Sec. E-1. 5 MRSA §1518 is enacted to read:
§1518. Tax Relief Fund for Maine Residents
1. Tax Relief Fund for Maine Residents. There is created the Tax Relief Fund for Maine Residents, which must be used for the following purposes.
A. In the 1998-1999 biennium, all resources appropriated to the fund must be used to increase the personal exemption amount authorized pursuant to Title 36, section 5126. The State Tax Assessor shall annually determine the amount of the increase allowable rounded down to the nearest $50. If any increase is allowable, it is effective for the current taxable year and is incorporated into the income tax forms and instructions of the State Tax Assessor for that taxable year. Any increase pursuant to this section must be determined before the adjustment authorized in Title 36, section 5126. The adjustment otherwise required by this paragraph is not in effect for any taxable year in which the increase in the personal exemption for state income tax purposes would result in a personal exemption amount higher than that allowed for federal income tax purposes.
B. All resources transferred to the fund pursuant to subsection 2 must remain in the fund until the joint standing committee of the Legislature having jurisdiction over taxation matters makes recommendations to the Legislature on the method or methods to provide tax relief to citizens of the State utilizing all resources transferred to the Tax Relief Fund for Maine Residents.
2. Transfers to the Tax Relief Fund for Maine Residents. Notwithstanding any other provision of law, the State Controller shall transfer money to the Tax Relief Fund for Maine Residents as follows.
A. At the end of fiscal year 1996-97, the State Controller shall transfer from the unappropriated surplus of the General Fund to the Tax Relief Fund for Maine Residents 75% of the excess of total General Fund revenue received over accepted estimates for that fiscal year, except that, if 75% of the excess of total General Fund revenue received over accepted estimates is less than $10,000,000, then 100% of the excess of total General Fund revenue received over accepted estimates must be transferred to the Tax Relief Fund for Maine Residents. The remaining 25% of the excess revenue must be transferred to the Retirement Allowance Fund established in section 17251.
B. At the end of fiscal year 1997-98, the State Controller shall transfer to the Tax Relief Fund for Maine Residents all undedicated General Fund individual income tax revenue in excess of $724,428,622.
C. At the end of fiscal year 1998-99, the State Controller shall transfer to the Tax Relief Fund for Maine Residents all undedicated General Fund individual income tax revenue in excess of $758,621,653.
D. At the end of fiscal year 1999-2000 and each fiscal year thereafter, the State Controller shall transfer to the Tax Relief Fund for Maine Residents all undedicated General Fund individual income tax revenue in excess of the first accepted individual income tax revenue estimates for that fiscal year.
3. Nonlapsing fund. Any unexpended balance in the Tax Relief Fund for Maine Residents may not lapse, but must be carried forward to be used pursuant to subsection 1.
Sec. E-2. 36 MRSA §5126, as repealed and replaced by PL 1989, c. 878, Pt. D, §12, is amended to read:
A resident individual shall be is allowed $2,000 $2,100 for each exemption to which the individual is entitled for the taxable year for federal income tax purposes, unless the taxpayer is claimed as a dependent on another return. No additional exemption may be allowed for taxpayers over 65 years of age or blind. The nominal dollar amount of this section shall be is subject to annual adjustment under section 5403 pursuant to Title 5, section 1518.
For tax years beginning on or after January 1, 1999, the nominal dollar amount of this section is also subject to annual adjustment by multiplying it by the percentage adjustment factor defined in section 5402, subsection 2 and rounded down to the nearest $50. If any adjustment is made pursuant to this paragraph, it is effective for the current taxable year and is incorporated into the income tax forms and instructions of the State Tax Assessor for that taxable year.
Sec. E-3. Appropriation. The following funds are appropriated from the General Fund to carry out the purposes of this Part.
1997-98 1998-99
ADMINISTRATIVE AND FINANCIAL SERVICES, DEPARTMENT OF
Tax Relief Fund for Maine Residents
Unallocated $3,000,000 $3,000,000
Provides funds as an initial investment in the Tax Relief Fund for Maine Residents in accordance with the provisions of the Maine Revised Statutes, Title 5, section 1518, subsection 1, paragraph A to increase the personal exemption authorized pursuant to Title 36, section 5126.
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