An Act To Create Jobs and S_timulate Economic Development by Making Captive Insurers Eligible for Pine Tree Development Zone Benefits for 10 Years
Maine Legislature, Session 124, LD 1679
Committee: Busine
Sponsors: ALFOND, WATSON, DAMON, BECK, LEGG, PILON, STUCKEY
Amends: 36 MRSA §5219-W

MAINE STATE LEGISLATURE 
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124th 
INE EGISLATURE 
Legislative Document 
No. 1679 
S.P.651 
In Senate, January 6, 2010 
An Act To Create Jobs and S_timulate Economic Development by 
Making Captive Insurers Eligible for Pine Tree Development Zone 
Benefits for 10 Years 
(EMERGENCy) 
Approved for introduction by a majority of the Legislative Council pursuant to Joint Rule 
203. 
Reference to the Committee on Busine.ss, Research and Economic Development suggested 
and ordered printed. 
Presented by Senator ALFOND of Cumberland. 
Cosponsored by Representative WATSON of Bath and 
9t[J{J~ 
JOY 1. O'BRIEN 
Secretary of the Senate 
Senator: DAMON of Hancock, Representatives: BECK of Waterville, LEGG of Kennebunk, 
MacDONALD of Boothbay, PILON of Sa co, PlOTT! of Unity, STUCKEY of Portland. 
Printed on recycled paper 
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Emergency preamble. Whereas, acts and resolves of the Legislature do not 
become effective until 90 days after adjournment unless enacted as emergencies; and 
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Whereas, during the First Regular Session of the 124th Legislature, Public Law 
2009, chapter 335 was enacted to moderfiiz;e the State's insurance laws to encourage the 
formation of new captive insura~ce9ompanies in this State; and 
Whereas, this legislation would stimulate economic development by amending the 
" State!s tax laws to attract captive insurance companies to the State by making captive 
insurance companies eligible for Pine Tree Development Zone tax credits; and 
Whereas, in the judgment of the Legislature, these facts create an emergency within 
the meaning of the Constitution of Maine and require the following legislation as 
immediately necessary for the preservation of the public peace, health and safety; now, 
therefore," 
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Be it enacted by the People of the State of Maine as" follows: 
Sec. 1. 30-A MRSA §S2S0-I, sub-§8, as enacted by PL 2003, c. 688, Pt. D, §2: .Is 
amended to read: 
8. Financial services. "Financial services" means services provided by an insurance 
company subject to taxation under Title 36,chapter 357;" a captive insurance company 
" formed or licensed under Title 24-A, chapter 83; a financial institution subject to taxation 
under Title 36, chapter 819; or a mutual fund service provider as defined in Title 36, 
section 5212, subsection 1, paragraph E. 
Sec. 2. 30-A MRS A §S2S0-I, sUb-§21-A, as enacted by PL 2009, c. 461, §11, is 
amended to read: 
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21-A. Tier 1 location. 
"Tier 1 location" means a location designated by the 
departmerit to be eligible fof Pine Tre~ Development Zone benefits for a period of 10 
years. 
Notwithstanding any other provision of this subchapter, a captive insurance 
company formed or licensed under Title 24-A, chapter 83 whose principal place of 
business is located inthis State is deemed to be located in a tier 1 location for all purposes 
of this subchapter: 
Sec. 3. 30-A MRSA §S2S0-J, sulb-§3-A, as enacted -by PL 2009, c. 461; §17, is 
amended to read: 
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3-A. Pine Tree Development Zone classification;- tier 1 locations. Beginning 
January 1,2009, the,department shaH classify the foHowing units oflcical government on 
an annual basis as tier 1 locations: 
A. From January 1,2009 to December 31,2009, all units oflocal government; and 
B. Beginning January 1, 2010, a unit of local government that is contained in a 
county other than Cumberland County or York County, as well as a unit of local 
gove"rnment that is contained in Cumberland County or York County with a 
municipal unemployment rate that is 15% higher than its hibor market unemployment 
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rate, based upon data published by the Department of Labor from the last completed 
calendar year~; and 
C. Notwithstanding any other provision of this subchapter, beginning January 1, . 
2010, a captive insurance company formed or licensed under Title 24-A, chapter 83 
whose principal place of business is located in the State is deemed to be located in a 
tier 1 location for all purposes of this subchapter. 
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A unit of local government that has been designated by the department as a participating 
municipality in the Pine Tree Development Zone program as of December 31, 2008 will 
must be c1as~ified as a tier I location. . 
Property within a military redevelopment zone as long as is deemed to be located in a 
tier 1 location if the property is classified by the department no later than December 3 I , 
2018. 
Sec. 4. 36 MRSA §5219-W, sub-§l, as amended by PL 2005, c. 351, §13 and 
affected by §26, is further amended to read: 
1. Credit allowed. Except as provided by subse~tion 2, a taxpayer that is a qualified 
Pine Tree Development Zone business as defined in Title 30-A, section 5250-1, 
subsection 17 is allowed a credit in the amount of: 
. A. 
One hundred percent of the tax that would otherwise be due under this Part for 
each of the first 5 tax years beginning with the tax year in which the taxpayer 
commences its qualified. business activity, as defined in Title 30-A, section 5250-1, 
subsection 16; and 
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B. 
Fifty percent of the tax that would otherwise be due under this Part for each of 
·the 5 tax years following the time period in paragraph A.; and 
C. In the case of a qualified Pine Tree Development Zone business that is a captive 
insurance company formed or licensed under Title 24-A, chapter 83, 100% of the tax 
that would otherwise be due under this Part for the first 10 tax years beginning with 
the tax year in which the taxpayer commences its qualified business activity, as 
dermed in Title 30-A, section 5250-1, subsection 16. 
Sec. 5. 36MRSA §5219-W, sub-§4, as enacted by PL 2003, c. 451, Pt. NNN, §5 
and affected by §8, is amended to read; 
4. Limitation. The credit provided by this section may not be claimed for tax years 
beginning on or after January 1, ~ 
2029. 
Emergency clause. 
In view of the emergency cited in the preamble, this 
legislation takes effect when approved. 
SUMMARY 
This bill makes captive insurance companies located anywhere in the State eligible 
for Pine Tree Development Zone benefits for a IO-year period and provides for a 100% 
state income tax credit during that IO-year period. The bill also extends the availability 
of the income tax credit for all qualified Pine Tree Development Zone businesses for 10 
years until 2029. 
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