Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

Innovative Aid Pa. Program for High-Tech Startups Will Raise Funds by Selling Future Tax Credits to Insurance Industry

Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

Innovative Aid Pa. Program for High-Tech Startups Will Raise Funds by Selling Future Tax Credits to Insurance Industry

Article excerpt

Local organizations that invest in early-stage, high-tech startup companies are going to have a new pool of money soon.

Republican Gov. Tom Corbett and a raft of legislators, both Democratic and Republican, announced a new fund Thursday that they expect to bring in $80 million to $85 million for ventures in the very early stages of development.

The program, called Innovate in PA, will be funded by selling $100 million in future tax credits to the insurance industry.

State Sen. John P. Blake, D-Scranton, who formerly worked for the state Department of Community and Economic Development, said the legislation was passed with bipartisan support. It was modeled after a similar program in Maryland.

The way the program will work, insurance companies will bid to buy tax credits worth $100 million. Those credits will then be used later as payment of taxes. If the companies buy $100 million in tax credits for $80 million it is a 25 percent return on the investment over the period of the investment.

Mr. Blake said the state will start accepting the credits in lieu of taxes in five years and will only accept $25 million per year. …

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