Sec. 1. 36 MRSA §5111-C is enacted to read:

§5111-C.__Income tax rate adjustment

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

A.__"Revenue projection" means the projection of General Fund revenue for the current fiscal year made by the Revenue Forecasting Committee, as established in Title 5, section 1710-E, for purposes of its December 1st report.

2.__Determination by State Budget Officer.__On September 1st annually, the State Budget Officer shall determine the amount, if any, by which General Fund revenue for the previous fiscal year exceeded the revenue projection for that year.

3.__Adjustment to rates.__If the State Budget Officer determines under subsection 2 that General Fund revenue for the previous fiscal year exceeded the revenue projection for that year by more than 5%, the State Tax Assessor shall reduce the tax rates specified in section 5111 by the same proportion that the General Fund revenue for the fiscal year exceeds 105% of the revenue projection.__The rates determined under this subsection apply to tax years beginning in the calendar year in which the adjustment is made.

SUMMARY

This bill proposes to reduce income tax rates if General Fund revenues for the previous fiscal year exceeded the December 1st projections for that fiscal year by more than 5%. Income tax rates would be reduced by the proportion by which General Fund revenues exceeded 105% of revenue projections.