Maine Legislature, Session 121, LD 1307
Committee: Appropriations and Financial Affairs
Sponsors: WOODBURY, DUDLEY, DUPLESSIE, EDER, MILLETT, MILLS, TURNER

Legislative Document 
No. 1307 
H.P.961 
House of Representatives, March 11,2003 
RESOLUTION, Proposing an Amendment to the Constitution of 
Maine To Create the Maine Economic Stabilization and Endowment 
Fund 
Reference to the Committee on Appropriations and Financial Affairs suggested and ordered 
printed. 
Presented by Representative WOODBURY of Yarmouth. 
'7!/~ 1?7.1l!tI£~ 
MILLICENT M. MacFARLAND 
Clerk 
Cosponsored by Representatives: DUDLEY of Portland, DUPLESSIE of Westbrook, EDER of 
Portland, MILLETT of Waterford, MILLS of Cornville, Senator: TURNER of Cumberland. 
Printed on recycled paper 
Constitutional amendment. 
Resolved: 
Two 
thi rds 
branch 
of 
the 
Legislature 
concurring, 
that 
the 
amendment to the Constitution of Maine be proposed: 
Constitution, Art. IX, §24 is enacted to read: 
of 
each 
following 
24. 
Budget 
stabilization 
and 
endowment 
fund. 
The 
Legislature 
shall 
enact 
legislation 
creating 
a 
budget 
stabilization and endowment fund as a permanent endowment fund to 
be managed and 
inyest~d by an independent board of trustees for 
long-term 
appreciation, 
consistent 
with 
the 
principles 
of 
endowment 
funds 
that 
are 
designed 
to 
provide 
supporting 
distributions to a ben¢ficiary in perpetu~ 
1. 
Transfers to fund. 
Two percent of General Fund revenue 
must be transferred monthly to the stabilization and endowment 
fund until the fund l;>alance equals the amount of General Fund 
revenue collected in the immediately preceding fiscal year. 
In 
any fiscal year that actual receipts of General Fund revenue 
exceed budgeted revenue, 1/2 of the excess revenue must also be 
transferred to the fund. 
2. 
Distributions from fund. 
Four percent of the balance in 
the 
stabilization 
ang 
endowment 
fund 
at 
the 
close 
of 
the 
immediately preceding fiscal year must be transferred annually to 
the General Fund for expenditure by the Legislature. 
Two percent 
of the fung balance above the regular 4% annual distribution may 
be transferred to the General 
Fund in any fiscal year 
when 
budgeted revenue growth is at least l'l-o below the average growth 
for the last 10 years. 
Four percent of the fund balance above 
the regular 4% 
annual distribution may be transferred to the 
General Fund when budgeted General Fund revenue growth is greater 
than 2% below the average growth for the last 10 years. 
At the 
close 
of 
a 
fiscal 
year 
when 
actual 
General 
Fund 
revenue 
collections are below budgeted revenue, additional funds may be 
transferred to the General Fund up to the amount of the shortfall 
or 
4% 
of 
the 
fund balance, 
whichever 
is less. 
Legislation 
implementing this section and any distribution proposed as an 
exception to this section may be enacted upon the vote of 2/3 of 
all members elected to each House. 
; and be it further 
Constitutional referendum procedure; form of question; effective 
date. Resolved: 
That .the municipal officers of this State shall 
notify the inhabitants of their respective cities, 
towns 
and 
plantations to meet, in the manner prescribed by law for holding 
a statewide election, at a statewide election, on the Tuesday 
following the first l-(onday of November following the passage of 
this 
resolution, 
to 
vote 
upon 
the 
ratification 
of 
the 
Page l-LR1466(1) 
amendment 
proposed 
in 
this 
resolution 
by 
voting 
upon 
the 
following question: 
"Do 
you 
favor 
authorize 
the 
stabilization and 
amending 
the 
Constitution 
Legislature 
to 
create 
endowment fund?" 
of 
an 
Maine 
to 
economic 
The legal voters of each city, town and plantation shall 
vote by ballot on this question and designate their choice by a 
cross or check mark placed within the corresponding square below 
the word "Yes" or "No." 
The ballots must be received, sorted, 
counted and declared in open ward, town and plantation meetings 
and returns made to the Secretary of State in the same manner as 
votes for members of the Legislature. 
The Governor shall review 
the returns and, if it appears that a majority of the legal votes 
are cast in favor of the amendment, the Governor shall proclaim 
that fact without delay and the amendment becomes part of the 
Constitution of Maine on the date of the proclamation; and be it 
further 
Secretary of State shall prepare ballots. Resolved: 
That 
the 
Secretary of State shall prepare and furnish to each city, town 
and plantation all ballots, returns and copies of this resolution 
necessary to carry out the purpose of this referendum. 
SUMMARY 
This resolution proposes an amendment to the Constitution of 
Maine 
to 
authorize 
the 
Legislature 
to 
create 
a 
budget 
stabilization and endowment fund. 
This fund would be established 
in 
ieu 
of 
the 
unprotected 
Maine 
Rainy 
Day 
Fund 
as 
a 
constitutionally protected asset of the State with explicit fund 
contribution requirements and distribution limitations. 
The purposes of an economic stabilization and endowment fund 
would be to serve as a permanent endowment fund of the State with 
an asset base of that grows over time and provides supporting 
distributions for programs and initiatives of State Government in 
perpetuity; 
as 
an 
economic 
stabilization 
fund 
that provides 
supplementary distributions to the State during budget years of 
economic stagnation and recession; and as an emergency liquidity 
fund that provides short-term distributions to the State when 
revenues fall unexpectedly short of budgeted projections. 
The fund would be built up through monthly transfers of 
2°'1> 
of the General Fund revenue in any year in which the fund balance 
does 
not 
exceed 
the 
amount 
of 
revenue 
collected 
in 
the 
immediately preceding fiscal year and by a transfer of 1/2 of any 
General Fund surplus revenue. 
I 
Annually, 4% of the fund assets would be transferred to the 
General Fund to be appropriated by the Legislature as part of its 
normal budget-making process. 
The fund would also provide budget 
stabilization distributions. 
The proposed amendment would allow 
for a supplemental transfer of up to 2% of fund assets during 
fiscal years when budgeted economic growth is at least 1% below 
long-term economic growth trends or up to 4% of fund assets when 
budgeted economic 
growth is greater than 
2% 
below 
long-term 
economic growth trends. 
In any fiscal year that actual General 
Fund revenue is below projections the fund would transfer the 
amount of the revenue shortfall up to 4 percent of fund assets. 
The 
implementing 
legislation 
to 
be 
enacted 
by 
the 
Legislature would establish an independent board of trustees to 
oversee the management of fund assets, and the board would be 
directed 
to 
invest 
the 
assets 
for 
long-term 
appreciation, 
consistent with 
the principles 
of 
endowment 
funds 
that 
are 
designed to provide supporting distributions to a beneficiary in 
perpetuity.