PLEASE NOTE: Legislative Information cannot perform research, provide legal advice, or interpret Maine law. For legal assistance, please contact a qualified attorney.
An Act To Make Technical Changes to Recently Enacted Legislation
Be it enacted by the People of the State of Maine as follows:
Sec. 1. 20-A MRSA §12545, as enacted by PL 2011, c. 665, §5, is amended to read:
§ 12545.Report
By February 1, 2021, each accredited Maine community college, college and university, as defined in section 12541, subsection 1, shall report to the department on efforts to promote and enroll individuals in the program and to train admissions and financial aid staff about the program. By March 1, 2021, 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, 2021, the Department of Administrative and Financial Services, Bureau of Revenue Services, Office of Tax Policy shall report on implementation of the educational opportunity tax credit, 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.
Sec. 2. 36 MRSA §199-C, sub-§3, as enacted by PL 2011, c. 665, §6, is amended to read:
 
3. Specific tax expenditure review.   By June 1, 2021, the committee shall review the income tax credit under section 5217-D to determine whether the credit should be retained, repealed or modified. The committee shall consider information provided by the Office of Tax Policy within the bureau and the Department of Education pursuant to Title 20-A, section 12545.
Sec. 3. 36 MRSA §5122, sub-§2, ¶M-1, as amended by PL 2015, c. 267, Pt. DD, §9, is further amended to read:
 
M-1. For tax years beginning on or after January 1, 2014 but before January 1, 2016, for each individual who is a primary recipient of retirement plan benefits under an employee retirement plan or an individual retirement account, an amount that is the lesser of the aggregate of retirement plan benefits under employee retirement plans or individual retirement accounts included in the individual's federal adjusted gross income and 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.
 
For purposes of this paragraph, the following terms have the following meanings.
 
(1) "Employee retirement plan" means a state or federal 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 part 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. "Employee retirement plan" does not include a military retirement plan or survivor benefits under such a plan.
 
(2) "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.
 
(3) "Military retirement plan" means retirement plan benefits received as a result of service in the active or reserve components of the Army, Navy, Air Force, Marines or Coast Guard.
 
(4) "Pension deduction amount" means $10,000 for tax years beginning on or after January 1, 2014.
 
(5) "Primary recipient" means the individual upon whose earnings or contributions the retirement plan benefits are based or the surviving spouse of that individual.
 
(6) "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 reported 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. 4. 36 MRSA §5213-A, sub-§1, ¶A, as enacted by PL 2015, c. 267, Pt. DD, §19, is amended to read:
 
A. "Base credit" means:
 
(1) For an individual income tax return claiming one personal exemption, $100 for tax years beginning in 2016 and $125 for tax years beginning on or after January 1, 2017;
 
(2) For an individual income tax return claiming 2 personal exemptions, $140 for tax years beginning in 2016 and $175 for tax years beginning on or after January 1, 2017;
 
(3) For an individual income tax return claiming 3 personal exemptions, $160 for tax years beginning in 2016 and $200 for tax years beginning on or after January 1, 2017; and
 
(4) For an individual income tax return claiming 4 or more personal exemptions, $180 for tax years beginning in 2016 and $225 for tax years beginning on or after January 1, 2017.
 
For the purposes of this paragraph, personal exemption does not include a personal exemption for an individual who is incarcerated.
Sec. 5. 36 MRSA §5217-D, sub-§1, ¶B-1, as amended by PL 2015, c. 267, Pt. QQQ, §2, is further amended to read:
 
B-1. "Financial aid package" means financial aid obtained by a student after December 31, 2007 for attendance at an accredited Maine community college, college or university after December 31, 2007. For purposes of a qualified individual claiming a credit under this section for tax years beginning on or after January 1, 2013, the financial aid package may include financial aid obtained for up to 30 credit hours of course work at an accredited non-Maine community college, college or university earned prior to transfer to an accredited Maine community college, college or university, if the 30 credit hours were earned after December 31, 2007 and the transfer occurred after December 31, 2012. For purposes of a qualified individual claiming a credit under this section for tax years beginning on or after January 1, 2016, who is eligible for a credit under paragraph G, subparagraph (1), division (b), the financial aid package may include financial aid obtained by a student for attendance at an accredited non-Maine community college, college or university after December 31, 2007. For purposes of a qualified individual claiming a credit under this section for tax years beginning on or after January 1, 2016, who is eligible for a credit under paragraph G, subparagraph (1), division (c), the financial aid package may include financial aid obtained by a student for attendance at an accredited Maine college or university after December 31, 2007. For purposes of an employer claiming a credit under this section for tax years beginning on or after January 1, 2013, the financial aid package may include financial aid obtained by a qualified employee after December 31, 2007 for attendance at an accredited non-Maine community college, college or university after December 31, 2007. The financial aid package may include private loans or less than the full amount of loans under federal programs, depending on the practices of the accredited Maine or non-Maine community college, college or university. Loans are includable in the financial aid package only if entered into prior to July 1, 2023.
Sec. 6. 36 MRSA §5217-D, sub-§1, ¶G, as amended by PL 2015, c. 267, Pt. QQQ, §3, is further amended to read:
 
G. "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) An associate or bachelor's degree from an accredited Maine community college, college or university after December 31, 2007 but before January 1, 2016. The individual need not obtain the degree from the institution in which that individual originally enrolled as long as all course work toward the degree is performed at an accredited Maine community college, college or university, except that an individual who transfers to an accredited Maine community college, college or university after December 31, 2012 but before January 1, 2016 from outside the State and earned no more than 30 credit hours of course work toward the degree at an accredited non-Maine community college, college or university after December 31, 2007 and prior to the transfer is eligible for the credit if all other eligibility criteria are met. Program eligibility for such an individual must be determined as if the commencement of course work at the relevant accredited Maine community college, college or university was the commencement of course work for the degree program as a whole;
 
(b) An associate or bachelor's degree from an accredited Maine or non-Maine community college, college or university after December 31, 20072015; or
 
(c) A graduate degree from an accredited Maine college or university after December 31, 20072015;
 
(4) During the taxable year, was a resident individual; and
 
(5) Worked during the taxable year:
 
(a) For tax years beginning prior to January 1, 2015, at least part time for an employer located in this State or, for tax years beginning on or after January 1, 2013, 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) For tax years beginning on or after January 1, 2015, 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.
 
As used in this subparagraph, "deployed for military service" has the same meaning as in Title 26, section 814, subsection 1, paragraph A.
Sec. 7. 36 MRSA §5217-D, sub-§3, as amended by PL 2013, c. 525, §15, is further amended to read:
 
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 amount determined under paragraph A or paragraph B, whichever is less, multiplied by the proration factor:
 
A.  The benchmark loan payment multiplied by the number of months during the taxable year in which the taxpayer made loan payments; or
 
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 for an individuala qualified individual under subsection 1, paragraph G, subparagraph (1), division (a) who transferred to an accredited Maine community college, college or university from an accredited non-Maine community college, college or university after December 31, 2012 but before January 1, 2016 and who earned no more than 30 credit hours of course work toward the degree at an accredited non-Maine community college, college or university is equal to 50% of the amount otherwise determined under this section in the case of an associate degree and equal to 75% of the amount otherwise determined under this section in the case of a bachelor's degree.
 
Notwithstanding subsection 2, paragraph C, 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 bachelor's degree or associate degree in science, technology, engineering or mathematics. For tax years beginning on or after January 1, 2016, 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 an associate degree.
 
For purposes of this subsection, the proration factor is the amount derived by dividing the total number of academic credit hours earned for a bachelor's or associate degree after December 31, 2007 by the total number of academic credit hours earned for the bachelor's or associate degree.
Sec. 8. 36 MRSA §5219-S, sub-§4, as amended by PL 2015, c. 267, Pt. DD, §31, is further amended to read:
 
4. Limitation.   The credit allowed by this section may not reduce the Maine income tax to less than zero, except that for tax years beginning on or after January 1, 2016, the credit allowed under subsections 1 and 3 is refundable.
Sec. 9. Appropriations and allocations. The following appropriations and allocations are made.
 
ADMINISTRATIVE AND FINANCIAL SERVICES, DEPARTMENT OF
 
Homestead Property Tax Exemption Reimbursement 0886
 
Initiative: Deappropriates funds no longer needed for the Homestead Property Tax Exemption Reimbursement program as a result of changes made in the 2016-2017 biennial budget.

GENERAL FUND	2015-16	2016-17	
All Other	$0	($27,975,000)	
			
GENERAL FUND TOTAL	$0	($27,975,000)	

Revenue Services, Bureau of 0002
 
Initiative: Provides funding for one Tax Examiner position effective January 1, 2017 and related All Other costs to review and process additional claims for the educational opportunity tax credit.

GENERAL FUND	2015-16	2016-17	
POSITIONS - LEGISLATIVE COUNT	0.000	1.000	
Personal Services	$0	$36,005	
All Other	$0	$3,895	
			
GENERAL FUND TOTAL	$0	$39,900	

ADMINISTRATIVE AND FINANCIAL SERVICES, DEPARTMENT OF			
DEPARTMENT TOTALS	2015-16	2016-17	
			
GENERAL FUND	$0	($27,935,100)	
			
DEPARTMENT TOTAL - ALL FUNDS	$0	($27,935,100)	

ECONOMIC AND COMMUNITY DEVELOPMENT, DEPARTMENT OF
 
Office of Tourism 0577
 
Initiative: Deallocates funds no longer needed as a result of changes made in the 2016-2017 biennial budget.

OTHER SPECIAL REVENUE FUNDS	2015-16	2016-17	
All Other	$0	($1,710,535)	
			
OTHER SPECIAL REVENUE FUNDS TOTAL	$0	($1,710,535)	

ECONOMIC AND COMMUNITY DEVELOPMENT, DEPARTMENT OF			
DEPARTMENT TOTALS	2015-16	2016-17	
			
OTHER SPECIAL REVENUE FUNDS	$0	($1,710,535)	
			
DEPARTMENT TOTAL - ALL FUNDS	$0	($1,710,535)	

SECTION TOTALS	2015-16	2016-17	
			
GENERAL FUND	$0	($27,935,100)	
OTHER SPECIAL REVENUE FUNDS	$0	($1,710,535)	
			
SECTION TOTAL - ALL FUNDS	$0	($29,645,635)	

SUMMARY
This bill adds language to income tax changes in Public Law 2015, chapter 267 to include language that was inadvertently omitted in an earlier amendment. The bill updates language to reflect changes to the income tax exemption for pensions, includes the correct amounts for 2016 tax years for the base credit under the sales tax fairness credit and provides that the refundability of the earned income tax credit applies only to residents and part-year residents of the State.
This bill also amends the laws governing the Job Creation Through Educational Opportunity Program as follows.
1. Current law requires that, by March 1, 2021, the Department of Administrative and Financial Services, Bureau of Revenue Services report on implementation of the educational opportunity tax credit. This amendment requires that this report include an analysis of the costs of the credits claimed and the impact of the program on job creation in the State.
2. It restores language that was removed by Public Law 2015, chapter 267 providing that, for a qualified individual claiming a credit for tax years beginning on or after January 1, 2013, the financial aid package may include financial aid obtained for up to 30 credit hours of course work at an accredited non-Maine community college, college or university earned prior to transfer to an accredited Maine community college, college or university, if the 30 credit hours were earned after December 31, 2007 and the transfer occurred after December 31, 2012.
3. It provides that a qualified individual may claim a credit if the individual received an associate or bachelor's degree from an accredited non-Maine community college, college or university after December 31, 2015, rather than after December 31, 2007.
4. It provides that a qualified individual may claim a credit if the individual received a graduate degree from an accredited Maine college or university after December 31, 2015, rather than after December 31, 2007.
5. It provides that the credit under the Job Creation Through Educational Opportunity Program is refundable to the extent the credit is based on loans included in the financial aid package acquired to obtain an associate degree.