An Act To Create a Tax Credit for Maine Workers Who Have Earned Certificates from Accredited Institutions
Maine Legislature, Session 130, LD 1667
Committee: Taxation
Sponsors: SHEEHAN, FAY, FECTEAU, TERRY
Amends: 36 MRSA §5217-E

Legislative Document
No. 1667
H.P. 1238
House of Representatives, May 5, 2021
An Act To Create a Tax Credit for Maine Workers Who Have 
Earned Certificates from Accredited Institutions
Received by the Clerk of the House on May 3, 2021.  Referred to the Committee on 
Taxation pursuant to Joint Rule 308.2 and ordered printed pursuant to Joint Rule 401.
ROBERT B. HUNT
Clerk
Presented by Representative SHEEHAN of Biddeford.
Cosponsored by Representatives: FAY of Raymond, Speaker FECTEAU of Biddeford, 
TERRY of Gorham.
Be it enacted by the People of the State of Maine as follows:
Sec. 1.  20-A MRSA c. 441 is enacted to read:
CHAPTER 441
EDUCATIONAL CERTIFICATE TAX CREDIT PROGRAM
§12941.  Definitions
As used in this chapter, unless the context otherwise indicates, the following terms 
have the following meanings.
1.  Accredited Maine 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:
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 
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.
2.  Accredited non-Maine community college, college or university.  "Accredited 
non-Maine community college, college or university" means an institution located outside 
the State that is accredited by a regional accrediting association or by one of the specialized 
accrediting agencies recognized by the United States Secretary of Education.
3. Certificate. "Certificate" means a postsecondary credential other than a degree 
denoting the successful completion of a course of study required for an occupation or to 
enter or to advance in an occupation.
4.  Educational certificate tax credit.  "Educational certificate tax credit" means the 
tax credit provided for in Title 36, section 5217-E.
5.  Educational institution.  "Educational institution" has the same meaning as in 
section 10701, subsection 3.
6.  Financial aid package.  "Financial aid package" means financial aid obtained by a 
student for attendance at an accredited Maine community college, college or university.  
For an employer claiming a tax credit under this chapter, "financial aid package" includes 
financial aid obtained by a qualified employee for attendance at an accredited non-Maine 
community college, college or university.  "Financial aid package" includes private loans 
or less than the full amount of loans under federal programs, depending on the practices of 
the accredited Maine community college, college or university or non-Maine community 
college, college or university.
7.  Maine resident.  "Maine resident" means an individual who qualifies for Maine 
residence under Title 21-A, section 112.  An individual is a Maine resident if, at the time 
the individual commences the relevant certificate program, the individual is registered to 
vote in the State or occupies a dwelling in the State and continues to occupy a dwelling in 
the State during the school year, except periods when it is reasonably necessary for the 
individual to live elsewhere as part of an accredited Maine community college, college or 
university's academic programs.
8.  Qualified employee.  "Qualified employee" has the same meaning as in Title 36, 
section 5217-E, subsection 1, paragraph J.
9.  Qualified individual.  "Qualified individual" has the same meaning as in Title 36, 
section 5217-E, subsection 1, paragraph K.
§12942.  Program created
1.  Program created; goals.  The Educational Certificate Tax Credit Program, referred 
to in this chapter as "the program," is created to provide a tax credit to Maine residents who 
obtain a certificate 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 affected 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.
2.  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 
certificate 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 may participate in the 
program.  An accredited Maine community college, college or university 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 shall document for 
the student information required for purposes of the educational certificate tax credit, 
including, once the student has earned the certificate, the total principal of loans the 
student received as part of that student's financial aid package related to certificate 
course work completed at the accredited Maine community college, college or 
university.  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.
3.  Effective date; participation by individual already enrolled in certificate 
program.  The program must commence for the first semester that begins after the effective 
date of this chapter.  A Maine resident who when the program commences is enrolled in a 
certificate program at an accredited Maine community college, college or university may 
participate, subject to the same essential terms as other program participants.
4.  Promotion by state agencies.  The department, the Finance Authority of Maine, 
the Department of Economic and Community Development and any other agency engaging 
in education-related outreach shall integrate promotion of the program with other 
educational outreach efforts to the extent possible in a manner consistent with the scope of 
the program and its centrality to the State's efforts to raise the levels of educational 
attainment of Maine residents.
A.  The department shall notify superintendents about the program annually and 
encourage the superintendents to publicize the availability of the program among 
students, parents and school staff.
B.  The Department of Labor shall require that publicly funded workforce development 
programs, including state and local workforce boards and the Competitive Skills 
Scholarship Program established in Title 26, section 2033, include within their plans 
and programs efforts to promote and increase awareness of the program.
5.  Promotion by institutions.  Public higher education institutions identified in 
section 12591, subsection 1, paragraphs A to C shall make reasonable efforts to inform 
students about the program.
6.  Publicity.  To assist institutions of higher education to promote the program, the 
Finance Authority of Maine shall contract with a private nonprofit corporation in the 
amount of at least $20,000 annually to market the program throughout the State, targeting 
high schools, postsecondary educational institutions and organizations of parents, teachers 
and other relevant audiences. Marketing efforts must include printed materials, online 
information and in-person promotional efforts.
§12943.  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 certificate tax credit serve as justification to 
decrease other funds appropriated or allocated to accredited Maine community colleges, 
colleges or universities, including institutions in the Maine Community College System 
and the University of Maine System, or to other higher education programs.
Sec. 2.  36 MRSA §5217-E is enacted to read:
§5217-E.  Credit for educational certificate
1.  Definitions.  As used in this section, unless the context otherwise indicates, the 
following terms have the following meanings.
A. "Accredited Maine community college, college or university" has the same meaning 
as in Title 20 A, section 12941, subsection 1
B. "Accredited non-Maine community college, college or university" has the same 
meaning as in Title 20-A, section 12941, subsection 2.
C. "Benchmark loan payment" means the monthly loan payment for the amount of the 
principal cap paid over 10 years at the interest rate for federally subsidized Stafford 
loans under 20 United States Code, Section 1077a applicable during the year of the 
individual's enrollment in a certificate program at an accredited Maine community 
college, college or university or an accredited non-Maine community college, college 
or university under paragraph K, subparagraph (1). 
D. "Certificate" has the same meaning as in Title 20-A, section 12941, subsection 3.
E. "Employer" has the same meaning as the term "employing unit," as defined in Title 
26, section 1043, subsection 10.
F. "Financial aid package" has the same meaning as in Title 20-A, section 12941, 
subsection 6.
G. "Full time" with regard to employment means employment with a normal workweek 
of 32 hours or more.
H. "Part time" with regard to employment means employment with a normal workweek 
of between 16 and 32 hours.
I. "Principal cap" means the average in-state tuition and mandatory fees for attendance 
at an accredited Maine community college, college or university for the academic year 
ending during the calendar year prior to the year of completion of the certificate 
program.
J. "Qualified employee" means an employee who is employed at least part time and 
who is a qualified individual or who would be a qualified individual except that the 
employee's certificate was awarded by an accredited non-Maine community college, 
college or university.
K. "Qualified individual" means an individual, including the spouse filing a joint return 
with the individual under section 5221, who is eligible for the credit provided in this 
section. An individual is eligible for the credit if the individual:
(1)  Attended and obtained a certificate from an accredited Maine community 
college, college or university or non-Maine community college, college or 
university after December 1, 2021;
(2)  During the taxable year, was a resident individual; and
(3)  Worked during the taxable year:
(a)  At least part time in this State for an employer or as a self-employed 
individual or was, during the taxable year, deployed for military service in the 
United States Armed Forces, including the National Guard and the Reserves 
of the United States Armed Forces; or  
(b) At least part time in a position on a vessel at sea.
As used in this subparagraph, "deployed for military service" means active military 
duty with the state military forces, as defined in Title 37-B, section 102, or the 
United States Armed Forces, including the National Guard and the Reserves of the 
United States Armed Forces, whether pursuant to orders of the Governor or the 
President of the United States.
L. "Resident individual" means someone:
(1)  Who is domiciled in this State; or
(2)  Who is not domiciled in this State, but maintains a permanent place of abode 
in this State and spends in the aggregate more than 183 days of the taxable year in 
this State, unless the individual is a member of the Armed Forces of the United 
States.
M. "Seasonal employment" has the same meaning as in Title 26, section 1251.
N. "Term of employment" includes all months when the individual is actually 
employed.  "Term of employment" includes time periods when an individual is on 
leave or vacation and extends to the full year for individuals working for employers 
who customarily operate only during a regularly recurring period of 9 months or more 
in a calendar year.  For individuals working for employers who customarily operate 
only during regularly recurring periods of less than 9 months in a calendar year, 
including seasonal employment, the term of employment extends only to months 
during which the individual is actually working.  
2.  Credit allowed.  For tax years beginning on or after January 1, 2022, a qualified 
individual or an employer of a qualified employee is allowed a credit against the tax 
imposed by this Part in accordance with the provisions of this section.  The credit is created 
to implement the Educational Certificate Tax Credit Program established under Title 20-
A, chapter 441.
A.  A taxpayer entitled to the credit under this section for any taxable year may carry 
over and apply to the tax liability for any one or more of the next succeeding 10 years 
the portion, as reduced from year to year, of any unused credits.
B.  A taxpayer may claim a credit based on a loan payment actually made to a relevant 
lender or lenders under this section only with respect to a loan that is part of the 
qualified individual's financial aid package and only with respect to the loan payment 
amount paid by the taxpayer during that part of the taxable year that the qualified 
individual worked in this State. Payment of a loan amount in excess of the amount due 
during the taxable year does not qualify for the credit.  A refinanced loan or 
consolidated loan that is part of the qualified individual's financial aid package is 
eligible for the credit under this section if the refinanced loan or consolidated loan 
remains separate from other debt, except for debt incurred in an educational program, 
but only in proportion to the portion of the loan payments that are otherwise eligible 
under this section.  Forbearance or deferment of a loan payment does not affect 
eligibility for the credit under this section.  An individual who worked in this State for 
any part of a month during the Maine residency period of the taxable year is considered 
to have worked in this State for the entire month.  An individual who worked outside 
this State for an entire month during the Maine residency period is considered to have 
worked in this State during that month, except that this exception may not exceed 3 
months during the Maine residency period of the taxable year.
C. Except as provided in subsection 3, the credit under this section may not reduce the 
tax otherwise due under this Part to less than zero.
3.  Calculation of the credit; qualified individuals.  Subject to subsection 2 and 
except as provided in this subsection, the credit with respect to a qualified individual is 
equal to the lesser of:
A. The benchmark loan payment multiplied by the number of months during the 
taxable year in which the taxpayer made loan payments; and
B. The monthly loan payment amount multiplied by the number of months during the 
taxable year in which the taxpayer made loan payments.
The credit under this subsection is refundable to the extent the credit is based on loans 
included in the financial aid package acquired to obtain a certificate.
4.  Calculation of the credit; employers.  Subject to subsection 2, a taxpayer 
constituting an employer making loan payments directly to a lender during the taxable year 
on loans included in a qualified employee's financial aid package may claim a credit equal 
to the actual monthly loan payment made by the employer on the loans multiplied by the 
number of months during the taxable year the employer made loan payments on behalf of 
the qualified employee during the term of employment.  The credit under this subsection 
may not be claimed with respect to months of the taxable year during which the employee 
was not a qualified employee.
If the qualified employee is employed on a part-time basis during the taxable year, the 
credit with respect to that employee is limited to 50% of the credit otherwise determined 
under this subsection.
Sec. 3.  Report.  By February 1, 2023, each accredited Maine community college, 
college or university, as defined in the Maine Revised Statutes, Title 20-A, section 12941, 
subsection 1, shall report to the Department of Education on efforts to promote the 
Educational Certificate Tax Credit Program under Title 20-A, section 12942, and to train 
admissions and financial aid staff about the program.  By March 1, 2023, the department 
shall report findings and recommendations regarding the program to the joint standing 
committee of the Legislature having jurisdiction over education and cultural affairs and the 
joint standing committee of the Legislature having jurisdiction over taxation matters.  By 
March 1, 2023, the Department of Administrative and Financial Services, Bureau of 
Revenue Services, Office of Tax Policy shall report on implementation of the educational 
certificate tax credit under Title 36, section 5217-E, including statistics on credits claimed, 
to the joint standing committee of the Legislature having jurisdiction over education and 
cultural affairs and the joint standing committee of the Legislature having jurisdiction over 
taxation matters.  The Office of Tax Policy, in conjunction with the State Economist and 
the Department of Labor, shall include in its report an analysis of the costs of the credits 
claimed and the impact of the program on the State's labor force.  After receipt and review 
of the information required under this section, the joint standing committee of the 
Legislature having jurisdiction over education and cultural affairs or the joint standing 
committee of the Legislature having jurisdiction over taxation matters may report out to 
the Legislature a bill regarding the program.
SUMMARY
This bill creates the Educational Certificate Tax Credit Program, modeled on the Job 
Creation Through Educational Opportunity Program, for workers who receive a certificate 
from an accredited postsecondary educational institution denoting completion of a course 
of study required for an occupation or to enter or advance in an occupation.