An Act To Provide Tax Fairness to Maine's Middle Class and Working Families
Maine Legislature, Session 126, LD 1113
Committee Amendment CA_A_H526 (House)
Amends: 36 MRSA §200, 36 MRSA §5111-C, 36 MRSA §6207

COMMITTEE AMENDMENT "A " 
to H.P. 785, L.D. 1113, Bill, "An Act To 
Provide Tax Fairness to Maine's Middle Class and Working Families" 
Amend the bill by striking out everything after the enacting clause and inserting the 
following: 
'Sec. 1. 36 MRSA §200, sub-§l, ~A, as enacted by PL 1997, c. 744, § 1, is 
amended to read: 
A. Part 1 of the report must describe the overall incidence of all state, local and 
county taxes. The report must present information on the distribution of the tax 
burden: 
(1) 
For the overall income distribution, using a measure of system-wide 
incidence that appropriately measures equality and inequality; 
(2) 
By income classes, including, at a minimum, deciles of the income 
distribution; and 
(3) By other appropriate taxpayer characteristics. 
The report must include a ealcu1ation of the average effective tax rate on state and 
local taxes paid by the top 1 % of tax families and the bottom 99% of tax families. For 
purposes of this paragraph, "average effective tax rate on state and local taxes paid" 
and "tax family" have the same meaning as in section 5III-C, subsection 1. 
Sec. 2. 36 MRS A §683, sub-§l, as amended by PL 2009, c. 213, Pt. YYY, § 1 
and affected by c. 652, Pt. A, §63, is further amended to read: 
1. Exemption amount. Except for assessments for special benefits, the just value of 
$1 Q,QQQ $30,000 of the homestead of a permanent resident of this State who has owned a 
homestead in this State for the preceding 12 months is exempt from taxation. 
In 
determining the local assessed value of the exemption, the assessor shall multiply the 
amount of the exemption by the: ratio of current just value upon which the assessment is 
based as furnished in the assessor's annual return pursuant to section 383. If the title to 
COMMITTEE AMENDMENT 
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II 
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COMMITIEE AMENDMENT "~,, to H.P. 785, L.D. 1113 
the homestead is held by the applicant jointly or in common with others, the exemption 
may not exceed $10,000 $30,000 of the just value of the homestead, but may be 
apportioned among the owners who reside on the property to the extent of their respective 
interests. A municipality responsible for administering the homestead exemption has no 
obligation to create separate accounts for each partial interest in a homestead owned 
jointly or in common. 
Sec. 3. 36 MRSA §5111-C is enacted to read: 
§5111-C. Tax equalization assessment 
1. Definitions. As used in this section, unless the context otherwise indicates, the 
following terms have the following meanings. 
A. "Average effective tax rate on state and local taxes paid" means a fraction, based 
on statewide tax family data for the taxable year, the numerator of which is the sum 
of income tax liability, property taxes accrued on a homestead and sales taxes paid 
and the denominator of which is expanded income for the taxable year. 
B. "Expanded income" means total gross income required to be reported on United 
States Internal Revenue Service Form 1040 for the taxable year, plus tax exempt 
interest earned during the taxable year and, to the extent included in the calculation of 
federal gross income, the absolute value of the amount of trade or business loss, net 
operating loss, capital loss, farm loss and partnership or S corporation loss. 
C. "Homestead" means any residential property, including cooperative property as 
defined in section 681, subsection I-B, in this State assessed as real property owned 
by a tax family or held in a revocable living trust for a tax family and occupied as a 
permanent residence or owned by a cooperative housing corporation and occupied as 
a permanent residence by a tax family who is a qualifying shareholder. "Homestead" 
does not include any real property used solely for commercial purposes. 
D. "Income tax liability" means the total amount of income tax that is estimated to be 
due for a tax family for a taxable year, exclusive of a withholder's liability for taxes 
withheld, less any allowable credits for that taxable year. "Income tax liability" does 
not include the assessment under subsection 2. 
E. "Individual effective tax rate on state and local taxes paid" means a fraction the 
numerator of which is the sum, for the taxable year, of a tax family's income tax paid 
to other jurisdictions, income tax liability, property taxes accrued on a tax family's 
homestead and sales taxes paid and the denominator of which is the tax family's 
expanded income for the taxable year. 
F. "Permanent residence" means that place where a tax family has a true, fixed and 
permanent home and principal establishment to which a tax family, whenever absent, 
has the intention of returning. A tax family may have only one permanent residence 
at a time and, once a permanent residence is established, that permanent residence is 
presumed to continue until circumstances indicate otherwise. 
G. 
"Sales taxes paid" means Maine sales and use tax reported as an itemized 
deduction for federal income tax purposes or, if not included as an itemized 
deduction, the amount as calculated by the federal optional state sales tax tables. 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT" An to H.P. 785, L.D. 1113 
H. "Tax equalization assessment" is an amount, which may not be less than zero, 
equal to the difference in the average effective tax rate on state and local tax taxes 
paid and a tax family'S individual effective tax rate on state and local taxes paid 
multiplied by a tax family's e:xpanded income. 
I. "Tax family" means an individual or a grouping of individuals based on tax filing 
status. 
2. Assessment. For tax years beginning on or after January 1, 2014, a tax family 
must pay a tax equalization assessment if, for the tax year, a tax family has: 
A. An individual effective tax rate on state and local tax taxes paid that is less than 
the average effective tax rate on state and local taxes paid by the bottom 99% of tax 
families as calculated in the most recent report submitted under section 200, 
subsection 1; and 
B. 
Expanded income of S250,000 or more for a tax family filing as a single 
individual or a married pen, on filing a separate return, $325,000 or more for a tax 
family filing as a single individual or legally separated individual who qualifies as a 
head of household or $400,000 or more for a tax family filing a married joint return 
or a tax family who is a surviving spouse permitted to file a joint return. 
Sec. 4. 36 MRSA §6207, sub-§l, 'A-l, as amended by PL 2009, c. 213, Pt. 
XXX, § 1, is further amended to read: 
A-I. 
Fifty pereent For application periods beginning on August 1, 2013, 50% of 
that portion of the benefit base that exceeds 4% but does not exceed 8% of income 
plus 100% of that portion of the benefit base that exceeds 8% of income to a 
maximum payment of $2,000; anti 
Sec. 5. 36 MRSA §6207, sub-§l, 'A-2 is enacted to read: 
A-2. For application periods beginning on or after August 1, 2014, 50% of that 
portion of the benefit base that exceeds 4% but does not exceed 8% of income plus 
100% of that portion of the benefit base that exceeds 8% of income to a maximum 
payment of $2,500; and 
Sec. 6. Application. That section of this Act that amends the Maine Revised 
Statutes, Title 36, section 683 applies to property tax years beginning on or after April I, 
2014. 
Sec. 7. Appropriations and allocations. 
The following appropriations and 
allocations are made. 
ADMINISTRATIVE AND FINANCIAL SERVICES, DEPARTMENT OF 
Homestead Property Tax Exemption Reimbursement 0886 
Initiative: Provides funds for the additional costs to increase the homestead property tax 
exemption to $30,000. 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT·A "to H.P. 785, L.D. 1113 
GENERAL FUND 
All Other 
GENERAL FUND TOTAL 
Revenue Services, Bureau of 0002 
2013-14 
$0 
$0 
2014-15 
$37,204,875 
$37,204,875 
Initiative: Provides one-time funding to implement the new tax equalization assessment 
including the costs of computer programming to update the Maine automated tax and 
processing systems and a new assessment worksheet form. 
GENERAL FUND 
All Other 
GENERAL FUND TOTAL 
2013-14 
$0 
$0 
2014-15 
$124,800 
$124,800 
ADMINISTRATIVE AND FINANCIAL 
SERVICES, DEPARTMENT OF 
DEPARTMENT TOTALS 
2013-14 
2014-15 
GENERAL FUND 
$0 
$37,329,675 
DEPARTMENT TOTAL - ALL FUNDS 
$0 
$37,329,675 
SUMMARY 
This amendment, which replaces the concept draft, does the following. 
1. For tax years beginning on or after January 1,2014, it requires payment of a tax 
equalization assessment if a tax family has an expanded income of at least $250,000 for a 
tax family filing as a single individual, $325,000 for a tax family filing as a head of a 
household or $400,000 for a tax family filing a married joint return or filing a joint return 
as a surviving spouse, and an effective tax rate that is less than the average effective tax 
rate on state and local taxes paid by the bottom 99% of tax families. 
2. For property tax years beginning on or after April 1,2014, it increases the amount 
of the Maine resident homestead property tax exemption to $30,000 of the just value of 
the homestead. 
3. For application periods beginning on or after August 1, 2014, it increases the 
maximum payment under the Circuitbreaker Program from $2,000 to $2,500. 
The amendment adds an appropriations and allocations section. 
FISCAL NOTE REQUIRED 
(See attached) 
COMMITTEE AMENDMENT 
• 
i\pproved: 06/14/13 ~~~ 
LD 1113 
LR 1936(02) 
An Act To Provide Tax Fairne:~s to Maine's Middle Class and Working Families 
Fiscal Note for BUI as Amended by Committee Amendment 'k C H ~ 5')0) 
Committee: Taxation 
~ 
Net Cost (Savings) 
General Fund 
Appropriations/Allocations 
General Fund 
Revenue 
General Fund 
Other Special Revenue Funds 
Fiscal Detail and Notes 
Fistal Note Required: Yes 
Fiscal Note 
FY 2013-14 
$0 
$0 
$0 
$0 
FY 2014-15 
$991,675 
$37,329,675 
$36,338,000 
$2,002,000 
Projections 
FY 2015-16 
$1,089,500 
$49,606,500 
$48,517,000 
$2,243,000 
Projections 
FY 2016-17 
($2,928,375) 
$50,951,625 
$53,880,000 
$2,420,000 
This bill has a net General Fund cost of$991,675 in fiscal year 2014-15 and $1,089,500 in fiscal year 2015-16. In fiscal 
year 2016-17, the bill will result in net General Fund savings of $2,928,375. Provided below is a table summarizing the 
net General Fund impacts of the tax and tax reimbursement program changes. 
Projections 
Projections 
FY 2013-14 
FY 2014-15 
FY 2015-16 
FY 2016-17 
General Fund Appropriations 
One-time administrative costs for new tax 
$124,800 
assessment 
Homestead Property Tax Reimbursment 
$37,204,875 
$49,606,500 
$50,951,625 
General Fund Revenue 
Maine Residents Property Tax Program Transfer 
($1,700,000) 
$5,900,000 
$7,900,000 
Tax equalization assessment - Income tax * 
$38,038,000 
$42,617,000 
$45,980,000 
* Income tax increase will increase transfers to the Local Government Fund for municipal revenue sharing by $2,002,000 
in fiscal year 2014-15, $2,243,000 in fiscal year 2015-16 and $2,420,000 in fiscal year 2016-17. 
LR1936(02) - Fiscal Note - Page 1 of 1