An Act To Strengthen Maine's Economy through Improvements to the Educational Opportunity Tax Credit
Maine Legislature, Session 125, LD 0835
Committee Amendment CA_B_H703 (House)
Amends: 20-A MRSA §12541, 20-A MRSA §12542, 36 MRSA §199-C

COMMITTEE AMENDMENT ·B" to H.P. 632, L.D. 835, Bill, "An Act To 
Strengthen Maine's Economy through Improvements to the Educational Opportunity Tax 
Credit" 
Amend the bill by striking out everything after the enacting clause and before the 
summary and inserting the following: 
'Sec. 1. 20-A MRSA §12541, sub-§l-A is enacted to read: 
I-A. 
Accredited non-Maine community colleee. college or university. 
"Accredited non-Maine community college, college or university" means an institution 
located outside the State that is accredited by a regional accrediting association or by one 
of the specialized accrediting agencies recognized by the United States Secretary of 
Education. 
Sec. 2. 20-A MRS A §12542, sub-§3, ~, as amended by PL 2009, c. 553, Pt. A, 
§ 10, is further amended to read: 
B. An individual must attend and obtain an associate degree or a bachelor's degree 
from an accredited Maine community college, college or university. The individual 
need not obtain the degree from the institution in which that individual originally 
enrolled, as long as all course work toward the degree is performed at accredited 
Maine community colleges, colleges or universities. Beginning January 1, 2013, an 
individual who transfers to an accredited Maine community college, college or 
university after completing the equivalent of up to 30 credit hours of course work 
toward a degree at an accredited non-Maine community college, college or university 
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 
community college, college or university. Such an individual is eligible for 112 ofthe 
educational opportunity tax credit in the case of obtaining an associate degree and 3/4 
of the educational opportunity tax credit in the case of obtaining a bachelor's degree. 
Program eligibility for such an individual must be determined as if the 
commencement of course work at the relevant accredited Maine community college, 
COMMITTEE AMENDMENT 
COMMITIEE AMENDMENT:B" to H.P. 632, L.D. 835 
college or university was the commencement of course work for the degree program 
as a whole; 
Sec. 3. 20-A MRSA §12542, sub-§3, ~C, as amended by PL 2009, c. 553, Pt. A, 
§ 10, is further amended to read: 
C. An 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 or while pursuing course work at an 
accredited non-Maine community college, college or university as provided in 
paragraph B. The individual 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; and 
Sec. 4. 20-A MRSA §12542, sub-§3-A, ~A, as enacted by PL 2009, c. 553, Pt. 
A, § 11, is amended to read: 
A. The individual may claim the educational opportunity tax credit only with respect 
to loans that are part of that individual's financial aid package and that have a term of 
at least 8 years are entered into before July 1, 2023. 
Sec. 5. 20-A MRS A §12545 is enacted to read: 
§12545. Report 
By February 1, 2021, each accredited Maine community college, college and 
university, as defined in section 12541, subsection 1, shall report to the department on 
efforts to promote and enroll individuals in the program and to train admissions and 
financial aid staff about the program. By March 1, 2021, the department shall report 
findings and recommendations regarding the program to the joint standing committee of 
the Legislature having jurisdiction over education and cultural affairs and the joint 
standing committee of the Legislature having jurisdiction over taxation matters. 
By 
March 1, 2021, the Department of Administrative and Financial Services, Bureau of 
Revenue Services shall report on implementation of the educational opportunity tax 
credit, including statistics on credits claimed, to the joint standing committee of the 
Legislature having jurisdiction over education and cultural affairs and the joint standing 
committee of the Legislature having jurisdiction over taxation matters. 
Sec. 6. 36 MRSA §199-C, sub-§3 is enacted to read: 
3. Specific tax expenditure review. By June 1, 2021, the committee shall review 
the income tax credit under section 52l7-D to determine whether the credit should be 
retained, repealed or modified. The committee shall consider information provided by the 
bureau and the Department of Education pursuant to Title 20-A, section 12545. 
Sec. 7. 36 MRS A §5217-D, sub-§l, ~A-l is enacted to read: 
A-I. "Accredited non-Maine community college, college or university" means an 
institution located outside the State that is accredited by a regional accrediting 
association or by one of the specialized accrediting agencies recognized by the 
United States Secretary of Education. 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMEN~" to H.P. 632, L.D. 835 
Sec. 8. 36 MRS A §S217-D, sub-§l, ~E, as enacted by PL 2007, c. 469, Pt. B, 
§ 1, is amended to read: 
E. "Qualified employee" means an employee lubo is eligible for the credit provided 
in this section emd who is employed at least part time and who is eligible for the 
credit provided in this section or who would be eligible for the credit in this section 
by meeting all the criteria established under Title 20-A, section 12542 except that the 
employee's associate or bachelor's degree was awarded by an accredited non-Maine 
community college, college or university. 
Sec. 9. 36 MRSA §S217-D, sub-§2, as enacted by PL 2007, c. 469, Pt. B, §1, is 
amended to read: 
2. Credit allowed. A taxpayer constituting an opportunity program participant or an 
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. The credit is created to 
implement the Job Creation Through Educational Opportunity Program established under 
Title 20-A, chapter 428-C. 
The credit may not reduce the tax otherwise due under this Part to less them ",ero. A 
7 
taxpayer entitled to the credit for any taxable year may carry over and apply to the tax 
liability for anyone or more of the next succeeding 10 years the portion, as reduced from 
year to year, of any unused credits. More than one taxpayer may claim a credit based on 
loan payments actually made to a relevant lender or lenders to benefit a single 
opportunity program participant, but no 2 taxpayers may claim the credit based on the 
same payment. 
The credit allowed to an opportunity program participant is refundable. 
The credit 
allowed to an employer of a qualified employee may not reduce the tax otherwise due 
under this Part to less than zero. 
Sec. 10. 36 MRSA §S217-D, sub-§S, as amended by PL 2009, c. 434, §78, is 
further 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. 
To receive the credit, the employer must retain for 5 years any proof of eligibility that the 
employee or independent 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 a part-time basis, the employer may claim a 
credit only up 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 amount the employer claims must still be based on 
amounts actually paid. An employer is not disqualified under this section if the qualified 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMEN~" to H.P. 632, L.D. 835 
employee is not eligible to claim the credit solely because the employee's associate 
degree or bachelor's degree was awarded by an accredited non-Maine community college, 
college or university. 
. 
Sec. 11. Application. The portions of this Act that amend the Maine Revised 
Statutes, Title 36, section 5217-D apply to tax years beginning on or after January 1, 
2013.' 
SUMMARY 
This amendment, which is the majority report, replaces the bill and makes the 
following changes to the educational opportunity tax credit. 
1. Beginning January 1, 2013, it allows an individual who transfers to an accredited 
Maine community college, college or university after completing up to 30 credit hours of 
course work at a non-Maine accredited community college, college or university to be 
eligible for a portion of the tax credit created to implement the Job Creation Through 
Educational Opportunity Program. 
2. It provides that an individual may claim the educational opportunity tax credit 
only with respect to loans that are part of that individual's financial aid package and that 
are entered into before July 1,2023. 
3. 
It makes the credit refundable for a Job Creation Through Educational 
Opportunity Program participant entitled to the credit. 
4. 
It allows an employer to claim the credit if a qualified employee meets all 
eligibility criteria for a Job Creation Through Educational Opportunity Program 
participant except that the qualified employee's associate degree or bachelor's degree was 
awarded by an accredited non-Maine community college, college or university. 
5. It requires all Maine community colleges, colleges and universities to report to the 
Department of Education by February 1, 2021 on efforts to promote and enroll 
individuals in the Job Creation Through Educational Opportunity Program and to train 
admissions and financial aid staff about the program. 
6. It requires the Department of Education and the Department of Administrative and 
Financial Services, Bureau of Revenue Services to report by March 1, 2021 to the joint 
standing committee of the Legislature having jurisdiction over education and cultural 
affairs and the joint standing committee of the Legislature having jurisdiction over 
taxation matters. 
7. It requires the joint standing committee of the Legislature having jurisdiction over 
taxation matters to review the educational opportunity tax credit by June 1, 2021. The 
committee is required to consider information provided by the Department of 
Administrative and Financial Services, Bureau of Revenue Services and the Department 
of Education to determine whether the credit should be retained, modified or repealed. 
FISCAL NOTE REQUIRED 
(See attached) 
COMMITTEE AMENDMENT 
Revised: 02/08112 
~ae 
LD835 
LR 1210(07) 
An Act To Strengthen Maine's Economy through Improvements to the Educational Opportunity Tax 
Net Cost (Savings) 
General Fund 
Revenue 
General Fund 
Credit 
,\ 
Fiscal Note for Bill as Amended by Committee Amendment::B" CH -70 3 J 
Committee: Taxation 
Fiscal Note Required: Yes 
Fiscal Note 
FY2011-12 
FY2012-13 
$0 
$146,300 
Projections 
FY2013-14 
$715,350 
Projections 
FY2014-15 
$1,037,400 
Other Special Revenue Funds 
$0 
$0 
($146,300) 
($7,700) 
($715,350) 
($37,650) 
($1,037,400) 
($54,600) 
Fiscal Detail and Notes 
The bill modifies the educational opportunity tax credit by extending it to encompass (at a reduced level of benefit) 
certain individuals who transfer to an accredited Maine community college, college or university from an accredited 
out-of-state institution, removes restrictions on the term of eligible loans and makes the credit refundable for tax 
years beginning on or after January 1, 2013. The changes made by the bill apply only to tax years beginning after 
December 31,2012, and the credit does not apply to any loans entered into on or afterJuly 1,2023. The Legislature is 
required to review the effectiveness of the educational opportunity income tax credit by no later than June 1, 2021. 
The bill will reduce General Fund revenues and reduce revenue sharing starting in fiscal year 2012-13. Maine 
Revenue Services (MRS) states that revenue reductions may be substantially larger beyond fiscal year 2014-15 as 
more cohorts become eligible for the credit and participation levels increase. The refundability of the credit creates 
greater uncertainty regarding the size of the potential revenue reduction. 
Additional costs to the University of Maine System, the Maine Community College System and Maine Maritime 
Academy to report the required information to the Department of Education by February 1,2021 can be absorbed 
within the budgeted resources of each institution. The Department of Education has estimated the cost for its staff to 
compile the data submitted and submit the required recommendations by March 1,2021 to be approximately $8,000 
in fiscal year 2020-21. 
LR1210(07) - Fiscal Note - Page 1 of 1