LD 1 LR 258(01)
An Act To Stimulate Capital Investment for Innovative Businesses in Maine
Preliminary Fiscal Impact Statement for Original Bill
Sponsor: Sen. Mills of Somerset
Committee: Business, Research and Economic Development
Fiscal Note Required: Yes
Preliminary Fiscal Impact Statement
Contingent Liability - General Fund
Potential current biennium revenue increase - General Fund
Fiscal Detail and Notes
This bill allows the Small Enterprise Growth Board to create the Maine Fund of Funds for the purposes of increasing the availablity of venture capital to the economy of the State.  The board raises capital for the fund by offering as security up to $80,000,000 in refundable tax credits.  No more than $10,000,000 of credits may be redeemed per calendar year, which means that the highest potential General Fund loss in a fiscal year would be $20,000,000 if the credits redeemed in two calendar years are redeemed in the same fiscal year.  It is unlikely that these credits will result in any revenue loss during the 2010-2011 biennium.  The bill may also increase General Fund revenue by an undeterminable amount since any net assets of the fund remaining after payment of all obligations must be remitted to the General Fund.  Additional costs to Maine Revenue Services associated with the tax credits can be absorbed within existing budgeted resources. 
Additional costs to the Small Enterprise Growth Board to establish and administer the Maine Fund of Funds can be absorbed within existing budgeted resources.  This legislation will also increase the amount of funds available in the Maine Patent Fund, administered by the University of Maine System, Center for Advanced Technology Law and Management, by $30,000 per year beginning in fiscal year 2010-11.
The cost to audit the Maine Fund of Funds, which will depend on the size of the fund and the entity performing the audit, is estimated at between $3,000 and $6,000 per year.