An Act To Provide Tax Relief for Maine's Citizens by Reducing Income Taxes
Maine Legislature, Session 125, LD 0849
Committee Amendment CA_A_S308 (Senate)
Amends: 5 MRSA §1518-A, 5 MRSA §1536, 36 MRSA §5402

COMMITTEE AMENDMENT" A" to S.P. 252, L.D. 849, Bill, "An Act To 
Provide Tax Relief for Maine's Citizens by Reducing Income Taxes" 
Amend the bill by striking out everything after the enacting clause and before the 
summary and inserting the following: 
'Sec. 1. 5 MRSA §1518-A, sub-§I, as enacted by PL 2005, c. 2, Pt. A, §4 and 
affected by § 14, is amended to read: 
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 section 1518-B 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 individual 
income tax bracket threshold amounts under Title 36, section 5111, subsections 1-C, 
1-D, 2-C, 2-D, 3-C and 3-D until the bracket thresholds are 20% higher than those in 
effect for tax years beginning in 2011. 
B. 
As the 2nd priority, after the increase in bracket thresholds required under 
paragraph A has been achieved; amounts in the fund must be used t-o reduce the 
highest individual income tax rate until it reaches 4.5%. 
The changes described in paragraphs A and B must be implemented pursuant to 
subsection I-A. 
Sec. 2. 5 MRSA §1518-A, sub-§I-A is enacted to read: 
I-A. Implementation. By July 1, 2013 and annually thereafter, the State Controller 
shall inform the State Tax Assessor of the amount available in the fund for the purposes 
of subsection 1. 
A. 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 subsectiop. 1, paragraph A 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, 2011. 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT" A" to S.P. 252, L.D. 849 
B. After bracket thresholds have reached the amounts required under subsection 1, 
paragraph A, by November 1st annually, the State Tax Assessor shall calculate the 
amount by which the income tax rates under Title 36. section 5111, subsections 1-C, 
I-D, 2-C. 2-D, 3-C and 3-D may be reduced. Bracket rate reductions must be a 
minimum of 0.2 percentage points in the first year in which reductions are made and 
a minimum of 0.1 percentage points 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 amount is 
sufficient to pay for the reduction, the reduction must first be applied equally to each 
bracket for all categories under Title 36, section 5111, subsections l-C, 1-D, 2-C, 
2-D, 3-C and 3-D until one of the brackets reaches 4.5%, at which time the funds in 
subsequent years must be applied to the remaining bracket until there is a single 
bracket with a rate of 4.5%. 
C. The State Tax Assessor shall provide public notice of new bracket thresholds and 
rates calculated under this subsection by November 15th annually. 
D. New 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. 
E. Beginning in 2013 and each subsequent calendar year thereafter, on or about 
September 15th, the State Tax Assessor shall mUltiply the cost-of-living adjustment 
required under Title 36, section 5403 for taxable years beginning in the succeeding 
calendar year by the dollar amounts of the tax rate as adjusted by this subsection. If 
the dollar amounts of each rate bracket, adjusted by application of the cost-of-living 
adjustment, are not multiples of $50, any increase must be rounded to the next lowest 
multiple of $50. If the cost-of-living adjustment for any taxable year would be less 
than the cost-of-living adjustment for the preceding calendar year, the cost-of-living 
adjustment is the same as for the preceding calendar year. 
Sec. 3. 5 MRS A §1518-A, sub-§3 is enacted to read: 
3. Tax reduction from General Fund revenue growth. Beginning with fiscal year 
2011-12 and before any other transfers from the General Fund, the State Controller shall 
transfer at the close of each fiscal year to the Tax Relief Fund for Maine Residents 40% 
of the amount by which General Fund revenue for the fiscal year being closed exceeds 
the General Fund appropriation limitation calculated for that year under section 1534. 
Sec. 4. 5 MRSA §1536, sub-§l, as amended by PL 2005, c. 519, Pt. VV, §4, is 
further amended to read: 
1. Third priority reserve. The State Controller shall, as the 3rd priority after the 
transfers to the State Contingent Account pursuant to section 1507 and the transfers to the 
Loan Insurance Reserve pursuant to section 1511 at the close of each fiscal year, transfer 
from the unappropriated surplus of the General Fund an amount equal to the amount 
a¥ailable from the unappropriated surplus and after all required deductions of 
appropriations, budgeted financial commitments and adjustments considered necessary 
by the State Controller have been made, transfer 40% of the amount available in the 
unappropriated surplus of the General Fund an amount equal to the amount available 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT" A" to S,P, 252, L.D, 849 
from the unappropriated surplus to the Tax Relief Fund for Maine Residents established 
in section 1518-A and 60% as follows: 
A. Thirty-five percent to the stabilization fund; 
B. Twenty percent to the Retirement Allowance Fund established in section 17251; 
C. Twenty percent to the Reserve for General Fund Operating Capital; 
D.Fifteen percent to the Retiree Health Insurance Internal Service Fund established 
in section 1519 to be used solely for the purpose of amortizing the unfunded actuarial 
liability associated with future health benefits; and 
E. 
Ten percent to the Capital Construction and Improvements Reserve Fund 
established in section 1516-A. 
Sec.S. 36 MRSA §Sl11, sub-§l-B, as enacted by PL 1999, c. 731, Pt. T, §3, is 
amended to read: 
I-B. Single individuals and married persons filing separate returns; tax years 
beginning 2002 to 2011. For tax years beginning on Of after January 1, in 2002 to tax 
years beginning in 2011, for single individuals and married persons filing separate 
returns: 
If Maine Taxable income is: 
Less than $4,200 
At least $4,200 but less than $8,350 
At least $8,350 but less than $16,700 
$16,700 or more 
The tax is: 
2% of the Maine taxable income 
$84 plus 4.5% of the excess over $4,200 
$271 plus 7% of the excess over $8,350 
$856 plus 8.5% of the excess over $16,700 
Sec. 6. 36 MRSA §S111, sub-§§l-C and I-D are enacted to read: 
I-C. Single individuals and married persons filing separate returns; tax year 
2012. For the tax year beginning on or after January 1, 2012 and ending prior to January 
1, 2013, for single individuals and married persons filing separate returns: 
If Maine Taxable income is: 
At least $5,000 but less than $19,950 
$19,950 or more 
The tax is: 
6.5% of the excess over $5,000 
$972 plus 8.5% of the excess over $19,950 
I-D. Single individuals and married persons filing separate returns; tax tears 
beginning 2013. For tax years beginning on or after January 1, 2013, for single 
individuals and married persons filing separate returns: 
If Maine Taxable income is: 
At least $5,000 but less than $19,950 
$19,950 or more 
The tax is: 
6.5% of the excess over $5,000 
$972 plus 7.95% of the excess over 
$19,950 
Sec. 7. 36 MRSA §S111,sub-§2-B, as enacted by PL 1999, c. 731, Pt. T, §5, is 
amended to read: 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT" A" to S.P. 252, L.D. 849 
2-B. Heads of households; tax years beginning 2002 to 2011. For tax years 
beginning on or after January 1, in 2002 to tax years beginning in 2011, for unmarried 
individuals or legally separated individuals who qualify as heads of households: 
If Maine Taxable income is: 
Less than $6,300 
At least $6,300 but less than $12,500 
At least $12,500 but less than $25,050 
$25,050 or more 
The tax is: 
2% of the Maine taxable income 
$126 plus 4.5% of the excess over $6,300 
$405 plus 7% of the excess over $12,500 
$1,284 plus 8.5% of the excess over 
$25,050 
Sec. 8. 36 MRS A §Sl11, sub-§§2-C and 2-D are enacted to read: 
2-C. Heads of households; tax year 2012. For the tax year beginning on or after 
January 1, 2012 and ending prior to January 1, 2013, fot unmarried individuals or legally 
separated individuals who qualify as heads of households: 
If Maine Taxable income is: 
At least $7,500 but less than $29,900 
$29,900 or more 
The tax is: 
6.5% of the excess over $7,500 
$1,456 plus 8.5% of the excess over 
$29,900 
2-D. Heads of households; tax years beginning 2013. For tax years beginning on 
or after January 1, 2013, for unmarried individuals or legally separated individuals who 
qualify as heads of households: 
If Maine Taxable income is: 
At least $7,500 but less than $29,900 
$29,900 or more 
The tax is: 
6.5% of the excess over $7,500 
$1,456 plus 7.95% of the excess over 
$29,900 
Sec. 9. 36 MRSA §S111, sub-§3-B, as enacted by PL 1999, c. 731, Pt. T, §7, is 
amended to read: 
3-B. Individuals filing married joint return or surviving spouses; tax years 
beginning 2002 to 2011. For tax years beginning on or after January 1, in 2002 to tax 
years beginning in 2011, for individuals filing married joint returns or surviving spouses 
permitted to file a joint return: 
If Maine Taxable income is: 
Less than $8,400 
At least $8,400 but less than $16,700 
At least $16,700 but less than $33,400 
$33,400 or more 
The tax is: 
2% of the Maine taxable income 
$168 plus 4.5% of the excess over $8,400 
$542 plus 7% of the excess over $16,700 
$1,711 plus 8.5% of the excess over 
$33,400 
Sec. 10. 36 MRS A §S111, sub-§§3-C and 3-D are enacted to read: 
3-C. Individuals filing married joint return or surviving spouses; tax year 2012. 
For the tax year beginning on or after January 1, 2012 and ending prior to January 1, 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT" A" to S.P. 252, L.D. 849 
2013. for individuals filing married joint returns or surviving spouses permitted to file a 
joint return: 
If Maine Taxable income is: 
At least $10,000 but less than $39,900 
$39,900 or more 
The tax is: 
6.5% of the excess over $10,000 
$1,944 plus 8.5% of the excess over 
$39,900 
3-D. Individuals filing married joint return or surviving spouses; tax years 
beginning 2013. For tax years beginning on or after January 1, 2013, for individuals 
filing married joint returns or surviving spouses permitted to file a joint return: 
If Maine Taxable income is: 
The tax is: 
At least $10,000 but less than $39,900 
6.5% of the excess over $10,000 
$39,900 or more 
$1,944 plus 7.95% of the excess over 
$39,900 
Sec. 11. 36 MRSA §5402, sub-§I-B, as enacted by PL 1999, c. 731, Pt. T, §8 
and affected by § 11, is amended to read: 
I-B. Cost-of-living adjustment. The "cost-of-living adjustment" for any calendar 
year is the Consumer Price Index for the 12-month period ending June 30th of the 
preceding calendar year divided by the Consumer Price Index for the 12-month period 
ending June 30, ~ 
2010. 
Sec. 12. 36 MRS A §5403, as amended by PL 2009, c. 213, Pt. WWW, §1 and 
affected by §2, is further amended to read: 
§5403. Annual adjustments for inflation 
Beginning in ~ 
2011, and each subsequent calendar year thereafter, on or about 
September 15th, the State Tax Assessor shall multiply the cost-of-living adjustment for 
taxable years beginning in the succeeding calendar year by the dollar amounts of the tax 
rate tables specified in section 5111, subsections -l-B I-C, I-D, ~ 
2-C, 2-D, and 3 B 
3-C and 3-D. If the dollar amounts of each rate bracket, adjusted by application of the 
cost-of-living adjustment, are not multiples of $50, any increase must be rounded to the 
next lowest multiple of $50. If the cost-of-living adjustment for any taxable year would 
be less than the cost-of-living adjustment for the preceding calendar year, the cost-of-
living adjustment is the same as for the preceding calendar year. The assessor shall 
incorporate such changes into the income tax forms, instructions and withholding tables 
for the taxable year. 
Beginning in 2009 and each subsequent calendar year thereafter, the assessor shall 
reduce the cost of living adjustment by an amount that increases estimated noncorporate 
income tax reveRUe by $10,500,000 for that calendar year using as a benchmark the most 
recent revenue projections of the Revenue Forecasting Committee established in Title 5, 
section 1710 E,' 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT" A" to S.P. 252, L.D. 849 
SUMMARY 
This amendment replaces the bill and establishes individual income tax rates at 0%, 
6.5% and 8.5% for tax years beginning on or after January 1,2012. It reduces the highest 
income tax rate of 8.5% to 7.95% for tax years beginning on or after January 1, 2013. 
The amendment requires that revenue that exceeds the General Fund appropriation 
limitation and unappropriated surplus of the General Fund be used to gradually increase 
by 20% the income tax bracket thresholds at which higher income tax rates apply and to 
reduce the highest income tax rates to 4.5% over time to eventually establish one income 
tax rate. 
FISCAL NOTE REQUIRED 
(See attached) 
COMMITTEE AMENDMENT 
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Revised: 06/10/11 ;t??ae 
LD849 
LR 149(02) 
An Act To Provide Tax Relief for Maine's Citizens by Reducing Income Taxes 
Fiscal Note for Bill as Amended by Committee Amendment "A" s" 30 & 
Committee: Taxation 
Net Cost (Savings) 
General Fund 
Revenue 
General Fund 
Other Special Revenue Funds 
Fiscal Detail and Notes 
Fiscal Note Required: Yes 
Fiscal Note 
FY 2011-12 
FY2012-13 
$11,852,200 
$52,932,100 
Projections 
FY 2013-14 
$89,575,500 
Projections 
FY 2014-15 
$93,487,600 
($11,852,200) 
($52,932,100) 
($89,575,500) 
($93,487,600) 
($623,800) 
($2,785,900) 
($4,714,500) 
($4,920,400) 
This bill establishes individual income tax rates at 0%,6.5% and 8.5% for tax years beginning on or after January 1, 
2012, reducing the highest income tax rate to 7.95% for tax years beginning on or after January 1,2013. This will 
reduce Individual Income Tax revenue by the amounts in the table below and will reduce General Fund revenue and 
transfers to the Local Government Fund for revenue sharing. 
FY 2011-12 
FY 2012-13 
FY 2013-14 
FY 2014-15 
Individual Income Tax Revenue 
($12,476,000) 
($55,718,000) 
($94,290,000) 
($98,408,000) 
The additional administrative costs to Maine Revenue Services associated with implementing the new tax brackets and' 
rates can be absorbed within existing budgeted resources. 
In addition to the effects on budgeted revenue, this bill also requires that 40% of any General Fund revenue exceeding 
the General Fund appropriation limitation as well as a portion of any uncommitted resources in the unappropriated 
surplus of the General Fund, also known as the Cascade, must be transferred at the close of each fiscal year to the Tax 
Relief Fund for Maine Residents. 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. However, if actual revenue 
in these or later fiscal years exceeds budgeted revenue leaving an excess for year-end distribution, this bill could have 
a substantial fiscal impact. 
LR0149(02) - Fiscal Note - Page 1 of2 
When funds are transferred, the State Tax Assessor must incrementally increase by 20% the income bracket thresholds 
at which higher income tax rates will apply and ultimately reduce the highest income tax rates down to 4.5% utilizing 
the excess, surplus or both for that purpose. Any changes to the income bracket thresholds and income tax rates under 
this bill are self-funding in the short term but not in the long term, since the new bracket thresholds and tax rates 
would reduce revenue in future fiscal years without a corresponding offset. As a result, the existence of an 
unappropriated surplus could trigger the tax reduction provisions in the bill and reduce General Fund revenue in all 
future fiscal years to an extent not determinable at this time. Further legislation would be required to establish a 
transfer mechanism in order for the State Tax Assessor to access the reserves for the transfers contemplated by this 
bill. 
LR0149(02) - Fiscal Note - Page 2 of2