An Act To Amend Criteria for Issuing a Certificate of Approval for Certain Projects under the Finance Authority of Maine Act
Maine Legislature, Session 128, LD 1503
Committee: Labor, Commerce, Research and Economic Development
Sponsors: VOLK
Amends: 10 MRSA §1043

Legislative Document
No. 1503
S.P. 528
In Senate, April 20, 2017
An Act To Amend Criteria for Issuing a Certificate of Approval for 
Certain Projects under the Finance Authority of Maine Act
(EMERGENCY)
Submitted by the Finance Authority of Maine pursuant to Joint Rule 204.
Reference to the Committee on Labor, Commerce, Research and Economic Development 
suggested and ordered printed.
HEATHER J.R. PRIEST
Secretary of the Senate
Presented by Senator VOLK of Cumberland.
Emergency preamble. Whereas, acts and resolves of the Legislature do not 
become effective until 90 days after adjournment unless enacted as emergencies; and 
Whereas, it is likely that applicants will seek financing for projects using the 
Revenue Obligation Securities Program before this Act takes effect if it is not enacted on 
an emergency basis; and 
Whereas, if this Act is not enacted on an emergency basis, applicants could obtain 
financing without sufficient credit safeguards to protect against the calling upon the moral 
obligation of the State, leading to undue losses to the State; 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, 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1.  10 MRSA §1043, sub-§2, ¶O, as amended by PL 2015, c. 504, §3, is 
further amended to read: 
O.  In the case of an energy distribution system project or an energy generating 
system project regulated by the Public Utilities Commission with respect to rates or 
terms of service or that requires, for construction or operation, authorization or 
certification from the commission, the following conditions are met. 
(1)  The energy distribution system project or the energy generating system 
project has received all authorizations or certifications from the Public Utilities 
Commission necessary for construction and operation of the project.  The 
authority may issue a certificate of approval for a project that has received 
conditional approvals or certifications from the commission, except that the 
authority's certificate becomes legally effective only upon fulfillment of the 
conditional provisions of the commission's certificates or approvals.  If the 
commission has approved rates to be charged by the project or has issued a 
certificate of public convenience and necessity for the project, the authority shall 
take into consideration any findings and conclusions of law of the commission, 
including any findings and conclusions pertaining to the need for the project and 
the financial viability of the project. 
(2)  The authority has reviewed and considered any comments provided by the 
Director of the Governor's Energy Office and the Public Advocate. 
(3)  The authority has determined that the applicant is creditworthy and that there 
is a reasonable strong likelihood that the revenue obligation securities will be 
repaid through the revenues of the project and any other sources of revenues and 
collateral pledged to the repayment of those securities.  In order to make these 
determinations, the authority shall consider such factors as it considers necessary 
and appropriate in light of the special purpose or other nature of the business 
entity owning the project and the specific purposes of the project to measure and 
evaluate the project and the sufficiency of the pledged revenues to repay the 
obligations, including, but not limited to: 
(a)  Whether the individuals or entities obligated to repay the obligations 
have demonstrated sufficient revenues from the project or from other sources 
to repay the obligations and a reasonable probability that those revenues will 
continue to be available for the term of the revenue obligation securities; 
(b)  Whether the applicant demonstrates a reasonable probability that the 
project will continue to operate and provide the public benefits projected to 
be created for the term of the revenue obligation securities; 
(c)  Whether the applicant's creditworthiness is demonstrated by factors such 
as its historical financial performance, management ability, plan for 
marketing its product or service and ability to access conventional financing; 
(d)  Whether the applicant meets or exceeds industry average financial 
performance ratios commonly accepted in determining creditworthiness in 
that industry; 
(e)  Whether the applicant demonstrates that the need for authority assistance 
is due to the reduced cost and increased flexibility of the financing for the 
project that result from authority assistance and not from an inability to 
obtain necessary financing without the capital reserve fund security provided 
by the authority; 
(f)  Whether collateral securing the repayment obligation is reasonably 
sufficient under the circumstances; 
(g)  Whether the proposed project enhances the opportunities for economic 
development; 
(h)  The effect that the proposed project financing has on the authority's 
financial resources; 
(i)  The financial performance of similar projects; 
(j)  The need for the project, as determined by the Public Utilities 
Commission and as indicated by any comments provided by the Director of 
the Governor's Energy Office, other public officials and members of the 
public; 
(k)  The nature and extent of customer commitment to use the project or the 
fuel or energy the project distributes, transmits or generates; 
(l)  The cost advantages to end users of the fuel or energy to be distributed, 
transmitted or generated by the project, to the extent those advantages may 
affect market penetration by the project; and 
(m)  The nature and extent of the applicant's equity contribution to payment 
of the costs of the project; such a contribution may not be less than 25% of 
the expected cost of the project. 
This paragraph is repealed January 1, 2020. 
Emergency clause.  In view of the emergency cited in the preamble, this 
legislation takes effect when approved. 
SUMMARY 
This bill amends a provision in the Finance Authority of Maine Act related to bond 
financing for energy projects to require as part of the Finance Authority of Maine's 
approval criteria that a borrower demonstrate a strong likelihood instead of a reasonable 
likelihood of the borrower's ability to repay the bonds through project revenues or other 
revenues and collateral, to match other authority moral obligation bond program 
requirements.