An Act to Provide Affordable Loans for Higher Education LR2152(02)
Maine Legislature, Session 121, LD 1625
Committee Amendment CA_A_S257 (Senate)

COMMITTEE AMENDMENT "A" to S.P. 579, L.D. 1625, 
Act To Provide Affordable Loans for Higher Education" 
Bill, "An 
Amend the bill in section 2 by striking out all of that part 
designated "§11491." and inserting in its place the following: 
I §11491. 
Pq:r.pose: program established 
The Legislature finds and declares that the provision of a 
higher 
education 
for 
all 
residents 
of 
this 
State 
and 
for 
nonresidents attending institutions of higher education wi thin 
this State 
who 
desire 
a 
higher 
education and 
are properly 
qualified is important to the welfare and security of this State 
and consequently is an important public purpose. 
Many qualified 
students are deterred by financial considerations from completing 
their education. with a consequent irreparable loss to the State 
of talents vital to the welfare of the State and its citizens. 
AccorQingly, 
there is established the Higher 
EQucation 
Loan 
Purchase 
Program 
to provide greater access 
to federal 
loan 
program loans at a 
lower cost, enabling all residents of this 
State as well as nonresidents attending an institution of higher 
education in this State to attend the institutions of higher 
education of their choice. I 
Further amend the bill in section 2 in 
"§11492." in subsection 4 in the 2nd line 
L.D.) 
by 
inserting after 
the 
following: 
following: 
I, credit union' 
Page l-LR2152(2) 
that part designated 
(page 1, line 48 in 
"institution" 
the 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT "A" to S.P. 579, L.D. 1625 
Further amend the bill in section 2 in that part designated 
"§11492." by striking out all of subsection 6 and inserting in 
its place the following: 
'6. 
Finapce. 
"Finance" 
means 
the 
aCQuisition 
or 
refinancing 
of 
eligible 
loans. 
including 
through 
loans 
to 
eligible 
lenders: 
however. 
except 
as 
otherwise 
provided 
in 
section 11493, subsection 2. 
the authority is not authorized 
hereby to originate loans. other than consolidation loans funding 
the payment of eligible loans to borrowers of eligible loans 
financed by the authority. through a financial institution acting 
in the capacity of a trustee on behalf of the authority.' 
Further amend the bill in section 2 in that part designated 
"§11493." in subsection 1 in the last line (page 2, line 29 in 
L.D.) by inserting after the following: 
"loans" the following: 
except as otherwise provided in subsection 2' 
Further amend the bill in section 2 in that part designated 
"§11493." by inserting after subsection 1 the following: 
'2. 
AnthorizatioD. 
The authority is not authorized to 
originate loans other than consolidation loans. except that. if 
the authority finds that there is a significant impediment to 
providing students the benefits of an allocation of tax-exempt 
bond cap without originating loans. it may adopt rules pursuant 
to subsection 3 to allow the authority to originate other loans.' 
Further amend the bill in section 2 in that part designated 
"§11493." in subsection 2 in the first line (page 2, line 31 in 
L.D.) by striking out the following: 
"z...." and inserting in its 
place the following: 
'~' 
Further amend the bill in section 2 in that part designated 
"§11494." in subsection 2 by striking out all of paragraphs C and 
D (page 3, lines 6 to 18 in L.D.) and inserting in their place 
the following: 
'C. 
Information necessary to comply with the federal Higher 
Education Act of 1965. Public Law 89 329. 79 Stat. 1219. 
Title IV. 
as 
amended. 
or the federal Health Professions 
Educational Assistance Act of 1976. Public Law 94-484. 
Stat. 
2243. 
as 
amended. 
in 
each 
case 
along with 
any 
successor prov~s~on. or any administrative reQuirement under 
either of those Acts or of any other federal or state law or 
rule 
or 
with 
any 
agreement 
pertaining 
to 
financial 
assistance: 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT "A" to S.P. 579, L.D. 1625 
D. 
Information, 
the disclosure of which 
the authority 
determines 
is 
necessary 
or 
convenient 
to 
the 
sale 
or 
transfer of its bonds or loans;' 
Further amend the bill in section 2 in that part designated 
"Sl149S." in subsection 1 in the 3rd line (page 3, line 40 in 
L.D.) by striking out the following: 
"without limitation" and 
inserting in its place the following: 
'except as otherwise 
provided by section 11493. subsection 2' 
Further amend the bill in section 2 in that part designated 
"Sl149S." in subsection 1 in the 14th line (page 4, line 1 in 
L.D.) 
by inserting after the following: 
"institutions." the 
following: 
'credit unions,' 
Further amend the bill in section 2 in that part designated 
"§1149S." in subsection 1 by striking out all of the first 
blocked paragraph (page 4, lines 8 to 16 in L.D.) and inserting 
in its place the following: 
'Bonds issued QY the authority for the purposes of this chapter. 
the resolution authorizing the issuance of such bonds or any 
trust agreement securing such bonds may include such provisions. 
which must be part of the contract with the holders of the bonds 
of such issue and with any 3rd-party credit or liquidity provider 
or counterparties to interest rate exchange agreements. as the 
authority considers necessary or convenient to the security or 
issuance of the bonds. including without limitation:' 
Further amend the bill in section 2 in that part designated 
"S1149S." in subsection 1 by striking out all of paragraph A 
(page 4, lines 18 to 28 in L.D.) and inserting in its place the 
following: 
'A. 
Specifying the terms of bonds, incluging the Qasis upon 
which interest accrues on those Qonds. which may be fixed. 
yariable. auction-based or agj us ta1>le: the gate from which 
interest begins to accrue; the time and manner of principal 
payment 
ypon 
scheduleg 
maturity 
or 
regemption: 
the 
denominations 
ang 
form. 
which 
may 
incluge 
coypon. 
registered, coypon and registered or book entry: and such 
privileges as to conversion and for the 
replacement of 
mutilateg. 
lost or destroyed bongs as the aythority may 
establish: ' 
Further amend the bill in section 2 in that part designated 
"Sl149S." in subsection 1 in paragraph H in the 2nd line (page 5, 
line 10 in L.D.) by striking out the following: 
"authority of" 
and inserting in its place the following: 
'aythority or' 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT "A" to S.P. 579, L.D. 1625 
Further amend the bill in section 2 in that part designated 
"§ll495." by striking out all of subsection 2 (page 5, lines 24 
to 42 in L.D.) and inserting in its place the following: 
'2. 
Credit Dot pledged. 
Bonds issued under this chapter do 
not constitute or create any debt or liabilit,y on behalf of t,he 
State, 
of 
any 
polit,ical 
subdivision 
of 
the 
Stat,e 
or 
the 
authority, a loan of the credit of the State or a pledge of t,he 
faith and credit of t,he Stat,e, of any political subdivision of 
t,he Stat,e or the authorit,y, but, are payable solely from the funds 
provided for the payment, of t,hose bOnds. 
All t,he bonds issued 
under t,his cha,pter must, cont,ain a stat,ement, to the effect t,hat 
the 
Stat,e, 
any political subdivision 
of 
the 
State 
or 
t,he 
authorit,y is not obligat,ed t,o pay the bonds or the interest on 
t,he bonds, except from funds provided for the payment of t,hose 
bonds pursuant, to one or more agreement,s, and that neit,her the 
fait,h and credit nor the taxing power of the Stat,e or of any 
political subdivision of the Stat,e is pledged to the payment of 
t,he principal of, 
premium, if any, 
or 
t,he interest, on such 
bonds. 
The 
issuance of bonds 
under 
this 
chapter 
does 
not 
directly or indirectly or contingently obligate the St,at,e or any 
political subdivision of the State to levy or to pledge any form 
of taxation whatever or to make any appropriation for t,he bonds' 
payment. ' 
Further amend the bill in section 2 in that part designated 
"§ll495." in subsection 4 in the 4th line (page 6, line 2 in 
L.D.) 
by inserting after the 
fOllowing: 
"instit,ut,ions" 
the 
following: 
'or credit unions' 
Further amend the bill in section 2 in that part designated 
"§ll495." in subsection 6 in the 2nd line (page 6, line 15 in 
L.D.) by striking out the following: 
"must be" and inserting in 
its place the following: 
'~' 
Further amend the bill in section 2 in 
"§ll496." in subsection 1 in the 3rd line 
L.D.) 
by 
inserting after 
the 
following: 
following: 
" 
a credit union' 
that part designated 
(page 6, line 24 in 
"inst,itut,ion" 
the 
Further amend the bill in section 2 in that part designated 
"§ll496." in subsection 2 by striking out all of paragraph A 
(page 6, lines 32 to 49 and page 7, lines 1 and 2 in L.D.) and 
inserting in its place the following: 
'A. 
All money received by t,he authorit,y or received on 
behalf of the authorit,y by any eligible lender. servicer. 
t,rust,ee. 
custodian or collection agent" 
pursuant 
t,o 
any 
resolution, 
t,rust, 
agreement 
or 
any 
other 
agreement, 
authorized by 
this 
chapter 
and 
pledged 
pursuant, 
t,o 
a 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT" A" to S.P. 579, L.D. 1625 
resolution. 
trust agreement 
or other 
agreement 
for 
the 
benefit of the bondholders. whether as proceeds from the 
sale of bonds or as revenues. is deemed to be trust funds to 
be held and applied solely as provided in such resolution. 
trust 
agreement 
or 
other 
agreement. 
Subject 
to 
the 
provisions of any such resolution, trust agreement or other 
agreement. 
any 
such 
money 
may 
be 
invested 
in 
such 
investments and investment agreements as may be approved by 
resolution of the authority. 
Any eligible lender. servicer. 
custodian or collection agent with which such money is 
deposited is deemed to be holding such money in trust for 
the 
benefit 
of 
the 
authority 
or 
the 
bondholders. 
as 
specified in the applicable resolution. trust agreement or 
other agreement and shall apply such money solely for the 
purposes of this chapter. subject to such restrictions as 
this chapter. the applicable resolution, trust agreement or 
other agreement may proyide.' 
Further amend the bill in section 2 by striking out all of 
that part designated "§11497." and inserting in its place the 
following: 
'§11497. Loan transactions 
Except as otherwise provided in section 11493. subsection 2. 
the authority may finance. sell. service. pledge. 
invest in. 
hold. trade. accept as collateral or otberwise deal in. acguire 
or transfer. all on such terms and conditions as the authori ty 
may specify. any eligible loan or portfolio of loans or loan 
pass-through certificate. pledge. including any pledge of loan 
revenue, loan participation certificate or other loan-backed or 
loan-related security. 
Any such transaction may be conducted by 
public or private offering. 
In connection with the financing or 
sale of 
an eligible 
loan 
or 
of 
a 
beneficial interest or 
participation in an eligible loan or portfolio of eligible loans. 
or other interest in eligible loans. the authority may enter into 
one or more agreements providing for the origination. guarantee. 
financing. 
purchase. 
sale. 
serv~c~ng. 
custody. 
control 
and 
administration of such eligible loan or portfolio of eligible 
loans. 
Any such agreement may provide that the authority, any 
other eligible lender. a financial institution. a credit union or 
other person may act as trustor. trustee or custodian under the 
agreement. 
Any such agreement may provide that. with respect to 
loans governed by the agreement. title to such eligible loans or 
portfolio of eligible loans or other interest in eligible loans 
is deemed to have been transferred on terms and to the extent 
specifi!l!d in that agr!l!em!l!nt and that th!l! effect of a sale of an 
interest in a 
loan is the same as 
a 
sale of a 
loan. 
Th!l! 
authority may issue or cauS!l! to b!l! issu!l!d c!l!rtificates or other 
instrum!l!nts !l!videncing the hold!l!r's fractional int!l!rest in a pool 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT "A" to S.P. 579, L.D. 1625 
of loans. which interest may be undivided or limited to one or 
more 
specific 
loans. 
Whether 
or 
not 
the 
certificates 
or 
instruments are of such form or character as to be negotiable 
instruments under Title 11, Article 3-A. 
the certificates or 
instruments are made negotiable instruments within the meaning of 
and for all purposes of Title 11. Article 3-A. subject only to 
such registration requirements as the authority may establish.' 
Further amend the bill in section 2 in that part designated 
"§11499." in the first paragraph in the 10th line (page 8, line 
in L.D.) by inserting after the following: 
"profit-sharing" 
the following: 'plans' 
SUMMARY 
This 
amendment 
limits 
the 
Finance Authority of Maine's 
authority to originate loans to consolidation loans only, unless 
the 
authority 
finds 
that 
that 
limitation is 
a 
significant 
impediment to providing students with the benefits of the loan 
program. 
The amendment also makes technical changes to the bill. 
FISCAL NOTE REQUIRED 
(See attached) 
COMMITTEE AMENDMENT 
Fiscal Detail and Notes 
Approved: 06/03/03 ;/J?ae 
Office of Fiscal and Program Review 
LD 1625 
An Act to Provide Affordable Loans for Higher Education 
LR2152(02) 
Fiscal Note for Bill as Amended by Committee Amendment ,A, S ~ '5'7 
Committee: Business, Research and Economic Development 
Fiscal Note Required: Yes 
Fiscal Note 
Minor cost increase - Other Funds 
The additional cost to the Finance Authority of Maine to establish and administer the Higher Education Loan 
Purchase Program can be absorbed utilizing existing budgeted resources. 
LR2152(2) - Fiscal Note - Page 1 of 1