An Act To Amend the Maine Seed Capital Tax Credit Program
Maine Legislature, Session 129, LD 1200
Committee: Taxation
Sponsors: POULIOT, GIDEON, JACKSON, BICKFORD, STEWART
Amends: 10 MRSA §1100-T

Legislative Document
No. 1200
S.P. 375
In Senate, March 12, 2019
An Act To Amend the Maine Seed Capital Tax Credit Program
(EMERGENCY)
Submitted by the Finance Authority of Maine pursuant to Joint Rule 204.
Reference to the Committee on Taxation suggested and ordered printed.
DAREK M. GRANT
Secretary of the Senate
Presented by Senator POULIOT of Kennebec.
Cosponsored by Speaker GIDEON of Freeport and
Senators: President JACKSON of Aroostook, SANBORN, H. of Cumberland, Representatives: 
BICKFORD of Auburn, STEWART of Presque Isle.
Emergency preamble. Whereas, acts and resolves of the Legislature do not 
become effective until 90 days after adjournment unless enacted as emergencies; and
Whereas, the Maine Seed Capital Tax Credit Program promotes the growth of new 
and existing small businesses in the State, which results in increased job opportunities for 
Maine residents, produces more spending in the State and increases municipal tax bases; 
and
Whereas, the total amount of tax credits available to investors is limited on a 
calendar year basis; and
Whereas, for calendar year 2019, the limit has already been reached; and
Whereas, without an immediate increase in the limit on available tax credits, 
investment in Maine businesses could suffer; 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,
Be it enacted by the People of the State of Maine as follows:
Sec. 1.  10 MRSA §1100-T, sub-§2, ¶¶A and B, as amended by PL 2013, c. 
438, §3, are further amended to read:
A.  For investments made in tax years beginning before January 1, 2012, a tax credit 
certificate may be issued in an amount not more than 40% of the amount of cash 
actually invested in an eligible Maine business in any calendar year or in an amount 
not more than 60% of the amount of cash actually invested in any one calendar year 
in an eligible Maine business located in a high-unemployment area, as determined by 
rule by the authority.  For investments made in tax years beginning on or after 
January 1, 2012, a tax credit certificate may be issued to an investor other than a 
private venture capital fund in an amount not more than 60% of the amount of cash 
actually invested in an eligible Maine business in any calendar year.  For investments 
made in tax years beginning on or after January 1, 2014, a tax credit certificate may 
be issued to an investor other than a private venture capital fund in an amount not 
more than 50% of the amount of cash actually invested in an eligible Maine business 
in any calendar year.  For investments made after April 1, 2019, a tax credit 
certificate may be issued to an investor other than a private venture capital fund in an 
amount not more than 40% of the amount of cash actually invested in an eligible 
Maine business in any calendar year.  Rules adopted pursuant to this section are 
routine technical rules as defined in Title 5, chapter 375, subchapter 2-A.
B.  The Maine business must be determined by the authority to be a manufacturer or a 
value-added natural resource enterprise; must provide a product or service that is sold 
or rendered, or is projected to be sold or rendered, predominantly outside of the State, 
while a majority of the employment associated with the creation and sale of the 
product or the provision of services is within the State; must be engaged in the 
development or application of advanced technologies; or must be certified as a visual 
media production company under Title 5, section 13090-L.  The business must certify 
that the amount of the investment is necessary to allow the business to create or retain 
jobs in the State.
Sec. 2.  10 MRSA §1100-T, sub-§2, ¶C, as amended by PL 2003, c. 451, Pt. E, 
§2, is further amended to read:
C.  Aggregate investment eligible for tax credits may not be more than $5,000,000 
$3,500,000 for any one business as of the date of issuance of a tax credit certificate 
and not more than $2,000,000 for any calendar year.
Sec. 3.  10 MRSA §1100-T, sub-§2-C, ¶A, as enacted by PL 2011, c. 454, §6, is 
amended to read:
A.  For investments made in tax years beginning on or after January 1, 2012, a tax 
credit certificate may be issued to a private venture capital fund in an amount that is 
not more than 50% of the amount of cash actually invested in an eligible business.  
For investments made after April 1, 2019, a tax credit certificate may be issued to a 
private venture capital fund in an amount that is not more than 40% of the amount of 
cash actually invested in an eligible business.  The tax credit certificate may be 
revoked and the credit recaptured pursuant to Title 36, section 5216-B, subsection 5 
to the extent that the authority determines that the eligible business for which the tax 
credit certificate was issued moves substantially all of its operations and assets 
outside of the State during the period ending 4 years after an investment, except in 
the case of an arm's length, fair value acquisition approved by the authority.  A 
private venture capital fund that received the 20% credit certificate under subsection 
2-A, paragraph A, subparagraph (2) for an investment is not eligible for a tax credit 
certificate under this subsection for that investment.
Sec. 4.  10 MRSA §1100-T, sub-§2-C, ¶B, as amended by PL 2013, c. 438, §4, 
is further amended to read:
B.  As used in this subsection, unless the context otherwise indicates, "eligible 
business" means a business located in the State that has certified that the amount of 
the investment is necessary to allow the business to create or retain jobs in the State 
and that, as determined by the authority:
(1)  Is a manufacturer or a value-added natural resource enterprise;
(2)  Is engaged in the development or application of advanced technologies;
(3)  Provides a service that is sold or rendered, or is projected to be sold or 
rendered, predominantly outside of the State, while a majority of the employment 
associated with the creation and sale of the product or the provision of services is 
within the State; or
(5)  Is certified as a visual media production company under Title 5, section 
13090-L.
Sec. 5.  10 MRSA §1100-T, sub-§2-C, ¶C, as enacted by PL 2011, c. 454, §6, is 
amended to read:
C.  Aggregate investment eligible for tax credit certificates, including investments 
under this subsection and under subsection 2, may not be more than $5,000,000 
$3,500,000 for any one eligible business in total and not more than $2,000,000 per 
calendar year.
Sec. 6.  10 MRSA §1100-T, sub-§2-C, ¶D, as amended by PL 2013, c. 438, §4, 
is further amended to read:
D.  The investment with respect to which any private venture capital fund is applying 
for a tax credit certificate may not be more than the lesser of an amount equal to 
$500,000 times the number of investors in the private venture capital fund and an 
aggregate of $4,000,000 $3,500,000 in any one eligible business invested in by a 
private venture capital fund in any 3 consecutive calendar years, except that this 
paragraph does not limit other investment by an applicant for which that applicant is 
not applying for a tax credit certificate.  A private venture capital fund must certify to 
the authority that it will be in compliance with these limitations.  The tax credit 
certificate issued to a private venture capital fund may be revoked and any credit 
taken recaptured pursuant to Title 36, section 5216-B, subsection 5 if the fund is not 
in compliance with this paragraph.
Sec. 7.  10 MRSA §1100-T, sub-§4, as amended by PL 2013, c. 438, §5, is 
further amended to read:
4.  Total of credits authorized.  The authority may issue tax credit certificates to 
investors eligible pursuant to subsections 2, 2-A and 2-C in an aggregate amount not to 
exceed $2,000,000 up to and including calendar year 1996, $3,000,000 up to and 
including calendar year 1997, $5,500,000 up to and including calendar year 1998, 
$8,000,000 up to and including calendar year 2001, $11,000,000 up to and including 
calendar year 2002, $14,000,000 up to and including calendar year 2003, $17,000,000 up 
to and including calendar year 2004, $20,000,000 up to and including calendar year 2005, 
$23,000,000 up to and including calendar year 2006, $26,000,000 up to and including 
calendar year 2007 and $30,000,000 up to and including calendar year 2013, in addition 
to which, the authority may issue tax credit certificates to investors eligible pursuant to 
subsections 2, 2-A and 2-C in an annual amount not to exceed $675,000 for investments 
made between January 1, 2014 and December 31, 2014, $4,000,000 for investments made 
in calendar year 2015 and, $5,000,000 for investments made in calendar years 2016 to 
2018 and $15,000,000 each year for investments made in calendar years beginning with 
2016 2019.  The authority may provide that investors eligible for a tax credit under this 
section in a year when there is insufficient credit available are entitled to take the credit 
when it becomes available subject to limitations established by the authority by rule.  
Rules adopted pursuant to this subsection are routine technical rules as defined in Title 5, 
chapter 375, subchapter 2-A.
Emergency clause.  In view of the emergency cited in the preamble, this 
legislation takes effect when approved.
SUMMARY
This bill amends the Maine Seed Capital Tax Credit Program by:   
1.  Reducing from 50% to 40% the maximum credit available to individual investors 
and private venture capital funds for investments made after April 1, 2019;
2.  Requiring that eligible exporting businesses retain in Maine a majority of their 
employees; 
3.  Reducing from $5,000,000 to $3,500,000 the total aggregate investment eligible 
for tax credits for any one business;
4.  Limiting to $2,000,000 the total aggregate investment eligible for any one 
business in any calendar year; and
5.  Increasing from $5,000,000 to $15,000,000 the overall annual limit on total 
authorized credits.