An Act To Reduce Costs for Small Businesses
Maine Legislature, Session 125, LD 1030
Committee Amendment CA_A_H736 (House)
Amends: 36 MRSA §5219-H

COMMITTEE AMENDMENT "fr" to H.P. 764, L.D. 1030, Bill, "An Act To 
Reduce Costs for Small Businesses" 
Amend the bill by striking out everything after the enacting clause and inserting the 
following: 
'Sec. 1. 36 MRSA §5219-HH is enacted to read: 
§5219-HH. Small business health coverage credit 
1. Definitions. As used in this section, unless the context otherwise indicates, the 
following terms have the following meanings. 
A. 
"Health coverage" means a qualified health plan purchased through a small 
business health exchange established in this State pursuant to the federal Patient 
Protection and Affordable Care Act, Public Law 111-148, as amended by the federal 
Health Care and Education Reconciliation Act of 20 1 0, Public Law 111-152, and any 
amendments to or regulations or guidance issued under those acts. 
B. "Eligible business" means a business that employs at least 2 but not more than 50 
full-time employees of whom at least 50% are eligible employees and that contributes 
at least 60% toward the cost of health coverage for each covered employee. 
C. "Eligible employee" means a resident of the State whose average hourly wage 
from an eligible business is less than the State's average hourly wage as calculated by 
the Department of Labor. 
2. 
Credit allowed. 
Subject to subsection 4, a taxpayer constituting an eligible 
business is allowed a credit against the tax imposed by this Part in an amount equal to the 
qualifying portion of expenditures paid and expenses incurred by the eligible business 
during the tax year for the purchase of health coverage. 
3. Qualifying portion. For the purpose of calculating the credit provided by this 
section, the qualifying portion is 5% of up to $25,000 of expenditures paid and expenses 
incurred by an eligible business pursuant to subsection 2. 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT ,A "to H.P. 764, LD. 1030 
4. Qualification; phase in of credit. The credit allowed under this section is phased 
in based on the number of employees of an eligible business as follows: 
A. For tax years beginning on or after January l, 2014 and before January l, 2015, 
the credit allowed is limited to an eligible business that employs at least 2 but not 
more than 10 full-time employees; 
B. For tax years beginning on or after January 1, 2015 and before January 1, 2016, 
the credit allowed is limited to an eligible business that employs at least 2 but not 
more than 25 full-time employees; and 
C. For tax years beginning on or after January 1, 2016, the credit allowed is available 
to any eligible business. 
5. Limitation; carry-over. The credit provided by this section may not reduce the 
tax otherwise due under this Part to less than zero. Any unused portion of the credit may 
be carried over to the following year or years for a period not to exceed 2 years. The 
credit allowable under this section may not be carried back to prior years. 
Sec. 2. Application. This Act applies to tax years beginning on or after January 1, 
2014.' 
SUMMARY 
This amendment is the minority report and replaces the bill, which is a concept draft. 
The amendment establishes the small business health coverage income tax credit for 
small businesses with up to 50 employees that purchase health coverage through a small 
business health exchange established in the State pursuant to federal law. The credit is 
calculated as 5% of up to $25,000 of expenditures paid and expenses incurred to purchase 
health coverage and is not refundable. The credit is phased in over 3 years beginning 
January 1,2014 based on the number of eligible employees. To qualify for the tax credit, 
a small business must contribute at least 60% of the cost of coverage and have at least 
50% of its employees earning less than the State's average hourly wage. 
FISCAL NOTE REQUIRED 
(See attached) 
COMMITTEE AMENDMENT 
Net Cost (Savings) 
General Fund 
Revenue 
General Fund 
Approved: 02/28/12 
~ac. 
LD 1030 
LR 1414(02) 
An Act To Reduce Costs for Small Businesses 
Fiscal Note for Bill as Amended by Committee Amendment 'R" [ H-7 ~ 
Committee: Insurance and Financial Services 
Fiscal Note Required: Yes 
Fiscal Note 
FY 2011-12 
FY 2012-13 
$0 
$0 
Projections 
FY 2013-14 
$185,250 
Projections 
FY 2014-15 
$684,000 
Other Special Revenue Funds 
$0 
$0 
$0 
$0 
($185,250) 
($9,750) 
($684,000) 
($36,000) 
Fiscal Detail and Notes 
The bill provides a tax credit for qualifying small businesses that purchase health insurance coverage through a small 
business health exchange established pursuant to federal law. The credit will be equal to 5% of qualifying 
expenditures for purchases of health coverage, up to a maximum credit value of$1,250, and is non-refundable. The 
credit will be available for taxable years beginning January 1,2014 for firms with from 2 to 10 employees. Eligibility 
will be extended to frrms with up to 25 employees for tax years beginning on or after January 1,2015, and to frrms 
with up to 50 employees for tax years beginning on or after January 1,2016. 
The bill will have no impact on General Fund revenues or expenditures through FY 2012-2013. Maine Revenue 
Services estimates that the bill will reduce General Fund Revenues by $185,250 in FY 2013-2014 and by $684,000 in 
FY 2014-2015. Transfers to the Local Government Fund will be reduced in those years. As the credit will not be fully 
phased in until later, it is likely that over the longer term the bill will reduce General Fund revenues by more than 
$1,000,000 annually. 
LR1414(02) -Fiscal Note - Page 1 of 1