An Act To Provide Tax Relief for Maine's Citizens by Reducing Income Taxes
Maine Legislature, Session 125, LD 0849
Committee Amendment CA_C-HA_A_H798 (House)
Amends: 5 MRSA §1518-A

HOUSE AMENDMENT "/I,, to COMMITTEE AMENDMENT "C" to S.P. 252, 
L.D. 849, Bill, "An Act To Provide Tax Relief for Maine's Citizens by Reducing Income 
Taxes" 
Amend the amendment by striking out all of section 1 (page 1, lines 13 to 35 and 
'Sec. 1. 5 MRSA §1518-A, as enacted by PL 2005, c. 2, Pt. A, §4 and affected by 
§ 14, is amended to read: 
§1518-A. Tax Relief Fund for Maine Residents 
1. Tax Relief Fund for Maine Residents. There is created the Tax Relief Fund for 
Maine Residents, referred to in this section as "the fund," which must be used to provide 
tax relief to residents of the State. The fund consists of all resources transferred to the 
fund under subsection 4 and section 1536 and other resources made available to the fund. 
The fund must be used in the order of the following. 
A. As the first priority, amounts in the fund must be used to increase the earned 
income credit under Title 36, section 5219-S until the credit is equal to 50% of the 
federal earned income credit for the same taxable year, and the credit is refundable. 
B. As the 2nd priority, amounts in the fund must be used to increase the individual 
income tax bracket threshold amounts under Title 36, section 5111 until the bracket 
thresholds are 20% higher than those in effect for tax years beginning in 2014. 
C. 
As the 3rd priority, after the increase in bracket thresholds required under 
paragraph B has been achieved, amounts in the fund must be used to reduce the 
highest individual income tax rate until it reaches 6.5%. 
I-A. Implementation. By September 15, 2014 and annually thereafter, the State 
Controller shall inform the State Tax Assessor of the amount available in the fund for the 
pumoses of subsection 1. 
A. By November 1 st annually, the State Tax Assessor shall use the amount in the 
fund identified by the State Controller to calculate the new earned income credit 
percentage and refundability under subsection 1, paragraph A. 
HOUSE AMENDMENT 
" 
HOUSE AMENDMENT ,,~ " to COMMITTEE AMENDMENT "C" to S.P. 252, L.D. 849 
B. After the earned income credit under paragraph A has been increased to 50% of 
the federal earned income credit for the same taxable year and the credit has been 
made refundable, by November 1st annually the State Tax Assessor shall use the 
amount in the fund identified by the State Controller to calculate new individual 
income tax bracket thresholds under subsection 1, paragraph B by proportional 
increases in each bracket until the thresholds are 20% higher than the bracket 
thresholds in effect for tax years beginning on or after January 1,2014. 
C. After bracket thresholds have reached the amounts required under subsection I, 
paragraph B, by November 1st annually the State Tax Assessor shall calculate the 
amount by which the highest income tax rate under Title 36, section 5111 may be 
II 
reduced. Bracket rate reductions must be 0.2% in the first year in which reductions 
are made and 0.1 % in subsequent years. If sufficient funds are not available to pay for 
the minimum reduction, a rate reduction may not be made until the amount in the 
fund is sufficient to pay for the reduction. When the 8.5% bracket under Title 36, 
section 5111 has been reduced to 7%, the 2 highest brackets for all categories under 
Title 36, section 5111 must be combined into one bracket. Future annual rate 
reductions must be calculated until the tax rate for the highest bracket is 6.5%. 
D. The State Tax Assessor shall provide public notice of new earned income credit 
percentages and the refundability of that credit, bracket thresholds and rates 
calculated under this subsection by November 15th annually. 
E. New earned income credit percentages and the refundability of that credit. bracket 
thresholds and rates take effect beginning with tax years that begin on or after 
January 1st of the calendar year following the determinations made under this 
subsection. 
2. Nonlapsing fund. Any unexpended balance in the Tax Relief Fund for Maine 
Residents may not lapse but must be carried forward to be used pursuant to subsection + 
I-A. 
3. Transfer for income tax reduction. In the fiscal years immediately following 
the calculation of the earned income credit. the refundable status of that earned income 
credit and the income tax rate reduction under subsection I-A, paragraphs A, B and C, the 
State Tax Assessor shall certifY to the State Controller the amount of the reduction in 
General Fund revenue by fiscal year, and the State Controller shall transfer from the fund 
the amount certified for the reduction in revenue attributable to adjustments made under 
subsection I-A to the General Fund unappropriated surplus. 
4. Transfer from General Fund revenue growth. Beginning with fiscal year 
2013-14 and before any other transfers from the General Fund, the State Controller shall 
transfer to the fund at the close of each fiscal year 40% of the amount by which General 
Fund revenue for that fiscal year exceeds the General Fund appropriation limitation 
calculated for that fiscal year under section 1534.' 
SUMMARY 
This amendment removes the requirement proposed in Committee Amendment "c" 
that a portion of revenue exceeding the General Fund appropriation limitation and 
unappropriated surplus of the General Fund be deposited in the Tax Relief Fund for 
HOUSE AMENDMENT 
HOUSE AMENDMENT'~ "to COMMITTEE AMENDMENT "C" to S.P. 252, L.D. 849 
Maine Residents and used to reduce the tax rates gradually to 4%. 
Instead, this 
amendment requires that revenue exceeding the General Fund appropriation limitation 
and unappropriated surplus of the General Fund be deposited in the Tax Relief Fund for 
Maine Residents and used to increase the earned income tax credit from 5% of the federal 
earned income credit to 50% of the federal earned income credit and make the credit 
refundable. Once the earned income credit is 50% of the federal earned income credit 
and refundable, as a 2nd priority, if funds are available in the Tax Relief Fund for Maine 
Residents, then the fund must be used to gradually increase by 20% the income bracket 
thresholds. As a 3rd priority, the Tax Relief Fund for Maine Residents must be used to 
reduce the highest income tax rate to 6.5%. 
SPONSORED BY: ~~ 
t:; I1k1' 
(Representative KUMIEGA) 
TOWN: Deer Isle 
FISCAL ~OTE REQLlRED 
(See attached) 
HOUSE AMENDMENT 
Approved: 03119112 
~ac.. 
LD849 
LR 149(17) 
An Act To Provide Tax Relief for Maine's Citizens by Reducing Income Taxes 
Fiscal Note for House Amendment "~,, to Committee Amendment "C" 
Sponsor: Rep. Kumiega, III of Deer Isle 
Fiscal Note Required: Yes 
Fiscal Note 
Potential future biennium revenue increase - General Fund 
Fiscal Detail and Notes 
The amendment changes the objective of the Tax Relief Fund for Maine Residents from gradually reducing the tax 
rates to 4% to funding the following initiatives (in order): increase the earned income tax credit from 5% of the 
federal credit to 50% of the federal credit and make the credit refundable, proportionately increase individual income 
tax bracket threshholds until they are 20% higher than the brackets in effect for taxable years beginning on or after 
January 1, 2014 and to gradually reduce the highest income tax rate from 7.95% to 6.5%. Based on currently 
budgeted revenue, no transfers of General Fund revenue in excess of the appropriation limitation are expected through 
the end of fiscal year 2014-15. Since the funding for the changes is non-recurring and the tax changes permanent, it is 
possible that the bill could result in significantly reduced General Fund revenues for all years following their 
implementation. The potential future revenue loss under this amendment is expected to be less than under the 
committee amendment. Therefore, the impact of this amendment is higher revenues in future biennia. 
LR0149(17) - Fiscal Note - Page 1 of 1