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An Act To Simplify and Expand the Educational Opportunity Tax Credit
Emergency preamble. Whereas, acts and resolves of the Legislature do not become effective until 90 days after adjournment unless enacted as emergencies; and
Whereas,  this legislation allows eligible student loans that had been consolidated with ineligible loans to remain eligible for the educational opportunity tax credit beginning with tax year 2015; and
Whereas,  in the judgment of the Legislature, these facts create an emergency within the meaning of the Constitution of Maine and require the following legislation as immediately necessary for the preservation of the public peace, health and safety; now, therefore,
Be it enacted by the People of the State of Maine as follows:
Sec. 1. 36 MRSA §5217-D, sub-§1, ¶B-1, as amended by PL 2015, c. 300, Pt. A, §42 and amended by c. 328, §5, is repealed and the following enacted in its place:
 
B-1.  "Financial aid package" means financial aid obtained by a student for attendance at an accredited Maine community college, college or university. For purposes of a qualified individual claiming a credit under this section for tax years beginning on or after January 1, 2013 but before January 1, 2016 who is eligible for a credit under paragraph G, subparagraph (1), division (a), "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 (a-1), "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 (b), "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), "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, "financial aid package" may include financial aid obtained by a qualified employee for attendance at an accredited non-Maine community college, college or university. "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. 2. 36 MRSA §5217-D, sub-§1, ¶E, as amended by PL 2013, c. 525, §15, is further amended to read:
 
E. "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 associate or bachelor's degree was awarded by an accredited non-Maine community college, college or university.
 
For tax years beginning on or after January 1, 2016, "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 associate, bachelor's or graduate degree was awarded by an accredited non-Maine community college, college or university.
Sec. 3. 36 MRSA §5217-D, sub-§1, ¶G, as amended by PL 2015, c. 328, §6, 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. This division does not apply to tax years beginning after December 31, 2015;
 
(a-1) For tax years beginning on or after January 1, 2016, an associate or bachelor's degree from an accredited Maine community college, college or university after December 31, 2007 but before January 1, 2016, regardless of whether the individual earned credit hours of course work toward the degree outside the State;
 
(b) An associate or bachelor's degree from an accredited Maine or non-Maine community college, college or university after December 31, 2015; or
 
(c) A graduate degree from an accredited Maine college or university after December 31, 2015;
 
(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.; or
 
(c) For tax years beginning on or after January 1, 2016, at least part time in a position on a vessel at sea.
 
As used in this subparagraph, "deployed for military service" has the same meaning as in Title 26, section 814, subsection 1, paragraph A.
Sec. 4. 36 MRSA §5217-D, sub-§2, ¶B, as amended by PL 2015, c. 267, Pt. QQQ, §4 and affected by §6, is further amended to read:
 
B. A taxpayer may claim a credit based on loan payments actually made to a relevant lender or lenders under this section only with respect to loans that are part of the qualified individual's financial aid package and, for tax years beginning on or after January 1, 2015, only with respect to loan payment amounts paid by the taxpayer during that part of the taxable year that the qualified individual worked in this State. Payment of loan amounts in excess of the amounts due during the taxable year does not qualify for the credit. RefinancedFor tax years beginning before January 1, 2015, refinanced loans that are part of the qualified individual’s financial aid package are eligible for the credit under this section if the refinanced loans remain separate from other debt, including debt incurred in an educational program other than the degree program for which a credit is claimed under this section. For tax years beginning on or after January 1, 2015, refinanced loans or consolidated loans that are part of the qualified individual's financial aid package are eligible for the credit under this section if the refinanced loans or consolidated loans remain 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 loan payments does not affect eligibility for the credit under this section. For tax years beginning on or after January 1, 2015, 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. For tax years beginning on or after January 1, 2015, 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 in no case may this exception exceed 3 months during the Maine residency period of the taxable year.
Sec. 5. 36 MRSA §5217-D, sub-§5, as amended by PL 2013, c. 525, §15, is further amended to read:
 
5. 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 benchmark loan payment or the actual monthly loan payment made by the employer on the loans, whichever is less, 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. For tax years beginning on or after January 1, 2016, 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. 6. Appropriations and allocations. The following appropriations and allocations are made.
 
HISTORIC PRESERVATION COMMISSION, MAINE
 
Historic Preservation Commission 0036
 
Initiative: Reduces funding to reflect projected fiscal year 2015-16 All Other costs for the Historic Preservation Commission program.

GENERAL FUND	2015-16	2016-17	
All Other	($200,000)	$0	
			
GENERAL FUND TOTAL	($200,000)	$0	

HISTORIC PRESERVATION COMMISSION, MAINE			
DEPARTMENT TOTALS	2015-16	2016-17	
			
GENERAL FUND	($200,000)	$0	
			
DEPARTMENT TOTAL - ALL FUNDS	($200,000)	$0	

TREASURER OF STATE, OFFICE OF
 
Debt Service - Treasury 0021
 
Initiative: Reduces funding for debt service costs.

GENERAL FUND	2015-16	2016-17	
All Other	($219,500)	$0	
			
GENERAL FUND TOTAL	($219,500)	$0	

TREASURER OF STATE, OFFICE OF			
DEPARTMENT TOTALS	2015-16	2016-17	
			
GENERAL FUND	($219,500)	$0	
			
DEPARTMENT TOTAL - ALL FUNDS	($219,500)	$0	

SECTION TOTALS	2015-16	2016-17	
			
GENERAL FUND	($419,500)	$0	
			
SECTION TOTAL - ALL FUNDS	($419,500)	$0	
 
Emergency clause.  In view of the emergency cited in the preamble, this legislation takes effect when approved.
 
Effective 90 days following adjournment of the 127th Legislature, Second Regular Session, unless otherwise indicated.