Maine Direct Financial Incentives 2011
Maine's economic development, finance, and tax organizations provide a range of incentive programs to initiate new business and commercial investment. Specific programs include industrial development bonds, the Maine Apprenticeship Program, and loan guarantees.
The Finance Authority of Maine (FAME), as well as municipalities in the state, issues bonds to provide tax-exempt financing for private businesses. Proceeds may cover the cost of land, land improvements, utilities, buildings, engineering, architectural and legal fees, and machinery and equipment.
The Commercial Loan Insurance Program insures up to 90 percent of a loan to a maximum loan insurance exposure of $4.25 million. 100 percent insurance available for loans to veterans, oil storage facility projects, clean fuel vehicle projects, and waste oil disposal site cleanup projects. Loan proceeds may be used for purchase of - and improvements to - real estate, machinery, and equipment.
The Economic Recovery Loan Program is a direct lending program designed to help small businesses remain viable during difficult economic times. Existing businesses may apply. In considering loan applications, FAME looks to support creditworthy projects demonstrating substantial public benefit that have utilized other sources of capital.
The program is meant to be a lending program of last resort after a business has exhausted conventional lending sources. Loans may not exceed $200,000, except in cases where substantial public benefit exists. The interest rate will not exceed Wall Street prime plus 2 percent. Terms may be structured to meet the borrower's specific needs.
Community Development Block Grant (CDBG) Program:
The CDBG Economic Development Program provides gap funding in the form of grants and loans for communities to assist businesses in the creation/retention of quality jobs for low and moderate-income persons. Program activity groups and maximum grant and loan amounts are as follows:
Economic Development Program:
Activity Group Numbers
1) Grants to Municipalities: for acquisition, relocation, demolition, clearance, construction, reconstruction, installation, and rehabilitation associated with public infrastructure projects such as water and sewer facilities, flood and drainage improvements, publicly-owned commercial and industrial buildings, parking, streets, curbs, gutters, sidewalks, etc. All public infrastructure must be owned by the municipality or public or private utility and be in support of an identified business. Maximum award: $300,000.
2) Grants to Municipalities for Direct Business Support: for non-capital equipment, land and site improvements, rehabilitation or construction of commercial or industrial buildings. Maximum award: $200,000.
3) Grants to Municipalities for Direct Business Support: Working Capital and capital equipment. Maximum award: $100,000.
4) Development Fund Loan (DF): for acquisition of existing facilities, land and site improvements necessary for the construction of a new facility, rehabilitation or construction of commercial or industrial buildings, structures, non-capital equipment, capital equipment, working capital, and real property improvements. Maximum award: $300,000.
Tax increment financing (TIF):
Local governing bodies can designate areas in their municipalities as development districts to facilitate redevelopment activities. Public financing, usually in the form of bonds, provides necessary improvements, and developers obtain financing to carry out the major redevelopment. The public debt is retired through the increase in property taxes generated by the redevelopment.
Employment tax increment financing (ETIF):
This program provides project financing to businesses that add five or more employees at wages above the regional average and provide health insurance and a retirement program. The amount of financing is based upon state income tax withholdings and is available for up to 10 years.
Pine Tree Development Zone Program:
This program uses a combination of tax incentives to spur economic development in targeted areas of the state where unemployment is relatively high and wages are relatively low. The state will offer to qualified new and expanding businesses (1) an enhanced employment tax increment financing that returns 80 percent of the state income taxes withheld from qualified net new employees for up to 10 years; (2) a 100 percent refund of corporate income tax and insurance premium tax for years one-five, and 50 percent for years six through 10; (3) a 100 percent sales tax exemption for construction materials and equipment purchases; (4) a 100 percent sales tax reimbursement on real property purchased and/or physically incorporated.
Governor's Training Initiative:
This program seeks to promote a globally competitive work force for Maine industry by directly linking Maine's education and training resources to employer-driven work force needs. The program reimburses qualifying Maine employers for a portion of their training and/or retraining costs. Some reimbursable costs include specialized recruitment, training for high-performance skills, customized technical training, workplace safety, on-the-job training, and competitive retooling of a business' current work force.
Maine Quality Centers:
The Maine Quality Centers, administered by the Maine Community College System, provide a pre-trained, competitively tooled work force for new or expanding Maine businesses that create at least eight full-time jobs with benefits. The education and training, provided at no cost to the company, is fast-track, guaranteed, and customized to an employer's specifications.
Maine Apprenticeship Program:
This program is a customized, systematic training program designed to meet the needs of Maine employers through on-the-job training and related classroom instruction. The program may reimburse the apprentice (or employer if the company is providing tuition assistance) for up to 50 percent of tuition for college credit courses. At the end of the program, an employer has a certified, skilled journeyperson.
Maine State Contact:
Maine Department of Economic and Community Development
59 State House Station
Augusta, ME 04333-0059
Incentive and tax information is provided to Area Development by each state's economic development or commerce agency for information purposes only and is subject to revision at any time by the state government. Please contact the state agency directly for full requirements and offerings.