An Act To Ensure the Availability of Supplemental Educational Loans
Maine Legislature, Session 124, LD 0856
Committee: Education and Cultural Affairs
Sponsors: RA YE, SUTHERLAND, ALPOND, BOWMAN, ROSEN, CAIN, EDGECOMB, MARTIN, TARDY

Legislative Document 
No. 856 
S.P.325 
'In Senate, March 5,2009 
An Act To Ensure the Availability of Supplemental Educational 
Loans 
(EMERGENCy) 
Reference to the Committee on Education and Cultural Affairs suggested and ordered 
printed. 
. 
Presented by Senator RA YE of Washington. 
9r~(J~ 
JOY J. O'BRIEN 
Secretary of the Senate 
Cosponsored by Representative SUTHERLAND of Chapman and 
Senators: ALPOND of Cumberland, BOWMAN of York, ROSEN of Hancock, -
Representatives: CAIN of Orono, EDGECOMB of Caribou, MARTIN of Eagle Lake, 
MILLETT ofWa~erford, TARDY of Newport. 
Printed on recycled pilper 
Emergellcy preamble. Whereas, acts and resolves of the Legislature do not 
become effec'tive until 90 days after adjournment unless enacted as emergencies; and 
, Whereas, unprecetlented turbulence in the capital markets has made it necessary to 
replace existing auction rate bond financing for supplemental or alternative student loans 
with financing supported by a capital reserve fund; and 
Whereas, if financing supported by a capital reserve fund can~ot be made available, 
Maine students and' families, may be adversely affected by increased costs ~f education 
borrowing or limited availability of supplemental loans, which may affect the number of . 
Maine students pursuing a higher education because they cannot secure the necessary 
financing; and 
Whereas, i~ the judgment of the Legislature; these facts create a~' 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, 
Be it enacted by the People ofthe State of Maine as follows: 
Sec. 1.' 20-A MRSA §U424, sulb-§2, as enacted by PL 1987, c. 807, §3, IS 
amended to read: 
2. Application. Money held in any capital reserve fund, except as provided in this 
section, shall be used solely with respect to bonds, repayment of which is secured by any 
such fund and solely for the payment of principal of bonds, the purchase or redemption of 
those bonds, including any fees or premiums and the payment of interest on those bonds. 
In addition,' if the authority obtains a letter of credit, insurance contract, surety bond or 
, similar financial undertaking to establish and fund a capital reserve fund under this 
section, money in that capital reserve fund may be used to pay, as and when due, all 
reimbursement obligations of the authority established in, connection with that letter of 
credit, insurance contract, surety bond or similar financial undertaking, including, but not 
limited to, all fees, expenses, indemnities and commissions. Money in excess of the 
reserve requirement set forth in subsection 3 may be transferred to other funds and 
accounts of the authority.' 
' .  
Sec. 2. 20-A MRS A §11424, s1.llb-§6,as enacted by PL 1987, c. 807, §3, IS 
1 
repealed. 
Emergency clause. 
In view of the emergency cited in the preamble, this, 
legislation takes effect when approved. 
SUMMARY 
This bill allows the Maine Educational Loan Authority to establish a capital reserve 
fund to secure student loan revenue bonds in the principal amount necessary to help meet 
the supplemental educational financing needs of Maine students and families. It also 
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removes language that places a limit on the principal amount of a certain type of bond 
that the authority may have outstanding at anyone time.