An Act To Provide Funding for Incubators for Business Start-ups
Maine Legislature, Session 127, LD 1345
Committee: Labor, Commerce, Research and Economic Development
Sponsors: FECTEAU, DUTREMBLE, AUSTIN, EDGECOMB, GILBERT, GOLDEN, GROHMAN, HERBIG, MASTRACCIO, WARD
Amends: 5 MRSA §13100-A, 36 MRSA §2535, 36 MRSA §5206-H, 36 MRSA §5219-N

Legislative Document 
No. 1345 
H.P. 914 
House of Representatives, April 16, 2015 
An Act To Provide Funding for Incubators for Business Start-ups 
Reference to the Committee on Labor, Commerce, Research and Economic Development 
suggested and ordered printed. 
ROBERT B. HUNT 
Clerk 
Presented by Representative FECTEAU of Biddeford. 
Cosponsored by Senator DUTREMBLE of York and 
Representatives: AUSTIN of Gray, EDGECOMB of Fort Fairfield, GILBERT of Jay, 
GOLDEN of Lewiston, GROHMAN of Biddeford, HERBIG of Belfast, MASTRACCIO of 
Sanford, WARD of Dedham. 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1.  5 MRSA §13100-A is enacted to read: 
§13100-A.  Small Business Incubator Program 
1.  Program established.  The Small Business Incubator Program is established 
under the direction of the department to provide loans, loan guarantees and grants for the 
establishment, operation and administration of small business incubators. 
2.  Definitions.  As used in this section, unless the context otherwise indicates, the 
following terms have the following meanings. 
A.  "Incubator" means a program in which small units of space may be leased by a 
tenant and in which management maintains or provides access to business 
development services for use by tenants or a program without physical infrastructure 
in which participants access business development services to assist in the growth of 
their start-up small businesses. 
B.  "Local sponsor" means an organization that enters into a written agreement with 
the department to establish, operate and administer an incubator or to provide funding 
to an organization that operates an incubator. 
C.  "Participant" means a sole proprietorship, business partnership or corporation 
operating a business for profit through which the owner accesses business 
development services in an incubator. 
D.  "Tenant" means a sole proprietorship, business partnership or corporation 
operating a business for profit and leasing or otherwise occupying space in an 
incubator. 
3.  Applications.  A local sponsor may submit an application to the department to 
obtain a loan, loan guarantee or grant to establish an incubator.  An application must: 
A.  Demonstrate the plan for creating an incubator at a specified cost; 
B.  Demonstrate the ability to directly provide or arrange for the provision of business 
development services for tenants and participants in the incubator.  These services 
must include, but are not limited to, financial consulting assistance, management and 
marketing assistance, business education and physical services; 
C.  Demonstrate a potential for sustained use of the incubator by tenants and 
participants through a market study or other means; 
D.  Demonstrate the ability to manage and operate the incubator; and 
E.  Include information as the department may require by rule. 
4.  Criteria for awards.  The department shall review and accept applications for 
loans, loan guarantees and grants under this section based on the following criteria: 
A.  Ability of the local sponsor to carry out the provisions of this section; 
B.  Economic impact of the incubator on the community; 
C.  Conformance with regional and local economic development plans, if such plans 
exist; and 
D.  Proximity of the incubator to an accredited Maine community college, college or 
university, as defined in Title 20-A, section 12541, subsection 1. 
5.  Administration of loans, loan guarantees and grants.  The department shall 
administer loans, loan guarantees and grants according to this subsection. 
A.  Loans awarded or guaranteed and grants awarded under this section may be used 
only for the acquisition and leasing of land and existing buildings, the rehabilitation 
and renovation of buildings or other facilities, the purchase of equipment and 
furnishings that are necessary for the creation and operation of the incubator and 
business development services, including, but not limited to, business management 
advising and business education. 
B.  Loans, loan guarantees and grants awarded under this section may not exceed 
50% of total eligible project costs. 
C.  Payment of interest and principal on loans awarded under this section may be 
deferred at the discretion of the department. 
6.  Duties of local sponsor.  A local sponsor, or the organization receiving assistance 
through the local sponsor, in establishing and operating an incubator with assistance from 
the Small Business Incubator Program, shall: 
A.  Secure title on a facility for the incubator or a lease of a facility for the incubator; 
B.  Manage the physical development of the incubator, including the provision of 
common conference or meeting space; 
C.  Provide furnishings and equipment to the incubator to provide business services 
to the tenants and participants; 
D.  Market the incubator and secure tenants and participants; 
E.  Provide financial consulting, marketing and management assistance services or 
arrange for the provision of these services for tenants and participants, including 
assistance in accessing private financial markets; 
F.  Set rental and service fees that would be revenue for the municipality upon 
approval from the department; 
G.  Encourage the sharing of ideas between tenants and participants and otherwise aid 
the tenants and participants using innovative technology and facilities; 
H.  Establish policies and criteria for the acceptance of tenants and participants and 
for the termination of occupancy of tenants so as to maximize the opportunity to 
succeed for the greatest number of tenants; and 
I.  Submit annual reports to the department that include a financial statement for the 
incubator, a summary of the economic impact of the incubator on the local 
community and a list of companies in the incubator. 
7.  Administration of loans; evaluation of reports.  The department may make 
loans, loan guarantees and grants to local sponsors for incubators and must ensure that 
local sponsors receiving loans, loan guarantees or grants meet the conditions of this 
section.  The department shall receive and evaluate annual reports from local sponsors. 
8.  Conversion of loans to grants.  The department is authorized to review any 
previous loans made under the Small Business Incubator Program and, when appropriate, 
convert such loans to grant status. 
9.  Report.  Beginning January 1, 2016, the department shall annually provide a 
report to the Governor, the President of the Senate and the Speaker of the House of 
Representatives that must include, but is not limited to: 
A.  The number of applications for incubators submitted to the department; 
B.  The number of applications for incubators approved by the department; 
C.  The number of incubators created through the Small Business Incubator Program; 
D.  The numbers of tenants and participants engaged in each incubator; 
E.  The number of jobs provided by each incubator; 
F.  The occupancy rate of each incubator; and 
G.  The number of firms that have left incubators and that are operating in the State 
and the number of jobs they have provided. 
10.  Fund established.  The Maine Small Business Incubators Fund is established as 
a nonlapsing fund under the jurisdiction and control of the department.  The fund consists 
of all money that may be appropriated to it, money that has been paid back from loans 
and any gifts, contributions, grants or bequests received from federal, private or other 
sources. 
11.  Tax credit.  For any taxable year beginning after December 31, 2015, a 
taxpayer, including a charitable organization that is exempt from federal income tax and 
whose Maine unrelated business taxable income, if any, would be subject to the state 
income tax imposed under Title 36, Part 8, is entitled to a tax credit against any tax 
otherwise due under the provisions of Title 36, Part 8 and Title 36, chapter 357, excluding 
withholding tax imposed by Title 36, section 5250, in the amount of 50% of any amount 
contributed by the taxpayer to the Maine Small Business Incubators Fund during the 
taxpayer's tax year or any contribution by the taxpayer to a local sponsor after the local 
sponsor's application has been accepted and approved by the department. The tax credit 
allowed by this subsection must be claimed by the taxpayer at the time the taxpayer files 
the return and must be applied against the income tax liability imposed by Title 36, Part 
8, after all other credits provided by law have been applied.  That portion of a tax credit 
under this subsection that exceeds the taxpayer's tax liability may be carried forward for 
up to 5 years.  The aggregate of all tax credits authorized under this subsection may not 
exceed $500,000 in any taxable year. 
12.  Transfer of tax credits.  Notwithstanding any provision of law to the contrary, a 
taxpayer may sell, assign, exchange, convey or otherwise transfer tax credits allowed in 
subsection 11 under the terms and conditions prescribed in paragraphs A and B.  The 
taxpayer may sell, assign, exchange or otherwise transfer allowed tax credits: 
A.  For no less than 75% of the par value of such credits; and 
B.  In an amount not to exceed 100% of annual allowed credits.  The taxpayer 
acquiring allowed credits may use the acquired credits to offset up to 100% of the tax 
liabilities otherwise imposed by Title 36, excluding the withholding tax.  Unused 
credits in the hands of the assignee may be carried forward for up to 5 years.  The 
assignor shall enter into a written agreement with the assignee establishing the terms 
and conditions of the agreement and shall perfect such transfer by notifying the 
department in writing within 30 calendar days following the effective date of the 
transfer and shall provide any information as may be required by the department to 
administer and carry out the provisions of this subsection. The commissioner shall 
prescribe the method for submitting applications for claiming a tax credit transferred 
pursuant to this subsection and shall, if an application is approved, certify to the 
director of Maine Revenue Services that the taxpayer to whom the credit is 
transferred has satisfied all the requirements specified in this section and is eligible to 
claim the credit. 
13.  Rules.  The department may adopt rules and guidelines that are necessary for the 
implementation of this section.  Rules adopted pursuant to this subsection are routine 
technical rules pursuant to Title 5, chapter 375, subchapter 2-A. 
Sec. 2.  36 MRSA §2535 is enacted to read: 
§2535.  Small business incubator tax credit  
1.  Credit allowed.  A taxpayer that has made a contribution to a local sponsor under 
the Small Business Incubator Program pursuant to Title 5, section 13100-A, subsection 
is allowed a credit in the amount of 50% of the tax that would otherwise be due under 
this chapter upon premiums that are attributable to the Small Business Incubator Program 
pursuant to Title 5, section 13100-A. 
Sec. 3.  36 MRSA §5206-H is enacted to read: 
§5206-H.  Small business incubator tax credit 
1.  Credit allowed.  A taxpayer that has made a contribution to a local sponsor under 
the Small Business Incubator Program pursuant to Title 5, section 13100-A, subsection 
is allowed a credit in the amount of 50% of the tax that would otherwise be due under 
this chapter pursuant to Title 5, section 13100-A. 
Sec. 4.  36 MRSA §5219-NN is enacted to read: 
§5219-NN.  Small business incubator tax credit 
1.  Credit allowed.  A taxpayer is allowed a credit against the tax that would 
otherwise be due under this Part in the amount of 50% of any amount contributed by the 
taxpayer to the Maine Small Business Incubators Fund during the taxpayer's tax year or 
any contribution by the taxpayer to a local sponsor, as defined in Title 5, section 
13100-A, after the local sponsor's application has been accepted and approved by the 
Department of Economic and Community Development. 
SUMMARY 
This bill enacts the Small Business Incubator Program under the direction of the 
Department of Economic and Community Development to provide loans, loan guarantees 
and grants for the establishment, operation and administration of small business 
incubators in Maine.  It also establishes a small business incubator tax credit to provide 
incentives to Maine taxpayers to make contributions of private funds to be used to 
establish small business incubators.