An Act To Increase Allowed Investments under the Maine New Markets Capital Investment Program
Maine Legislature, Session 127, LD 0297
Committee Amendment CA_B-SA_A_S308 (Senate)
Amends: 36 MRSA §5219, 36 MRSA §5219-H

SENATE AMENDMENT" A "to COMMITTEE AMENDMENT "B" to S.P. 112, 
L.D. 297, Bill, "An Act To Increase Allowed Investments under the Maine New Markets 
Capital Investment Program" 
Amend the amendment by inserting after section 3 the following: 
'Sec. 4. 36 MRSA §5219~HH, sub~§l, ~B~l is enacted to read: 
B-l. 
"Capital at risk" means the estimated amount of a qualified low-income 
community investment in a qualified active low-income community business, 
excluding any fees charged to an investor, lender or bOlTower, that does not include 
any related transactions or ownership interests that reduce, mitigate or offset the 
comprehensive risk to a person eligible to claim a tax credit under this section for a 
qualified equity investment under Title 10, section 11 OO-Z.' 
Amend the amendment by inserting after section 4 the following: 
'Sec. 5. 36 MRSA §5219-HH, sub~§l, ~(is enacted to read: 
K. "Sham transaction"· means any business transactions by an entity that invested 
under this section, or by a person eligible to claim a tax credit under this section for a 
qualified equity investment under Title 10, section 1100-Z, if the business 
transactions giving rise to the investment and the cOlTesponding tax credits authorized 
under this section are determined by the State Tax Assessor to have achieved a result 
that is inconsistent with the purpose of the Maine New Markets Capital Investment 
Program under Title 10, section 1100-Z and its implementing lUles or of the credit 
authorized under this section and rules adopted under this section. 
Sec. 6. 36 MRSA §5219~HH, sub~§8 is enacted to read: 
8. Recapture of credits associated with sham transaction. Notwithstanding the 
federal recapture provisions under the Code, Section 45D or any other provisions of this 
section, the State Tax Assessor shall recapture any tax credits issued under this section 
that the State Tax Assessor determines to be connected with a sham transaction, including 
but not limited to any fees charged by a qualified community development entity to an 
investor, lender or bOlTower under the Maine New Markets Capita,! Investment Program 
under Title 10, section 1100-Z using the tax credit under this section. The State Tax 
SENA TE AMENDMENT 
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SENATE AMENDMENT" A "to COMlvfITTEE AMENDMENT "B" to S.P. 112, L.D. 297 
Assessor shall consider the following factors when making the determination of a sham 
transaction under this section: 
A. Whether the qualified low-income community investment had sufficient capital at 
risk as demonstrated by either a qualified equity investment or a loan with a 7-year 
mahlrity date that is equal to or greater than the amount a f the claimed investment: 
B. Whether the capital at risk in the qualified low-income community investment 
was used to purchase ownership interests from existing investors instead of directly 
from the qualified active low-income community business through the issuance of 
new stock: and 
C. Whether the capital at risk in the qualified low-income community investment 
was used to refinance existing loans of the qualified active low-income community 
business instead of providing new capital to the business to support its operations.' 
Amend the amendment by inserting after section 5 the following; 
'Sec. 6. Appropriations and allocations. 
The following appropriations and 
allocations are made. 
FINANCE AUTHORITY OF MAINE 
Finance Authority of Maine 0582 
Initiative: Provides funds for the additional costs associated with the State Tax Assessor 
review of sham transactions. 
GENERAL FUND 
All Other 
GENERAL FUND TOTAL 
2015-16 
$10,000 
$10,000 
2016-17 
$10,000 
$10,000 
Amend the amendment by relettering or renumbering any nonconsecutive Pali letter 
or section number to read consecutively. 
SUMMARY 
1. This amendment adds new definitions of "sham transaction" and "capital at risk II 
2. It requires the State Tax Assessor to recapture new markets capital investment 
credits issued that are determined to be connected with a sham transaction, including fees 
charged by an entity to an investor, lender or borrower under the Maine New Markets 
Capital Investment Program under the Maine Revised Statutes, Title 10, section l100-Z 
using the tax credit. 
SENA TE AMENDMENT 
SENATE AMENDMENT" A "to COMMITTEE AMENDMENT "8" to S.P. 112, L.D. 297 
3, It adds an appropriations and allocations section to the amendment. 
FISCAL NOTE REQUIRED 
(See attached) 
SPONSORED BY: 
~;;(; rf5M 
(Senator P A TRICKV 
COUNTY: Oxford 
SENA TE AMENDMENT 
i\pproved: 06/18/15 
~/.?~c: 
127th lVIAINE LEGISLATURE 
LD 297 
LR 1423(05) 
An Act To Increase Allowed Investments under the Maine New Markets Capital Investment Program 
Fiscal Note for Senate Amendment "Po' to Committee Amendment "B" (5-3()g ') 
Sponsor: Sen. Patrick of Oxford 
Net Cost (Savings) 
General Fund 
Appropriations/Allocations 
General Fund 
Fiscal Detail and Notes 
Fiscal Note Required: Yes 
Fiscal Note 
FY 2015-16 
FY 2016-17 
$10,000 
$10,000 
$10,000 
$10,000 
Projections 
FY 2017-18 
$10,000 
$10,000 
Projections 
FY 2018-19 
$10,000 
$10,000 
This amendment requires the State Tax Assessor to recapture credits under the Maine New Markets Capital 
Investment Program if the credits are deemed to be the result of sham transactions. These provisions could result in 
an increase in General Fund and Local Government Fund revenue if sham transactions are found. No estimate of the 
potential revenue impact can be made at this time. 
This amendment provides General Fund appropriations of $1 0,000 in fiscal year 2015-16 and $10,000 in fiscal year 
2016-17 to the Finance Authority of Maine for the costs associated with the State Tax Assessor review of sham 
transactions.