HP1037, LD 1424, item 1, An Act To Create an Access to Justice Income Tax Credit

An Act To Create an Access to Justice Income Tax Credit

Be it enacted by the People of the State of Maine as follows:

Sec. 1. 36 MRSA §191, sub-§2, ¶HHH is enacted to read:

HHH. The disclosure of information required to make the report required under section 5219-VV, subsection 5.

Sec. 2. 36 MRSA §5219-VV is enacted to read:

§ 5219-VV. Access to justice credit

1. Definitions. As used in this section, unless the context otherwise indicates, the following terms have the following meanings.

A. "Court" means the Supreme Judicial Court or its designee.

B. "Eligible attorney" means a person eligible to practice law in the State under Title 4, chapter 17 who, after January 1, 2020:

(1) Agrees to practice law in a private practice setting in an underserved area for at least 5 years by joining an existing legal practice, establishing a new legal practice or purchasing an existing legal practice;

(2) Is rostered by the Maine Commission on Indigent Legal Services to accept court appointments to represent clients in an underserved area;

(3) Agrees to perform pro bono legal services in an underserved area; and

(4) Is certified by the court under subsection 3 to be eligible for the credit under this section.

C. "Underserved area" means an area in the State that is determined by the court to be an area where there is insufficient access to legal services. When identifying underserved areas, the court shall take into consideration the ratio of the number of attorneys to the population.

2. Credit. Beginning with tax years beginning on or after January 1, 2020, an eligible attorney is allowed a credit for each taxable year, not to exceed $6,000, against the taxes due under this Part. The credit may be claimed in the first year that the eligible attorney meets the conditions of eligibility for at least 6 months and in each of the 4 subsequent years.

3. Eligibility limitation; certification. The court may certify up to 5 eligible attorneys in each year in 2020 through 2025. Additional attorneys may not be certified after 2025. The court shall annually, at year-end, verify that certified attorneys continue to be eligible for the credit under this section and shall decertify any attorney who ceases to meet the conditions of eligibility. The court shall notify the bureau whenever an attorney is certified or decertified. A decertified attorney ceases to be eligible for the credit under this section beginning with the tax year during which the attorney is decertified.

4. Rules. The court shall adopt rules to implement this section.

5. Report; review. By February 15, 2025, the assessor shall submit to the joint standing committee of the Legislature having jurisdiction over taxation matters a report that identifies the number of eligible attorneys claiming the credit under this section each year in which the credit is available and identifies the underserved areas where those attorneys practice. The committee shall review the report and determine the effectiveness of the credit in expanding legal services to underserved areas. The committee may submit legislation to the First Regular Session of the 132nd Legislature related to the report.

summary

This bill provides an income tax credit for 5 years for attorneys who practice law in the State and agree to practice for at least 5 years in an underserved area of the State as determined by the Supreme Judicial Court. Eligibility for the credit is open from 2020 through 2025. The court may certify up to 5 eligible attorneys each year. The joint standing committee of the Legislature having jurisdiction over taxation matters is directed to review the effectiveness of the credit and may submit legislation to extend or revise it.

HP1037 LD 1424	Session - 129th Maine Legislature		LR 1684 Item 1
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