An Act To Stimulate Capital Investment for Innovative Businesses in Maine
Sec. 1. 10 MRSA §385, sub-§2, as enacted by PL 1995, c. 699, §3, is amended to read:
Sec. 2. 10 MRSA c. 15 is enacted to read:
MAINE FUND OF FUNDS
§ 396. Definitions
As used in this chapter, unless the context otherwise indicates, the following terms have the following meanings.
§ 397. Maine Fund of Funds; creation authorized
The board may create and oversee a fund, to be known as the Maine Fund of Funds, for the purpose of increasing the availability of venture capital to the economy of the State. The fund is managed by the director, who is selected by the board. The board may raise capital for the fund by offering as security certificates issued by the board.
§ 398. Fund structure and management
§ 399. Refundable tax credits
The board may issue to one or more lenders certificates for up to $80,000,000 in refundable tax credits as provided by Title 36, section 5219-DD.
Sec. 3. 36 MRSA §5219-DD is enacted to read:
§ 5219-DD. Maine Fund of Funds refundable tax credit
This bill is modeled on statutes in Arkansas, Iowa, Michigan, Montana and Utah. It authorizes the establishment of the Maine Fund of Funds within the Small Enterprise Growth Board for the purpose of increasing the availability of venture capital to the Maine economy. The fund is managed by a director chosen by the Small Enterprise Growth Board by means of a competitive selection. The Small Enterprise Growth Board has authority to close the fund if necessary to protect the State's interests. The board raises capital for the fund by offering as security refundable tax credits issued by the board, with the goal of attracting venture capital investment in the State's economy. The board maintains regulatory control over the fund. The bill requires annual audits and reports on the fund.
The goal of the fund is to create investments in the Maine economy, which is broadly described as including the development of intellectual capital as well as job creation. The director may invest outside of the State as necessary to maximize returns and reduce the likelihood that tax credits will be redeemed. The bill provides that net profits from the fund after payment of obligations must be remitted to the General Fund. It also provides the Maine Public Employees Retirement System a preference in becoming a lender of capital and a special provision that the Maine Public Employees Retirement System may be granted a piece of the profits as an additional inducement to becoming a capital lender. Tax credits may not be redeemed for defaults occurring later than 2031, and the bill restricts tax credit redemption to $10,000,000 per year.