An Act to Provide Heating Relief with Tax-free Home Energy Savings Accounts
Maine Legislature, Session 131, LD 1873
Committee: Taxation
Sponsors: BRAKEY, LIBBY, BENNETT, HARRINGTON, MOORE, STEWART, BAGSHAW, MORRIS, SWALLOW
Amends: 36 MRSA §5122

Legislative Document
No. 1873
S.P. 757
In Senate, May 2, 2023
An Act to Provide Heating Relief with Tax-free Home Energy 
Savings Accounts
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 LIBBY of Auburn and
Senators: BENNETT of Oxford, HARRINGTON of York, LIBBY of Cumberland, MOORE of 
Washington, STEWART of Aroostook, Representatives: BAGSHAW of Windham, MORRIS 
of Turner, SWALLOW of Houlton.
Be it enacted by the People of the State of Maine as follows:
Sec. 1.  10 MRSA c. 110, sub-c. 15 is enacted to read:
SUBCHAPTER 15
HOME ENERGY SAVINGS ACCOUNT PROGRAM
§1100-HH.  Home Energy Savings Account Program
1.  Program established.  There is established within the authority the Home Energy 
Savings Account Program, referred to in this subchapter as "the program," to provide for 
the deposit of tax-free funds to be used for home weatherization and heating or electricity 
costs.
2.  Requirements.  The authority shall develop and administer the program.  The 
program must allow individuals to establish and deposit funds into home energy savings 
accounts, referred to in this subchapter as "the accounts," established in financial 
institutions in this State, including credit unions, authorized by the authority.
3.  Deposit amounts; lapse.  Deposits into the accounts are limited as follows:
A.  An individual may deposit up to $2,500 per year; and
B.  A married couple may deposit up to $5,000 per year.
Any balances in an account do not lapse but carry forward each year.  
4.  Authorized use of funds.  An individual may use funds in that individual's account 
only for weatherization of that individual's residence or for payment of fuel or electricity 
costs incurred for heating that individual's residence. The residence must be located in this 
State.
5.  Tax exemption only for funds used for authorized use.  Funds deposited into an 
account are not subject to Maine income tax.  Funds that are withdrawn from an account 
that are not used for the purposes specified in subsection 4 are subject to Maine income 
tax.
6.  Rulemaking.  The authority shall adopt routine technical rules pursuant to Title 5, 
chapter 375, subchapter 2-A to implement this subchapter.
Sec. 2.  36 MRSA §5122, sub-§2, ¶AAA is enacted to read:
AAA.  For taxable years beginning on or after January 1, 2023, any amount up to 
$2,500 for a single individual and $5,000 for individuals filing married joint returns 
deposited annually in a home energy savings account established pursuant to Title 10, 
chapter 110, subchapter 15, to the extent included in federal adjusted gross income. 
The subtraction modification specified in this paragraph does not apply if funds in the 
account are withdrawn and used for a purpose other than those specified in Title 10, 
section 1100-HH, subsection 4.
SUMMARY
This bill establishes the Home Energy Savings Account Program to allow individuals 
and married couples to open a home energy savings account into which annual deposits of 
up to $2,500 for an individual and $5,000 for a married couple may be made.  The amount 
deposited is exempt from Maine income tax but may be used only for the weatherization 
of the account holder's residence or the payment of fuel or electricity costs incurred for 
heating the account holder's residence; funds withdrawn and used for any other purpose are 
subject to Maine income tax. The residence must be located in Maine.  Balances in the 
accounts do not lapse but are carried forward each year.  The Home Energy Savings 
Account Program is administered by the Finance Authority of Maine.