An Act To Stimulate Capital Investment for Innovative Businesses in Maine
Maine Legislature, Session 124, LD 0001
Committee Amendment CA_A_S378 (Senate)
Amends: 10 MRSA §1026-T, 36 MRSA §5219-E

COMMITTEE AMENDMENT" Ii" to S.P. 10, L.D. I, 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 insel1ing the following: 
'Sec. 1. 5 MRS A §17057, sub-§4 is enacted to read: 
4. 
Investment activity information. 
Disclosure of investment activity of the 
retirement system, pursuant to the innovation finance program, is governed by this 
subsection. 
A. Documentmy material, data or information in the possession of the retirement 
system that consists of trade secrets or commercial or financial information that 
relates to the investments or potential investments of the retirement system pursuant 
to the innovation finance program under Title 10, section 1026-T is confidential and 
not open to public inspection and does not constitute "public records" as defined in 
Title 1, section 402, subsection 3 if, in the sole discretion of the retirement system, 
the disclosure of the material, data or information may: 
(1) 
Impair the retirement system's ability to obtain such material, data or 
information in the future; or 
(2) May cause substantial harm to the competitive position of the retirement 
system or of the person or entity from whom the information was obtained. 
8. The following information concerning any venture capital fund in which the 
retirement system is invested pursuant to the innovation finance progralTI under Title 
10, section 1026-T is not exempt from disclosure: 
(I) The retirement system's total commitment to the venture capital fund; 
(2) The date of the commitment to the venture capital fund; 
(3) Contributions and distributions made to or received from an innovation 
finance program fund; 
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COMMITrEE AMENDMENT "II" to S.P. 10, L.D. I 
(4) The market value of the investment; 
(5) The name of the venture capital fund; and 
(6) The interim internal rate of return of the venture capital fund. 
Sec. 2. 10 MRS A §963-A, sub-§47-D is enacted to read: 
47-D. Retirement system. "Retirement system" means the Maine Public Employees 
Retirement System, established pursuant to Title 5, chapter 421. 
Sec. 3. io MRSA §963-A, sub-§49-J is enacted to read: 
49-J. 
Targeted technologies. 
"Targeted technologies" means biotechnology, 
aquaculture and marine technology, composite materials technology, environmental 
technology, advanced technologies for forestry and agriculture, information technology 
and precision manufacturing technology. 
Sec. 4. 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 by improving access by innovative businesses in this 
State to venture capital funds. Investment performance of the program may be partially 
guaranteed by refundable tax credits issued by the authority to the retirement system. 
This section does not mandate or require any investment by the retirement system or give 
the retirement system any economic development responsibilities, its sole responsibility 
being to safeguard, invest and increase retirement system assets consistent with its 
fiduciary duty to its members. 
2. Investment goal; guidelines. The goal of the program is to attract more venture 
capital to innovative businesses in this State by providing the retirement system with an 
incentive to invest in high-quality venture capital funds that evidence both a commitment 
to seeking investments in the State and the ability to produce favorable returns to 
minimize the risk of tax credit redemption. Consistent with this investment goal, the 
retirement system may, in the exercise of its discretion and consistent with its fiduciaIY 
duties to the beneficiaries of the retirement system, apply to the authority, for approval 
under the program for proposed investments in venture capital funds. The authority may 
approve such a proposed venture capital fund investment under the program if it 
determines that the venture capital fund will give strong consideration to investing in 
businesses in this State that fall within the targeted technologies. In making this decision, 
the authority shall consider whether the venture capital fund: 
A. Will maintain at least a periodic presence in the State; 
B. 
Will build linkages to, and accept referrals from, at least some of the 
organizations promoting the State's innovation economy, including the authority, the 
Maine Technology Institute under Title 5, section 15302, the Srriall Enterprise 
Growth Fund under section 383, the DepaIiment of Economic and Community 
Development, the Maine Patent Program under section 1921, the University of Maine 
System and other venture capital investors within the State; 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT ,It "to S.P. 10, L.D. I 
C. Will actively prospect for investments in the State; 
D. Expresses a commitment to seek investments in businesses in this State that meet 
its investment criteria; and 
E. Demonstrates the ability to make successful venture capital investments. 
3. Investment restrictions. Investments under the program are governed by this 
su bsection. 
A. The retirement system may not invest directly in individual businesses under this 
program but may invest only in venture capital funds that are managed to best 
achieve the purpose set out under subsection 2. 
B. No more than $4,000,000 of tax credits may be placed at risk with respect to any 
single commitment to a venture capital fund. 
e. The retirement system may cooperate with the authority and other organizations 
promoting the State's innovation economy by encouraging participating venture 
capital funds to consider investments in this State consistent with their investment 
strategies. The retirement system may at any time be relieved of this obligation by 
releasing the State from its obligations under all outstanding tax credit cel1ificates 
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-EE to serve as partial security against a loss of capital under the program. 
Cel1ificates must be issued to expire no later than July I, 2028. 
A. Refundable tax credits as authorized by this subsection may be redeemed only as 
necessary to offset 80% of any realized loss of capital in the program; 
B. A cel1ificate 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, AI1icle J, Section 11 and the 
United States Constitution, AI1icle I, Section 10. Once issued, as long as the 
retirement system is not in default under its agreement with the authority with respect 
to any cel1ificate of tax credits, the cel1ificate 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 
Depal1ment of Administrative and Financial Services, Bureau of Revenue Services. 
The retirement system shall rep0l1 annually to the authority on the status and 
valuation of investments secured by the cel1ificate of tax credits and such other 
information as may be required pursuant to an agreement between the retirement 
system and the authority. 
The rep0l1 must include details of capital caIls and 
distributions. 
D. A refundable tax credit allowed pursuant to this section is not a security under 
Title 32, chapter 135. 
E. On the final liquidation of a venture capital fund for which a cel1ificate of tax 
credits has been issued, the retirement system shall notify the authority of termination 
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COMMITIEE AMENDMENT" A " 
to S.P. 10, L.D. I 
of the investment and certifY the amount of any loss. The authority may request such 
information or documentation from the retirement system as it determines reasonably 
necessary to confirm the amount of any loss and shall promptly cel1ifY any capital 
loss to the Department of Administrative and Financial Services, Bureau of Revenue 
. Services. Upon submission by the authority, the bureau shall redeem registered 
credits as necessary to pay 80% of the loss certified by the authority up to a 
maximum payment of $4,000,000 with respect to any single venture capital fund 
investment or an aggregate loss under the program of $20,000,000. For purposes of 
this subsection, "loss" means the total amount of investment by the retirement system 
into the venture capital fund less the total value of all distributions received by the 
retirement system from such venture capital fund, as determined by the authority. 
F. Nothing in this section may be construed to place the assets of the authority 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, and this section may not be construed to require or mandate 
the retirement system to make any investments under the program. 
G. The authority may charge the retirement system reasonable fees for the cost of 
implementing and administering the program and any tax credits authorized by this 
section, not to exceed the authority's out-of-pocket costs plus an annualized fee not to 
exceed I % of the outstanding balance of tax credits. In addition, the authority may 
assess a reasonable program fee from gains received by the retirement system from 
investments under the program. Any such fees are subject to the approval of the 
retirement system and the authority. 
Sec. 5. 36 MRSA §5219-EE is enacted to read: 
§5219-EE. 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, referred to in this section as "the retirement 
system," a refundable credit against the taxes imposed by this Part in an amount certified 
by the Finance Authority of Maine as equal either to $4,000,000 or 80% of any loss of 
capital sustained in the innovation finance program established under Title 10, section 
1026-T, whichever is less. Upon receipt of a cel1ification as provided in Title 10, section 
1026-T, subsection 4, paragraph E, the Department of Administrative and Financial 
Services, Bureau of Revenue Services shall pay the amount certified to the retirement 
system as provided in that subsection. 
2. Reimbursement by the retirement system. In the event that the retirement 
system incurs a loss and redeems a credit under this section and the retirement system 
subsequently achieves an aggregate return on all of its investments under the innovation 
finance program under Title 10, section 1026-T that exceeds an annualized retum of 8%, 
the retirement system shall reimburse the State in an amount equal to the total amount of 
credits paid to the retirement system under this section. 
3. Limitations. A credit under this section may not be redeemed for any loss 
occurring after July 1,2028. Pursuant to Title 10, section I 026-T, total credits redeemed 
may not exceed $20,000,000. 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT "A" to s.P. 10, L.D. I 
4. Audit. The State Tax Assessor may audit any transactions necessary to verity 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 16,2029.' 
SUMMARY 
This amendment is the majority repOli of the committee and it replaces the bill with a 
smaller initiative to encourage, but not require, the Maine Public Employees Retirement 
System to invest in venture capital funds that are seeking to invest in Maine businesses in 
the targeted technology sectors. 
The amendment establishes an innovation finance 
program authorizing the Finance Authority of Maine to approve refundable tax credits 
equal to up to 80% of celiain investments by the retirement system in venture capital 
funds that the authority determines will give strong consideration to investing in Maine 
businesses. 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 with respect to any single venture capital 
fund. The amendment includes a recapture provision where if the retirement system 
redeems a credit and subsequently achieves an aggregate annual return in excess of 8% 
on all investments under the program,it is required to return the excess to the State until 
it has reimbursed the credits redeemed. 
It also adds an exception from the laws 
governing public records by allowing the retirement system to protect the confidentiality 
of information that could impair the ability of the retirement system to obtain such 
information in the future or that could cause substantial harm to the retirement system or 
that could cause substantial harm to the venture capital funds into which the retirement 
system invests under the innovation finance program. 
FISCAL .\UTE HEQLlRED 
(See attached) 
COMMITTEE AMENDMENT 
Approved: 02/17/10 Mac. 
LD 1 
LR 258(04) 
An Act To Stimulate Capital Investment for Innovative Businesses in Maine 
Fiscal Note for Bill as Amended by Committee Amendment ~" 
Committee: Business, Research and Economic Development 
Fiscal Note Required: Yes 
Fiscal Note 
Potential future biennium cost increase - General Fund 
Fiscal Detail and Notes 
This bill authorizes the Finance Authority of Maine (FAME) to oversee a state innovation finance program allowing 
the Maine Public Employees Retirement System (MainePERS) to apply to FAME for approval of new investments in 
venture capital funds. FAME may issue refundable tax credits to MainePERS sufficient to offset 80% of the cost of 
any such investments in the event of realized losses in value. The timing and extent of any such losses will depend 
upon the extent of MainePERS pal1icipation in the program and the performance of any investments, with 
reimbursement for any such losses capped at a maximum of $20,000,000. No current biennium impact is anticipated. 
This legislation permits, but does not require, MainePERS to invest in cel1ain venture capital funds. IfMainePERS 
decides to participate, it is not expected to significantly affect administrative costs. 
FAME will not require additional General Fund appropriations to establish and administer the state innovation finance 
program due to the provisions in the bill that allow it to charge MainePERS fees for the costs of implementing and 
administering the program. 
LR0258(04) - Fiscal Note - Pagel of I 
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