FAME changes New Markets Tax Credit rule
PHOTO / Amber Waterman
Bruce Wagner, CEO of the Finance Authority of Maine.
The Finance Authority of Maine has approved an emergency rule that prevents New Markets Tax Credit deals like the one used by Great Northern Paper mill’s investors.
The Bangor Daily News reported that the new rule, approved on Thursday, prevents investors from using more than 5% of their investment in a New Markets Tax Credit project for the purposes of refinancing previous investments, paying transaction fees, acquiring an existing business or making equity distributions. The newspaper noted that FAME is planning to brief a legislative committee on the New Markets Tax Credit program later this year.
Bruce Wagner, FAME’s CEO, told the newspaper the new rule means that the financing plan used to reopen GNP’s mill in East Millinocket a few years ago would not be able to occur now. The financing plan came under fire earlier this year when a Maine Sunday Telegram investigation showed that GNP’s investors inflated the value of their investment with a $31.8 million one-day loan and another $8.2 million that was used to pay old debts. The structuring of that finance deal allowed the investors to receive nearly $16 million in tax credits.
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