An Act To Make Supplemental Appropriations and Allocations for the Expenditures of State Government and To Change Certain Provisions of the Law Necessary to the Proper Operations of State Government for the Fiscal Years Ending June 30, 2012 and June 30, 2013
Maine Legislature, Session 125, LD 1746
Committee Amendment CA_A-HA_N_H976 (House)

HOUSE AMENDMENT" N" to COMMITTEE AMENDMENT "A" to S.P. 600, 
L.D. 1746, Bill, "An Act To Make Supplemental Appropriations and Allocations for the 
Expenditures of State Government and To Change Certain Provisions of the Law 
Necessary to the Proper Operations of State Government for the Fiscal Years Ending 
June 30, 2012 and June 30, 2013" 
Amend the amendment by inserting after Part HH the following: 
'PART II 
Sec. 11-1. Tax fairness and responsibility. The joint standing committee of the 
Legislature having jurisdiction over appropriations and financial affairs shall, by January 
15, 2013, report legislation to the First Regular Session of the l26th Legislature that 
contains the following provisions. 
1. Tax fairness. The legislation must include provisions imposing a tax equalization 
payment on resident individual taxpayers whose expanded income is among the top 1 % 
of all resident individual taxpayer incomes. 
The payment must be based on a tax 
equalization assessment that is applied to every resident individual taxpayer whose 
income is determined, solely on the basis of expanded income and with respect to the 
most recent tax incidence analysis report filed by the Department of Administrative and 
Financial Services, Bureau of Revenue Services with the Legislature under the Maine 
Revised Statutes, Title 36, section 200, to fall within the top 1 % of resident individual 
taxpayers. The payment must ensure that no resident individual taxpayer whose income 
is within the top 1 % based on expanded income has a lower state and local tax burden 
than the average of taxpayers whose incomes are not within the top 1%. 
2. Tax and budget responsibility. The legislation must include provisions that 
establish a separate nonlapsing fund for receipt of revenue from the tax equalization 
payment. Amounts in the fund must be transferred to the General Fund to provide a 
supplemental payment to persons receiving benefits under the Maine Public Employees 
Retirement System during the periods when no cost-of-living adjustment is allowed under 
Public Law 2011, chapter 380, Part T, section 21 and to reimburse the General Fund for 
the cost of the following tax expenditures adopted after May 1, 2012 in the following 
order of priority: 
HOUSE AMENDMENT 
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HOUSE AMENDMENT "rI, to COMMITTEE AMENDMENT "An to S.P. 600, L.D. 1746 
A. 
An amendment of the law governing the income tax deduction for certain 
retirement plan benefits under the Maine Revised Statutes, Title 36, section 5122, 
subsection 2, paragraph M-l to increase the deduction to $14,000. The cost of this 
tax expenditure must be determined in comparison to what the cost would have been 
under former Title 36, section 5122, subsection 2, paragraph M; 
B. The income tax exemption for certain military compensation available under Title 
36, section 5122, subsection 2, paragraph LL; 
C. The expansion of the sales tax exemption or refund for certain products used in 
commercial agricultural production and commercial wood harvesting enacted in this 
Act; 
D. The increase enacted in this Act in the maximum amount of capital or equity 
investment in or loan to a qualified active low-income community business from 
$10,000,000 to $40,000,000 under the new markets capital investment credit; 
E. An amendment of the law governing the earned income credit under Title 36, 
section 5219-S making the credit refundable; and 
F. An amendment of the law governing the earned income credit under Title 36, 
section 5219-S increasing the credit to 10% of the federal credit. 
The legislation must provide that any money remaining in the fund after reimbursing the 
General Fund for expenditures under this subsection must be used to increase the state 
share of general purpose aid for public education for kindergarten to grade 12 until the 
state share reaches 55%.' 
Amend the amendment by relettering or renumbering any nonconsecutive Part letter 
or section number to read consecutively. 
SUMMARY 
This amendment directs the joint standing committee of the Legislature having 
jurisdiction over appropriations and financial affairs by January 15, 2013 to report 
legislation to the First Regular Session of the 126th Legislature that provides for tax 
fairness and responsibility. The legislation must establish a tax equalization payment to 
narrow the gap in tax burden between the top 1 % of all resident taxpayers and the bottom 
99% based on expanded income. The legislation must provide that revenue from the 
equalization payment must be paid to a nonlapsing fund to be used to provide a 
supplemental payment to public retirees during the period when cost-of-living 
adjustments are not allowed and to reimburse the General Fund for the loss of revenue 
resulting from new tax expenditures, including an increase in the pension deduction under 
the income tax laws to $14,000, and from expanding the earned income credit. Any 
remaining funds must be used to increase the state share of general purpose aid for public 
education for kindergart~ 1 ~il th~statuhare reaches 55%. 
SPONSORED BY: ~ 
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(Representative BERRY) 
TOWN: Bowdoinham 
HOUSE AMENDMENT