An Act To Provide Tax Relief for Maine's Citizens by Reducing Income Taxes
Maine Legislature, Session 125, LD 0849
Committee Amendment CA_C_S427 (Senate)
Amends: 5 MRSA §1518-A, 5 MRSA §1536

COMMITTEE AMENDMENT "e " 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, 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 to reduce the individual income tax rates to 4% pursuant to 
subsection I-A. 
1-A. Implementation. By September 1, 2014 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 calculate the amount by 
which the income tax rates under Title 36, section 511 1, subsections 1-C, 2-C and 
3-C may be reduced during the subsequent tax year using the amount available from 
the fund. 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 under Title 36, section 5111, 
subsections l-C, 2-C and 3-C until the lower bracket reaches 4%. Funds available 
from the fund in subsequent years must be applied to reduce the higher bracket rates 
COMMITTEE AMENDMENT 
"C(~ 
~v ; 
COMMITTEE AMENDMENT" C. "to S.P. 252, L.D. 849 
until there is a single bracket with a rate of 4%, after which future tax relief may be 
identified. 
B. The State Tax Assessor shall provide public notice of new bracket rates calculated 
under this subsection by November 15th annually. 
C. New bracket rates calculated under this subsection apply 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 income tax rate reduction under subsection I-A, paragraph A, 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. 
Sec. 2. 5 MRSA §1536, sub-§l, as amended by PL 2011, c. 380, Pt. X, §2, is 
further amended to read: 
1. Fourth priority reserve. The State Controller shall, as the 4th priority after the 
transfers to the State Contingent Account pursuant to section 1507, the transfers to the 
Loan Insurance Reserve pursuant to section 1511 and the transfers pursuant to section 
1522 at the close of each fiscal year, transfer from the unappropriated surplus of the 
General Fund an amount equal to the amount available from the unappropriated surplus 
after all required deductions of appropriations, budgeted financial commitments and 
adjustments considered necessary by the State Controller have been made as follows: 
A. Thirty five Twenty-one percent to the stabilization fund; 
B. Twenty Twelve percent to the Retirement Allowance Fund established in section 
17251 ; 
C. vNenty Twelve percent to the Reserve for General Fund Operating Capital; 
D. 
Fifteen Nine 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. +en Six percent to the Capital Construction and Improvements Reserve Fund 
established in section 1516-A·; and 
F. Forty percent to the Tax Relief Fund for Maine Residents established in section 
15I8-A. 
COMMITTEE AMENDMENT 
~ 'E0MMITTEE AMENDMENT "C" to S.P. 252, L.D. 849 
0'-; 
~ 
Sec. 3. Application. That section of this Act that amends the Maine Revised 
Statutes, Title 5, section 1536, subsection 1 applies to fiscal years beginning on or after 
July 1, 2012.' 
SUMMARY 
This amendment replaces the bill. It removes the requirement proposed in the bill that 
revenue exceeding the General Fund appropriation limitation and unappropriated surplus 
of the General Fund be applied to gradually increase by 20% the income bracket 
thresholds at which higher income tax rates apply. The amendment requires that a portion 
of revenue exceeding the General Fund appropriation limitation and unappropriated 
surplus of the General Fund be used to gradually reduce the tax rates to 4% instead of 
6.5% as proposed in the bill. 
:.FISCAL ~OTE RlQViRED '". 
(See attached) 
COMMITTEE AMENDMENT 
Approved: 03/06/12 Mac:.. 
LD849 
LR 149(08) 
An Act To Provide Tax Relief for Maine's Citizens by Reducing Income Taxes 
Fiscal Detail and Notes 
Fiscal Note for Bill as Amended by Committee Amendment "e" S -+2 7 
Committee: Taxation 
Fiscal Note Required: Yes 
Fiscal Note 
Potential future biennium revenue decrease - General Fund 
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. If actual revenue in these 
or later fiscal years exceeds budgeted revenue, leaving an excess for year-end distribution to the Fund, the balance, 
when sufficient, would be used to replace the revenues that would be lost by reducing individual income tax rates. The 
amount of rate reduction that would occur in any tax year is to be determined solely by reference to the balance of the 
Fund and the revenue that would be lost by any rate reduction effective for the following tax year. Since the funding 
for the rate reduction is non-recurring and the rate reductions permanent, it is possible that the bill could result in 
significantly reduced revenues for all years following the implementatuion of a tax rate reduction. 
LROI49(08) - Fiscal Note - Page 1 of 1