‘Sec. 1. 36 MRSA §5219-HH is enacted to read:
§ 5219-HH. Small business health coverage credit
1. Definitions. As used in this section, unless the context otherwise indicates, the following terms have the following meanings.
A. "Health coverage" means a qualified health plan purchased through a small business health exchange established in this State pursuant to the federal Patient Protection and Affordable Care Act, Public Law 111-148, as amended by the federal Health Care and Education Reconciliation Act of 2010, Public Law 111-152, and any amendments to or regulations or guidance issued under those acts.
B. "Eligible business" means a business that employs at least 2 but not more than 50 full-time employees of whom at least 50% are eligible employees and that contributes at least 60% toward the cost of health coverage for each covered employee.
C. "Eligible employee" means a resident of the State whose average hourly wage from an eligible business is less than the State's average hourly wage as calculated by the Department of Labor.
2. Credit allowed. Subject to subsection 4, a taxpayer constituting an eligible business is allowed a credit against the tax imposed by this Part in an amount equal to the qualifying portion of expenditures paid and expenses incurred by the eligible business during the tax year for the purchase of health coverage.
3. Qualifying portion. For the purpose of calculating the credit provided by this section, the qualifying portion is 5% of up to $25,000 of expenditures paid and expenses incurred by an eligible business pursuant to subsection 2.
4. Qualification; phase in of credit. The credit allowed under this section is phased in based on the number of employees of an eligible business as follows:
A. For tax years beginning on or after January 1, 2014 and before January 1, 2015, the credit allowed is limited to an eligible business that employs at least 2 but not more than 10 full-time employees;
B. For tax years beginning on or after January 1, 2015 and before January 1, 2016, the credit allowed is limited to an eligible business that employs at least 2 but not more than 25 full-time employees; and
C. For tax years beginning on or after January 1, 2016, the credit allowed is available to any eligible business.
5. Limitation; carry-over. The credit provided by this section may not reduce the tax otherwise due under this Part to less than zero. Any unused portion of the credit may be carried over to the following year or years for a period not to exceed 2 years. The credit allowable under this section may not be carried back to prior years.
Sec. 2. Application. This Act applies to tax years beginning on or after January 1, 2014.’