An Act to Establish the Income Tax Relief Fund for Maine Residents
Maine Legislature, Session 131, LD 0971
Committee: Appropriations and Financial Affairs
Sponsors: CARMICHAEL
Amends: 5 MRSA §1518-B

Legislative Document
No. 971
H.P. 618
House of Representatives, March 2, 2023
An Act to Establish the Income Tax Relief Fund for Maine 
Residents
Reference to the Committee on Appropriations and Financial Affairs suggested and ordered 
printed.
ROBERT B. HUNT
Clerk
Presented by Representative CARMICHAEL of Greenbush.
Be it enacted by the People of the State of Maine as follows:
Sec. 1.  5 MRSA §1518-B is enacted to read:
§1518-B.  Income Tax Relief Fund for Maine Residents
1.  Income Tax Relief Fund for Maine Residents.  There is created the Income Tax 
Relief Fund for Maine Residents, referred to in this section as "the fund," which must be 
used to provide income tax relief to residents of the State. The fund consists of all funds 
transferred to the fund under subsection 5 and other funds made available to the fund. The 
fund must be used to reduce the individual income tax rates pursuant to subsection 2.
2.  Implementation.  By September 1, 2024, and annually thereafter, the State 
Controller shall inform the State Tax Assessor of the amount available in the fund for the 
purposes of subsection 1.
A.  By November 1st annually beginning in 2024, the State Tax Assessor shall calculate 
the amount by which the income tax rates under Title 36, section 5111, subsections 
1-F, 2-F and 3-F may be reduced during the subsequent tax year using the amount 
available from the fund. Bracket rate reductions must be a minimum of 0.2 percentage 
points in the first year in which reductions are made and a minimum of 0.1 percentage 
points in subsequent years. If sufficient funds are not available to pay for the minimum 
reduction, a rate reduction may not be made until the amount in the fund is sufficient 
to pay for the reduction. When the amount is sufficient to pay for the reduction, the 
reduction must first be applied equally to each bracket under Title 36, section 5111, 
subsections 1-F, 2-F and 3-F. 
B.  The State Tax Assessor shall provide public notice of new bracket rates calculated 
under this subsection by November 15th annually.
C.  New bracket rates calculated under this subsection apply beginning with tax years 
that begin on or after January 1st of the calendar year following the determinations 
made under this subsection.
3.  Nonlapsing fund.  Any unexpended balance in the fund may not lapse but must be 
carried forward to be used pursuant to subsection 2.
4.  Transfer for income tax rate reduction.  In the fiscal years immediately following 
the calculation of the income tax rate reduction under subsection 2, paragraph A, the State 
Tax Assessor shall certify to the State Controller the amount of the reduction in General 
Fund revenue by fiscal year, and the State Controller shall transfer from the fund the 
amount certified for the reduction in revenue attributable to adjustments made under 
subsection 2 to the General Fund unappropriated surplus.
5.  Transfer from General Fund revenue growth.  Notwithstanding section 1536, 
beginning with fiscal year 2023-24, at the close of each fiscal year and before any other 
transfers from the General Fund, the State Controller shall transfer to the fund the amount 
by which General Fund  revenue for that fiscal year exceeds the General Fund revenue for 
the previous fiscal year adjusted by the growth limitation factor for that year established  
under section 1534.
SUMMARY
This bill establishes the Income Tax Relief Fund for Maine Residents for the purpose 
of reducing individual income tax rates.  The fund receives a transfer at the close of each 
fiscal year of the amount by which General Fund revenue for that fiscal year exceeds 
General Fund revenue for the preceding fiscal year.