Legislative Document No. 1200 S.P. 375 In Senate, March 12, 2019
An Act To Amend the Maine Seed Capital Tax Credit Program
(EMERGENCY)
Submitted by the Finance Authority of Maine pursuant to Joint Rule 204. Reference to the Committee on Taxation suggested and ordered printed.
DAREK M. GRANT Secretary of the Senate
Presented by Senator POULIOT of Kennebec. Cosponsored by Speaker GIDEON of Freeport and Senators: President JACKSON of Aroostook, SANBORN, H. of Cumberland, Representatives: BICKFORD of Auburn, STEWART of Presque Isle.
Printed on recycled paper 1 Emergency preamble. Whereas, acts and resolves of the Legislature do not 2 become effective until 90 days after adjournment unless enacted as emergencies; and
3 Whereas, the Maine Seed Capital Tax Credit Program promotes the growth of new 4 and existing small businesses in the State, which results in increased job opportunities for 5 Maine residents, produces more spending in the State and increases municipal tax bases; 6 and
7 Whereas, the total amount of tax credits available to investors is limited on a 8 calendar year basis; and
9 Whereas, for calendar year 2019, the limit has already been reached; and 10 Whereas, without an immediate increase in the limit on available tax credits, 11 investment in Maine businesses could suffer; and
12 Whereas, in the judgment of the Legislature, these facts create an emergency within 13 the meaning of the Constitution of Maine and require the following legislation as 14 immediately necessary for the preservation of the public peace, health and safety; now, 15 therefore,
16 Be it enacted by the People of the State of Maine as follows:
17 Sec. 1. 10 MRSA §1100-T, sub-§2, ¶¶A and B, as amended by PL 2013, c. 18 438, §3, are further amended to read: 19 A. For investments made in tax years beginning before January 1, 2012, a tax credit 20 certificate may be issued in an amount not more than 40% of the amount of cash 21 actually invested in an eligible Maine business in any calendar year or in an amount 22 not more than 60% of the amount of cash actually invested in any one calendar year 23 in an eligible Maine business located in a high-unemployment area, as determined by 24 rule by the authority. For investments made in tax years beginning on or after 25 January 1, 2012, a tax credit certificate may be issued to an investor other than a 26 private venture capital fund in an amount not more than 60% of the amount of cash 27 actually invested in an eligible Maine business in any calendar year. For investments 28 made in tax years beginning on or after January 1, 2014, a tax credit certificate may 29 be issued to an investor other than a private venture capital fund in an amount not 30 more than 50% of the amount of cash actually invested in an eligible Maine business 31 in any calendar year. For investments made after April 1, 2019, a tax credit 32 certificate may be issued to an investor other than a private venture capital fund in an 33 amount not more than 40% of the amount of cash actually invested in an eligible 34 Maine business in any calendar year. Rules adopted pursuant to this section are 35 routine technical rules as defined in Title 5, chapter 375, subchapter 2-A. 36 B. The Maine business must be determined by the authority to be a manufacturer or a 37 value-added natural resource enterprise; must provide a product or service that is sold 38 or rendered, or is projected to be sold or rendered, predominantly outside of the State, 39 while a majority of the employment associated with the creation and sale of the 40 product or the provision of services is within the State; must be engaged in the
Page 1 - 129LR1066(01)-1 1 development or application of advanced technologies; or must be certified as a visual 2 media production company under Title 5, section 13090-L. The business must certify 3 that the amount of the investment is necessary to allow the business to create or retain 4 jobs in the State. 5 Sec. 2. 10 MRSA §1100-T, sub-§2, ¶C, as amended by PL 2003, c. 451, Pt. E, 6 §2, is further amended to read: 7 C. Aggregate investment eligible for tax credits may not be more than $5,000,000 8 $3,500,000 for any one business as of the date of issuance of a tax credit certificate 9 and not more than $2,000,000 for any calendar year. 10 Sec. 3. 10 MRSA §1100-T, sub-§2-C, ¶A, as enacted by PL 2011, c. 454, §6, is 11 amended to read: 12 A. For investments made in tax years beginning on or after January 1, 2012, a tax 13 credit certificate may be issued to a private venture capital fund in an amount that is 14 not more than 50% of the amount of cash actually invested in an eligible business. 15 For investments made after April 1, 2019, a tax credit certificate may be issued to a 16 private venture capital fund in an amount that is not more than 40% of the amount of 17 cash actually invested in an eligible business. The tax credit certificate may be 18 revoked and the credit recaptured pursuant to Title 36, section 5216-B, subsection 5 19 to the extent that the authority determines that the eligible business for which the tax 20 credit certificate was issued moves substantially all of its operations and assets 21 outside of the State during the period ending 4 years after an investment, except in 22 the case of an arm's length, fair value acquisition approved by the authority. A 23 private venture capital fund that received the 20% credit certificate under subsection 24 2-A, paragraph A, subparagraph (2) for an investment is not eligible for a tax credit 25 certificate under this subsection for that investment. 26 Sec. 4. 10 MRSA §1100-T, sub-§2-C, ¶B, as amended by PL 2013, c. 438, §4, 27 is further amended to read: 28 B. As used in this subsection, unless the context otherwise indicates, "eligible 29 business" means a business located in the State that has certified that the amount of 30 the investment is necessary to allow the business to create or retain jobs in the State 31 and that, as determined by the authority: 32 (1) Is a manufacturer or a value-added natural resource enterprise; 33 (2) Is engaged in the development or application of advanced technologies; 34 (3) Provides a service that is sold or rendered, or is projected to be sold or 35 rendered, predominantly outside of the State, while a majority of the employment 36 associated with the creation and sale of the product or the provision of services is 37 within the State; or 38 (5) Is certified as a visual media production company under Title 5, section 39 13090-L. 40 Sec. 5. 10 MRSA §1100-T, sub-§2-C, ¶C, as enacted by PL 2011, c. 454, §6, is 41 amended to read:
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