An Act To Provide Accessible HiPer Ed.cation FiDancial Assistance for Maine Families
Maine Legislature, Session 123, LD 1998
Committee: Business, Research and Economic Development
Sponsors: MITCHELL, CUMMINGS, BOWMAN, EDMONDS, MILLS, EDGECOMB, NORTON, PINGREE, PRESCOTT, SIMPSON
Amends: 10 MRSA §363, 20-A MRSA §1, 20-A MRSA §11493, 20-A MRSA §11495, 20-A MRSA §11497

Legislative Document 
No. 1998 
S.P.792 
December 18, 2007 
An Act To Provide Accessible HiPer Ed.cation FiDancial 
Assistance for Maine Families 
(EMERGENCY) 
Submitted by the Finance Authority of Maine pursuant to Joint Rule 204. 
Received by the Secretary of the Senate on December 18,2007. Referred to the Committee 
on Business, Research and Economic Development pursuant to Joint Rule 308.2 and ordered 
printed. 
Presented by Senator MITCHELL of Kennebec. 
Cosponsored by Speaker CUMMINGS of Portland and 
JOY J. O'BRIEN 
Secretary of the Senate 
Senators: BOWMAN of York, President EDMONDS of Cumberland, MILLS of Somerset, 
Representatives: EDGECOMB of Caribou, NORTON of Bangor, PINGREE of North Haven, 
PRESCOTT of Topsham, SIMPSON of Auburn. 
Printed on recycled poper 
Emergency preamble. Whereas, acts and resolves of the Legislature do not 
become effective until 90 days after adjournment unless enacted as emergencies; and 
Whereas, Maine residents require a consistent, reliable source of higher education 
financial assistance, including unbiased information; and 
Whereas., due to substantial changes in the availability of student financial 
assistance, Maine residents have less access to higher education financial assistance; and 
Whereas, the educational attainment of Maine residents is essential to the economic 
growth and prosperity of Maine; and 
Whereas, students need to know that sufficient student financial assistance is 
available so that they can make determinations about attending postsecondary schools in 
a timely manner; and 
Whereas, in the judgment of the Legislature, these facts create an emergency within 
the meaning of the Constitution of Maine and require the following legislation as 
immediately necessary for the preservation of the public peace, health and safety; now, 
therefore, 
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Be it enacted by the People of the State of Maine as follows: 
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Sec. 1. 10 MRSA §363, sub-§10, as enacted by PL 1999, c. 443, §4, is amended 
to read: 
10. Allocation for benefit Df State. All ofthe allocation of the state ceiling must be 
used for a purpose that benefits individuals, communities or businesses in this State. For 
purposes of this subsection, a bond issuance is presumed to benefit individuals, 
communities or businesses in this State if it benefits business operations located in this 
State, residents of this State, students attending institutions of higher education in this 
State, residents of this State attending institutions of higher education outside this State 
ef~ municipalities in this State or programs predominantly for the provision of benefits for 
residents of this State. AR allosatioR of the state seiliRg FRlfy oRly Be yse(,} to flyrehase 
stYeeRt 10aRs if the Borrower is a resieeRt of this gtate or is a stYeeRt lftteReiRg aft 
iRstitytioR of higher eeYelftioR iR this gtlfte or if the Borrower has flre'/ioYsl)' oBtaiRe('} a 
stYeeRt 10aR while a resieeRt of this gtate or while &tteReiRg aR iRstitytioR of higher 
e(,}YsatioR iR this gtate. A student eligible to receive the benefit of a portion of the state 
ceiling remains eligible for student loans notwithstanding any changes in residency or 
institution attended. 
Sec. 2. 20-A MRSA §1l492, sub-§6, as enacted by PL 2003, c. 455, §2, IS 
amended to read: 
6. Finance. "Finance" means the origination, acquisition or refinancing of eligible 
loans, including through loans to eligible lenders; howe\'er, eJlieeflt as othenvise flroyiee('} 
iR sestioR 11493, sYBseetioR 2, the aYthoril)' is Rot aythori~ee hereby to origiRate loaRs, 
other thaR sORsolialftioR loaRs fl:lRaiRg the fl9)'fReRt of eligible loaRs to borrowers of 
Page I - 123LR3064(OI)-1 
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eligible- loaf!s fif!af!oed by the aHthority, throHgh a fif!af!eial if!stitHtiof! aotif!g if! the 
oapaoit)' ofa tmstee Of! behalf of the aHthority. 
Sec. 3. 20-A MRSA §11493, sub-§l, as enacted by PL 2003, c. 455, §2, IS 
amended to read: 
1. Program. The authority is authorized to carry out the program by issuing bonds 
for the purpose of financing eligible loans and may use any net earnings on those bonds 
to administer the program, to payor further secure the bonds and to make eligible loans, 
exoept as otherwise proyided if! sHbseotiof! 2. 
Sec. 4. 20-A MRSA §11493, sub-§2, as enacted by PL 2003, c. 455, §2, is 
repealed. 
Sec. 5. 20-A MRSA §11495, sub-§l, as enacted by PL 2003, c. 455, §2, is 
amended to read: 
1. Issuance; purpose; payment; authorization; interim receipts or certificates. 
The authority may issue bonds for the purposes of this chapter, including, exeept as 
otherwise proyided by seotioR 11493, sHbseetiof! 2, financing eligible loans, which may 
include originating eligible loans, including consolidation loans fuf!dif!g the p~'ffief!t of 
eligible loaf!s to borrowers of eligible loaf!s fif!af!oed by the aHthority, financing loans to 
eligible lenders to fund the origination of eligible loans and acquiring existing portfolios 
of eligible loans from eligible lenders. The bonds of each issue must be authorized by the 
authority and be payable only from such sources specified in the agreement with 
bondholders, which may include, without limitation, payments on or with respect to 
eligible loans from any source, including sale proceeds; reserves established by the 
authority for the bonds; payments pursuant to agreements with financial institutions, 
credit unions, educational institutions or any governmental entity; payments pursuant to 
interest rate exchange agreements; investment earnings from funds or accounts 
maintained pursuant to a trust agreement or other document; proceeds of refunding 
bonds; and other fees, charges or revenues of the authority. 
Bonds issued by 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 ffH:tSt may 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: 
A. 
Specifying the terms of bonds, including the basis upon which interest accrues 
on those bonds, which may be fixed, variable, auction-based or adjustable; the date 
from which interest begins to accrue; the time and manner of principal payment upon 
scheduled maturity or redemption; the denominations and form, which may include 
coupon, registered, coupon and registered or book entry; and such privileges as to 
conversion and for the replacement of mutilated, lost or destroyed bonds as the 
authority may establish; 
B, 
Providing that bonds be payable in lawful money of the United States at a 
designated place or be payable in another form of currency if the authority so 
designates and be considered to be negotiable instruments issued under the laws of 
the State within the meaning and for all purposes of Title II, Article 3-A, whether or 
not of the form or character to so quality under the terms of Title II, Article 3-A, 
subject only to the applicable provisions of any trust agreement; 
C. 
Providing that bonds be executed by the manual or facsimile signatures of the 
officers or designees of the authority; 
D. 
Providing that bonds be sold in the manner and upon the terms determined by 
the authority at public or private sale, with or without public bidding; 
E. 
Pledging or assigning revenues, contractual rights and other assets to secure the 
bonds; 
F. 
Establishing loan funding deposits, debt service reserves, capitalized interest 
accounts, cost of issuance accounts and sinking funds and other accounts and their 
regulation, investment and disposition; 
G. 
Providing for the issuance of additional bonds and refunding bonds; 
H. 
Defining the acts or omissions that constitute a default in the duties of the 
authority or its obligations to bondholders and providing the rights or remedies of 
such bondholders in the event of a default; 
I. 
Providing for guarantees, letters of credit, lines of credit, insurance policies, 
surety bonds, purchase agreements or similar instruments or other security for the 
benefit of the bondholders; 
J. 
Providing for interest rate or exchange agreements; and 
K. 
Any other matter relating to the bonds that the authority determines appropriate. 
Sec. 6. 20-A MRSA §11497, as enacted by PL 2003, c. 455, §2, is amended to 
read: 
§1l497. Loan transactions 
Exeeflt as otherwise flro"ided iR seetioR 11493, subseetioR 2, the The authority may 
finance, sell, service, pledge, invest in, hold, trade, accept as collateral or otherwise deal 
in, acquire or transfer, all on such terms and conditions as the authority may specity, 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, servicing, 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 specified in that agreement and that the effect of a 
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sale of an interest in a loan is the same as a sale of a loan. The authority may issue or 
cause to be issued certificates or other instruments evidencing the holder's fractional 
interest in a pool 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 II. Article 3-A, subject only to such registration requirements as the authority 
may establish. 
Emergency clause. 
In view of the emergency cited In the preamble, this 
legislation takes effect when approved. 
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SUMMARY 
This bill amends certain provisions of the Finance Authority of Maine's eXlstmg 
authority to finance education loans to ensure the ability of the Finance Authority of 
Maine to originate such loans.