An Act To Eliminate the State Income Tax for Maine Public Employees Retirement' System Pensions
Maine Legislature, Session 128, LD 0513
Committee Amendment CA_B_S119 (Senate)
Amends: 36 MRSA §5122, 36 MRSA §5403

COMMITTEE AMENDMENT "g" to S.P. 174, L.D. 513, Bill, "An Act To 
Eliminate the State Income Tax for Maine Public Employees Retirement' System 
Pensions" 
Amend the bill by striking out the title and substituting the following: 
'An Act To Increase the Maximum Pension Deduction for State Income Tax' 
Amend the bill by striking out everything after the enacting clause and before the 
summary and insetting the following: 
· 
'Sec. 1. 36 MRSA §5122, sub-§2, ,iM-2, as amended by PL 2015, c. 382, §2 and 
c. 390, §8, is fmther amended to read: 
M-2. For tax years beginning on or after Januaiy 1, 2016: 
( 1) For each individual who is a primaiy recipient of retirement plan benefits, the 
reduction is the sum of: 
(a) Excluding militaiy retirement plan benefits, an amount that is the lesser 
of: 
(i) The aggregate of retirement plan benefits under employee retirement 
plans or individual retirement accounts included in the individual's 
federal adjusted gross income; and 
(ii) The pension deduction amount reduced by the total amount of the 
individual's social security benefits and railroad retirement benefits paid 
by the United States, but not less than $0; and 
(b) An amount equal to the aggregate of retirement benefits under military 
retirement plans included in the individual's federal adjusted gross income; 
and 
(2) 
For purposes of this paragraph, the following tenns have the following 
meanings. 
COMMITTEE AMENDMENT 
COMMI1TEE AMENDMENT "6 " 
to S.P. 174, L.D. 513 
(a) "Employee retirement plan" means a state, federal or military retirement 
plan or any other retirement benefit plan established and maintained by an 
employer for the benefit of its employees under the Code, Section 401(a), 
Section 403 or Section 457 (b ), except that distributions made pursuant to a 
Section 457(b) plan are not eligible for the deduction provided by this 
paragraph if they are made prior to age 55 and are not pmi of a series of 
substantially equal periodic payments made for the life of the primary 
recipient or the joint lives of the primary recipient and that recipient's 
designated beneficiary. 
0 
(b) "Individual retirement account" means an individual retirement account 
under Section 408 of the Code, a Roth IRA under Section 408A of the Code, 
a simplified employee pension under Section 408(k) of the Code or a simple 
retirement account for employees under Section 408(p) of the Code. 
( c) "Military retirement plan" means retirement p Ian benefits received as a 
result of service in the active or reserve components of the Army, Navy, Air 
Force, Marines or Coast Guard. 
(d) "Pension deduction amount" means $10,000, except that, for tax years 
beginning on or after Janumy 1, 2017 but before Januaty 1, 2022, "pension 
deduction amount" means the pension deduction amount applicable to the 
preceding tax year increased by $5,000. For tax years beginning on or after 
January 1, 2022, "pension deduction amount" means $35,000. 
( e) 
"Primary recipient" means the individual upon whose earnings or 
contributions the retirement plan benefits are based or the surviving spouse of 
that individual. 
(f) 
"Retirement plan benefits" means employee retirement plan benefits, 
except pick-up contributions for which a subtraction is allowed under 
paragraph E, reported as pension or annuity income for federal income tax 
purposes and individual retirement account benefits repotied as individual 
retirement 
account 
distributions 
for 
federal 
income tax 
purposes. 
"Retirement plan benefits" does not include distributions that are subject to 
the tax imposed by the Code, Section 72(t); 
Sec. 2. 36 MRSA §5403, first 1, as enacted by PL 2015, c. 267, Pt. DD, §33, is 
amended to read: 
On or about September 15th of each year as specified in subsections 1 to 6 1, the 
assessor shall multiply the cost-of-living adjustment for taxable years beginning in the 
succeeding calendar year by the following: 
Sec. 3. 36 MRSA §5403, sub-§5, 1C, as enacted by PL 2015, c. 267, Pt. DD, 
§33, is amended to read: 
C. 
Beginning in 2016 and each year thereafter, by the dollar amount of the income 
threshold set fotih in section 5213-A, subsection 4, except that for the purposes of 
this paragraph, notwithstanding section 5402, subsection 1-B, the "cost-of-living 
adjustment" is the Chained Consumer Price Index for the 12-month period ending 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT"/!;" to S.P. 174, L.D. 513 
June 30th of the preceding calendar year divided by the Chained Consumer Price 
Index for the 12-month period ending June 30, 2015; and 
Sec. 4. 36 MRSA §5403, sub-§6, as enacted by PL 2015, c. 267, Pt. DD, §33, is 
amended to read: 
6. Property tax fairness credit. Beginning in 2015 and each year thereafter, the 
benefit base amounts in section 5219-KK, subsection 1, paragraph A7; and 
Sec. 5. 36 MRSA §5403, sub-§7 is enacted to read: 
7. Pension deduction. Beginning in 2021 and each year thereafter, by the pension 
deduction amount defined in section 5122, subsection 2, paragraph M-2 with respect to 
tax years beginning on or after January 1, 2022.' 
SUMMARY 
This amendment increases the maximum annual income tax pension deduction 
amount for nonmilitary retirement pensions from $10,000 to $35,000 over a 5-year period 
beginning with the 2017 tax year. The $35,000 pension deduction amount that applies 
after 2021 is subject to an annual inflation adjustment. 
FISCAL NOTE REQUIRED 
7 
(See attached) 
COMMITTEE AMENDMENT 
Approved: 05/05/17 feac.. 
LD513 
LR 998(03) 
An Act To Eliminate the State Income Tax for Maine Public Employees Retirement System Pensions 
Fiscal Note for Bill as Amended by Committee Amendment "Yj ( S -/ / ~ 
Committee: Taxation 
1,9 
Net Cost (Savings) 
General Fund 
Revenue 
General Fund 
Other Special Revenue Funds 
Fiscal Detail and Notes 
Fiscal Note Required: Yes 
Fiscal Note 
FY 2017-18 
$20,251,700 . 
($20,251,700) 
($603,210) 
FY 2018-19 
$28, 11 8, 160 
($28, 118, 160) 
($1,074,050) 
Projections 
FY 2019-20 
$41,470,350 
($41,4 70,350) 
($2,993 ,005) 
Projections 
FY 2020-21 
$58,325,250 
($58,325,250) 
($4,319,900) 
This bill increases the pension deduction from $10,000 to $35,000 over a 5 year period. It would result in a loss of 
General Fund revenue of $20,251, 700 in fiscal year 2017-18 and $28, 118, 160 in fiscal year 2018-19 and a loss of 
Local Government Fund revenue of $413,210 in fiscal year 2017-18 and $574,050 in fiscal year 2018-19. It would 
also reduce revenue to the Fund to Advance Public Kindergarten to Grade 12 Education by $190,000 in fiscal year 
2017-18 and $500,000 in fiscal year 2018-19. 
LR0998(03) - Fiscal Note - Page I of l