the budget, accounts and control, purchasing or other provisions of Title 5, 
Part 4, the board may not be construed to be a state agency.  The board consists of 11 
members who, following the transition period provided for in subsection 11, must be 
elected in accordance with the procedures set forth in this chapter and such additional 
procedures as the board may prescribe by rulemaking.  Subject to such staggered terms as 
the board may provide by rule, board members shall serve 2-year terms, provided except 
that a board member may continue to serve until a successor is duly elected and qualified 
and that board members may not serve more than 3 consecutive terms. 
Sec. 21.  36 MRSA §4603, sub-§11, as enacted by PL 1985, c. 753, §§14 and 15, 
is repealed. 
Sec. 22.  36 MRSA §5122, sub-§2, ¶II, as corrected by RR 2011, c. 1, §56, is 
amended to read: 
II.  For taxable years beginning on or after January 1, 2012, an amount equal to the 
net increase in the depreciation deduction allowable under the Code, Sections 167 
and 168 that would have been applicable to that property had the depreciation 
deduction under the Code, Section 168(k) not been claimed with respect to such 
property placed in service during the taxable year beginning in 2011 or 2012 for 
which an addition was required under subsection 1, paragraph FF, subparagraph (2) 
for the taxable year beginning in 2011 or 2012. 
Upon the taxable disposition of property to which this paragraph applies, the amount 
of any gain or loss includable in federal adjusted gross income must be adjusted for 
Maine income tax purposes by an amount equal to the difference between the 
addition modification for such property under subsection 1, paragraph FF, 
subparagraph (2) related to property placed in service outside the State and the 
subtraction modifications allowed pursuant to this paragraph. 
The total amount of the subtraction modification claimed for property placed in 
service outside the State under this paragraph for all tax years may not exceed the 
addition modification under subsection 1, paragraph FF, subparagraph (2) for the 
same property; and 
Sec. 23.  36 MRSA §5142, sub-§8-B, ¶C, as enacted by PL 2011, c. 380, Pt. 
CCCC, §2 and affected by §4, is amended to read: 
C.  Performance of the following personal services for 24 days during a calendar 
taxable year may not be counted toward the 12-day threshold under paragraph A: 
(1)  Personal services performed in connection with presenting or receiving 
employment-related training or education; 
(2)  Personal services performed in connection with a site inspection, review, 
analysis of management or any other supervision of a facility, affiliate or 
subsidiary based in the State by a representative from a company, not 
headquartered in the State, that owns that facility or is the parent company of the 
affiliate or subsidiary; 
(3)  Personal services performed in connection with research and development at 
a facility based in the State or in connection with the installation of new or 
upgraded equipment or systems at that facility; or 
(4)  Personal services performed as part of a project team working on the 
attraction or implementation of new investment in a facility based in the State. 
Sec. 24.  36 MRSA §5164, sub-§1, as amended by PL 2007, c. 539, Pt. CCC, §12, 
is further amended to read: 
1.  Fiduciary adjustment defined.  The fiduciary adjustment is the net amount of the 
modifications described in section 5122, including subsection 3 if the estate or trust is a 
beneficiary of another estate or trust, which that relates to items of income or deduction 
of an estate or trust.  Income taxes imposed by this State or any other taxing jurisdiction, 
mortgage insurance premiums paid or accrued on or after January 1, 2008 and claimed as 
a deduction pursuant to the Code, Section 163(h)(3)(E) and interest or expenses incurred 
in the production of income exempt from tax under this Part that were deducted in 
arriving at federal taxable income must be added back to the fiduciary adjustment.  
Interest or expenses incurred in the production of income taxable under this Part but 
exempt from federal income tax must be subtracted from the fiduciary adjustment. 
Sec. 25.  36 MRSA §5191, sub-§3, as amended by PL 1979, c. 541, Pt. A, §233, 
is further amended to read: 
3.  Tax avoidance or evasion.  Where If a partner's distributive share of an item of 
partnership income, gain, loss or deduction is determined for federal income tax purposes 
by a special provision in the partnership agreement with respect to such item, and the 
principal purpose of such provision which is the avoidance or evasion of tax under this 
Part, the partner's distributive share of such that item and any modification required with 
respect thereto shall to that item must be determined in accordance with his the partner's 
distributive share of the taxable income or loss of the partnership generally (that is, 
exclusive of those items requiring separate computation that must be separately computed 
under the Internal Revenue Code, Section 702, or its equivalent.). 
Sec. 26.  36 MRSA §5200-A, sub-§2, ¶V, as corrected by RR 2011, c. 1, §57, is 
amended to read: 
V.  For taxable years beginning on or after January 1, 2012, an amount equal to the 
net increase in the depreciation deduction allowable under the Code, Sections 167 
and 168 that would have been applicable to that property had the depreciation 
deduction under the Code, Section 168(k) not been claimed with respect to such 
property placed in service during the taxable year beginning in 2011 or 2012 for 
which an addition was required under subsection 1, paragraph Y, subparagraph (2) 
for the taxable year beginning in 2011 or 2012. 
Upon the taxable disposition of property to which this paragraph applies, the amount 
of any gain or loss includable in federal adjusted gross taxable income must be 
adjusted for Maine income tax purposes by an amount equal to the difference 
between the addition modification for such property under subsection 1, paragraph Y, 
subparagraph (2) related to property placed in service outside the State and the 
subtraction modifications allowed pursuant to this paragraph. 
The total amount of the subtraction modification claimed for property placed in 
service outside the State under this paragraph for all tax years may not exceed the 
addition modification under subsection 1, paragraph Y, subparagraph (2) for the same 
property; and 
Sec. 27.  36 MRSA §5204, as amended by PL 2011, c. 380, Pt. N, §15 and affected 
by §19, is further amended to read: 
§5204.  Lump-sum retirement plan distributions 
In addition to any other tax imposed by this Part, a tax is hereby imposed for each 
taxable year on every taxpayer who, in accordance with the Code, Section 402(e)(1), 
elects to compute a separate federal tax on a lump-sum distribution from a retirement plan 
at the rate of 15% of the separate federal tax imposed on the distribution, except that, for 
tax years beginning in 2012, the rate is 7.5%.  The tax under this section does not apply to 
tax years beginning on or after January 1, 2013. 
Sec. 28.  36 MRSA §5216-D, sub-§§3 and 4, as enacted by PL 2011, c. 380, Pt. 
HHHH, §3, are amended to read: 
3.  Limitation.  The amount of the credit allowed under this section for any one 
taxable year may not exceed 50% of the tax imposed by this Part on the investor for the 
taxable year before application of the credit.  The credit allowed under this section may 
not reduce the tax otherwise due under this Part to less than zero. 
4.  Carry-forward.  A credit under this section not taken because of the limitation 
limitations in subsection 3 must be taken in the next taxable year in which the credit may 
be taken, and the limitation limitations of subsection 3 also applies apply to the carry-
forward years. In no case may this carry-forward period exceed 15 years. 
Sec. 29.  36 MRSA §5219-BB, sub-§4, as amended by PL 2011, c. 453, §9, is 
further amended to read: 
4.  Maximum credit.  The credit allowed pursuant to this section and section 2531 
2534 may not exceed $5,000,000 for each certified rehabilitation project under Section 47 
of the Code, Section 47, placed into service in the State during the taxable year for which 
a credit is claimed under this section. 
Sec. 30.  36 MRSA §5219-GG, as enacted by PL 2011, c. 380, Pt. O, §17 and 
affected by §18 and enacted by Pt. Q, §6 and affected by §7, is repealed and the following 
enacted in its place: 
§5219-GG.  Maine capital investment credit 
1.  Credit allowed.  A taxpayer that claims a depreciation deduction under the Code, 
Section 168(k) for property placed in service in the State during the taxable year 
beginning in 2011 or 2012 is allowed a credit against the taxes imposed by this Part in an 
amount equal to 10% of the amount claimed for the taxable year under the Code, Section 
168(k) with respect to that property, except for excluded property under subsection 2. 
2.  Certain property excluded.  The following property is not eligible for the credit 
under this section: 
A.  Property owned by a public utility as defined by Title 35-A, section 102; 
B.  Property owned by a person that provides radio paging services as defined by 
Title 35-A, section 102; 
C.  Property owned by a person that provides mobile telecommunications services as 
defined by Title 35-A, section 102; 
D.  Property owned by a cable television company as defined by Title 30-A, section 
2001; 
E.  Property owned by a person that provides satellite-based direct television 
broadcast services; 
F.  Property owned by a person that provides multichannel, multipoint television 
distribution services; and 
G.  Property that is not in service in the State for the entire 12-month period 
following the date it is placed in service in the State. 
3.  Limitations; carry-forward.  The credit allowed under subsection 1 may not 
reduce the tax otherwise due under this Part to less than zero.  Any unused portion of the 
credit may be carried forward to the following year or years for a period not to exceed 20 
years. 
4.  Recapture.  The credit allowed under this section must be fully recaptured to the 
extent claimed by the taxpayer if the property forming the basis of the credit is not used 
in the State for the entire 12-month period following the date it is placed in service in the 
State.  The credit must be recaptured by filing an amended return in accordance with 
section 5227-A for the tax year in which that property was used to calculate the credit 
under this section.  The amended return must reflect the credit disallowed and the income 
modifications required by section 5122, subsection 1, paragraph FF and section 5200-A, 
subsection 1, paragraph Y with respect to that property. 
Sec. 31.  36 MRSA §5219-HH is enacted to read: 
§5219-HH.  New markets capital investment credit 
1.  Definitions.  As used in this section, unless the context otherwise indicates, the 
following terms have the following meanings. 
A.  "Applicable percentage" means 0% for each of the first 2 credit allowance dates, 
7% for the 3rd credit allowance date and 8% for the next 4 credit allowance dates. 
B.  "Authority" means the Finance Authority of Maine. 
C.  "Commissioner" means the Commissioner of Administrative and Financial 
Services. 
D.  "Credit allowance date" means, with respect to any qualified equity investment, 
the date on which the investment is initially made and each of the 6 anniversary dates 
of the date thereafter. 
E.  "Long-term debt security" means any debt instrument issued by a qualified 
community development entity, at par value or a premium, with an original maturity 
date of at least 7 years from the date of its issuance, with no acceleration of 
repayment, amortization or prepayment features prior to its original maturity date.  
The qualified community development entity that issues the debt instrument may not 
make cash interest payments on the debt instrument during the period commencing 
with its issuance and ending on its final credit allowance date in excess of the 
cumulative operating income, as defined in the regulations adopted pursuant to the 
Code, Section 45D, of the qualified community development entity for the same 
period prior to giving effect to interest expense on such debt instrument.  This 
paragraph does not limit the holder's ability to accelerate payments on the debt 
instrument in situations when the qualified community development entity has 
defaulted on covenants designed to ensure compliance with this section; section 191, 
subsection 2, paragraph SS; section 2533; and Title 10, section 1100-Z or the Code, 
Section 45D. 
F.  "Purchase price" means the amount of the investment in the qualified community 
development entity for the qualified equity investment. 
G.  "Qualified active low-income community business" has the same meaning as in 
the Code, Section 45D. 
H.  "Qualified community development entity" has the same meaning as in the Code, 
Section 45D, except that the entity must have entered into or be controlled by or 
under common control of an entity that has entered into an allocation agreement with 
the Community Development Financial Institutions Fund of the United States 
Department of the Treasury with respect to credits authorized by the Code, Section 
45D. 
I.  "Qualified equity investment" means any equity investment in, or long-term debt 
security issued by, a qualified community development entity that: 
(1)  Has at least 85% of its cash purchase price used by the issuer to make 
qualified low-income community investments in qualified active low-income 
community businesses located in the State by the 2nd anniversary of the initial 
credit allowance date; 
(2)  Is acquired after December 31, 2011 at its original issuance solely in 
exchange for cash; and 
(3)  Is designated by the issuer as a qualified equity investment and is certified by 
the authority pursuant to Title 10, section 1100-Z, subsection 3, paragraph G.  
"Qualified equity investment" includes any qualified equity investment that does 
not meet the provisions of Title 10, section 1100-Z, subsection 3, paragraph G if 
the investment was a qualified equity investment in the hands of a prior holder.  
The qualified community development entity shall keep sufficiently detailed 
books and records with respect to the investments made with the proceeds of the 
qualified equity investments to allow the direct tracing of the proceeds into 
qualified low-income community investments in qualified active low-income 
community businesses in the State. 
J.  "Qualified low-income community investment" means any capital or equity 
investment in, or loan to, any qualified active low-income community business made 
after September 28, 2011.  With respect to any one qualified active low-income 
community business, the maximum amount of qualified low-income community 
investments that may be made in the business, on a collective basis with all of its 
affiliates, with the proceeds of qualified equity investments that have been certified 
under Title 10, section 1100-Z, subsection 3, paragraph G is $10,000,000 whether 
made by one or several qualified community development entities. 
2.  Credit allowed.  A person that holds a qualified equity investment certified by the 
authority pursuant to Title 10, section 1100-Z, subsection 3, paragraph G on a credit 
allowance date that falls within the taxable year is allowed a credit equal to the applicable 
percentage that applies to the credit allowance date multiplied by the purchase price paid 
for the qualified equity investment.  Notwithstanding any other provision of law, other 
than the recapture provisions of subsection 7, the person, and any subsequent person, that 
is the holder of the credit certificate issued by the authority for a qualified equity 
investment is entitled, in the aggregate, to the entire 39% credit amount computed with 
respect to the 7 credit allowance dates.  In no event may the credit amount in the 
aggregate exceed 39% for any single qualified equity investment certified by the 
authority. 
3.  Memorandum of agreement.  Upon receipt of the authority's written notice of 
the certification of a qualified equity investment's tax credit eligibility, the commissioner 
shall enter into an agreement on behalf of the State with the person eligible to claim the 
credit pursuant to Title 10, section 1100-Z, subsection 3, paragraph G.  That agreement 
must provide that the State shall, with the exception of recapture pursuant to subsection 7, 
allow the tax credit as provided for in subsection 2 and recognize that the person named 
as eligible for tax credit pursuant to Title 10, section 1100-Z, subsection 3, paragraph G is 
entitled to claim the tax credits and the respective tax credit amounts in the aggregate, to 
the entire 39% credit amount computed with respect to the 7 credit allowance dates. 
4.  Carry-over to succeeding year.  Any unused portion of the credit may be carried 
over to the following taxable year or years, except that the carry-over period for unused 
credit amounts may not exceed 20 years. 
5.  Pass-through entity; allocation of the credit.  Credits allowed pursuant to this 
section to a partnership, limited liability company, S corporation or other similar pass-
through entity must be allocated to the partners, members, shareholders or other owners 
in accordance with section 5219-G or pursuant to an executed agreement among the 
partners, members or shareholders or other owners documenting an alternate allocation 
method. 
6.  Credit refundable.  The credit allowed under this section is fully refundable. 
7.  Recapture of credits.  The State Tax Assessor may recapture all of the credit 
allowed under this section if: 
A.  Any amount of federal tax credits available with respect to a qualified equity 
investment that is eligible for a tax credit under this section is recaptured under the 
Code, Section 45D.  In such a case, the recapture must be proportionate to the federal 
recapture with respect to the qualified equity investment; 
B.  The qualified community development entity redeems or makes a principal 
repayment with respect to the qualified equity investment that generated the tax credit 
prior to the final credit allowance date of the qualified equity investment. In such a 
case, the recapture must be proportionate to the amount of the redemption or 
repayment with respect to the qualified equity investment; or 
C.  The qualified community development entity fails to invest at least 85% of the 
purchase price of the qualified equity investment in qualified low-income community 
investments in qualified active low-income community businesses located in the 
State within 24 months of the issuance of the qualified equity investment and 
maintain this level of investment in qualified low-income community investments in 
qualified active low-income community businesses located in the State until the last 
credit allowance date for the qualified equity investment. For purposes of calculating 
the amount of qualified low-income community investments held by a qualified 
community development entity, an investment is considered held by the qualified 
community development entity even if the investment has been sold or repaid as long 
as the qualified community development entity reinvests an amount equal to the 
capital returned to or recovered from the original investment, exclusive of any profits 
realized, in another qualified active low-income community business in this State 
within 12 months of the receipt of the capital.  A qualified community development 
entity may not be required to reinvest capital returned from qualified low-income 
community investments after the 6th anniversary of the issuance of the qualified 
equity investment, the proceeds of which were used to make the qualified low-
income community investment, and the qualified low-income community investment 
is considered to be held by the issuer through the qualified equity investment's final 
credit allowance date. 
The qualified community development entity must be provided 90 days to cure any 
deficiency indicated in the authority's original recapture notice and avoid such recapture.  
If the entity fails or is unable to cure the deficiency within the 90-day period, the assessor 
shall provide the qualified community development entity and the person from whom the 
credit is to be recaptured with a final order of recapture.  Any amount of tax credits for 
which a final recapture order has been issued must be recaptured from the person that 
actually claimed the tax credit. 
Sec. 32.  38 MRSA §2138, sub-§3, as enacted by PL 1989, c. 585, Pt. A, §7, is 
repealed. 
Sec. 33.  Application.  Those sections of this Act that enact the Maine Revised 
Statutes, Title 36, section 2533 and section 5219-HH apply to tax years beginning on or 
after January 1, 2012.  That section of this Act that amends the Title 36, section 5164, 
subsection 1 applies to tax years beginning on or after January 1, 2012. 
Sec. 34.  Retroactivity.  That section of this Act that repeals and replaces the 
Maine Revised Statutes, Title 36, section 2531 applies retroactively to taxes on all 
premiums received on or after July 1, 2011.  That section of this Act that enacts Title 36, 
section 2534 applies retroactively to September 28, 2011.  That section of this Act that 
amends Title 36, section 5216-D, subsections 3 and 4 applies retroactively to June 20, 
2011.  Those sections of this Act that amend Title 36, section 5122, subsection 2, 
paragraph II; section 5142, subsection 8-B, paragraph C; and section 5200-A, subsection 
2, paragraph V apply retroactively to tax years beginning on or after January 1, 2011. 
That section of this Act that repeals and replaces Title 36, section 5219-GG applies 
retroactively to tax years beginning on or after January 1, 2011. 
SUMMARY 
This bill makes the following changes to the laws governing taxation. 
It makes technical changes to correct cross-references, correct clerical errors, resolve 
statutory numbering conflicts, improve syntax and repeal unnecessary language. 
It corrects references to the Department of Administrative and Financial Services, 
Bureau of Revenue Services. 
It clarifies the computation of a benchmark loan payment for purposes of the 
educational opportunity tax credit, consistent with the way the credit is currently 
administered. 
It clarifies that an insurance company that does not do business in Maine and is not 
subject to the Maine insurance premiums tax is eligible for the new markets capital 
investment credit. 
It clarifies the computation of the Maine fishery infrastructure investment tax credit. 
It adds administration of reports and payments by initiators of deposit under the 
beverage container laws to the list of duties assigned to the State Tax Assessor. 
It clarifies that only the applicant may appeal to the State Board of Property Tax 
Review the decision of the assessors or municipal officers with respect to a request for 
abatement of property taxes on nonresidential property with a valuation of $1,000,000 or 
greater. 
It corrects the computation of the subtraction modification relating to bonus 
depreciation for property not used as the basis for the Maine capital investment credit. 
It clarifies that the minimum taxability thresholds for nonresidents apply to the 
taxable year of the taxpayer rather than the calendar year. 
It amends the definition of "fiduciary adjustment" to reflect the repeal of the 
requirement to reduce itemized deductions by the amount of any federal deduction for 
mortgage insurance premiums. 
It clarifies the recapture provisions of the Maine capital investment credit.