1.Legislative findings; authorization.
The Legislature finds that the growth of new and existing small businesses in the State results in increased job opportunities for Maine residents, produces more spending in the State and increases municipal tax bases. Businesses that export their products or services out of the State bring capital into the State and help to develop export markets for Maine products. Small new and existing businesses can provide significant economic benefits to the State if they can obtain sufficient seed equity financing to carry them from start-up through the initial development phases of a business. The jobs created by such businesses tend to pay higher wages and offer more benefits than other businesses; however, the per capita level of private venture capital in
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1.
Legislative findings; authorization.
The Legislature finds that the growth of new and existing small businesses in the State results in increased job opportunities for Maine residents, produces more spending in the State and increases municipal tax bases. Businesses that export their products or services out of the State bring capital into the State and help to develop export markets for Maine products. Small new and existing businesses can provide significant economic benefits to the State if they can obtain sufficient seed equity financing to carry them from start-up through the initial development phases of a business. The jobs created by such businesses tend to pay higher wages and offer more benefits than other businesses; however, the per capita level of private venture capital investment in businesses located in the State is substantially below the national average and the average of the other New England states. In order to encourage the increased availability of risk equity capital to enterprises that have the potential for rapid growth and that bring capital into the State, the authority is authorized to issue certificates of eligibility for the seed capital investment tax credit permitted by Title 36, section 5216‑B, subject to the requirements of this section. This program is known as the Maine Seed Capital Tax Credit Program.
1-A.
Private venture capital fund.
As used in this section, "private venture capital fund" means a professionally managed pool of capital organized to make equity or equity-like investments in unrelated private companies using capital derived from multiple limited partners or members at least half of which, measured in dollar commitments, are unaffiliated and unrelated, and includes any venture capital fund licensed by the United States Small Business Administration. The authority may require such information as may be necessary or desirable for determining whether an entity qualifies as a private venture capital fund. An entity that otherwise qualifies as a private venture capital fund may elect not to be treated as a private venture capital fund for purposes of this section with respect to any investment.
2.
Eligibility for tax credit certificate for individuals and entities other than venture capital funds.
The authority shall adopt rules in accordance with the Maine Administrative Procedure Act, Title 5, chapter 375, to implement the program. Without limitation, the requirements for eligibility for a tax credit certificate include the following.
2-A.
Eligibility of private venture capital funds for tax credit certificate.
The authority shall adopt rules in accordance with the Maine Administrative Procedure Act to implement application of the program to investment in a private venture capital fund. This subsection does not apply to credits claimed for tax years beginning on or after January 1, 2012. The requirements for eligibility for a tax credit certificate for investment in a private venture capital fund include the following.
2-B.
Eligibility of private venture capital funds for tax credit certificate until July 1, 2001.
2-C.
Eligibility of private venture capital funds for refundable tax credit certificate.
This subsection applies to investments by private venture capital funds in eligible businesses made in tax years beginning on or after January 1, 2012. The authority shall adopt routine technical rules as defined in Title 5, chapter 375, subchapter 2‑A to implement application of the program to investments in eligible businesses by private venture capital funds. The requirements for eligibility for a tax credit certificate for an investment by a private venture capital fund include the following.
3.
Priority.
The authority may reserve $500,000 in tax credit authorization for "natural resource enterprises," as defined in section 963‑A, subsection 41.
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, $5,000,000 for investments made in calendar years 2016 to 2019, $15,000,000 for investments made in calendar year 2020, $13,500,000 for investments made in calendar years 2021 and 2022, $15,000,000 for investments made in calendar years 2023 to 2026 and $10,000,000 each year for investments made in calendar years beginning with 2027. 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.
5.
Revocation of tax credit certificate.
The authority may revoke a tax credit certificate if any representation to the authority in connection with the application for the certificate proves to have been false when made or if the applicant violates any conditions established by the authority and stated in the tax credit certificate. The revocation may be in full or in part as the authority may determine. The authority shall specify the amount of credit being revoked and shall send notice of the revocation to the investor and to the State Tax Assessor.
6.
Reports.
7.
Reports.
The following reports are required regarding activities under this section.
PL 1987, c. 854, §§2,5 (NEW). PL 1989, c. 502, §A28 (AMD). PL 1989, c. 765, §4 (AMD). PL 1991, c. 854, §§A7-11 (AMD). PL 1995, c. 424, §§2-4 (AMD). PL 1995, c. 462, §A19 (AMD). PL 1995, c. 658, §§3,4 (AMD). PL 1997, c. 774, §1 (AMD). PL 1997, c. 782, §§1-4 (AMD). PL 1999, c. 504, §10 (AMD). PL 1999, c. 752, §§1-3 (AMD). PL 2001, c. 446, §§1-3 (AMD). PL 2001, c. 446, §6 (AFF). PL 2001, c. 642, §§4-10 (AMD). PL 2001, c. 642, §12 (AFF). PL 2003, c. 20, §§X1-5 (AMD). PL 2003, c. 451, §§E1-5 (AMD). PL 2009, c. 470, §§2, 3 (AMD). PL 2011, c. 454, §§1-8 (AMD). PL 2013, c. 438, §§2-5 (AMD). PL 2019, c. 616, Pt. LL, §§1-11 (AMD). PL 2021, c. 412, §§1-4 (AMD). RR 2023, c. 2, Pt. C, §§11, 12 (COR). PL 2025, c. 442, §1 (AMD).