An Act to Protect Maine Taxpayers from Unconstitutional Federal Expenditures
Maine Legislature, Session 131, LD 1928
Committee: Taxation
Sponsors: BRAKEY, WHITE, HARRINGTON, KEIM, BOYER, FAULKINGHAM, HENDERSON, HYMES, LIBBY, QUINT
Amends: 36 MRSA §185-B, 36 MRSA §5250

Legislative Document
No. 1928
S.P. 786
In Senate, May 11, 2023
An Act to Protect Maine Taxpayers from Unconstitutional Federal 
Expenditures
Reference to the Committee on Taxation suggested and ordered printed.
DAREK M. GRANT
Secretary of the Senate
Presented by Senator BRAKEY of Androscoggin.
Cosponsored by Representative WHITE of Guilford and
Senators: HARRINGTON of York, KEIM of Oxford, Representatives: BOYER of Poland, 
FAULKINGHAM of Winter Harbor, HENDERSON of Rumford, HYMES of Waldo, LIBBY 
of Auburn, QUINT of Hodgdon.
Be it enacted by the People of the State of Maine as follows:
Sec. 1.  3 MRSA c. 39 is enacted to read:
CHAPTER 39
REGULATION OF UNCONSTITUTIONAL FEDERAL EXPENDITURES
§1051.  Process for determining unconstitutional federal expenditures
1.  Request for opinion of justices.  Upon the belief that the Federal Government has 
made an expenditure of federal funds that is not authorized by the United States 
Constitution, either body of the Legislature may request the Supreme Judicial Court, 
pursuant to the Constitution of Maine, Article VI, Section 3, for a determination of whether 
the expenditure is an unconstitutional expenditure.  For purposes of this section, 
"unconstitutional expenditure" means an expenditure of federal funds that is not authorized 
under the provisions of the United States Constitution.  
2. Action based on affirmative answer.  If, pursuant to subsection 1, the Supreme 
Judicial Court answers that an expenditure is an unconstitutional expenditure, the 
Legislature by resolve may:
A.  Require for a limited duration, as specified in the resolve, employers to submit 
federal income taxes withheld from their employees to the Department of 
Administrative and Financial Services, Bureau of Revenue Services pursuant to Title 
36, section 5250, subsection 1-A; and
B.  Require the Department of Administrative and Financial Services, Bureau of 
Revenue Services to:
(1)  Determine the amount of the unconstitutional expenditure borne by residents 
of this State; and  
(2)  Withhold from federal income taxes payable to the United States Internal 
Revenue Service the amount determined pursuant to subparagraph (1).
Sec. 2.  36 MRSA §185-B is enacted to read:
§185-B.  Setoff of federal income taxes against unconstitutional federal expenditures
Upon direction by the Legislature pursuant to Title 3, section 1051, subsection 2, the 
bureau shall set off an unconstitutional federal expenditure as provided in this section.  For 
purposes of this section, "unconstitutional federal expenditure" means an expenditure of 
federal funds that is not authorized under the provisions of the United States Constitution 
and is found to be unconstitutional by the Supreme Judicial Court pursuant to Title 3, 
section 1051, subsection 1.
1.  Determination of set-off amount.  In order to determine the amount of the setoff, 
the bureau shall:
A. Determine the cost of the unconstitutional federal expenditure;
B. Determine the total federal appropriation for the federal fiscal year in which the 
unconstitutional federal expenditure is made;
C. Divide the amount determined under paragraph A by the amount determined under 
paragraph B; and
D. Multiply the result obtained in paragraph C by the total amount of federal income 
taxes paid by resident and nonresident individuals who filed Maine income tax returns 
for the tax year during which the unconstitutional federal expenditure was made.
The assessor shall inform the Governor, the President of the Senate and the Speaker of the 
House of the amounts determined pursuant to this subsection.
2.  Withhold federal income taxes.  The bureau shall establish within the Department 
of Administrative and Financial Services a segregated account, referred to in this section 
as "the segregated account."  The bureau shall transfer into the segregated account the 
amount of federal income taxes collected pursuant to section 5250, subsection 1-A equal 
to the portion of the unconstitutional federal expenditure attributable to Maine taxpayer 
funds as determined pursuant to subsection 1, paragraph D.
3.  Disbursement of set-off amount.  Funds withheld and transferred to the segregated 
account pursuant to subsection 2 must be disbursed as provided in this subsection.
A.  The Treasurer of State shall inform the State Controller and the assessor if the State 
receives an amount of federal funds less than the amount anticipated.  Upon such 
notice, the State Controller shall transfer from the segregated account to the General 
Fund an amount equal to the deficit of federal funds determined by the Treasurer of 
State.
B.  At the close of each state fiscal year, if funds remain in the segregated account, the 
assessor shall refund the funds to Maine taxpayers on a pro rata basis in direct 
proportion to the amount of federal taxes paid by the taxpayer for the prior tax year.
Sec. 3.  36 MRSA §5250, sub-§1-A is enacted to read:
1-A.  Federal tax withholding.  Notwithstanding any provision of law to the contrary, 
when directed by law pursuant to Title 3, section 1051, subsection 2, paragraph A, an 
employer maintaining an office or transacting business in this State that makes payment to 
a resident individual or a nonresident individual of wages subject to tax under this Part, if 
required to withhold federal income tax from those wages, shall transmit to the assessor 
any federal income taxes withheld by that employer at the same time and in the same 
manner as the taxes due under this Part are transmitted to the assessor.  Except as provided 
in section 185-B, the bureau shall transmit the federal income taxes collected pursuant to 
this subsection to the United States Internal Revenue Service no later than 5 business days 
following transmission from an employer.
SUMMARY
This bill establishes a procedure for the State to avoid paying for federal expenditures 
that are determined by the Maine Supreme Judicial Court to be in violation of the United 
States Constitution.  
Upon a determination by the Maine Supreme Judicial Court that a federal expenditure 
is unconstitutional, the Legislature may require an employer in this State that withholds 
federal income taxes from its employees to remit temporarily, for a time determined by the 
Legislature, those withheld federal income taxes to the Department of Administrative and 
Financial Services, Bureau of Revenue Services instead of to the United States Internal 
Revenue Service.  The Legislature may also direct the bureau to determine the portion of 
the unconstitutional federal expenditure paid for with income taxes from Maine taxpayers 
and transfer that amount to a segregated account.  The funds in the segregated account are 
used to either make up a shortage in federal funding that the State is due, as determined by 
the Treasurer of State, or to provide a refund to Maine taxpayers on a pro rata basis in direct 
proportion to the amount of federal taxes paid by the taxpayer for the prior tax year.