An Act To Stimulate Capital Investment for Innovative Businesses in Maine
Maine Legislature, Session 124, LD 0001
Senate Amendment SA_A_S309 (Senate)
Amends: 10 MRSA §382, 10 MRSA §383, 10 MRSA §1026-T, 36 MRSA §5219-G

SENATE AMENDMENT" A " to S.P. 10, L.D. 1, Bill, "An Act To Stimulate 
Capital Investment for Innovative Businesses in Maine" 
Amend the bill by striking out everything after the enacting clause and before the 
summary and inserting the following: 
'PART A 
Sec. A-I. 10 MRS A §963-A, sub-§47-D is enacted to read: 
47-D. 
Retirement system. 
Employees Retirement System. 
"Retirement system" means the Maine Public 
Sec. A-2. 10 MRS A §1026-N, sub-§l-A is enacted to read: 
I-A. Loans from the retirement system. The retirement system may lend up to 
$10,000,000 to the fund upon the following terms. 
A. The term of any loan may not exceed 15 years. Payments of principal may be 
deferred for up to 6 years or for such shorter period as the authority and the 
retirement system may agree. 
B. 
A portion of the loan may be set aside in a reserve for interest payments on the 
loan. 
C. To secure its loans, the retirement system may have a first security interest in all 
assets of the fund. All distributions received by the authority on investments from the 
fund must be applied first to pay down the outstanding balance of loans from the 
retirement system. 
D. The authority may agree to share with the retirement system up to 20% of profits 
on fund investments after all refundable tax credits have either expired or been 
released by the retirement system. 
E. If assets of the fund are inadequate to repay a loan from the retirement system in 
accordance with its terms, the retirement system may redeem refundable tax credits in 
accordance with subsection I-B. 
Sec. A-3. 10 MRS A §1026-N, sub-§l-B is enacted to read: 
Page I - 1 24LR0258(03)-1 
SENA TE AMENDMENT 
SENATE AMENDMENT "A ,. to S.P. 10, L.D. I 
I-B. 
Refundable tax credits. 
As provided by Title 36, section 5219-EE, the 
authority may issue to the retirement system certificates for up to $10,000,000 in 
refundable tax credits as follows. 
A. Refundable tax credits authorized by this subsection may be redeemed only as 
necessary to cure default in scheduled payments of interest or principal on debt owed 
to the retirement system to capitalize the fund. The rate of return, whether fixed or 
variable. must be determined by a formula stipulated in the certificate issued as 
security. Refundable tax credits may not be redeemed prior to July 1, 2014 nor after 
June 30, 2031. No more than $2,500.000 of credits may be redeemed per fiscal year. 
B. A certificate of tax credits issued under this subsection is binding on the State and 
constitutes a solemn contractual commitment of the State protected under the contract 
clauses of the Constitution of Maine, Article I, Section 11 and the United States 
Constitution, Article I, Section 10. Once funds secured by a certificate are borrowed, 
the certificate may not be modified, terminated or rescinded until the underlying debt 
is paid or the certificate expires, is redeemed or is released by the retirement system. 
C. The' authority shall register each refundable tax credit with the Department of 
Administrative and Financial Services, Bureau of Revenue Services and shalI report 
annually on the extent to which each credit has been extinguished through payment of 
interest and principal on the underlying debt. 
D. The refundable tax credits allowed by this section are not securities under Title 
32, chapter 135. 
E. The authority shall certify any lending default immediately to the Department of 
Administrative and Financial Services, Bureau of Revenue Services, which shall 
verify the amount of the default and redeem registered credits as necessary to cure the 
default. 
F. 
All obligations created under this subsection must be paid exclusively from 
investments in the fund or by redemption of refundable tax credits. No other public 
assets and no other assets of the authority may be placed at risk. Except for those 
rights that relate to refundable tax credits, nothing in this section may be construed to 
create an obligation of the State or of any political subdivision of the State. 
Sec. A-4. 36 MRSA §S219-EE is enacted to read: 
§5219-EE. Maine Economic Development Venture Capital Revolving Investment 
Program refundable tax credit 
1. Credit allowed. The Maine Public Employees Retirement System in its capacity 
as lender to the Maine Economic Development Venture Capital Revolving Investment 
Program, referred to in this section as "the program" and established in Title 10, section 
1026-N, is allowed a refundable credit against the taxes imposed by this Part in an 
amount certified by the Finance Authority of Maine as necessary to cure default in 
scheduled payments on debt owed by the program to the retirement system. 
2. Transferability. Credits authorized by this section are transferable and may be 
redeemed by any transferee of the Maine Public Employees Retirement System. 
SENATE AMENDMENT 
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SENATE AMENDMENT .. A 
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3. Limitations. 
Refundable tax credits may not be redeemed prior to July 1,2014 
nor after June 30, 2034. No more than $2,500,000 of credits may be redeemed per fiscal 
year. 
Pursuant to Title 10, section 1026-N, total credits redeemed may not exceed 
$10,000,000. 
4. Audit. The State Tax Assessor may audit any transactions necessary to verifY the 
amount of credits claimed or redeemed under this section. If the assessor determines that 
a credit larger than that authorized by this section has been received, the assessor may 
enforce repayment of the overpayment by assessment pursuant to the provisions of 
chapter 7 or may apply the overpayment against subsequent redemptions made pursuant 
to this section. 
S. Repeal. This section is repealed April 16, 2035. 
PARTB 
Sec. B-1. 10 MRSA §382, sub-§I-A is enacted to read: 
I-A. Authority. "Authority" means the Finance Authority of Maine. 
Sec. B-2. 10 MRSA §382, sub-§5 is enacted to read: 
S. Retirement system. 
"Retirement system" means the Maine Public Employees 
Retirement System. 
Sec. B-3. 10 MRSA §383, sub-§3 is enacted to read: 
3. Loans from the retirement system. The retirement system may lend up to 
$5,000,000 to the fund upon the following terms. 
A. The term of any loan may not exceed 15 years. Payments of principal may be 
deferred for up to 6 years or for such shorter period as the board and the retirement 
system may agree. 
B. A portion of the loan may be set aside in a reserve for interest payments on the 
loan. 
C. To secure its loans, the retirement system may have a first security interest in all 
assets of the fund. All distributions received by the board on investments from the 
fund must be applied first to pay down the outstanding balance on loans from the 
retirement system. 
D. The board may agree to share with the retirement system up to 20% of profits on 
fund investments after all refundable tax credits have either expired or been released 
by the retirement system. 
E. If assets of the fund are inadequate to repay a loan from the retirement system in 
accordance with its terms, the retirement system may redeem refundable tax credits in 
accordance with subsection 4. 
Sec. B-4. 10 MRS A §383, sub-§4 is enacted to read: 
SENATE AMENDMENT 
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SENATE AMENDMENT +1- "to S.P. 10, L.D. 1 
4. Refundable tax credits. As provided by Title 36, section 5219-FF, the authority 
may issue to the retirement system certificates for up to $5,000,000 in refundable tax 
credits as follows. 
A. Refundable tax credits authorized by this subsection may be redeemed only as 
necessary to cure a default in scheduled payments of interest or principal on debt 
owed to the retirement system to capitalize the fund. The rate of return, whether fixed 
or variable, must be determined by a formula stipulated in the certificate issued as 
security. Refundable tax credits may not be redeemed prior to July 1, 2014 nor after 
June 30, 2031. No more than $2,500,000 of credits may be redeemed per fiscal year. 
B. A certificate of tax credits issued under this subsection is binding on the State and 
constitutes a solemn contractual commitment of the State protected under the contract 
clauses of the Constitution of Maine, Article I, Section 11 and the United States 
Constitution, Article I, Section 10. Once funds secured by a certificate are borrowed, 
the certificate may not be modified, terminated or rescinded until the underlying debt 
is paid or the certificate expires, is redeemed or is released by the retirement system. 
C. The. authority shall register each refundable tax credit with the Department of 
Administrative and Financial Services, Bureau of Revenue Services and shall report 
annually on the extent to which each credit has been extinguished through payment of 
interest and principal on the underlying debt. 
D. The refundable tax credits allowed by this section are not securities under Title 
32, chapter 135. 
E. The authority and the board shall certify any lending default immediately to the 
Department of Administrative and Financial Services, Bureau of Revenue Services, 
which shall verify the amount of the default and redeem registered credits as 
necessary to cure the default. 
F. 
All obligations created under this subsection must be paid exclusively from 
investments in the fund or by redemption of refundable tax credits. No other public 
assets and no other assets of the authority or the board may be placed at risk. Except 
for those rights that relate to refundable tax credits, nothing in this section may be 
construed to create an obligation of the State or of any political subdivision of the 
State. 
Sec. B-S. 36 MRSA §S219-FF is enacted to read: 
§5219-FF. Small Enterprise Growth Fund refundable tax credit 
1. Credit allowed. The Maine Public Employees Retirement System in its capacity 
as lender to the Small Enterprise Growth Fund, referred to in this section as "the fund" 
and established in Title 10, section 383, is allowed a refundable credit against the taxes 
imposed by this Part in an amount certified by the Finance Authority of Maine as 
necessary to cure default in scheduled payments on debt owed by the fund to the 
retirement system. 
2. Transferability. Credits authorized by this section are transferable and may be 
redeemed by any transferee of the Maine Public Employees Retirement System. 
SENATE AMENDMENT 
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SENATE AMENDMENT "ff., to S,P. 10, L.D. I 
3. Limitations. Refundable tax credits may not be redeemed prior to July 1, 2014 
nor after June 30, 2034. No more than $2,500,000 of credits may be redeemed per fiscal 
year. 
Pursuant to Title 10, section 383, total credits redeemed may not exceed 
$5,000,000. 
4. Audit. The State Tax Assessor may audit any transactions necessary to verify the 
amount of credits claimed or redeemed under this section. If the assessor determines that 
a credit larger than that authorized by this section has been received, the assessor may 
enforce repayment of the overpayment by assessment pursuant to the provisions of 
chapter 7 or may apply the overpayment against subsequent redemptions made pursuant 
to this section. 
5. Repeal. This section is repealed April 16, 2035. 
PART C 
Sec. C-l. 10 MRSA §1026-T is enacted to read: 
§1026-T. Innovation finance program 
1. Established. The authority may create and oversee a state innovation finance 
program, referred to in this section as "the program," to increase the supply of venture 
capital to the economy of the State. Investment performance of the program may be 
partially guaranteed by refundable tax credits issued by the authority to the retirement 
system. 
2. Investment goals; guidelines. The purpose of the program is to provide the 
retirement system with an incentive to invest in a series of high-quality venture capital 
funds oriented toward the state economy and managed with the goal of producing a 
favorable aggregate return among diversified investments while minimizing the risk of 
tax credit redemption. Consistent with these investment goals, the retirement system shall 
select, with the approval of the authority, fund managers whose strategies include: 
A. Maintaining at least a periodic presence in the State; 
B. 
Building links to organizations promoting the State's innovation economy 
including the Maine Technology Institute, the Small Enterprise Growth Fund, the 
Department of Economic and Community Development, the Maine Patent Program, 
the University of Maine System and other venture capital investors within the State; 
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C. Actively prospecting for investments in the State; 
D. Creating or retaining jobs in the State; and 
E. Bringing to fruition the ideas, technologies and intellectual property produced by 
citizens and institutions of the State. 
3. Investment restrictions. Investments under the program are governed by this 
subsection. 
A. The retirement system may not invest directly in individual businesses but may 
invest only in venture capital funds that are managed to best achieve the goals of 
subsection 2. 
SENATE AMENDMENT 
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SENATE AMENDMENT" ~"to S.P. 10, L.D. I 
B. No more than $4,000,000 of tax credits may be placed at risk within any single 
venture capital fund. 
C. The retirement system may at any time be relieved of investment restrictions by 
releasing the State from its obligations under all outstanding tax credit certificates 
issued under the program. 
4. 
Refundable tax credits. The authority may issue to the retirement system 
certificates of up to $20,000,000 in refundable tax credits as provided by Title 36, section 
5219-GG to serve as partial security against a loss of capital under the program. 
Certificates must be issued to expire on a valuation date that is no later than July 1, 2027. 
A. Refundable tax credits as authorized by this subsection may be redeemed only as 
necessary to offset 80% of any loss of capital in the program as appraised on the 
valuation date. 
B. A certificate of tax credits issued by the authority under this section is binding on 
the State and constitutes a solemn contractual commitment of the State protected 
under the contract clauses of the Constitution of Maine, Article J, Section 11 and the 
United States Constitution, Article J, Section 10. Once issued, the certificate may not 
be modified, terminated or rescinded until the certificate expires, is redeemed or is 
released by the retirement system. 
C. The authority shall register each refundable tax credit under this section with the 
Department of Administrative and Financial Services, Bureau of Revenue Services. 
The retirement system shall report annually to the authority on the state of 
investments secured by the certificate pursuant to an agreement between the 
retirement system and the authority. 
D. Any refundable tax credit allowed pursuant to this section is not a security under 
Title 32, chapter 135. 
E. On the valuation date identified in the certificate, the authority shall appraise the 
value of investments made under the program and immediately certify any capital 
loss to the Department of Administrative and Financial Services, Bureau of Revenue 
Services. The bureau shall redeem registered credits as necessary to pay 80% of the 
loss up to a maximum payment of $20,000,000. 
F. No assets of the authority are placed at risk by this section. Except for those rights 
that relate to refundable tax credits, nothing in this section may be construed to create 
an obligation of the State or of any political subdivision of the State. 
G. The authority may charge the retirement system reasonable fees for the cost of 
administering any tax credits authorized by this section. 
Sec. C-2. 36 MRSA §5219-GG is enacted to read: 
§5219-GG. Maine Public Employees Retirement System innovation finance credit 
1. Credit allowed. The Finance Authority of Maine is authorized to issue to the 
Maine Public Employees Retirement System a refundable credit against the taxes 
imposed by this Part in an amount certified by the Finance Authority of Maine as equal to 
80% of any loss of capital sustained in the innovation finance program established under 
SENATE AMENDMENT 
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SENATE AMENDMENT "A" to S.P. 10, L.D. I 
Title 10, section 1026-T. The loss of capital must be calculated as of the valuation date 
denominated in the certificate authorizing the credit. The valuation date may be no later 
than July 1,2027. 
2. Transferability. Credits authorized by this section are transferable and may be 
redeemed by any transferee of the Maine Public Employees Retirement System. 
3. Limitations. A credit under this section may not be redeemed for any loss 
occurring after July 1, 2027. Pursuant to Title 10, section 1026-T, total credits redeemed 
may not exceed $20,000,000. 
4. Audit. The State Tax Assessor may audit any transactions necessary to verify the 
amount of credits claimed or redeemed under this section. If the assessor determines that 
a credit larger than that authorized by this section has been received, the assessor may 
enforce repayment of the overpayment by assessment pursuant to the provisions of 
chapter 7 or may apply the overpayment against subsequent redemptions made pursuant 
to this section. 
5. Repeal. This section is repealed April 16, 2028. 
PARTD 
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Sec. D-l. Appropriations and allocations. The following appropriations and 
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allocations are made. 
FINANCE AUTHORITY OF MAINE 
Finance Authority of Maine 0582 
Initiative: Provides one-time funds for the costs associated with rulemaking and 
programming costs associated with providing incentives for the Maine Public Employees 
Retirement System to use its assets for economic development in the State. 
GENERAL FUND 
All Other 
GENERAL FUND TOTAL 
SUMMARY 
2009-10 
$7,500 
$7,500 
2010-11 
$0 
$0 
This amendment replaces the Maine Fund of Funds proposed in the bill with 3 
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smaller initiatives to encourage the use of assets of the Maine Public Employees 
Retirement System for economic development in the State. 
Part A, which establishes a secured loan of up to $10,000,000 from the retirement 
system to the Maine Economic Development Venture Capital Revolving Investment 
Program administered by the Finance Authority of Maine, creates an incentive for the 
retirement system to loan up to $10,000,000 to the program. Amounts loaned by the 
retirement system are secured by assets of the Maine Economic Development Venture 
Capitol Revolving Investment Program Fund and by refundable tax credits issued by the 
SENATE AMENDMENT 
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SENATE AMENDMENT "A" to S.P. 10, L.D. 1 
Finance Authority of Maine. Tax credits may be redeemed from the Department of 
Administrative and Financial Services, Maine Revenue Services in future years in the 
event of default on payment of interest or principal. The Finance Authority of Maine 
may agree to share with the retirement system up to 20% of the profits from the venture 
capital investments. 
Part B, which establishes a secured loan of up to $5,000,000 from the retirement 
system to the Small Enterprise Growth Fund, creates an incentive for the retirement 
system to loan up to $5,000,000 to the fund. Amounts loaned are secured by assets of the 
fund and by refundable tax credits issued by the Finance Authority of Maine. Tax credits 
may be redeemed from Maine Revenue Services in future years in the event of default on 
payment of interest or principal. The fund may agree to share with the retirement system 
up to 20% of the profits from the venture capital investments. 
Part C, which establishes an innovation finance program authorizing the Finance 
Authority of Maine to guarantee up to 80% of certain investments by the retirement 
system in Maine-connected venture capital funds, authorizes the Finance Authority of 
Maine to issue refundable tax credits to guarantee up to 80% of any investments made by 
the retirement system in venture capital funds whose strategies include meeting 5 criteria 
for strong connections to the Maine economy. Tax credits under this program are limited 
to $20,000,000. No more than $4,000,000 of tax credits may be placed at risk within any 
single venture capital fund. 
Part D adds an appropriations and allocations section. 
FISCAL NOTE REQUIRED 
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SPONSORED BY: 
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(Senator MILLS, P.) 
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COUNTY: Somerset 
SENATE AMENDMENT 
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Approved: 06/05/09 Mac 
LD 1 
LR 258(03) 
An Act To Stimulate Capital Investment for Innovative Businesses in Maine 
Fiscal Note for Senate Amendment ,~" 
Sponsor: Sen. Mills of Somerset 
Fiscal Note Required: Yes 
Fiscal Note 
Reduces Contingent Liability - General Fund 
Removes potential revenue increase - General Fund 
2009-10 
2010-11 
Projections 
2011-12 
Projections 
2012-13 
Net Cost (Savings) 
General Fund 
$7,500 
$0 
$0 
$0 
Appropriations/Allocations 
General Fund 
Fiscal Detail and Notes 
$7,500 
$0 
$0 
$0 
This amendment replaces the Maine Fund of Funds and creates the Maine Economic Development Venture Capital 
Revolving Investment Program, the Small Enterprise Growth Program and the Innovation Finance Program, all with 
the purpose of increasing the availability of venture capital to the economy of the State. Each fund will raise capital 
by offering as security up to $35,000,000 in refundable tax credits, a reduction of tax credits from the original bill 
limit of $80,000,00. No more than $25,000,000 of credits may be redeemed in any single calendar year and the 
highest potential General Fund loss (worst case scenario) in a fiscal year would be $30,000,000 if the credits 
redeemed in two calendar years ($25,000,000 in one year and $5,000,000 the next) are redeemed in the same fiscal 
year. Tax credits under the Economic Development Venture Capital Revolving Investment Program and the Small 
Enterprise Growth Program may not be redeemed before July 1,2014. The Innovation Finance Program has no date 
on which the tax credits may first be redeemed and the maximum exposure in that program is $20,000,000. 
Language in the original bill indicating the General Fund had some potential to benefit has been removed. 
This amendment includes a one-time General Fund appropriation of $7,500 to the Finance Authority of Maine 
(FAME) for the costs associated with rulemaking and initial programming to create incentives to encourage the Maine 
Public Employees Retirement System to use its assets for economic development in the State. This fiscal note 
assumes that the ongoing administrative costs to FAME will be paid either through fees charged by FAME or through 
amounts available in the Small Enterprise Growth Fund pursuant to the Maine Revised Statutes, Title 10, §383, sub-
§2. 
LR0258(03) - Fiscal Note - Page 1 of 1