An Act To Repeal and Subject to Referendum in 2018 the Fund To Advance Public Kindergarten to Grade 12 Education and the 3 Percent Income Tax Surcharge
Maine Legislature, Session 128, LD 0851
Committee: Taxation
Sponsors: SIROCKI, LANGLEY, AUSTIN, GUERIN, HILLIARD, MALABY, O'CONNOR, PICKETT, TURNER, DOW
Amends: 20-A MRSA §15697, 36 MRSA §5111, 20-A MRSA §15698

Legislative Document
No. 851
H.P. 600
House of Representatives, March 7, 2017
An Act To Repeal and Subject to Referendum in 2018 the Fund To 
Advance Public Kindergarten to Grade 12 Education and the 3 
Percent Income Tax Surcharge
(EMERGENCY)
Reference to the Committee on Taxation suggested and ordered printed.
ROBERT B. HUNT
Clerk
Presented by Representative SIROCKI of Scarborough.
Cosponsored by Senator LANGLEY of Hancock and
Representatives: AUSTIN of Gray, GUERIN of Glenburn, HILLIARD of Belgrade, MALABY 
of Hancock, O'CONNOR of Berwick, PICKETT of Dixfield, TURNER of Burlington, Senator: 
DOW of Lincoln.
Emergency preamble. Whereas, acts and resolves of the Legislature do not 
become effective until 90 days after adjournment unless enacted as emergencies; and 
Whereas, Initiated Bill 2015, chapter 4 imposes a 3% surcharge on certain income, 
beginning in 2017, and requires all of the revenue from the surcharge to be deposited in 
the Fund to Advance Public Kindergarten to Grade 12 Education, beginning January 1, 
2018; and 
Whereas, this legislation repeals the surcharge and the fund; and 
Whereas, the repeal needs to take effect as soon as possible to avoid uncertainty and 
administrative issues; and 
Whereas, in the judgment of the Legislature, these facts create an emergency within 
the meaning of the Constitution of Maine and require the following legislation as 
immediately necessary for the preservation of the public peace, health and safety; now, 
therefore, 
Be it enacted by the People of the State of Maine as follows: 
PART A 
Sec. A-1.  20-A MRSA §15697, as enacted by IB 2015, c. 4, §1, is repealed. 
Sec. A-2.  36 MRSA §5111, sub-§6, as enacted by IB 2015, c. 4, §2, is repealed. 
Sec. A-3.  Retroactivity.  This Part applies retroactively to January 10, 2017. 
PART B 
Sec. B-1.  20-A MRSA §15698 is enacted to read: 
§15698.  Fund to Advance Public Kindergarten to Grade 12 Education 
1.  Fund established.  The Fund to Advance Public Kindergarten to Grade 12 
Education, referred to in this section as "the fund," is established as an interest-bearing 
account administered by the department. 
2.  Revenue; 30-day review before changing use of fund.  The Treasurer of State 
shall deposit all revenue collected pursuant to Title 36, section 5111, subsection 7 from 
the income tax surcharge to advance public kindergarten to grade 12 education into the 
fund according to the schedule in Title 36, section 5111, subsection 7. Any private or 
public funds appropriated, allocated or dedicated to the fund must be deposited into the 
fund as well as income from any other source directed to the fund. All interest earned by 
the fund becomes part of the fund.  Legislation that proposes to enact or amend a law that 
would change the distribution of the revenue directed to the fund by this subsection or by 
Title 36, section 5111, subsection 7 must be submitted to the Legislative Council and to 
the joint standing committee of the Legislature having jurisdiction over education matters 
at least 30 days prior to any vote or public hearing on that legislation. 
3.  Use of fund to supplement and not supplant General Fund appropriations; 
direct support for student learning.  The use of the fund is controlled by this 
subsection.  The fund may not be used for any purpose other than as described in this 
subsection.  
A.  If the General Fund appropriation for the state contribution for general purpose 
aid for local schools as finally enacted in any year is insufficient to meet the annual 
target established by section 15752, the commissioner shall use the fund to 
supplement the state contribution.  These supplemental funds must be used to enable 
the State to meet the annual target established by section 15752 or to decrease the 
amount by which state funding from all other sources falls short of the target.  The 
commissioner shall announce the increased state contribution amounts made possible 
by the supplemental amounts obtained from the fund within 14 days after final 
enactment of the General Fund appropriation for general purpose aid for local 
schools.  The commissioner shall distribute the increased state contribution amounts 
on the basis of the essential programs and services formula set forth in this chapter. 
B.  The fund may be used only to pay for portions of the state contribution that 
constitute direct support for student learning and not for the costs of administration.  
As used in this paragraph, "direct support for student learning" includes salary and 
benefit costs paid for public school classroom teachers; special teachers of reading or 
mathematics; literacy specialists; career and technical education teachers; education 
technicians; associate teachers; assistant teachers; special education technicians I, II 
or III; guidance staff; health staff; librarians; and media assistants as documented in 
the department's database.  Direct support for student learning does not include salary 
and benefit costs paid for school administrative staff or clerical staff.  By July 1st 
annually each school administrative unit must file a report to the department detailing 
how the funding provided by this section was used to provide direct support for 
student learning in this chapter. 
C.  The fund may be used for the necessary expenses of the department in the 
administration of the fund.  
4.  Report.  Annually by January 15th, the department shall submit a report to the 
joint standing committee of the Legislature having jurisdiction over education matters 
showing the amounts deposited into and disbursed from the fund and detailing how those 
disbursements increased the state contribution and enabled the State to meet or come 
closer to meeting the applicable annual targets specified in section 15752.  The 
department shall post the report on its publicly accessible website. 
5.  Rule of construction.  This section must be liberally construed to increase the 
amount of funding available for public kindergarten to grade 12 education above the 
General Fund appropriation for that year to the greatest extent possible in any year. 
Sec. B-2.  36 MRSA §5111, sub-§7 is enacted to read: 
7.  Income tax surcharge to advance public kindergarten to grade 12 education.  
An income tax surcharge to advance public kindergarten to grade 12 education, referred 
to in this subsection as "the surcharge," is established and administered as follows. 
A.  For tax years beginning on or after January 1, 2019, in addition to any other tax 
imposed by this chapter, a tax at the rate of 3% is imposed on that portion of the 
taxpayer's Maine taxable income in excess of $200,000. 
B.  One hundred percent of the revenue from the surcharge must be deposited each 
year into the Fund to Advance Public Kindergarten to Grade 12 Education 
established in Title 20-A, section 15698 in accordance with this paragraph. 
(1)  Prior to January 1st of each year, the bureau shall estimate the annual 
revenue to be collected from the surcharge for the immediately following 
calendar year. 
(2)  On the first of each month, beginning on January 1, 2020, the Treasurer of 
State shall deposit 8.333% of the estimated annual total revenue from the 
surcharge into the Fund to Advance Public Kindergarten to Grade 12 Education. 
(3)  The bureau may adjust the monthly transfer amount once annually to account 
for any difference between the estimated collection and actual collection. 
C.  The surcharge must be imposed and collected regardless of whether the income 
tax brackets in this section are changed, replaced or eliminated by an act of the 
Legislature or by a measure approved by voters pursuant to the Constitution of 
Maine, Article IV, Part Third, Section 18. 
Sec. B-3.  Statutory referendum procedure; submission at statewide 
election; form of question; effective date. This Part must be submitted to the legal 
voters of the State at a statewide election held in November 2018. The municipal officers 
of this State shall notify the inhabitants of their respective cities, towns and plantations to 
meet, in the manner prescribed by law for holding a statewide election, to vote on the 
acceptance or rejection of this Part by voting on the following question: 
"Do you favor adding a 3% tax on individual Maine taxable income 
above $200,000 to create a state fund that would provide direct support 
for student learning in kindergarten through 12th grade public 
education?" 
The legal voters of each city, town and plantation shall vote by ballot on this question 
and designate their choice by a cross or check mark placed within a corresponding square 
below the word "Yes" or "No."  The ballots must be received, sorted, counted and 
declared in open ward, town and plantation meetings and returns made to the Secretary of 
State in the same manner as votes for members of the Legislature.  The Governor shall 
review the returns. If a majority of the legal votes are cast in favor of this Part, the 
Governor shall proclaim the result without delay and this Part becomes effective 30 days 
after the date of the proclamation.  
The Secretary of State shall prepare and furnish to each city, town and plantation all 
ballots, returns and copies of this Part necessary to carry out the purposes of this 
referendum. 
Emergency clause.  In view of the emergency cited in the preamble, Part A of this 
Act takes effect when approved. 
SUMMARY 
Part A of this bill repeals the 3% surcharge imposed on taxable individual income 
over $200,000 for tax years beginning in or after 2017 and the Fund to Advance Public 
Kindergarten to Grade 12 Education, both as enacted in Initiated Bill 2015, chapter 4.  
The repeal is retroactive to the effective date of the initiated bill. 
Part B of this bill enacts a 3% surcharge on taxable individual income over $200,000 
for tax years beginning in or after 2019 and it enacts the Fund to Advance Public 
Kindergarten to Grade 12 Education, but only if approved by the voters at referendum in 
November 2018.