Sec. 5. 10 MRSA §1100-T, sub-§4, as amended by PL 2001, c. 446, §3 and affected by §6, is further amended to read:

4. Total of credits authorized. The authority may issue tax credit certificates to investors eligible pursuant to subsections 2 and 2-A 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, $10,000,000 $11,000,000 up to and including calendar year 2002, $11,000,000 $14,000,000 up to and including calendar year 2003 and $12,000,000 , $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 thereafter. 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.

Sec. 6. 36 MRSA §5216-B, sub-§2, as amended by PL 2001, c. 446, §4 and affected by §6, is further amended to read:

2. Credit. An investor is entitled to a credit against the tax otherwise due under this Part equal to the amount of the tax credit certificate issued by the Finance Authority of Maine in accordance with Title 10, section 1100-T and as limited by this section. In the case of partnerships, limited liability companies, S corporations, nontaxable trusts and any other entities that are treated as flow-through entities for tax purposes under the Code, the individual partners, members, stockholders, beneficiaries or equity owners of such entities must be treated as the investors under this section and are allowed a credit against the tax otherwise due from them under this Part in proportion to their respective interests in those partnerships, limited liability companies, S corporations, trusts or other flow-through entities. Except as limited or authorized by subsection 3 or 4, 15% 25% of the credit must be taken in the taxable year the investment is made and 15% 25% per year must be taken in each of the next 5 3 taxable years and 10% taken in the next taxable year.

Sec. 7. Application. This Act applies to tax credit certificates issued on or after July 1, 2002 for investments made on or after July 1, 2002.

SUMMARY

The bill modifies the Maine Seed Capital Tax Credit Program administered by the Finance Authority of Maine by increasing the tax credit available for investments in businesses located in areas of the State with high unemployment. The bill also encourages the investment of private capital by allowing investors to obtain a tax credit on investments of up to $500,000 per company, an increase from $200,000 per company, and allowing each company to receive up to $5,000,000 in investments for which investors may receive tax credits, up from $1,000,000.

The bill allows the tax credit to be taken over 4 years, rather than 7 years.