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An Act To Provide a Tax Credit for High-quality Child Care Sites
Be it enacted by the People of the State of Maine as follows:
Sec. 1.  22 MRSA §4100, sub-§3  is enacted to read:
 
3.  Quality rating system.     The department shall establish a 4-step quality rating system for child care sites within which step one includes those child care sites that meet minimum licensing standards and step 4 includes those child care sites that provide the highest level of quality child care services, as defined in Title 36, section 5219-Q, subsection 1.
Sec. 2. 36 MRSA §5218, sub-§3, as amended by PL 2003, c. 391, §10, is further amended to read:
 
3. Quality child care services.   The credit provided by subsections 1, 2 and 2-A doubles in amountincreases as follows if the child care expenses were incurred through the use of quality child care services as defined in section 5219-Q, subsection 1.
 
A.  If child care services are provided at step 2 child care sites as rated under Title 22, section 4100, subsection 3, the credit increases to 30% of the federal credit.
 
B.  If child care services are provided at step 3 child care sites as rated under Title 22, section 4100, subsection 3, the credit increases to 38% of the federal credit.
 
C.  If child care services are provided at step 4 child care sites as rated under Title 22, section 4100, subsection 3, the credit increases to 50% of the federal credit.
Sec. 3. 36 MRSA §5218, sub-§4, as amended by PL 2003, c. 391, §10, is further amended to read:
 
4. Refund.   The credit allowed by this section may result in a refund of up to $500$1,000. In the case of a nonresident individual, the refundable portion of the credit may not exceed $500$1,000 multiplied by the ratio of the individual's Maine adjusted gross income, as defined in section 5102, subsection 1-C, paragraph B, to the individual's entire federal adjusted gross income, as modified by section 5122. In the case of an individual who files a return as a part-year resident in accordance with section 5224-A, the refundable portion of the credit may not exceed $500$1,000 multiplied by a ratio, the numerator of which is the individual's Maine adjusted gross income as defined in section 5102, subsection 1-C, paragraph A for that portion of the taxable year during which the individual was a resident plus the individual's Maine adjusted gross income as defined in section 5102, subsection 1-C, paragraph B for that portion of the taxable year during which the individual was a nonresident and the denominator of which is the individual's entire federal adjusted gross income, as modified by section 5122.
Sec. 4. 36 MRSA §5219-Q, sub-§1-A, as amended by PL 2005, c. 618, §13, is further amended to read:
 
1-A. Certification.   Upon application by an investor, the Department of Health and Human Services, Office of Child Care and Head Start shall certify if an investment in a child care site contributed significantly toward the ability of the child care site to improve its level of child care services toward the goal of providing quality child care services. The department shall send a list of taxpayers making certified investments in the previous year to the State Tax Assessor by February 1st annually. The department may not certify more that $50,000 in investments in a calendar year.
Sec. 5.  36 MRSA §5219-Q, sub-§2-A  is enacted to read:
 
2-A.  Fund contribution credit allowed.     A taxpayer that has made a contribution to a child care public-private partnership fund certified by the Department of Health and Human Services, Office of Child Care and Head Start is allowed a credit against the tax imposed by this Part in an amount equal to the qualifying portion of contributions made by the taxpayer as calculated pursuant to subsection 3.
Sec. 6. 36 MRSA §5219-Q, sub-§3, as amended by PL 1999, c. 708, §47, is further amended to read:
 
3. Qualifying portion.   For purposes of calculating the credit provided by this section, the qualifying portion is:
 
A. For a corporation, 30% of up to $30,000 of the total of expenditures and contributions as provided in subsections 2 and 2-A, apportioned if part of an affiliated group engaged in a unitary business; and
 
B. For an individual taxpayer, if the taxpayer expends or contributes as provided in subsections 2 and 2-A at least $10,000 in one year, $1,000 each year for 10 years and $10,000 at the end of the 10-year period.
Sec. 7. Application. This Act applies to tax years beginning on or after January 1, 2012.
 
SUMMARY
This bill amends the income tax credit for child and dependent care expenses to provide an enhanced credit if the services are provided at a child care site rated according to the level of quality by the Department of Health and Human Services. The bill also expands the income tax credit for quality child care investments to include contributions to a public-private partnership fund certified by the Department of Health and Human Services, Office of Child Care and Head Start and caps the amount of eligible investments that may be certified at $50,000 per year.