An Act To Help Maine's Employers To Recruit Skilled Workers by Expanding the Availability of the Educational Opportunity Tax Credit
Maine Legislature, Session 125, LD 1174
Committee: Taxation
Sponsors: KNIGHT, WOODBURY, BRIGGS, CURTIS, HARMON, KNAPP, WAGNER, GERZOFSKY, GOODALL
Amends: 20-A MRSA §12541, 20-A MRSA §12542, 20-A MRSA §12543

Legislative Document 
No. 1174 
H.P. 872 
House of Representatives, March 17, 2011 
An Act To Help Maine's Employers To Recruit Skilled Workers by 
Expanding the Availability of the Educational Opportunity Tax 
Credit 
Reference to the Committee on Taxation suggested and ordered printed. 
HEATHER J.R. PRIEST 
Clerk 
Presented by Representative KNIGHT of Livermore Falls. 
Cosponsored by Senator WOODBURY of Cumberland and 
Representatives: BRIGGS of Mexico, CORNELL du HOUX of Brunswick, CURTIS of 
Madison, HARMON of Palermo, KNAPP of Gorham, WAGNER of Lewiston, Senators: 
GERZOFSKY of Cumberland, GOODALL of Sagadahoc. 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1.  20-A MRSA §12541, sub-§1, as amended by PL 2009, c. 553, Pt. A, §1, 
is further amended to read: 
1.  Accredited community college, college or university.  "Accredited Maine 
community college, college or university" means an institution that is accredited by a 
regional accrediting association or by one of the specialized accrediting agencies 
recognized by the United States Secretary of Education and is, including, but not limited 
to: 
A.  Any campus of the Maine Community College System; 
B.  Any campus of the University of Maine System; 
C.  The Maine Maritime Academy; 
D.  Any educational institution that is located in this State and has authorization to 
confer an associate degree or a bachelor's degree, in accordance with sections 10704 
and 10704-A; 
E.  Any educational institution that is located in this State and is exempted from 
chapter 409 under section 10708, subsections 1 and 2; and 
F.  Any educational institution that is located in this State and is operating under a 
certificate of temporary approval from the state board under section 10703, to the 
extent that a student is ultimately able either to obtain an associate or a bachelor's 
degree at that institution or to transfer to and obtain a degree from an institution 
described in paragraphs A to E. 
Sec. 2.  20-A MRSA §12541, sub-§4-A, as enacted by PL 2009, c. 553, Pt. A, §4, 
is amended to read: 
4-A.  Financial aid package.  "Financial aid package" means all financial aid 
received by a student and includes any loans that are certified by an accredited Maine 
community college, college or university's financial aid office, subject to any changes 
made by that institution's financial aid office.  These loans may include private loans for 
the cost of attendance at an accredited Maine community college, college or university or 
less than the full amount of loans under federal programs, depending on the practices of 
the accredited Maine community college, college or university. 
Sec. 3.  20-A MRSA §12542, sub-§1, as enacted by PL 2007, c. 469, Pt. A, §1, is 
amended to read: 
1.  Program created; goals.  The Job Creation Through Educational Opportunity 
Program, referred to in this chapter as "the program," is created to reimburse 
education-related costs for Maine residents who obtain an associate degree or a bachelor's 
degree in this State, and live, work and pay taxes in this State thereafter. The program is 
designed to achieve the following goals: 
A.  Promote economic opportunity for people in this State by ensuring access to the 
training and higher education that higher-paying jobs require; 
B.  Bring more and higher-paying jobs to this State by increasing the skill level of 
this State's workforce; 
C.  Offer educational opportunity and retraining to individuals impacted by job loss, 
workplace injury, disability or other hardship; 
D.  Keep young people in this State through incentives for educational opportunity 
and creation of more high-paying jobs; and 
E.  Accomplish all of the goals in this subsection with as little bureaucracy as 
possible. 
Sec. 4.  20-A MRSA §12542, sub-§2-A, as enacted by PL 2009, c. 553, Pt. A, §9, 
is amended to read: 
2-A.  Principal cap.  The principal cap limits the loan principal for purposes of 
claiming the educational opportunity tax credit.  The University of Maine System and the 
Maine Community College System shall publish on their respective publicly accessible 
websites the average in-state tuition and mandatory fees applicable to their respective 
programs and provide those figures to the State Tax Assessor and all accredited Maine 
community colleges, colleges and universities by September 1st each year. 
A.  For an individual graduating in 2010, the individual's principal cap is $7,865 for a 
bachelor's degree earner or $3,300 for an associate degree earner, multiplied by the 
number of years of full-time attendance to obtain the relevant degree. 
B.  Beginning in 2010, by November 1st annually the State Tax Assessor shall 
multiply the educational cost-of-living adjustment by the principal cap applicable to 
individuals who graduate in that calendar year; the result is the principal cap for 
individuals who graduate during the following calendar year. 
C.  For an individual earning a degree from an accredited Maine community college, 
college or university, the relevant accredited Maine community college, college or 
university shall certify, once the individual has earned the degree, the total principal 
of loans the individual received as part of that individual's financial aid package. 
D.  For an individual whose student loans exceed the principal cap, a benchmark loan 
payment must be calculated as described in this paragraph.  The State Tax Assessor 
shall annually by November 1st calculate what the monthly payment would be on a 
loan for the amount of the principal cap, to be paid over 10 years, at the interest rate 
offered for federally subsidized Stafford loans under 20 United States Code, Section 
1077a, during the individual's last year of enrollment at an accredited Maine 
community college, college or university. 
Sec. 5.  20-A MRSA §12542, sub-§3, ¶B, 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; 
Sec. 6.  20-A MRSA §12542, sub-§3-A, ¶C, as enacted by PL 2009, c. 553, Pt. 
A, §11, is amended to read: 
C.  The individual, including an individual who has graduated from an accredited 
Maine community college, college or university after January 1, 2008, may refinance 
educational loans only if they remain separate from other debt, whether 
noneducational debt or educational debt incurred in a program other than the degree 
program for which the educational opportunity tax credit is claimed. 
Sec. 7.  20-A MRSA §12542, sub-§4-A, as enacted by PL 2009, c. 553, Pt. A, 
§13, is amended to read: 
4-A.  Administration.  The program must be administered as described in this 
subsection. 
A.  The department, in consultation with the State Tax Assessor, shall make 
information about the program available on the department's publicly accessible 
website.  The department shall refer any questions regarding the program to the 
relevant accredited Maine community college, college or university's financial aid 
office.  The assessor shall provide to an accredited Maine community college, college 
or university information that is necessary to document a student's eligibility for the 
educational opportunity tax credit.  
B.  A Maine resident who enrolls in an accredited Maine community college, college 
or university who receives financial aid in the form of loans must have the 
opportunity to participate in the program. An accredited Maine community college, 
college or university in Maine shall, at a minimum, provide information about the 
program in financial aid award materials, entrance interviews, exit interviews, 
materials listing financial aid resources and, as appropriate, any promotional 
materials provided by state agencies, to the extent such contacts with students are 
already part of the accredited Maine community college, college or university's 
procedures. 
C.  An accredited Maine community college, college or university in Maine must 
document for the student information required for purposes of the educational 
opportunity tax credit.  The accredited Maine community college, college or 
university shall provide an original or certified copy to the student and shall retain a 
copy of the documentation in its files for at least 10 years after the student graduates. 
D.  An individual may take advantage of any forbearance or deferment provisions in 
the relevant loan agreements without forfeiting the right to claim the educational 
opportunity tax credit when the individual resumes repayment.  This paragraph 
applies to a student that obtained a bachelor's or associate degree from an accredited 
Maine community college, college or university after September 20, 2007. 
Sec. 8.  20-A MRSA §12542, sub-§5, as amended by PL 2009, c. 553, Pt. A, §14, 
is further amended to read: 
5.  Effective date; participation by individual already enrolled in degree 
program.  The program must commence for the first semester that begins after the 
effective date of this chapter September 20, 2007.  A Maine resident who when the 
program commences is enrolled in an associate or a bachelor's degree program at an 
accredited Maine community college, college or university may participate, subject to the 
same essential terms as other program participants.  Such an individual need only meet 
the eligibility requirements in subsection 3 from January 1, 2008 forward. 
Sec. 9.  20-A MRSA §12543, as amended by PL 2009, c. 553, Pt. A, §16, is 
further amended to read: 
§12543.  Effect on funding of higher education 
It is the intent of the Legislature that neither the existence of the program nor the 
benefits provided under the educational opportunity tax credit serve as justification to 
decrease other funds appropriated or allocated to accredited Maine community colleges, 
colleges or universities in Maine, including institutions in the Maine Community College 
System and the University of Maine System, or to other higher education programs. 
SUMMARY 
This bill amends the Job Creation Through Educational Opportunity Program to 
allow a tax credit for student loans incurred by a person who receives an associate degree 
or a bachelor’s degree from any accredited community college, college or university, not 
just one located in Maine.